10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C.   20549

FORM 10-Q

(Mark one)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

March 31, 2012

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to

Commission file number 33-13061

OWENS-ILLINOIS GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	34-1559348
(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

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 x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x  No o

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

Large accelerated filer o	Accelerated filer o
Non-accelerated filer x	Smaller reporting company o
(do not check if a smaller reporting company)

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

The number of shares of common stock, par value $.01, of Owens-Illinois Group, Inc. outstanding as of March 31, 2012  was 100.

Part I — FINANCIAL INFORMATION

Item 1.  Financial Statements.

The Condensed Consolidated Financial Statements of Owens-Illinois Group, 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, 2011.

2

OWENS-ILLINOIS GROUP, INC.

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS

 (Dollars in millions)

	Three months ended March 31,
	2012			2011
Net sales	$	1,739		$	1,719
Manufacturing, shipping and delivery expense	(1,361		)	(1,376		)
Gross profit	378			343
Selling and administrative expense	(140		)	(142		)
Research, development and engineering expense	(15		)	(16		)
Interest expense	(64		)	(76		)
Interest income	3			3
Equity earnings	13			14
Royalties and net technical assistance	4			5
Other income	2			2
Other expense	(11		)	(18		)
Earnings from continuing operations before income taxes	170			115
Provision for income taxes	(44		)	(28		)
Earnings from continuing operations	126			87
Loss from discontinued operations	(1		)	(1		)
Net earnings	125			86
Net earnings attributable to noncontrolling interests	(4		)	(4		)
Net earnings attributable to the Company	$	121		$	82
Amounts attributable to the Company:
Earnings from continuing operations	$	122		$	83
Loss from discontinued operations	(1		)	(1		)
Net earnings	$	121		$	82

See accompanying notes.

3

OWENS-ILLINOIS GROUP, INC.

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME

 (Dollars in millions)

	Three months ended March 31,
	2012			2011
Net earnings	$	125		$	86
Other comprehensive income, net of tax:
Foreign currency translation adjustments	99			74
Pension and other postretirement benefit adjustments	24			20
Change in fair value of derivative instruments				1
Other comprehensive income	123			95
Total comprehensive income	248			181
Comprehensive income attributable to noncontrolling interests	(11		)	(8		)
Comprehensive income attributable to the Company	$	237		$	173

See accompanying notes.

4

OWENS-ILLINOIS GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 (Dollars in millions, except per share amounts)

	March 31,		December 31,		March 31,
	2012		2011		2011
Assets
Current assets:
Cash and cash equivalents	$	299	$	400	$	430
Receivables, less allowances for losses and discounts ($42 at March 31, 2012, $38 at December 31, 2011, and $43 at March 31, 2011)	1,199		1,158		1,223
Inventories	1,237		1,061		1,103
Prepaid expenses	130		124		78
Total current assets	2,865		2,743		2,834
Investments and other assets:
Equity investments	316		315		301
Repair parts inventories	153		155		154
Pension assets	121		116		59
Other assets	695		687		634
Goodwill	2,127		2,082		2,900
Total other assets	3,412		3,355		4,048
Property, plant and equipment, at cost	7,049		6,899		7,213
Less accumulated depreciation	4,165		4,022		4,070
Net property, plant and equipment	2,884		2,877		3,143
Total assets	$	9,161	$	8,975	$	10,025

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CONDENSED CONSOLIDATED BALANCE SHEETS — Continued

	March 31,			December 31,			March 31,
	2012			2011			2011
Liabilities and Share Owners’ Equity
Current liabilities:
Short-term loans and long-term debt due within one year	$	406		$	406		$	372
Accounts payable	943			1,038			889
Other liabilities	602			636			646
Total current liabilities	1,951			2,080			1,907
Long-term debt	3,724			3,627			3,991
Deferred taxes	214			212			215
Pension benefits	856			871			576
Nonpension postretirement benefits	270			269			260
Other liabilities	410			404			403
Share owners’ equity:
Share owner’s equity of the Company:
Common stock, par value $.01 per share, 1000 shares authorized, 100 shares issued
Other contributed capital	271			295			476
Retained earnings	2,465			2,344			2,761
Accumulated other comprehensive loss	(1,164		)	(1,280		)	(765		)
Total share owner’s equity of the Company	1,572			1,359			2,472
Noncontrolling interests	164			153			201
Total share owners’ equity	1,736			1,512			2,673
Total liabilities and share owners’ equity	$	9,161		$	8,975		$	10,025

See accompanying notes.

6

OWENS-ILLINOIS GROUP, INC.

CONDENSED CONSOLIDATED CASH FLOWS

 (Dollars in millions)

	Three months ended March 31,
	2012			2011
Cash flows from operating activities:
Net earnings	$	125		$	86
Loss from discontinued operations	1			1
Non-cash charges (credits):
Depreciation	97			101
Amortization of intangibles and other deferred items	8			5
Amortization of finance fees and debt discount	8			8
Pension Expense	22			23
Restructuring and asset impairment				8
Other	10			11
Pension Contributions	(17		)	(12		)
Cash paid for restructuring activities	(30		)	(4		)
Change in non-current assets and liabilities	(13		)	(30		)
Change in components of working capital	(275		)	(249		)
Cash utilized in continuing operating activities	(64		)	(52		)
Cash utilized in discontinued operating activities	(1		)
Total cash utilized in operating activities	(65		)	(52		)
Cash flows from investing activities:
Additions to property, plant and equipment	(73		)	(73		)
Acquisitions, net of cash acquired	(5		)	6
Net cash proceeds related to sale of assets and other	11
Cash utilized in investing activities	(67		)	(67		)
Cash flows from financing activities:
Additions to long-term debt	119			5
Repayments of long-term debt	(62		)	(10		)
Decrease in short-term loans	(20		)	(32		)
Net receipts (payments) for hedging activity	8			(12		)
Dividends paid to noncontrolling interests				(18		)
Distributions to parent	(30		)	(31		)
Cash provided by (utilized in) financing activities	15			(98		)
Effect of exchange rate fluctuations on cash	16			7
Decrease in cash	(101		)	(210		)
Cash at beginning of period	400			640
Cash at end of period	$	299		$	430

See accompanying notes.

7

OWENS-ILLINOIS GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Tabular data dollars in millions

1. Basis of Presentation

The Company is a 100%-owned subsidiary of Owens-Illinois, Inc. (“OI Inc.”).  Although OI Inc. does not conduct any operations, it has substantial obligations related to outstanding indebtedness and asbestos-related payments. OI Inc. relies primarily on distributions from its direct and indirect subsidiaries to meet these obligations.

2. Change in Accounting Method

Effective January 1, 2012, the Company elected to change the method of valuing U.S. inventories to the average cost method while in prior years, these inventories were valued using the last-in, first-out (“LIFO”) method.  The Company believes the average cost method is preferable as it conforms the inventory costing methods globally, improves comparability with industry peers and better reflects the current value of inventory on the consolidated balance sheets. All prior periods presented have been adjusted to apply the new method retrospectively.

The effect of the change on the condensed consolidated results of operations for the quarter ended March 31, 2011 is as follows:

	As originally
	reported under			Effect of		As
	LIFO			Change		Adjusted
Manufacturing, shipping and delivery expense	$	(1,386	)	$	10	$	(1,376	)
Amounts attributable to the Company:
Net earnings from continuing operations	73			10		83

The effect of the change on the condensed consolidated balance sheets as of December 31, 2011 and March 31, 2011 is as follows:

	As originally
	reported under		Effect of		As
December 31, 2011	LIFO		Change		Adjusted
Assets:
Inventories	$	1,012	$	49	$	1,061
Share owners' equity:
Retained earnings	2,295		49		2,344
March 31, 2011
Assets:
Inventories	$	1,054	$	49	$	1,103
Share owners' equity:
Retained earnings	2,712		49		2,761

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The effect of the change on the consolidated share owners’ equity as of January 1, 2011 is as follows:

	As originally
	reported under		Effect of		As
	LIFO		Change		Adjusted
Retained earnings	$	2,640	$	39	$	2,679

The effect of the change on the condensed consolidated cash flows for the quarter ended March 31, 2011  is as follows:

	As originally
	reported under			Effect of			As
	LIFO			Change			Adjusted
Net earnings	$	76		$	10		$	86
Change in components of working capital	(239		)	(10		)	(249		)

Had the Company not made this change in accounting method, manufacturing, shipping, and delivery expense for the quarter ended March 31, 2012 would have been $6 million lower and net earnings attributable to the Company would have been $6 million higher than reported in the condensed consolidated results of operations.

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3. Debt

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

	March 31,		December 31,		March 31,
	2012		2011		2011
Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans	$	55	$	—	$	—
Term Loans:
Term Loan A (170 million AUD)	177		173
Term Loan B	600		600
Term Loan C (116 million CAD)	117		114
Term Loan D (€141 million)	188		182
Fourth Amended and Restated Secured Credit Agreement:
Term Loans:
Term Loan A					93
Term Loan B					190
Term Loan C					114
Term Loan D					268
Senior Notes:
6.75%, due 2014					400
6.75%, due 2014 (€225 million)					318
3.00%, Exchangeable, due 2015	628		624		611
7.375%, due 2016	588		588		586
6.875%, due 2017 (€300 million)	401		388		425
6.75%, due 2020 (€500 million)	668		647		708
Payable to OI Inc.	250		250		250
Other	139		137		163
Total long-term debt	3,811		3,703		4,126
Less amounts due within one year	87		76		135
Long-term debt	$	3,724	$	3,627	$	3,991

On May 19, 2011, the Company’s subsidiary borrowers entered into the Secured Credit Agreement (the “Agreement”).  At March 31, 2012, the Agreement included a $900 million revolving credit facility, a 170 million Australian dollar term loan, a $600 million term loan, a 116 million Canadian dollar term loan, and a €141 million term loan, each of which has a final maturity date of May 19, 2016.  At March 31, 2012, the Company’s subsidiary borrowers had unused credit of $749 million available under the Agreement.

The weighted average interest rate on borrowings outstanding under the Agreement at March 31, 2012 was 2.82%.

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The Company has a €280 million European accounts receivable securitization program, which extends through September 2016, subject to annual renewal of backup credit lines. Information related to the Company’s accounts receivable securitization program is as follows:

	March 31,			December 31,			March 31,
	2012			2011			2011
Balance (included in short-term loans)	$	276		$	281		$	222
Weighted average interest rate	1.42		%	2.41		%	2.85		%

The carrying amounts reported for the accounts receivable securitization programs, and 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 March 31, 2012 of the Company’s significant fixed rate debt obligations are as follows:

			Indicated
	Principal		Market	Fair
	Amount		Price	Value
Senior Notes:
3.00%, Exchangeable, due 2015	$	690	98.12	$	677
7.375%, due 2016	600		112.74	676
6.875%, due 2017 (€300 million)	401		103.11	413
6.75%, due 2020 (€500 million)	668		106.02	708

4.  Supplemental Cash Flow Information

	Three months ended March 31,
	2012		2011
Interest paid in cash	$	69	$	67
Income taxes paid in cash:
Non-U.S.	31		21

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5.  Share Owners’ Equity

The activity in share owners’ equity for the three months ended March 31, 2012 and 2011 is as follows:

	Share Owner’s Equity of the Company
	Other Contributed Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Non- controlling Interests		Total Share Owners’ Equity
Balance on January 1, 2012	$	295		$	2,344	$	(1,280	)	$	153	$	1,512
Net distribution to parent	(24		)								(24		)
Comprehensive income:
Net earnings				121					4		125
Foreign currency translation adjustments						92			7		99
Pension and other postretirement benefit adjustments, net of tax						24					24
Balance on March 31, 2012	$	271		$	2,465	$	(1,164	)	$	164	$	1,736

	Share Owner’s Equity of the Company
	Other Contributed Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Share Owners’ Equity
Balance on January 1, 2011, adjusted	$	507		$	2,679	$	(856	)	$	211		$	2,541
Net distribution to parent	(31		)									(31		)
Comprehensive income:
Net earnings				82					4			86
Foreign currency translation adjustments						70			4			74
Pension and other postretirement benefit adjustments, net of tax						20						20
Change in fair value of derivative instruments, net of tax						1						1
Dividends paid to noncontrolling interests on subsidiary common stock									(18		)	(18		)
Balance on March 31, 2011, adjusted	$	476		$	2,761	$	(765	)	$	201		$	2,673

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6.  Inventories

Major classes of inventory are as follows:

	March 31,		December 31,		March 31,
	2012		2011		2011
Finished goods	$	1,061	$	891	$	932
Raw materials	126		123		114
Operating supplies	50		47		57
	$	1,237	$	1,061	$	1,103

7.  Contingencies

OI Inc. is a defendant in numerous lawsuits alleging bodily injury and death as a result of exposure to asbestos dust.  From 1948 to 1958, one of OI Inc.’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.  OI Inc. exited the pipe and block insulation business in April 1958.  The typical asbestos personal injury lawsuit alleges various theories of liability, including negligence, gross negligence and strict liability and seek compensatory and in some cases, punitive damages in various amounts (herein referred to as “asbestos claims”).

As of March 31, 2012, OI Inc. has determined that it is a named defendant in asbestos lawsuits and claims involving approximately 4,700 plaintiffs and claimants.  Based on an analysis of the lawsuits pending as of December 31, 2011, approximately 71% of plaintiffs either do not specify the monetary damages sought, or in the case of court filings, claim an amount sufficient to invoke the jurisdictional minimum of the trial court.  Approximately 27% of plaintiffs specifically plead damages of $15 million or less, and 2% of plaintiffs specifically plead damages greater than $15 million but less than $100 million.  Fewer than 1% of plaintiffs specifically plead damages $100 million or greater but less than $122 million.

As indicated by the foregoing summary, current pleading practice permits considerable variation in the assertion of monetary damages.  OI Inc.’s experience resolving hundreds of thousands of asbestos claims and lawsuits over an extended period demonstrates that the monetary relief that may be alleged in a complaint bears little relevance to a claim’s merits or disposition value.  Rather, the amount potentially recoverable is determined by such factors as the severity of the plaintiff’s asbestos disease, the product identification evidence against OI Inc. and other defendants, the defenses available to OI Inc. and other defendants, the specific jurisdiction in which the claim is made, and the plaintiff’s medical history and exposure to other disease-causing agents.

In addition to the pending claims set forth above, OI Inc. has claims-handling agreements in place with many plaintiffs’ counsel throughout the country.  These agreements require evaluation and negotiation regarding whether particular claimants qualify under the criteria established by such agreements. The criteria for such claims include verification of a compensable illness and a reasonable probability of exposure to a product manufactured by OI Inc.’s former business unit during its manufacturing period ending in 1958.  Some plaintiffs’ counsel have historically withheld claims under these agreements for later presentation while focusing their attention on active litigation in the tort system.  OI Inc. believes that as of March 31, 2012 there are approximately 350 claims against other defendants which are likely to be

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asserted some time in the future against OI Inc. These claims are not included in the pending “lawsuits and claims” totals set forth above.

OI Inc. is also a defendant in other asbestos-related lawsuits or claims involving maritime workers, medical monitoring claimants, co-defendants and property damage claimants.  Based upon its past experience, the OI Inc. believes that these categories of lawsuits and claims will not involve any material liability and they are not included in the above description of pending matters or in the following description of disposed matters.

Since receiving its first asbestos claim, OI Inc. as of March 31, 2012, has disposed of the asbestos claims of approximately 388,000 plaintiffs and claimants at an average indemnity payment per claim of approximately $8,200.  Certain of these dispositions have included deferred amounts payable over a number of years.  Deferred amounts payable totaled approximately $35 million at March 31, 2012 ($18 million at December 31, 2011) and are included in the foregoing average indemnity payment per claim.  OI Inc.’s asbestos indemnity payments have varied on a per claim basis, and are expected to continue to vary considerably over time.  As discussed above, a part of OI Inc.’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 OI Inc.’s administrative claims handling agreements has generally reduced the number of marginal or suspect claims that would otherwise have been received.  In addition, certain courts and legislatures have reduced or eliminated the number of marginal or suspect claims that OI Inc. otherwise would have received.  These developments generally have had the effect of increasing the OI Inc.’s per-claim average indemnity payment.

OI Inc. believes that its ultimate asbestos-related liability (i.e., its indemnity payments or other claim disposition costs plus related legal fees) cannot reasonably be estimated. Beginning with the initial liability of $975 million established in 1993, OI Inc. has accrued a total of approximately $4.0 billion through 2011, before insurance recoveries, for its asbestos-related liability.  OI Inc.’s ability to reasonably estimate its liability has 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, the magnitude and timing of co-defendant bankruptcy trust payments, the inherent uncertainty of future disease incidence and claiming patterns, the expanding list of non-traditional defendants that have been sued in this litigation, and the use of mass litigation screenings to generate large numbers of claims by parties who allege exposure to asbestos dust but have no present physical asbestos impairment.

OI Inc. has continued to monitor trends that may affect its ultimate liability and has continued to analyze the developments and variables affecting or likely to affect the resolution of pending and future asbestos claims against OI Inc. The material components of OI Inc.’s accrued liability are based on amounts determined by OI Inc. in connection with its annual comprehensive 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 OI Inc.; (ii) the liability for preexisting but unasserted asbestos claims for prior periods arising under its administrative claims-handling agreements with various plaintiffs’ counsel; (iii) the liability for asbestos claims not yet asserted against OI Inc., but which OI Inc. believes will be asserted in the next several years; and (iv) the legal defense costs likely to be incurred in connection with the foregoing types of claims.

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The significant assumptions underlying the material components of OI Inc.’s accrual are:

a)  the extent to which settlements are limited to claimants who were exposed to OI Inc.’s asbestos-containing insulation prior to its exit from that business in 1958;

b)  the extent to which claims are resolved under OI Inc.’s administrative claims agreements or on terms comparable to those set forth in those agreements;

c)  the extent of decrease or increase in the incidence of serious disease cases and claiming patterns for such cases;

d)  the extent to which OI Inc. is able to defend itself successfully at trial;

e)  the extent to which courts and legislatures eliminate, reduce or permit the diversion of financial resources for unimpaired claimants;

f)  the number and timing of additional co-defendant bankruptcies;

g)  the extent to which bankruptcy trusts direct resources to resolve claims that are also presented to OI Inc. and the timing of the payments made by the bankruptcy trusts; and

h)  the extent to which co-defendants with substantial resources and assets continue to participate significantly in the resolution of future asbestos lawsuits and claims.

As noted above, OI Inc. conducts a comprehensive review of its asbestos-related liabilities and costs annually in connection with finalizing and reporting its annual results of operations, unless significant changes in trends or new developments warrant an earlier review.  If the results of an annual comprehensive review indicate that the existing amount of the accrued liability is insufficient to cover its estimated future asbestos-related costs, then OI Inc. will record an appropriate charge to increase the accrued liability.  OI Inc. believes that a reasonable estimation of the probable amount of the liability for claims not yet asserted against OI Inc. is not possible beyond a period of several years.  Therefore, while the results of future annual comprehensive reviews cannot be determined, OI Inc. expects the addition of one year to the estimation period will result in an annual charge.

On March 11, 2011, OI Inc. received a verdict in an asbestos case in which conspiracy claims had been asserted against OI Inc. Of the total nearly $90 million awarded by the jury against the four defendants in the case, almost $10 million in compensatory damages were assessed against all four defendants, and $40 million in punitive damages were assessed against OI Inc.

