Financial Information for Subsidiary Guarantors and Non-Guarantors

6 Months Ended

Jun. 30, 2011

Financial Information for Subsidiary Guarantors and Non-Guarantors

Financial Information for Subsidiary Guarantors and Non-Guarantors

14.  Financial Information for Subsidiary Guarantors and Non-Guarantors

The following presents condensed consolidating financial information for the Company, segregating:  (1) Owens-Illinois Group, Inc. (the “Parent”); (2) Owens-Brockway Glass Container Inc. (the “Issuer”); (3) those domestic subsidiaries that guarantee the 6.75% senior notes, 6.75% Euro senior notes, 3.00% exchangeable notes and 7.375% senior notes of the Issuer (the “Guarantor Subsidiaries”); and (4) all other subsidiaries (the “Non-Guarantor Subsidiaries”).  The Guarantor Subsidiaries are 100% owned direct and indirect subsidiaries of the Parent and their guarantees are full, unconditional and joint and several.  The Parent is also a guarantor, and its guarantee is full, unconditional and joint and several.

100% owned subsidiaries of the Parent and of the Issuer are presented on the equity basis of accounting.  Certain reclassifications have been made to conform all of the financial information to the financial presentation on a consolidated basis.  The principal eliminations relate to investments in subsidiaries and intercompany balances and transactions.

	June 30, 2011
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	115	$	(1	)	$	1,208				$	1,322
Inventories			102					963					1,065
Other current assets			18		43			303					364
Total current assets	—		235		42			2,474		—			2,751
Investments in and advances to subsidiaries	2,791		3,923		(158		)			(6,556		)	—
Goodwill			561		10			2,387		(1		)	2,957
Other non-current assets			150		117			960		33			1,260
Total other assets	2,791		4,634		(31		)	3,347		(6,524		)	4,217
Property, plant and equipment, net			650		42			2,484					3,176
Total assets	$	2,791	$	5,519	$	53		$	8,305	$	(6,524	)	$	10,144
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	299	$	41		$	1,311	$	—		$	1,651
Short-term loans and long-term debt due within one year					1			370					371
Total current liabilities	—		299		42			1,681		—			2,022
Long-term debt	250		1,927		15			1,777					3,969
Other non-current liabilities			86		410			959					1,455
Investments by and advances from parent			3,207		(414		)	3,731		(6,524		)	—
Total share owner’s equity of the Company	2,541												2,541
Noncontrolling interests								157					157
Total liabilities and share owners’ equity	$	2,791	$	5,519	$	53		$	8,305	$	(6,524	)	$	10,144

	December 31, 2010
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	81	$	(8	)	$	1,002	$	—		$	1,075
Inventories			124					822					946
Other current assets			38		223			457		(1		)	717
Total current assets	—		243		215			2,281		(1		)	2,738
Investments in and advances to subsidiaries	2,541		3,739		(246		)			(6,034		)	—
Goodwill			561		10			2,251		(1		)	2,821
Other non-current assets			151		114			823					1,088
Total other assets	2,541		4,451		(123		)	3,074		(6,035		)	3,909
Property, plant and equipment, net			664		42			2,399		2			3,107
Total assets	$	2,541	$	5,358	$	135		$	7,754	$	(6,034	)	$	9,754
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	314	$	46		$	1,195	$	—		$	1,555
Short-term loans and long-term debt due within one year					1			353					354
Total current liabilities	—		314		47			1,548		—			1,909
Long-term debt	250		2,082		16			1,577		(1		)	3,924
Other non-current liabilities			75		419			926		(1		)	1,419
Investments by and advances from parent			2,887		(347		)	3,492		(6,032		)	—
Total share owner’s equity of the Company	2,291												2,291
Noncontrolling interests								211					211
Total liabilities and share owners’ equity	$	2,541	$	5,358	$	135		$	7,754	$	(6,034	)	$	9,754

