10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended

June 30, 2019

or

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

For the transition period from to

Commission file number 1-9576

OWENS-ILLINOIS, INC.

(Exact name of registrant as specified in its charter)

Delaware	22-2781933
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

One Michael Owens Way, Perrysburg, Ohio	43551
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (567) 336-5000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $.01 par value	OI	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐
Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock, par value $.01, of Owens-Illinois, Inc. outstanding as of June 30, 2019 was 155,456,952.

Part I — FINANCIAL INFORMATION

Item 1. Financial Statements.

The Condensed Consolidated Financial Statements of Owens-Illinois, Inc. (the “Company”) presented herein are unaudited but, in the opinion of management, reflect all adjustments necessary to present fairly such information for the periods and at the dates indicated. All adjustments are of a normal recurring nature. Because the following unaudited condensed consolidated financial statements have been prepared in accordance with Article 10 of Regulation S-X, they do not contain all information and footnotes normally contained in annual consolidated financial statements; accordingly, they should be read in conjunction with the Consolidated Financial Statements and notes thereto appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

1

OWENS-ILLINOIS, INC.

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS

(Dollars in millions, except per share amounts)
(Unaudited)

	Three months ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
Net sales	$	1,756	$	1,772	$	3,393	$	3,508
Cost of goods sold		(1,420)		(1,426)		(2,760)		(2,843)
Gross profit		336		346		633		665
Selling and administrative expense		(116)		(126)		(231)		(252)
Research, development and engineering expense		(18)		(17)		(34)		(33)
Interest expense, net		(68)		(74)		(132)		(136)
Equity earnings		19		21		38		38
Other expense, net		(55)		(72)		(65)		(69)
Earnings from continuing operations before income taxes		98		78		209		213
Provision for income taxes		(27)		(22)		(54)		(54)
Earnings from continuing operations		71		56		155		159
Loss from discontinued operations		(1)				(1)		(1)
Net earnings		70		56		154		158
Net earnings attributable to noncontrolling interests		(5)		(6)		(10)		(11)
Net earnings attributable to the Company	$	65	$	50	$	144	$	147
Amounts attributable to the Company:
Earnings from continuing operations	$	66	$	50	$	145	$	148
Loss from discontinued operations		(1)				(1)		(1)
Net earnings	$	65	$	50	$	144	$	147
Basic earnings per share:
Earnings from continuing operations	$	0.42	$	0.31	$	0.94	$	0.91
Loss from discontinued operations						(0.01)		(0.01)
Net earnings	$	0.42	$	0.31	$	0.93	$	0.90
Weighted average shares outstanding (thousands)		155,338		160,858		154,852		161,904
Diluted earnings per share:
Earnings from continuing operations	$	0.42	$	0.31	$	0.93	$	0.90
Loss from discontinued operations						(0.01)
Net earnings	$	0.42	$	0.31	$	0.92	$	0.90
Weighted average diluted shares outstanding (thousands)		156,471		162,712		156,555		163,964

See accompanying notes.

2

OWENS-ILLINOIS, INC.

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME (LOSS)

(Dollars in millions)

(Unaudited)

	Three months ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
Net earnings	$	70	$	56	$	154	$	158
Other comprehensive income (loss):
Foreign currency translation adjustments		1		(268)		50		(141)
Pension and other postretirement benefit adjustments, net of tax		16		29		22		36
Change in fair value of derivative instruments, net of tax		(9)		(1)		(4)		(6)
Other comprehensive income (loss)		8		(240)		68		(111)
Total comprehensive income (loss)		78		(184)		222		47
Comprehensive income (loss) attributable to noncontrolling interests		7		9		(1)		(2)
Comprehensive income (loss) attributable to the Company	$	85	$	(175)	$	221	$	45

See accompanying notes.

3

OWENS-ILLINOIS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(Unaudited)

	June 30,		December 31,		June 30,
	2019		2018		2018
Assets
Current assets:
Cash and cash equivalents	$	371	$	512	$	365
Trade receivables, net of allowance of $34 million, $35 million, and $35 million at June 30, 2019, December 31, 2018 and June 30, 2018		1,275		549		1,026
Inventories		1,015		1,018		985
Prepaid expenses and other current assets		282		278		248
Total current assets		2,943		2,357		2,624
Property, plant and equipment, net		3,216		3,085		3,025
Goodwill		2,527		2,513		2,533
Intangibles, net		422		400		419
Other assets		1,615		1,344		1,217
Total assets	$	10,723	$	9,699	$	9,818
Liabilities and Share owners' equity
Current liabilities:
Accounts payable	$	1,074	$	1,321	$	1,088
Short-term loans and long-term debt due within one year		96		160		291
Current portion of asbestos-related liabilities		135		160		100
Other liabilities		624		566		576
Other liabilities - discontinued operations						115
Total current liabilities		1,929		2,207		2,170
Long-term debt		6,235		5,181		5,377
Asbestos-related liabilities		364		442		456
Other long-term liabilities		1,105		969		916
Share owners' equity		1,090		900		899
Total liabilities and share owners' equity	$	10,723	$	9,699	$	9,818

See accompanying notes.

4

OWENS-ILLINOIS, INC.

CONDENSED CONSOLIDATED CASH FLOWS

(Dollars in millions)

(Unaudited)

	Six months ended June 30,
	2019		2018
Cash flows from operating activities:
Net earnings	$	154	$	158
Loss from discontinued operations		1		1
Non-cash charges
Depreciation and amortization		253		254
Pension expense		16		17
Restructuring, asset impairment and related charges		32		70
Pension settlement charges		2
Cash payments
Pension contributions		(19)		(18)
Asbestos-related payments		(103)		(26)
Cash paid for restructuring activities		(29)		(12)
Change in components of working capital		(939)		(586)
Other, net (a)		(30)		(8)
Cash utilized in operating activities		(662)		(150)
Cash utilized in discontinued operating activities		(1)		(1)
Total cash utilized in operating activities		(663)		(151)
Cash flows from investing activities:
Cash payments for property, plant and equipment		(233)		(273)
Acquisitions, net of cash acquired		(157)
Contributions and advances to joint ventures		(22)		(25)
Net cash proceeds on disposal of assets		1		9
Other, net		1		2
Cash utilized in investing activities		(410)		(287)
Cash flows from financing activities:
Changes in borrowings, net		970		437
Treasury shares repurchased		(38)		(95)
Payment of finance fees		(8)		(12)
Distributions to noncontrolling interests		(7)		(8)
Dividends paid		(16)
Net cash proceeds for hedging activity		28
Other, net		(3)
Cash provided by financing activities		926		322
Effect of exchange rate fluctuations on cash		6		(11)
Decrease in cash		(141)		(127)
Cash at beginning of period		512		492
Cash at end of period	$	371	$	365

(a) Other, net includes other non-cash charges plus other changes in non-current assets and liabilities.

See accompanying notes.

5

OWENS-ILLINOIS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Tabular data dollars in millions, except per share amounts

1. Segment Information

The Company has three reportable segments and three operating segments based on its geographic locations: Americas, Europe and Asia Pacific. These three segments are aligned with the Company’s internal approach to managing, reporting, and evaluating performance of its global glass operations. Certain assets and activities not directly related to one of the regions or to glass manufacturing are reported with Retained corporate costs and other. These include licensing, equipment manufacturing, global engineering, and certain equity investments. Retained corporate costs and other also includes certain headquarters administrative and facilities costs and certain incentive compensation and other benefit plan costs that are global in nature and are not allocable to the reportable segments.

The Company’s measure of profit for its reportable segments is segment operating profit, which is a non-GAAP financial measure that consists of consolidated earnings from continuing operations before interest income, interest expense, and provision for income taxes and excludes amounts related to certain items that management considers not representative of ongoing operations, as well as certain retained corporate costs. The Company’s management uses segment operating profit, in combination with net sales and selected cash flow information, to evaluate performance and to allocate resources. Segment operating profit for reportable segments includes an allocation of some corporate expenses based on both a percentage of sales and direct billings based on the costs of specific services provided.

Financial information for the three and six months ended June 30, 2019 and 2018 regarding the Company’s reportable segments is as follows:

	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Net sales:
Americas	$	934	$	930	$	1,815		$	1,838
Europe		650		674		1,246			1,317
Asia Pacific		152		153		303			326
Reportable segment totals		1,736		1,757		3,364			3,481
Other		20		15		29			27
Net sales	$	1,756	$	1,772	$	3,393		$	3,508

	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Segment operating profit:
Americas	$	144	$	152	$	257	$	299
Europe		90		101		169		173
Asia Pacific		2		2		10		7
Reportable segment totals		236		255		436		479
Items excluded from segment operating profit:
Retained corporate costs and other		(28)		(30)		(53)		(57)
Restructuring, asset impairment and other		(42)		(73)		(42)		(73)
Interest expense, net		(68)		(74)		(132)		(136)
Earnings from continuing operations before income taxes	$	98	$	78	$	209	$	213

6

Financial information regarding the Company’s total assets is as follows:

	June 30,		December 31,		June 30,
	2019		2018		2018
Total assets:
Americas	$	5,994	$	5,497	$	5,402
Europe		3,342		3,036		3,232
Asia Pacific		1,045		918		981
Reportable segment totals		10,381		9,451		9,615
Other		342		248		203
Consolidated totals	$	10,723	$	9,699	$	9,818

2. Revenue

Revenue is recognized when obligations under the terms of the Company’s contracts and related purchase orders with its customers are satisfied. This occurs with the transfer of control of glass containers, which primarily takes place when products are shipped from the Company’s manufacturing or warehousing facilities to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimated provisions for rebates, discounts, returns and allowances. Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s payment terms are based on customary business practices and can vary by customer type. The term between invoicing and when payment is due is not significant. Also, the Company elected to account for shipping and handling costs as a fulfillment cost at the time of shipment.

For the three and six month periods ended June 30, 2019 and June 30, 2018, the Company had no material bad debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the Condensed Consolidated Balance Sheet. For the three and six month periods ended June 30, 2019 and June 30, 2018, revenue recognized from prior periods (for example, due to changes in transaction price) was not material.

The following tables for the three months ended June 30, 2019 and 2018 disaggregates the Company’s revenue by customer end use:

	Three months ended June 30, 2019
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	590	$	474	$	105	$	1,169
Food and other		191		109		29		329
Non-alcoholic beverages		153		67		18		238
Reportable segment totals	$	934	$	650	$	152	$	1,736
Other								20
Net sales							$	1,756
	Three months ended June 30, 2018
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	585	$	493	$	113	$	1,191
Food and other		197		112		23		332
Non-alcoholic beverages		148		69		17		234
Reportable segment totals	$	930	$	674	$	153	$	1,757
Other								15
Net sales							$	1,772

7

The following tables for the six months ended June 30, 2019 and 2018 disaggregates the Company’s revenue by customer end use:

	Six months ended June 30, 2019
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	1,153	$	907	$	214	$	2,274
Food and other		372		211		54		637
Non-alcoholic beverages		290		128		35		453
Reportable segment totals	$	1,815	$	1,246	$	303	$	3,364
Other								29
Net sales							$	3,393
	Six months ended June 30, 2018
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	1,161	$	964	$	240	$	2,365
Food and other		386		224		47		657
Non-alcoholic beverages		291		129		39		459
Reportable segment totals	$	1,838	$	1,317	$	326	$	3,481
Other								27
Net sales							$	3,508

3. Inventories

Major classes of inventory at June 30, 2019, December 31, 2018 and June 30, 2018 are as follows:

	June 30,		December 31,		June 30,
	2019		2018		2018
Finished goods	$	838	$	849	$	821
Raw materials		131		125		123
Operating supplies		46		44		41
	$	1,015	$	1,018	$	985

4. Derivative Instruments

The Company has certain derivative assets and liabilities, which consist of natural gas forwards, foreign exchange option and forward contracts, interest rate swaps and cross currency swaps. The valuation of these instruments is determined primarily using the income approach, including discounted cash flow analysis on the expected cash flows of each derivative. Natural gas forward rates, foreign exchange rates and interest rates are the significant inputs into the valuation models. The Company also evaluates counterparty risk in determining fair values. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. These inputs are observable in active markets over the terms of the instruments the Company holds, and accordingly, the Company classifies its derivative assets and liabilities as Level 2 in the hierarchy.

8

Commodity Forward Contracts Designated as Cash Flow Hedges

The Company enters into commodity forward contracts related to forecasted natural gas requirements, the objectives of which are to limit the effects of fluctuations in the future market price paid for natural gas and the related volatility in cash flows.

An unrecognized gain of $2 million at June 30, 2019, an unrecognized gain of $1 million at December 31, 2018 and an unrecognized gain of $7 million at June 30, 2018 related to the commodity forward contracts were included in Accumulated OCI, and will be reclassified into earnings in the period when the commodity forward contracts expire.

Foreign Exchange Derivative Contracts Not Designated as Hedging Instruments

The Company uses short-term forward exchange or option agreements to purchase foreign currencies at set rates in the future. These agreements are used to limit exposure to fluctuations in foreign currency exchange rates for significant planned purchases of fixed assets or commodities that are denominated in currencies other than the subsidiaries’ functional currency. The Company also uses foreign exchange agreements to offset the foreign currency risk for receivables and payables, including intercompany receivables, payables, and loans, not denominated in, or indexed to, their functional currencies.

Cash Flow Hedges of Foreign Exchange Risk

The Company has variable-interest rate borrowings denominated in currencies other than the functional currency of the borrowing subsidiaries. As a result, the Company is exposed to fluctuations in the currency of the borrowing against the subsidiaries’ functional currency.  The Company uses derivatives to manage these exposures and designates these derivatives as cash flow hedges of foreign exchange risk.

During the second quarter of 2019, the Company terminated a portion of its cross-currency swaps, which resulted in a $15 million cash inflow recognized in the Cash flows from financing activities section of the Condensed Consolidated Cash Flows.

An unrecognized loss of $18 million at June 30, 2019, an unrecognized loss of $9 million at December 31, 2018 and an unrecognized loss of $8 million at June 30, 2018, related to these cross-currency swaps, were included in Accumulated OCI, and will be reclassified into earnings within the next twelve months.

Interest Rate Swaps Designated as Fair Value Hedges

The Company enters into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. The Company’s fixed-to-variable interest rate swaps are accounted for as fair value hedges. The relevant terms of the swap agreements match the corresponding terms of the notes and therefore there is no hedge ineffectiveness. The Company recorded the net of the fair market values of the swaps as a long-term liability and short-term asset, along with a corresponding net decrease in the carrying value of the hedged debt.

During the second quarter of 2019, the Company terminated a portion of its interest rate swaps, which resulted in a $13 million cash inflow recognized in the Cash flows from financing activities section of the Condensed Consolidated Cash Flows.

Cash Flow Hedges of Interest Rate Risk

The Company enters into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments. These interest rate swap agreements were used to hedge the variable cash flows associated with variable-rate debt.

An unrecognized loss of $1 million at June 30, 2019 and an unrecognized loss of less than $1 million at December 31, 2018, related to these interest rate swaps, was included in Accumulated OCI, and will be reclassified into earnings within the next twelve months.

Net Investment Hedges

The Company is exposed to fluctuations in foreign exchange rates on investments it holds in non-U.S. subsidiaries and uses cross-currency swaps to partially hedge this exposure.  

9

An unrecognized gain of $5 million at June 30, 2019 and an unrecognized gain of $4 million at year ended December 31, 2018, related to these net investment hedges, was included in Accumulated OCI, and will be reclassified into earnings within the next twelve months.

Balance Sheet Classification

The following table shows the amount and classification (as noted above) of the Company’s derivatives at June 30, 2019, December 31, 2018 and June 30, 2018:

	Fair Value of						Fair Value of
	Hedge Assets						Hedge Liabilities
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
	2019		2018		2018		2019		2018		2018
Derivatives designated as hedging instruments:
Commodity forward contracts (a)	$	2	$	1	$	7	$	1	$	-	$	-
Interest rate swaps - fair value hedges (b)		15		6		6				1		8
Cash flow hedges of foreign exchange risk (c)		20		10		5		30		1		12
Interest rate swaps - cash flow hedges (d)		1						2
Net investment hedges (e)		6		6				6		8
Total derivatives accounted for as hedges	$	44	$	23	$	18	$	39	$	10	$	20
Derivatives not designated as hedges:
Foreign exchange derivative contracts (f)		2		2		2		1		2		2
Total derivatives	$	46	$	25	$	20	$	40	$	12	$	22
Current	$	13	$	19	$	13	$	3	$	3	$	3
Noncurrent		33		6		7		37		9		19
Total derivatives	$	46	$	25	$	20	$	40	$	12	$	22

(a) The notional amounts of the commodity forward contracts were $19 million, $21 million and $21 million at June 30, 2019, December 31, 2018 and June 30, 2018, respectively. The maximum maturity dates were in 2020 for all three periods.

(b) The notional amounts of the interest rate swaps designated as fair value hedges were €725 million at June 30, 2019, December 31, 2018 and June 30, 2018, respectively. The maximum maturity dates were in 2024 for all three periods.

(c) The notional amounts of the cash flow hedges of foreign exchange risk were $1.210 billion, $587 million and $310 million at June 30, 2019, December 31, 2018 and June 30, 2018, respectively. The maximum maturity dates were in 2023 for all three periods.

(d) The notional amounts of the interest rate swaps designated as cash flow hedges were $480 million at June 30, 2019 and $180 million at June 30, 2018 and December 31, 2018. Maximum maturity dates were 2021 at June 30, 2019 and 2020 at June 30, 2018 and December 31, 2018, respectively.

(e) The notional amounts of the net investment hedges were €160 million and maximum maturity dates were 2020 at June 30, 2019 and December 31, 2018.

(f) The notional amounts of the foreign exchange derivative contracts were $292 million, $470 million and $380 million and maximum maturity dates were 2019, 2019, and 2018 at June 30, 2019, December 31, 2018 and June 30, 2018, respectively.

10

	Gain (Loss) Recognized in OCI (Effective Portion)				Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1)
	Three months ended June 30,				Three months ended June 30,
Derivatives designated as hedging instruments:	2019		2018		2019		2018
Cash Flow Hedges
Commodity forward contracts (a)	$	(1)	$	4	$	—	$	—
Cash flow hedges of foreign exchange risk (b)		(5)		14		(2)		18
Cash flow hedges of interest rate risk (c)		(1)
Net Investment Hedges
Net Investment Hedges		5				(4)
	$	(2)	$	18	$	(6)	$	18
	Gain (Loss) Recognized in OCI (Effective Portion)				Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1)
	Six months ended June 30,				Six months ended June 30,
Derivatives designated as hedging instruments:	2019		2018		2019		2018
Cash Flow Hedges
Commodity forward contracts (a)	$	1	$	5	$	(1)	$	(1)
Cash flow hedges of foreign exchange risk (b)		2		1		(12)		10
Cash flow hedges of interest rate risk (c)		(1)
Net Investment Hedges
Net Investment Hedges		5				(4)
	$	7	$	6	$	(17)	$	9
	Amount of Gain (Loss) Recognized in Other income (expense), net				Amount of Gain (Loss) Recognized in Other income (expense), net
	Three months ended June 30,				Six months ended June 30,
Derivatives not designated as hedges:	2019		2018		2019		2018
Foreign exchange derivative contracts	$	1	$	—	$	7	$	—
(1) Gains and losses reclassified from accumulated OCI and recognized in income are recorded to (a) cost of goods sold, (b) other expense, net or (c) interest expense, net.

11

5. Restructuring Accruals

Selected information related to the restructuring accruals for the three months ended June 30, 2019 and 2018 is as follows:

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at April 1, 2019	$	34	$		$	19	$	53
Charges		27				5		32
Net cash paid, principally severance and related benefits		(11)				(3)		(14)
Other, including foreign exchange translation						(1)		(1)
Balance at June 30, 2019	$	50	$	—	$	20	$	70

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at April 1, 2018	$	63	$		$	17	$	80
Charges		15		53		2		70
Write-down of assets to net realizable value				(53)				(53)
Net cash paid, principally severance and related benefits		(5)				(1)		(6)
Other, including foreign exchange translation		(2)				(2)		(4)
Balance at June 30, 2018	$	71	$	—	$	16	$	87

Selected information related to the restructuring accruals for the six months ended June 30, 2019 and 2018 is as follows:

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2019	$	47	$		$	22	$	69
Charges		27				5		32
Net cash paid, principally severance and related benefits		(24)				(5)		(29)
Other, including foreign exchange translation						(2)		(2)
Balance at June 30, 2019	$	50	$	—	$	20	$	70

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2018	$	67	$		$	18	$	85
Charges		15		53		2		70
Write-down of assets to net realizable value				(53)				(53)
Net cash paid, principally severance and related benefits		(10)				(2)		(12)
Other, including foreign exchange translation		(1)				(2)		(3)
Balance at June 30, 2018	$	71	$	—	$	16	$	87

When a decision is made to take restructuring actions, the Company manages and accounts for them programmatically apart from the on-going operations of the business. Information related to major programs are presented separately while minor initiatives are presented on a combined basis. As of June 30, 2019 and 2018, no major restructuring programs were in effect.

In the three and six months ended June 30, 2019, the Company implemented several discrete restructuring initiatives and recorded restructuring and other charges of $32 million.  These charges consisted of employee costs such as severance and benefit related costs and other exit costs primarily related to a severance program for certain salaried employees at the Company’s corporate and America’s headquarters.  These charges were recorded to Selling and administrative expense ($2 million) and Other expense, net ($30 million) on the Consolidated Results of Operations. The Company expects that the majority of the remaining cash expenditures related to the accrued employee costs will be paid out by the end of 2019.

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In the three and six months ended June 30, 2018, the Company implemented several discrete restructuring initiatives and recorded restructuring, asset impairment and other charges of $70 million. These charges consisted of employee costs, write-down of assets and other exit costs primarily related to a plant closure in the Americas region. These restructuring charges were discrete actions and are expected to approximate the total cumulative costs for those actions as no significant additional costs are expected to be incurred. These restructuring actions primarily relate to capacity curtailments and the Company plans to reallocate the products produced to other facilities. These charges were recorded to Cost of goods sold ($5 million) and Other expense, net ($65 million) on the Condensed Consolidated Results of Operations. The Company expects that the majority of the remaining cash expenditures related to the above charges will be paid out by the end of 2019.

The Company’s decisions to curtail selected production capacity have resulted in write downs of certain long-lived assets to the extent their carrying value exceeded fair value or fair value less cost to sell. The Company classified the assumptions used to determine the fair value of the impaired assets in the period that the measurement was taken as Level 3 (third party appraisal) in the fair value hierarchy as set forth in the general accounting principles for fair value measurements. For the asset impairments recorded through June 30, 2019 and 2018, the remaining carrying value of the impaired assets was approximately $0 and $3 million, respectively.

6. Pension Benefit Plans

The components of the net periodic pension cost for the three months ended June 30, 2019 and 2018 are as follows:

	U.S.				Non-U.S.
	2019		2018		2019		2018
Service cost	$	3	$	4	$	3	$	3
Interest cost		15		15		7		8
Expected asset return		(22)		(25)		(11)		(14)
Amortization of actuarial loss		10		13		3		3
Net periodic pension cost	$	6	$	7	$	2	$	—

The components of the net periodic pension cost for the six months ended June 30, 2019 and 2018 are as follows:

	U.S.				Non-U.S.
	2019		2018		2019		2018
Service cost	$	6	$	7	$	6	$	7
Interest cost		30		30		15		16
Expected asset return		(44)		(49)		(22)		(27)
Amortization of actuarial loss		20		26		5		7
Net periodic pension cost	$	12	$	14	$	4	$	3

7.  Leases

In the first quarter of 2019, the Company adopted ASC 842, Leases, and selected the modified retrospective transition as of the effective date of January 1, 2019 (the effective date method). Under the effective date method, financial results reported in periods prior to 2019 are unchanged.

The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

The Company uses an estimated incremental borrowing rate at the lease commencement date to determine the present value of lease payments when the implicit rate is not readily determinable in the lease. The Company’s incremental borrowing rate reflects a fully secured rate based on recent debt issuances, the credit rating of the Company, changes in currency, repayment timing of the lease, as well as publicly available data for instruments with similar characteristics when calculating incremental borrowing rates.

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Certain lease agreements include terms with options to extend the lease, however none of these have been recognized in the Company’s right-of-use assets or lease liabilities since those options were not reasonably certain to be exercised. Leases with a term of 12 months or less are not recorded on the balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. The Company’s lease agreements include lease payments that are largely fixed, do not contain material residual value guarantees or variable lease payments and no lease transactions with related parties. For the three and six months ended June 30, 2019, the Company’s lease costs associated with leases with terms less than 12 months or variable lease costs were immaterial. Certain leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s leases do not contain restrictions or covenants that restrict the Company from incurring other financial obligations.

The Company leases warehouses, office buildings and equipment under both operating and finance lease arrangements. Information related to leases is as follows:

	Three months ended			Six months ended
	June 30,			June 30,
	2019			2019
Lease cost
Finance lease cost:
Amortization of right-of-use assets (included in Cost of goods sold and Selling and administrative expense)	$	2	$	3
Interest on lease liabilities (included in Interest expense, net)				1
Operating lease cost (included in Cost of goods sold and Selling and administrative expense)		21		42
Total lease cost	$	23	$	46

		Six months ended
		June 30,
		2019
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	21
Operating cash flows from finance leases		1
Financing cash flows from finance leases		3
Right-of-use assets obtained in exchange for new operating lease liabilities		33

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	June 30, 2019
Supplemental balance sheet information
Operating leases:
Operating lease right-of-use assets (included in Other assets)	$	196
Current operating lease liabilities (included in Other current liabilities)		67
Noncurrent operating lease liabilities (included in Other long-term liabilities)		129
Total operating lease liabilities	$	196
Finance leases:
Property, plant and equipment	$	74
Accumulated amortization		(30)
Property, plant and equipment, net		44
Current finance lease liabilities (included in Long-term debt due within one year)		6
Noncurrent finance lease liabilities (included in Long-term debt)		35
Total finance lease liabilities	$	41
Weighted-average remaining lease term (in years):
Operating leases		4.8
Finance leases		7.0
Weighted-average discount rate:
Operating leases		3.8	%
Finance leases		5.2	%

Maturity of lease liabilities		Operating leases		Finance leases
2019	$	39	$	5
2020		61		8
2021		37		8
2022		28		6
2023		18		6
2024 and thereafter		32		17
Total lease payments		215		50
Less: imputed interest		(19)		(9)
Total lease obligations	$	196	$	41
Minimum payments related to leases not yet commenced as of June 30, 2019	$	-	$	85

8. Income Taxes

The Company calculates its interim tax provision using the estimated annual effective tax rate (“EAETR”) methodology in accordance with ASC 740-270. The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effect of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pretax ordinary income or loss in each tax jurisdiction in which the Company operates. The tax effects of discrete items are recognized in the tax provision in the quarter they occur in accordance with GAAP. Depending on various factors such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter can materially impact the reported effective tax rate. The Company’s annual effective tax rate may be

15

affected by the mix of earnings in the U.S. and foreign jurisdictions and such factors as changes in tax laws, tax rates or regulations, changes in business, changing interpretation of existing tax laws or regulations, the finalization of tax audits and reviews, as well as other factors. As such, there can be significant volatility in interim tax provisions. The annual effective tax rate differs from the statutory U.S. Federal tax rate of 21% primarily because of varying non-U.S. tax rates.

The Company is currently under examination in various tax jurisdictions in which it operates, including Bolivia, Brazil, Canada, China, Colombia, France, Germany, Indonesia, and Italy. The years under examination range from 2004 through 2017. The Company has received tax assessments in excess of established reserves. The Company is contesting these tax assessments, and will continue to do so, including pursuing all available remedies such as appeals and litigation, if necessary. The Company believes that adequate provisions for all income tax uncertainties have been made. However, if tax assessments are settled against the Company at amounts in excess of established reserves, it could have a material impact on the Company’s results of operations, financial position or cash flows.

9. Debt

The following table summarizes the long-term debt of the Company:

	June 30,		December 31,		June 30,
	2019		2018		2018
Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans	$	389	$		$
Term Loans:
Term Loan A		1,496
Previous Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans						397
Term Loans:
Term Loan A				897		908
Other secured debt		454		404		150
Senior Notes:
6.75%, due 2020 (€500 million)		567		570		580
4.875%, due 2021 (€330 million)		374		376		383
5.00%, due 2022		497		497		496
4.00%, due 2023		307		306		306
5.875%, due 2023		689		688		686
3.125%, due 2024 (€725 million)		845		825		833
6.375%, due 2025		296		295		295
5.375%, due 2025		298		297		297
Finance leases		41		45		50
Other		12		14		17
Total long-term debt		6,265		5,214		5,398
Less amounts due within one year		30		33		21
Long-term debt	$	6,235	$	5,181	$	5,377

The Company presents debt issuance costs in the balance sheet as a deduction of the carrying amount of the related debt liability.

On June 25, 2019, certain of the Company’s subsidiaries entered into a new Senior Secured Credit Facility (the “Agreement”), which amended and restated the previous credit agreement (the “Previous Agreement”). The proceeds from the Agreement were used to repay all outstanding amounts under the Previous Agreement. The Company recorded $2 million of additional interest charges for third party fees and the write-off of unamortized fees in the second quarter of 2019.

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The Agreement provides for up to $3.0 billion of borrowings pursuant to term loans and revolving credit facilities. The term loans mature, and the revolving credit facilities terminate, in June 2024. At June 30, 2019, the Agreement includes a $300 million revolving credit facility, a $1.2 billion multicurrency revolving credit facility, and a $1.5 billion term loan A facility ($1,496 million net of debt issuance costs). At June 30, 2019, the Company had unused credit of $1.1 billion available under the Agreement. The weighted average interest rate on borrowings outstanding under the Agreement at June 30, 2019 was 3.71%.

The Agreement contains various covenants that restrict, among other things and subject to certain exceptions, the ability of the Company to incur certain indebtedness and liens, make certain investments, become liable under contingent obligations in certain defined instances only, make restricted payments, make certain asset sales within guidelines and limits, engage in certain affiliate transactions, participate in sale and leaseback financing arrangements, alter its fundamental business, and amend certain subordinated debt obligations.

The Agreement also contains one financial maintenance covenant, a Total Leverage Ratio (the “Leverage Ratio”), that requires the Company not to exceed a ratio of 5.0x calculated by dividing consolidated total debt, less cash and cash equivalents, by Consolidated EBITDA, with such Leverage Ratio decreasing to 4.50x for the quarter ending December 31, 2020 and thereafter, as defined and described in the Agreement. The maximum Leverage Ratio is subject to an increase of 0.5x for (i) any fiscal quarter during which certain qualifying acquisitions (as specified in the Agreement) are consummated and (ii) the following three fiscal quarters, provided that the Leverage Ratio shall not exceed 5.0x. The Leverage Ratio could restrict the ability of the Company to undertake additional financing or acquisitions to the extent that such financing or acquisitions would cause the Leverage Ratio to exceed the specified maximum.

Failure to comply with these covenants and other customary restrictions could result in an event of default under the Agreement. In such an event, the Company could not request borrowings under the revolving facilities, and all amounts outstanding under the Agreement, together with accrued interest, could then be declared immediately due and payable. Upon the occurrence and for the duration of a payment event of default, an additional default interest rate equal to 2.0% per annum will apply to all overdue obligations under the Agreement. If an event of default occurs under the Agreement and the lenders cause all of the outstanding debt obligations under the Agreement to become due and payable, this would result in a default under a number of other outstanding debt securities and could lead to an acceleration of obligations related to these debt securities. As of June 30, 2019, the Company was in compliance with all covenants and restrictions in the Agreement.  In addition, the Company believes that it will remain in compliance and that its ability to borrow funds under the Agreement will not be adversely affected by the covenants and restrictions.

The Leverage Ratio also determines pricing under the Agreement. The interest rate on borrowings under the Agreement is, at the Company’s option, the Base Rate or the Eurocurrency Rate, as defined in the Agreement, plus an applicable margin. The applicable margin is linked to the Leverage Ratio. The margins range from 1.00% to 1.50% for Eurocurrency Loans and from 0.00% to 0.50% for Base Rate Loans. In addition, a commitment fee is payable on the unused revolving credit facility commitments ranging from 0.20% to 0.30% per annum linked to the Leverage Ratio.