OI Inc. continues to deny the conspiracy allegations in this case and will vigorously challenge this verdict, if necessary, in the appellate courts, and, therefore, has made no change to its asbestos-related liability as of March 31, 2012.  While OI Inc. cannot predict the ultimate outcome of this lawsuit, OI Inc. and other conspiracy defendants have successfully challenged jury verdicts in similar cases.

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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OI Inc.’s reported results of operations for 2011 were materially affected by the $165 million fourth quarter charge for asbestos-related costs and asbestos-related payments continue to be substantial.  Any future additional charge would likewise materially affect OI Inc.’s results of operations for the period in which it is recorded. Also, the continued use of significant amounts of cash for asbestos-related costs has affected and may continue to affect the Company’s and OI Inc.’s cost of borrowing and its ability to pursue global or domestic acquisitions. However, the Company believes that its operating cash flows and other sources of liquidity will be sufficient to pay its obligations for asbestos-related costs and to fund its working capital and capital expenditure requirements on a short-term and long-term basis.

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.

8. Segment Information

The Company has four reportable segments based on its four geographic locations:  (1) Europe; (2) North America; (3) South America; (4) Asia Pacific.  These four 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 non-glass 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 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.

In prior periods, pension expense was recorded in each segment related to the pension plans in place in that segment, with the exception of the U.S. pension plans which were recorded in Retained corporate costs and other.  Effective January 1, 2012, the Company changed the allocation of pension expense to its reportable segments such that pension expense recorded in each segment relates only to the service cost component of the plans in that segment.  The other components of pension expense, including interest cost, expected asset returns and amortization of actuarial losses, are recorded in Retained corporate costs and other.  This change in allocation has been applied retrospectively to all periods.  Also effective January 1, 2012, the Company elected to change the method of valuing U.S. inventories (see Note 2 for additional information).

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The impact of the changes in pension expense allocation and accounting method for inventory on Segment Operating Profit for the quarter ended March 31, 2011 is as follows:

	As Originally Reported			Change in Pension Allocation			Change in Accounting Method for Inventory		As Adjusted
Segment Operating Profit:
Europe	$	71		$	5		$	—	$	76
North America	59			(6		)	10		63
South America	45								45
Asia Pacific	24								24
Reportable segment totals	199			(1		)	10		208
Retained corporate costs and other	(13		)	1					(12		)

Financial information for the three-month periods ended March 31, 2012 and 2011 regarding the Company’s reportable segments is as follows:s

	2012		2011
Net sales:
Europe	$	705	$	698
North America	482		463
South America	277		269
Asia Pacific	257		262
Reportable segment totals	1,721		1,692
Other	18		27
Net sales	$	1,739	$	1,719

	2012			2011
Segment Operating Profit:
Europe	$	108		$	76
North America	78			63
South America	38			45
Asia Pacific	36			24
Reportable segment totals	260			208
Items excluded from Segment Operating Profit:
Retained corporate costs and other	(29		)	(12		)
Restructuring and asset impairment				(8		)
Interest income	3			3
Interest expense	(64		)	(76		)
Earnings from continuing operations before income taxes	$	170		$	115

17

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

	March 31,		December 31,		March 31,
	2012		2011		2011
Total assets:
Europe	$	3,744	$	3,588	$	3,842
North America	2,056		2,020		2,040
South America	1,724		1,682		1,678
Asia Pacific	1,359		1,379		2,037
Reportable segment totals	8,883		8,669		9,597
Other	278		306		428
Consolidated totals	$	9,161	$	8,975	$	10,025

9. Other Expense

During the three months ended March 31, 2011, the Company recorded charges of $8 million for restructuring charges in the Company’s Asia Pacific segment.  See Note 10 for additional information.

10.  Restructuring Accruals

Selected information related to the restructuring accruals for the first three months of 2012 and 2011 is as follows:

	Strategic Footprint Review			Asia Pacific Restructuring			Other Restructuring Actions			Total Restructuring
Balance at January 1, 2012	$	37		$	17		$	49		$	103
Net cash paid, principally severance and related benefits	(2		)	(11		)	(17		)	(30		)
Other, including foreign exchange translation							3			3
Balance at March 31, 2012	$	35		$	6		$	35		$	76
Balance at January 1, 2011	$	52		$	—		$	27		$	79
First quarter 2011 charges				8						8
Net cash paid, principally severance and related benefits	(4		)							(4		)
Other, including foreign exchange translation	2									2
Balance at March 31, 2011	$	50		$	8		$	27		$	85

The Company’s decisions to curtail selected production capacity have resulted in write downs of certain long-lived assets to the extent their carrying amounts exceeded fair value or fair value less cost to sell.  The Company classified the significant assumptions used to determine the fair value of the impaired assets, which was not material, as Level 3 in the fair value hierarchy as set forth in the general accounting principles for fair value measurements.

The Company also recorded liabilities for certain employee separation costs to be paid under contractual arrangements and other exit costs.

18

11. Derivative Instruments

The Company has certain derivative assets and liabilities which consist of natural gas forwards and foreign exchange option and forward contracts.  The Company uses an income approach to valuing these contracts.  Natural gas forward rates and foreign exchange rates are the significant inputs into the valuation models.  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.  The Company also evaluates counterparty risk in determining fair values.

Commodity Futures Contracts Designated as Cash Flow Hedges

In North America, the Company enters into commodity futures 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.  The Company continually evaluates the natural gas market and related price risk and periodically enters into commodity futures contracts in order to hedge a portion of its usage requirements.  The majority of the sales volume in North America is tied to customer contracts that contain provisions that pass the price of natural gas to the customer.  In certain of these contracts, the customer has the option of fixing the natural gas price component for a specified period of time.  At March 31, 2012  and 2011, the Company had entered into commodity futures contracts covering approximately 4,600,000 MM BTUs and 8,000,000 MM BTUs, respectively, primarily related to customer requests to lock the price of natural gas.

The Company accounts for the above futures contracts as cash flow hedges at March 31, 2012 and recognizes them on the balance sheet at fair value. The effective portion of changes in the fair value of a derivative that is designated as, and meets the required criteria for, a cash flow hedge is recorded in the Accumulated Other Comprehensive Income component of share owners’ equity (“OCI”) and reclassified into earnings in the same period or periods during which the underlying hedged item affects earnings. At March 31, 2012 and 2011, an unrecognized loss of $6 million and $2 million, respectively, related to the commodity futures contracts was included in Accumulated OCI, and will be reclassified into earnings over the next twelve to twenty-four months.  Any material portion of the change in the fair value of a derivative designated as a cash flow hedge that is deemed to be ineffective is recognized in current earnings.  The ineffectiveness related to these natural gas hedges for the three months ended March 31, 2012 and 2011 was not material.

The effect of the commodity futures contracts on the results of operations for the three months ended March 31, 2012 and 2011 is as follows:

						Amount of Loss
						Reclassified from
Amount of Loss						Accumulated OCI into
Recognized in OCI on						Income (reported in
Commodity Futures Contracts						manufacturing, shipping, and
(Effective Portion)						delivery) (Effective Portion)
2012			2011			2012			2011
$	(3	)	$	(1	)	$	(3	)	$	(2	)

19

Senior Notes Designated as Net Investment Hedge

During December 2004, a U.S. subsidiary of the Company issued senior notes totaling €225 million.  These notes were designated by the Company’s subsidiary as a hedge of a portion of its net investment in a non-U.S. subsidiary with a Euro functional currency.  Because the amount of the senior notes matched the hedged portion of the net investment, there was no hedge ineffectiveness. Accordingly, the Company recorded the impact of changes in the foreign currency exchange rate on the Euro-denominated notes in OCI.  During the second quarter of 2011, the senior notes designated as the net investment hedge were redeemed by a subsidiary of the Company.  The amount recorded in OCI related to this net investment hedge will be reclassified into earnings when the Company sells or liquidates its net investment in the non-U.S. subsidiary.

The effect of the net investment hedge on the results of operations for the three months ended March 31, 2011 is as follows:

Amount of Loss Recognized in OCI
$	(18	)

Forward Exchange Contracts not Designated as Hedging Instruments

The Company’s subsidiaries may enter into 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. Subsidiaries may also use forward exchange agreements to offset the foreign currency risk for receivables and payables, including intercompany receivables and payables, not denominated in, or indexed to, their functional currencies. The Company records these short-term forward exchange agreements on the balance sheet at fair value and changes in the fair value are recognized in current earnings.

At March 31, 2012 and 2011, various subsidiaries of the Company had outstanding forward exchange and option agreements denominated in various currencies covering the equivalent of approximately $640 million and $881 million, respectively, related primarily to intercompany transactions and loans.

The effect of the forward exchange contracts on the results of operations for the three months ended March 31, 2012 and 2011 is as follows:

	Amount of Gain (Loss)
Location of Gain (Loss)	Recognized in Income on
Recognized in Income on	Forward Exchange Contracts
Forward Exchange Contracts	2012		2011
Other expense	$	1	$	(7	)

20

Balance Sheet Classification

The Company records the fair values of derivative financial instruments on the balance sheet as follows: (a) receivables if the instrument has a positive fair value and maturity within one year, (b) deposits, receivables, and other assets if the instrument has a positive fair value and maturity after one year, (c) other accrued liabilities or other liabilities (current) if the instrument has a negative fair value and maturity within one year, and (d) other liabilities if the instrument has a negative fair value and maturity after one year.  The following table shows the amount and classification (as noted above) of the Company’s derivatives:

	Balance	Fair Value
	Sheet Location	March 31, 2012		December 31, 2011		March 31, 2011
Asset Derivatives:
Derivatives not designated as hedging instruments:
Foreign exchange contracts	a	$	8	$	13	$	6
Foreign exchange contracts	b					4
Foreign exchange contracts	c	1				1
Total derivatives not designated as hedging instruments		9		13		11
Total asset derivatives		$	9	$	13	$	11
Liability Derivatives:
Derivatives designated as hedging instruments:
Commodity futures contracts	c	$	6	$	6	$	2
Derivatives not designated as hedging instruments:
Foreign exchange contracts	c	4		4		15
Total liability derivatives		$	10	$	10	$	17

21

12.  Pensions Benefit Plans and Other Postretirement Benefits

The components of the net periodic pension cost for the three months ended March 31, 2012 and 2011 are as follows:

	U.S.						Non-U.S.
	2012			2011			2012			2011
Service cost	$	7		$	7		$	7		$	5
Interest cost	28			31			19			21
Expected asset return	(46		)	(47		)	(22		)	(21		)
Amortization:
Actuarial loss	24			21			5			6
Net periodic pension cost	$	13		$	12		$	9		$	11

The components of the net postretirement benefit cost for the three months ended March 31, 2012 and 2011 are as follows:

	U.S.						Non-U.S.
	2012			2011			2012		2011
Service cost	$	1		$	—		$	—	$	—
Interest cost	2			3			1		1
Amortization:
Prior service credit	(1		)	(1		)
Actuarial loss	1			1
Net amortization	—			—			—		—
Net postretirement benefit cost	$	3		$	3		$	1	$	1

13.  Income Taxes

The Company performs a quarterly review of the annual effective tax rate and makes changes if necessary based on new information or events. The estimated annual effective tax rate is forecasted quarterly using actual historical information and forward-looking estimates. The estimated annual effective tax rate may fluctuate due to changes in forecasted annual operating income; changes in the forecasted mix of earnings by country; changes to the valuation allowance for deferred tax assets (such changes would be recorded discretely in the quarter in which they occur); changes to actual or forecasted permanent book to tax differences (non-deductible expenses); impacts from future tax settlements with state, federal or foreign tax authorities (such changes would be recorded discretely in the quarter in which they occur); or impacts from tax law changes. To the extent such changes impact deferred tax assets/liabilities, these changes would generally be recorded discretely in the quarter in which they occur.  Additionally, the annual effective tax rate differs from the statutory U.S. Federal tax rate of 35% primarily because of valuation allowances in some jurisdictions and varying non-U.S. tax rates.

22

14.  Discontinued Operations

On October 26, 2010, the Venezuelan government, through Presidential Decree No. 7.751, expropriated the assets of Owens-Illinois de Venezuela and Fabrica de Vidrios Los Andes, C.A., two of the Company’s subsidiaries in that country, which in effect constituted a taking of the going concerns of those companies.  Shortly after the issuance of the decree, the Venezuelan government installed temporary administrative boards to control the expropriated assets.

Since the issuance of the decree, the Company has cooperated with the Venezuelan government, as it is compelled to do under Venezuelan law, to provide for an orderly transition while ensuring the safety and well-being of the employees and the integrity of the production facilities.  The Company has been engaged in negotiations with the Venezuelan government in relation to certain aspects of the expropriation, including the compensation payable by the government as a result of its expropriation. On September 26, 2011, the Company, having been unable to reach an agreement with the Venezuelan government regarding fair compensation, commenced an arbitration against Venezuela through the World Bank’s International Centre for Settlement of Investment Disputes.  The Company is unable at this stage to predict the amount, or timing of receipt, of compensation it will ultimately receive.

15.  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 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 wholly-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.

Wholly-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.

23

	March 31, 2012
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	110	$	(12	)	$	1,101				$	1,199
Inventories			212					1,025					1,237
Other current assets			3		32			394					429
Total current assets	—		325		20			2,520		—			2,865
Investments in and advances to subsidiaries	1,822		2,987		(12		)			(4,797		)	—
Goodwill			555		8			1,564					2,127
Other non-current assets			162		88			1,035					1,285
Total other assets	1,822		3,704		84			2,599		(4,797		)	3,412
Property, plant and equipment, net			619		44			2,221					2,884
Total assets	$	1,822	$	4,648	$	148		$	7,340	$	(4,797	)	$	9,161
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	235	$	77		$	1,219	$	14		$	1,545
Short-term loans and long-term debt due within one year			23		1			382					406
Total current liabilities	—		258		78			1,601		14			1,951
Long-term debt	250		1,849		14			1,611					3,724
Other non-current liabilities			34		741			975					1,750
Investments by and advances from parent			2,507		(685		)	2,989		(4,811		)	—
Total share owner’s equity of the Company	1,572												1,572
Noncontrolling interests								164					164
Total liabilities and share owners’ equity	$	1,822	$	4,648	$	148		$	7,340	$	(4,797	)	$	9,161

24

	December 31, 2011
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	120	$	(14	)	$	1,052	$	—		$	1,158
Inventories			192					869					1,061
Other current assets			3		33			488					524
Total current assets	—		315		19			2,409		—			2,743
Investments in and advances to subsidiaries	1,609		2,788		18					(4,415		)	—
Goodwill			561		8			1,513					2,082
Other non-current assets			148		83			1,041		1			1,273
Total other assets	1,609		3,497		109			2,554		(4,414		)	3,355
Property, plant and equipment, net			626		45			2,206					2,877
Total assets	$	1,609	$	4,438	$	173		$	7,169	$	(4,414	)	$	8,975
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	358	$	19		$	1,310	$	(13	)	$	1,674
Short-term loans and long-term debt due within one year			15		1			390					406
Total current liabilities	—		373		20			1,700		(13		)	2,080
Long-term debt	250		1,797		15			1,565					3,627
Other non-current liabilities			45		753			958					1,756
Investments by and advances from parent			2,223		(615		)	2,793		(4,401		)	—
Total share owner’s equity of the Company	1,359									—			1,359
Noncontrolling interests								153					153
Total liabilities and share owners’ equity	$	1,609	$	4,438	$	173		$	7,169	$	(4,414	)	$	8,975

25

	March 31, 2011
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	129	$	(7	)	$	1,101	$	—		$	1,223
Inventories			169					935		(1		)	1,103
Other current assets			21		166			321					508
Total current assets	—		319		159			2,357		(1		)	2,834
Investments in and advances to subsidiaries	2,722		3,904		(224		)			(6,402		)	—
Goodwill			561		10			2,329					2,900
Other non-current assets			150		124			875		(1		)	1,148
Total other assets	2,722		4,615		(90		)	3,204		(6,403		)	4,048
Property, plant and equipment, net			653		42			2,448					3,143
Total assets	$	2,722	$	5,587	$	111		$	8,009	$	(6,404	)	$	10,025
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	303	$	41		$	1,195	$	(4	)	$	1,535
Short-term loans and long-term debt due within one year					1			371					372
Total current liabilities	—		303		42			1,566		(4		)	1,907
Long-term debt	250		2,105		15			1,621					3,991
Other non-current liabilities			98		413			945		(2		)	1,454
Investments by and advances from parent			3,081		(359		)	3,676		(6,398		)	—
Total share owner’s equity of the Company	2,472									—			2,472
Noncontrolling interests								201					201
Total liabilities and share owners’ equity	$	2,722	$	5,587	$	111		$	8,009	$	(6,404	)	$	10,025

26

	Three months ended March 31, 2012
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales				$	456					$	1,283					$	1,739
Manufacturing, shipping, and delivery				(330		)				(1,031		)				(1,361		)
Gross profit	—			126			—			252			—			378
Research, engineering, selling, administrative, and other				(47		)	(23		)	(96		)				(166		)
Net intercompany interest	5			(5		)										—
Interest expense	(5		)	(26		)				(33		)				(64		)
Interest income										3						3
Equity earnings from subsidiaries	121			97									(218		)	—
Other equity earnings				3						10						13
Other income				4						2						6
Earnings (loss) from continuing operations before income taxes	121			152			(23		)	138			(218		)	170
Provision for income taxes				(3		)	(1		)	(40		)				(44		)
Earnings (loss) from continuing
operations	121			149			(24		)	98			(218		)	126
Earnings from discontinued operations										(1		)				(1		)
Net earnings (loss)	121			149			(24		)	97			(218		)	125
Net earnings attributable to noncontrolling interests										(4		)				(4		)
Net earnings (loss) attributable to the Company	$	121		$	149		$	(24	)	$	93		$	(218	)	$	121

	Three months ended March 31, 2012
								Non-
					Guarantor			Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net earnings (loss)	$	121	$	149	$	(24	)	$	97		$	(218	)	$	125
Other comprehensive income	116							99			(92		)	123
Total comprehensive income (loss)	237		149		(24		)	196			(310		)	248
Comprehensive income attributable to noncontrolling interests								(11		)				(11		)
Comprehensive income (loss) attributable to the Company	$	237	$	149	$	(24	)	$	185		$	(310	)	$	237

27

	Three months ended March 31, 2011
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	449		$	—		$	1,296		$	(26	)	$	1,719
Manufacturing, shipping, and delivery				(364		)				(1,110		)	98			(1,376		)
Gross profit	—			85			—			186			72			343
Research, engineering, selling, administrative, and other				(40		)	(17		)	(120		)	1			(176		)
Net intercompany interest	5						(4		)	(1		)				—
Interest expense	(5		)	(36		)	(1		)	(34		)				(76		)
Interest income										3						3
Equity earnings from subsidiaries	82			22			(7		)				(97		)	—
Other equity earnings				2			7			4			1			14
Other income				76						2			(71		)	7
Earnings (loss) from continuing operations before income taxes	82			109			(22		)	40			(94		)	115
Provision for income taxes				(4		)	(4		)	(20		)				(28		)
Earnings (loss) from continuing operations	82			105			(26		)	20			(94		)	87
Loss from discontinued operations							(1		)							(1		)
Net earnings (loss)	82			105			(27		)	20			(94		)	86
Net earnings attributable to noncontrolling interests										(4		)				(4		)
Net earnings (loss) attributable to the Company	$	82		$	105		$	(27	)	$	16		$	(94	)	$	82

	Three months ended March 31, 2011
									Non-
						Guarantor			Guarantor
Comprehensive Income	Parent		Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net earnings (loss)	$	82	$	105		$	(27	)	$	20		$	(94	)	$	86
Other comprehensive income (loss)	91		(17		)				91			(70		)	95
Total comprehensive income (loss)	173		88			(27		)	111			(164		)	181
Comprehensive income attributable to noncontrolling interests									(8		)				(8		)
Comprehensive income (loss) attributable to the Company	$	173	$	88		$	(27	)	$	103		$	(164	)	$	173

28

	Three months ended March 31, 2012
										Non-
							Guarantor			Guarantor
Cash Flows	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash provided by (utilized in) operating activities	$	—		$	45		$	42		$	(80	)	$	(72	)	$	(65	)
Investing Activities:
Additions to property, plant and equipment				(29		)	(1		)	(43		)				(73		)
Acquisitions, net of cash acquired										(5		)				(5		)
Net cash proceeds from asset sales and other										11						11
Cash utilized in investing activities	—			(29		)	(1		)	(37		)	—			(67		)
Financing Activities:
Net distribution to OI Inc.	(30		)													(30		)
Change in intercompany transactions	30			(71		)	(42		)	11			72			—
Additions to long term debt				110						9						119
Repayments of long term debt				(55		)				(7		)				(62		)
Decrease in short term debt										(20		)				(20		)
Net receipts for hedging activity										8						8
Cash provided by (utilized in) financing activities	—			(16		)	(42		)	1			72			15
Effect of exchange rate change on cash										16						16
Decrease in cash	—			—			(1		)	(100		)	—			(101		)
Cash at beginning of period							21			379						400
Cash at end of period	$	—		$	—		$	20		$	279		$	—		$	299

29

	Three months ended March 31, 2011
										Non-
							Guarantor			Guarantor
Cash Flows	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash provided by (utilized in) operating activities	$	—		$	91		$	55		$	(156	)	$	(42	)	$	(52	)
Investing Activities:
Additions to property, plant, and equipment				(17		)	(1		)	(55		)				(73		)
Acquisitions, net of cash acquired										6						6
Cash utilized in investing activities	—			(17		)	(1		)	(49		)	—			(67		)
Financing Activities:
Net distribution to OI Inc.	(31		)													(31		)
Change in intercompany transactions	31			(74		)	(106		)	107			42			—
Additions to short term debt										(32		)				(32		)
Additions to long term debt										5						5
Repayments of long term debt										(10		)				(10		)
Net receipts for hedging activity										(12		)				(12		)
Dividends paid to noncontrolling interests										(18		)				(18		)
Cash provided by (utilized in) financing activities	—			(74		)	(106		)	40			42			(98		)
Effect of exchange rate change on cash										7						7
Decrease in cash	—			—			(52		)	(158		)	—			(210		)
Cash at beginning of period							230			410						640
Cash at end of period	$	—		$	—		$	178		$	252		$	—		$	430

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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 line titled “reportable segment totals”, however, is a non-GAAP measure 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.  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.