	June 30, 2010
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	124	$	65		$	887	$	—		$	1,076
Inventories			151					705					856
Other current assets			63		220			435					718
Assets of discontinued operations								78					78
Total current assets	—		338		285			2,105		—			2,728
Investments in and advances to subsidiaries	2,196		3,358		(312		)			(5,242		)	—
Goodwill			561		9			1,652					2,222
Other non-current assets			153		100			518		3			774
Assets of discontinued operations								36					36
Total other assets	2,196		4,072		(203		)	2,206		(5,239		)	3,032
Property, plant and equipment, net			639		42			1,917					2,598
Total assets	$	2,196	$	5,049	$	124		$	6,228	$	(5,239	)	$	8,358
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	387	$	25		$	1,024	$	11		$	1,447
Short-term loans and long-term debt due within one year								272					272
Liabilities of discontinued operations								25					25
Total current liabilities	—		387		25			1,321		11			1,744
Long-term debt	250		2,047		17			914					3,228
Other non-current liabilities			99		401			720					1,220
Liabilities of discontinued operations								15					15
Investments by and advances from parent			2,516		(319		)	3,053		(5,250		)	—
Total share owner’s equity of the Company	1,946												1,946
Noncontrolling interests								205					205
Total liabilities and share owners’ equity	$	2,196	$	5,049	$	124		$	6,228	$	(5,239	)	$	8,358

	Three months ended June 30, 2011
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	474		$	—		$	1,509		$	(24	)	$	1,959
Manufacturing, shipping, and delivery				(407		)				(1,266		)	69			(1,604		)
Gross profit	—			67			—			243			45			355
Research, engineering, selling, administrative, and other				(32		)	(9		)	(131		)				(172		)
Net intercompany interest	5			—			(4		)	(1		)				—
Interest expense	(5		)	(56		)	1			(40		)				(100		)
Interest income										3						3
Equity earnings from subsidiaries	73			68			(34		)				(107		)	—
Other equity earnings				2			11			8			(2		)	19
Other income				49						3			(47		)	5
Earnings (loss) before income taxes	73			98			(35		)	85			(111		)	110
Provision for income taxes				—			12			(44		)				(32		)
Earnings (loss) from continuing operations	73			98			(23		)	41			(111		)	78
Earnings from discontinued operations										2						2
Net earnings (loss)	73			98			(23		)	43			(111		)	80
Net earnings attributable to noncontrolling interest										(7		)				(7		)
Net earnings (loss) attributable to the Company	$	73		$	98		$	(23	)	$	36		$	(111	)	$	73

	Three months ended June 30, 2010
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	485		$	—		$	1,217		$	(32	)	$	1,670
Manufacturing, shipping, and delivery				(386		)	4			(951		)	46			(1,287		)
Gross profit	—			99			4			266			14			383
Research, engineering, selling, administrative, and other				(41		)	(20		)	(91		)				(152		)
Net intercompany interest	5			(9		)	5			(1		)				—
Other interest expense	(5		)	(40		)				(15		)				(60		)
Interest income										4						4
Equity earnings from subsidiaries	141			152			(30		)				(263		)	—
Other equity earnings				2			7			4						13
Other income				19						1			(14		)	6
Earnings (loss) from continuing operations before income taxes	141			182			(34		)	168			(263		)	194
Provision for income taxes				2			(8		)	(45		)				(51		)
Earnings (loss) from continuing operations	141			184			(42		)	123			(263		)	143
Earnings from discontinued operations										12						12
Net earnings (loss)	141			184			(42		)	135			(263		)	155
Net earnings attributable to noncontrolling interests										(14		)				(14		)
Net earnings (loss) attributable to the Company	$	141		$	184		$	(42	)	$	121		$	(263	)	$	141

	Six months ended June 30, 2011
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	923		$	—		$	2,805		$	(50	)	$	3,678
Manufacturing, shipping, and delivery				(781		)				(2,376		)	167			(2,990		)
Gross profit	—			142			—			429			117			688
Research, engineering, selling, administrative, and other				(72		)	(26		)	(250		)				(348		)
Net intercompany interest	10			—			(8		)	(2		)				—
Interest expense	(10		)	(92		)				(74		)				(176		)
Interest income										6						6
Equity earnings from subsidiaries	145			90			(41		)				(194		)	—
Other equity earnings				4			18			12			(1		)	33
Other income				125						4			(117		)	12
Earnings (loss) from continuing operations before income taxes	145			197			(57		)	125			(195		)	215
Provision for income taxes				(4		)	8			(64		)				(60		)
Earnings (loss) from continuing operations	145			193			(49		)	61			(195		)	155
Earnings from discontinued operations										1						1
Net earnings (loss)	145			193			(49		)	62			(195		)	156
Net earnings attributable to noncontrolling interest										(11		)				(11		)
Net earnings (loss) attributable to the Company	$	145		$	193		$	(49	)	$	51		$	(195	)	$	145