Obligations under the Agreement are secured by substantially all of the assets, excluding real estate and certain other excluded assets, of certain of the Company’s domestic subsidiaries and certain foreign subsidiaries. Such obligations are also secured by a pledge of intercompany debt and equity investments in certain of the Company’s domestic subsidiaries and, in the case of foreign obligations, of stock of certain foreign subsidiaries. All obligations under the Agreement are guaranteed by certain domestic subsidiaries of the Company, and certain foreign obligations under the Agreement are guaranteed by certain foreign subsidiaries of the Company.

In order to maintain a capital structure containing appropriate amounts of fixed and floating-rate debt, the Company has entered into a series of interest rate swap agreements. These interest rate swap agreements were accounted for as either fair value hedges or cash flow hedges (see Note 4).

The Company assesses its capital raising and refinancing needs on an ongoing basis and may enter into additional credit facilities and seek to issue equity and/or debt securities in the domestic and international capital markets if market conditions are favorable. Also, depending on market conditions, the Company may elect to repurchase portions of its debt securities in the open market.

The carrying amounts reported for certain long-term debt obligations subject to frequently redetermined interest rates, approximate fair value. Fair values for the Company’s significant fixed rate debt obligations are based on published market quotations, and are classified as Level 1 in the fair value hierarchy.

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Fair values at June 30, 2019 of the Company’s significant fixed rate debt obligations are as follows:

	Principal		Indicated
	Amount		Market Price		Fair Value
Senior Notes:
6.75%, due 2020 (€500 million)	$	568	$	108.48	$	616
4.875%, due 2021 (€330 million)		375		108.35		406
5.00%, due 2022		500		102.95		515
5.875%, due 2023		700		107.36		752
4.00%, due 2023		310		100.37		311
3.125%, due 2024 (€725 million)		824		108.85		897
6.375%, due 2025		300		107.66		323
5.375%, due 2025		300		103.49		310

10. Contingencies

Asbestos

From 1948 to 1958, one of the Company's former business units commercially produced and sold approximately $40 million of a high-temperature, calcium-silicate based pipe and block insulation material containing asbestos. The Company sold its insulation business unit in April 1958. The Company receives claims from individuals alleging bodily injury and death as a result of exposure to asbestos from this product (“Asbestos Claims”). Some Asbestos Claims are brought as personal injury lawsuits that typically allege various theories of liability, including negligence, gross negligence and strict liability and seek compensatory and, in some cases, punitive damages.

Predominantly, however, Asbestos Claims are presented to the Company under administrative claims-handling agreements, which the Company has in place with many plaintiffs’ counsel throughout the country (“Administrative Claims”). Administrative Claims require evaluation and negotiation regarding whether particular claimants qualify under the criteria established by the related claims-handling agreements. The criteria for Administrative Claims include verification of a compensable illness and a reasonable probability of exposure to a product manufactured by the Company's former business unit during its manufacturing period ending in 1958. Plaintiffs’ counsel present, and the Company negotiates, Administrative Claims under these various agreements in differing quantities, at different times, and under a variety of conditions.

As of June 30, 2019, the Company had approximately 1,020 asbestos lawsuits pending. These pending lawsuits do not include an estimate of potential Administrative Claims that may be presented under a claims-handling agreement due to the uncertainties around presentation timing, quantities, or qualification rates. The Company considers Administrative Claims to be filed and disposed when they are accepted for payment.

The lack of uniform rules in lawsuit pleading practice, technical pleading requirements in some jurisdictions, local rules, and other factors cause considerable variation in the specific amounts of monetary damages asserted. In the Company’s experience, the monetary relief alleged in a lawsuit bears little relationship to an Asbestos Claim’s merits or its disposition value. Rather, several variables, including but not limited to, the type and severity of the asbestos disease, medical history, and exposure to other disease-causing agents; the product identification evidence against the Company and other co-defendants; the defenses available to the Company and other co-defendants; the specific jurisdiction in which the claim is made; the applicable law; and the law firm representing the claimant, affect the value.

The Company has also been a defendant in other Asbestos Claims involving maritime workers, medical monitoring, co-defendants’ third-party actions, and property damage allegations. Based upon its experience, the Company believes that these categories of Asbestos Claims will not involve any material liability. Therefore, they are not included in the description of pending or disposed matters.

Since receiving its first Asbestos Claim, as of June 30, 2019, the Company in the aggregate has disposed of approximately 400,800 Asbestos Claims at an average indemnity payment of approximately $10,000 per claim. The Company’s asbestos indemnity payments have varied on a per-claim basis and are expected to continue to vary considerably over time. Asbestos-related cash payments for 2018, 2017, and 2016 were $105 million, $110 million, and $125 million, respectively. The Company’s cash payments per claim disposed (inclusive of legal costs) were approximately $86,000, $83,000 and $71,000 for the years ended December 31, 2018, 2017, and 2016, respectively.

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The Company’s objective is to achieve, where possible, resolution of Asbestos Claims pursuant to claims-handling agreements. Failure of claimants to meet certain medical and product exposure criteria in claims-handling agreements generally has reduced the number of claims that would otherwise have been received by the Company in the tort system. In addition, changes in jurisdictional dynamics, legislative acts, asbestos docket management and procedures, the substantive law, the co-defendant pool, and other external factors have affected lawsuit volume, claim volume, qualification rates, claim values, and related matters. Collectively, these variables generally have had the effect of increasing the Company’s per-claim average indemnity payment over time.

Beginning with the initial liability of $975 million established in 1993, the Company has accrued a total of approximately $5.0 billion through June 30, 2019, before insurance recoveries, for its asbestos-related liability. The Company’s estimates of its liability have been significantly affected by, among other factors, the volatility of asbestos-related litigation in the United States, the significant number of co-defendants that have filed for bankruptcy, changes in mortality rates, the inherent uncertainty of future disease incidence and claiming patterns against the Company, the significant expansion of the types of defendants that are now sued in this litigation, and the continuing changes in the extent to which these defendants participate in the resolution of cases in which the Company is also a defendant.

The Company continues to monitor trends that may affect its ultimate liability and analyze the developments and variables likely to affect the resolution of Asbestos Claims against the Company. The material components of the Company’s total accrued liability are determined by the Company in connection with its annual comprehensive legal review and consist of the following estimates, to the extent it is probable that such liabilities have been incurred and can be reasonably estimated: (i) the liability for Asbestos Claims already asserted against the Company; (ii) the liability for Asbestos Claims not yet asserted against the Company; and (iii) the legal defense costs estimated to be incurred in connection with the Asbestos Claims already asserted and those Asbestos Claims the Company believes will be asserted.

The Company conducts an annual comprehensive legal review of its asbestos-related liabilities and costs in connection with finalizing and reporting its annual results of operations, unless significant changes in trends or new developments warrant an earlier review. As part of its annual comprehensive legal review, the Company provides historical Asbestos Claims’ data to a third party with expertise in determining the impact of disease incidence and mortality on future filing trends to develop information to assist the Company in estimating the total number of future Asbestos Claims likely to be asserted against the Company. The Company uses this estimate, along with an estimation of disposition costs and related legal costs, as inputs to develop its best estimate of its total probable liability. If the results of the annual comprehensive legal review indicate that the existing amount of the accrued liability is lower (higher) than its reasonably estimable asbestos-related costs, then the Company will record an appropriate charge (credit) to the Company’s results of operations to increase (decrease) the accrued liability.

The significant assumptions underlying the material components of the Company’s accrual are:

a) settlements will continue to be limited almost exclusively to claimants who were exposed to the Company’s asbestos containing insulation prior to its exit from that business in 1958;

b) Asbestos Claims will continue to be resolved primarily under the Company’s administrative claims-handling agreements or on terms comparable to those set forth in those agreements;

c) the incidence of serious asbestos-related disease cases and claiming patterns against the Company for such cases do not change materially;

d) the Company is substantially able to defend itself successfully at trial and on appeal;

e) the number and timing of additional co-defendant bankruptcies do not change significantly the assets available to participate in the resolution of cases in which the Company is a defendant; and

f) co-defendants with substantial resources and assets continue to participate significantly in the resolution of future Asbestos Claims.

For the years ended December 31, 2018 and 2017, the Company concluded that accruals in the amounts of $602 million and $582 million, respectively, were required. These amounts have not been discounted for the time value of money. The Company’s comprehensive legal reviews resulted in charges of $125 million, $0 million and $0 million for the years ended December 31, 2018, 2017 and 2016, respectively. As previously disclosed, the Company anticipated that adjustments to its asbestos-related accruals were possible given the inherent uncertainties involved in asbestos litigation. In the fourth quarter of 2018, the Company determined that it was advantageous to accelerate the disposition

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of certain claims in light of additional information the Company obtained about higher estimated future claim volumes and values in certain of the affected discrete streams of potential liability. Factors impacting the increased likelihood of these additional losses included changes in the law, procedure, the expansion of judicial resources in certain jurisdictions, and renewed attention to dockets of non-mesothelioma cases. The Company also obtained new information about other Asbestos Claims, which had the effect of reducing its asbestos-related liability. The combined effect of these items resulted in a change in estimate of the Company’s asbestos-related liability.

The Company believes that it is reasonably possible that it will incur a loss for its asbestos-related liabilities in excess of the amount currently recognized, which was $602 million as of December 31, 2018. The Company estimated that reasonably possible losses could result in asbestos-related liabilities of approximately $722 million. This estimate of additional reasonably possible loss reflects a qualitative judgment regarding the nature of contingencies that could impact future Asbestos Claims and legal costs, which include, but are not limited to, successful attempts by plaintiffs to challenge existing legal barriers to entry, enact plaintiff-oriented procedural rules or liability or damage-related legislation, establish new theories of liability, revive long-dormant inventories of non-mesothelioma cases, or leverage changing jurisdictional dynamics and a changing litigation environment to increase the volume of Asbestos Claims presented or per-claim indemnity values. However, it is also possible that the ultimate amount of asbestos-related liabilities could be above this estimate.

The Company expects a significant majority of the total number of Asbestos Claims to be received in the next five to seven years. This timeframe appropriately reflects the mortality of current and expected claimants in light of the Company’s sale of its insulation business unit in 1958. The Company may continue to experience increased year-over-year variability with regard to the annual quantity of Asbestos Claims presented to and disposed by the Company. This increased variability, jurisdictional dynamics, a changing litigation environment, the size of the remaining pool of claimants, and the expected increase in mortality over the next five to seven years may present the Company with further opportunities to accelerate disposition of discrete parts of its claimant pool. These influences may create increased variability in the annual cash payments year-over-year.

The Company’s asbestos-related liability is based on a projection of new Asbestos Claims that will eventually be filed against the Company and the estimated average disposition cost of these claims and related legal costs. Changes in these projections, and estimates, as well as changes in the significant assumptions noted above, have the potential to significantly impact the estimation of the Company’s asbestos-related liability.

Other Matters

Other litigation is pending against the Company, in many cases involving ordinary and routine claims incidental to the business of the Company and in others presenting allegations that are non-routine and involve compensatory, punitive or treble damage claims as well as other types of relief. The Company records a liability for such matters when it is both probable that the liability has been incurred and the amount of the liability can be reasonably estimated. Recorded amounts are reviewed and adjusted to reflect changes in the factors upon which the estimates are based, including additional information, negotiations, settlements and other events.

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11. Share Owners’ Equity

The activity in share owners’ equity for the three months ended June 30, 2019 and 2018 is as follows:

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on April 1, 2019	$	2		3,130		(745)		412		(1,911)		122	$	1,010
Reissuance of common stock (0.1 million shares)						3								3
Stock compensation (0.5 million shares)				6										6
Net earnings								65				5		70
Other comprehensive income (loss)										20		(12)		8
Dividends declared								(7)						(7)
Balance on June 30, 2019	$	2	$	3,136	$	(742)	$	470	$	(1,891)	$	115	$	1,090

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on April 1, 2018	$	2		3,104		(595)		182		(1,704)		130	$	1,119
Reissuance of common stock (0.03 million shares)						3								3
Treasury shares purchased (2.7 million shares)						(50)								(50)
Stock compensation (0.5 million shares)				11										11
Net earnings								50				6		56
Other comprehensive loss										(225)		(15)		(240)
Balance on June 30, 2018	$	2	$	3,115	$	(642)	$	232	$	(1,929)	$	121	$	899

The activity in share owners’ equity for the six months ended June 30, 2019 and 2018 is as follows:

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on January 1, 2019	$	2		3,124		(705)		333		(1,968)		114	$	900
Issuance of common stock (0.1 million shares)				2										2
Reissuance of common stock (0.2 million shares)				(1)		6								5
Treasury shares purchased (2.1 million shares)						(38)								(38)
Stock compensation (1.7 million shares)				11										11
Net earnings								144				10		154
Other comprehensive income (loss)										77		(9)		68
Dividends declared								(7)						(7)
Other						(5)								(5)
Balance on June 30, 2019	$	2	$	3,136	$	(742)	$	470	$	(1,891)	$	115	$	1,090

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	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on January 1, 2018	$	2		3,099		(551)		85		(1,827)		119	$	927
Reissuance of common stock (0.3 million shares)						4								4
Treasury shares purchased (4.7 million shares)						(95)								(95)
Stock compensation (0.3 million shares)				16										16
Net earnings								147				11		158
Other comprehensive loss										(102)		(9)		(111)
Balance on June 30, 2018	$	2	$	3,115	$	(642)	$	232	$	(1,929)	$	121	$	899

During the three months ended June 30, 2018, the Company purchased 2,676,363 shares of its common stock for approximately $50 million. During the six months ended June 30, 2019 and 2018, the Company purchased 2,064,652 and 4,676,122 shares of its common stock for approximately $38 million and $95 million, respectively. The stock purchases were pursuant to the authorization by its Board of Directors that had approximately $512 million in remaining purchase authority as of June 30, 2019.

The Company has 250,000,000 shares of common stock authorized with a par value of $.01 per share. Shares outstanding are as follows:

	Shares Outstanding (in thousands)
	June 30,	December 31,	June 30,
	2019	2018	2018
Shares of common stock issued (including treasury shares)	188,435	186,576	186,423
Treasury shares	32,978	30,918	27,176

12. Accumulated Other Comprehensive Loss

The activity in accumulated other comprehensive loss for the three months ended June 30, 2019 and 2018 is as follows:

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on April 1, 2019	$	(843)		(13)			(1,055)		$	(1,911)
Change before reclassifications		13		(4)						9
Amounts reclassified from accumulated other comprehensive income (loss)				(6)	(a)		12	(b)		6
Translation effect				1			4			5
Tax effect										—
Other comprehensive income (loss) attributable to the Company		13		(9)			16			20
Balance on June 30, 2019	$	(830)	$	(22)		$	(1,039)		$	(1,891)

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									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on April 1, 2018	$	(603)	$	(17)		$	(1,084)		$	(1,704)
Change before reclassifications		(253)		18			(3)			(238)
Amounts reclassified from accumulated other comprehensive income (loss)				(18)	(a)		16	(b)		(2)
Translation effect				(1)			16			15
Other comprehensive income (loss) attributable to the Company		(253)		(1)			29			(225)
Balance on June 30, 2018	$	(856)	$	(18)		$	(1,055)		$	(1,929)

(a) Amount is included in Cost of goods sold and Other expense, net on the Condensed Consolidated Results of Operations (see Note 4 for additional information).

(b) Amount is included in the computation of net periodic pension cost (see Note 6 for additional information) and net postretirement benefit cost.

The activity in accumulated other comprehensive loss for the six months ended June 30, 2019 and 2018 is as follows:

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on January 1, 2019	$	(889)		(18)			(1,061)		$	(1,968)
Change before reclassifications		59		7			(2)			64
Amounts reclassified from accumulated other comprehensive income (loss)				(17)	(a)		25	(b)		8
Translation effect				3			(1)			2
Tax effect				3						3
Other comprehensive income (loss) attributable to the Company		59		(4)			22			77
Balance on June 30, 2019	$	(830)	$	(22)		$	(1,039)		$	(1,891)

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on January 1, 2018	$	(724)		(12)			(1,091)		$	(1,827)
Change before reclassifications		(132)		4			(7)			(135)
Amounts reclassified from accumulated other comprehensive income (loss)				(9)	(a)		33	(b)		24
Translation effect				(1)			10			9
Other comprehensive income (loss) attributable to the Company		(132)		(6)			36			(102)
Balance on June 30, 2018	$	(856)	$	(18)		$	(1,055)		$	(1,929)

(a) Amount is included in Cost of goods sold and Other expense, net on the Condensed Consolidated Results of Operations (see Note 4 for additional information).

(b) Amount is included in the computation of net periodic pension cost (see Note 6 for additional information) and

23

net postretirement benefit cost.

13. Other Expense (Income), net

Other expense (income), net for the three and six months ended June 30, 2019 and 2018 included the following:

	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Restructuring, asset impairment and other charges	$	38	$	68	$	38	$	68
Foreign currency exchange (gain) loss						3		(2)
Intangible amortization expense		10		10		20		20
Royalty income		(4)		(3)		(7)		(6)
Other expense (income), net		11		(3)		11		(11)
	$	55	$	72	$	65	$	69

14. Earnings Per Share

The following tables sets forth the computation of basic and diluted earnings per share:

	Three months ended June 30,
	2019		2018
Numerator:
Net earnings attributable to the Company	$	65	$	50
Denominator (in thousands):
Denominator for basic earnings per share-weighted average shares outstanding		155,338		160,858
Effect of dilutive securities:
Stock options and other		1,133		1,854
Denominator for diluted earnings per share-adjusted weighted average shares outstanding		156,471		162,712
Basic earnings per share:
Earnings from continuing operations	$	0.42	$	0.31
Loss from discontinued operations
Net earnings	$	0.42	$	0.31
Diluted earnings per share:
Earnings from continuing operations	$	0.42	$	0.31
Loss from discontinued operations
Net earnings	$	0.42	$	0.31

Options to purchase 1,603,692 and 1,989,521 weighted average shares of common stock, which were outstanding during the three months ended June 30, 2019 and 2018, respectively, were not included in the computation of diluted earnings per share because the options exercise price was greater than the average market price of the common shares.

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	Six months ended June 30,
	2019		2018
Numerator:
Net earnings attributable to the Company	$	144	$	147
Denominator (in thousands):
Denominator for basic earnings per share-weighted average shares outstanding		154,852		161,904
Effect of dilutive securities:
Stock options and other		1,703		2,060
Denominator for diluted earnings per share-adjusted weighted average shares outstanding		156,555		163,964
Basic earnings per share:
Earnings from continuing operations	$	0.94	$	0.91
Loss from discontinued operations		(0.01)		(0.01)
Net earnings	$	0.93	$	0.90
Diluted earnings per share:
Earnings from continuing operations	$	0.93	$	0.90
Loss from discontinued operations		(0.01)
Net earnings	$	0.92	$	0.90

Options to purchase 1,549,995 and 1,895,822 weighted average shares of common stock, which were outstanding during the six months ended June 30, 2019 and 2018, respectively, were not included in the computation of diluted earnings per share because the options exercise price was greater than the average market price of the common shares.

15. Supplemental Cash Flow Information

Income taxes paid (received) in cash were as follows:

	Six months ended June 30,
	2019		2018
U.S.	$	(3)	$	7
Non-U.S.		61		68
Total income taxes paid in cash	$	58	$	75

Interest paid in cash for the six months ended June 30, 2019 and 2018 was $128 million and $128 million, respectively.

The Company uses various factoring programs to sell certain receivables to financial institutions as part of managing its cash flows. At June 30, 2019, December 31, 2018 and June 30, 2018, the amount of receivables sold by the Company was $173 million, $600 million and $221 million, respectively. For the six months ended June 30, 2019 and 2018, the Company reduced the use of its factoring programs compared to the most recent respective year end periods and this resulted in a higher use of working capital, and corresponding decrease to cash from operating activities, of approximately $427 million and $233 million, respectively.

16. Discontinued Operations

On December 6, 2018, an ad hoc committee for the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) rejected the request by the Bolivarian Republic of Venezuela (“Venezuela”) to annul the award issued by an ICSID tribunal in favor of OI European Group B.V. (“OIEG”) related to the 2010 expropriation of OIEG’s majority interest in two plants in Venezuela (the “Award”). The annulment proceeding with respect to the Award is now concluded.

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On July 31, 2017, OIEG sold its right, title and interest in amounts due under the Award to an Ireland-domiciled investment fund. Under the terms of the sale, OIEG received a payment, in cash, at closing equal to $115 million (the “Cash Payment”). OIEG may also receive additional payments in the future (“Deferred Amounts”) calculated based on the total compensation that is received from Venezuela as a result of collection efforts or as settlement of the Award with Venezuela. OIEG’s right to receive any Deferred Amounts is subject to the limitations described below.

OIEG’s interest in any amounts received in the future from Venezuela in respect of the Award is limited to a percentage of such recovery after taking into account reimbursement of the Cash Payment to the purchaser and reimbursement of legal fees and expenses incurred by the Company and the purchaser. OIEG’s percentage of such recovery will also be reduced over time. Because the Award has yet to be satisfied and the ability to successfully enforce the Award in countries that are party to the ICSID Convention is subject to significant challenges, the Company is unable to reasonably predict the amount of recoveries from the Award, if any, to which the Company may be entitled in the future. Any future amounts that the Company may receive from the Award are highly speculative and the timing of any such future payments, if any, is highly uncertain. As such, there can be no assurance that the Company will receive any future payments under the Award beyond the Cash Payment.

As a result of the favorable ruling by an ICSID ad hoc committee rejecting Venezuela’s request to annul the OIEG Award, and thereby concluding those annulment proceedings, the Company recognized a $115 million gain from discontinued operations in the fourth quarter of 2018.

A separate arbitration involving other subsidiaries of the Company was initiated in 2012 to obtain compensation primarily for third-party minority shareholders’ lost interests in the two expropriated plants. However, on November 13, 2017, ICSID issued an award that dismissed this arbitration on jurisdiction grounds. In March 2018, the two subsidiaries of the Company submitted to ICSID an application to annul the November 13, 2017 award, and a hearing on the annulment was heard by an ad hoc committee of ICSID in July 2019; no decision has been rendered yet.

The loss from discontinued operations, which primarily reflects the ongoing costs for the Venezuelan expropriation, was approximately $1 million for each of the six month periods ended June 30, 2019 and 2018.

​
17. New Accounting Pronouncement

Leases - On January 1, 2019, the Company adopted ASU No. 2016-02, “Leases”. Under this guidance, lessees are required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The adoption of ASU No. 2016-02 had a significant impact on the Company’s consolidated balance sheet due to the recognition of approximately $214 million of lease liabilities with corresponding right-of-use assets for operating leases as of January 1, 2019. The adoption of ASU No. 2016-02 had no material impact on the Company’s retained earnings, consolidated results of operations or consolidated cash flows.

The Company elected the package of practical expedients relating to the identification, classification and initial direct costs of leases commencing before the effective date, and the transitional practical expedient for the treatment of existing land easements; however, the Company did not elect the hindsight transitional practical expedient. The Company has also elected the practical expedient to not account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the nonlease components (e.g., common-area maintenance costs). See Note 7, Leases, for additional information.

Credit Losses - In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The new guidance is effective for the Company on January 1, 2020. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

Income Taxes - In January 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which gives entities the option to reclassify to retained earnings the tax effects resulting from the U.S. Tax Cuts and Jobs Act

26

(the “Act”) related to items in Accumulated other comprehensive income (“AOCI”) that the FASB refers to as having been stranded in AOCI. The new guidance may be applied retrospectively to each period in which the effect of the Act is recognized in the period of adoption. The Company must adopt this guidance for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company adopted this standard in the first quarter of 2019. The Company has not elected to reclassify income tax effects of the Act from AOCI to retained earnings.

Disclosure Requirements for Fair Value Measurement - In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” which modifies the fair value disclosure requirements. Application of the standard is required for annual periods beginning after December 15, 2019. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

Disclosure Requirements for Defined Benefit Plans - In August 2018, the FASB issued ASU No. 2018-14, “Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” which modifies the defined benefit plan disclosure requirements. Application of the standard is required for annual periods beginning after December 15, 2020. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

18. Business Combinations

On June 28, 2019, the Company completed the acquisition of Nueva Fábrica Nacional de Vidrio, S. de R.L. de C.V. (“Nueva Fanal”) from Grupo Modelo, an affiliate of Anheuser-Busch InBev SA/NV for a total purchase price of approximately $195 million. In the second quarter of 2019, the Company paid approximately $157 million in cash toward this acquisition and the remaining approximately $38 million is expected to be paid by the end of 2019, subject to a working capital adjustment. The Company financed this acquisition with debt. The Nueva Fanal facility is located near Mexico City, Mexico. Currently, this plant has four furnaces to produce and supply approximately 300,000 tons of glass containers annually for Grupo Modelo brands, such as Corona, for local and global export markets. Further, O-I has entered into a long-term agreement to continue to supply glass to Grupo Modelo. This acquisition increases the Company’s presence in the Mexican glass packaging market.

Nueva Fanal’s operating results are included in the Company’s unaudited condensed consolidated financial statements from the acquisition date as part of the Americas segment. The acquisition qualifies as a business combination and will be accounted for using the acquisition method of accounting.

The total purchase price will be allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values.  The purchase agreement contains customary provisions for working capital adjustments, which the Company expects to resolve with the seller by the end of 2019.  The aggregate purchase price was preliminarily allocated to the Company’s balance sheet as of June 30, 2019 and has not yet been finalized because the Company has not yet completed its review of the asset and liability values and related amortization and depreciation periods.  The following table summarizes the preliminary estimates of fair value of the assets and liabilities assumed on June 28, 2019:

Accounts receivable	$	42
Inventory		17
Long lived assets (includes PP&E and intangibles)		164
Total assets		223
Accounts payable		25
Accrued liabilities		3
Net assets acquired	$	195

This acquisition did not meet the thresholds for a significant acquisition and therefore no pro forma financial information is presented.

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19. Subsequent Events

In July 2019, a subsidiary of the Company redeemed €250 million aggregate principal amount to holders of its outstanding 6.75% senior notes due 2020 (the “Notes”). Following the redemption, €250 million aggregate principal amount of the Notes remain outstanding.

The Notes were redeemed at a price equal to the sum of the principal amount of the Notes to be redeemed, the applicable premium calculated in accordance with the terms of the Notes and the related indenture, and the accrued and unpaid interest on the Notes up to, but not including, the redemption date. In the third quarter of 2019, the Company recorded note repurchase premiums and the write-off of deferred finance fees of approximately $24 million related to the redeemed Notes.  The Company funded the redemption with cash on hand and revolver borrowings.

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

The Company’s measure of profit for its reportable segments is segment operating profit, which consists of consolidated earnings from continuing operations before interest income, interest expense, and provision for income taxes and excludes amounts related to certain items that management considers not representative of ongoing operations as well as certain retained corporate costs. The segment data presented below is prepared in accordance with general accounting principles for segment reporting. The lines titled “reportable segment totals” in both net sales and segment operating profit, however, are non-GAAP measures when presented outside of the financial statement footnotes. Management has included reportable segment totals below to facilitate the discussion and analysis of financial condition and results of operations and believes this information allows the board of directors, management, investors and analysts to better understand the Company’s financial performance. The Company’s management uses segment operating profit, in combination with net sales and selected cash flow information, to evaluate performance and to allocate resources. Segment operating profit is not, however, intended as an alternative measure of operating results as determined in accordance with U.S. GAAP and is not necessarily comparable to similarly titled measures used by other companies.

Financial information for the three and six months ended June 30, 2019 and 2018 regarding the Company’s reportable segments is as follows (dollars in millions):

	Three months ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
Net Sales:
Americas	$	934	$	930	$	1,815	$	1,838
Europe		650		674		1,246		1,317
Asia Pacific		152		153		303		326
Reportable segment totals		1,736		1,757		3,364		3,481
Other		20		15		29		27
Net Sales	$	1,756	$	1,772	$	3,393	$	3,508

	Three months ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
Segment operating profit:
Americas	$	144	$	152	$	257	$	299
Europe		90		101		169		173
Asia Pacific		2		2		10		7
Reportable segment totals		236		255		436		479
Items excluded from segment operating profit:
Retained corporate costs and other		(28)		(30)		(53)		(57)
Restructuring, asset impairment and other charges		(42)		(73)		(42)		(73)
Interest expense, net		(68)		(74)		(132)		(136)
Earnings from continuing operations before income taxes		98		78		209		213
Provision for income taxes		(27)		(22)		(54)		(54)
Earnings from continuing operations		71		56		155		159
Loss from discontinued operations		(1)				(1)		(1)
Net earnings		70		56		154		158
Net earnings attributable to noncontrolling interests		(5)		(6)		(10)		(11)
Net earnings attributable to the Company	$	65	$	50	$	144	$	147
Net earnings from continuing operations attributable to the Company	$	66	$	50	$	145	$	148

Note: All amounts excluded from reportable segment totals are discussed in the following applicable sections.

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Executive Overview — Quarters ended June 30, 2019 and 2018

Second Quarter 2019 Highlights

● Net sales in the second quarter of 2019 were down slightly with the same quarter in 2018, primarily due to the unfavorable effects of changes in foreign currency exchange rates, partially offset by higher prices.

● Segment operating profit for reportable segments was down 7% in the second quarter of 2019 compared to the second quarter of 2018, driven by lower segment profit in the Americas and Europe.

● On June 28, 2019, the Company completed its acquisition of a four furnace glass plant located near Mexico City, Mexico for a total purchase price of approximately $195 million. O-I has also entered into a long-term glass supply agreement to continue to supply Grupo Modelo brands, such as Corona, for local and global export markets.

● The Company entered into a new $3.0 billion senior secured credit facility with a final maturity date of June 2024.

Net sales for the second quarter of 2019 were $16 million lower than the second quarter of the prior year primarily due to the unfavorable effect of changes in foreign currency exchange rates, partially offset by higher prices.

Earnings from continuing operations before income taxes were $20 million higher in the second quarter of 2019 than the prior year quarter, primarily due to a decrease in charges related to restructuring activities and the write-off of finance fees. Segment operating profit for reportable segments for the second quarter of 2019 was $19 million lower than the second quarter of the prior year. While the benefit of higher selling prices more than offset cost inflation, operating costs were higher than the prior year. Increased costs reflected additional costs to commission a new joint venture furnace, unexpected weather related downtime and timing of an energy credit.

Net interest expense for the second quarter of 2019 decreased $6 million compared to the second quarter of 2018. Net interest expense included $2 million and $11 million of deferred finance fees written off and third party fees in the second quarters of 2019 and 2018, respectively, that related to debt that was repaid prior to its maturity.

For the second quarter of 2019, the Company recorded net earnings from continuing operations attributable to the Company of $66 million, or $0.42 per share (diluted), compared to $50 million, or $0.31 per share (diluted), in the second quarter of 2018. Earnings in the second quarter of 2019 and the second quarter of 2018 included items that management considered not representative of ongoing operations. These items decreased earnings attributable to the Company by $42 million, or $0.27 per share, in the second quarter of 2019 and decreased net earnings attributable to the Company by $75 million, or $0.46 per share in the second quarter of 2018.

Results of Operations — Second Quarter of 2019 compared with Second Quarter of 2018

Net Sales

The Company’s net sales in the second quarter of 2019 were $1,756 million compared with $1,772 million for the second quarter of 2018, a decrease of $16 million, or 1%. Unfavorable foreign currency exchange rates decreased sales by $59 million in the second quarter of 2019 compared to the prior year quarter as the U.S. dollar strengthened against the Australian dollar, Brazilian real, Colombian peso and the Euro. Higher selling prices increased net sales by $44 million in the quarter. Total glass container shipments, in tonnes, were comparable in the second quarter of 2019 to the prior year quarter, however, an unfavorable sales mix decreased net sales by $6 million.