Effective January 1, 2012, the Company elected to change the method of valuing U.S. inventories to the average cost method, while in prior years these inventories were valued using the last-in, first-out (“LIFO”) method (see Note 2 to the Condensed Consolidated Financial Statements for more information).  Also effective January 1, 2012, the Company changed its method of allocating pension expense to its reportable segments (see Note 8 to the Condensed Consolidated Financial Statements for more information).  The changes in the inventory valuation method and pension allocation have been applied retrospectively to all prior periods.  The impact of these changes on Segment Operating Profit for the quarter ended March 31, 2011 is as follows (dollars in millions):

	As Originally Reported			Change in Pension Allocation			Change in Accounting Method for Inventory		As Adjusted
Segment Operating Profit:
Europe	$	71		$	5		$	—	$	76
North America	59			(6		)	10		63
South America	45								45
Asia Pacific	24								24
Reportable segment totals	199			(1		)	10		208
Retained corporate costs and other	(13		)	1					(12		)

Financial information for the three-month periods ended March 31, 2012 and 2011 regarding the Company’s reportable segments is as follows (dollars in millions):

	Three months ended
	March 31,
	2012		2011
Net Sales:
Europe	$	705	$	698
North America	482		463
South America	277		269
Asia Pacific	257		262
Reportable segment totals	1,721		1,692
Other	18		27
Net Sales	$	1,739	$	1,719

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	Three months ended March 31,
	2012			2011
Segment Operating Profit:
Europe	$	108		$	76
North America	78			63
South America	38			45
Asia Pacific	36			24
Reportable segment totals	260			208
Items excluded from Segment Operating Profit:
Retained corporate costs and other	(29		)	(12		)
Restructuring and asset impairment				(8		)
Interest income	3			3
Interest expense	(64		)	(76		)
Earnings from continuing operations before income taxes	170			115
Provision for income taxes	(44		)	(28		)
Earnings from continuing operations	126			87
Earnings (loss) from discontinued operations	(1		)	(1		)
Net earnings	125			86
Net earnings attributable to noncontrolling interests	(4		)	(4		)
Net earnings attributable to the Company	$	121		$	82
Amounts attributable to the Company:
Earnings from continuing operations	$	122		$	83
Earnings (loss) from discontinued operations	(1		)	(1		)
Net earnings	$	121		$	82

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

Executive Overview — Quarters ended March 31, 2012 and 2011

First Quarter 2012 Highlights

·Net sales increased due to higher pricing to recover cost inflation.

·Increased Segment Operating Profit due to strong manufacturing performance, cost-cutting initiatives and higher pricing .

Net sales were $20 million higher than the prior year, primarily due to higher pricing partially offset by the unfavorable effect of changes in foreign currency exchange rates.

Segment Operating Profit for reportable segments was $52 million higher than the prior year.  The increase was mainly attributable to strong manufacturing performance and cost-cutting initiatives as well as higher pricing to offset inflation.

Interest expense for the first quarter of 2012 decreased $12 million over the first quarter of 2011.  The decrease was due to the refinancing of higher cost debt in mid-2011.

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Net earnings from continuing operations attributable to the Company for the first quarter of 2012 was $122 million compared with $83 million for the first quarter of 2011.  Earnings in the first quarter of 2011 included items that management considered not representative of ongoing operations.  These items decreased net earnings attributable to the Company in 2011 by $6 million. There were no items that management considered not representative of ongoing operations in the first quarter of 2012.

Results of Operations — First Quarter of 2012 compared with First Quarter of 2011

Net Sales

The Company’s net sales in the first quarter of 2012 were $1,739 million compared with $1,719 million for the first quarter of 2011, an increase of $20 million, or 1%. The increase in net sales was primarily due to improved pricing, as the Company increased prices in the first quarter of 2012 to recover high cost inflation.  Glass container shipments, in tonnes, were down nearly 2% in the first quarter of 2012 compared to the first quarter of 2011.  Sales volumes were flat to slightly up in Europe, North America and South America, but were down overall due to lower shipments in Asia Pacific.  Unfavorable foreign currency exchange rate changes decreased net sales in the first quarter of 2012 compared to the prior year, primarily due to a weaker Euro in relation to the U.S. dollar.

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

Net sales - 2011				$	1,692
Price
Price and product mix	$	63
Cost pass-through provisions	(8		)
Sales volume	(4		)
Effects of changing foreign currency rates	(22		)
Total effect on net sales				29
Net sales - 2012				$	1,721

Europe:  Net sales in Europe in the first quarter of 2012 were $705 million compared with $698 million for the first quarter of 2011, an increase of $7 million, or 1%.  The increase in net sales was primarily due to the successful negotiation of higher selling prices in annual customer contracts to recover high cost inflation from the prior year.  The favorable impact of higher selling prices was partially offset by the unfavorable effects of foreign currency exchange rate changes, as the Euro weakened in relation to the U.S. dollar. Glass container shipment levels in the first quarter of 2012 were flat compared to the prior year, as growth in beer bottle shipments offset declines in wine and champagne bottle shipments.

North America:  Net sales in North America in the first quarter of 2012 were $482 million compared with $463 million for the first quarter of 2011, an increase of $19 million, or 4%.  The increase in net sales was due to improved pricing and higher glass container shipments.  The Company increased selling prices in the current year to recover high cost inflation from the prior year.  Glass container shipments, in tonnes, were up slightly in the current quarter, particularly in the wine and beer categories.

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South America:  Net sales in South America in the first quarter of 2012 were $277 million compared with $269 million for the first quarter of 2011, an increase of $8 million, or 3%.  The increase in net sales was primarily due to higher sales volumes in the current quarter.  Glass container shipments were up slightly in the first quarter of 2012 compared to the prior year, particularly in the beer category.  The increase in net sales from higher volumes was partially offset by the unfavorable effects of foreign currency exchange rate changes, principally due to a weaker Brazilian real in relation to the U.S. dollar.

Asia Pacific:  Net sales in Asia Pacific in the first quarter of 2012 were $257 million compared with $262 million for the first quarter of 2011, a decrease of $5 million, or 2%.  Glass container shipments, in tonnes, were down more than 10% compared to the prior year.  Glass container shipments in Australia, primarily wine and beer bottles, were down in the current quarter compared to the prior year.  The decrease in shipments of wine bottles was due to the reductions of in-country bottling by wine producers.  The decrease in shipments of beer bottles was due to the continued effect of high interest and savings rates on consumer spending in the country.  Glass container shipments in China were down more than 25% in the current quarter, due in large part to furnace rebuilds in the first quarter of 2012 and the effects of the prior closure of one facility as required by the Chinese government.  The impact of lower sales volumes on net sales was partially offset by the favorable effects of foreign currency exchange rate changes during the first quarter of 2012, primarily due to the strengthening of the Australian dollar in relation to the U.S. dollar.

Segment Operating Profit

Operating Profit of the 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.  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 8 to the Condensed Consolidated Financial Statements.

Segment Operating Profit of reportable segments in the first quarter of 2012 was $260 million compared to $208 million for the first quarter of 2011, an increase of $52 million, or 25%.  The increase in Segment Operating Profit was primarily due to strong manufacturing performance, cost-cutting initiatives and higher selling prices to offset inflation.  Manufacturing and delivery costs were lower in the current quarter, benefiting $22 million due to cost control initiatives and strong manufacturing performance that resulted in high fixed cost absorption and approximately $9 million due to the non-recurrence of costs related to flooding in Australia during the first quarter of 2011.  The Company increased selling prices in the first quarter of 2012 to offset the high cost inflation experienced during 2011. Operating expenses were also lower in the first quarter of 2012 due to global cost reductions and the timing of costs related to the phased implementation of a global Enterprise Resource Planning (“ERP”) system.

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The change in Segment Operating Profit of reportable segments can be summarized as follows (dollars in millions):

Segment Operating Profit - 2011				$	208
Price and product mix	$	63
Cost inflation	(50		)
Price / inflation spread	13
Manufacturing and delivery	31
Operating expenses and other	13
Effects of changing foreign currency rates	(5		)
Total net effect on Segment Operating Profit				52
Segment Operating Profit - 2012				$	260

Europe:  Segment operating profit in Europe in the first quarter of 2012 was $108 million compared with $76 million in the first quarter of 2011, an increase of $32 million, or 42%.  The increase in segment operating profit was primarily due to strong manufacturing performance and higher prices to offset inflation.  High production rates in the first quarter of 2012 helped the region to build inventories in advance of its seasonally stronger sales in the second quarter and resulted in higher fixed cost absorption compared to the prior year.  Segment operating profit also increased during the first quarter of 2012 due to cost control initiatives.

North America:  Segment operating profit in North America in the first quarter of 2012 was $78 million compared with $63 million in the first quarter of 2011, an increase of $15 million, or 24%.  The increase in segment operating profit was primarily due to strong manufacturing performance and higher prices to offset inflation.  High production rates in the first quarter of 2012, along with the restarting of two idled furnaces in the second half of 2011, helped the region increase its inventory levels by about 25% over the first quarter of 2011. The increase in inventory levels during the first quarter of 2012 resulted in higher fixed cost absorption compared to the prior year and will help the region better serve its customers during the seasonally stronger second quarter.  Segment operating profit also increased during the first quarter of 2012 due to cost control initiatives and the timing of costs related to the phased implementation of a global ERP system.

South America:  Segment operating profit in South America in the first quarter of 2012 was $38 million compared with $45 million in the first quarter of 2011, a decrease of $7 million, or 16%.  The lower segment operating profit was primarily due to scheduled furnace rebuilds and higher repairs and maintenance activity in the first quarter of 2012 compared to the prior year.  The first quarter of 2012 was also impacted by a one-time adjustment for employee benefit costs.

Asia Pacific:  Segment operating profit in Asia Pacific in the first quarter of 2012 was $36 million compared with $24 million in the first quarter of 2011, an increase of $12 million, or 50%.  The increase in operating profit was primarily due to the non-recurrence of costs related to flooding in Australia during the first quarter of 2011.  Segment operating profit also benefited from cost reductions and the favorable effects of foreign currency exchange rate changes during the first quarter of 2012, primarily due to the strengthening of the Australian dollar in relation to the U.S. dollar, partially offset by lower sales volumes.

Interest Expense

Interest expense for the first quarter of 2012 was $64 million compared with $76 million for the first quarter of 2011.  The decrease was principally due to the refinancing of higher cost debt in connection with the Company’s new bank credit agreement completed in mid-2011.

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Provision for Income Taxes

The Company’s effective tax rate from continuing operations for the three months ended March 31, 2012 was 25.9% compared with 24.3% for the three months ended March 31, 2011.  Excluding the amounts related to items that management considers not representative of ongoing operations, the Company expects that the full year effective tax rate for 2012 will be between 24% to 26% compared with 21.6% for 2011.  The increase in the expected effective tax rate for the full year 2012 is due to the Company’s current expected change in mix of earnings by jurisdiction.

Net Earnings Attributable to Noncontrolling Interests

Net earnings attributable to noncontrolling interests in the first quarter of 2012 were $4 million compared with $4 million in the first quarter of 2011. Net earnings attributable to noncontrolling interests in the first quarter of 2011 included $2 million of charges related to items that management considered not representative of ongoing operations. Exclusive of these items, net earnings attributable to noncontrolling interests in the first quarter of 2012 decreased $2 million from the first quarter of 2011. This decrease was primarily the result of the Company’s purchase of the noncontrolling interest in its southern Brazil operations in the second quarter of 2011.

Earnings from Continuing Operations Attributable to the Company

For the first quarter of 2012, the Company recorded earnings from continuing operations attributable to the Company of $122 million compared to $83 million in the first quarter of 2011.  Earnings in the first quarter of 2011 included items that management considered not representative of ongoing operations.  These items decreased earnings from continuing operations attributable to the Company in 2011 by $6 million.

Items Excluded from Reportable Segment Totals

Retained Corporate Costs and Other

Retained corporate costs and other for the first quarter of 2012 was $29 million compared with $12 million for the first quarter of 2011.  Retained corporate costs and other for the three months ended March 31, 2012 reflect lower global equipment sales as well as higher management incentive compensation expense.

Restructuring

During the three months ended March 31, 2011, the Company recorded restructuring charges of $8 million for employee costs related to a plant closing in the Company’s Asia Pacific segment.  See Note 10 to the Condensed Consolidated Financial Statements for additional information.

Discontinued Operations

On October 26, 2010, the Venezuelan government, through Presidential Decree No. 7.751, expropriated the assets of Owens-Illinois de Venezuela and Fabrica de Vidrios Los Andes, C.A., two of the Company’s subsidiaries in that country, which in effect constituted a taking of the going concerns of those companies.  Shortly after the issuance of the decree, the Venezuelan government installed temporary administrative boards to control the expropriated assets.

Since the issuance of the decree, the Company has cooperated with the Venezuelan government, as it is compelled to do under Venezuelan law, to provide for an orderly transition while ensuring the safety and well-being of the employees and the integrity of the production facilities.  The Company has been engaged in negotiations with the Venezuelan government in

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relation to certain aspects of the expropriation, including the compensation payable by the government as a result of its expropriation. On September 26, 2011, the Company, having been unable to reach an agreement with the Venezuelan government regarding fair compensation, commenced an arbitration against Venezuela through the World Bank’s International Centre for Settlement of Investment Disputes.  The Company is unable at this stage to predict the amount, or timing of receipt, of compensation it will ultimately receive.

The loss from discontinued operations of $1 million for the three months ended March 31, 2012 and 2011 consisted primarily of ongoing legal fees related to the expropriation.

Capital Resources and Liquidity

As of March 31, 2012, the Company had cash and total debt of $299 million and $4.1 billion, respectively, compared to $430 million and $4.4 billion, respectively, as of March 31, 2011.  A significant portion of the cash was held in mature, liquid markets where the Company has operations, such as the U.S., Europe and Australia, and is readily available to fund global liquidity requirements. The amount of cash held in non-U.S. locations as of March 31, 2012 was $279 million.

Current and Long-Term Debt

On May 19, 2011, the Company’s subsidiary borrowers entered into the Secured Credit Agreement (the “Agreement”).  At March 31, 2012, the Agreement included a $900 million revolving credit facility, a 170 million Australian dollar term loan, a $600 million term loan, a 116 million Canadian dollar term loan, and a €141 million term loan, each of which has a final maturity date of May 19, 2016.  At March 31, 2012, the Company’s subsidiary borrowers had unused credit of $749 million available under the Agreement.

The weighted average interest rate on borrowings outstanding under the Agreement at March 31, 2012 was 2.82%.

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.

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The Company has a €280 million European accounts receivable securitization program, which extends through September 2016, subject to annual renewal of backup credit lines. Information related to the Company’s accounts receivable securitization program is as follows:

	March 31,			December 31,			March 31,
	2012			2011			2011
Balance (included in short-term loans)	$	276		$	281		$	222
Weighted average interest rate	1.42		%	2.41		%	2.85		%

Cash Flows

Underlying free cash flow was $(134) million for the first three months of 2012 compared to $(125) million for the first three months of 2011. The Company defines free cash flow as cash provided by continuing operating activities less additions to property, plant and equipment from continuing operations. The Company defines underlying free cash flow as free cash flow plus the addback of capital spending in China to replace capacity lost due to Chinese government requirements. Certain of the Company’s older glass manufacturing plants in China are being encroached by strong urban growth. The local Chinese government entities have determined that the land on which some of these facilities reside should be returned to the government. The Company expects the compensation to be received from the Chinese government for the value of the land should offset most or all of the future capital spending required to rebuild capacity at alternative sites in China. Free cash flow and underlying free cash flow do not conform to U.S. GAAP and should not be construed as an alternative to the cash flow measures reported in accordance with U.S. GAAP. The Company uses free cash flow and underlying free cash flow for internal reporting, forecasting and budgeting and believes this information allows the board of directors, management, investors and analysts to better understand the Company’s financial performance. Free cash flow and underlying free cash for the three months ended March 31, 2012 and 2011 are calculated as follows:

	2012			2011
Cash utilized in continuing operating activities	$	(64	)	$	(52	)
Additions to property, plant and equipment	(73		)	(73		)
Free cash flow	(137		)	(125		)
Capital spending for China replacement capacity	3
Underlying free cash flow	$	(134	)	$	(125	)

Operating activities:  Cash utilized in continuing operating activities was $64 million for the three months ended March 31, 2012, compared with $52 million for the three months ended March 31, 2011.  The increase in cash utilized in continuing operating activities was primarily due to an increase in working capital of $275 million in 2012 compared to $249 million in 2011.  The larger increase in working capital during 2012 was mainly due to a larger increase in inventory in the first quarter of 2012 as the Company prepared for the seasonally stronger sales in the second and third quarters and looked to avoid the supply chain issues that impacted its North American

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segment in the second quarter of 2011.  The increase in cash utilized in continuing operating activities was also due to an increase in cash paid for restructuring activities of $26 million, an increase in income taxes paid of $10 million and an increase in pension plan contributions of $5 million, partially offset by higher earnings and a decrease in cash paid related to the implementation of the global ERP system.