	Six months ended June 30, 2010
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	905		$	—		$	2,368		$	(57	)	$	3,216
Manufacturing, shipping, and delivery				(734		)	2			(1,885		)	83			(2,534		)
Gross profit	—			171			2			483			26			682
Research, engineering, selling, administrative, and other				(80		)	(36		)	(178		)				(294		)
Net intercompany interest	11			(22		)	13			(2		)				—
Other interest expense	(11		)	(74		)				(31		)				(116		)
Interest income										8						8
Equity earnings from subsidiaries	226			266			(60		)				(432		)	—
Other equity earnings				7			13			6						26
Other income				34						3			(26		)	11
Earnings (loss) from continuing operations before income taxes	226			302			(68		)	289			(432		)	317
Provision for income taxes							(8		)	(75		)				(83		)
Earnings (loss) from continuing operations	226			302			(76		)	214			(432		)	234
Earnings from discontinued operations										15						15
Net earnings (loss)	226			302			(76		)	229			(432		)	249
Net earnings attributable to noncontrolling interests										(23		)				(23		)
Net earnings (loss) attributable to the Company	$	226		$	302		$	(76	)	$	206		$	(432	)	$	226

	Six months ended June 30, 2011
										Non-
							Guarantor			Guarantor
Cash Flows	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash provided by (utilized in) operating activities	$	—		$	190		$	34		$	(56	)	$	(6	)	$	162
Investing Activities:
Additions to property, plant, and equipment -				(34		)	(2		)	(117		)				(153		)
Acquisitions, net of cash acquired				(8		)				(139		)				(147		)
Cash utilized in investing activities	—			(42		)	(2		)	(256		)	—			(300		)
Financing Activities:
Net distribution to OI Inc.	(66		)													(66		)
Change in intercompany transactions	66			65			(211		)	173			(93		)	—
Additions to short term debt										61						61
Borrowings of long term debt				933						518						1,451
Payments of long term debt				(1,137		)	(1		)	(506		)				(1,644		)
Net receipts for hedging activity										(9		)				(9		)
Dividends paid to noncontrolling interests										(31		)				(31		)
Payment of finance fees				(9		)				(9		)				(18		)
Cash provided by (utilized in) financing activities	—			(148		)	(212		)	197			(93		)	(256		)
Effect of exchange rate change on cash										14						14
Decrease in cash	—			—			(180		)	(101		)	(99		)	(380		)
Cash at beginning of period							230			410						640
Cash at end of period	$	—		$	—		$	50		$	309		$	(99	)	$	260

	Six months ended June 30, 2010
										Non-
							Guarantor			Guarantor
Cash Flows	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash provided by (utilized in) operating activities	$	—		$	45		$	(131	)	$	372		$	(35	)	$	251
Investing Activities:
Additions to property, plant, and equipment - continuing				(69		)	(2		)	(164		)				(235		)
Additions to property, plant, and equipment - discontinued										(1		)				(1		)
Acquisitions, net of cash acquired										(26		)				(26		)
Cash utilized in investing activities	—			(69		)	(2		)	(191		)	—			(262		)
Financing Activities:
Net distribution to OI Inc.	(301		)													(301		)
Change in intercompany transactions	301			(198		)	98			(236		)	35			—
Additions to long term debt				690												690
Payments of long term debt				(450		)	(1		)	(11		)				(462		)
Change in short term debt - continuing										(7		)				(7		)
Change in short term debt - discontinued										(1		)				(1		)
Net receipts for hedging activity										22						22
Payment of finance fees				(18		)										(18		)
Dividends paid to noncontrolling interests										(22		)				(22		)
Cash provided by (utilized in) financing activities	—			24			97			(255		)	35			(99		)
Effect of exchange rate change on cash										(20		)				(20		)
Decrease in cash	—			—			(36		)	(94		)	—			(130		)
Cash at beginning of period							284			528						812
Cash at end of period	$	—		$	—		$	248		$	434		$	—		$	682