The change in net sales of reportable segments can be summarized as follows (dollars in millions):

Reportable segment net sales - 2018			$	1,757
Price	$	44
Sales volume and mix		(6)
Effects of changing foreign currency rates		(59)
Total effect on reportable segment net sales				(21)
Reportable segment net sales - 2019			$	1,736

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Americas: Net sales in the Americas in the second quarter of 2019 were $934 million compared with $930 million for the second quarter of 2018, an increase of $4 million, or less than 1%. Higher selling prices increased net sales by $27 million in the second quarter of 2019. Total glass container shipments in the region were up nearly 1% in the second quarter of 2019 compared to the prior year quarter, driven primarily by higher shipments to alcoholic beverage customers. Year over year shipments in Brazil, Colombia and Mexico were strong compared to the second quarter in the prior year. In the U.S., sales volumes were primarily impacted by lower shipments to alcoholic beverage customers, largely due to ongoing trends in beer shipments. Overall, changes in mix in the region decreased net sales by $5 million in the second quarter of 2019. The unfavorable effects of foreign currency exchange rate changes decreased net sales $18 million in the second quarter of 2019 compared to 2018.

Europe: Net sales in Europe in the second quarter of 2019 were $650 million compared with $674 million for the second quarter of 2018, a decrease of $24 million, or 4%. Unfavorable foreign currency exchange rates impacted the region by approximately $33 million in the second quarter of 2019 as the Euro weakened in relation to the U.S. dollar. Glass container shipments in the second quarter of 2019 were down approximately 2% compared to the same quarter in 2018, primarily driven by lower alcoholic beverage shipments due to extreme weather conditions in the later part of the quarter, resulting in $8 million of lower net sales. Selling prices in Europe increased net sales by $17 million in the second quarter of 2019 compared to the same period in the prior year.

Asia Pacific: Net sales in Asia Pacific in the second quarter of 2019 were $152 million compared with $153 million for the second quarter of 2018, a decrease of $1 million, or less than 1%. Glass container shipments in the second quarter of 2019 were up nearly 7% with the prior year period and improved across nearly all end-use categories. Despite modestly lower shipments in Australia due to lower beer demand, higher shipment levels in China and other markets led to overall improved sales volumes in the region in the second quarter. This resulted in $7 million of higher sales in the second quarter of 2019 compared to the prior year quarter. The effects of foreign currency exchange rate changes in the current year quarter decreased net sales by $8 million.

Earnings from Continuing Operations before Income Taxes and Segment Operating Profit

Earnings from continuing operations before income taxes were $98 million in the second quarter of 2019 compared to $78 million in the second quarter of 2018, an increase of $20 million, or 26%. This increase was primarily related to a decrease in charges related to restructuring activities and the write-off of finance fees in the second quarter of 2019 compared to the second quarter of 2018.

Operating profit of the reportable segments includes an allocation of some corporate expenses based on a percentage of sales and direct billings based on the costs of specific services provided. Unallocated corporate expenses and certain other expenses not directly related to the reportable segments’ operations are included in Retained corporate costs and other. For further information, see Segment Information included in Note 1 to the Condensed Consolidated Financial Statements.

Segment operating profit of reportable segments in the second quarter of 2019 was $236 million compared to $255 million for the second quarter of 2018, a decrease of $19 million, or 8%. The decrease was largely attributable to higher operating costs and unfavorable foreign currency effects, partially offset by higher selling prices.

The change in segment operating profit of reportable segments can be summarized as follows (dollars in millions):

Reportable segment operating profit - 2018			$	255
Price	$	44
Sales volume and mix		(1)
Operating costs		(57)
Effects of changing foreign currency rates		(5)
Total net effect on reportable segment operating profit				(19)
Reportable segment operating profit - 2019			$	236

Americas: Segment operating profit in the Americas in the second quarter of 2019 was $144 million compared with $152 million in the second quarter of 2018, a decrease of $8 million, or 5%. Selling prices were $27 million higher in the current year quarter compared to the prior year quarter. Segment operating profit was impacted by $45 million of higher operating costs in the second quarter of 2019 than the same quarter in the prior year, driven by cost inflation,

31

costs incurred to commission a new joint venture furnace and weather-related downtime. Partially offsetting this, the region’s restructuring actions in 2018 and 2019 have reduced operating costs by approximately $9 million in the second quarter of 2019, in line with management’s expectations. The effects of foreign currency exchange rates increased segment operating profit by $1 million in the current year quarter.

Europe: Segment operating profit in Europe in the second quarter of 2019 was $90 million compared with $101 million in the second quarter of 2018, a decrease of $11 million, or 11%. The decrease in sales volume discussed above decreased segment operating profit in the current year quarter by $2 million. The effects of foreign currency exchange rates decreased segment operating profit by $5 million in the current year quarter. Selling prices were $17 million higher in the current quarter compared to the prior year quarter. Segment operating profit in the second quarter of 2019 decreased due to approximately $12 million of higher operating costs compared to the same period in the prior year, driven by cost inflation. Segment operating income was also impacted by $9 million due to the nonoccurrence of an energy credit from a local government entity that was received in the first quarter of this year versus the second quarter of the prior year.

Asia Pacific: Segment operating profit in Asia Pacific in the second quarter of 2019 was $2 million compared with $2 million in the second quarter of 2018. The increase and change in sales mix discussed above increased segment operating profit by $1 million. The effects of foreign currency exchange rates decreased segment operating profit by $1 million in the current year quarter. The region also benefitted from improved operating costs as a result of increased productivity, but this was offset by the acceleration of planned maintenance and a furnace rebuild.

Interest Expense, Net

Net interest expense for the second quarter of 2019 was $68 million compared with $74 million for the second quarter of 2018. Net interest expense included $2 million and $11 million in the second quarter of 2019 and 2018, respectively, for the write off of deferred finance fees and third party fees related to debt that was repaid prior to its maturity. Exclusive of these items, net interest expense increased $3 million in the second quarter of 2019 compared to the same quarter in the prior year due to higher debt balances throughout the quarter.

Provision for Income Taxes

The Company’s effective tax rate from continuing operations for the three months ended June 30, 2019 was 27.6% compared with 28.2% for the three months ended June 30, 2018. The effective tax rate for the second quarter of 2019 was lower than the same period in 2018 due, in part, to the geographic mix of earnings.

Net Earnings from Continuing Operations Attributable to the Company

For the second quarter of 2019, the Company recorded net earnings from continuing operations attributable to the Company of $66 million, or $0.42 per share (diluted), compared to $50 million, or $0.31 per share (diluted), in the second quarter of 2018. Earnings in the second quarter of 2019 and the second quarter of 2018 included items that management considered not representative of ongoing operations. These items decreased earnings attributable to the Company by $42 million, or $0.27 per share, in the second quarter of 2019 and decreased net earnings attributable to the Company by $75 million, or $0.46 per share in the second quarter of 2018 as set forth in the following table (dollars in millions):

	Net Earnings		Net Earnings
	Increase		Increase
	(Decrease)		(Decrease)
Description	2019		2018
Restructuring, asset impairment, pension settlement and other charges	$	(42)	$	(73)
Write-off of unamortized finance fees and third party fees		(2)		(11)
Net tax benefit for income tax on items above		2		9
Total	$	(42)	$	(75)

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Executive Overview — Six Months ended June 30, 2019 and 2018

2019 Highlights

● Net sales in the first six months of 2019 were down 3% from the same period in 2018, primarily due to the unfavorable effects of changes in foreign currency exchange rates and lower volumes, partially offset by higher prices.

● Segment operating profit for reportable segments was down 9% in the first half of 2019 compared to the same period in 2018, primarily due to lower segment operating profit in the Americas.

● On June 28, 2019, the Company completed its acquisition of a four furnace glass plant located near Mexico City, Mexico for a total purchase price of approximately $195 million. O-I has also entered into a long-term glass supply agreement to continue to supply Grupo Modelo brands, such as Corona, for local and global export markets.

● The Company entered into a new $3.0 billion senior secured credit facility with a final maturity date of June 2024.

● The Company repurchased approximately 2.1 million shares of its common stock during the first half of 2019 for approximately $38 million and paid dividends of approximately $16 million.

Net sales for the first six months of 2019 were $115 million lower than the same period in the prior year primarily due to the unfavorable effect of changes in foreign currency exchange rates and lower sales volumes, partially offset by higher prices.

Earnings from continuing operations before income taxes were $4 million lower in the first six months of 2019 than in the same period in the prior year, primarily due to a decrease in segment operating profit partially offset by a decrease in charges related to restructuring activities and the write-off of finance fees in 2019 compared to 2018. Segment operating profit for reportable segments for the first six months of 2019 was $43 million lower than the same period in the prior year, driven by lower segment operating profit in the Americas.

Net interest expense for the first half of 2019 decreased $4 million compared to the same period in 2018. Net interest expense included $2 million and $11 million for the write-off of deferred finance fees and third party fees in the first six months of 2019 and 2018, respectively, that related to debt that was repaid prior to its maturity.

For the first six months of 2019, the Company recorded net earnings from continuing operations attributable to the Company of $145 million, or $0.93 per share (diluted), compared to $148 million, or $0.90 per share (diluted), in the first six months of 2018. Earnings in the first six months of 2019 and the first six months of 2018 included items that management considered not representative of ongoing operations. These items decreased earnings attributable to the Company by $42 million, or $0.27 per share, in the first six months of 2019 and decreased net earnings attributable to the Company by $75 million, or $0.46 per share in the first six months of 2018.

Results of Operations — First six months of 2019 compared with first six months of 2018

Net Sales

The Company’s net sales in the first six months of 2019 were $3,393 million compared with $3,508 million for the first six months of 2018, a decrease of $115 million, or 3%. Unfavorable foreign currency exchange rates decreased sales by $156 million in the first six months of 2019 compared to the prior year period as the U.S. dollar strengthened against the Australian dollar, Brazilian real, Colombian peso and the Euro. Total glass container shipments, in tonnes, were approximately 1% lower in the first half of 2019 compared to the prior year period. Sales volume and mix decreased net sales by $47 million. Higher selling prices increased net sales by $86 million in 2019.

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The change in net sales of reportable segments can be summarized as follows (dollars in millions):

Reportable segment net sales - 2018			$	3,481
Price	$	86
Sales volume and mix		(47)
Effects of changing foreign currency rates		(156)
Total effect on reportable segment net sales				(117)
Reportable segment net sales - 2019			$	3,364

Americas: Net sales in the Americas in the first six months of 2019 were $1,815 million compared with $1,838 million in the same period in 2018, a decrease of $23 million, or 1%. Higher selling prices increased net sales by $54 million in the first six months of 2019. Total glass container shipments in the region were down approximately 1% in the first six months of 2019 compared to the prior year period, driven primarily by lower shipments to alcoholic beverage and food customers. Year over year shipments in Brazil, Colombia and Mexico were strong compared to the first six months in the prior year. In the U.S., sales volumes were primarily impacted by lower shipments to food and alcoholic beverage customers, largely due to ongoing trends in beer shipments and the transfer of production to the Company’s joint venture with Constellation Brands. Overall, lower shipments and changes in mix in the region decreased net sales by $26 million in the first six months of 2019. The unfavorable effects of foreign currency exchange rate changes decreased net sales $51 million in the first six months of 2019 compared to 2018.

Europe: Net sales in Europe in the first six months of 2019 were $1,246 million compared with $1,317 million for the same period in 2018, a decrease of $71 million, or 5%. Unfavorable foreign currency exchange rates impacted the region by approximately $84 million in the first six months of 2019 as the Euro weakened in relation to the U.S. dollar. Glass container shipments in the first six months of 2019 were down approximately 2% compared to the same period in 2018, primarily driven by capacity constraints and extreme weather conditions, resulting in $19 million of lower net sales. Selling prices in Europe increased net sales by $32 million in the first half of 2019 compared to the same period in the prior year.

Asia Pacific: Net sales in Asia Pacific in the first six months of 2019 were $303 million compared with $326 million for the same period in 2018, a decrease of $23 million, or 7%. Glass container shipments in the first six months of 2019 were up slightly compared with the same period in the prior year, but an unfavorable mix resulted in $2 million of lower sales in the first half of 2019 compared to the same period in the prior year. The effects of foreign currency exchange rate changes in the current year period decreased net sales by $21 million.

Earnings from Continuing Operations before Income Taxes and Segment Operating Profit

Earnings from continuing operations before income taxes were $209 million in the first half of 2019 compared to $213 million in the first half of 2018, a decrease of $4 million, or 2%. This decrease was primarily due to a decrease in segment operating profit, partially offset by a decrease in charges related to restructuring activities.

Operating profit of the reportable segments includes an allocation of some corporate expenses based on a percentage of sales and direct billings based on the costs of specific services provided. Unallocated corporate expenses and certain other expenses not directly related to the reportable segments’ operations are included in Retained corporate costs and other. For further information, see Segment Information included in Note 1 to the Condensed Consolidated Financial Statements.

Segment operating profit of reportable segments in the first half of 2019 was $436 million compared to $479 million for the first half of 2018, a decrease of $43 million, or 9%. The decrease was largely attributable to the unfavorable effect of changes in foreign currency, lower sales volumes and higher operating costs, partially offset by higher selling prices.

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The change in segment operating profit of reportable segments can be summarized as follows (dollars in millions):

Reportable segment operating profit - 2018			$	479
Price	$	86
Sales volume and mix		(10)
Operating costs		(102)
Effects of changing foreign currency rates		(17)
Total net effect on reportable segment operating profit				(43)
Reportable segment operating profit - 2019			$	436

Americas: Segment operating profit in the Americas in the first six months of 2019 was $257 million compared with $299 million in the same period in 2018, a decrease of $42 million, or 14%. The decrease in sales volume discussed above decreased segment operating profit in the first half of 2019 by $3 million. Selling prices were $54 million higher in the first half of 2019 compared to the same period in the prior year. Segment operating profit was impacted by $97 million of higher operating costs in the first half of 2019 than the same period in the prior year, driven by cost inflation and costs incurred to add production capacity at several plants and weather-related downtime. Segment operating profit in the region was also impacted by $7 million of lower insurance gains in the first six months of 2019 than in the same period in the prior year. Partially offsetting this, the region’s restructuring actions in 2018 and 2019 have reduced operating costs by approximately $17 million in the first six months of 2019, in line with management’s expectations. The effects of foreign currency exchange rates decreased segment operating profit by $6 million in the first six months of 2019, which included a $2 million impact from the highly-inflationary basis of accounting in the region’s operations in Argentina.

Europe: Segment operating profit in Europe in the first half of 2019 was $169 million compared with $173 million in the same period in 2018, a decrease of $4 million, or 2%. The decrease in sales volume discussed above decreased segment operating profit in the first half of 2019 by $5 million. The effects of foreign currency exchange rates decreased segment operating profit by $10 million in the first six months of 2019. Selling prices were $32 million higher in the first six months of 2019 compared to the same period in the prior year. Segment operating profit in the first six months of 2019 decreased due to approximately $21 million of higher operating costs compared to the same period in the prior year, primarily due to cost inflation.

Asia Pacific: Segment operating profit in Asia Pacific in the first half of 2019 was $10 million compared with $7 million in the first half of 2018, an increase of $3 million, or 43%. The change in sales mix discussed above reduced segment operating profit by $2 million. The effects of foreign currency exchange rates decreased segment operating profit by $1 million in the first six months of 2019. The region experienced approximately $12 million of lower operating costs, which benefited segment operating income, in the first half of 2019 compared to the same period in the prior year due to fewer asset improvement projects in 2019. Partially offsetting this, the region was impacted by the nonoccurrence of $6 million of gains related to land sales that were recorded in the first half of 2018.

Interest Expense, Net

Net interest expense for the first six months of 2019 was $132 million compared with $136 million for the first six months of 2018. Net interest expense included $2 million and $11 million in the first half of 2019 and 2018, respectively, for the write-off of deferred finance fees and third party fees that were related to debt that was repaid prior to its maturity. Exclusive of these items, net interest expense increased $5 million in the first six months of 2019 compared to the same period in the prior year due to higher debt levels.

Provision for Income Taxes

The Company’s effective tax rate from continuing operations for the six months ended June 30, 2019 was 25.8% compared with 25.4% for the six months ended June 30, 2018.  The effective tax rate for the first six months of 2019 was higher than the first six months of 2018 due, in part, to the geographic mix of earnings.

The Company expects that the full year effective tax rate for 2019 will range between approximately 24% and 26% (excluding the tax on items that management considers not representative of ongoing operations).

Net Earnings from Continuing Operations Attributable to the Company

For the first six months of 2019, the Company recorded net earnings from continuing operations attributable to the

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Company of $145 million, or $0.93 per share (diluted), compared to $148 million, or $0.90 per share (diluted), in the first six months of 2018. Earnings in 2019 and 2018 included items that management considered not representative of ongoing operations as set forth in the following table (dollars in millions):

	Net Earnings
	Increase
	(Decrease)
Description	2019		2018
Restructuring, asset impairment, pension settlement and other charges	$	(42)	$	(73)
Write-off of unamortized finance fees and third party fees		(2)		(11)
Net tax benefit for income tax on items above		2		9
Total	$	(42)	$	(75)

Items excluded from Reportable Segment Totals

Retained Corporate Costs and Other

Retained corporate costs and other for the second quarter of 2019 were $28 million compared with $30 million recorded in the second quarter of 2018. For the first six months of 2019, retained corporate costs and other were $53 million compared with $57 million for the same period in 2018. These costs were lower in 2019 primarily due to the benefit of recent organization simplification initiatives and lower management incentive compensation expense.

Discontinued Operations

On December 6, 2018, an ad hoc committee for the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) rejected the request by the Bolivarian Republic of Venezuela (“Venezuela”) to annul the award issued by an ICSID tribunal in favor of OI European Group B.V. (“OIEG”) related to the 2010 expropriation of OIEG’s majority interest in two plants in Venezuela (the “Award”). The annulment proceeding with respect to the Award is now concluded.

On July 31, 2017, OIEG sold its right, title and interest in amounts due under the Award to an Ireland-domiciled investment fund. Under the terms of the sale, OIEG received a payment, in cash, at closing equal to $115 million (the “Cash Payment”). OIEG may also receive additional payments in the future (“Deferred Amounts”) calculated based on the total compensation that is received from Venezuela as a result of collection efforts or as settlement of the Award with Venezuela. OIEG’s right to receive any Deferred Amounts is subject to the limitations described below.

OIEG’s interest in any amounts received in the future from Venezuela in respect of the Award is limited to a percentage of such recovery after taking into account reimbursement of the Cash Payment to the purchaser and reimbursement of legal fees and expenses incurred by the Company and the purchaser. OIEG’s percentage of such recovery will also be reduced over time. Because the Award has yet to be satisfied and the ability to successfully enforce the Award in countries that are party to the ICSID Convention is subject to significant challenges, the Company is unable to reasonably predict the amount of recoveries from the Award, if any, to which the Company may be entitled in the future. Any future amounts that the Company may receive from the Award are highly speculative and the timing of any such future payments, if any, is highly uncertain. As such, there can be no assurance that the Company will receive any future payments under the Award beyond the Cash Payment.

As a result of the favorable ruling by an ICSID ad hoc committee rejecting Venezuela’s request to annul the OIEG Award, and thereby concluding those annulment proceedings, the Company recognized a $115 million gain from discontinued operations in the fourth quarter of 2018.

A separate arbitration involving other subsidiaries of the Company was initiated in 2012 to obtain compensation primarily for third-party minority shareholders’ lost interests in the two expropriated plants. However, on November 13, 2017, ICSID issued an award that dismissed this arbitration on jurisdiction grounds. In March 2018, the two subsidiaries of the Company submitted to ICSID an application to annul the November 13, 2017 award, and a hearing on the annulment was heard by an ad hoc committee of ICSID in July 2019; no decision has been rendered yet.

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The loss from discontinued operations, which primarily reflects the ongoing costs for the Venezuelan expropriation, was approximately $1 million for each of the six month periods ended June 30, 2019 and 2018.

Capital Resources and Liquidity

On June 25, 2019, certain of the Company’s subsidiaries entered into a new Senior Secured Credit Facility (the “Agreement”), which amended and restated the previous credit agreement (the “Previous Agreement”). The proceeds from the Agreement were used to repay all outstanding amounts under the Previous Agreement. The Company recorded $2 million of additional interest charges for third party fees and the write-off of unamortized fees in the second quarter of 2019.

The Agreement provides for up to $3.0 billion of borrowings pursuant to term loans and revolving credit facilities. The term loans mature, and the revolving credit facilities terminate, in June 2024. At June 30, 2019, the Agreement includes a $300 million revolving credit facility, a $1.2 billion multicurrency revolving credit facility, and a $1.5 billion term loan A facility ($1,496 million net of debt issuance costs). At June 30, 2019, the Company had unused credit of $1.1 billion available under the Agreement. The weighted average interest rate on borrowings outstanding under the Agreement at June 30, 2019 was 3.71%.

The Agreement contains various covenants that restrict, among other things and subject to certain exceptions, the ability of the Company to incur certain indebtedness and liens, make certain investments, become liable under contingent obligations in certain defined instances only, make restricted payments, make certain asset sales within guidelines and limits, engage in certain affiliate transactions, participate in sale and leaseback financing arrangements, alter its fundamental business, and amend certain subordinated debt obligations.

The Agreement also contains one financial maintenance covenant, a Total Leverage Ratio (the “Leverage Ratio”), that requires the Company not to exceed a ratio of 5.0x calculated by dividing consolidated total debt, less cash and cash equivalents, by Consolidated EBITDA, with such Leverage Ratio decreasing to 4.50x for the quarter ending December 31, 2020 and thereafter, as defined and described in the Agreement. The maximum Leverage Ratio is subject to an increase of 0.5x for (i) any fiscal quarter during which certain qualifying acquisitions (as specified in the Agreement) are consummated and (ii) the following three fiscal quarters, provided that the Leverage Ratio shall not exceed 5.0x. The Leverage Ratio could restrict the ability of the Company to undertake additional financing or acquisitions to the extent that such financing or acquisitions would cause the Leverage Ratio to exceed the specified maximum.

Failure to comply with these covenants and other customary restrictions could result in an event of default under the Agreement. In such an event, the Company could not request borrowings under the revolving facilities, and all amounts outstanding under the Agreement, together with accrued interest, could then be declared immediately due and payable. Upon the occurrence and for the duration of a payment event of default, an additional default interest rate equal to 2.0% per annum will apply to all overdue obligations under the Agreement. If an event of default occurs under the Agreement and the lenders cause all of the outstanding debt obligations under the Agreement to become due and payable, this would result in a default under a number of other outstanding debt securities and could lead to an acceleration of obligations related to these debt securities. As of June 30, 2019, the Company was in compliance with all covenants and restrictions in the Agreement.  In addition, the Company believes that it will remain in compliance and that its ability to borrow funds under the Agreement will not be adversely affected by the covenants and restrictions.

The Leverage Ratio also determines pricing under the Agreement. The interest rate on borrowings under the Agreement is, at the Company’s option, the Base Rate or the Eurocurrency Rate, as defined in the Agreement, plus an applicable margin. The applicable margin is linked to the Leverage Ratio. The margins range from 1.00% to 1.50% for Eurocurrency Loans and from 0.00% to 0.50% for Base Rate Loans. In addition, a commitment fee is payable on the unused revolving credit facility commitments ranging from 0.20% to 0.30% per annum linked to the Leverage Ratio.

Obligations under the Agreement are secured by substantially all of the assets, excluding real estate and certain other excluded assets, of certain of the Company’s domestic subsidiaries and certain foreign subsidiaries. Such obligations are also secured by a pledge of intercompany debt and equity investments in certain of the Company’s domestic subsidiaries and, in the case of foreign obligations, of stock of certain foreign subsidiaries. All obligations under the Agreement are guaranteed by certain domestic subsidiaries of the Company, and certain foreign obligations under the Agreement are guaranteed by certain foreign subsidiaries of the Company.

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In order to maintain a capital structure containing appropriate amounts of fixed and floating-rate debt, the Company has entered into a series of interest rate swap agreements. These interest rate swap agreements were accounted for as either fair value hedges or cash flow hedges (see Note 4 to the Condensed Consolidated Financial Statements).

The Company assesses its capital raising and refinancing needs on an ongoing basis and may enter into additional credit facilities and seek to issue equity and/or debt securities in the domestic and international capital markets if market conditions are favorable. Also, depending on market conditions, the Company may elect to repurchase portions of its debt securities in the open market.

Cash Flows

Operating activities: Cash utilized in continuing operating activities was $662 million for the six months ended June 30, 2019, compared to $150 million utilized for the six months ended June 30, 2018. The increase in cash utilized by operating activities in the first six months of 2019 was primarily due to higher cash paid for asbestos-related payments and restructuring payments and higher working capital levels than in the same period in 2018. Working capital was a use of cash of $939 million in the first six months of 2019 compared to a use of cash of $586 million in the same period in 2018. The primary reasons for the higher use of working capital were higher accounts receivable balances and lower accounts payable balances than at year end 2018. As of June 30, 2019 and 2018, the Company reduced its level of accounts receivable factoring compared to the most recent respective year periods and this led to a use of cash from working capital in the first six months of 2019 and 2018. The reduction in accounts receivable factoring compared to the most recent year end period was approximately $195 million more in the first six months of 2019 than in 2018 and this contributed to a higher use of cash from working capital in the 2019 period. Also, the Company has continued to experience higher year over year sales levels in several countries, such as Brazil, Colombia and Mexico, and lower sales levels in the U.S. This change in the Company’s sales mix has impacted its receivables as longer payment terms are more common outside the U.S. Together, the impact of less factoring and a higher mix of sales outside the U.S. have negatively impacted the Company’s operating cash flows in the first six months of 2019.

Cash payments for restructuring activities were $29 million in the first six months of 2019 compared to $12 million in the same period in 2018, driven higher in 2019 by several restructuring projects in the Americas region and at the corporate headquarters. Also, asbestos-related payments in the first six months of 2019 were $103 million, or approximately $77 million higher compared to the same period in the prior year, due to the execution of the Company’s de-risking and accelerated claim disposition strategy. The Company continues to expect that its full year 2019 asbestos-related payments will approximate $160 million. See Note 10 to the Consolidated Financial Statements for additional information. In addition, the Company utilized approximately $30 million of cash for other operating items in the first six months of 2019 compared to $8 million of cash utilized by other items in the same period in 2018. This change was due, in part, to the nonoccurrence in 2019 of a dividend paid to the Company by a joint venture investment in 2018 since the joint venture is utilizing its cash for a major project in the current year.

Investing activities: Cash utilized in investing activities was $410 million for the six months ended June 30, 2019, compared to $287 million utilized for the six months ended June 30, 2018. Capital spending for property, plant and equipment was $233 million during the first six months of 2019 compared to $273 million in the same period in 2018. Capital spending decreased in the first six months of 2019 due to lower project activity in the Asia Pacific region, as well as a lower level of vendor invoices paid in early 2019 that were accrued at the end of 2018 compared to the same period in the prior year.

Cash paid for acquisitions was $157 million and $0 for the first six months ended June 30, 2019 and 2018, respectively. On June 28, 2019, the Company completed its acquisition of Nueva Fábrica Nacional de Vidrio, S. de R.L. de C.V., a four furnace glass plant located near Mexico City, Mexico, from Grupo Modelo, a wholly owned affiliate of Anheuser-Busch InBev SA/NV. Through June 30, 2019, $157 million of the purchase price has been paid for this facility and an additional $38 million is expected to be paid by the end of 2019. Contributions and advances to joint ventures were $22 million and $25 million in the first six months of 2019 and 2018, respectively.

Financing activities: Cash provided by financing activities was $926 million for the six months ended June 30, 2019, compared to $322 million for the same period in 2018. The increase in cash provided by financing activities was primarily due to higher net borrowings in the first half of 2019.

As of December 31, 2018, the Company’s Board of Directors had authorized a share repurchase program with approximately $550 million in remaining repurchase authority. Through the first six months of 2019 and 2018, the

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Company repurchased $38 million and $95 million, respectively, in shares of the Company’s stock. Additional share repurchases in 2019 will be dependent on the generation of net proceeds from divestitures and the timing of cash generation. In addition, the Company paid dividends of $16 million in the first six months of 2019. On July 31, 2019, the Company’s Board of Directors declared a dividend of $0.05 per share, which will be paid on September 16, 2019, to shareholders of record on the close of business on August 30, 2019. The Board anticipates declaring a dividend in future quarters on a regular basis; however, future declarations of dividends are subject to Board approval and may be adjusted based on the Company’s results of operations, financial position and cash flow, or as business needs or market conditions change. Also, the Company received approximately $28 million in proceeds related to hedging activity in the first six months of 2019.

In July 2019, a subsidiary of the Company redeemed €250 million aggregate principal amount to holders of its outstanding 6.75% senior notes due 2020 (the “Notes”). Following the redemption, €250 million aggregate principal amount of the Notes remain outstanding. The Notes were redeemed at a price equal to the sum of the principal amount of the Notes to be redeemed, the applicable premium calculated in accordance with the terms of the Notes and the related indenture, and the accrued and unpaid interest on the Notes up to, but not including, the redemption date. In the third quarter of 2019, the Company recorded note repurchase premiums and the write-off of deferred finance fees of approximately $24 million related to the redeemed Notes.  The Company funded the redemption with cash on hand and revolver borrowings.

The Company anticipates that cash flows from its opera­tions and from utiliza­tion of credit available under the Agreement will be sufficient to fund its operating and seasonal working capital needs, debt service and other obligations on a short-term (twelve-months) and long-term basis. Based on the Company's expecta­tions regarding future payments for lawsuits and claims and also based on the Company's expected operating cash flow, the Company believes that the payment of any deferred amounts of previously settled or otherwise determined lawsuits and claims, and the resolution of presently pending and anticipated future lawsuits and claims associated with asbestos, will not have a material adverse effect upon the Company's liquidity on a short-term or long-term basis.

The Company currently intends to retain earnings for use in its business, for investment in acquisitions and to repurchase shares of its common stock. The Company continuously reassesses its capital allocation strategy, and evaluates a variety of options, including share repurchases and dividends, as a means to return capital to its share owners.

Critical Accounting Estimates

The Company’s analysis and discussion of its financial condition and results of operations are based upon its consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. The Company evaluates these estimates and assumptions on an ongoing basis. Estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances at the time the financial statements are issued. The results of these estimates may form the basis of the carrying value of certain assets and liabilities and may not be readily apparent from other sources. Actual results, under conditions and circumstances different from those assumed, may differ from estimates.

The impact of, and any associated risks related to, estimates and assumptions are discussed within Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as in the Notes to the Condensed Consolidated Financial Statements, if applicable, where estimates and assumptions affect the Company’s reported and expected financial results.

Goodwill – The Company evaluates goodwill annually (or more frequent if impairment indicators arise) for impairment. During the fourth quarter of 2018, the Company completed its annual impairment testing and determined that no impairment of goodwill existed. However, this testing did indicate that the business enterprise value for the Company’s North America reporting unit exceeded its carrying value by approximately 12% and was determined to be the reporting unit with the greatest risk of a future impairment if actual results fell modestly short of expectations.

Based on operating results for the first six months ended June 30, 2019 and current forecasts, the Company believes that it is more likely than not that the business enterprise value for each of its reporting units is still greater than the book value and the cushion continues to be monitored. Accordingly, no goodwill impairment indicators were present at June

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30, 2019, that would necessitate an interim impairment assessment. The Company is continuing to review its business plans and taking actions to improve performance for all its segments. The Company will conduct its annual goodwill impairment testing as of October 1, 2019, and this assessment will include the most current business plan information. The Company will continue to monitor its business plans throughout 2019 to determine if an interim goodwill evaluation should be conducted. The finalization of the annual budgeting and planning cycle in the fourth quarter of 2019 could result in a goodwill impairment. As of June 30, 2019, the North America reporting unit had goodwill of approximately $1.04 billion.