Investing activities:  Cash utilized in investing activities was $67 million for the three months ended March 31, 2012 compared to $67 million for the three months ended March 31, 2011.  Capital spending for property, plant and equipment was $73 million during both the current year and the prior year.  Cash utilized in investing activities in 2012 included $5 million for the final payment related to an acquisition in China in 2010.  During the first quarter of 2012, the Company received $11 million from the Chinese government as partial compensation for the land in China that the Company is required to return to the government.  During the first quarter of 2011, the Company received $6 million as it settled the working capital adjustment provision related to the 2010 acquisition in Brazil.

Financing activities:  Cash provided by financing activities was $15 million for the three months ended March 31, 2012 compared to cash utilized in financing activities of $98 million for the three months ended March 31, 2011.  Financing activities in 2012 included additions to long-term debt of $119 million, partially offset by repayments of long-term debt of $62 million and short-term loans of $20 million.  Financing activities in 2011 included the repayment of short-term loans of $32 million and dividends paid to noncontrolling interests of $18 million.

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.

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,

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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.

There have been no other material changes in critical accounting estimates at March 31, 2012 from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Forward Looking Statements

This document contains “forward looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934 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, specifically the Euro, Brazilian real and Australian dollar, (2) changes in capital availability or cost, including interest rate fluctuations, (3) the general political, economic and competitive conditions in markets and countries where the Company has operations, including uncertainties related to the economic conditions in Europe and Australia, the expropriation of the Company’s operations in Venezuela, disruptions in capital markets, disruptions in the supply chain, competitive pricing pressures, inflation or deflation, and changes in tax rates and laws, (4) consumer preferences for alternative forms of packaging, (5) fluctuations in raw material and labor costs, (6) availability of raw materials, (7) costs and availability of energy, including natural gas prices, (8) transportation costs, (9) the ability of the Company to raise selling prices commensurate with energy and other cost increases, (10) consolidation among competitors and customers, (11) the ability of the Company to acquire businesses and expand plants, integrate operations of acquired businesses and achieve expected synergies, (12) unanticipated expenditures with respect to environmental, safety and health laws, (13) the performance by customers of their obligations under purchase agreements, (14) the Company’s ability to further develop its sales, marketing and product development capabilities, (15) the Company’s ability to resolve its production and supply chain issues in North America, (16) the Company’s success in implementing necessary restructuring plans and the impact of such restructuring plans on the carrying value of recorded goodwill, (17) the Company’s ability to successfully navigate the structural changes in Australia, (18) the proceeds from the land sales in China do not occur in the time schedule or amount that the Company expects, and (19) the timing and occurrence of events which are beyond the control of the Company, including any expropriation of the Company’s operations, floods and other natural disasters, and events related to asbestos-related claims. 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.

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Item 3.Quantitative and Qualitative Disclosure About Market Risk.

There have been no material changes in market risk at March 31, 2012 from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

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 periods specified in the Securities and Exchange Commission’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 March 31, 2012.

Management concluded that the Company’s system of internal control over financial reporting was effective as of December 31, 2011.  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 have materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.  The Company is undertaking the phased implementation of a global Enterprise Resource Planning (“ERP”) software system.   The phased implementation was completed in the North America segment during the first quarter of 2012, resulting in changes to certain processes in that segment.  The Company believes it is maintaining and monitoring appropriate internal controls during the implementation period and further believes that its internal control environment will be enhanced as a result of this implementation.  There have been no other changes in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially 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 7 to the Condensed Consolidated Financial Statements, “Contingencies,” that is included in Part I of this Report and is incorporated herein by reference.

Item 1A.  Risk Factors.

There have been no material changes in risk factors at March 31, 2012 from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Item 6.Exhibits.

Exhibit 12	Computation of Ratio of Earnings to Fixed Charges.
Exhibit 18	Letter of Independent Registered Public Accounting Firm regarding change in accounting principle.
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 Group, Inc. for the quarter ended March 31, 2012, formatted in XBRL: (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 GROUP, INC.
Date	April 26, 2012	By	/s/ Edward C. White
			Edward C. White
			President and Chief Financial Officer
			(Principal Financial Officer; Principal Accounting Officer)

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INDEX TO EXHIBITS

Exhibits
12	Computation of Ratio of Earnings to Fixed Charges.
18	Letter of Independent Registered Public Accounting Firm regarding change in accounting principle.
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2*	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.
101	Financial statements from the quarterly report on Form 10-Q of Owens-Illinois Group, Inc. for the quarter ended March 31, 2012, formatted in XBRL: (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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EX-12

Exhibit 12

OWENS-ILLINOIS GROUP, INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

 (Dollars in millions)

		Three months ended March 31,
		2012			2011
Earnings from continuing operations before income taxes		$	170		$	115
Less:	Equity earnings	(13		)	(14		)
Add:	Total fixed charges deducted from earnings	65			77
	Dividends received from equity investees	6			5
	Earnings available for payment of fixed charges	$	228		$	183
Fixed charges
	Interest expense	$	64		$	76
	Portion of operating lease rental deemed to be interest	1			1
	Total fixed charges deducted from earnings and fixed charges	$	65		$	77
Ratio of earnings to fixed charges		3.5			2.4

EX-18

EXHIBIT 18

April 26, 2012

The Board of Directors

Owens-Illinois Group, Inc.

One Michael Owens Way

Perrysburg, OH 43551

Ladies and Gentlemen:

Note 2 of the notes to the condensed consolidated financial statements of Owens-Illinois Group, Inc. included in its Form 10-Q for the quarter ended March 31, 2012 describes a change in the method of accounting for inventory valuation from the last-in, first-out method to the average cost method for the Company’s U.S.-based inventories.  There are no authoritative criteria for determining a “preferable” inventory method based on the particular circumstances; however, we conclude that such change in the method of accounting is to an acceptable alternative method which, based on your business judgment to make this change and for the stated reasons, is preferable in your circumstances.  We have not conducted an audit in accordance with the standards of the Public Company Account Oversight Board (United States) of any financial statements of the Company as of any date or for any period subsequent to December 31, 2011, and therefore we do not express any opinion on any financial statements of Owens-Illinois Group, Inc. subsequent to that date.

Very truly yours,

/s/ Ernst & Young LLP

1

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Albert P.L. Stroucken, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Owens-Illinois Group, 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 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 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 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	April 26, 2012	/s/ Albert P.L. Stroucken
		Albert P.L. Stroucken
		Chairman and Chief Executive Officer
		(Principal Executive Officer)

1

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Edward C. White, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Owens-Illinois Group, 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 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 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 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	April 26, 2012	/s/ Edward C. White
		Edward C. White
		President and Chief Financial Officer
		(Principal Financial Officer)

1

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 Group, 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 March 31, 2012 (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: April 26, 2012	/s/ Albert P.L. Stroucken
	Albert P.L. Stroucken
	Chairman and Chief Executive Officer
	Owens-Illinois Group, Inc.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

1

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 Group, 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 March 31, 2012 (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: April 26, 2012	/s/ Edward C. White
	Edward C. White
	President
	Owens-Illinois Group, Inc.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

1

XML

Segment Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012 segment	Mar. 31, 2011
Segment Reporting Information
Number of reportable segments	4
Net sales:
Net sales	$ 1,739	$ 1,719
Items excluded from Segment Operating Profit:
Retained corporate costs and other	(29)	(12)
Restructuring and asset impairment		(8)
Interest income	3	3
Interest expense	(64)	(76)
Earnings from continuing operations before income taxes	170	115
Change in Pension Allocation
Items excluded from Segment Operating Profit:
Retained corporate costs and other		1
As Originally Reported
Items excluded from Segment Operating Profit:
Retained corporate costs and other		(13)
As Adjusted
Items excluded from Segment Operating Profit:
Retained corporate costs and other		(12)
Reportable Segment Totals
Net sales:
Net sales	1,721	1,692
Segment Operating Profit:
Segment Operating Profit	260	208
Reportable Segment Totals | Change in Pension Allocation
Segment Operating Profit:
Segment Operating Profit		(1)
Reportable Segment Totals | Change in Accounting Method for Inventory
Segment Operating Profit:
Segment Operating Profit		10
Reportable Segment Totals | As Originally Reported
Segment Operating Profit:
Segment Operating Profit		199
Reportable Segment Totals | As Adjusted
Segment Operating Profit:
Segment Operating Profit		208
Europe
Net sales:
Net sales	705	698
Segment Operating Profit:
Segment Operating Profit	108	76
Europe | Change in Pension Allocation
Segment Operating Profit:
Segment Operating Profit		5
Europe | As Originally Reported
Segment Operating Profit:
Segment Operating Profit		71
Europe | As Adjusted
Segment Operating Profit:
Segment Operating Profit		76
North America
Net sales:
Net sales	482	463
Segment Operating Profit:
Segment Operating Profit	78	63
North America | Change in Pension Allocation
Segment Operating Profit:
Segment Operating Profit		(6)
North America | Change in Accounting Method for Inventory
Segment Operating Profit:
Segment Operating Profit		10
North America | As Originally Reported
Segment Operating Profit:
Segment Operating Profit		59
North America | As Adjusted
Segment Operating Profit:
Segment Operating Profit		63
South America
Net sales:
Net sales	277	269
Segment Operating Profit:
Segment Operating Profit	38	45
South America | As Originally Reported
Segment Operating Profit:
Segment Operating Profit		45
South America | As Adjusted
Segment Operating Profit:
Segment Operating Profit		45
Asia Pacific
Net sales:
Net sales	257	262
Segment Operating Profit:
Segment Operating Profit	36	24
Asia Pacific | As Originally Reported
Segment Operating Profit:
Segment Operating Profit		24
Asia Pacific | As Adjusted
Segment Operating Profit:
Segment Operating Profit		24
Other
Net sales:
Net sales	$ 18	$ 27

XML

Financial Information for Subsidiary Guarantors and Non-Guarantors (Details)	Mar. 31, 2012
Senior Notes 3.00%, Exchangeable, due 2015
Debt Instrument
Interest rate, stated percentage (as a percent)	3.00%
Senior Notes 7.375%, due 2016
Debt Instrument
Interest rate, stated percentage (as a percent)	7.375%

XML

Income Taxes (Details)	3 Months Ended
	Mar. 31, 2012
Income Taxes
Statutory U.S. Federal tax rate (as a percent)	35.00%

XML

Change in Accounting Method (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011	Jan. 02, 2011	Dec. 31, 2010
Condensed consolidated results of operations
Manufacturing, shipping and delivery expense	$ (1,361)	$ (1,376)
Amounts attributable to the Company:
Net earnings from continuing operations	122	83
Assets:
Inventories	1,237	1,103	1,061
Share owners' equity:
Retained earnings	2,465	2,761	2,344
Consolidated share owners' equity
Share owners' equity	1,736	2,673	1,512		2,541
Condensed consolidated cash flows
Net earnings	125	86
Change in components of working capital	(275)	(249)
Retained Earnings
Consolidated share owners' equity
Share owners' equity	2,465	2,761	2,344	2,679	2,679
Condensed consolidated cash flows
Net earnings	125	86
Change in accounting method for valuation of inventories
Effect of change in accounting method
Effect of a change in accounting method on manufacturing, shipping and delivery expenses	6
Effect of a change in accounting method on net earnings	6
Originally reported under LIFO
Condensed consolidated results of operations
Manufacturing, shipping and delivery expense		(1,386)
Amounts attributable to the Company:
Net earnings from continuing operations		73
Assets:
Inventories		1,054	1,012
Share owners' equity:
Retained earnings		2,712	2,295
Condensed consolidated cash flows
Net earnings		76
Change in components of working capital		(239)
Originally reported under LIFO | Retained Earnings
Consolidated share owners' equity
Share owners' equity				2,640
Effect of Change | Change in accounting method for valuation of inventories
Condensed consolidated results of operations
Manufacturing, shipping and delivery expense		10
Amounts attributable to the Company:
Net earnings from continuing operations		10
Assets:
Inventories		49	49
Share owners' equity:
Retained earnings		49	49
Condensed consolidated cash flows
Net earnings		10
Change in components of working capital		(10)
Effect of Change | Change in accounting method for valuation of inventories | Retained Earnings
Consolidated share owners' equity
Share owners' equity				$ 39

XML

Share Owners' Equity (Tables)

3 Months Ended

Mar. 31, 2012

Share Owners' Equity

Activity in share owners' equity

	Share Owner’s Equity of the Company
	Other Contributed Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Non- controlling Interests		Total Share Owners’ Equity
Balance on January 1, 2012	$	295		$	2,344	$	(1,280	)	$	153	$	1,512
Net distribution to parent	(24		)								(24		)
Comprehensive income:
Net earnings				121					4		125
Foreign currency translation adjustments						92			7		99
Pension and other postretirement benefit adjustments, net of tax						24					24
Balance on March 31, 2012	$	271		$	2,465	$	(1,164	)	$	164	$	1,736

	Share Owner’s Equity of the Company
	Other Contributed Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Share Owners’ Equity
Balance on January 1, 2011, adjusted	$	507		$	2,679	$	(856	)	$	211		$	2,541
Net distribution to parent	(31		)									(31		)
Comprehensive income:
Net earnings				82					4			86
Foreign currency translation adjustments						70			4			74
Pension and other postretirement benefit adjustments, net of tax						20						20
Change in fair value of derivative instruments, net of tax						1						1
Dividends paid to noncontrolling interests on subsidiary common stock									(18		)	(18		)
Balance on March 31, 2011, adjusted	$	476		$	2,761	$	(765	)	$	201		$	2,673

XML

Financial Information for Subsidiary Guarantors and Non-Guarantors (Details 3) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Results of Operations
Net sales	$ 1,739	$ 1,719
Manufacturing, shipping, and delivery	(1,361)	(1,376)
Gross profit	378	343
Research, engineering, selling, administrative, and other	(166)	(176)
Interest expense	(64)	(76)
Interest income	3	3
Other equity earnings	13	14
Other income	6	7
Earnings from continuing operations before income taxes	170	115
Provision for income taxes	(44)	(28)
Earnings from continuing operations	126	87
Earnings from discontinued operations	(1)	(1)
Net earnings	125	86
Net earnings attributable to noncontrolling interests	(4)	(4)
Net earnings attributable to the Company	121	82
Comprehensive Income
Net earnings	125	86
Other comprehensive income (loss)	123	95
Total comprehensive income	248	181
Comprehensive income attributable to noncontrolling interests	(11)	(8)
Comprehensive income attributable to the Company	237	173
Parent
Results of Operations
Net intercompany interest	5	5
Interest expense	(5)	(5)
Equity earnings from subsidiaries	121	82
Earnings from continuing operations before income taxes	121	82
Earnings from continuing operations	121	82
Net earnings	121	82
Net earnings attributable to the Company	121	82
Comprehensive Income
Net earnings	121	82
Other comprehensive income (loss)	116	91
Total comprehensive income	237	173
Comprehensive income attributable to the Company	237	173
Issuer
Results of Operations
Net sales	456	449
Manufacturing, shipping, and delivery	(330)	(364)
Gross profit	126	85
Research, engineering, selling, administrative, and other	(47)	(40)
Net intercompany interest	(5)
Interest expense	(26)	(36)
Equity earnings from subsidiaries	97	22
Other equity earnings	3	2
Other income	4	76
Earnings from continuing operations before income taxes	152	109
Provision for income taxes	(3)	(4)
Earnings from continuing operations	149	105
Net earnings	149	105
Net earnings attributable to the Company	149	105
Comprehensive Income
Net earnings	149	105
Other comprehensive income (loss)		(17)
Total comprehensive income	149	88
Comprehensive income attributable to the Company	149	88
Guarantor Subsidiaries
Results of Operations
Research, engineering, selling, administrative, and other	(23)	(17)
Net intercompany interest		(4)
Interest expense		(1)
Equity earnings from subsidiaries		(7)
Other equity earnings		7
Earnings from continuing operations before income taxes	(23)	(22)
Provision for income taxes	(1)	(4)
Earnings from continuing operations	(24)	(26)
Earnings from discontinued operations		(1)
Net earnings	(24)	(27)
Net earnings attributable to the Company	(24)	(27)
Comprehensive Income
Net earnings	(24)	(27)
Total comprehensive income	(24)	(27)
Comprehensive income attributable to the Company	(24)	(27)
Non-Guarantor Subsidiaries
Results of Operations
Net sales	1,283	1,296
Manufacturing, shipping, and delivery	(1,031)	(1,110)
Gross profit	252	186
Research, engineering, selling, administrative, and other	(96)	(120)
Net intercompany interest		(1)
Interest expense	(33)	(34)
Interest income	3	3
Other equity earnings	10	4
Other income	2	2
Earnings from continuing operations before income taxes	138	40
Provision for income taxes	(40)	(20)
Earnings from continuing operations	98	20
Earnings from discontinued operations	(1)
Net earnings	97	20
Net earnings attributable to noncontrolling interests	(4)	(4)
Net earnings attributable to the Company	93	16
Comprehensive Income
Net earnings	97	20
Other comprehensive income (loss)	99	91
Total comprehensive income	196	111
Comprehensive income attributable to noncontrolling interests	11	(8)
Comprehensive income attributable to the Company	185	103
Eliminations
Results of Operations
Net sales		(26)
Manufacturing, shipping, and delivery		98
Gross profit		72
Research, engineering, selling, administrative, and other		1
Equity earnings from subsidiaries	(218)	(97)
Other equity earnings		1
Other income		(71)
Earnings from continuing operations before income taxes	(218)	(94)
Earnings from continuing operations	(218)	(94)
Net earnings	(218)	(94)
Net earnings attributable to the Company	(218)	(94)
Comprehensive Income
Net earnings	(218)	(94)
Other comprehensive income (loss)	(92)	(70)
Total comprehensive income	(310)	(164)
Comprehensive income attributable to the Company	$ (310)	$ (164)

XML

Restructuring Accruals (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended							3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012 Strategic Footprint Review	Mar. 31, 2011 Strategic Footprint Review	Mar. 31, 2012 Other Restructuring Actions	Mar. 31, 2011 Other Restructuring Actions	Dec. 31, 2010 Other Restructuring Actions	Mar. 31, 2012 Asia Pacific Restructuring	Mar. 31, 2011 Asia Pacific Restructuring
Restructuring reserve
Restructuring reserve balance at beginning of period	$ 103	$ 79	$ 37	$ 52	$ 49	$ 27	$ 27	$ 17
Restructuring charge reserve		8							8
Net cash paid, principally severance and related benefits	(30)	(4)	(2)	(4)	(17)			(11)
Other, including foreign exchange translation	3	2		2	3
Restructuring reserve balance at end of period	$ 76	$ 85	$ 35	$ 50	$ 35	$ 27	$ 27	$ 6	$ 8

XML

Inventories (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011
Inventories
Finished goods	$ 1,061	$ 891	$ 932
Raw materials	126	123	114
Operating supplies	50	47	57
Inventories	$ 1,237	$ 1,061	$ 1,103

XML

Discontinued Operations (Details) (Discontinued Operations, Disposed Venezuelan Subsidiaries)	1 Months Ended
	Oct. 31, 2010 subsidiary
Discontinued Operations, Disposed Venezuelan Subsidiaries
Subsidiaries
Number of subsidiaries (in number of subsidiaries)	2

XML

Debt

3 Months Ended

Mar. 31, 2012

Debt

Debt

3. Debt

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

	March 31,		December 31,		March 31,
	2012		2011		2011
Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans	$	55	$	—	$	—
Term Loans:
Term Loan A (170 million AUD)	177		173
Term Loan B	600		600
Term Loan C (116 million CAD)	117		114
Term Loan D (€141 million)	188		182
Fourth Amended and Restated Secured Credit Agreement:
Term Loans:
Term Loan A					93
Term Loan B					190
Term Loan C					114
Term Loan D					268
Senior Notes:
6.75%, due 2014					400
6.75%, due 2014 (€225 million)					318
3.00%, Exchangeable, due 2015	628		624		611
7.375%, due 2016	588		588		586
6.875%, due 2017 (€300 million)	401		388		425
6.75%, due 2020 (€500 million)	668		647		708
Payable to OI Inc.	250		250		250
Other	139		137		163
Total long-term debt	3,811		3,703		4,126
Less amounts due within one year	87		76		135
Long-term debt	$	3,724	$	3,627	$	3,991

On May 19, 2011, the Company’s subsidiary borrowers entered into the Secured Credit Agreement (the “Agreement”).  At March 31, 2012, the Agreement included a $900 million revolving credit facility, a 170 million Australian dollar term loan, a $600 million term loan, a 116 million Canadian dollar term loan, and a €141 million term loan, each of which has a final maturity date of May 19, 2016.  At March 31, 2012, the Company’s subsidiary borrowers had unused credit of $749 million available under the Agreement.