There have been no other material changes in critical accounting estimates at June 30, 2019 from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Forward-Looking Statements

This document contains "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 27A of the Securities Act of 1933. Forward-looking statements reflect the Company's current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,” “could,” “would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,” “potential,” “continue,” and the negatives of these words and other similar expressions generally identify forward-looking statements. It is possible the Company's future financial performance may differ from expectations due to a variety of factors including, but not limited to the following: (1) foreign currency fluctuations relative to the U.S. dollar, (2) changes in capital availability or cost, including interest rate fluctuations and the ability of the Company to refinance debt at favorable terms, (3) the general political, economic and competitive conditions in markets and countries where the Company has operations, including uncertainties related to Brexit, economic and social conditions, disruptions in the supply chain, competitive pricing pressures, inflation or deflation, and changes in tax rates and laws, (4) the Company’s ability to generate sufficient future cash flows to ensure the Company’s goodwill is not impaired, (5) consumer preferences for alternative forms of packaging, (6) cost and availability of raw materials, labor, energy and transportation, (7) the Company’s ability to manage its cost structure, including its success in implementing restructuring plans and achieving cost savings, (8) consolidation among competitors and customers, (9) the Company’s ability to acquire businesses and expand plants, integrate operations of acquired businesses and achieve expected synergies, (10) unanticipated expenditures with respect to data privacy, environmental, safety and health laws, (11) unanticipated operational disruptions, including higher capital spending, (12) the Company’s ability to further develop its sales, marketing and product development capabilities, (13) the failure of the Company’s joint venture partners to meet their obligations or commit additional capital to the joint venture, (14) the ability of the Company and the third parties on which it relies for information technology system support to prevent and detect security breaches related to cybersecurity and data privacy, (15) the Company’s ability to accurately estimate its total asbestos-related liability or to control the timing and occurrence of events related to outstanding asbestos-related claims, including but not limited to settlements of those claims, (16) changes in U.S. trade policies, (17) the Company’s ability to achieve its strategic plan, and the other risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and any subsequently filed Quarterly Report on Form 10-Q. It is not possible to foresee or identify all such factors. Any forward-looking statements in this document are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes are appropriate in the circumstances. Forward-looking statements are not a guarantee of future performance and actual results or developments may differ materially from expectations. While the Company continually reviews trends and uncertainties affecting the Company's results of operations and financial condition, the Company does not assume any obligation to update or supplement any particular forward-looking statements contained in this document.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in market risk at June 30, 2019 from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Item 4. Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time

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periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, the Company has investments in certain unconsolidated entities. As the Company does not control or manage these entities, its disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those maintained with respect to its consolidated subsidiaries.

As required by Rule 13a-15(b) of the Exchange Act, the Company carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2019.

As required by Rule 13a-15(d) of the Exchange Act, the Company carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of any change in the Company’s internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting. There have been no changes in the Company’s internal controls over financial reporting during the fiscal quarter ended June 30, 2019 that have materially affected, or are reasonably likely to material affect, the Company’s internal controls over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

For further information on legal proceedings, see Note 10 to the Condensed Consolidated Financial Statements, “Contingencies,” that is included in Part I of this Quarterly Report and incorporated herein by reference.

Item 1A. Risk Factors.

There have been no material changes in risk factors at June 30, 2019 from those described in the Company’s

Annual Report on Form 10-K for the year ended December 31, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The Company purchased 2,064,652 shares of its common stock during the first six months of 2019 for approximately $38 million pursuant to authorization by its Board of Directors in January 2018 to purchase up to $400 million of the Company’s common stock along with an authorization by its Board of Directors in November 2018 to purchase an additional $313 million of the Company’s common stock. The following table provides information about the Company’s purchases of its common stock during the three months ended June 30, 2019:

Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased (in thousands)	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plan (in thousands)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (in millions)
April 1 - April 30, 2019					512
May 1 - May 31, 2019					512
June 1 - June 30, 2019					512

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Item 6. Exhibits.

Exhibit 4.1	Third Amended and Restated Credit Agreement and Syndicated Facility Agreement, dated June 25, 2019, by and among the Borrowers named therein, Owens-Illinois General Inc., as Borrowers’ Agent, Deutsche Bank AG New York Branch, as Administrative Agent, and the other Agents, Arrangers and Lenders named therein (filed as Exhibit 4.1 to Owens-Illinois, Inc.’s Form 8-K filed June 26, 2019, File No. 1-9576, and incorporated herein by reference).
Exhibit 4.2	First Amendment to the Fourth Amended and Restated Intercreditor Agreement, dated as of June 25, 2019, by and among Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent for the lenders party to the Credit Agreement (as defined therein) and any other parties thereto (filed as Exhibit 4.2 to Owens-Illinois, Inc.’s Form 8-K filed June 26, 2019, File No. 1-9576, and incorporated herein by reference).
Exhibit 4.3	Domestic Guarantor Consent and Reaffirmation, dated as of June 25, 2019, by and among Owens-Illinois Group, Inc., the Subsidiary Grantors (as defined therein) and Deutsche Bank AG New York Branch, as the Collateral Agent. (filed as Exhibit 4.3 to Owens-Illinois, Inc.’s Form 8-K filed June 26, 2019, File No. 1-9576, and incorporated herein by reference).
Exhibit 10.1	Form of Employee Restricted Stock Unit Agreement for use under the Owens-Illinois, Inc. Amended and Restated 2017 Incentive Award Plan.
Exhibit 10.2	Form of Employee Performance Stock Unit Agreement for use under the Owens-Illinois, Inc. Amended and Restated 2017 Incentive Award Plan.
Exhibit 10.3	Form of Director Restricted Stock Unit Agreement for use under the Owens-Illinois, Inc. Amended and Restated 2017 Incentive Award Plan.
Exhibit 31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1*	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.
Exhibit 32.2*	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.
Exhibit 101	Financial statements from the Quarterly Report on Form 10-Q of Owens-Illinois, Inc. for the quarter ended June 30, 2019, were formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Results of Operations, (ii) the Condensed Consolidated Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements.

* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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SIGNATURES

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

		OWENS-ILLINOIS, INC.
Date	August 1, 2019	By	/s/ John A. Haudrich
			John A. Haudrich
			Senior Vice President and Chief Financial Officer

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EX-10.1

Exhibit 10.1

OWENS-ILLINOIS, INC.

AMENDED AND RESTATED

2017 INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT AGREEMENT

THIS RESTRICTED STOCK UNIT AGREEMENT (“Agreement”), dated as of the grant date referenced above (the “Grant Date”) is made by and between Owens-Illinois, Inc., a Delaware corporation (the “Company”) and the person whose account for which this grant is being accepted, an employee or consultant of the Company, a Parent Corporation or a Subsidiary (the “Participant”):

WHEREAS, the Company has established the Amended and Restated 2017 Incentive Award Plan (the “Plan”) (the terms of which are hereby incorporated by reference and made a part of this Agreement); and

WHEREAS, the Plan provides for the issuance of Restricted Stock Units (“RSUs”), subject to certain vesting conditions thereon and to other conditions stated herein; and

WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) has determined it would be to the advantage and best interest of the Company and its stockholders to issue the RSUs provided for herein to the Participant in partial consideration of services rendered, or to be rendered, to the Company, a Parent Corporation or a Subsidiary.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I.

DEFINITIONS

Whenever the following terms are used in this Agreement, they shall have the meaning specified below, unless the context clearly indicates to the contrary.  Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan.  The masculine pronoun shall include the feminine and neuter, and the singular shall include the plural, where the context so indicates.

Section 1.1 ‑ Cause

“Cause” shall mean dishonesty, disloyalty, misconduct, insubordination, failure to reasonably devote working time to assigned duties, failure or refusal to comply with any reasonable rule, regulation, standard or policy which from time to time may be established by the Company, including, without limitation, those policies set forth in the Owens-Illinois Policy Manual in effect from time to time, or failure to fully cooperate with any investigation of an alleged violation of any such rule, regulation, standard or policy.

Section 1.2 ‑ Competing Business

“Competing Business” shall mean any person, corporation or other entity engaged in the United States of America or in any other country in which the Company, any Parent Corporation or any Subsidiary manufactures or sells its products, in the manufacture or sale of glass containers, or any other products manufactured or sold by the Company, any Parent Corporation or any Subsidiary within the last three (3) years prior to the Participant’s Termination of Service or Retirement.

Section 1.3 ‑ Good Reason

“Good Reason” means the occurrence of any of the following without the prior written consent of the Participant:

(i)        a material diminution in base compensation;

(ii)       a material diminution in authority, duties or responsibilities (including, if Participant is then serving as the Chief Executive Officer or the Chief Financial Officer of the Company, any changes which result from Participant not being employed by a public company following a  Change in Control);

(iii)      a material change in the geographic location at which the Participant must perform services; or

(iv)      any other action or inaction that constitutes a material breach by the Company of the terms of Participant’s employment as in effect immediately prior to a Change in Control.

Notwithstanding the foregoing, (a) Good Reason shall not be deemed to exist unless notice of termination on account thereof (specifying a termination date no later than thirty (30) days from the date of such notice) is given no later than thirty (30) days after the time at which the Participant becomes aware of the occurrence of the event or condition purportedly giving rise to Good Reason and (b) if there exists (without regard to this clause (b)) an event or condition that constitutes Good Reason, the Company shall have thirty (30) days from the date notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition shall not constitute Good Reason hereunder.

Section 1.4 ‑ Parent Corporation

“Parent Corporation” shall mean any corporation in an unbroken chain of corporations ending with the Company if each of the corporations other than the Company then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

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Section 1.5 ‑ Retirement

“Retirement” solely for purposes of this Agreement shall mean “separation from service” (within the meaning of Section 409A of the Code) of an Employee from the Company, a Parent Corporation or a Subsidiary after reaching the age of 60 and having 10 years of employment, or after reaching the age of 65.

ARTICLE II.

ISSUANCE OF RSUs

In consideration of the services rendered or to be rendered to the Company, a Parent Corporation or a Subsidiary and for other good and valuable consideration which the Committee has determined to be equal to the par value of the Shares, on the date hereof the Company awards to the Participant the number of RSUs specified for this grant in the Solium Shareworks Account accessible by the Participant.

ARTICLE III.

VESTING; PAYMENT

Section 3.1 ‑ Vesting of RSUs

Except as otherwise provided in Section 3.1 or 3.2, the RSUs shall vest in 25% increments on each anniversary of the Grant Date with full vesting on the fourth anniversary of the Grant Date (each such anniversary, a “Vesting Date”); provided, however, that notwithstanding the foregoing the RSU shall be fully vested on the date the Participant (i) dies, (ii) satisfies the requirements for Retirement, provided that the Participant has held the RSU for at least one (1) year from the Grant Date,  or (iii) experiences a Disability, provided that the Participant has not experienced a Termination of Service prior to each such date. 

Section 3.2 ‑ Effect of a Change in Control

Notwithstanding Section 3.1, in the event of a Change in Control, if:

(a)        The RSUs are not continued, assumed or new RSUs substituted therefore by a successor, or any Parent Corporation or Subsidiary, under Section 13.2(b)(ii) of the Plan, then immediately prior to the Change in Control the RSUs shall become fully vested subject to and effective on the Change in Control; or

(b)        The RSUs are  continued, assumed or new RSUs are substituted therefore by a successor, or any Parent Corporation or Subsidiary, under Section 13.2(b)(ii) of the Plan, then the RSUs shall become fully vested upon the Participant’s Termination of Service without Cause or by the Participant for Good Reason prior to the second (2nd) anniversary of the Change in Control.

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Section 3.3 ‑ Termination of RSUs

Until vested pursuant to Section 3.1 or 3.2, all RSUs issued to the Participant pursuant to this Agreement shall terminate immediately upon the Participant’s Termination of Service.  For the avoidance of doubt, if the Participant experiences a Termination of Service prior to a Vesting Date for any reason not described in Section 3.1 or 3.2(b), all RSUs issued to the Participant pursuant to this Agreement shall immediately terminate.

Section 3.4 ‑ Payment of RSUs

RSUs shall become payable, to the extent vested as follows:

25% of the RSUs on the first anniversary of the Grant Date;

25% of the RSUs on the second anniversary of the Grant Date;

25% of the RSUs on the third anniversary of the Grant Date; and

25% of the RSUs on the fourth anniversary of the Grant Date. 

Section 3.5 – Dividend Equivalents

A bookkeeping account will be established by the Company to which Dividend Equivalents equal to the product of (a) the number of RSUs subject to this Agreement, and (b) the dividend declared on a single share of Common Stock will be credited. To the extent the Participant becomes vested in the RSUs issued pursuant to this Agreement, such Dividend Equivalents will be converted to cash or additional Shares (as may be determined by the Administrator in its sole discretion) and will be paid to the Participant at the same time as the Shares of Common Stock are issued with respect to the vested RSUs. The Dividend Equivalents will cease and be forfeited upon the earlier of (i) the settlement of the RSUs into shares of Common Stock, and (ii) the forfeiture and termination of the RSUs under this Agreement.  

ARTICLE IV.

NON-COMPETITION/NON-SOLICITATION

Section 4.1 ‑ Covenant Not to Compete

Participant covenants and agrees that prior to Participant’s Termination of Service or Retirement and for a period of three (3) years following the Participant’s Termination of Service or Retirement, including without limitation termination for Cause or without Cause, Participant shall not, in any country in which the Company, any Parent Corporation or any Subsidiary manufactures or sells its products, engage, directly or indirectly, whether as principal or as agent, officer, director, employee, consultant, shareholder or otherwise, alone or in association with any other person, corporation or other entity, in any Competing Business.

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Section 4.2 ‑ Non-Solicitation of Employees

Participant agrees that prior to his Termination of Service or Retirement and for three (3) years following Participant’s Termination of Service or Retirement, including without limitation termination for Cause or without Cause, Participant shall not, directly or indirectly, solicit or induce, or attempt to solicit or induce, any Employee of the Company, any Parent Corporation or any Subsidiary to leave the employment of the Company, any Parent Corporation or any Subsidiary for any reason whatsoever, or hire any Employee of the Company, any Parent Corporation or any Subsidiary except into the employment of the Company, a Parent Corporation or a Subsidiary.

Section 4.3‑ Equitable Relief

Participant agrees that it is impossible to measure in money the damages that will accrue to the Company in the event that Participant breaches any of the restrictive covenants provided in Sections 4.1 or 4.2 hereof.  Accordingly, in the event that Participant breaches any such restrictive covenant, the Company shall be entitled to an injunction restraining Participant from further violating such restrictive covenant.  If the Company shall institute any action or proceeding to enforce any such restrictive covenant, Participant hereby waives the claim or defense that the Company has an adequate remedy at law and agrees not to assert such claim or defense.  The foregoing shall not prejudice the Company’s right to require Participant to account for and pay over to the Company, and Participant hereby agrees to account for and pay over, any compensation, profits, monies, accruals or other benefits derived or received by Participant as a result of any transaction constituting a breach of any of the restrictive covenants provided in Sections 4.1 or 4.2 hereof.

ARTICLE V.

OTHER PROVISIONS

Section 5.1 ‑ RSUs Not Transferable

Neither the RSUs nor Dividend Equivalents, nor any interest or right therein or part thereof, shall be liable for the debts, contracts or engagements of the Participant or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided however, that this Section 5.1 shall not prevent transfers by will or by the applicable laws of descent and distribution.

Section 5.2 ‑ No Right to Continued Employment

Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in the employ or service of the Company, any Parent Corporation or any Subsidiary or shall interfere with or restrict in any way the rights of the Company, any Parent Corporation or any Subsidiary, which are hereby expressly reserved, to discharge the Participant at any time for any reasons whatsoever, with or without Cause.

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Section 5.3 ‑ Conditions to Issuance of Stock Certificates

The Company shall not be required to issue or deliver any certificate or certificates for Shares pursuant to this Agreement prior to fulfillment of all of the following conditions:

(a)        The admission of such Shares to listing on all stock exchanges on which such class of stock is then listed; and

(b)        The completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Committee shall, in its sole discretion, deem necessary or advisable; and

(c)        The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its sole discretion, determine to be necessary or advisable; and

(d)        Subject to Section 5.10, the payment by the Participant of all amounts which, under federal, state or local tax law, the Company, a Parent Corporation or a Subsidiary is required to withhold upon vesting or payment of a RSU and/or Dividend Equivalent; and

(e)        The lapse of such reasonable period of time as the Committee may from time to time establish for reasons of administrative convenience.

Section 5.4 ‑ Notices

Any notice to be delivered to the Company under this Agreement shall be delivered to such individual and in such form as the Committee shall specify from time to time and communicate to the Participant.  Any notice to be delivered to the Participant shall be addressed to the Participant at the Participant's last address reflected in the Company’s records. Notices may, as approved by the Committee be given electronically (or by facsimile), and if so approved will be deemed given when sent.  Otherwise, notices shall be sent by reputable overnight courier or by certified mail (return receipt requested) through the United States Postal Service.

Section 5.5 ‑ Rights as Stockholder

Participant shall not, by virtue of the RSUs, be entitled to vote in any Company election, receive any dividend in respect of Shares subject to the RSUs (except as provided under Section 3.5 above) or exercise any other rights of a stockholder of the Company.  The RSUs shall not confer upon the Participant any rights of a stockholder of the Company unless and until the RSUs have vested and certificates representing the Shares subject to the RSUs shall have been issued by the Company pursuant to the terms of this Agreement.

Section 5.6 ‑ Titles

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

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Section 5.7 ‑ Conformity to Laws

The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of applicable law, including without limitation the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including without limitation Rule 16b-3 of the Exchange Act.  Notwithstanding anything herein to the contrary, this Agreement shall be administered, and the RSUs shall be granted, only in such a manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law, this Agreement and the RSUs granted hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

Section 5.8 ‑ Section 409A

Section 409A of the Internal Revenue Code provides that “nonqualified deferred compensation” that does not meet the requirements specified in Section 409A may become subject to penalty taxes.  Currently, the Company does not believe that RSUs constitute nonqualified deferred compensation within the meaning of Section 409A; however, if, in the future, the RSUs are or may become subject to Section 409A, the Committee may make such modifications to the Plan and this Agreement as may become necessary or advisable, in the Committee’s sole discretion, to either comply with Section 409A or to avoid its application to the RSUs.

Section 5.9 ‑ Amendment

This Agreement and the Plan may be amended without the consent of the Participant provided that such amendment would not impair any rights of the Participant under this Agreement.  No amendment of this Agreement shall, without the written consent of the Participant, impair any rights of the Participant under this Agreement.

Section 5.10 ‑ Tax Withholding

The Company’s obligation to issue or deliver to the Participant any certificate or certificates for Shares is expressly conditioned upon receipt from the Participant, on or prior to the date reasonably specified by the Company of:

(a)        Full payment (in cash or by check) of any amount that must be withheld by the Company, a Parent Corporation or Subsidiary for federal, state and/or local tax purposes; or

(b)        Subject to the Committee’s consent, full payment by delivery to the Company of unrestricted Shares previously owned by the Participant, duly endorsed for transfer to the Company by the Participant with an aggregate Fair Market Value (determined, as applicable, as of the date of vesting or as of the date of the distribution) equal to the amount that must be withheld by the Company, a Parent Corporation or a Subsidiary for federal, state and/or local tax purposes; or

(c)        With respect to the withholding obligation for RSUs that become vested and Dividend Equivalents that become payable, subject to the Committee’s consent, full payment by

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retention by the Company of a portion of the Shares (or cash, as applicable) deliverable in respect of such vested RSUs and Dividend Equivalents with an aggregated Fair Market Value (determined on the payment date) equal to the amount that must be withheld by the Company, a Parent Corporation or a Subsidiary for federal, state and/or local tax purposes; or

(d)        With respect to any withholding tax obligations for RSUs that become vested, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable to Participant pursuant to the RSUs, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company or the Subsidiary with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided that payment of such proceeds is then made to the Company or the applicable Subsidiary at such time as may be required by the Committee, but in any event not later than the settlement of such sale; or

(e)        Subject to the Committee’s consent, a combination of payments provided for in the foregoing subsections (a), (b), (c) and (d).

With respect to each individual who was an executive officer of the Company and subject to Section 16 of the Exchange Act on the Grant Date only, the Committee in approving this RSU award has consented to payment of tax withholding obligations under subsection (c), or a combination of the methods set forth in subsections (a), (c) and (d), as the Participant may elect during such time periods as the Company may permit in compliance with all applicable legal requirements.

Notwithstanding anything herein to the contrary, the number of Shares which may be withheld with respect to the payment of any RSUs and/or Dividend Equivalents in order to satisfy the Company’s federal, state and/or local tax withholding obligations with respect to the payment of the RSUs and/or Dividend Equivalents shall be no greater than the number of Shares which have a Fair Market Value on the date of withholding equal to the aggregate amount of such withholding obligations based on the maximum statutory withholding rates in Participant’s applicable jurisdictions for federal, state, local and/or foreign income and payroll tax purposes.

Section 5.11 ‑ Clawback

Notwithstanding anything contained in the Agreement to the contrary, all RSUs and Dividend Equivalents awarded under this Agreement, and any Shares issued upon settlement hereunder shall be subject to forfeiture, or repayment pursuant to the terms of any policy that the Company may implement in compliance with the requirements of applicable law, including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder.

Section 5.12 ‑ Governing Law

The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

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IN WITNESS HEREOF, this Agreement has been executed and delivered by the parties hereto.

OWENS-ILLINOIS, INC.

By:

Its:

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EX-10.2

Exhibit 10.2

OWENS-ILLINOIS, INC.

AMENDED AND RESTATED

2017 INCENTIVE AWARD PLAN

PERFORMANCE STOCK UNIT AGREEMENT

THIS PERFORMANCE STOCK UNIT AGREEMENT (“Agreement”), dated as of the grant date referenced above (the “Grant Date”) is made by and between Owens-Illinois, Inc., a Delaware corporation (the “Company”) and the person whose account for which this grant is being accepted, an employee or consultant of the Company, a Parent Corporation or a Subsidiary (the “Participant”):

WHEREAS, the Company has established the Amended and Restated 2017 Incentive Award Plan (the “Plan”) (the terms of which are hereby incorporated by reference and made a part of this Agreement); and

WHEREAS, the Plan provides for the issuance of performance-based Restricted Stock Units (“PSUs”), subject to vesting based on performance conditions and to other conditions stated herein; and

WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) has determined it would be to the advantage and best interest of the Company and its stockholders to issue the PSUs provided for herein to the Participant in partial consideration of services rendered, or to be rendered, to the Company, a Parent Corporation or a Subsidiary.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I.

DEFINITIONS

Whenever the following terms are used in this Agreement, they shall have the meaning specified below, unless the context clearly indicates to the contrary.  Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan.  The masculine pronoun shall include the feminine and neuter, and the singular shall include the plural, where the context so indicates.

Section 1.1 ‑ Cause

“Cause” shall mean dishonesty, disloyalty, misconduct, insubordination, failure to reasonably devote working time to assigned duties, failure or refusal to comply with any reasonable rule, regulation, standard or policy which from time to time may be established by the Company, including, without limitation, those policies set forth in the Owens-Illinois Policy

Manual in effect from time to time, or failure to fully cooperate with any investigation of an alleged violation of any such rule, regulation, standard or policy.

Section 1.2 ‑ Competing Business

“Competing Business” shall mean any person, corporation or other entity engaged in the United States of America or in any other country in which the Company, any Parent Corporation or any Subsidiary manufactures or sells its products, in the manufacture or sale of glass containers, or any other products manufactured or sold by the Company, any Parent Corporation or any Subsidiary within the last three  (3) years prior to the Participant’s Termination of Service or Retirement.

Section 1.3 ‑ Good Reason

“Good Reason” means the occurrence of any of the following without the prior written consent of the Participant:

(i)         a material diminution in base compensation;

(ii)       a material diminution in authority, duties or responsibilities (including, if Participant is then serving as the Chief Executive Officer or the Chief Financial Officer of the Company, any changes which result from Participant not being employed by a public company following a  Change in Control);

(iii)      a material change in the geographic location at which the Participant must perform services; or

(iv)      any other action or inaction that constitutes a material breach by the Company of the terms of Participant’s employment as in effect immediately prior to a Change in Control.

Notwithstanding the foregoing, (a) Good Reason shall not be deemed to exist unless notice of termination on account thereof (specifying a termination date no later than thirty (30) days from the date of such notice) is given no later than thirty (30) days after the time at which the Participant becomes aware of the occurrence of the event or condition purportedly giving rise to Good Reason and (b) if there exists (without regard to this clause (b)) an event or condition that constitutes Good Reason, the Company shall have thirty (30) days from the date notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition shall not constitute Good Reason hereunder.

Section 1.4 ‑ Parent Corporation

“Parent Corporation” shall mean any corporation in an unbroken chain of corporations ending with the Company if each of the corporations other than the Company then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

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Section 1.5       Performance Period

“Performance Period” shall mean [  ] through [  ], or such shorter period ending on any Vesting Date occurring prior to [  ].

Section 1.6‑ Retirement

“Retirement” solely for purposes of this Agreement shall mean “separation from service” (within the meaning of Section 409A of the Code) of an Employee from the Company, a Parent Corporation or a Subsidiary after reaching the age of 60 and having 10 years of employment, or after reaching the age of 65.

Section 1.7 ‑ Vesting Date

“Vesting Date” shall mean the date on which the PSU is vested under Section 3.1 or 3.2 of this Agreement.

ARTICLE II.

ISSUANCE OF PSUs

In consideration of the services rendered or to be rendered to the Company, a Parent Corporation or a Subsidiary and for other good and valuable consideration which the Committee has determined to be equal to the par value of the Shares, on the date hereof the Company awards to the Participant the number of PSUs specified for this grant in the Solium Shareworks Account accessible by the Participant.

ARTICLE III.

VESTING; PAYMENT

Section 3.1 ‑ Vesting of PSUs

(a)        Except as otherwise provided in Section 3.1 and 3.2, the PSUs shall vest in their entirety on [  ]; provided, however, that notwithstanding the foregoing the PSUs shall be fully vested on the date the Participant (i) dies, (ii) satisfies the requirements for Retirement or (iii) experiences a Disability;  provided further, that the Participant has not experienced a Termination of Service prior to each such date. 

(b)        If the Participant experiences a Termination of Service resulting from the Company’s discharge of the Participant without Cause, such Participant shall immediately vest in that number of PSUs, equal to the number of PSUs in which such Participant would have vested on [  ], but for such Termination of Service,  multiplied by a fraction, the numerator of which is the number of days from the date hereof to the date of Participant’s Termination of Service and the denominator of which is the number of days from the date hereof to [  ].        

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Section 3.2 ‑ Effect of a Change in Control 

Notwithstanding Section 3.1, in the event of a Change in Control, if:

(a)        The PSUs are not continued, assumed or new PSUs substituted therefore by a successor, any Parent Corporation or Subsidiary under Section 13.2(b)(ii) of the Plan, then immediately prior to the Change in Control the PSUs shall become fully vested and payable at target levels subject to and effective on the Change in Control; or

(b)        The PSUs are continued, assumed or new PSUs are substituted therefore by a successor or any Parent Corporation or Subsidiary under Section 13.2(b)(ii) of the Plan, then the PSUs shall become fully vested upon the Participant’s Termination of Service without Cause or by the Participant for Good Reason prior to the second (2nd) anniversary of the Change in Control. 

Section 3.3 ‑ Termination of PSUs

Until vested pursuant to Section 3.1 or 3.2, all PSUs issued to the Participant pursuant to this Agreement shall terminate immediately upon the Participant’s Termination of Service.  For the avoidance of doubt, if the Participant experiences a Termination of Service prior to a Vesting Date for any reason not described in Section 3.1 or 3.2(b), all PSUs issued to the Participant pursuant to this Agreement shall immediately terminate.

Section 3.4 ‑ Payment of PSUs

Except as provided under Section 3.2(a) vested PSUs shall become payable, to the extent any amount becomes payable in respect of a vested PSU, as soon as practicable after [  ]; provided, however, if the Participant has not satisfied the requirements for Retirement or has not died or incurred a Disability, such payment shall be made by the March 15 immediately following the end of the Performance Period, and if the Participant has a Termination of Service due to death, Retirement or Disability prior to [  ], such vested PSUs shall become payable as soon as practicable after the Company determines the extent, if any, to which the performance criteria below have been satisfied, but in any event during [  ].  Each vested PSU shall entitle the Participant to receive a number of Shares, if any, determined by the addition of:  (a) the Company’s cumulative EPS (as defined below) performance at a weight of [  ]% and (b) the Company’s average ROIC (as defined below) performance at a weight of [  ]%, with the total of that summation multiplied by (c) the Company’s relative Total Shareholder Return (“r-TSR”) (as defined below) results.

§ EPS.  The Company’s target cumulative EPS for the Performance Period shall equal $[  ] to achieve a target level award, and $[  ] to achieve a maximum level award, with the entry point to achieve a payout set at $[  ].  For purposes hereof, “EPS” shall mean, for each fiscal year ending during the Performance Period, “diluted earnings per share” from continuing operations before items that management considers not representative of ongoing operations, as reported by the Company in its earnings release for each of the Company’s fiscal years ending during the Performance

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Period and adjusted for the impact of acquisitions and divestitures and to exclude the effect of non-service pension costs. The cumulative EPS shall be the sum of the EPS for each fiscal year ending during the Performance Period.  Results between the minimum and target cumulative EPS; and results between the target and maximum cumulative EPS shall be interpolated per the attached charts, as determined by the Committee.

§ ROIC.  The Company’s target average of the annual ROIC for each of the Company’s three fiscal years ending during the Performance Period shall equal [  ]%, with a minimum of [  ]% and a maximum of [  ]%.  For purposes hereof, “Return on Invested Capital” shall mean the number calculated by multiplying (a) the Company’s  earnings before interest, taxes and items that management considers not representative of ongoing operations for each of  the Company’s fiscal years during the Performance Period times (b) one minus the Company’s tax rate for the respective full year, [  ], [  ], and [  ] (as reflected in the EPS numerator), and dividing the product thereof by the sum of the (x) Company’s total debt and (y) total share owners’ equity, all as reflected on the Company’s consolidated balance sheet for each fiscal year of the Company ending during the Performance Period and adjusted for the impact of acquisitions and divestitures. The ROIC performance for each of the three years of the Performance Period will be averaged for purposes of determining the ROIC payout. For purposes of computing total share owners’ equity for the denominator of this calculation, the accumulated other comprehensive income related to pension and retiree medical shall be held constant for each year of the Performance Period at the amount reflected on the Company’s consolidated balance sheet as of December 31, [  ]. Results between the minimum and target average ROIC; and, results between the target and maximum average ROIC shall be interpolated per the attached charts, as determined by the Committee.

§ r-TSR.  If the Company’s r-TSR for the Performance Period is (a) less than or equal to the 25th percentile the multiplier is 0.8; or (b)  equal to or above the 75th percentile, then the multiplier is 1.2. Results above the 25thpercentile, but less than the 75th percentile performance shall be interpolated as per the attached charts, as determined by the Committee. For purposes hereof, “r-TSR” means,  the relative rate of return reflecting stock price appreciation, plus the reinvestment of dividends in additional shares of stock, from the beginning of the Performance Period through the end of the Performance Period of the Common Stock as compared to that of the shares of common stock of each member of the Peer Group (as defined below).  For purposes of calculating r-TSR for the Company and the members of the Peer Group, the beginning stock price will be based on the closing price on the trading day immediately prior to the first day of the Performance Period on the principal stock exchange on which the stock is then traded and the ending stock price will be based on the closing price on the last day of the Performance Period on the principal stock exchange on which the stock then trades (and also adjusted for any stock splits). The “Peer Group” means the S&P 1500 – Materials (GICS# 1510) as of the Grant Date.  The Peer Group r-TSR will be adjusted by the Committee, in its discretion, to reflect acquisitions or dispositions of Peer Group members, the pro ration of r-TSR due to stock splits and a zero r-TSR for the bankruptcy or delisting of a member of the Peer Group.

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If the Company’s performance falls below either EPS or ROIC minimum amount, no Shares shall become payable with respect to such component of the PSU, provided that failure to meet or exceed the minimum amount with respect to EPS or ROIC shall not affect any payment due with respect to the other measure of performance.  PSUs shall have a zero value if the Company fails to meet or exceed both the minimum EPS and the minimum ROIC during the Performance Period.  Conversely, to the extent the Company’s performance exceeds either performance measure, no amounts in excess of such maximum performance measures shall be taken into account in determining the amount payable with respect to such PSU.  Charts illustrating the [  ] through [  ] performance measures are shown in Attachment A.

Section 3.5 – Dividend Equivalents

A bookkeeping account will be established by the Company to which Dividend Equivalents equal to the product of (a) the number of PSUs subject to this Agreement, and (b) the dividend declared on a single share of Common Stock will be credited. To the extent the Participant becomes vested in the PSUs issued pursuant to this Agreement, such Dividend Equivalents will be converted to cash or additional Shares (as may be determined by the Administrator in its sole discretion) and will be paid to the Participant at the same time as the Shares of Common Stock are issued with respect to the vested PSUs. The Dividend Equivalents will cease and be forfeited upon the earlier of (i) the settlement of the PSUs into shares of Common Stock, and (ii) the forfeiture and termination of the PSUs under this Agreement.

ARTICLE IV.

NON-COMPETITION/NON-SOLICITATION

Section 4.1 ‑ Covenant Not to Compete

Participant covenants and agrees that prior to Participant’s Termination of Service and for a period of three (3) years following the Participant’s Termination of Service, including without limitation termination for Cause or without Cause, Participant shall not, in any country in which the Company, any Parent Corporation or any Subsidiary manufactures or sells its products, engage, directly or indirectly, whether as principal or as agent, officer, director, employee, consultant, shareholder or otherwise, alone or in association with any other person, corporation or other entity, in any Competing Business.

Section 4.2 ‑ Non-Solicitation of Employees

Participant agrees that prior to his Termination of Service and for three (3) years following Participant’s Termination of Service, including without limitation termination for Cause or without Cause, Participant shall not, directly or indirectly, solicit or induce, or attempt to solicit or induce, any Employee of the Company, any Parent Corporation or any Subsidiary to leave the employment of the Company, any Parent Corporation or any Subsidiary for any reason whatsoever, or hire any Employee of the Company, any Parent Corporation or any Subsidiary except into the employment of the Company, a Parent Corporation or a Subsidiary.

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Section 4.3‑ Equitable Relief

Participant agrees that it is impossible to measure in money the damages that will accrue to the Company in the event that Participant breaches any of the restrictive covenants provided in Sections 4.1 or 4.2 hereof.  Accordingly, in the event that Participant breaches any such restrictive covenant, the Company shall be entitled to an injunction restraining Participant from further violating such restrictive covenant.  If the Company shall institute any action or proceeding to enforce any such restrictive covenant, Participant hereby waives the claim or defense that the Company has an adequate remedy at law and agrees not to assert such claim or defense.  The foregoing shall not prejudice the Company’s right to require Participant to account for and pay over to the Company, and Participant hereby agrees to account for and pay over, any  compensation, profits, monies, accruals or other benefits derived or received by Participant as a result of any transaction constituting a breach of any of the restrictive covenants provided in Sections 4.1 or 4.2 hereof.

ARTICLE V.

OTHER PROVISIONS

Section 5.1 ‑ PSUs Not Transferable

Neither the PSUs nor Dividend Equivalents, nor any interest or right therein or part thereof, shall be liable for the debts, contracts or engagements of the Participant or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided however, that this Section 5.1 shall not prevent transfers by will or by the applicable laws of descent and distribution.

Section 5.2 ‑ No Right to Continued Employment

Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in the employ or service of the Company, any Parent Corporation or any Subsidiary or shall interfere with or restrict in any way the rights of the Company, any Parent Corporation or any Subsidiary, which are hereby expressly reserved, to discharge the Participant at any time for any reasons whatsoever, with or without Cause.

Section 5.3 ‑ Conditions to Issuance of Stock Certificates

The Company shall not be required to issue or deliver any certificate or certificates for Shares pursuant to this Agreement prior to fulfillment of all of the following conditions:

(a)        The admission of such Shares to listing on all stock exchanges on which such class of stock is then listed; and

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(b)        The completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Committee shall, in its sole discretion, deem necessary or advisable; and

(c)        The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its sole discretion, determine to be necessary or advisable; and

(d)        Subject to Section 5.10, the payment by the Participant of all amounts which, under federal, state or local tax law, the Company, a Parent Corporation or a Subsidiary is required to withhold upon vesting or payment of a PSU and/or Dividend Equivalent; and

(e)        The lapse of such reasonable period of time as the Committee may from time to time establish for reasons of administrative convenience.

Section 5.4 ‑ Notices

Any notice to be delivered to the Company under this Agreement shall be delivered to such individual and in such form as the Committee shall specify from time to time and communicate to the Participant.  Any notice to be delivered to the Participant shall be addressed to the Participant at the Participant’s last address reflected in the Company’s records.  Notices may, as approved by the Committee be given electronically (or by facsimile), and if so approved will be deemed given when sent.  Otherwise, notices shall be sent by reputable overnight courier or by certified mail (return receipt requested) through the United States Postal Service.

Section 5.5 ‑ Rights as Stockholder

Participant shall not, by virtue of the PSUs, be entitled to vote in any Company election, receive any dividend in respect of Shares subject to the PSUs (except as provided under Section 3.5 above) or exercise any other rights of a stockholder of the Company.  The PSUs shall not confer upon the Participant any rights of a stockholder of the Company unless and until the PSUs have vested and certificates representing the Shares subject to the PSUs shall have been issued by the Company pursuant to the terms of this Agreement.

Section 5.6 ‑ Titles

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

Section 5.7 ‑ Conformity to Laws

The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of applicable law, including without limitation the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including without limitation Rule 16b-3 of the Exchange Act.  Notwithstanding anything herein to the contrary, this

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Agreement shall be administered, and the PSUs shall be granted, only in such a manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law, this Agreement and the PSUs granted hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

Section 5.8 ‑ Section 409A

Section 409A of the Internal Revenue Code provides that “nonqualified deferred compensation” that does not meet the requirements specified in Section 409A may become subject to penalty taxes.  Currently, the Company does not believe that PSUs constitute nonqualified deferred compensation within the meaning of Section 409A; however, if, in the future, the PSUs are or may become subject to Section 409A, the Committee may make such modifications to the Plan and this Agreement as may become necessary or advisable, in the Committee’s sole discretion, to either comply with Section 409A or to avoid its application to the PSUs.

Section 5.9 ‑ Amendment

This Agreement and the Plan may be amended without the consent of the Participant provided that such amendment would not impair any rights of the Participant under this Agreement.  No amendment of this Agreement shall, without the written consent of the Participant, impair any rights of the Participant under this Agreement.

Section 5.10 ‑ Tax Withholding

The Company’s obligation to issue or deliver to the Participant any certificate or certificates for Shares is expressly conditioned upon receipt from the Participant, on or prior to the date reasonably specified by the Company of:

(a)        Full payment (in cash or by check) of any amount that must be withheld by the Company, a Parent Corporation or Subsidiary for federal, state and/or local tax purposes; or

(b)        Subject to the Committee’s consent, full payment by delivery to the Company of unrestricted Shares previously owned by the Participant, duly endorsed for transfer to the Company by the Participant with an aggregate Fair Market Value (determined, as applicable, as of the date of vesting or as of the date of the distribution) equal to the amount that must be withheld by the Company, a Parent Corporation or a Subsidiary for federal, state and/or local tax purposes; or

(c)        With respect to the withholding obligation for PSUs that become vested and Dividend Equivalents that become payable, subject to the Committee’s consent, full payment by retention by the Company of a portion of the Shares (or cash as applicable) deliverable in respect of such vested PSUs and Dividend Equivalents with an aggregated Fair Market Value (determined on the payment date) equal to the amount that must be withheld by the Company, a Parent Corporation or a Subsidiary for federal, state and/or local tax purposes; or

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(d)        With respect to any withholding tax obligations for PSUs that become vested, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable to Participant pursuant to the PSUs, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company or the Subsidiary with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided that payment of such proceeds is then made to the Company or the applicable Subsidiary at such time as may be required by the Committee, but in any event not later than the settlement of such sale; or

(e)        Subject to the Committee’s consent, a combination of payments provided for in the foregoing subsections (a), (b), (c) and (d).

With respect to each individual who was an executive officer of the Company and subject to Section 16 of the Exchange Act on the Grant Date only, the Committee in approving this PSU award has consented to payment of tax withholding obligations under subsection (c), or a combination of the methods set forth in subsections (a), (c) and (d), as the Participant may elect during such time periods as the Company may permit in compliance with all applicable legal requirements.

Notwithstanding anything herein to the contrary, the number of Shares which may be withheld with respect to the payment of any PSUs and/or Dividend Equivalents in order to satisfy the Company’s federal, state and/or local tax withholding obligations with respect to the payment of the PSUs and/or Dividend Equivalents shall be no greater than the number of Shares which have a Fair Market Value on the date of withholding equal to the aggregate amount of such withholding obligations based on the maximum statutory withholding rates in Participant’s applicable jurisdictions for federal, state, local and/or foreign income and payroll tax purposes.

Section 5.11 ‑ Clawback

Notwithstanding anything contained in the Agreement to the contrary, all PSUs and Dividend Equivalents awarded under this Agreement, and any Shares issued upon settlement hereunder shall be subject to forfeiture, or repayment pursuant to the terms of any policy that the Company may implement in compliance with the requirements of applicable law, including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder.

Section 5.12 ‑ Governing Law

The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

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IN WITNESS HEREOF, this Agreement has been executed and delivered by the parties hereto.

OWENS-ILLINOIS, INC.

By:

Its:

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EX-10.3

Exhibit 10.3

OWENS-ILLINOIS, INC.

AMENDED AND RESTATED

2017 INCENTIVE AWARD PLAN

DIRECTOR RESTRICTED STOCK UNIT AGREEMENT

THIS RESTRICTED STOCK UNIT (“RSU”) AGREEMENT (“AGREEMENT”) is made by and between Owens-Illinois, Inc., a Delaware corporation (the “Company”) and the member of the Board of Directors of the Company whose account for which this grant is being accepted (the “Director”) effective as of the grant date referenced above (the “Date of Grant”):

WHEREAS, the Company has established the Amended and Restated 2017 Incentive Award Plan (the “Plan”); and

WHEREAS, the Plan provides for the issuance of RSUs, subject to certain vesting conditions thereon and to other conditions stated herein; and

WHEREAS, the Board of Directors of the Company (the “Board”) after consultation with the Compensation Committee of the Board (the “Committee”) has determined that it would be to the advantage and best interest of the Company and its stockholders to issue the RSUs provided for herein to the Director in partial consideration of services rendered, or to be rendered, to the Company.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I.

DEFINITIONS

             Whenever the following terms are used in this Agreement, they shall have the meaning specified below, unless the context clearly indicates to the contrary.  Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan.  The masculine pronoun shall include the feminine and neuter and the singular shall include the plural, where the context so indicates.

Section 1.1.Cause

                         “Cause” shall mean dishonesty, disloyalty, misconduct, insubordination, failure to reasonably devote working time to assigned duties, failure or refusal to comply with any reasonable rule, regulation, standard or policy which from time to time may be established by the Company, including, without limitation, those policies set forth in the Owens-Illinois Policy Manual in effect from time to time, or failure to fully cooperate with any investigation of an alleged violation of any such rule, regulation, standard or policy.

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Section 1.2.Disability

“Disability” means the total disability of the Director, as determined in the sole discretion of the Committee.

Section 1.3.Parent Corporation

“Parent Corporation” shall mean any corporation in an unbroken chain of corporations ending with the Company if each of the corporations other than the Company then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

Section 1.4. Retirement

“Retirement” shall mean the retirement and “separation from service” (within the meaning of Section 409A of the Code) of a Director from the Company, a Parent Corporation or a Subsidiary after reaching the Company’s normal retirement age or the early retirement of a Director from the Company, a Parent Corporation or a Subsidiary after reaching the age of 60.

Section 1.5.Rule 16b-3

“Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time.

Section 1.6.Secretary

             “Secretary” shall mean the Secretary of the Company.

ARTICLE II.

ISSUANCE OF RSUs

Section 2.1.Issuance of RSUs

In consideration of the services rendered or to be rendered to the Company, a Parent Corporation or a Subsidiary and for other good and valuable consideration which the Committee has determined to be equal to the par value of its Common Stock, on the Date of Grant the Company awards to the Director the number of RSUs specified for this grant in the Employee’s Solium Shareworks Account, upon the terms and conditions set forth in this Agreement.

Section 2.2.No Right to Continued Service

Nothing in this Agreement or in the Plan shall confer upon the Director any right to continue in the membership of the Board.

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ARTICLE III.

VESTING; PAYMENT

Section 3.1.Vesting of RSUs

             Except as otherwise provided in this Section 3.1 and in Section 3.4 below, the RSUs shall vest in their entirety on the date of the Company’s annual meeting of shareholders at which directors are elected following the Date of Grant or such earlier date as the Director experiences a Termination of Service by reason of the Director’s death, Disability or Retirement.  If the Director experiences a Termination of Service other than by reason of the Director’s death, Disability or Retirement or for Cause, such Director shall immediately vest in that number of RSUs, equal to the number of RSUs in which such Director would have vested on the next annual meeting of shareholders at which directors are elected, but for such Termination of Service, times a fraction, the numerator of which is the number of days from the Date of Grant to the date of the Termination of Service and the denominator of which is the number of days from the Date of Grant to the next annual meeting of shareholders at which directors are elected. 

Section 3.2.Termination of RSUs

Until vested pursuant to Section 3.1 or 3.4, all RSUs issued to the Director pursuant to this Agreement shall terminate immediately upon the Director’s Termination of Service. 

Section 3.3.Payment of RSUs

Vested RSUs shall become payable within 30 days after the earlier of (i) the date of the Company’s annual meeting of shareholders at which directors are elected following the Date of Grant or (ii) the Director’s Termination of Service which constitutes a “separation from service” within the meaning of the regulations under Section 409A of the Internal Revenue Code of 1986, as amended.  Each vested RSU shall entitle the Director to receive a number of Shares, on a one for one basis, based on the number of RSUs which are vested as of the payment date. 

Section 3.4.Change in Control

Notwithstanding any other provision of this Agreement, upon a Change in Control, the Committee shall then provide by resolution adopted prior to such event that, at some time prior to the effective date of such event, all outstanding RSUs not previously terminated pursuant to Section 3.2 shall fully vest.

Section 3.5.Dividend Equivalents

A bookkeeping account will be established by the Company to which Dividend Equivalents equal to the product of (a) the number of RSUs subject to this Agreement, and (b) the dividend declared on a single share of Common Stock will be credited. To the extent the Director becomes vested in the RSUs issued pursuant to this Agreement, such Dividend Equivalents will be converted to cash or additional Shares (as may be determined by the

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Committee in its sole discretion) and will be paid to the Director at the same time as the Shares of Common Stock are issued with respect to the vested RSUs. The Dividend Equivalents will cease and be forfeited upon the earlier of (i) the settlement of the RSUs into shares of Common Stock, and (ii) the forfeiture and termination of the RSUs under this Agreement.  

Section 3.6.Adjustments

             In the event of any change in the number or type of outstanding Shares as a result of a stock dividend, stock split or otherwise, the Committee may make such adjustments to the number of RSUs and corresponding Dividend Equivalents credited to the Director and the Shares subject to such RSUs as the Committee deems appropriate in its sole discretion.

ARTICLE IV.

MISCELLANEOUS

Section 4.1.Administration

The Committee shall have the power to interpret the Plan and this Agreement, and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith, to interpret, amend or revoke any such rules.  All action taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Director, the Company and all other interested persons. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan or this Agreement except with respect to matters which, under Rule 16b-3, or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee.  No member of the Committee or Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the RSUs and/or Dividend Equivalents, and all members of the Committee and the Board shall be fully protected by the Company in respect of any such action, determination or interpretation.

Section 4.2.RSUs Not Transferable

Neither the RSUs nor Dividend Equivalents, nor any interest or right therein or part thereof, shall be liable for the debts, contracts or engagements of the Director or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means, whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided however, that this Section 4.2 shall not prevent transfers by will or by the applicable laws of descent and distribution.

Section 4.3.Conditions to Issuance of Stock Certificates

             The Company shall not be required to issue or deliver any certificate or certificates for Shares pursuant to this Agreement prior to fulfillment of all of the following conditions:

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             (a)        The admission of such Shares to listing on all stock exchanges on which such class of stock is then listed; and

             (b)        The completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Committee shall, in its sole discretion, deem necessary or advisable; and

             (c)        The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its sole discretion, determine to be necessary or advisable; and

             (d)        The lapse of such reasonable period of time as the Committee may from time to time establish for reasons of administrative convenience.

Section 4.4.Notices

Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Director shall be addressed to him at the address given beneath his signature hereto.  By a notice given pursuant to this Section 4.4, either party may hereafter designate a different address for notices to be given to him.  Any notice which is required to be given to the Director shall, if the Director is then deceased, be given to the Director’s personal representative if such representative has previously informed the Company of his status and address by written notice under this Section 4.4.  Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

Section 4.5.Rights as Stockholder

The Director shall not, by virtue of any RSU, be entitled to vote in any Company election, receive any dividend in respect of the Shares subject to any RSU (except as provided under Section 3.5 above) or exercise any other rights of a stockholder of the Company.  The RSUs shall not confer upon the Director any rights of a stockholder of the Company unless and until such RSUs have vested and Shares have been distributed in respect of such RSUs.

Section 4.6.Titles

             Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

Section 4.7.Conformity to Laws

The Director acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of applicable law, including without limitation the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including without limitation Rule 16b-3.  Notwithstanding anything herein to the contrary, this Agreement shall be

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administered only in such a manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

Section 4.8.Section 409A

It is intended that this Agreement shall comply with the provisions of Section 409A of the Code (“Section 409A”) and the Treasury Regulations relating thereto (the “Treasury Regulations”) so as not to subject the Director to the payment of additional taxes and interest under Section 409A.  In furtherance of this intent, this Agreement shall be interpreted, operated, and administered in a manner consistent with these intentions, and to the extent that any regulations or other guidance issued under Section 409A would result in the Director's being subject to payment of additional income taxes or interest under Section 409A, the Director and the Company agree to amend this Agreement in order to avoid the application of such taxes or interest under Section 409A.  Notwithstanding any provision to the contrary in this Agreement, no payment or distribution under this Agreement which constitutes an item of deferred compensation under Section 409A and becomes payable by reason of the Director's Termination of Service shall be made to the Director prior to the expiration of the six (6)-month period measured from the date of the Director’s “separation from service” (as such term is defined in the Treasury Regulations) if the Director is deemed at the time of such separation from service to be a “specified employee” within the meaning of such term as defined in the Treasury Regulations and such delayed commencement is otherwise required in order to avoid additional taxes and interest under Section 409A.  Upon the expiration of any such delayed payment period, all payments and benefits deferred pursuant to this Section 4.8 (whether they would have otherwise been payable in a single sum or in installments in the absence of such deferral) shall be paid or reimbursed to the Director in a lump sum, and any remaining payments due under this Agreement will be paid in accordance with the normal payment dates specified for them herein.

Section 4.9.Amendments

             This Agreement and the Plan may be amended without the consent of the Director provided that such amendment would not impair any rights of the Director under this Agreement.  No amendment of this Agreement shall, without the consent of the Director, impair any rights of the Director under this Agreement.

Section 4.10.Tax Withholding

To the extent the Company, any Parent Corporation or a Subsidiary has any withholding obligations for the RSUs upon grant, vesting or settlement hereunder and/or the Dividend Equivalents upon payment hereunder, the Company will, unless the Director elects otherwise, automatically retain a portion of the Shares (or cash, as applicable) otherwise deliverable in respect of such vested RSUs and Dividend Equivalents with an aggregate fair market value (determined on the date such withholding obligation arises) equal to the amount that must be withheld by the Company, a Parent Corporation or a Subsidiary for federal, state and/or local tax purposes.  The Director may, however, elect to pay the Company, any Parent Corporation or a Subsidiary the amount of any required withholdings in cash or by check and not have Shares (or cash, as applicable) withheld. 

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Section 4.11.Governing Law

This Agreement shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof.

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IN WITNESS HEREOF, this Agreement has been executed and delivered by the parties hereto.

OWENS-ILLINOIS, INC.

By:

Its:

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EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Andres A. Lopez, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Owens-Illinois, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 1, 2019	/s/ Andres A. Lopez
		Andres A. Lopez
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, John A. Haudrich, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Owens-Illinois, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 1, 2019	/s/ John A. Haudrich
		John A. Haudrich
		Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification of Principal Executive Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Owens-Illinois, Inc. (the “Company”) hereby certifies that to such officer’s knowledge:

(i) the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:August 1, 2019	/s/ Andres A. Lopez
	Andres A. Lopez
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

Certification of Principal Financial Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Owens-Illinois, Inc. (the “Company”) hereby certifies that to such officer’s knowledge:

(i) the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 1, 2019	/s/ John A. Haudrich
	John A. Haudrich
	Senior Vice President and Chief Financial Officer

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2019 shares
Document and Entity Information
Entity Registrant Name	OWENS-ILLINOIS, INC.
Entity Central Index Key	0000812074
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2019
Entity File Number	1-9576
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	22-2781933
Entity Address, Address Line One	One Michael Owens Way
Entity Address, City or Town	Perrysburg
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43551
City Area Code	567
Local Phone Number	336-5000
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	OI
Security Exchange Name	NYSE
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	155,456,952
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2

XML

CONSOLIDATED RESULTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
CONSOLIDATED RESULTS OF OPERATIONS
Net sales	$ 1,756	$ 1,772	$ 3,393	$ 3,508
Revenue, Product and Service [Extensible List]	Net sales	Net sales	Net sales	Net sales
Cost of goods sold	$ (1,420)	$ (1,426)	$ (2,760)	$ (2,843)
Gross profit	336	346	633	665
Selling and administrative expense	(116)	(126)	(231)	(252)
Research, development and engineering expense	(18)	(17)	(34)	(33)
Interest expense, net	(68)	(74)	(132)	(136)
Equity earnings	19	21	38	38
Other expense, net	(55)	(72)	(65)	(69)
Earnings from continuing operations before income taxes	98	78	209	213
Provision for income taxes	(27)	(22)	(54)	(54)
Earnings from continuing operations	71	56	155	159
Loss from discontinued operations	(1)		(1)	(1)
Net earnings	70	56	154	158
Net earnings attributable to noncontrolling interests	(5)	(6)	(10)	(11)
Net earnings attributable to the Company	65	50	144	147
Amounts attributable to the Company:
Earnings from continuing operations	66	50	145	148
Loss from discontinued operations	(1)		(1)	(1)
Net earnings attributable to the Company	$ 65	$ 50	$ 144	$ 147
Basic earnings per share:
Earnings from continuing operations (in dollars per share)	$ 0.42	$ 0.31	$ 0.94	$ 0.91
Loss from discontinued operations (in dollars per share)			(0.01)	(0.01)
Net earnings (in dollars per share)	$ 0.42	$ 0.31	$ 0.93	$ 0.90
Weighted average shares outstanding (thousands) (in shares)	155,338	160,858	154,852	161,904
Diluted earnings per share:
Earnings from continuing operations (in dollars per share)	$ 0.42	$ 0.31	$ 0.93	$ 0.90
Loss from discontinued operations (in dollars per share)			(0.01)
Net earnings (in dollars per share)	$ 0.42	$ 0.31	$ 0.92	$ 0.90
Weighted average diluted shares outstanding (thousands) (in shares)	156,471	162,712	156,555	163,964

XML

CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
CONSOLIDATED COMPREHENSIVE INCOME
Net earnings	$ 70	$ 56	$ 154	$ 158
Other comprehensive income (loss):
Foreign currency translation adjustments	1	(268)	50	(141)
Pension and other postretirement benefit adjustments, net of tax	16	29	22	36
Change in fair value of derivative instruments, net of tax	(9)	(1)	(4)	(6)
Other comprehensive income (loss)	8	(240)	68	(111)
Total comprehensive income (loss)	78	(184)	222	47
Comprehensive income (loss) attributable to noncontrolling interests	7	9	(1)	(2)
Comprehensive income (loss) attributable to the Company	$ 85	$ (175)	$ 221	$ 45

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Current assets:
Cash and cash equivalents	$ 371	$ 512	$ 365
Trade receivables, net of allowance of $34 million, $35 million, and $35 million at June 30, 2019, December 31, 2018 and June 30, 2018	1,275	549	1,026
Inventories	1,015	1,018	985
Prepaid expenses and other current assets	282	278	248
Total current assets	2,943	2,357	2,624
Property, plant and equipment, net	3,216	3,085	3,025
Goodwill	2,527	2,513	2,533
Intangibles, net	422	400	419
Other assets	1,615	1,344	1,217
Total assets	10,723	9,699	9,818
Current liabilities:
Accounts payable	1,074	1,321	1,088
Short-term loans and long-term debt due within one year	96	160	291
Current portion of asbestos-related liabilities	135	160	100
Other liabilities	624	566	576
Other liabilities - discontinued operations			115
Total current liabilities	1,929	2,207	2,170
Long-term debt	6,235	5,181	5,377
Asbestos-related liabilities	364	442	456
Other long-term liabilities	1,105	969	916
Share owners' equity	1,090	900	899
Total liabilities and share owners' equity	$ 10,723	$ 9,699	$ 9,818

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
CONSOLIDATED BALANCE SHEETS
Trade receivables allowance	$ 34	$ 35	$ 35

XML

CONDENSED CONSOLIDATED CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net earnings	$ 154	$ 158
Loss from discontinued operations	1	1
Non-cash charges
Depreciation and amortization	253	254
Pension expense	16	17
Restructuring, asset impairment and related charges	32	70
Pension settlement charges	2
Cash payments
Pension contributions	(19)	(18)
Asbestos-related payments	(103)	(26)
Cash paid for restructuring activities	(29)	(12)
Change in components of working capital	(939)	(586)
Other, net (a)	(30)	(8)
Cash utilized in operating activities	(662)	(150)
Cash utilized in discontinued operating activities	(1)	(1)
Total cash utilized in operating activities	(663)	(151)
Cash flows from investing activities:
Cash payments for property, plant and equipment	(233)	(273)
Acquisitions, net of cash acquired	(157)
Contributions and advances to joint ventures	(22)	(25)
Net cash proceeds on disposal of assets	1	9
Other, net	1	2
Cash utilized in investing activities	(410)	(287)
Cash flows from financing activities:
Changes in borrowings, net	970	437
Treasury shares repurchased	(38)	(95)
Payment of finance fees	(8)	(12)
Distributions to noncontrolling interests	(7)	(8)
Dividends paid	(16)
Net cash proceeds for hedging activity	28
Other, net	(3)
Cash provided by financing activities	926	322
Effect of exchange rate fluctuations on cash	6	(11)
Decrease in cash	(141)	(127)
Cash at beginning of period	512	492
Cash at end of period	$ 371	$ 365

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Segment Information

6 Months Ended

Jun. 30, 2019

Segment Information

Segment Information

1. Segment Information

The Company has three reportable segments and three operating segments based on its geographic locations: Americas, Europe and Asia Pacific. These three segments are aligned with the Company’s internal approach to managing, reporting, and evaluating performance of its global glass operations. Certain assets and activities not directly related to one of the regions or to glass manufacturing are reported with Retained corporate costs and other. These include licensing, equipment manufacturing, global engineering, and certain equity investments. Retained corporate costs and other also includes certain headquarters administrative and facilities costs and certain incentive compensation and other benefit plan costs that are global in nature and are not allocable to the reportable segments.

The Company’s measure of profit for its reportable segments is segment operating profit, which is a non-GAAP financial measure that consists of consolidated earnings from continuing operations before interest income, interest expense, and provision for income taxes and excludes amounts related to certain items that management considers not representative of ongoing operations, as well as certain retained corporate costs. The Company’s management uses segment operating profit, in combination with net sales and selected cash flow information, to evaluate performance and to allocate resources. Segment operating profit for reportable segments includes an allocation of some corporate expenses based on both a percentage of sales and direct billings based on the costs of specific services provided.

Financial information for the three and six months ended June 30, 2019 and 2018 regarding the Company’s reportable segments is as follows:

	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Net sales:
Americas	$	934	$	930	$	1,815		$	1,838
Europe		650		674		1,246			1,317
Asia Pacific		152		153		303			326
Reportable segment totals		1,736		1,757		3,364			3,481
Other		20		15		29			27
Net sales	$	1,756	$	1,772	$	3,393		$	3,508

	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Segment operating profit:
Americas	$	144	$	152	$	257	$	299
Europe		90		101		169		173
Asia Pacific		2		2		10		7
Reportable segment totals		236		255		436		479
Items excluded from segment operating profit:
Retained corporate costs and other		(28)		(30)		(53)		(57)
Restructuring, asset impairment and other		(42)		(73)		(42)		(73)
Interest expense, net		(68)		(74)		(132)		(136)
Earnings from continuing operations before income taxes	$	98	$	78	$	209	$	213

Financial information regarding the Company’s total assets is as follows:

	June 30,		December 31,		June 30,
	2019		2018		2018
Total assets:
Americas	$	5,994	$	5,497	$	5,402
Europe		3,342		3,036		3,232
Asia Pacific		1,045		918		981
Reportable segment totals		10,381		9,451		9,615
Other		342		248		203
Consolidated totals	$	10,723	$	9,699	$	9,818

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Revenue

6 Months Ended

Jun. 30, 2019

Revenue

Revenue

2. Revenue

Revenue is recognized when obligations under the terms of the Company’s contracts and related purchase orders with its customers are satisfied. This occurs with the transfer of control of glass containers, which primarily takes place when products are shipped from the Company’s manufacturing or warehousing facilities to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimated provisions for rebates, discounts, returns and allowances. Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s payment terms are based on customary business practices and can vary by customer type. The term between invoicing and when payment is due is not significant. Also, the Company elected to account for shipping and handling costs as a fulfillment cost at the time of shipment.

For the three and six month periods ended June 30, 2019 and June 30, 2018, the Company had no material bad debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the Condensed Consolidated Balance Sheet. For the three and six month periods ended June 30, 2019 and June 30, 2018, revenue recognized from prior periods (for example, due to changes in transaction price) was not material.

The following tables for the three months ended June 30, 2019 and 2018 disaggregates the Company’s revenue by customer end use:

	Three months ended June 30, 2019
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	590	$	474	$	105	$	1,169
Food and other		191		109		29		329
Non-alcoholic beverages		153		67		18		238
Reportable segment totals	$	934	$	650	$	152	$	1,736
Other								20
Net sales							$	1,756
	Three months ended June 30, 2018
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	585	$	493	$	113	$	1,191
Food and other		197		112		23		332
Non-alcoholic beverages		148		69		17		234
Reportable segment totals	$	930	$	674	$	153	$	1,757
Other								15
Net sales							$	1,772

The following tables for the six months ended June 30, 2019 and 2018 disaggregates the Company’s revenue by customer end use:

	Six months ended June 30, 2019
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	1,153	$	907	$	214	$	2,274
Food and other		372		211		54		637
Non-alcoholic beverages		290		128		35		453
Reportable segment totals	$	1,815	$	1,246	$	303	$	3,364
Other								29
Net sales							$	3,393
	Six months ended June 30, 2018
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	1,161	$	964	$	240	$	2,365
Food and other		386		224		47		657
Non-alcoholic beverages		291		129		39		459
Reportable segment totals	$	1,838	$	1,317	$	326	$	3,481
Other								27
Net sales							$	3,508

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Inventories

6 Months Ended

Jun. 30, 2019

Inventories

Inventories

3. Inventories

Major classes of inventory at June 30, 2019, December 31, 2018 and June 30, 2018 are as follows:

	June 30,		December 31,		June 30,
	2019		2018		2018
Finished goods	$	838	$	849	$	821
Raw materials		131		125		123
Operating supplies		46		44		41
	$	1,015	$	1,018	$	985

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Derivative Instruments

6 Months Ended

Jun. 30, 2019

Derivative Instruments

Derivative Instruments

4. Derivative Instruments

The Company has certain derivative assets and liabilities, which consist of natural gas forwards, foreign exchange option and forward contracts, interest rate swaps and cross currency swaps. The valuation of these instruments is determined primarily using the income approach, including discounted cash flow analysis on the expected cash flows of each derivative. Natural gas forward rates, foreign exchange rates and interest rates are the significant inputs into the valuation models. The Company also evaluates counterparty risk in determining fair values. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. These inputs are observable in active markets over the terms of the instruments the Company holds, and accordingly, the Company classifies its derivative assets and liabilities as Level 2 in the hierarchy.

Commodity Forward Contracts Designated as Cash Flow Hedges

The Company enters into commodity forward contracts related to forecasted natural gas requirements, the objectives of which are to limit the effects of fluctuations in the future market price paid for natural gas and the related volatility in cash flows.