The weighted average interest rate on borrowings outstanding under the Agreement at March 31, 2012 was 2.82%.

The Company has a €280 million European accounts receivable securitization program, which extends through September 2016, subject to annual renewal of backup credit lines. Information related to the Company’s accounts receivable securitization program is as follows:

	March 31,			December 31,			March 31,
	2012			2011			2011
Balance (included in short-term loans)	$	276		$	281		$	222
Weighted average interest rate	1.42		%	2.41		%	2.85		%

The carrying amounts reported for the accounts receivable securitization programs, and 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 March 31, 2012 of the Company’s significant fixed rate debt obligations are as follows:

			Indicated
	Principal		Market	Fair
	Amount		Price	Value
Senior Notes:
3.00%, Exchangeable, due 2015	$	690	98.12	$	677
7.375%, due 2016	600		112.74	676
6.875%, due 2017 (€300 million)	401		103.11	413
6.75%, due 2020 (€500 million)	668		106.02	708

XML

Derivative Instruments (Details) In Millions, unless otherwise specified	3 Months Ended			3 Months Ended
	Mar. 31, 2012 USD ($)	Mar. 31, 2011 USD ($)	Dec. 31, 2004 EUR (€)	Mar. 31, 2012 Commodity futures contracts Cash Flow Hedges USD ($) mmbtu	Mar. 31, 2011 Commodity futures contracts Cash Flow Hedges USD ($) mmbtu	Mar. 31, 2012 Commodity futures contracts Cash Flow Hedges Maximum	Mar. 31, 2012 Commodity futures contracts Cash Flow Hedges Minimum
Derivatives and Hedges
Coverage of commodity futures contracts (in MM BTUs)				4,600,000	8,000,000
Unrecognized loss included in Accumulated OCI				$ (6)	$ (2)
Period during which unrecognized loss included in Accumulated OCI will be reclassified into earnings (in months)						24 months	12 months
Commodity futures contracts loss recognized in OCI				(3)	(1)
Commodity futures contracts loss reclassified from accumulated OCI into income				(3)	(2)
Senior notes designated as net investment hedge			225
Net investment hedge gain (loss) recognized in OCI		(18)
Forward exchange and option agreements in various currencies	640	881
Foreign exchange contracts gain (loss) recognized in income	$ 1	$ (7)

XML

Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2012

Derivative Instruments

Effect of commodity futures contracts designated as cash flow hedges on the results of operations

						Amount of Loss
						Reclassified from
Amount of Loss						Accumulated OCI into
Recognized in OCI on						Income (reported in
Commodity Futures Contracts						manufacturing, shipping, and
(Effective Portion)						delivery) (Effective Portion)
2012			2011			2012			2011
$	(3	)	$	(1	)	$	(3	)	$	(2	)

Effect of senior notes designated as net investment hedge on the results of operations

Amount of Loss Recognized in OCI
$	(18	)

Effect of the forward exchange contracts not designated as hedging instruments on the results of operations

	Amount of Gain (Loss)
Location of Gain (Loss)	Recognized in Income on
Recognized in Income on	Forward Exchange Contracts
Forward Exchange Contracts	2012		2011
Other expense	$	1	$	(7	)

Balance Sheet Classification of derivative instruments

	Balance	Fair Value
	Sheet Location	March 31, 2012		December 31, 2011		March 31, 2011
Asset Derivatives:
Derivatives not designated as hedging instruments:
Foreign exchange contracts	a	$	8	$	13	$	6
Foreign exchange contracts	b					4
Foreign exchange contracts	c	1				1
Total derivatives not designated as hedging instruments		9		13		11
Total asset derivatives		$	9	$	13	$	11
Liability Derivatives:
Derivatives designated as hedging instruments:
Commodity futures contracts	c	$	6	$	6	$	2
Derivatives not designated as hedging instruments:
Foreign exchange contracts	c	4		4		15
Total liability derivatives		$	10	$	10	$	17

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Restructuring Accruals (Tables)

3 Months Ended

Mar. 31, 2012

Restructuring Accruals

Selected information related to the restructuring accruals

	Strategic Footprint Review			Asia Pacific Restructuring			Other Restructuring Actions			Total Restructuring
Balance at January 1, 2012	$	37		$	17		$	49		$	103
Net cash paid, principally severance and related benefits	(2		)	(11		)	(17		)	(30		)
Other, including foreign exchange translation							3			3
Balance at March 31, 2012	$	35		$	6		$	35		$	76
Balance at January 1, 2011	$	52		$	—		$	27		$	79
First quarter 2011 charges				8						8
Net cash paid, principally severance and related benefits	(4		)							(4		)
Other, including foreign exchange translation	2									2
Balance at March 31, 2011	$	50		$	8		$	27		$	85

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Derivative Instruments (Details 2) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011
Derivatives, Fair Value
Total asset derivatives	$ 9	$ 13	$ 11
Total liability derivatives	10	10	17
Derivatives designated as hedging instruments | Commodity futures contracts | Other liabilities (current)
Derivatives, Fair Value
Total liability derivatives	6	6	2
Derivatives not designated as hedging instruments
Derivatives, Fair Value
Total asset derivatives	9	13	11
Derivatives not designated as hedging instruments | Foreign exchange contracts | Receivables
Derivatives, Fair Value
Total asset derivatives	8	13	6
Derivatives not designated as hedging instruments | Foreign exchange contracts | Deposits, receivables, and other assets
Derivatives, Fair Value
Total asset derivatives			4
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other liabilities (current)
Derivatives, Fair Value
Total asset derivatives	1		1
Total liability derivatives	$ 4	$ 4	$ 15

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Pension Benefit Plans and Other Postretirement Benefits (Tables)

3 Months Ended

Mar. 31, 2012

Pension Benefit Plans

Defined Benefit Plans and Other Postretirement Benefit Plans

Components of net periodic pension cost (income) and net periodic postretirement benefit (cost)

	U.S.						Non-U.S.
	2012			2011			2012			2011
Service cost	$	7		$	7		$	7		$	5
Interest cost	28			31			19			21
Expected asset return	(46		)	(47		)	(22		)	(21		)
Amortization:
Actuarial loss	24			21			5			6
Net periodic pension cost	$	13		$	12		$	9		$	11

Postretirement Benefits Other Than Pensions

Defined Benefit Plans and Other Postretirement Benefit Plans

Components of net periodic pension cost (income) and net periodic postretirement benefit (cost)

	U.S.						Non-U.S.
	2012			2011			2012		2011
Service cost	$	1		$	—		$	—	$	—
Interest cost	2			3			1		1
Amortization:
Prior service credit	(1		)	(1		)
Actuarial loss	1			1
Net amortization	—			—			—		—
Net postretirement benefit cost	$	3		$	3		$	1	$	1

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Financial Information for Subsidiary Guarantors and Non-Guarantors (Tables)

3 Months Ended

Mar. 31, 2012

Financial Information for Subsidiary Guarantors and Non-Guarantors

Balance Sheet

	March 31, 2012
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	110	$	(12	)	$	1,101				$	1,199
Inventories			212					1,025					1,237
Other current assets			3		32			394					429
Total current assets	—		325		20			2,520		—			2,865
Investments in and advances to subsidiaries	1,822		2,987		(12		)			(4,797		)	—
Goodwill			555		8			1,564					2,127
Other non-current assets			162		88			1,035					1,285
Total other assets	1,822		3,704		84			2,599		(4,797		)	3,412
Property, plant and equipment, net			619		44			2,221					2,884
Total assets	$	1,822	$	4,648	$	148		$	7,340	$	(4,797	)	$	9,161
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	235	$	77		$	1,219	$	14		$	1,545
Short-term loans and long-term debt due within one year			23		1			382					406
Total current liabilities	—		258		78			1,601		14			1,951
Long-term debt	250		1,849		14			1,611					3,724
Other non-current liabilities			34		741			975					1,750
Investments by and advances from parent			2,507		(685		)	2,989		(4,811		)	—
Total share owner’s equity of the Company	1,572												1,572
Noncontrolling interests								164					164
Total liabilities and share owners’ equity	$	1,822	$	4,648	$	148		$	7,340	$	(4,797	)	$	9,161

	December 31, 2011
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	120	$	(14	)	$	1,052	$	—		$	1,158
Inventories			192					869					1,061
Other current assets			3		33			488					524
Total current assets	—		315		19			2,409		—			2,743
Investments in and advances to subsidiaries	1,609		2,788		18					(4,415		)	—
Goodwill			561		8			1,513					2,082
Other non-current assets			148		83			1,041		1			1,273
Total other assets	1,609		3,497		109			2,554		(4,414		)	3,355
Property, plant and equipment, net			626		45			2,206					2,877
Total assets	$	1,609	$	4,438	$	173		$	7,169	$	(4,414	)	$	8,975
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	358	$	19		$	1,310	$	(13	)	$	1,674
Short-term loans and long-term debt due within one year			15		1			390					406
Total current liabilities	—		373		20			1,700		(13		)	2,080
Long-term debt	250		1,797		15			1,565					3,627
Other non-current liabilities			45		753			958					1,756
Investments by and advances from parent			2,223		(615		)	2,793		(4,401		)	—
Total share owner’s equity of the Company	1,359									—			1,359
Noncontrolling interests								153					153
Total liabilities and share owners’ equity	$	1,609	$	4,438	$	173		$	7,169	$	(4,414	)	$	8,975

	March 31, 2011
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	129	$	(7	)	$	1,101	$	—		$	1,223
Inventories			169					935		(1		)	1,103
Other current assets			21		166			321					508
Total current assets	—		319		159			2,357		(1		)	2,834
Investments in and advances to subsidiaries	2,722		3,904		(224		)			(6,402		)	—
Goodwill			561		10			2,329					2,900
Other non-current assets			150		124			875		(1		)	1,148
Total other assets	2,722		4,615		(90		)	3,204		(6,403		)	4,048
Property, plant and equipment, net			653		42			2,448					3,143
Total assets	$	2,722	$	5,587	$	111		$	8,009	$	(6,404	)	$	10,025
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	303	$	41		$	1,195	$	(4	)	$	1,535
Short-term loans and long-term debt due within one year					1			371					372
Total current liabilities	—		303		42			1,566		(4		)	1,907
Long-term debt	250		2,105		15			1,621					3,991
Other non-current liabilities			98		413			945		(2		)	1,454
Investments by and advances from parent			3,081		(359		)	3,676		(6,398		)	—
Total share owner’s equity of the Company	2,472									—			2,472
Noncontrolling interests								201					201
Total liabilities and share owners’ equity	$	2,722	$	5,587	$	111		$	8,009	$	(6,404	)	$	10,025

Results of Operations

	Three months ended March 31, 2012
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales				$	456					$	1,283					$	1,739
Manufacturing, shipping, and delivery				(330		)				(1,031		)				(1,361		)
Gross profit	—			126			—			252			—			378
Research, engineering, selling, administrative, and other				(47		)	(23		)	(96		)				(166		)
Net intercompany interest	5			(5		)										—
Interest expense	(5		)	(26		)				(33		)				(64		)
Interest income										3						3
Equity earnings from subsidiaries	121			97									(218		)	—
Other equity earnings				3						10						13
Other income				4						2						6
Earnings (loss) from continuing operations before income taxes	121			152			(23		)	138			(218		)	170
Provision for income taxes				(3		)	(1		)	(40		)				(44		)
Earnings (loss) from continuing
operations	121			149			(24		)	98			(218		)	126
Earnings from discontinued operations										(1		)				(1		)
Net earnings (loss)	121			149			(24		)	97			(218		)	125
Net earnings attributable to noncontrolling interests										(4		)				(4		)
Net earnings (loss) attributable to the Company	$	121		$	149		$	(24	)	$	93		$	(218	)	$	121

	Three months ended March 31, 2012
								Non-
					Guarantor			Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net earnings (loss)	$	121	$	149	$	(24	)	$	97		$	(218	)	$	125
Other comprehensive income	116							99			(92		)	123
Total comprehensive income (loss)	237		149		(24		)	196			(310		)	248
Comprehensive income attributable to noncontrolling interests								(11		)				(11		)
Comprehensive income (loss) attributable to the Company	$	237	$	149	$	(24	)	$	185		$	(310	)	$	237

	Three months ended March 31, 2011
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	449		$	—		$	1,296		$	(26	)	$	1,719
Manufacturing, shipping, and delivery				(364		)				(1,110		)	98			(1,376		)
Gross profit	—			85			—			186			72			343
Research, engineering, selling, administrative, and other				(40		)	(17		)	(120		)	1			(176		)
Net intercompany interest	5						(4		)	(1		)				—
Interest expense	(5		)	(36		)	(1		)	(34		)				(76		)
Interest income										3						3
Equity earnings from subsidiaries	82			22			(7		)				(97		)	—
Other equity earnings				2			7			4			1			14
Other income				76						2			(71		)	7
Earnings (loss) from continuing operations before income taxes	82			109			(22		)	40			(94		)	115
Provision for income taxes				(4		)	(4		)	(20		)				(28		)
Earnings (loss) from continuing operations	82			105			(26		)	20			(94		)	87
Loss from discontinued operations							(1		)							(1		)
Net earnings (loss)	82			105			(27		)	20			(94		)	86
Net earnings attributable to noncontrolling interests										(4		)				(4		)
Net earnings (loss) attributable to the Company	$	82		$	105		$	(27	)	$	16		$	(94	)	$	82

	Three months ended March 31, 2011
									Non-
						Guarantor			Guarantor
Comprehensive Income	Parent		Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net earnings (loss)	$	82	$	105		$	(27	)	$	20		$	(94	)	$	86
Other comprehensive income (loss)	91		(17		)				91			(70		)	95
Total comprehensive income (loss)	173		88			(27		)	111			(164		)	181
Comprehensive income attributable to noncontrolling interests									(8		)				(8		)
Comprehensive income (loss) attributable to the Company	$	173	$	88		$	(27	)	$	103		$	(164	)	$	173

Cash Flows

	Three months ended March 31, 2012
										Non-
							Guarantor			Guarantor
Cash Flows	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash provided by (utilized in) operating activities	$	—		$	45		$	42		$	(80	)	$	(72	)	$	(65	)
Investing Activities:
Additions to property, plant and equipment				(29		)	(1		)	(43		)				(73		)
Acquisitions, net of cash acquired										(5		)				(5		)
Net cash proceeds from asset sales and other										11						11
Cash utilized in investing activities	—			(29		)	(1		)	(37		)	—			(67		)
Financing Activities:
Net distribution to OI Inc.	(30		)													(30		)
Change in intercompany transactions	30			(71		)	(42		)	11			72			—
Additions to long term debt				110						9						119
Repayments of long term debt				(55		)				(7		)				(62		)
Decrease in short term debt										(20		)				(20		)
Net receipts for hedging activity										8						8
Cash provided by (utilized in) financing activities	—			(16		)	(42		)	1			72			15
Effect of exchange rate change on cash										16						16
Decrease in cash	—			—			(1		)	(100		)	—			(101		)
Cash at beginning of period							21			379						400
Cash at end of period	$	—		$	—		$	20		$	279		$	—		$	299

	Three months ended March 31, 2011
										Non-
							Guarantor			Guarantor
Cash Flows	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash provided by (utilized in) operating activities	$	—		$	91		$	55		$	(156	)	$	(42	)	$	(52	)
Investing Activities:
Additions to property, plant, and equipment				(17		)	(1		)	(55		)				(73		)
Acquisitions, net of cash acquired										6						6
Cash utilized in investing activities	—			(17		)	(1		)	(49		)	—			(67		)
Financing Activities:
Net distribution to OI Inc.	(31		)													(31		)
Change in intercompany transactions	31			(74		)	(106		)	107			42			—
Additions to short term debt										(32		)				(32		)
Additions to long term debt										5						5
Repayments of long term debt										(10		)				(10		)
Net receipts for hedging activity										(12		)				(12		)
Dividends paid to noncontrolling interests										(18		)				(18		)
Cash provided by (utilized in) financing activities	—			(74		)	(106		)	40			42			(98		)
Effect of exchange rate change on cash										7						7
Decrease in cash	—			—			(52		)	(158		)	—			(210		)
Cash at beginning of period							230			410						640
Cash at end of period	$	—		$	—		$	178		$	252		$	—		$	430

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Change in Accounting Method

3 Months Ended

Mar. 31, 2012

Change in Accounting Method

Change in Accounting Method

2. Change in Accounting Method

Effective January 1, 2012, the Company elected to change the method of valuing U.S. inventories to the average cost method while in prior years, these inventories were valued using the last-in, first-out (“LIFO”) method.  The Company believes the average cost method is preferable as it conforms the inventory costing methods globally, improves comparability with industry peers and better reflects the current value of inventory on the consolidated balance sheets. All prior periods presented have been adjusted to apply the new method retrospectively.

The effect of the change on the condensed consolidated results of operations for the quarter ended March 31, 2011 is as follows:

	As originally
	reported under			Effect of		As
	LIFO			Change		Adjusted
Manufacturing, shipping and delivery expense	$	(1,386	)	$	10	$	(1,376	)
Amounts attributable to the Company:
Net earnings from continuing operations	73			10		83

The effect of the change on the condensed consolidated balance sheets as of December 31, 2011 and March 31, 2011 is as follows:

	As originally
	reported under		Effect of		As
December 31, 2011	LIFO		Change		Adjusted
Assets:
Inventories	$	1,012	$	49	$	1,061
Share owners' equity:
Retained earnings	2,295		49		2,344
March 31, 2011
Assets:
Inventories	$	1,054	$	49	$	1,103
Share owners' equity:
Retained earnings	2,712		49		2,761

The effect of the change on the consolidated share owners’ equity as of January 1, 2011 is as follows:

	As originally
	reported under		Effect of		As
	LIFO		Change		Adjusted
Retained earnings	$	2,640	$	39	$	2,679

The effect of the change on the condensed consolidated cash flows for the quarter ended March 31, 2011  is as follows:

	As originally
	reported under			Effect of			As
	LIFO			Change			Adjusted
Net earnings	$	76		$	10		$	86
Change in components of working capital	(239		)	(10		)	(249		)

Had the Company not made this change in accounting method, manufacturing, shipping, and delivery expense for the quarter ended March 31, 2012 would have been $6 million lower and net earnings attributable to the Company would have been $6 million higher than reported in the condensed consolidated results of operations.