An unrecognized gain of $2 million at June 30, 2019, an unrecognized gain of $1 million at December 31, 2018 and an unrecognized gain of $7 million at June 30, 2018 related to the commodity forward contracts were included in Accumulated OCI, and will be reclassified into earnings in the period when the commodity forward contracts expire.

Foreign Exchange Derivative Contracts Not Designated as Hedging Instruments

The Company uses short-term forward exchange or option agreements to purchase foreign currencies at set rates in the future. These agreements are used to limit exposure to fluctuations in foreign currency exchange rates for significant planned purchases of fixed assets or commodities that are denominated in currencies other than the subsidiaries’ functional currency. The Company also uses foreign exchange agreements to offset the foreign currency risk for receivables and payables, including intercompany receivables, payables, and loans, not denominated in, or indexed to, their functional currencies.

Cash Flow Hedges of Foreign Exchange Risk

The Company has variable-interest rate borrowings denominated in currencies other than the functional currency of the borrowing subsidiaries. As a result, the Company is exposed to fluctuations in the currency of the borrowing against the subsidiaries’ functional currency.  The Company uses derivatives to manage these exposures and designates these derivatives as cash flow hedges of foreign exchange risk.

During the second quarter of 2019, the Company terminated a portion of its cross-currency swaps, which resulted in a $15 million cash inflow recognized in the Cash flows from financing activities section of the Condensed Consolidated Cash Flows.

An unrecognized loss of $18 million at June 30, 2019, an unrecognized loss of $9 million at December 31, 2018 and an unrecognized loss of $8 million at June 30, 2018, related to these cross-currency swaps, were included in Accumulated OCI, and will be reclassified into earnings within the next twelve months.

Interest Rate Swaps Designated as Fair Value Hedges

The Company enters into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. The Company’s fixed-to-variable interest rate swaps are accounted for as fair value hedges. The relevant terms of the swap agreements match the corresponding terms of the notes and therefore there is no hedge ineffectiveness. The Company recorded the net of the fair market values of the swaps as a long-term liability and short-term asset, along with a corresponding net decrease in the carrying value of the hedged debt.

During the second quarter of 2019, the Company terminated a portion of its interest rate swaps, which resulted in a $13 million cash inflow recognized in the Cash flows from financing activities section of the Condensed Consolidated Cash Flows.

Cash Flow Hedges of Interest Rate Risk

The Company enters into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments. These interest rate swap agreements were used to hedge the variable cash flows associated with variable-rate debt.

An unrecognized loss of $1 million at June 30, 2019 and an unrecognized loss of less than $1 million at December 31, 2018, related to these interest rate swaps, was included in Accumulated OCI, and will be reclassified into earnings within the next twelve months.

Net Investment Hedges

The Company is exposed to fluctuations in foreign exchange rates on investments it holds in non-U.S. subsidiaries and uses cross-currency swaps to partially hedge this exposure.  

An unrecognized gain of $5 million at June 30, 2019 and an unrecognized gain of $4 million at year ended December 31, 2018, related to these net investment hedges, was included in Accumulated OCI, and will be reclassified into earnings within the next twelve months.

Balance Sheet Classification

The following table shows the amount and classification (as noted above) of the Company’s derivatives at June 30, 2019, December 31, 2018 and June 30, 2018:

	Fair Value of						Fair Value of
	Hedge Assets						Hedge Liabilities
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
	2019		2018		2018		2019		2018		2018
Derivatives designated as hedging instruments:
Commodity forward contracts (a)	$	2	$	1	$	7	$	1	$	-	$	-
Interest rate swaps - fair value hedges (b)		15		6		6				1		8
Cash flow hedges of foreign exchange risk (c)		20		10		5		30		1		12
Interest rate swaps - cash flow hedges (d)		1						2
Net investment hedges (e)		6		6				6		8
Total derivatives accounted for as hedges	$	44	$	23	$	18	$	39	$	10	$	20
Derivatives not designated as hedges:
Foreign exchange derivative contracts (f)		2		2		2		1		2		2
Total derivatives	$	46	$	25	$	20	$	40	$	12	$	22
Current	$	13	$	19	$	13	$	3	$	3	$	3
Noncurrent		33		6		7		37		9		19
Total derivatives	$	46	$	25	$	20	$	40	$	12	$	22

(a) The notional amounts of the commodity forward contracts were $19 million, $21 million and $21 million at June 30, 2019, December 31, 2018 and June 30, 2018, respectively. The maximum maturity dates were in 2020 for all three periods.

(b) The notional amounts of the interest rate swaps designated as fair value hedges were €725 million at June 30, 2019, December 31, 2018 and June 30, 2018, respectively. The maximum maturity dates were in 2024 for all three periods.

(c) The notional amounts of the cash flow hedges of foreign exchange risk were $1.210 billion, $587 million and $310 million at June 30, 2019, December 31, 2018 and June 30, 2018, respectively. The maximum maturity dates were in 2023 for all three periods.

(d) The notional amounts of the interest rate swaps designated as cash flow hedges were $480 million at June 30, 2019 and $180 million at June 30, 2018 and December 31, 2018. Maximum maturity dates were 2021 at June 30, 2019 and 2020 at June 30, 2018 and December 31, 2018, respectively.

(e) The notional amounts of the net investment hedges were €160 million and maximum maturity dates were 2020 at June 30, 2019 and December 31, 2018.

(f) The notional amounts of the foreign exchange derivative contracts were $292 million, $470 million and $380 million and maximum maturity dates were 2019, 2019, and 2018 at June 30, 2019, December 31, 2018 and June 30, 2018, respectively.

	Gain (Loss) Recognized in OCI (Effective Portion)				Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1)
	Three months ended June 30,				Three months ended June 30,
Derivatives designated as hedging instruments:	2019		2018		2019		2018
Cash Flow Hedges
Commodity forward contracts (a)	$	(1)	$	4	$	—	$	—
Cash flow hedges of foreign exchange risk (b)		(5)		14		(2)		18
Cash flow hedges of interest rate risk (c)		(1)
Net Investment Hedges
Net Investment Hedges		5				(4)
	$	(2)	$	18	$	(6)	$	18
	Gain (Loss) Recognized in OCI (Effective Portion)				Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1)
	Six months ended June 30,				Six months ended June 30,
Derivatives designated as hedging instruments:	2019		2018		2019		2018
Cash Flow Hedges
Commodity forward contracts (a)	$	1	$	5	$	(1)	$	(1)
Cash flow hedges of foreign exchange risk (b)		2		1		(12)		10
Cash flow hedges of interest rate risk (c)		(1)
Net Investment Hedges
Net Investment Hedges		5				(4)
	$	7	$	6	$	(17)	$	9
	Amount of Gain (Loss) Recognized in Other income (expense), net				Amount of Gain (Loss) Recognized in Other income (expense), net
	Three months ended June 30,				Six months ended June 30,
Derivatives not designated as hedges:	2019		2018		2019		2018
Foreign exchange derivative contracts	$	1	$	—	$	7	$	—
(1) Gains and losses reclassified from accumulated OCI and recognized in income are recorded to (a) cost of goods sold, (b) other expense, net or (c) interest expense, net.

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Restructuring Accruals

6 Months Ended

Jun. 30, 2019

Restructuring Accruals

Restructuring Accruals

5. Restructuring Accruals

Selected information related to the restructuring accruals for the three months ended June 30, 2019 and 2018 is as follows:

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at April 1, 2019	$	34	$		$	19	$	53
Charges		27				5		32
Net cash paid, principally severance and related benefits		(11)				(3)		(14)
Other, including foreign exchange translation						(1)		(1)
Balance at June 30, 2019	$	50	$	—	$	20	$	70

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at April 1, 2018	$	63	$		$	17	$	80
Charges		15		53		2		70
Write-down of assets to net realizable value				(53)				(53)
Net cash paid, principally severance and related benefits		(5)				(1)		(6)
Other, including foreign exchange translation		(2)				(2)		(4)
Balance at June 30, 2018	$	71	$	—	$	16	$	87

Selected information related to the restructuring accruals for the six months ended June 30, 2019 and 2018 is as follows:

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2019	$	47	$		$	22	$	69
Charges		27				5		32
Net cash paid, principally severance and related benefits		(24)				(5)		(29)
Other, including foreign exchange translation						(2)		(2)
Balance at June 30, 2019	$	50	$	—	$	20	$	70

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2018	$	67	$		$	18	$	85
Charges		15		53		2		70
Write-down of assets to net realizable value				(53)				(53)
Net cash paid, principally severance and related benefits		(10)				(2)		(12)
Other, including foreign exchange translation		(1)				(2)		(3)
Balance at June 30, 2018	$	71	$	—	$	16	$	87

When a decision is made to take restructuring actions, the Company manages and accounts for them programmatically apart from the on-going operations of the business. Information related to major programs are presented separately while minor initiatives are presented on a combined basis. As of June 30, 2019 and 2018, no major restructuring programs were in effect.

In the three and six months ended June 30, 2019, the Company implemented several discrete restructuring initiatives and recorded restructuring and other charges of $32 million.  These charges consisted of employee costs such as severance and benefit related costs and other exit costs primarily related to a severance program for certain salaried employees at the Company’s corporate and America’s headquarters.  These charges were recorded to Selling and administrative expense ($2 million) and Other expense, net ($30 million) on the Consolidated Results of Operations. The Company expects that the majority of the remaining cash expenditures related to the accrued employee costs will be paid out by the end of 2019.

In the three and six months ended June 30, 2018, the Company implemented several discrete restructuring initiatives and recorded restructuring, asset impairment and other charges of $70 million. These charges consisted of employee costs, write-down of assets and other exit costs primarily related to a plant closure in the Americas region. These restructuring charges were discrete actions and are expected to approximate the total cumulative costs for those actions as no significant additional costs are expected to be incurred. These restructuring actions primarily relate to capacity curtailments and the Company plans to reallocate the products produced to other facilities. These charges were recorded to Cost of goods sold ($5 million) and Other expense, net ($65 million) on the Condensed Consolidated Results of Operations. The Company expects that the majority of the remaining cash expenditures related to the above charges will be paid out by the end of 2019.

The Company’s decisions to curtail selected production capacity have resulted in write downs of certain long-lived assets to the extent their carrying value exceeded fair value or fair value less cost to sell. The Company classified the assumptions used to determine the fair value of the impaired assets in the period that the measurement was taken as Level 3 (third party appraisal) in the fair value hierarchy as set forth in the general accounting principles for fair value measurements. For the asset impairments recorded through June 30, 2019 and 2018, the remaining carrying value of the impaired assets was approximately $0 and $3 million, respectively.

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Pension Benefit Plans

6 Months Ended

Jun. 30, 2019

Pension Benefit Plans

Pension Benefit Plans

6. Pension Benefit Plans

The components of the net periodic pension cost for the three months ended June 30, 2019 and 2018 are as follows:

	U.S.				Non-U.S.
	2019		2018		2019		2018
Service cost	$	3	$	4	$	3	$	3
Interest cost		15		15		7		8
Expected asset return		(22)		(25)		(11)		(14)
Amortization of actuarial loss		10		13		3		3
Net periodic pension cost	$	6	$	7	$	2	$	—

The components of the net periodic pension cost for the six months ended June 30, 2019 and 2018 are as follows:

	U.S.				Non-U.S.
	2019		2018		2019		2018
Service cost	$	6	$	7	$	6	$	7
Interest cost		30		30		15		16
Expected asset return		(44)		(49)		(22)		(27)
Amortization of actuarial loss		20		26		5		7
Net periodic pension cost	$	12	$	14	$	4	$	3

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Leases

6 Months Ended

Jun. 30, 2019

Leases

Leases

7.  Leases

In the first quarter of 2019, the Company adopted ASC 842, Leases, and selected the modified retrospective transition as of the effective date of January 1, 2019 (the effective date method). Under the effective date method, financial results reported in periods prior to 2019 are unchanged.

The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

The Company uses an estimated incremental borrowing rate at the lease commencement date to determine the present value of lease payments when the implicit rate is not readily determinable in the lease. The Company’s incremental borrowing rate reflects a fully secured rate based on recent debt issuances, the credit rating of the Company, changes in currency, repayment timing of the lease, as well as publicly available data for instruments with similar characteristics when calculating incremental borrowing rates.

Certain lease agreements include terms with options to extend the lease, however none of these have been recognized in the Company’s right-of-use assets or lease liabilities since those options were not reasonably certain to be exercised. Leases with a term of 12 months or less are not recorded on the balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. The Company’s lease agreements include lease payments that are largely fixed, do not contain material residual value guarantees or variable lease payments and no lease transactions with related parties. For the three and six months ended June 30, 2019, the Company’s lease costs associated with leases with terms less than 12 months or variable lease costs were immaterial. Certain leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s leases do not contain restrictions or covenants that restrict the Company from incurring other financial obligations.

The Company leases warehouses, office buildings and equipment under both operating and finance lease arrangements. Information related to leases is as follows:

	Three months ended			Six months ended
	June 30,			June 30,
	2019			2019
Lease cost
Finance lease cost:
Amortization of right-of-use assets (included in Cost of goods sold and Selling and administrative expense)	$	2	$	3
Interest on lease liabilities (included in Interest expense, net)				1
Operating lease cost (included in Cost of goods sold and Selling and administrative expense)		21		42
Total lease cost	$	23	$	46

		Six months ended
		June 30,
		2019
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	21
Operating cash flows from finance leases		1
Financing cash flows from finance leases		3
Right-of-use assets obtained in exchange for new operating lease liabilities		33

	June 30, 2019
Supplemental balance sheet information
Operating leases:
Operating lease right-of-use assets (included in Other assets)	$	196
Current operating lease liabilities (included in Other current liabilities)		67
Noncurrent operating lease liabilities (included in Other long-term liabilities)		129
Total operating lease liabilities	$	196
Finance leases:
Property, plant and equipment	$	74
Accumulated amortization		(30)
Property, plant and equipment, net		44
Current finance lease liabilities (included in Long-term debt due within one year)		6
Noncurrent finance lease liabilities (included in Long-term debt)		35
Total finance lease liabilities	$	41
Weighted-average remaining lease term (in years):
Operating leases		4.8
Finance leases		7.0
Weighted-average discount rate:
Operating leases		3.8	%
Finance leases		5.2	%

Maturity of lease liabilities		Operating leases		Finance leases
2019	$	39	$	5
2020		61		8
2021		37		8
2022		28		6
2023		18		6
2024 and thereafter		32		17
Total lease payments		215		50
Less: imputed interest		(19)		(9)
Total lease obligations	$	196	$	41
Minimum payments related to leases not yet commenced as of June 30, 2019	$	-	$	85

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Taxes

Income Taxes

8. Income Taxes

The Company calculates its interim tax provision using the estimated annual effective tax rate (“EAETR”) methodology in accordance with ASC 740-270. The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effect of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pretax ordinary income or loss in each tax jurisdiction in which the Company operates. The tax effects of discrete items are recognized in the tax provision in the quarter they occur in accordance with GAAP. Depending on various factors such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter can materially impact the reported effective tax rate. The Company’s annual effective tax rate may be

affected by the mix of earnings in the U.S. and foreign jurisdictions and such factors as changes in tax laws, tax rates or regulations, changes in business, changing interpretation of existing tax laws or regulations, the finalization of tax audits and reviews, as well as other factors. As such, there can be significant volatility in interim tax provisions. The annual effective tax rate differs from the statutory U.S. Federal tax rate of 21% primarily because of varying non-U.S. tax rates.

The Company is currently under examination in various tax jurisdictions in which it operates, including Bolivia, Brazil, Canada, China, Colombia, France, Germany, Indonesia, and Italy. The years under examination range from 2004 through 2017. The Company has received tax assessments in excess of established reserves. The Company is contesting these tax assessments, and will continue to do so, including pursuing all available remedies such as appeals and litigation, if necessary. The Company believes that adequate provisions for all income tax uncertainties have been made. However, if tax assessments are settled against the Company at amounts in excess of established reserves, it could have a material impact on the Company’s results of operations, financial position or cash flows.

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Debt

6 Months Ended

Jun. 30, 2019

Debt

Debt

9. Debt

The following table summarizes the long-term debt of the Company:

	June 30,		December 31,		June 30,
	2019		2018		2018
Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans	$	389	$		$
Term Loans:
Term Loan A		1,496
Previous Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans						397
Term Loans:
Term Loan A				897		908
Other secured debt		454		404		150
Senior Notes:
6.75%, due 2020 (€500 million)		567		570		580
4.875%, due 2021 (€330 million)		374		376		383
5.00%, due 2022		497		497		496
4.00%, due 2023		307		306		306
5.875%, due 2023		689		688		686
3.125%, due 2024 (€725 million)		845		825		833
6.375%, due 2025		296		295		295
5.375%, due 2025		298		297		297
Finance leases		41		45		50
Other		12		14		17
Total long-term debt		6,265		5,214		5,398
Less amounts due within one year		30		33		21
Long-term debt	$	6,235	$	5,181	$	5,377

The Company presents debt issuance costs in the balance sheet as a deduction of the carrying amount of the related debt liability.

On June 25, 2019, certain of the Company’s subsidiaries entered into a new Senior Secured Credit Facility (the “Agreement”), which amended and restated the previous credit agreement (the “Previous Agreement”). The proceeds from the Agreement were used to repay all outstanding amounts under the Previous Agreement. The Company recorded $2 million of additional interest charges for third party fees and the write-off of unamortized fees in the second quarter of 2019.

The Agreement provides for up to $3.0 billion of borrowings pursuant to term loans and revolving credit facilities. The term loans mature, and the revolving credit facilities terminate, in June 2024. At June 30, 2019, the Agreement includes a $300 million revolving credit facility, a $1.2 billion multicurrency revolving credit facility, and a $1.5 billion term loan A facility ($1,496 million net of debt issuance costs). At June 30, 2019, the Company had unused credit of $1.1 billion available under the Agreement. The weighted average interest rate on borrowings outstanding under the Agreement at June 30, 2019 was 3.71%.

The Agreement contains various covenants that restrict, among other things and subject to certain exceptions, the ability of the Company to incur certain indebtedness and liens, make certain investments, become liable under contingent obligations in certain defined instances only, make restricted payments, make certain asset sales within guidelines and limits, engage in certain affiliate transactions, participate in sale and leaseback financing arrangements, alter its fundamental business, and amend certain subordinated debt obligations.

The Agreement also contains one financial maintenance covenant, a Total Leverage Ratio (the “Leverage Ratio”), that requires the Company not to exceed a ratio of 5.0x calculated by dividing consolidated total debt, less cash and cash equivalents, by Consolidated EBITDA, with such Leverage Ratio decreasing to 4.50x for the quarter ending December 31, 2020 and thereafter, as defined and described in the Agreement. The maximum Leverage Ratio is subject to an increase of 0.5x for (i) any fiscal quarter during which certain qualifying acquisitions (as specified in the Agreement) are consummated and (ii) the following three fiscal quarters, provided that the Leverage Ratio shall not exceed 5.0x. The Leverage Ratio could restrict the ability of the Company to undertake additional financing or acquisitions to the extent that such financing or acquisitions would cause the Leverage Ratio to exceed the specified maximum.

Failure to comply with these covenants and other customary restrictions could result in an event of default under the Agreement. In such an event, the Company could not request borrowings under the revolving facilities, and all amounts outstanding under the Agreement, together with accrued interest, could then be declared immediately due and payable. Upon the occurrence and for the duration of a payment event of default, an additional default interest rate equal to 2.0% per annum will apply to all overdue obligations under the Agreement. If an event of default occurs under the Agreement and the lenders cause all of the outstanding debt obligations under the Agreement to become due and payable, this would result in a default under a number of other outstanding debt securities and could lead to an acceleration of obligations related to these debt securities. As of June 30, 2019, the Company was in compliance with all covenants and restrictions in the Agreement.  In addition, the Company believes that it will remain in compliance and that its ability to borrow funds under the Agreement will not be adversely affected by the covenants and restrictions.

The Leverage Ratio also determines pricing under the Agreement. The interest rate on borrowings under the Agreement is, at the Company’s option, the Base Rate or the Eurocurrency Rate, as defined in the Agreement, plus an applicable margin. The applicable margin is linked to the Leverage Ratio. The margins range from 1.00% to 1.50% for Eurocurrency Loans and from 0.00% to 0.50% for Base Rate Loans. In addition, a commitment fee is payable on the unused revolving credit facility commitments ranging from 0.20% to 0.30% per annum linked to the Leverage Ratio.

Obligations under the Agreement are secured by substantially all of the assets, excluding real estate and certain other excluded assets, of certain of the Company’s domestic subsidiaries and certain foreign subsidiaries. Such obligations are also secured by a pledge of intercompany debt and equity investments in certain of the Company’s domestic subsidiaries and, in the case of foreign obligations, of stock of certain foreign subsidiaries. All obligations under the Agreement are guaranteed by certain domestic subsidiaries of the Company, and certain foreign obligations under the Agreement are guaranteed by certain foreign subsidiaries of the Company.

In order to maintain a capital structure containing appropriate amounts of fixed and floating-rate debt, the Company has entered into a series of interest rate swap agreements. These interest rate swap agreements were accounted for as either fair value hedges or cash flow hedges (see Note 4).

The Company assesses its capital raising and refinancing needs on an ongoing basis and may enter into additional credit facilities and seek to issue equity and/or debt securities in the domestic and international capital markets if market conditions are favorable. Also, depending on market conditions, the Company may elect to repurchase portions of its debt securities in the open market.

The carrying amounts reported for certain long-term debt obligations subject to frequently redetermined interest rates, approximate fair value. Fair values for the Company’s significant fixed rate debt obligations are based on published market quotations, and are classified as Level 1 in the fair value hierarchy.

Fair values at June 30, 2019 of the Company’s significant fixed rate debt obligations are as follows:

	Principal		Indicated
	Amount		Market Price		Fair Value
Senior Notes:
6.75%, due 2020 (€500 million)	$	568	$	108.48	$	616
4.875%, due 2021 (€330 million)		375		108.35		406
5.00%, due 2022		500		102.95		515
5.875%, due 2023		700		107.36		752
4.00%, due 2023		310		100.37		311
3.125%, due 2024 (€725 million)		824		108.85		897
6.375%, due 2025		300		107.66		323
5.375%, due 2025		300		103.49		310

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Contingencies

6 Months Ended

Jun. 30, 2019

Contingencies

Contingencies

10. Contingencies

Asbestos

From 1948 to 1958, one of the Company's former business units commercially produced and sold approximately $40 million of a high-temperature, calcium-silicate based pipe and block insulation material containing asbestos. The Company sold its insulation business unit in April 1958. The Company receives claims from individuals alleging bodily injury and death as a result of exposure to asbestos from this product (“Asbestos Claims”). Some Asbestos Claims are brought as personal injury lawsuits that typically allege various theories of liability, including negligence, gross negligence and strict liability and seek compensatory and, in some cases, punitive damages.

Predominantly, however, Asbestos Claims are presented to the Company under administrative claims-handling agreements, which the Company has in place with many plaintiffs’ counsel throughout the country (“Administrative Claims”). Administrative Claims require evaluation and negotiation regarding whether particular claimants qualify under the criteria established by the related claims-handling agreements. The criteria for Administrative Claims include verification of a compensable illness and a reasonable probability of exposure to a product manufactured by the Company's former business unit during its manufacturing period ending in 1958. Plaintiffs’ counsel present, and the Company negotiates, Administrative Claims under these various agreements in differing quantities, at different times, and under a variety of conditions.

As of June 30, 2019, the Company had approximately 1,020 asbestos lawsuits pending. These pending lawsuits do not include an estimate of potential Administrative Claims that may be presented under a claims-handling agreement due to the uncertainties around presentation timing, quantities, or qualification rates. The Company considers Administrative Claims to be filed and disposed when they are accepted for payment.

The lack of uniform rules in lawsuit pleading practice, technical pleading requirements in some jurisdictions, local rules, and other factors cause considerable variation in the specific amounts of monetary damages asserted. In the Company’s experience, the monetary relief alleged in a lawsuit bears little relationship to an Asbestos Claim’s merits or its disposition value. Rather, several variables, including but not limited to, the type and severity of the asbestos disease, medical history, and exposure to other disease-causing agents; the product identification evidence against the Company and other co-defendants; the defenses available to the Company and other co-defendants; the specific jurisdiction in which the claim is made; the applicable law; and the law firm representing the claimant, affect the value.

The Company has also been a defendant in other Asbestos Claims involving maritime workers, medical monitoring, co-defendants’ third-party actions, and property damage allegations. Based upon its experience, the Company believes that these categories of Asbestos Claims will not involve any material liability. Therefore, they are not included in the description of pending or disposed matters.

Since receiving its first Asbestos Claim, as of June 30, 2019, the Company in the aggregate has disposed of approximately 400,800 Asbestos Claims at an average indemnity payment of approximately $10,000 per claim. The Company’s asbestos indemnity payments have varied on a per-claim basis and are expected to continue to vary considerably over time. Asbestos-related cash payments for 2018, 2017, and 2016 were $105 million, $110 million, and $125 million, respectively. The Company’s cash payments per claim disposed (inclusive of legal costs) were approximately $86,000, $83,000 and $71,000 for the years ended December 31, 2018, 2017, and 2016, respectively.

The Company’s objective is to achieve, where possible, resolution of Asbestos Claims pursuant to claims-handling agreements. Failure of claimants to meet certain medical and product exposure criteria in claims-handling agreements generally has reduced the number of claims that would otherwise have been received by the Company in the tort system. In addition, changes in jurisdictional dynamics, legislative acts, asbestos docket management and procedures, the substantive law, the co-defendant pool, and other external factors have affected lawsuit volume, claim volume, qualification rates, claim values, and related matters. Collectively, these variables generally have had the effect of increasing the Company’s per-claim average indemnity payment over time.

Beginning with the initial liability of $975 million established in 1993, the Company has accrued a total of approximately $5.0 billion through June 30, 2019, before insurance recoveries, for its asbestos-related liability. The Company’s estimates of its liability have been significantly affected by, among other factors, the volatility of asbestos-related litigation in the United States, the significant number of co-defendants that have filed for bankruptcy, changes in mortality rates, the inherent uncertainty of future disease incidence and claiming patterns against the Company, the significant expansion of the types of defendants that are now sued in this litigation, and the continuing changes in the extent to which these defendants participate in the resolution of cases in which the Company is also a defendant.

The Company continues to monitor trends that may affect its ultimate liability and analyze the developments and variables likely to affect the resolution of Asbestos Claims against the Company. The material components of the Company’s total accrued liability are determined by the Company in connection with its annual comprehensive legal review and consist of the following estimates, to the extent it is probable that such liabilities have been incurred and can be reasonably estimated: (i) the liability for Asbestos Claims already asserted against the Company; (ii) the liability for Asbestos Claims not yet asserted against the Company; and (iii) the legal defense costs estimated to be incurred in connection with the Asbestos Claims already asserted and those Asbestos Claims the Company believes will be asserted.

The Company conducts an annual comprehensive legal review of its asbestos-related liabilities and costs in connection with finalizing and reporting its annual results of operations, unless significant changes in trends or new developments warrant an earlier review. As part of its annual comprehensive legal review, the Company provides historical Asbestos Claims’ data to a third party with expertise in determining the impact of disease incidence and mortality on future filing trends to develop information to assist the Company in estimating the total number of future Asbestos Claims likely to be asserted against the Company. The Company uses this estimate, along with an estimation of disposition costs and related legal costs, as inputs to develop its best estimate of its total probable liability. If the results of the annual comprehensive legal review indicate that the existing amount of the accrued liability is lower (higher) than its reasonably estimable asbestos-related costs, then the Company will record an appropriate charge (credit) to the Company’s results of operations to increase (decrease) the accrued liability.

The significant assumptions underlying the material components of the Company’s accrual are:

a) settlements will continue to be limited almost exclusively to claimants who were exposed to the Company’s asbestos containing insulation prior to its exit from that business in 1958;

b) Asbestos Claims will continue to be resolved primarily under the Company’s administrative claims-handling agreements or on terms comparable to those set forth in those agreements;

c) the incidence of serious asbestos-related disease cases and claiming patterns against the Company for such cases do not change materially;

d) the Company is substantially able to defend itself successfully at trial and on appeal;

e) the number and timing of additional co-defendant bankruptcies do not change significantly the assets available to participate in the resolution of cases in which the Company is a defendant; and

f) co-defendants with substantial resources and assets continue to participate significantly in the resolution of future Asbestos Claims.

For the years ended December 31, 2018 and 2017, the Company concluded that accruals in the amounts of $602 million and $582 million, respectively, were required. These amounts have not been discounted for the time value of money. The Company’s comprehensive legal reviews resulted in charges of $125 million, $0 million and $0 million for the years ended December 31, 2018, 2017 and 2016, respectively. As previously disclosed, the Company anticipated that adjustments to its asbestos-related accruals were possible given the inherent uncertainties involved in asbestos litigation. In the fourth quarter of 2018, the Company determined that it was advantageous to accelerate the disposition

of certain claims in light of additional information the Company obtained about higher estimated future claim volumes and values in certain of the affected discrete streams of potential liability. Factors impacting the increased likelihood of these additional losses included changes in the law, procedure, the expansion of judicial resources in certain jurisdictions, and renewed attention to dockets of non-mesothelioma cases. The Company also obtained new information about other Asbestos Claims, which had the effect of reducing its asbestos-related liability. The combined effect of these items resulted in a change in estimate of the Company’s asbestos-related liability.

The Company believes that it is reasonably possible that it will incur a loss for its asbestos-related liabilities in excess of the amount currently recognized, which was $602 million as of December 31, 2018. The Company estimated that reasonably possible losses could result in asbestos-related liabilities of approximately $722 million. This estimate of additional reasonably possible loss reflects a qualitative judgment regarding the nature of contingencies that could impact future Asbestos Claims and legal costs, which include, but are not limited to, successful attempts by plaintiffs to challenge existing legal barriers to entry, enact plaintiff-oriented procedural rules or liability or damage-related legislation, establish new theories of liability, revive long-dormant inventories of non-mesothelioma cases, or leverage changing jurisdictional dynamics and a changing litigation environment to increase the volume of Asbestos Claims presented or per-claim indemnity values. However, it is also possible that the ultimate amount of asbestos-related liabilities could be above this estimate.

The Company expects a significant majority of the total number of Asbestos Claims to be received in the next five to seven years. This timeframe appropriately reflects the mortality of current and expected claimants in light of the Company’s sale of its insulation business unit in 1958. The Company may continue to experience increased year-over-year variability with regard to the annual quantity of Asbestos Claims presented to and disposed by the Company. This increased variability, jurisdictional dynamics, a changing litigation environment, the size of the remaining pool of claimants, and the expected increase in mortality over the next five to seven years may present the Company with further opportunities to accelerate disposition of discrete parts of its claimant pool. These influences may create increased variability in the annual cash payments year-over-year.

The Company’s asbestos-related liability is based on a projection of new Asbestos Claims that will eventually be filed against the Company and the estimated average disposition cost of these claims and related legal costs. Changes in these projections, and estimates, as well as changes in the significant assumptions noted above, have the potential to significantly impact the estimation of the Company’s asbestos-related liability.

Other Matters

Other litigation is pending against the Company, in many cases involving ordinary and routine claims incidental to the business of the Company and in others presenting allegations that are non-routine and involve compensatory, punitive or treble damage claims as well as other types of relief. The Company records a liability for such matters when it is both probable that the liability has been incurred and the amount of the liability can be reasonably estimated. Recorded amounts are reviewed and adjusted to reflect changes in the factors upon which the estimates are based, including additional information, negotiations, settlements and other events.

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Share Owners' Equity

6 Months Ended

Jun. 30, 2019

Share Owners' Equity

Share Owners' Equity

11. Share Owners’ Equity

The activity in share owners’ equity for the three months ended June 30, 2019 and 2018 is as follows:

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on April 1, 2019	$	2		3,130		(745)		412		(1,911)		122	$	1,010
Reissuance of common stock (0.1 million shares)						3								3
Stock compensation (0.5 million shares)				6										6
Net earnings								65				5		70
Other comprehensive income (loss)										20		(12)		8
Dividends declared								(7)						(7)
Balance on June 30, 2019	$	2	$	3,136	$	(742)	$	470	$	(1,891)	$	115	$	1,090

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on April 1, 2018	$	2		3,104		(595)		182		(1,704)		130	$	1,119
Reissuance of common stock (0.03 million shares)						3								3
Treasury shares purchased (2.7 million shares)						(50)								(50)
Stock compensation (0.5 million shares)				11										11
Net earnings								50				6		56
Other comprehensive loss										(225)		(15)		(240)
Balance on June 30, 2018	$	2	$	3,115	$	(642)	$	232	$	(1,929)	$	121	$	899

The activity in share owners’ equity for the six months ended June 30, 2019 and 2018 is as follows:

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on January 1, 2019	$	2		3,124		(705)		333		(1,968)		114	$	900
Issuance of common stock (0.1 million shares)				2										2
Reissuance of common stock (0.2 million shares)				(1)		6								5
Treasury shares purchased (2.1 million shares)						(38)								(38)
Stock compensation (1.7 million shares)				11										11
Net earnings								144				10		154
Other comprehensive income (loss)										77		(9)		68
Dividends declared								(7)						(7)
Other						(5)								(5)
Balance on June 30, 2019	$	2	$	3,136	$	(742)	$	470	$	(1,891)	$	115	$	1,090

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on January 1, 2018	$	2		3,099		(551)		85		(1,827)		119	$	927
Reissuance of common stock (0.3 million shares)						4								4
Treasury shares purchased (4.7 million shares)						(95)								(95)
Stock compensation (0.3 million shares)				16										16
Net earnings								147				11		158
Other comprehensive loss										(102)		(9)		(111)
Balance on June 30, 2018	$	2	$	3,115	$	(642)	$	232	$	(1,929)	$	121	$	899

During the three months ended June 30, 2018, the Company purchased 2,676,363 shares of its common stock for approximately $50 million. During the six months ended June 30, 2019 and 2018, the Company purchased 2,064,652 and 4,676,122 shares of its common stock for approximately $38 million and $95 million, respectively. The stock purchases were pursuant to the authorization by its Board of Directors that had approximately $512 million in remaining purchase authority as of June 30, 2019.

The Company has 250,000,000 shares of common stock authorized with a par value of $.01 per share. Shares outstanding are as follows:

	Shares Outstanding (in thousands)
	June 30,	December 31,	June 30,
	2019	2018	2018
Shares of common stock issued (including treasury shares)	188,435	186,576	186,423
Treasury shares	32,978	30,918	27,176

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2019

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

12. Accumulated Other Comprehensive Loss

The activity in accumulated other comprehensive loss for the three months ended June 30, 2019 and 2018 is as follows:

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on April 1, 2019	$	(843)		(13)			(1,055)		$	(1,911)
Change before reclassifications		13		(4)						9
Amounts reclassified from accumulated other comprehensive income (loss)				(6)	(a)		12	(b)		6
Translation effect				1			4			5
Tax effect										—
Other comprehensive income (loss) attributable to the Company		13		(9)			16			20
Balance on June 30, 2019	$	(830)	$	(22)		$	(1,039)		$	(1,891)

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on April 1, 2018	$	(603)	$	(17)		$	(1,084)		$	(1,704)
Change before reclassifications		(253)		18			(3)			(238)
Amounts reclassified from accumulated other comprehensive income (loss)				(18)	(a)		16	(b)		(2)
Translation effect				(1)			16			15
Other comprehensive income (loss) attributable to the Company		(253)		(1)			29			(225)
Balance on June 30, 2018	$	(856)	$	(18)		$	(1,055)		$	(1,929)

(a) Amount is included in Cost of goods sold and Other expense, net on the Condensed Consolidated Results of Operations (see Note 4 for additional information).

(b) Amount is included in the computation of net periodic pension cost (see Note 6 for additional information) and net postretirement benefit cost.

The activity in accumulated other comprehensive loss for the six months ended June 30, 2019 and 2018 is as follows:

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on January 1, 2019	$	(889)		(18)			(1,061)		$	(1,968)
Change before reclassifications		59		7			(2)			64
Amounts reclassified from accumulated other comprehensive income (loss)				(17)	(a)		25	(b)		8
Translation effect				3			(1)			2
Tax effect				3						3
Other comprehensive income (loss) attributable to the Company		59		(4)			22			77
Balance on June 30, 2019	$	(830)	$	(22)		$	(1,039)		$	(1,891)

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on January 1, 2018	$	(724)		(12)			(1,091)		$	(1,827)
Change before reclassifications		(132)		4			(7)			(135)
Amounts reclassified from accumulated other comprehensive income (loss)				(9)	(a)		33	(b)		24
Translation effect				(1)			10			9
Other comprehensive income (loss) attributable to the Company		(132)		(6)			36			(102)
Balance on June 30, 2018	$	(856)	$	(18)		$	(1,055)		$	(1,929)

(a) Amount is included in Cost of goods sold and Other expense, net on the Condensed Consolidated Results of Operations (see Note 4 for additional information).

(b) Amount is included in the computation of net periodic pension cost (see Note 6 for additional information) and

net postretirement benefit cost.

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Other Expense (Income), net

6 Months Ended

Jun. 30, 2019

Other Expense (Income), net

Other Expense (Income), net

13. Other Expense (Income), net

Other expense (income), net for the three and six months ended June 30, 2019 and 2018 included the following:

	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Restructuring, asset impairment and other charges	$	38	$	68	$	38	$	68
Foreign currency exchange (gain) loss						3		(2)
Intangible amortization expense		10		10		20		20
Royalty income		(4)		(3)		(7)		(6)
Other expense (income), net		11		(3)		11		(11)
	$	55	$	72	$	65	$	69

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Earnings Per Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share

Earnings Per Share

14. Earnings Per Share

The following tables sets forth the computation of basic and diluted earnings per share:

	Three months ended June 30,
	2019		2018
Numerator:
Net earnings attributable to the Company	$	65	$	50
Denominator (in thousands):
Denominator for basic earnings per share-weighted average shares outstanding		155,338		160,858
Effect of dilutive securities:
Stock options and other		1,133		1,854
Denominator for diluted earnings per share-adjusted weighted average shares outstanding		156,471		162,712
Basic earnings per share:
Earnings from continuing operations	$	0.42	$	0.31
Loss from discontinued operations
Net earnings	$	0.42	$	0.31
Diluted earnings per share:
Earnings from continuing operations	$	0.42	$	0.31
Loss from discontinued operations
Net earnings	$	0.42	$	0.31

Options to purchase 1,603,692 and 1,989,521 weighted average shares of common stock, which were outstanding during the three months ended June 30, 2019 and 2018, respectively, were not included in the computation of diluted earnings per share because the options exercise price was greater than the average market price of the common shares.

	Six months ended June 30,
	2019		2018
Numerator:
Net earnings attributable to the Company	$	144	$	147
Denominator (in thousands):
Denominator for basic earnings per share-weighted average shares outstanding		154,852		161,904
Effect of dilutive securities:
Stock options and other		1,703		2,060
Denominator for diluted earnings per share-adjusted weighted average shares outstanding		156,555		163,964
Basic earnings per share:
Earnings from continuing operations	$	0.94	$	0.91
Loss from discontinued operations		(0.01)		(0.01)
Net earnings	$	0.93	$	0.90
Diluted earnings per share:
Earnings from continuing operations	$	0.93	$	0.90
Loss from discontinued operations		(0.01)
Net earnings	$	0.92	$	0.90

Options to purchase 1,549,995 and 1,895,822 weighted average shares of common stock, which were outstanding during the six months ended June 30, 2019 and 2018, respectively, were not included in the computation of diluted earnings per share because the options exercise price was greater than the average market price of the common shares.

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Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2019

Supplemental Cash Flow Information

Supplemental Cash Flow Information

15. Supplemental Cash Flow Information

Income taxes paid (received) in cash were as follows:

	Six months ended June 30,
	2019		2018
U.S.	$	(3)	$	7
Non-U.S.		61		68
Total income taxes paid in cash	$	58	$	75

Interest paid in cash for the six months ended June 30, 2019 and 2018 was $128 million and $128 million, respectively.

The Company uses various factoring programs to sell certain receivables to financial institutions as part of managing its cash flows. At June 30, 2019, December 31, 2018 and June 30, 2018, the amount of receivables sold by the Company was $173 million, $600 million and $221 million, respectively. For the six months ended June 30, 2019 and 2018, the Company reduced the use of its factoring programs compared to the most recent respective year end periods and this resulted in a higher use of working capital, and corresponding decrease to cash from operating activities, of approximately $427 million and $233 million, respectively.

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Discontinued Operations

6 Months Ended

Jun. 30, 2019

Discontinued Operations

Discontinued Operations

16. Discontinued Operations

On December 6, 2018, an ad hoc committee for the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) rejected the request by the Bolivarian Republic of Venezuela (“Venezuela”) to annul the award issued by an ICSID tribunal in favor of OI European Group B.V. (“OIEG”) related to the 2010 expropriation of OIEG’s majority interest in two plants in Venezuela (the “Award”). The annulment proceeding with respect to the Award is now concluded.

On July 31, 2017, OIEG sold its right, title and interest in amounts due under the Award to an Ireland-domiciled investment fund. Under the terms of the sale, OIEG received a payment, in cash, at closing equal to $115 million (the “Cash Payment”). OIEG may also receive additional payments in the future (“Deferred Amounts”) calculated based on the total compensation that is received from Venezuela as a result of collection efforts or as settlement of the Award with Venezuela. OIEG’s right to receive any Deferred Amounts is subject to the limitations described below.

OIEG’s interest in any amounts received in the future from Venezuela in respect of the Award is limited to a percentage of such recovery after taking into account reimbursement of the Cash Payment to the purchaser and reimbursement of legal fees and expenses incurred by the Company and the purchaser. OIEG’s percentage of such recovery will also be reduced over time. Because the Award has yet to be satisfied and the ability to successfully enforce the Award in countries that are party to the ICSID Convention is subject to significant challenges, the Company is unable to reasonably predict the amount of recoveries from the Award, if any, to which the Company may be entitled in the future. Any future amounts that the Company may receive from the Award are highly speculative and the timing of any such future payments, if any, is highly uncertain. As such, there can be no assurance that the Company will receive any future payments under the Award beyond the Cash Payment.

As a result of the favorable ruling by an ICSID ad hoc committee rejecting Venezuela’s request to annul the OIEG Award, and thereby concluding those annulment proceedings, the Company recognized a $115 million gain from discontinued operations in the fourth quarter of 2018.

A separate arbitration involving other subsidiaries of the Company was initiated in 2012 to obtain compensation primarily for third-party minority shareholders’ lost interests in the two expropriated plants. However, on November 13, 2017, ICSID issued an award that dismissed this arbitration on jurisdiction grounds. In March 2018, the two subsidiaries of the Company submitted to ICSID an application to annul the November 13, 2017 award, and a hearing on the annulment was heard by an ad hoc committee of ICSID in July 2019; no decision has been rendered yet.

The loss from discontinued operations, which primarily reflects the ongoing costs for the Venezuelan expropriation, was approximately $1 million for each of the six month periods ended June 30, 2019 and 2018.

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New Accounting Pronouncement

6 Months Ended

Jun. 30, 2019

New Accounting Pronouncement

New Accounting Pronouncement

​
17. New Accounting Pronouncement

Leases - On January 1, 2019, the Company adopted ASU No. 2016-02, “Leases”. Under this guidance, lessees are required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The adoption of ASU No. 2016-02 had a significant impact on the Company’s consolidated balance sheet due to the recognition of approximately $214 million of lease liabilities with corresponding right-of-use assets for operating leases as of January 1, 2019. The adoption of ASU No. 2016-02 had no material impact on the Company’s retained earnings, consolidated results of operations or consolidated cash flows.

The Company elected the package of practical expedients relating to the identification, classification and initial direct costs of leases commencing before the effective date, and the transitional practical expedient for the treatment of existing land easements; however, the Company did not elect the hindsight transitional practical expedient. The Company has also elected the practical expedient to not account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the nonlease components (e.g., common-area maintenance costs). See Note 7, Leases, for additional information.

Credit Losses - In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The new guidance is effective for the Company on January 1, 2020. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

Income Taxes - In January 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which gives entities the option to reclassify to retained earnings the tax effects resulting from the U.S. Tax Cuts and Jobs Act

(the “Act”) related to items in Accumulated other comprehensive income (“AOCI”) that the FASB refers to as having been stranded in AOCI. The new guidance may be applied retrospectively to each period in which the effect of the Act is recognized in the period of adoption. The Company must adopt this guidance for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company adopted this standard in the first quarter of 2019. The Company has not elected to reclassify income tax effects of the Act from AOCI to retained earnings.

Disclosure Requirements for Fair Value Measurement - In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” which modifies the fair value disclosure requirements. Application of the standard is required for annual periods beginning after December 15, 2019. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

Disclosure Requirements for Defined Benefit Plans - In August 2018, the FASB issued ASU No. 2018-14, “Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” which modifies the defined benefit plan disclosure requirements. Application of the standard is required for annual periods beginning after December 15, 2020. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

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Business Combinations

6 Months Ended

Jun. 30, 2019

Business Combinations

Business Combinations

18. Business Combinations

On June 28, 2019, the Company completed the acquisition of Nueva Fábrica Nacional de Vidrio, S. de R.L. de C.V. (“Nueva Fanal”) from Grupo Modelo, an affiliate of Anheuser-Busch InBev SA/NV for a total purchase price of approximately $195 million. In the second quarter of 2019, the Company paid approximately $157 million in cash toward this acquisition and the remaining approximately $38 million is expected to be paid by the end of 2019, subject to a working capital adjustment. The Company financed this acquisition with debt. The Nueva Fanal facility is located near Mexico City, Mexico. Currently, this plant has four furnaces to produce and supply approximately 300,000 tons of glass containers annually for Grupo Modelo brands, such as Corona, for local and global export markets. Further, O-I has entered into a long-term agreement to continue to supply glass to Grupo Modelo. This acquisition increases the Company’s presence in the Mexican glass packaging market.

Nueva Fanal’s operating results are included in the Company’s unaudited condensed consolidated financial statements from the acquisition date as part of the Americas segment. The acquisition qualifies as a business combination and will be accounted for using the acquisition method of accounting.

The total purchase price will be allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values.  The purchase agreement contains customary provisions for working capital adjustments, which the Company expects to resolve with the seller by the end of 2019.  The aggregate purchase price was preliminarily allocated to the Company’s balance sheet as of June 30, 2019 and has not yet been finalized because the Company has not yet completed its review of the asset and liability values and related amortization and depreciation periods.  The following table summarizes the preliminary estimates of fair value of the assets and liabilities assumed on June 28, 2019:

Accounts receivable	$	42
Inventory		17
Long lived assets (includes PP&E and intangibles)		164
Total assets		223
Accounts payable		25
Accrued liabilities		3
Net assets acquired	$	195

This acquisition did not meet the thresholds for a significant acquisition and therefore no pro forma financial information is presented.

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Subsequent Events

6 Months Ended

Jun. 30, 2019

Subsequent Events

Subsequent Events

19. Subsequent Events

In July 2019, a subsidiary of the Company redeemed €250 million aggregate principal amount to holders of its outstanding 6.75% senior notes due 2020 (the “Notes”). Following the redemption, €250 million aggregate principal amount of the Notes remain outstanding.

The Notes were redeemed at a price equal to the sum of the principal amount of the Notes to be redeemed, the applicable premium calculated in accordance with the terms of the Notes and the related indenture, and the accrued and unpaid interest on the Notes up to, but not including, the redemption date. In the third quarter of 2019, the Company recorded note repurchase premiums and the write-off of deferred finance fees of approximately $24 million related to the redeemed Notes.  The Company funded the redemption with cash on hand and revolver borrowings.

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2019

Segment Information

Net sales for the Company's reportable segments

	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Net sales:
Americas	$	934	$	930	$	1,815		$	1,838
Europe		650		674		1,246			1,317
Asia Pacific		152		153		303			326
Reportable segment totals		1,736		1,757		3,364			3,481
Other		20		15		29			27
Net sales	$	1,756	$	1,772	$	3,393		$	3,508

Segment operating profit (loss) for the Company's reportable segments

	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Segment operating profit:
Americas	$	144	$	152	$	257	$	299
Europe		90		101		169		173
Asia Pacific		2		2		10		7
Reportable segment totals		236		255		436		479
Items excluded from segment operating profit:
Retained corporate costs and other		(28)		(30)		(53)		(57)
Restructuring, asset impairment and other		(42)		(73)		(42)		(73)
Interest expense, net		(68)		(74)		(132)		(136)
Earnings from continuing operations before income taxes	$	98	$	78	$	209	$	213

Total assets for the Company's reportable segments

	June 30,		December 31,		June 30,
	2019		2018		2018
Total assets:
Americas	$	5,994	$	5,497	$	5,402
Europe		3,342		3,036		3,232
Asia Pacific		1,045		918		981
Reportable segment totals		10,381		9,451		9,615
Other		342		248		203
Consolidated totals	$	10,723	$	9,699	$	9,818

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Revenue (Tables)

6 Months Ended

Jun. 30, 2019

Revenue

Schedule of disaggregation of revenue by customer end use

The following tables for the three months ended June 30, 2019 and 2018 disaggregates the Company’s revenue by customer end use:

	Three months ended June 30, 2019
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	590	$	474	$	105	$	1,169
Food and other		191		109		29		329
Non-alcoholic beverages		153		67		18		238
Reportable segment totals	$	934	$	650	$	152	$	1,736
Other								20
Net sales							$	1,756
	Three months ended June 30, 2018
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	585	$	493	$	113	$	1,191
Food and other		197		112		23		332
Non-alcoholic beverages		148		69		17		234
Reportable segment totals	$	930	$	674	$	153	$	1,757
Other								15
Net sales							$	1,772

The following tables for the six months ended June 30, 2019 and 2018 disaggregates the Company’s revenue by customer end use:

	Six months ended June 30, 2019
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	1,153	$	907	$	214	$	2,274
Food and other		372		211		54		637
Non-alcoholic beverages		290		128		35		453
Reportable segment totals	$	1,815	$	1,246	$	303	$	3,364
Other								29
Net sales							$	3,393
	Six months ended June 30, 2018
	Americas		Europe		Asia Pacific		Total
Alcoholic beverages (beer, wine, spirits)	$	1,161	$	964	$	240	$	2,365
Food and other		386		224		47		657
Non-alcoholic beverages		291		129		39		459
Reportable segment totals	$	1,838	$	1,317	$	326	$	3,481
Other								27
Net sales							$	3,508

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Inventories (Tables)

6 Months Ended

Jun. 30, 2019

Inventories

Major classes of inventory

	June 30,		December 31,		June 30,
	2019		2018		2018
Finished goods	$	838	$	849	$	821
Raw materials		131		125		123
Operating supplies		46		44		41
	$	1,015	$	1,018	$	985

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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments

Balance Sheet Classification of derivative instruments

	Fair Value of						Fair Value of
	Hedge Assets						Hedge Liabilities
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
	2019		2018		2018		2019		2018		2018
Derivatives designated as hedging instruments:
Commodity forward contracts (a)	$	2	$	1	$	7	$	1	$	-	$	-
Interest rate swaps - fair value hedges (b)		15		6		6				1		8
Cash flow hedges of foreign exchange risk (c)		20		10		5		30		1		12
Interest rate swaps - cash flow hedges (d)		1						2
Net investment hedges (e)		6		6				6		8
Total derivatives accounted for as hedges	$	44	$	23	$	18	$	39	$	10	$	20
Derivatives not designated as hedges:
Foreign exchange derivative contracts (f)		2		2		2		1		2		2
Total derivatives	$	46	$	25	$	20	$	40	$	12	$	22
Current	$	13	$	19	$	13	$	3	$	3	$	3
Noncurrent		33		6		7		37		9		19
Total derivatives	$	46	$	25	$	20	$	40	$	12	$	22

(a) The notional amounts of the commodity forward contracts were $19 million, $21 million and $21 million at June 30, 2019, December 31, 2018 and June 30, 2018, respectively. The maximum maturity dates were in 2020 for all three periods.

(b) The notional amounts of the interest rate swaps designated as fair value hedges were €725 million at June 30, 2019, December 31, 2018 and June 30, 2018, respectively. The maximum maturity dates were in 2024 for all three periods.

(c) The notional amounts of the cash flow hedges of foreign exchange risk were $1.210 billion, $587 million and $310 million at June 30, 2019, December 31, 2018 and June 30, 2018, respectively. The maximum maturity dates were in 2023 for all three periods.

(d) The notional amounts of the interest rate swaps designated as cash flow hedges were $480 million at June 30, 2019 and $180 million at June 30, 2018 and December 31, 2018. Maximum maturity dates were 2021 at June 30, 2019 and 2020 at June 30, 2018 and December 31, 2018, respectively.

(e) The notional amounts of the net investment hedges were €160 million and maximum maturity dates were 2020 at June 30, 2019 and December 31, 2018.

(f) The notional amounts of the foreign exchange derivative contracts were $292 million, $470 million and $380 million and maximum maturity dates were 2019, 2019, and 2018 at June 30, 2019, December 31, 2018 and June 30, 2018, respectively.

Effects of derivative instruments on the results of operations

	Gain (Loss) Recognized in OCI (Effective Portion)				Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1)
	Three months ended June 30,				Three months ended June 30,
Derivatives designated as hedging instruments:	2019		2018		2019		2018
Cash Flow Hedges
Commodity forward contracts (a)	$	(1)	$	4	$	—	$	—
Cash flow hedges of foreign exchange risk (b)		(5)		14		(2)		18
Cash flow hedges of interest rate risk (c)		(1)
Net Investment Hedges
Net Investment Hedges		5				(4)
	$	(2)	$	18	$	(6)	$	18
	Gain (Loss) Recognized in OCI (Effective Portion)				Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1)
	Six months ended June 30,				Six months ended June 30,
Derivatives designated as hedging instruments:	2019		2018		2019		2018
Cash Flow Hedges
Commodity forward contracts (a)	$	1	$	5	$	(1)	$	(1)
Cash flow hedges of foreign exchange risk (b)		2		1		(12)		10
Cash flow hedges of interest rate risk (c)		(1)
Net Investment Hedges
Net Investment Hedges		5				(4)
	$	7	$	6	$	(17)	$	9
	Amount of Gain (Loss) Recognized in Other income (expense), net				Amount of Gain (Loss) Recognized in Other income (expense), net
	Three months ended June 30,				Six months ended June 30,
Derivatives not designated as hedges:	2019		2018		2019		2018
Foreign exchange derivative contracts	$	1	$	—	$	7	$	—
(1) Gains and losses reclassified from accumulated OCI and recognized in income are recorded to (a) cost of goods sold, (b) other expense, net or (c) interest expense, net.

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Restructuring Accruals (Tables)

6 Months Ended

Jun. 30, 2019

Restructuring Accruals

Selected information related to the restructuring accruals

Selected information related to the restructuring accruals for the three months ended June 30, 2019 and 2018 is as follows:

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at April 1, 2019	$	34	$		$	19	$	53
Charges		27				5		32
Net cash paid, principally severance and related benefits		(11)				(3)		(14)
Other, including foreign exchange translation						(1)		(1)
Balance at June 30, 2019	$	50	$	—	$	20	$	70

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at April 1, 2018	$	63	$		$	17	$	80
Charges		15		53		2		70
Write-down of assets to net realizable value				(53)				(53)
Net cash paid, principally severance and related benefits		(5)				(1)		(6)
Other, including foreign exchange translation		(2)				(2)		(4)
Balance at June 30, 2018	$	71	$	—	$	16	$	87

Selected information related to the restructuring accruals for the six months ended June 30, 2019 and 2018 is as follows:

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2019	$	47	$		$	22	$	69
Charges		27				5		32
Net cash paid, principally severance and related benefits		(24)				(5)		(29)
Other, including foreign exchange translation						(2)		(2)
Balance at June 30, 2019	$	50	$	—	$	20	$	70

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2018	$	67	$		$	18	$	85
Charges		15		53		2		70
Write-down of assets to net realizable value				(53)				(53)
Net cash paid, principally severance and related benefits		(10)				(2)		(12)
Other, including foreign exchange translation		(1)				(2)		(3)
Balance at June 30, 2018	$	71	$	—	$	16	$	87

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Pension Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2019

Pension Benefit Plans

Defined Benefit Plans and Other Postretirement Benefit Plans

Components of net periodic pension cost

The components of the net periodic pension cost for the three months ended June 30, 2019 and 2018 are as follows:

	U.S.				Non-U.S.
	2019		2018		2019		2018
Service cost	$	3	$	4	$	3	$	3
Interest cost		15		15		7		8
Expected asset return		(22)		(25)		(11)		(14)
Amortization of actuarial loss		10		13		3		3
Net periodic pension cost	$	6	$	7	$	2	$	—

The components of the net periodic pension cost for the six months ended June 30, 2019 and 2018 are as follows:

	U.S.				Non-U.S.
	2019		2018		2019		2018
Service cost	$	6	$	7	$	6	$	7
Interest cost		30		30		15		16
Expected asset return		(44)		(49)		(22)		(27)
Amortization of actuarial loss		20		26		5		7
Net periodic pension cost	$	12	$	14	$	4	$	3

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases

Schedule of components of lease expense

	Three months ended			Six months ended
	June 30,			June 30,
	2019			2019
Lease cost
Finance lease cost:
Amortization of right-of-use assets (included in Cost of goods sold and Selling and administrative expense)	$	2	$	3
Interest on lease liabilities (included in Interest expense, net)				1
Operating lease cost (included in Cost of goods sold and Selling and administrative expense)		21		42
Total lease cost	$	23	$	46

		Six months ended
		June 30,
		2019
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	21
Operating cash flows from finance leases		1
Financing cash flows from finance leases		3
Right-of-use assets obtained in exchange for new operating lease liabilities		33

Schedule of supplemental balance sheet information

	June 30, 2019
Supplemental balance sheet information
Operating leases:
Operating lease right-of-use assets (included in Other assets)	$	196
Current operating lease liabilities (included in Other current liabilities)		67
Noncurrent operating lease liabilities (included in Other long-term liabilities)		129
Total operating lease liabilities	$	196
Finance leases:
Property, plant and equipment	$	74
Accumulated amortization		(30)
Property, plant and equipment, net		44
Current finance lease liabilities (included in Long-term debt due within one year)		6
Noncurrent finance lease liabilities (included in Long-term debt)		35
Total finance lease liabilities	$	41
Weighted-average remaining lease term (in years):
Operating leases		4.8
Finance leases		7.0
Weighted-average discount rate:
Operating leases		3.8	%
Finance leases		5.2	%

Schedule of finance leases maturities of lease liabilities

Maturity of lease liabilities		Operating leases		Finance leases
2019	$	39	$	5
2020		61		8
2021		37		8
2022		28		6
2023		18		6
2024 and thereafter		32		17
Total lease payments		215		50
Less: imputed interest		(19)		(9)
Total lease obligations	$	196	$	41
Minimum payments related to leases not yet commenced as of June 30, 2019	$	-	$	85

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Debt (Tables)

6 Months Ended

Jun. 30, 2019

Debt

Long-term Debt

	June 30,		December 31,		June 30,
	2019		2018		2018
Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans	$	389	$		$
Term Loans:
Term Loan A		1,496
Previous Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans						397
Term Loans:
Term Loan A				897		908
Other secured debt		454		404		150
Senior Notes:
6.75%, due 2020 (€500 million)		567		570		580
4.875%, due 2021 (€330 million)		374		376		383
5.00%, due 2022		497		497		496
4.00%, due 2023		307		306		306
5.875%, due 2023		689		688		686
3.125%, due 2024 (€725 million)		845		825		833
6.375%, due 2025		296		295		295
5.375%, due 2025		298		297		297
Finance leases		41		45		50
Other		12		14		17
Total long-term debt		6,265		5,214		5,398
Less amounts due within one year		30		33		21
Long-term debt	$	6,235	$	5,181	$	5,377

Fair values of the Company's significant fixed rate debt obligations

Fair values at June 30, 2019 of the Company’s significant fixed rate debt obligations are as follows:

	Principal		Indicated
	Amount		Market Price		Fair Value
Senior Notes:
6.75%, due 2020 (€500 million)	$	568	$	108.48	$	616
4.875%, due 2021 (€330 million)		375		108.35		406
5.00%, due 2022		500		102.95		515
5.875%, due 2023		700		107.36		752
4.00%, due 2023		310		100.37		311
3.125%, due 2024 (€725 million)		824		108.85		897
6.375%, due 2025		300		107.66		323
5.375%, due 2025		300		103.49		310

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Share Owners' Equity (Tables)

6 Months Ended

Jun. 30, 2019

Share Owners' Equity

Activity in share owner's equity

The activity in share owners’ equity for the three months ended June 30, 2019 and 2018 is as follows:

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on April 1, 2019	$	2		3,130		(745)		412		(1,911)		122	$	1,010
Reissuance of common stock (0.1 million shares)						3								3
Stock compensation (0.5 million shares)				6										6
Net earnings								65				5		70
Other comprehensive income (loss)										20		(12)		8
Dividends declared								(7)						(7)
Balance on June 30, 2019	$	2	$	3,136	$	(742)	$	470	$	(1,891)	$	115	$	1,090

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on April 1, 2018	$	2		3,104		(595)		182		(1,704)		130	$	1,119
Reissuance of common stock (0.03 million shares)						3								3
Treasury shares purchased (2.7 million shares)						(50)								(50)
Stock compensation (0.5 million shares)				11										11
Net earnings								50				6		56
Other comprehensive loss										(225)		(15)		(240)
Balance on June 30, 2018	$	2	$	3,115	$	(642)	$	232	$	(1,929)	$	121	$	899

The activity in share owners’ equity for the six months ended June 30, 2019 and 2018 is as follows:

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on January 1, 2019	$	2		3,124		(705)		333		(1,968)		114	$	900
Issuance of common stock (0.1 million shares)				2										2
Reissuance of common stock (0.2 million shares)				(1)		6								5
Treasury shares purchased (2.1 million shares)						(38)								(38)
Stock compensation (1.7 million shares)				11										11
Net earnings								144				10		154
Other comprehensive income (loss)										77		(9)		68
Dividends declared								(7)						(7)
Other						(5)								(5)
Balance on June 30, 2019	$	2	$	3,136	$	(742)	$	470	$	(1,891)	$	115	$	1,090

	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on January 1, 2018	$	2		3,099		(551)		85		(1,827)		119	$	927
Reissuance of common stock (0.3 million shares)						4								4
Treasury shares purchased (4.7 million shares)						(95)								(95)
Stock compensation (0.3 million shares)				16										16
Net earnings								147				11		158
Other comprehensive loss										(102)		(9)		(111)
Balance on June 30, 2018	$	2	$	3,115	$	(642)	$	232	$	(1,929)	$	121	$	899

Schedule of shares outstanding

	Shares Outstanding (in thousands)
	June 30,	December 31,	June 30,
	2019	2018	2018
Shares of common stock issued (including treasury shares)	188,435	186,576	186,423
Treasury shares	32,978	30,918	27,176

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2019

Accumulated Other Comprehensive Loss

Component of accumulated other comprehensive loss

The activity in accumulated other comprehensive loss for the three months ended June 30, 2019 and 2018 is as follows:

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on April 1, 2019	$	(843)		(13)			(1,055)		$	(1,911)
Change before reclassifications		13		(4)						9
Amounts reclassified from accumulated other comprehensive income (loss)				(6)	(a)		12	(b)		6
Translation effect				1			4			5
Tax effect										—
Other comprehensive income (loss) attributable to the Company		13		(9)			16			20
Balance on June 30, 2019	$	(830)	$	(22)		$	(1,039)		$	(1,891)

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on April 1, 2018	$	(603)	$	(17)		$	(1,084)		$	(1,704)
Change before reclassifications		(253)		18			(3)			(238)
Amounts reclassified from accumulated other comprehensive income (loss)				(18)	(a)		16	(b)		(2)
Translation effect				(1)			16			15
Other comprehensive income (loss) attributable to the Company		(253)		(1)			29			(225)
Balance on June 30, 2018	$	(856)	$	(18)		$	(1,055)		$	(1,929)

(a) Amount is included in Cost of goods sold and Other expense, net on the Condensed Consolidated Results of Operations (see Note 4 for additional information).

(b) Amount is included in the computation of net periodic pension cost (see Note 6 for additional information) and net postretirement benefit cost.