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Basis of Presentation (Details)	Mar. 31, 2012
Basis of Presentation
Owens-Illinois, Inc.'s ownership percentage in the Company	100.00%

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Segment Information (Details 2) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011
Assets
Total assets:	$ 9,161	$ 8,975	$ 10,025
Reportable Segment Totals
Assets
Total assets:	8,883	8,669	9,597
Europe
Assets
Total assets:	3,744	3,588	3,842
North America
Assets
Total assets:	2,056	2,020	2,040
South America
Assets
Total assets:	1,724	1,682	1,678
Asia Pacific
Assets
Total assets:	1,359	1,379	2,037
Other
Assets
Total assets:	$ 278	$ 306	$ 428

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CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net sales	$ 1,739	$ 1,719
Manufacturing, shipping and delivery expense	(1,361)	(1,376)
Gross profit	378	343
Selling and administrative expense	(140)	(142)
Research, development and engineering expense	(15)	(16)
Interest expense	(64)	(76)
Interest income	3	3
Equity earnings	13	14
Royalties and net technical assistance	4	5
Other income	2	2
Other expense	(11)	(18)
Earnings from continuing operations before income taxes	170	115
Provision for income taxes	(44)	(28)
Earnings from continuing operations	126	87
Loss from discontinued operations	(1)	(1)
Net earnings	125	86
Net earnings attributable to noncontrolling interests	(4)	(4)
Net earnings attributable to the Company	121	82
Amounts attributable to the Company:
Earnings from continuing operations	122	83
Loss from discontinued operations	(1)	(1)
Net earnings	$ 121	$ 82

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Pension Benefit Plans and Other Postretirement Benefits (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
U.S Pension Plans
Components of the net pension expense (income) and postretirement benefit cost
Service cost	$ 7	$ 7
Interest cost	28	31
Expected asset return	(46)	(47)
Amortization
Actuarial loss	24	21
Net periodic pension and postretirement benefit cost	13	12
Non-U.S. Pension Plans
Components of the net pension expense (income) and postretirement benefit cost
Service cost	7	5
Interest cost	19	21
Expected asset return	(22)	(21)
Amortization
Actuarial loss	5	6
Net periodic pension and postretirement benefit cost	9	11
U.S Postretirement Benefit Plans
Components of the net pension expense (income) and postretirement benefit cost
Service cost	1
Interest cost	2	3
Amortization
Prior service credit	(1)	(1)
Actuarial loss	1	1
Net periodic pension and postretirement benefit cost	3	3
Non-U.S. Postretirement Benefit Plans
Components of the net pension expense (income) and postretirement benefit cost
Interest cost	1	1
Amortization
Net periodic pension and postretirement benefit cost	$ 1	$ 1

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CONDENSED CONSOLIDATED CASH FLOWS (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities:
Net earnings	$ 125	$ 86
Loss from discontinued operations	1	1
Non-cash charges (credits):
Depreciation	97	101
Amortization of intangibles and other deferred items	8	5
Amortization of finance fees and debt discount	8	8
Pension Expense	22	23
Restructuring and asset impairment		8
Other	10	11
Pension Contributions	(17)	(12)
Cash paid for restructuring activities	(30)	(4)
Change in non-current assets and liabilities	(13)	(30)
Change in components of working capital	(275)	(249)
Cash utilized in continuing operating activities	(64)	(52)
Cash utilized in discontinued operating activities	(1)
Total cash utilized in operating activities	(65)	(52)
Cash flows from investing activities:
Additions to property, plant and equipment	(73)	(73)
Acquisitions, net of cash acquired	(5)	6
Net cash proceeds related to sale of assets and other	11
Cash utilized in investing activities	(67)	(67)
Cash flows from financing activities:
Additions to long-term debt	119	5
Repayments of long-term debt	(62)	(10)
Decrease in short-term loans	(20)	(32)
Net receipts (payments) for hedging activity	8	(12)
Dividends paid to noncontrolling interests		(18)
Distributions to parent	(30)	(31)
Cash provided by (utilized in) financing activities	15	(98)
Effect of exchange rate fluctuations on cash	16	7
Increase (decrease) in cash	(101)	(210)
Cash at beginning of period	400	640
Cash at end of period	$ 299	$ 430

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Supplemental Cash Flow Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Supplemental Cash Flow Information
Interest paid in cash	$ 69	$ 67
Non-U.S. Income taxes paid in cash	$ 31	$ 21

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Change in Accounting Method (Tables)

3 Months Ended

Mar. 31, 2012

Change in Accounting Method

Effect of change on consolidated statement of operations

	As originally
	reported under			Effect of		As
	LIFO			Change		Adjusted
Manufacturing, shipping and delivery expense	$	(1,386	)	$	10	$	(1,376	)
Amounts attributable to the Company:
Net earnings from continuing operations	73			10		83

Effect of change on consolidated balance sheets

	As originally
	reported under		Effect of		As
December 31, 2011	LIFO		Change		Adjusted
Assets:
Inventories	$	1,012	$	49	$	1,061
Share owners' equity:
Retained earnings	2,295		49		2,344
March 31, 2011
Assets:
Inventories	$	1,054	$	49	$	1,103
Share owners' equity:
Retained earnings	2,712		49		2,761

Effect of change on consolidated share owner's equity

	As originally
	reported under		Effect of		As
	LIFO		Change		Adjusted
Retained earnings	$	2,640	$	39	$	2,679

Effect of change on consolidated cash flows

	As originally
	reported under			Effect of			As
	LIFO			Change			Adjusted
Net earnings	$	76		$	10		$	86
Change in components of working capital	(239		)	(10		)	(249		)

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Share Owners' Equity (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Jan. 02, 2011
Increase (Decrease) in Share Owners' Equity
Balance at the beginning of the period	$ 1,512	$ 2,541
Net distribution to parent	(24)	(31)
Comprehensive income:
Net earnings	125	86
Foreign currency translation adjustments	99	74
Pension and other postretirement benefit adjustments, net of tax	24	20
Change in fair value of derivative instruments, net of tax		1
Dividends paid to noncontrolling interests on subsidiary common stock		(18)
Balance at the end of the period	1,736	2,673
Other Contributed Capital.
Increase (Decrease) in Share Owners' Equity
Balance at the beginning of the period	295	507
Net distribution to parent	(24)	(31)
Comprehensive income:
Balance at the end of the period	271	476
Retained Earnings
Increase (Decrease) in Share Owners' Equity
Balance at the beginning of the period	2,344	2,679	2,679
Comprehensive income:
Net earnings	125	86
Balance at the end of the period	2,465	2,761	2,679
Accumulated Other Comprehensive Loss
Increase (Decrease) in Share Owners' Equity
Balance at the beginning of the period	(1,280)	(856)
Comprehensive income:
Foreign currency translation adjustments	92	70
Pension and other postretirement benefit adjustments, net of tax	24	20
Change in fair value of derivative instruments, net of tax		1
Balance at the end of the period	(1,164)	(765)
Noncontrolling Interests
Increase (Decrease) in Share Owners' Equity
Balance at the beginning of the period	153	211
Comprehensive income:
Net earnings	4	4
Foreign currency translation adjustments	7	4
Dividends paid to noncontrolling interests on subsidiary common stock		(18)
Balance at the end of the period	$ 164	$ 201

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Supplemental Cash Flow Information (Tables)

3 Months Ended

Mar. 31, 2012

Supplemental Cash Flow Information

Supplemental Cash Flow Information

	Three months ended March 31,
	2012		2011
Interest paid in cash	$	69	$	67
Income taxes paid in cash:
Non-U.S.	31		21

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Basis of Presentation

3 Months Ended

Mar. 31, 2012

Basis of Presentation

Basis of Presentation

1. Basis of Presentation

The Company is a 100%-owned subsidiary of Owens-Illinois, Inc. (“OI Inc.”).  Although OI Inc. does not conduct any operations, it has substantial obligations related to outstanding indebtedness and asbestos-related payments. OI Inc. relies primarily on distributions from its direct and indirect subsidiaries to meet these obligations.

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CONDENSED CONSOLIDATED COMPREHENSIVE INCOME (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net earnings	$ 125	$ 86
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	99	74
Pension and other postretirement benefit adjustments	24	20
Change in fair value of derivative instruments		1
Other comprehensive income (loss)	123	95
Total comprehensive income	248	181
Comprehensive income attributable to noncontrolling interests	(11)	(8)
Comprehensive income attributable to the Company	$ 237	$ 173

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Derivative Instruments

3 Months Ended

Mar. 31, 2012

Derivative Instruments

Derivative Instruments

11. Derivative Instruments

The Company has certain derivative assets and liabilities which consist of natural gas forwards and foreign exchange option and forward contracts.  The Company uses an income approach to valuing these contracts.  Natural gas forward rates and foreign exchange rates are the significant inputs into the valuation models.  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.  The Company also evaluates counterparty risk in determining fair values.

Commodity Futures Contracts Designated as Cash Flow Hedges

In North America, the Company enters into commodity futures 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.  The Company continually evaluates the natural gas market and related price risk and periodically enters into commodity futures contracts in order to hedge a portion of its usage requirements.  The majority of the sales volume in North America is tied to customer contracts that contain provisions that pass the price of natural gas to the customer.  In certain of these contracts, the customer has the option of fixing the natural gas price component for a specified period of time.  At March 31, 2012  and 2011, the Company had entered into commodity futures contracts covering approximately 4,600,000 MM BTUs and 8,000,000 MM BTUs, respectively, primarily related to customer requests to lock the price of natural gas.

The Company accounts for the above futures contracts as cash flow hedges at March 31, 2012 and recognizes them on the balance sheet at fair value. The effective portion of changes in the fair value of a derivative that is designated as, and meets the required criteria for, a cash flow hedge is recorded in the Accumulated Other Comprehensive Income component of share owners’ equity (“OCI”) and reclassified into earnings in the same period or periods during which the underlying hedged item affects earnings. At March 31, 2012 and 2011, an unrecognized loss of $6 million and $2 million, respectively, related to the commodity futures contracts was included in Accumulated OCI, and will be reclassified into earnings over the next twelve to twenty-four months.  Any material portion of the change in the fair value of a derivative designated as a cash flow hedge that is deemed to be ineffective is recognized in current earnings.  The ineffectiveness related to these natural gas hedges for the three months ended March 31, 2012 and 2011 was not material.

The effect of the commodity futures contracts on the results of operations for the three months ended March 31, 2012 and 2011 is as follows:

						Amount of Loss
						Reclassified from
Amount of Loss						Accumulated OCI into
Recognized in OCI on						Income (reported in
Commodity Futures Contracts						manufacturing, shipping, and
(Effective Portion)						delivery) (Effective Portion)
2012			2011			2012			2011
$	(3	)	$	(1	)	$	(3	)	$	(2	)

Senior Notes Designated as Net Investment Hedge

During December 2004, a U.S. subsidiary of the Company issued senior notes totaling €225 million.  These notes were designated by the Company’s subsidiary as a hedge of a portion of its net investment in a non-U.S. subsidiary with a Euro functional currency.  Because the amount of the senior notes matched the hedged portion of the net investment, there was no hedge ineffectiveness. Accordingly, the Company recorded the impact of changes in the foreign currency exchange rate on the Euro-denominated notes in OCI.  During the second quarter of 2011, the senior notes designated as the net investment hedge were redeemed by a subsidiary of the Company.  The amount recorded in OCI related to this net investment hedge will be reclassified into earnings when the Company sells or liquidates its net investment in the non-U.S. subsidiary.

The effect of the net investment hedge on the results of operations for the three months ended March 31, 2011 is as follows:

Amount of Loss Recognized in OCI
$	(18	)

Forward Exchange Contracts not Designated as Hedging Instruments

The Company’s subsidiaries may enter into 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. Subsidiaries may also use forward exchange agreements to offset the foreign currency risk for receivables and payables, including intercompany receivables and payables, not denominated in, or indexed to, their functional currencies. The Company records these short-term forward exchange agreements on the balance sheet at fair value and changes in the fair value are recognized in current earnings.

At March 31, 2012 and 2011, various subsidiaries of the Company had outstanding forward exchange and option agreements denominated in various currencies covering the equivalent of approximately $640 million and $881 million, respectively, related primarily to intercompany transactions and loans.

The effect of the forward exchange contracts on the results of operations for the three months ended March 31, 2012 and 2011 is as follows:

	Amount of Gain (Loss)
Location of Gain (Loss)	Recognized in Income on
Recognized in Income on	Forward Exchange Contracts
Forward Exchange Contracts	2012		2011
Other expense	$	1	$	(7	)

Balance Sheet Classification

The Company records the fair values of derivative financial instruments on the balance sheet as follows: (a) receivables if the instrument has a positive fair value and maturity within one year, (b) deposits, receivables, and other assets if the instrument has a positive fair value and maturity after one year, (c) other accrued liabilities or other liabilities (current) if the instrument has a negative fair value and maturity within one year, and (d) other liabilities if the instrument has a negative fair value and maturity after one year.  The following table shows the amount and classification (as noted above) of the Company’s derivatives:

	Balance	Fair Value
	Sheet Location	March 31, 2012		December 31, 2011		March 31, 2011
Asset Derivatives:
Derivatives not designated as hedging instruments:
Foreign exchange contracts	a	$	8	$	13	$	6
Foreign exchange contracts	b					4
Foreign exchange contracts	c	1				1
Total derivatives not designated as hedging instruments		9		13		11
Total asset derivatives		$	9	$	13	$	11
Liability Derivatives:
Derivatives designated as hedging instruments:
Commodity futures contracts	c	$	6	$	6	$	2
Derivatives not designated as hedging instruments:
Foreign exchange contracts	c	4		4		15
Total liability derivatives		$	10	$	10	$	17

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Document and Entity Information	3 Months Ended
	Mar. 31, 2012
Document and Entity Information
Entity Registrant Name	OWENS-ILLINOIS GROUP INC
Entity Central Index Key	0000812233
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	100
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1

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Pensions Benefit Plans and Other Postretirement Benefits

3 Months Ended

Mar. 31, 2012

Pensions Benefit Plans and Other Postretirement Benefits

Pensions Benefit Plans and Other Postretirement Benefits

12.  Pensions Benefit Plans and Other Postretirement Benefits

The components of the net periodic pension cost for the three months ended March 31, 2012 and 2011 are as follows:

	U.S.						Non-U.S.
	2012			2011			2012			2011
Service cost	$	7		$	7		$	7		$	5
Interest cost	28			31			19			21
Expected asset return	(46		)	(47		)	(22		)	(21		)
Amortization:
Actuarial loss	24			21			5			6
Net periodic pension cost	$	13		$	12		$	9		$	11

The components of the net postretirement benefit cost for the three months ended March 31, 2012 and 2011 are as follows:

	U.S.						Non-U.S.
	2012			2011			2012		2011
Service cost	$	1		$	—		$	—	$	—
Interest cost	2			3			1		1
Amortization:
Prior service credit	(1		)	(1		)
Actuarial loss	1			1
Net amortization	—			—			—		—
Net postretirement benefit cost	$	3		$	3		$	1	$	1

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011
Current assets:
Cash and cash equivalents	$ 299	$ 400	$ 430
Receivables, less allowances for losses and discounts ($42 at March 31, 2012, $38 at December 31, 2011, and $43 at March 31, 2011)	1,199	1,158	1,223
Inventories	1,237	1,061	1,103
Prepaid expenses	130	124	78
Total current assets	2,865	2,743	2,834
Investments and other assets:
Equity investments	316	315	301
Repair parts inventories	153	155	154
Pension assets	121	116	59
Other assets	695	687	634
Goodwill	2,127	2,082	2,900
Total other assets	3,412	3,355	4,048
Property, plant and equipment, at cost	7,049	6,899	7,213
Less accumulated depreciation	4,165	4,022	4,070
Net property, plant and equipment	2,884	2,877	3,143
Total assets	9,161	8,975	10,025
Current liabilities:
Short-term loans and long-term debt due within one year	406	406	372
Accounts payable	943	1,038	889
Other liabilities	602	636	646
Total current liabilities	1,951	2,080	1,907
Long-term debt	3,724	3,627	3,991
Deferred taxes	214	212	215
Pension benefits	856	871	576
Nonpension postretirement benefits	270	269	260
Other liabilities	410	404	403
Share owner's equity of the Company:
Common stock, par value $.01 per share, 1000 shares authorized, 100 shares issued
Other contributed capital	271	295	476
Retained earnings	2,465	2,344	2,761
Accumulated other comprehensive loss	(1,164)	(1,280)	(765)
Total share owner's equity of the Company	1,572	1,359	2,472
Noncontrolling interests	164	153	201
Total share owners' equity	1,736	1,512	2,673
Total liabilities and share owners' equity	$ 9,161	$ 8,975	$ 10,025

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Inventories

3 Months Ended

Mar. 31, 2012

Inventories

Inventories

6.  Inventories

Major classes of inventory are as follows:

	March 31,		December 31,		March 31,
	2012		2011		2011
Finished goods	$	1,061	$	891	$	932
Raw materials	126		123		114
Operating supplies	50		47		57
	$	1,237	$	1,061	$	1,103

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Share Owners' Equity

3 Months Ended

Mar. 31, 2012

Share Owners' Equity

Share Owners' Equity

5.  Share Owners’ Equity

The activity in share owners’ equity for the three months ended March 31, 2012 and 2011 is as follows:

	Share Owner’s Equity of the Company
	Other Contributed Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Non- controlling Interests		Total Share Owners’ Equity
Balance on January 1, 2012	$	295		$	2,344	$	(1,280	)	$	153	$	1,512
Net distribution to parent	(24		)								(24		)
Comprehensive income:
Net earnings				121					4		125
Foreign currency translation adjustments						92			7		99
Pension and other postretirement benefit adjustments, net of tax						24					24
Balance on March 31, 2012	$	271		$	2,465	$	(1,164	)	$	164	$	1,736

	Share Owner’s Equity of the Company
	Other Contributed Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Share Owners’ Equity
Balance on January 1, 2011, adjusted	$	507		$	2,679	$	(856	)	$	211		$	2,541
Net distribution to parent	(31		)									(31		)
Comprehensive income:
Net earnings				82					4			86
Foreign currency translation adjustments						70			4			74
Pension and other postretirement benefit adjustments, net of tax						20						20
Change in fair value of derivative instruments, net of tax						1						1
Dividends paid to noncontrolling interests on subsidiary common stock									(18		)	(18		)
Balance on March 31, 2011, adjusted	$	476		$	2,761	$	(765	)	$	201		$	2,673

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Debt (Tables)

3 Months Ended

Mar. 31, 2012

Debt

Long-term Debt

	March 31,		December 31,		March 31,
	2012		2011		2011
Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans	$	55	$	—	$	—
Term Loans:
Term Loan A (170 million AUD)	177		173
Term Loan B	600		600
Term Loan C (116 million CAD)	117		114
Term Loan D (€141 million)	188		182
Fourth Amended and Restated Secured Credit Agreement:
Term Loans:
Term Loan A					93
Term Loan B					190
Term Loan C					114
Term Loan D					268
Senior Notes:
6.75%, due 2014					400
6.75%, due 2014 (€225 million)					318
3.00%, Exchangeable, due 2015	628		624		611
7.375%, due 2016	588		588		586
6.875%, due 2017 (€300 million)	401		388		425
6.75%, due 2020 (€500 million)	668		647		708
Payable to OI Inc.	250		250		250
Other	139		137		163
Total long-term debt	3,811		3,703		4,126
Less amounts due within one year	87		76		135
Long-term debt	$	3,724	$	3,627	$	3,991

Information related to accounts receivable securitization program

	March 31,			December 31,			March 31,
	2012			2011			2011
Balance (included in short-term loans)	$	276		$	281		$	222
Weighted average interest rate	1.42		%	2.41		%	2.85		%

Fair values at March 31, 2012 of the entity's significant fixed rate debt obligations

			Indicated
	Principal		Market	Fair
	Amount		Price	Value
Senior Notes:
3.00%, Exchangeable, due 2015	$	690	98.12	$	677
7.375%, due 2016	600		112.74	676
6.875%, due 2017 (€300 million)	401		103.11	413
6.75%, due 2020 (€500 million)	668		106.02	708

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Income Taxes

3 Months Ended

Mar. 31, 2012

Income Taxes

Income Taxes

13.  Income Taxes

The Company performs a quarterly review of the annual effective tax rate and makes changes if necessary based on new information or events. The estimated annual effective tax rate is forecasted quarterly using actual historical information and forward-looking estimates. The estimated annual effective tax rate may fluctuate due to changes in forecasted annual operating income; changes in the forecasted mix of earnings by country; changes to the valuation allowance for deferred tax assets (such changes would be recorded discretely in the quarter in which they occur); changes to actual or forecasted permanent book to tax differences (non-deductible expenses); impacts from future tax settlements with state, federal or foreign tax authorities (such changes would be recorded discretely in the quarter in which they occur); or impacts from tax law changes. To the extent such changes impact deferred tax assets/liabilities, these changes would generally be recorded discretely in the quarter in which they occur.  Additionally, the annual effective tax rate differs from the statutory U.S. Federal tax rate of 35% primarily because of valuation allowances in some jurisdictions and varying non-U.S. tax rates.

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Other Expense

3 Months Ended

Mar. 31, 2012

Other Expense

Other Expense

9. Other Expense

During the three months ended March 31, 2011, the Company recorded charges of $8 million for restructuring charges in the Company’s Asia Pacific segment.  See Note 10 for additional information.

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Contingencies

3 Months Ended

Mar. 31, 2012

Contingencies

Contingencies

7.  Contingencies

OI Inc. is a defendant in numerous lawsuits alleging bodily injury and death as a result of exposure to asbestos dust.  From 1948 to 1958, one of OI Inc.’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.  OI Inc. exited the pipe and block insulation business in April 1958.  The typical asbestos personal injury lawsuit alleges various theories of liability, including negligence, gross negligence and strict liability and seek compensatory and in some cases, punitive damages in various amounts (herein referred to as “asbestos claims”).

As of March 31, 2012, OI Inc. has determined that it is a named defendant in asbestos lawsuits and claims involving approximately 4,700 plaintiffs and claimants.  Based on an analysis of the lawsuits pending as of December 31, 2011, approximately 71% of plaintiffs either do not specify the monetary damages sought, or in the case of court filings, claim an amount sufficient to invoke the jurisdictional minimum of the trial court.  Approximately 27% of plaintiffs specifically plead damages of $15 million or less, and 2% of plaintiffs specifically plead damages greater than $15 million but less than $100 million.  Fewer than 1% of plaintiffs specifically plead damages $100 million or greater but less than $122 million.

As indicated by the foregoing summary, current pleading practice permits considerable variation in the assertion of monetary damages.  OI Inc.’s experience resolving hundreds of thousands of asbestos claims and lawsuits over an extended period demonstrates that the monetary relief that may be alleged in a complaint bears little relevance to a claim’s merits or disposition value.  Rather, the amount potentially recoverable is determined by such factors as the severity of the plaintiff’s asbestos disease, the product identification evidence against OI Inc. and other defendants, the defenses available to OI Inc. and other defendants, the specific jurisdiction in which the claim is made, and the plaintiff’s medical history and exposure to other disease-causing agents.

In addition to the pending claims set forth above, OI Inc. has claims-handling agreements in place with many plaintiffs’ counsel throughout the country.  These agreements require evaluation and negotiation regarding whether particular claimants qualify under the criteria established by such agreements. The criteria for such claims include verification of a compensable illness and a reasonable probability of exposure to a product manufactured by OI Inc.’s former business unit during its manufacturing period ending in 1958.  Some plaintiffs’ counsel have historically withheld claims under these agreements for later presentation while focusing their attention on active litigation in the tort system.  OI Inc. believes that as of March 31, 2012 there are approximately 350 claims against other defendants which are likely to be asserted some time in the future against OI Inc. These claims are not included in the pending “lawsuits and claims” totals set forth above.

OI Inc. is also a defendant in other asbestos-related lawsuits or claims involving maritime workers, medical monitoring claimants, co-defendants and property damage claimants.  Based upon its past experience, the OI Inc. believes that these categories of lawsuits and claims will not involve any material liability and they are not included in the above description of pending matters or in the following description of disposed matters.

Since receiving its first asbestos claim, OI Inc. as of March 31, 2012, has disposed of the asbestos claims of approximately 388,000 plaintiffs and claimants at an average indemnity payment per claim of approximately $8,200.  Certain of these dispositions have included deferred amounts payable over a number of years.  Deferred amounts payable totaled approximately $35 million at March 31, 2012 ($18 million at December 31, 2011) and are included in the foregoing average indemnity payment per claim.  OI Inc.’s asbestos indemnity payments have varied on a per claim basis, and are expected to continue to vary considerably over time.  As discussed above, a part of OI Inc.’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 OI Inc.’s administrative claims handling agreements has generally reduced the number of marginal or suspect claims that would otherwise have been received.  In addition, certain courts and legislatures have reduced or eliminated the number of marginal or suspect claims that OI Inc. otherwise would have received.  These developments generally have had the effect of increasing the OI Inc.’s per-claim average indemnity payment.

OI Inc. believes that its ultimate asbestos-related liability (i.e., its indemnity payments or other claim disposition costs plus related legal fees) cannot reasonably be estimated. Beginning with the initial liability of $975 million established in 1993, OI Inc. has accrued a total of approximately $4.0 billion through 2011, before insurance recoveries, for its asbestos-related liability.  OI Inc.’s ability to reasonably estimate its liability has 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, the magnitude and timing of co-defendant bankruptcy trust payments, the inherent uncertainty of future disease incidence and claiming patterns, the expanding list of non-traditional defendants that have been sued in this litigation, and the use of mass litigation screenings to generate large numbers of claims by parties who allege exposure to asbestos dust but have no present physical asbestos impairment.

OI Inc. has continued to monitor trends that may affect its ultimate liability and has continued to analyze the developments and variables affecting or likely to affect the resolution of pending and future asbestos claims against OI Inc. The material components of OI Inc.’s accrued liability are based on amounts determined by OI Inc. in connection with its annual comprehensive 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 OI Inc.; (ii) the liability for preexisting but unasserted asbestos claims for prior periods arising under its administrative claims-handling agreements with various plaintiffs’ counsel; (iii) the liability for asbestos claims not yet asserted against OI Inc., but which OI Inc. believes will be asserted in the next several years; and (iv) the legal defense costs likely to be incurred in connection with the foregoing types of claims.

The significant assumptions underlying the material components of OI Inc.’s accrual are:

a)  the extent to which settlements are limited to claimants who were exposed to OI Inc.’s asbestos-containing insulation prior to its exit from that business in 1958;

b)  the extent to which claims are resolved under OI Inc.’s administrative claims agreements or on terms comparable to those set forth in those agreements;

c)  the extent of decrease or increase in the incidence of serious disease cases and claiming patterns for such cases;

d)  the extent to which OI Inc. is able to defend itself successfully at trial;

e)  the extent to which courts and legislatures eliminate, reduce or permit the diversion of financial resources for unimpaired claimants;

f)  the number and timing of additional co-defendant bankruptcies;

g)  the extent to which bankruptcy trusts direct resources to resolve claims that are also presented to OI Inc. and the timing of the payments made by the bankruptcy trusts; and

h)  the extent to which co-defendants with substantial resources and assets continue to participate significantly in the resolution of future asbestos lawsuits and claims.

As noted above, OI Inc. conducts a comprehensive review of its asbestos-related liabilities and costs annually in connection with finalizing and reporting its annual results of operations, unless significant changes in trends or new developments warrant an earlier review.  If the results of an annual comprehensive review indicate that the existing amount of the accrued liability is insufficient to cover its estimated future asbestos-related costs, then OI Inc. will record an appropriate charge to increase the accrued liability.  OI Inc. believes that a reasonable estimation of the probable amount of the liability for claims not yet asserted against OI Inc. is not possible beyond a period of several years.  Therefore, while the results of future annual comprehensive reviews cannot be determined, OI Inc. expects the addition of one year to the estimation period will result in an annual charge.

On March 11, 2011, OI Inc. received a verdict in an asbestos case in which conspiracy claims had been asserted against OI Inc. Of the total nearly $90 million awarded by the jury against the four defendants in the case, almost $10 million in compensatory damages were assessed against all four defendants, and $40 million in punitive damages were assessed against OI Inc.

OI Inc. continues to deny the conspiracy allegations in this case and will vigorously challenge this verdict, if necessary, in the appellate courts, and, therefore, has made no change to its asbestos-related liability as of March 31, 2012.  While OI Inc. cannot predict the ultimate outcome of this lawsuit, OI Inc. and other conspiracy defendants have successfully challenged jury verdicts in similar cases.

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.

OI Inc.’s reported results of operations for 2011 were materially affected by the $165 million fourth quarter charge for asbestos-related costs and asbestos-related payments continue to be substantial.  Any future additional charge would likewise materially affect OI Inc.’s results of operations for the period in which it is recorded. Also, the continued use of significant amounts of cash for asbestos-related costs has affected and may continue to affect the Company’s and OI Inc.’s cost of borrowing and its ability to pursue global or domestic acquisitions. However, the Company believes that its operating cash flows and other sources of liquidity will be sufficient to pay its obligations for asbestos-related costs and to fund its working capital and capital expenditure requirements on a short-term and long-term basis.

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.

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Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information

Segment Information

8. Segment Information

The Company has four reportable segments based on its four geographic locations:  (1) Europe; (2) North America; (3) South America; (4) Asia Pacific.  These four 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 non-glass 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 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.

In prior periods, pension expense was recorded in each segment related to the pension plans in place in that segment, with the exception of the U.S. pension plans which were recorded in Retained corporate costs and other.  Effective January 1, 2012, the Company changed the allocation of pension expense to its reportable segments such that pension expense recorded in each segment relates only to the service cost component of the plans in that segment.  The other components of pension expense, including interest cost, expected asset returns and amortization of actuarial losses, are recorded in Retained corporate costs and other.  This change in allocation has been applied retrospectively to all periods.  Also effective January 1, 2012, the Company elected to change the method of valuing U.S. inventories (see Note 2 for additional information).

The impact of the changes in pension expense allocation and accounting method for inventory on Segment Operating Profit for the quarter ended March 31, 2011 is as follows:

	As Originally Reported			Change in Pension Allocation			Change in Accounting Method for Inventory		As Adjusted
Segment Operating Profit:
Europe	$	71		$	5		$	—	$	76
North America	59			(6		)	10		63
South America	45								45
Asia Pacific	24								24
Reportable segment totals	199			(1		)	10		208
Retained corporate costs and other	(13		)	1					(12		)

Financial information for the three-month periods ended March 31, 2012 and 2011 regarding the Company’s reportable segments is as follows:

	2012		2011
Net sales:
Europe	$	705	$	698
North America	482		463
South America	277		269
Asia Pacific	257		262
Reportable segment totals	1,721		1,692
Other	18		27
Net sales	$	1,739	$	1,719

	2012			2011
Segment Operating Profit:
Europe	$	108		$	76
North America	78			63
South America	38			45
Asia Pacific	36			24
Reportable segment totals	260			208
Items excluded from Segment Operating Profit:
Retained corporate costs and other	(29		)	(12		)
Restructuring and asset impairment				(8		)
Interest income	3			3
Interest expense	(64		)	(76		)
Earnings from continuing operations before income taxes	$	170		$	115

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

	March 31,		December 31,		March 31,
	2012		2011		2011
Total assets:
Europe	$	3,744	$	3,588	$	3,842
North America	2,056		2,020		2,040
South America	1,724		1,682		1,678
Asia Pacific	1,359		1,379		2,037
Reportable segment totals	8,883		8,669		9,597
Other	278		306		428
Consolidated totals	$	9,161	$	8,975	$	10,025

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Restructuring Accruals

3 Months Ended

Mar. 31, 2012

Restructuring Accruals

Restructuring Accruals

10.  Restructuring Accruals

Selected information related to the restructuring accruals for the first three months of 2012 and 2011 is as follows:

	Strategic Footprint Review			Asia Pacific Restructuring			Other Restructuring Actions			Total Restructuring
Balance at January 1, 2012	$	37		$	17		$	49		$	103
Net cash paid, principally severance and related benefits	(2		)	(11		)	(17		)	(30		)
Other, including foreign exchange translation							3			3
Balance at March 31, 2012	$	35		$	6		$	35		$	76
Balance at January 1, 2011	$	52		$	—		$	27		$	79
First quarter 2011 charges				8						8
Net cash paid, principally severance and related benefits	(4		)							(4		)
Other, including foreign exchange translation	2									2
Balance at March 31, 2011	$	50		$	8		$	27		$	85

The Company’s decisions to curtail selected production capacity have resulted in write downs of certain long-lived assets to the extent their carrying amounts exceeded fair value or fair value less cost to sell.  The Company classified the significant assumptions used to determine the fair value of the impaired assets, which was not material, as Level 3 in the fair value hierarchy as set forth in the general accounting principles for fair value measurements.

The Company also recorded liabilities for certain employee separation costs to be paid under contractual arrangements and other exit costs.

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Debt (Details) In Millions, except Per Share data, unless otherwise specified	Mar. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Mar. 31, 2011 USD ($)	Mar. 31, 2012 Secured Credit Agreement USD ($)	Mar. 31, 2012 Revolving Loans USD ($)	Mar. 31, 2012 Term Loan A (170 million AUD) USD ($)	Mar. 31, 2012 Term Loan A (170 million AUD) AUD	Dec. 31, 2011 Term Loan A (170 million AUD) USD ($)	Mar. 31, 2012 Term Loan B USD ($)	Dec. 31, 2011 Term Loan B USD ($)	Mar. 31, 2012 Term Loan C (116 million CAD) USD ($)	Mar. 31, 2012 Term Loan C (116 million CAD) CAD	Dec. 31, 2011 Term Loan C (116 million CAD) USD ($)	Mar. 31, 2012 Term Loan D (141 million EUR) USD ($)	Mar. 31, 2012 Term Loan D (141 million EUR) EUR (€)	Dec. 31, 2011 Term Loan D (141 million EUR) USD ($)	Mar. 31, 2011 Fourth Amended and Restated Secured Credit Agreement, Term Loan A USD ($)	Mar. 31, 2011 Fourth Amended and Restated Secured Credit Agreement, Term Loan B USD ($)	Mar. 31, 2011 Fourth Amended and Restated Secured Credit Agreement, Term Loan C USD ($)	Mar. 31, 2011 Fourth Amended and Restated Secured Credit Agreement, Term Loan D USD ($)	Mar. 31, 2012 Senior Notes 6.75%, due 2014	Mar. 31, 2011 Senior Notes 6.75%, due 2014 USD ($)	Mar. 31, 2012 Senior Notes 6.75%, due 2014 (225 million EUR) EUR (€)	Mar. 31, 2011 Senior Notes 6.75%, due 2014 (225 million EUR) USD ($)	Mar. 31, 2012 Senior Notes 3.00%, Exchangeable, due 2015 USD ($)	Dec. 31, 2011 Senior Notes 3.00%, Exchangeable, due 2015 USD ($)	Mar. 31, 2011 Senior Notes 3.00%, Exchangeable, due 2015 USD ($)	Mar. 31, 2012 Senior Notes 7.375%, due 2016 USD ($)	Dec. 31, 2011 Senior Notes 7.375%, due 2016 USD ($)	Mar. 31, 2011 Senior Notes 7.375%, due 2016 USD ($)	Mar. 31, 2012 Senior Notes 6.875%, due 2017 (300 million EUR) USD ($)	Mar. 31, 2012 Senior Notes 6.875%, due 2017 (300 million EUR) EUR (€)	Dec. 31, 2011 Senior Notes 6.875%, due 2017 (300 million EUR) USD ($)	Mar. 31, 2011 Senior Notes 6.875%, due 2017 (300 million EUR) USD ($)	Mar. 31, 2012 Senior Notes 6.75%, due 2020 (500 million EUR) USD ($)	Mar. 31, 2012 Senior Notes 6.75%, due 2020 (500 million EUR) EUR (€)	Dec. 31, 2011 Senior Notes 6.75%, due 2020 (500 million EUR) USD ($)	Mar. 31, 2011 Senior Notes 6.75%, due 2020 (500 million EUR) USD ($)	Mar. 31, 2012 Payable to OI Inc. USD ($)	Dec. 31, 2011 Payable to OI Inc. USD ($)	Mar. 31, 2011 Payable to OI Inc. USD ($)	Mar. 31, 2012 Other debt USD ($)	Dec. 31, 2011 Other debt USD ($)	Mar. 31, 2011 Other debt USD ($)	Mar. 31, 2012 Accounts Receivable Securitization Program USD ($)	Dec. 31, 2011 Accounts Receivable Securitization Program USD ($)	Mar. 31, 2011 Accounts Receivable Securitization Program USD ($)	Mar. 31, 2012 European Accounts Receivable Securitization Program EUR (€)
Debt Instrument
Total long-term debt	$ 3,811	$ 3,703	$ 4,126		$ 55	$ 177	170	$ 173	$ 600	$ 600	$ 117	116	$ 114	$ 188	€ 141	$ 182	$ 93	$ 190	$ 114	$ 268		$ 400	€ 225	$ 318	$ 628	$ 624	$ 611	$ 588	$ 588	$ 586	$ 401	€ 300	$ 388	$ 425	$ 668	€ 500	$ 647	$ 708	$ 250	$ 250	$ 250	$ 139	$ 137	$ 163
Less amounts due within one year	87	76	135
Long-term debt	3,724	3,627	3,991
Interest rate, stated percentage (as a percent)																					6.75%		6.75%		3.00%			7.375%			6.875%	6.875%			6.75%	6.75%
Maximum Borrowing Capacity					900																																											280
Unused Credit				749
Weighted Average Interest Rate (as a percent)				2.82%
Short-term loans and long-term debt due within one year	406	406	372																																										276	281	222
Weighted average interest rate, short-term debt (as a percent)																																													1.42%	2.41%	2.85%
Principal Amount																									690			600			401				668
Indicated Market Price (in dollars per share)																									$ 98.12			$ 112.74			$ 103.11				$ 106.02
Fair Value																									$ 677			$ 676			$ 413				$ 708

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Financial Information for Subsidiary Guarantors and Non-Guarantors (Details 4) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash Flows
Cash provided by (utilized in) continuing operating activities	$ (65)	$ (52)
Investing Activities:
Additions to property, plant and equipment	(73)	(73)
Acquisitions, net of cash acquired	(5)	6
Net cash proceeds from asset sales and other	11
Cash utilized in investing activities	(67)	(67)
Financing Activities:
Net distribution to OI Inc.	(30)	(31)
Additions to short term debt	(20)	(32)
Additions of long-term debt	119	5
Repayments of long-term debt	(62)	(10)
Net receipts for hedging activity	8	(12)
Dividends paid to noncontrolling interests		(18)
Cash provided by (utilized in) financing activities	15	(98)
Effect of exchange rate change on cash	16	7
Increase (decrease) in cash	(101)	(210)
Cash at beginning of period	400	640
Cash at end of period	299	430
Parent
Financing Activities:
Net distribution to OI Inc.	(30)	(31)
Change in intercompany transactions	30	31
Issuer
Cash Flows
Cash provided by (utilized in) continuing operating activities	45	91
Investing Activities:
Additions to property, plant and equipment	(29)	(17)
Cash utilized in investing activities	(29)	(17)
Financing Activities:
Change in intercompany transactions	(71)	(74)
Additions of long-term debt	(55)
Repayments of long-term debt	110
Cash provided by (utilized in) financing activities	(16)	(74)
Guarantor Subsidiaries
Cash Flows
Cash provided by (utilized in) continuing operating activities	42	55
Investing Activities:
Additions to property, plant and equipment	(1)	(1)
Cash utilized in investing activities	(1)	(1)
Financing Activities:
Change in intercompany transactions	(42)	(106)
Cash provided by (utilized in) financing activities	(42)	(106)
Increase (decrease) in cash	(1)	(52)
Cash at beginning of period	21	230
Cash at end of period	20	178
Non-Guarantor Subsidiaries
Cash Flows
Cash provided by (utilized in) continuing operating activities	(80)	(156)
Investing Activities:
Additions to property, plant and equipment	(43)	(55)
Acquisitions, net of cash acquired	(5)	6
Net cash proceeds from asset sales and other	11
Cash utilized in investing activities	(37)	(49)
Financing Activities:
Change in intercompany transactions	11	107
Additions to short term debt	(20)	(32)
Additions of long-term debt	(7)	5
Repayments of long-term debt	(9)	(10)
Net receipts for hedging activity	8	(12)
Dividends paid to noncontrolling interests		(18)
Cash provided by (utilized in) financing activities	1	40
Effect of exchange rate change on cash	16	7
Increase (decrease) in cash	(100)	(158)
Cash at beginning of period	379	410
Cash at end of period	279	252
Eliminations
Cash Flows
Cash provided by (utilized in) continuing operating activities	(72)	(42)
Financing Activities:
Change in intercompany transactions	72	42
Cash provided by (utilized in) financing activities	$ 72	$ 42

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Financial Information for Subsidiary Guarantors and Non-Guarantors

3 Months Ended

Mar. 31, 2012

Financial Information for Subsidiary Guarantors and Non-Guarantors

Financial Information for Subsidiary Guarantors and Non-Guarantors

15.  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 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 wholly-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.