The activity in accumulated other comprehensive loss for the six months ended June 30, 2019 and 2018 is as follows:

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on January 1, 2019	$	(889)		(18)			(1,061)		$	(1,968)
Change before reclassifications		59		7			(2)			64
Amounts reclassified from accumulated other comprehensive income (loss)				(17)	(a)		25	(b)		8
Translation effect				3			(1)			2
Tax effect				3						3
Other comprehensive income (loss) attributable to the Company		59		(4)			22			77
Balance on June 30, 2019	$	(830)	$	(22)		$	(1,039)		$	(1,891)

									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on January 1, 2018	$	(724)		(12)			(1,091)		$	(1,827)
Change before reclassifications		(132)		4			(7)			(135)
Amounts reclassified from accumulated other comprehensive income (loss)				(9)	(a)		33	(b)		24
Translation effect				(1)			10			9
Other comprehensive income (loss) attributable to the Company		(132)		(6)			36			(102)
Balance on June 30, 2018	$	(856)	$	(18)		$	(1,055)		$	(1,929)

(a) Amount is included in Cost of goods sold and Other expense, net on the Condensed Consolidated Results of Operations (see Note 4 for additional information).

(b) Amount is included in the computation of net periodic pension cost (see Note 6 for additional information) and

net postretirement benefit cost.

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Other Expense (Income), net (Tables)

6 Months Ended

Jun. 30, 2019

Other Expense (Income), net

Schedule of other expense (income), net

	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Restructuring, asset impairment and other charges	$	38	$	68	$	38	$	68
Foreign currency exchange (gain) loss						3		(2)
Intangible amortization expense		10		10		20		20
Royalty income		(4)		(3)		(7)		(6)
Other expense (income), net		11		(3)		11		(11)
	$	55	$	72	$	65	$	69

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share

Computation of basic and diluted earnings per share

	Three months ended June 30,
	2019		2018
Numerator:
Net earnings attributable to the Company	$	65	$	50
Denominator (in thousands):
Denominator for basic earnings per share-weighted average shares outstanding		155,338		160,858
Effect of dilutive securities:
Stock options and other		1,133		1,854
Denominator for diluted earnings per share-adjusted weighted average shares outstanding		156,471		162,712
Basic earnings per share:
Earnings from continuing operations	$	0.42	$	0.31
Loss from discontinued operations
Net earnings	$	0.42	$	0.31
Diluted earnings per share:
Earnings from continuing operations	$	0.42	$	0.31
Loss from discontinued operations
Net earnings	$	0.42	$	0.31

	Six months ended June 30,
	2019		2018
Numerator:
Net earnings attributable to the Company	$	144	$	147
Denominator (in thousands):
Denominator for basic earnings per share-weighted average shares outstanding		154,852		161,904
Effect of dilutive securities:
Stock options and other		1,703		2,060
Denominator for diluted earnings per share-adjusted weighted average shares outstanding		156,555		163,964
Basic earnings per share:
Earnings from continuing operations	$	0.94	$	0.91
Loss from discontinued operations		(0.01)		(0.01)
Net earnings	$	0.93	$	0.90
Diluted earnings per share:
Earnings from continuing operations	$	0.93	$	0.90
Loss from discontinued operations		(0.01)
Net earnings	$	0.92	$	0.90

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2019

Supplemental Cash Flow Information

Supplemental cash flow information

	Six months ended June 30,
	2019		2018
U.S.	$	(3)	$	7
Non-U.S.		61		68
Total income taxes paid in cash	$	58	$	75

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2019

Business Combinations

Schedule of preliminary estimates of fair value of the assets and liabilities

Accounts receivable	$	42
Inventory		17
Long lived assets (includes PP&E and intangibles)		164
Total assets		223
Accounts payable		25
Accrued liabilities		3
Net assets acquired	$	195

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Segment Information - Reportable Segments (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) segment	Jun. 30, 2018 USD ($)
Segment Reporting Information
Number of reportable segments | segment			3
Number of operating segments | segment			3
Net sales:
Net sales	$ 1,756	$ 1,772	$ 3,393	$ 3,508
Segment operating profit:
Segment operating profit	236	255	436	479
Items excluded from Segment Operating Profit:
Retained corporate costs and other charges	(28)	(30)	(53)	(57)
Restructuring, asset impairment and other	(42)	(73)	(42)	(73)
Interest expense, net	(68)	(74)	(132)	(136)
Earnings from continuing operations before income taxes
Earnings from continuing operations before income taxes	98	78	209	213
Reportable Segment Totals
Net sales:
Net sales	1,736	1,757	3,364	3,481
Americas
Net sales:
Net sales	934	930	1,815	1,838
Segment operating profit:
Segment operating profit	144	152	257	299
Europe
Net sales:
Net sales	650	674	1,246	1,317
Segment operating profit:
Segment operating profit	90	101	169	173
Asia Pacific
Net sales:
Net sales	152	153	303	326
Segment operating profit:
Segment operating profit	2	2	10	7
Other
Net sales:
Net sales	$ 20	$ 15	$ 29	$ 27

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Segment Information - Total Assets (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Assets
Total assets:	$ 10,723	$ 9,699	$ 9,818
Reportable Segment Totals
Assets
Total assets:	10,381	9,451	9,615
Americas
Assets
Total assets:	5,994	5,497	5,402
Europe
Assets
Total assets:	3,342	3,036	3,232
Asia Pacific
Assets
Total assets:	1,045	918	981
Other
Assets
Total assets:	$ 342	$ 248	$ 203

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Revenue (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue
Net sales	$ 1,756	$ 1,772	$ 3,393	$ 3,508
Reportable Segment Totals
Disaggregation of Revenue
Net sales	1,736	1,757	3,364	3,481
Americas
Disaggregation of Revenue
Net sales	934	930	1,815	1,838
Europe
Disaggregation of Revenue
Net sales	650	674	1,246	1,317
Asia Pacific
Disaggregation of Revenue
Net sales	152	153	303	326
Other
Disaggregation of Revenue
Net sales	20	15	29	27
Alcoholic beverages (beer, wine, spirits)
Disaggregation of Revenue
Net sales	1,169	1,191	2,274	2,365
Alcoholic beverages (beer, wine, spirits) | Americas
Disaggregation of Revenue
Net sales	590	585	1,153	1,161
Alcoholic beverages (beer, wine, spirits) | Europe
Disaggregation of Revenue
Net sales	474	493	907	964
Alcoholic beverages (beer, wine, spirits) | Asia Pacific
Disaggregation of Revenue
Net sales	105	113	214	240
Food and other
Disaggregation of Revenue
Net sales	329	332	637	657
Food and other | Americas
Disaggregation of Revenue
Net sales	191	197	372	386
Food and other | Europe
Disaggregation of Revenue
Net sales	109	112	211	224
Food and other | Asia Pacific
Disaggregation of Revenue
Net sales	29	23	54	47
Non-alcoholic beverages
Disaggregation of Revenue
Net sales	238	234	453	459
Non-alcoholic beverages | Americas
Disaggregation of Revenue
Net sales	153	148	290	291
Non-alcoholic beverages | Europe
Disaggregation of Revenue
Net sales	67	69	128	129
Non-alcoholic beverages | Asia Pacific
Disaggregation of Revenue
Net sales	$ 18	$ 17	$ 35	$ 39

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Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Inventories
Finished goods	$ 838	$ 849	$ 821
Raw materials	131	125	123
Operating supplies	46	44	41
Inventories	$ 1,015	$ 1,018	$ 985

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Derivative Instruments - Derivatives and Hedges (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Derivatives and Hedges
Net cash proceeds for hedging activity		$ (28)
Commodity forwards contracts | Cash Flow Hedges
Derivatives and Hedges
Unrecognized (loss) gain included in Accumulated OCI	$ 2	2	$ 1	$ 7
Cross-currency swap | Cash Flow Hedges
Derivatives and Hedges
Unrecognized (loss) gain included in Accumulated OCI	(18)	(18)	(9)	$ (8)
Net cash proceeds for hedging activity	15
Interest rate swaps | Derivatives designated as hedging instruments
Derivatives and Hedges
Net cash proceeds for hedging activity	13
Interest rate swaps | Cash Flow Hedges
Derivatives and Hedges
Unrecognized (loss) gain included in Accumulated OCI	(1)	(1)
Interest rate swaps | Cash Flow Hedges | Maximum
Derivatives and Hedges
Unrecognized (loss) gain included in Accumulated OCI			(1)
Interest rate swaps | Net investment hedges
Derivatives and Hedges
Unrecognized (loss) gain included in Accumulated OCI	$ 5	$ 5	$ 4

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Derivative Instruments - Balance Sheet Classification (Details) $ in Thousands, € in Millions	Jun. 30, 2019 USD ($)	Jun. 30, 2019 EUR (€)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 EUR (€)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 EUR (€)
Derivatives, Fair Value
Total asset derivatives	$ 46,000		$ 25,000		$ 20,000
Total liability derivatives	40,000		12,000		22,000
Current derivative asset	13,000		19,000		13,000
Current derivative liability	3,000		3,000		3,000
Noncurrent derivative asset	33,000		6,000		7,000
Noncurrent derivative liability	37,000		9,000		19,000
Derivatives designated as hedging instruments
Derivatives, Fair Value
Total asset derivatives	44,000		23,000		18,000
Total liability derivatives	39,000		10,000		20,000
Derivatives designated as hedging instruments | Commodity forwards contracts
Derivatives, Fair Value
Notional amount	19,000		21,000		21,000
Total asset derivatives	2,000		1,000		7,000
Total liability derivatives	1,000
Derivatives designated as hedging instruments | Interest rate swaps - fair value hedges
Derivatives, Fair Value
Notional amount | €		€ 725		€ 725		€ 725
Total asset derivatives	15,000		6,000		6,000
Total liability derivatives			1,000		8,000
Derivatives designated as hedging instruments | Interest rate swaps - cash flow hedges
Derivatives, Fair Value
Notional amount	480,000		180,000		180,000
Total asset derivatives	1,000
Total liability derivatives	2,000
Derivatives designated as hedging instruments | Cash flow hedges of foreign exchange risk
Derivatives, Fair Value
Notional amount	1,210,000		587,000		310,000
Total asset derivatives	20,000		10,000		5,000
Total liability derivatives	30,000		1,000		12,000
Derivatives designated as hedging instruments | Net investment hedges
Derivatives, Fair Value
Notional amount | €		€ 160		€ 160
Total asset derivatives	6,000		6,000
Total liability derivatives	6,000		8,000
Derivatives not designated as hedging instruments | Foreign exchange contracts
Derivatives, Fair Value
Notional amount	292,000		470,000		380,000
Total asset derivatives	2,000		2,000		2,000
Total liability derivatives	$ 1,000		$ 2,000		$ 2,000

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Derivative Instruments - Effects of Derivative Instruments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivatives not designated as hedging instruments | Foreign exchange contracts
Derivatives and Hedges
Amount of Gain (Loss) Recognized in Other income (expense), net	$ 1		$ 7
Derivatives designated as hedging instruments
Derivatives and Hedges
Amount of Gain (Loss) Recognized in OCI (Effective Portion)	(2)	$ 18	7	$ 6
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income	(6)	18	(17)	9
Derivatives designated as hedging instruments | Net Investment Hedges
Derivatives and Hedges
Amount of Gain (Loss) Recognized in OCI (Effective Portion)	5		5
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income	(4)		(4)
Derivatives designated as hedging instruments | Commodity forwards contracts | Cash Flow Hedges | Cost of goods sold
Derivatives and Hedges
Amount of Gain (Loss) Recognized in OCI (Effective Portion)	(1)	4	1	5
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income			(1)	(1)
Derivatives designated as hedging instruments | Foreign exchange contracts | Cash Flow Hedges | Other expense, net
Derivatives and Hedges
Amount of Gain (Loss) Recognized in OCI (Effective Portion)	(5)	14	2	1
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income	(2)	$ 18	(12)	$ 10
Derivatives designated as hedging instruments | Interest rate swaps | Cash Flow Hedges | Interest expense, net
Derivatives and Hedges
Amount of Gain (Loss) Recognized in OCI (Effective Portion)	$ (1)		$ (1)

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Restructuring Accruals (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Restructuring accrual
Beginning balance, restructuring reserve	$ 53	$ 80	$ 69	$ 85
Charges	32	70	32	70
Write-down of assets to net realizable value		(53)		(53)
Net cash paid, principally severance and related benefits	(14)	(6)	(29)	(12)
Other, including foreign exchange translation	(1)	(4)	(2)	(3)
Ending balance, restructuring reserve	70	87	70	87
Restructuring, Additional Information
Carrying value of impaired assets	0	3	0	3
Cost of goods sold
Restructuring accrual
Charges		5		5
Selling and administrative expense
Restructuring accrual
Charges	2		2
Other expense, net
Restructuring accrual
Charges	30	65	30	65
Employee Costs
Restructuring accrual
Beginning balance, restructuring reserve	34	63	47	67
Charges	27	15	27	15
Net cash paid, principally severance and related benefits	(11)	(5)	(24)	(10)
Other, including foreign exchange translation		(2)		(1)
Ending balance, restructuring reserve	50	71	50	71
Asset Impairment
Restructuring accrual
Charges		53		53
Write-down of assets to net realizable value		(53)		(53)
Other Exit Costs
Restructuring accrual
Beginning balance, restructuring reserve	19	17	22	18
Charges	5	2	5	2
Net cash paid, principally severance and related benefits	(3)	(1)	(5)	(2)
Other, including foreign exchange translation	(1)	(2)	(2)	(2)
Ending balance, restructuring reserve	$ 20	$ 16	$ 20	$ 16

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Pension Benefit Plans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
U.S.
Components of net periodic pension cost
Service cost	$ 3	$ 4	$ 6	$ 7
Interest cost	15	15	30	30
Expected asset return	(22)	(25)	(44)	(49)
Amortization:
Amortization of Actuarial loss	10	13	20	26
Net periodic pension cost	6	7	12	14
Non-U.S.
Components of net periodic pension cost
Service cost	3	3	6	7
Interest cost	7	8	15	16
Expected asset return	(11)	(14)	(22)	(27)
Amortization:
Amortization of Actuarial loss	3	$ 3	5	7
Net periodic pension cost	$ 2		$ 4	$ 3

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Leases (Details)	6 Months Ended
	Jun. 30, 2019
Leases
Finance leases - option to extend	true
Operating leases - option to extend	true

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Lease Cost (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Leases
Amortization of right-of-use assets	$ 2	$ 3
Interest on lease liabilities		1
Operating lease cost	21	42
Total lease cost	$ 23	$ 46

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Leases - Other information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($)
Leases
Operating cash flows from operating leases	$ 21
Operating cash flows from finance leases	1
Financing cash flows from finance leases	3
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 33

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Leases - Supplemental balance sheet information (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018	Jun. 30, 2018
Operating leases:
Operating lease right-of-use assets (included in Other assets)	$ 196	$ 214
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other Assets, Noncurrent
Current operating lease liabilities (included in Other current liabilities)	$ 67
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Current operating lease liabilities (included in Other current liabilities)
Noncurrent operating lease liabilities (included in Other long-term liabilities)	$ 129
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Noncurrent operating lease liabilities (included in Other long-term liabilities)
Total operating lease liabilities	$ 196	$ 214
Finance leases:
Property, plant and equipment, net	3,216		$ 3,085	$ 3,025
Current finance lease liabilities (included in Long-term debt due within one year)	$ 6
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Current finance lease liabilities (included in Long-term debt due within one year)
Noncurrent finance lease liabilities (included in Long-term debt)	$ 35
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Noncurrent finance lease liabilities (included in Long-term debt)
Total finance lease liabilities	$ 41
Weighted-average remaining lease term (in years):
Operating leases weighted-average remaining lease term (in years)	4 years 9 months 18 days
Finance leases weighted-average remaining lease term (in years)	7 years
Weighted-average discount rate:
Operating leases (as a percent)	3.80%
Finance leases (as a percent)	5.20%
Property, plant and equipment finance leases
Finance leases:
Property, plant and equipment	$ 74
Accumulated amortization	(30)
Property, plant and equipment, net	$ 44

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Leases - Maturity of lease liabilities (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jan. 01, 2019
Operating leases
2019	$ 39
2020	61
2021	37
2022	28
2023	18
2024 and thereafter	32
Total lease payments	215
Less: imputed interest	(19)
Total operating lease liabilities	196	$ 214
Finance leases
2019	5
2020	8
2021	8
2022	6
2023	6
2024 and thereafter	17
Total lease payments	50
Less: imputed interest	(9)
Total finance lease liabilities	41
Minimum payments related to leases not yet commenced	$ 85

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Income Taxes - (Details)	6 Months Ended
	Jun. 30, 2019
Income Taxes
Statutory U.S. Federal tax rate (as a percent)	21.00%

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Debt (Details) $ / shares in Units, € in Millions, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2019 USD ($) item agreement	Dec. 31, 2020 item	Jun. 30, 2019 EUR (€) item	Jun. 30, 2019 USD ($) item $ / shares	Dec. 31, 2018 EUR (€)	Dec. 31, 2018 USD ($)	Jun. 30, 2018 EUR (€)	Jun. 30, 2018 USD ($)
Debt Instrument
Total long-term debt					$ 6,265		$ 5,214		$ 5,398
Less amounts due within one year					30		33		21
Long-term debt					6,235		5,181		5,377
Number financial maintenance covenants | agreement		1
Maximum Leverage Ratio may increase | item		0.5
Short-term loans and long-term debt due within one year					$ 96		160		291
Maximum
Debt Instrument
Leverage Ratio | item				5.0	5.0
Maximum Borrowing Capacity					$ 3,000
Maximum | Forecast
Debt Instrument
Leverage Ratio | item			4.50
Prior Agreement
Debt Instrument
Interest charges for write-off of finance fees	$ 2
Secured Credit Agreement
Debt Instrument
Unused Credit					$ 1,100
Weighted average interest rate (as a percent)				3.71%	3.71%
Secured Credit Agreement | Minimum
Debt Instrument
Interest rate margin, Eurocurrency Rate loans (as a percent)				1.00%	1.00%
Interest rate margin, Base Rate loans (as a percent)		0.00%
Secured Credit Agreement | Maximum
Debt Instrument
Interest rate margin, Eurocurrency Rate loans (as a percent)				1.50%	1.50%
Interest rate margin, Base Rate loans (as a percent)		0.50%
Revolving Loans
Debt Instrument
Total long-term debt					$ 389
Revolving Loans | Prior Agreement
Debt Instrument
Total long-term debt									397
Term Loan A
Debt Instrument
Total long-term debt					1,496
Face Value					1,500
Net proceeds, after deducting debt issuance costs		$ 1,496
Term Loan A | Prior Agreement
Debt Instrument
Total long-term debt							897		908
Other secured debt
Debt Instrument
Total long-term debt					454		404		150
Senior Notes 6.75%, due 2020 (500 million EUR)
Debt Instrument
Total long-term debt				€ 500	$ 567	€ 500	570	€ 500	580
Interest rate, stated percentage				6.75%	6.75%
Fair values of fixed rate debt obligations
Principal Amount					$ 568
Indicated Market Price (in dollars per share) | $ / shares					$ 108.48
Fair Value					$ 616
Senior Notes 4.875%, due 2021 (330 million EUR)
Debt Instrument
Total long-term debt				€ 330	$ 374	330	376	330	383
Interest rate, stated percentage				4.875%	4.875%
Fair values of fixed rate debt obligations
Principal Amount					$ 375
Indicated Market Price (in dollars per share) | $ / shares					$ 108.35
Fair Value					$ 406
Senior Notes 5.00%, due 2022
Debt Instrument
Total long-term debt					$ 497		497		496
Interest rate, stated percentage				5.00%	5.00%
Fair values of fixed rate debt obligations
Principal Amount					$ 500
Indicated Market Price (in dollars per share) | $ / shares					$ 102.95
Fair Value					$ 515
Senior Notes 4.00%, due 2023
Debt Instrument
Total long-term debt					$ 307		306		306
Interest rate, stated percentage				4.00%	4.00%
Fair values of fixed rate debt obligations
Principal Amount					$ 310
Indicated Market Price (in dollars per share) | $ / shares					$ 100.37
Fair Value					$ 311
Senior Notes 5.875%, due 2023
Debt Instrument
Total long-term debt					$ 689		688		686
Interest rate, stated percentage				5.875%	5.875%
Fair values of fixed rate debt obligations
Principal Amount					$ 700
Indicated Market Price (in dollars per share) | $ / shares					$ 107.36
Fair Value					$ 752
Senior Notes 3.125%, due 2024 (725 million EUR)
Debt Instrument
Total long-term debt				€ 725	$ 845	€ 725	825	€ 725	833
Interest rate, stated percentage				3.125%	3.125%
Fair values of fixed rate debt obligations
Principal Amount					$ 824
Indicated Market Price (in dollars per share) | $ / shares					$ 108.85
Fair Value					$ 897
Senior Notes 6.375%, due 2025
Debt Instrument
Total long-term debt					$ 296		295		295
Interest rate, stated percentage				6.375%	6.375%
Fair values of fixed rate debt obligations
Principal Amount					$ 300
Indicated Market Price (in dollars per share) | $ / shares					$ 107.66
Fair Value					$ 323
Senior Notes, 5.375% due 2025
Debt Instrument
Total long-term debt					$ 298		297		297
Interest rate, stated percentage				5.375%	5.375%
Fair values of fixed rate debt obligations
Principal Amount					$ 300
Indicated Market Price (in dollars per share) | $ / shares					$ 103.49
Fair Value					$ 310
Finance leases
Debt Instrument
Total long-term debt					41		45		50
Other
Debt Instrument
Total long-term debt					12		$ 14		$ 17
Revolving Credit Facility
Debt Instrument
Total long-term debt					300
Additional default interest rate per annum applied to all obligations owed under the Agreement		2.00%
Revolving Credit Facility | Minimum
Debt Instrument
Facility fee payable (as a percent)		0.20%
Revolving Credit Facility | Maximum
Debt Instrument
Facility fee payable (as a percent)		0.30%
Multicurrency Revolving Credit Facility
Debt Instrument
Total long-term debt					$ 1,200

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Contingencies - Asbestos (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2019 USD ($) lawsuit	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 1993 USD ($)
Asbestos
Sale of goods containing asbestos from 1948 to 1958	$ 40,000,000
Number of pending plaintiffs and claimants | lawsuit	1,020
Approximate number of claims disposed of to date | lawsuit	400,800
Average indemnity payment per claim	$ 10,000
Asbestos-related cash payments		$ 105,000,000	$ 110,000,000	$ 125,000,000
Cash payments per claim disposed including legal costs		86,000	83,000	71,000
Asbestos-related liability, total amount accrued beginning in 1993 through current reporting period before insurance recoveries	5,000,000,000.0				$ 975,000,000
Accrual of asbestos related liability		602,000,000	582,000,000
Asbestos related charges		$ 125,000,000	$ 0	$ 0
Loss contingency, plaintiffs damages	$ 722,000,000
Minimum
Asbestos
Period in which significant majority of claims to be received	5 years
Maximum
Asbestos
Period in which significant majority of claims to be received	7 years

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Share Owners' Equity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Increase (Decrease) in Share Owners' Equity
Balance	$ 1,010	$ 1,119	$ 900	$ 927
Issuance of common stock			$ 2
Issuance of common stock (in shares)			100,000
Reissuance of common stock	$ 3	$ 3	$ 5	$ 4
Reissuance of common stock (in shares)	100,000	30,000.00	200,000	300,000
Treasury shares purchased		$ (50)	$ (38)	$ (95)
Treasury shares purchased (in shares)		2,676,363	2,064,652	4,676,122
Stock compensation	$ 6	$ 11	$ 11	$ 16
Stock compensation (in shares)	500,000	500,000	1,700,000	300,000
Net earnings	$ 70	$ 56	$ 154	$ 158
Other comprehensive income (loss)	8	(240)	68	(111)
Dividends declared	(7)		(7)
Other			(5)
Balance	1,090	$ 899	1,090	$ 899
Remaining repurchase of common stock available	$ 512		$ 512
Authorization of common stock
Common stock, shares authorized	250,000,000		250,000,000
Common stock, par value (in dollars per share)	$ 0.01		$ 0.01
Shares of common stock issued (including treasury shares)	188,435,000	186,423,000	188,435,000	186,423,000	186,576,000
Treasury stock, shares	32,978,000	27,176,000	32,978,000	27,176,000	30,918,000
Common Stock
Increase (Decrease) in Share Owners' Equity
Balance	$ 2	$ 2	$ 2	$ 2
Balance	2	2	2	2
Capital in Excess of Par Value
Increase (Decrease) in Share Owners' Equity
Balance	3,130	3,104	3,124	3,099
Issuance of common stock			2
Reissuance of common stock			(1)
Stock compensation	6	11	11	16
Balance	3,136	3,115	3,136	3,115
Treasury Stock
Increase (Decrease) in Share Owners' Equity
Balance	(745)	(595)	(705)	(551)
Reissuance of common stock	3	3	6	4
Treasury shares purchased		(50)	(38)	(95)
Other			(5)
Balance	(742)	(642)	(742)	(642)
Retained Earnings (accumulated deficit)
Increase (Decrease) in Share Owners' Equity
Balance	412	182	333	85
Net earnings	65	50	144	147
Dividends declared	(7)		(7)
Balance	470	232	470	232
Accumulated Other Comprehensive Loss.
Increase (Decrease) in Share Owners' Equity
Balance	(1,911)	(1,704)	(1,968)	(1,827)
Other comprehensive income (loss)	20	(225)	77	(102)
Balance	(1,891)	(1,929)	(1,891)	(1,929)
Non-Controlling Interests
Increase (Decrease) in Share Owners' Equity
Balance	122	130	114	119
Net earnings	5	6	10	11
Other comprehensive income (loss)	(12)	(15)	(9)	(9)
Balance	$ 115	$ 121	$ 115	$ 121

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Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax
Other comprehensive income (loss)	$ 8	$ (240)	$ 68	$ (111)
Net Effect of Exchange Rate Fluctuations
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax
Balance at beginning of the period	(843)	(603)	(889)	(724)
Change before reclassifications	13	(253)	59	(132)
Other comprehensive income (loss)	13	(253)	59	(132)
Balance at end of the period	(830)	(856)	(830)	(856)
Change in Certain Derivative Instruments
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax
Balance at beginning of the period	(13)	(17)	(18)	(12)
Change before reclassifications	(4)	18	7	4
Amounts reclassified from accumulated other comprehensive income (loss)	(6)	(18)	(17)	(9)
Translation effect	1	(1)	3	(1)
Tax effect			3
Other comprehensive income (loss)	(9)	(1)	(4)	(6)
Balance at end of the period	(22)	(18)	(22)	(18)
Employee Benefit Plans
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax
Balance at beginning of the period	(1,055)	(1,084)	(1,061)	(1,091)
Change before reclassifications		(3)	(2)	(7)
Amounts reclassified from accumulated other comprehensive income (loss)	12	16	25	33
Translation effect	4	16	(1)	10
Other comprehensive income (loss)	16	29	22	36
Balance at end of the period	(1,039)	(1,055)	(1,039)	(1,055)
Accumulated Other Comprehensive Loss.
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax
Balance at beginning of the period	(1,911)	(1,704)	(1,968)	(1,827)
Change before reclassifications	9	(238)	64	(135)
Amounts reclassified from accumulated other comprehensive income (loss)	6	(2)	8	24
Translation effect	5	15	2	9
Tax effect			3
Other comprehensive income (loss)	20	(225)	77	(102)
Balance at end of the period	$ (1,891)	$ (1,929)	$ (1,891)	$ (1,929)

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Other Expense (Income), net (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Other Expense (Income), net
Restructuring, asset impairment and other charges	$ 38	$ 68	$ 38	$ 68
Foreign currency exchange loss			3	(2)
Intangible amortization expense	10	10	20	20
Royalty income	(4)	(3)	(7)	(6)
Other expense (income), net	11	(3)	11	(11)
Other Expense, net	$ 55	$ 72	$ 65	$ 69

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Numerator:
Net earnings attributable to the Company	$ 65	$ 50	$ 144	$ 147
Denominator (in thousands):
Denominator for basic earnings per share - weighted average shares outstanding (in shares)	155,338,000	160,858,000	154,852,000	161,904,000
Effect of dilutive securities:
Stock options and other (in shares)	1,133,000	1,854,000	1,703,000	2,060,000
Denominator for diluted earnings per share - adjusted weighted average shares outstanding (in shares)	156,471,000	162,712,000	156,555,000	163,964,000
Basic earnings per share:
Earnings from continuing operations (in dollars per share)	$ 0.42	$ 0.31	$ 0.94	$ 0.91
Loss from discontinued operations (in dollars per share)			(0.01)	(0.01)
Net earnings (in dollars per share)	0.42	0.31	0.93	0.90
Diluted earnings per share:
Earnings from continuing operations (in dollars per share)	0.42	0.31	0.93	0.90
Loss from discontinued operations (in dollars per share)			(0.01)
Net earnings (in dollars per share)	$ 0.42	$ 0.31	$ 0.92	$ 0.90
Weighted average shares of common stock attributable to options not included in diluted earnings per share (in shares)	1,603,692	1,989,521	1,549,995	1,895,822

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Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Income taxes paid	$ 58	$ 75
Interest paid in cash	128	128
Amount of receivables sold	173	221	$ 600
Change in cash from operating activities from factoring program	427	233
U.S.
Income taxes paid	(3)	7
Non-U.S.
Income taxes paid	$ 61	$ 68

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Discontinued Operations (Details) $ in Millions			1 Months Ended	3 Months Ended		6 Months Ended
	Dec. 06, 2018 Plant	Jul. 31, 2017 USD ($)	Mar. 31, 2018 subsidiary	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)
Subsidiaries
Loss from discontinued operations				$ (1)		$ (1)	$ (1)
Discontinued Operations, Disposed of by Sale | OI European Group B.V. ("OIEG")
Subsidiaries
Litigation settlement amount		$ 115
Loss from discontinued operations					$ 115
Disposed Venezuelan subsidiaries
Subsidiaries
Expropriated plants | Plant	2
Number of subsidiaries seeking an annulment | subsidiary			2
Disposed Venezuelan subsidiaries | Maximum
Subsidiaries
Loss from discontinued operations						$ 1	$ 1

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New Accounting Pronouncement (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jan. 01, 2019
New Accounting Pronouncement
Operating lease liabilities	$ 196	$ 214
Operating lease right-of-use assets (included in Other assets)	$ 196	$ 214

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Business Combinations (Details) $ in Millions		3 Months Ended	6 Months Ended
	Jun. 28, 2019 USD ($) item T	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)
Business Combinations
Cash paid for acquisition				$ 157
Nueva Fbrica Nacional de Vidrio, S. de R.L. de C.V. ("Nueva Fanal")
Business Combinations
Cash paid for acquisition	$ 195	$ 157	$ 38
Number of furnaces in the Nueva Fanal facility | item	4
Tonnage of glass containers produced by Nueva Fbrica Nacional de Vidrio, S. de R.L. de C.V. ("Nueva Fanal") | T	300,000
Pro forma financial information	$ 0
Fair values of the assets and liabilities assumed
Accounts Receivable	42
Inventory	17
Long lived assets (includes PP&E and intangibles)	164
Total assets	223
Accounts payable	25
Accrued liabilities	3
Net assets acquired	$ 195

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Subsequent Events (Details) € in Millions, $ in Millions	3 Months Ended
	Sep. 30, 2019 USD ($)	Jul. 31, 2019 EUR (€)	Jun. 30, 2019 USD ($)	Jun. 30, 2019 EUR (€)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 EUR (€)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 EUR (€)
Subsequent Events
Total long-term debt			$ 6,265		$ 5,214		$ 5,398
Senior Notes 6.75%, due 2020 (500 million EUR)
Subsequent Events
Total long-term debt			$ 567	€ 500	$ 570	€ 500	$ 580	€ 500
Interest rate, stated percentage			6.75%	6.75%
Subsequent Events | Senior Notes 6.75%, due 2020 (500 million EUR)
Subsequent Events
Total long-term debt | €		€ 250
Interest rate, stated percentage		6.75%
Write-off of deferred finance fees	$ 24