Wholly-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.

	March 31, 2012
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	110	$	(12	)	$	1,101				$	1,199
Inventories			212					1,025					1,237
Other current assets			3		32			394					429
Total current assets	—		325		20			2,520		—			2,865
Investments in and advances to subsidiaries	1,822		2,987		(12		)			(4,797		)	—
Goodwill			555		8			1,564					2,127
Other non-current assets			162		88			1,035					1,285
Total other assets	1,822		3,704		84			2,599		(4,797		)	3,412
Property, plant and equipment, net			619		44			2,221					2,884
Total assets	$	1,822	$	4,648	$	148		$	7,340	$	(4,797	)	$	9,161
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	235	$	77		$	1,219	$	14		$	1,545
Short-term loans and long-term debt due within one year			23		1			382					406
Total current liabilities	—		258		78			1,601		14			1,951
Long-term debt	250		1,849		14			1,611					3,724
Other non-current liabilities			34		741			975					1,750
Investments by and advances from parent			2,507		(685		)	2,989		(4,811		)	—
Total share owner’s equity of the Company	1,572												1,572
Noncontrolling interests								164					164
Total liabilities and share owners’ equity	$	1,822	$	4,648	$	148		$	7,340	$	(4,797	)	$	9,161

	December 31, 2011
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	120	$	(14	)	$	1,052	$	—		$	1,158
Inventories			192					869					1,061
Other current assets			3		33			488					524
Total current assets	—		315		19			2,409		—			2,743
Investments in and advances to subsidiaries	1,609		2,788		18					(4,415		)	—
Goodwill			561		8			1,513					2,082
Other non-current assets			148		83			1,041		1			1,273
Total other assets	1,609		3,497		109			2,554		(4,414		)	3,355
Property, plant and equipment, net			626		45			2,206					2,877
Total assets	$	1,609	$	4,438	$	173		$	7,169	$	(4,414	)	$	8,975
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	358	$	19		$	1,310	$	(13	)	$	1,674
Short-term loans and long-term debt due within one year			15		1			390					406
Total current liabilities	—		373		20			1,700		(13		)	2,080
Long-term debt	250		1,797		15			1,565					3,627
Other non-current liabilities			45		753			958					1,756
Investments by and advances from parent			2,223		(615		)	2,793		(4,401		)	—
Total share owner’s equity of the Company	1,359									—			1,359
Noncontrolling interests								153					153
Total liabilities and share owners’ equity	$	1,609	$	4,438	$	173		$	7,169	$	(4,414	)	$	8,975

	March 31, 2011
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	129	$	(7	)	$	1,101	$	—		$	1,223
Inventories			169					935		(1		)	1,103
Other current assets			21		166			321					508
Total current assets	—		319		159			2,357		(1		)	2,834
Investments in and advances to subsidiaries	2,722		3,904		(224		)			(6,402		)	—
Goodwill			561		10			2,329					2,900
Other non-current assets			150		124			875		(1		)	1,148
Total other assets	2,722		4,615		(90		)	3,204		(6,403		)	4,048
Property, plant and equipment, net			653		42			2,448					3,143
Total assets	$	2,722	$	5,587	$	111		$	8,009	$	(6,404	)	$	10,025
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	303	$	41		$	1,195	$	(4	)	$	1,535
Short-term loans and long-term debt due within one year					1			371					372
Total current liabilities	—		303		42			1,566		(4		)	1,907
Long-term debt	250		2,105		15			1,621					3,991
Other non-current liabilities			98		413			945		(2		)	1,454
Investments by and advances from parent			3,081		(359		)	3,676		(6,398		)	—
Total share owner’s equity of the Company	2,472									—			2,472
Noncontrolling interests								201					201
Total liabilities and share owners’ equity	$	2,722	$	5,587	$	111		$	8,009	$	(6,404	)	$	10,025

	Three months ended March 31, 2012
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales				$	456					$	1,283					$	1,739
Manufacturing, shipping, and delivery				(330		)				(1,031		)				(1,361		)
Gross profit	—			126			—			252			—			378
Research, engineering, selling, administrative, and other				(47		)	(23		)	(96		)				(166		)
Net intercompany interest	5			(5		)										—
Interest expense	(5		)	(26		)				(33		)				(64		)
Interest income										3						3
Equity earnings from subsidiaries	121			97									(218		)	—
Other equity earnings				3						10						13
Other income				4						2						6
Earnings (loss) from continuing operations before income taxes	121			152			(23		)	138			(218		)	170
Provision for income taxes				(3		)	(1		)	(40		)				(44		)
Earnings (loss) from continuing
operations	121			149			(24		)	98			(218		)	126
Earnings from discontinued operations										(1		)				(1		)
Net earnings (loss)	121			149			(24		)	97			(218		)	125
Net earnings attributable to noncontrolling interests										(4		)				(4		)
Net earnings (loss) attributable to the Company	$	121		$	149		$	(24	)	$	93		$	(218	)	$	121

	Three months ended March 31, 2012
								Non-
					Guarantor			Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net earnings (loss)	$	121	$	149	$	(24	)	$	97		$	(218	)	$	125
Other comprehensive income	116							99			(92		)	123
Total comprehensive income (loss)	237		149		(24		)	196			(310		)	248
Comprehensive income attributable to noncontrolling interests								(11		)				(11		)
Comprehensive income (loss) attributable to the Company	$	237	$	149	$	(24	)	$	185		$	(310	)	$	237

	Three months ended March 31, 2011
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	449		$	—		$	1,296		$	(26	)	$	1,719
Manufacturing, shipping, and delivery				(364		)				(1,110		)	98			(1,376		)
Gross profit	—			85			—			186			72			343
Research, engineering, selling, administrative, and other				(40		)	(17		)	(120		)	1			(176		)
Net intercompany interest	5						(4		)	(1		)				—
Interest expense	(5		)	(36		)	(1		)	(34		)				(76		)
Interest income										3						3
Equity earnings from subsidiaries	82			22			(7		)				(97		)	—
Other equity earnings				2			7			4			1			14
Other income				76						2			(71		)	7
Earnings (loss) from continuing operations before income taxes	82			109			(22		)	40			(94		)	115
Provision for income taxes				(4		)	(4		)	(20		)				(28		)
Earnings (loss) from continuing operations	82			105			(26		)	20			(94		)	87
Loss from discontinued operations							(1		)							(1		)
Net earnings (loss)	82			105			(27		)	20			(94		)	86
Net earnings attributable to noncontrolling interests										(4		)				(4		)
Net earnings (loss) attributable to the Company	$	82		$	105		$	(27	)	$	16		$	(94	)	$	82

	Three months ended March 31, 2011
									Non-
						Guarantor			Guarantor
Comprehensive Income	Parent		Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net earnings (loss)	$	82	$	105		$	(27	)	$	20		$	(94	)	$	86
Other comprehensive income (loss)	91		(17		)				91			(70		)	95
Total comprehensive income (loss)	173		88			(27		)	111			(164		)	181
Comprehensive income attributable to noncontrolling interests									(8		)				(8		)
Comprehensive income (loss) attributable to the Company	$	173	$	88		$	(27	)	$	103		$	(164	)	$	173

	Three months ended March 31, 2012
										Non-
							Guarantor			Guarantor
Cash Flows	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash provided by (utilized in) operating activities	$	—		$	45		$	42		$	(80	)	$	(72	)	$	(65	)
Investing Activities:
Additions to property, plant and equipment				(29		)	(1		)	(43		)				(73		)
Acquisitions, net of cash acquired										(5		)				(5		)
Net cash proceeds from asset sales and other										11						11
Cash utilized in investing activities	—			(29		)	(1		)	(37		)	—			(67		)
Financing Activities:
Net distribution to OI Inc.	(30		)													(30		)
Change in intercompany transactions	30			(71		)	(42		)	11			72			—
Additions to long term debt				110						9						119
Repayments of long term debt				(55		)				(7		)				(62		)
Decrease in short term debt										(20		)				(20		)
Net receipts for hedging activity										8						8
Cash provided by (utilized in) financing activities	—			(16		)	(42		)	1			72			15
Effect of exchange rate change on cash										16						16
Decrease in cash	—			—			(1		)	(100		)	—			(101		)
Cash at beginning of period							21			379						400
Cash at end of period	$	—		$	—		$	20		$	279		$	—		$	299

	Three months ended March 31, 2011
										Non-
							Guarantor			Guarantor
Cash Flows	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash provided by (utilized in) operating activities	$	—		$	91		$	55		$	(156	)	$	(42	)	$	(52	)
Investing Activities:
Additions to property, plant, and equipment				(17		)	(1		)	(55		)				(73		)
Acquisitions, net of cash acquired										6						6
Cash utilized in investing activities	—			(17		)	(1		)	(49		)	—			(67		)
Financing Activities:
Net distribution to OI Inc.	(31		)													(31		)
Change in intercompany transactions	31			(74		)	(106		)	107			42			—
Additions to short term debt										(32		)				(32		)
Additions to long term debt										5						5
Repayments of long term debt										(10		)				(10		)
Net receipts for hedging activity										(12		)				(12		)
Dividends paid to noncontrolling interests										(18		)				(18		)
Cash provided by (utilized in) financing activities	—			(74		)	(106		)	40			42			(98		)
Effect of exchange rate change on cash										7						7
Decrease in cash	—			—			(52		)	(158		)	—			(210		)
Cash at beginning of period							230			410						640
Cash at end of period	$	—		$	—		$	178		$	252		$	—		$	430

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Inventories (Tables)

3 Months Ended

Mar. 31, 2012

Inventories

Major classes of inventory

	March 31,		December 31,		March 31,
	2012		2011		2011
Finished goods	$	1,061	$	891	$	932
Raw materials	126		123		114
Operating supplies	50		47		57
	$	1,237	$	1,061	$	1,103

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Financial Information for Subsidiary Guarantors and Non-Guarantors (Details 2) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011
Current assets:
Accounts receivable	$ 1,199	$ 1,158	$ 1,223
Inventories	1,237	1,061	1,103
Other current assets	429	524	508
Total current assets	2,865	2,743	2,834
Goodwill	2,127	2,082	2,900
Other non-current assets	1,285	1,273	1,148
Total other assets	3,412	3,355	4,048
Property, plant and equipment, net	2,884	2,877	3,143
Total assets	9,161	8,975	10,025
Current liabilities:
Accounts payable and accrued liabilities	1,545	1,674	1,535
Short-term loans and long-term debt due within one year	406	406	372
Total current liabilities	1,951	2,080	1,907
Long-term debt	3,724	3,627	3,991
Other non-current liabilities	1,750	1,756	1,454
Total share owner's equity of the Company	1,572	1,359	2,472
Noncontrolling interests	164	153	201
Total liabilities and share owners' equity	9,161	8,975	10,025
Parent
Current assets:
Investments in and advances to subsidiaries	1,822	1,609	2,722
Total other assets	1,822	1,609	2,722
Total assets	1,822	1,609	2,722
Current liabilities:
Long-term debt	250	250	250
Total share owner's equity of the Company	1,572	1,359	2,472
Total liabilities and share owners' equity	1,822	1,609	2,722
Issuer
Current assets:
Accounts receivable	110	120	129
Inventories	212	192	169
Other current assets	3	3	21
Total current assets	325	315	319
Investments in and advances to subsidiaries	2,987	2,788	3,904
Goodwill	555	561	561
Other non-current assets	162	148	150
Total other assets	3,704	3,497	4,615
Property, plant and equipment, net	619	626	653
Total assets	4,648	4,438	5,587
Current liabilities:
Accounts payable and accrued liabilities	235	358	303
Short-term loans and long-term debt due within one year	23	15
Total current liabilities	258	373	303
Long-term debt	1,849	1,797	2,105
Other non-current liabilities	34	45	98
Investments by and advances from parent	2,507	2,223	3,081
Total liabilities and share owners' equity	4,648	4,438	5,587
Guarantor Subsidiaries
Current assets:
Accounts receivable	(12)	(14)	(7)
Other current assets	32	33	166
Total current assets	20	19	159
Investments in and advances to subsidiaries	(12)	18	(224)
Goodwill	8	8	10
Other non-current assets	88	83	124
Total other assets	84	109	(90)
Property, plant and equipment, net	44	45	42
Total assets	148	173	111
Current liabilities:
Accounts payable and accrued liabilities	77	19	41
Short-term loans and long-term debt due within one year	1	1	1
Total current liabilities	78	20	42
Long-term debt	14	15	15
Other non-current liabilities	741	753	413
Investments by and advances from parent	(685)	(615)	(359)
Total liabilities and share owners' equity	148	173	111
Non-Guarantor Subsidiaries
Current assets:
Accounts receivable	1,101	1,052	1,101
Inventories	1,025	869	935
Other current assets	394	488	321
Total current assets	2,520	2,409	2,357
Goodwill	1,564	1,513	2,329
Other non-current assets	1,035	1,041	875
Total other assets	2,599	2,554	3,204
Property, plant and equipment, net	2,221	2,206	2,448
Total assets	7,340	7,169	8,009
Current liabilities:
Accounts payable and accrued liabilities	1,219	1,310	1,195
Short-term loans and long-term debt due within one year	382	390	371
Total current liabilities	1,601	1,700	1,566
Long-term debt	1,611	1,565	1,621
Other non-current liabilities	975	958	945
Investments by and advances from parent	2,989	2,793	3,676
Noncontrolling interests	164	153	201
Total liabilities and share owners' equity	7,340	7,169	8,009
Eliminations
Current assets:
Inventories			(1)
Total current assets			(1)
Investments in and advances to subsidiaries	(4,797)	(4,415)	(6,402)
Other non-current assets		1	(1)
Total other assets	(4,797)	(4,414)	(6,403)
Total assets	(4,797)	(4,414)	(6,404)
Current liabilities:
Accounts payable and accrued liabilities	14	(13)	(4)
Total current liabilities	14	(13)	(4)
Other non-current liabilities			(2)
Investments by and advances from parent	(4,811)	(4,401)	(6,398)
Total liabilities and share owners' equity	$ (4,797)	$ (4,414)	$ (6,404)

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Other Expense (Details) (Asia Pacific, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2011
Asia Pacific
Segment Reporting Information
Restructuring charges	$ 8

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011
CONDENSED CONSOLIDATED BALANCE SHEETS
Receivables, allowances for losses and discounts (in dollars)	$ 42	$ 38	$ 43
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	1,000	1,000	1,000
Common stock, shares issued	100	100	100

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Supplemental Cash Flow Information

3 Months Ended

Mar. 31, 2012

Supplemental Cash Flow Information

Supplemental Cash Flow Information

4.  Supplemental Cash Flow Information

	Three months ended March 31,
	2012		2011
Interest paid in cash	$	69	$	67
Income taxes paid in cash:
Non-U.S.	31		21

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2012

Segment Information

Impact of changes in accounting method on Segment Operating Profit

	As Originally Reported			Change in Pension Allocation			Change in Accounting Method for Inventory		As Adjusted
Segment Operating Profit:
Europe	$	71		$	5		$	—	$	76
North America	59			(6		)	10		63
South America	45								45
Asia Pacific	24								24
Reportable segment totals	199			(1		)	10		208
Retained corporate costs and other	(13		)	1					(12		)

Net sales for the Company's reportable segments

	2012		2011
Net sales:
Europe	$	705	$	698
North America	482		463
South America	277		269
Asia Pacific	257		262
Reportable segment totals	1,721		1,692
Other	18		27
Net sales	$	1,739	$	1,719

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

	2012			2011
Segment Operating Profit:
Europe	$	108		$	76
North America	78			63
South America	38			45
Asia Pacific	36			24
Reportable segment totals	260			208
Items excluded from Segment Operating Profit:
Retained corporate costs and other	(29		)	(12		)
Restructuring and asset impairment				(8		)
Interest income	3			3
Interest expense	(64		)	(76		)
Earnings from continuing operations before income taxes	$	170		$	115

Total assets for the Company's reportable segments

	March 31,		December 31,		March 31,
	2012		2011		2011
Total assets:
Europe	$	3,744	$	3,588	$	3,842
North America	2,056		2,020		2,040
South America	1,724		1,682		1,678
Asia Pacific	1,359		1,379		2,037
Reportable segment totals	8,883		8,669		9,597
Other	278		306		428
Consolidated totals	$	9,161	$	8,975	$	10,025

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Contingencies (Details) (OI Inc., USD $)	1 Months Ended	3 Months Ended	12 Months Ended
	Mar. 31, 2011 litigant	Mar. 31, 2012 litigant claim	Dec. 31, 2011	Dec. 31, 1993
Percentage of asbestos plaintiffs
Sale of goods containing asbestos from 1948 to 1958		$ 40,000,000
Approximate plaintiffs and claimants (in number of litigants)		4,700
Approximate number of claims likely to be asserted in the future (in number of claims)		350
Approximate number of claims disposed of to date (in number of litigants)		388,000
Average indemnity payment per claim		8,200
Deferred amounts payable		35,000,000	18,000,000
Asbestos-related liability, total amount accrued beginning in 1993 through 2011 before insurance recoveries			4,000,000,000	975,000,000
Total amount awarded by jury against defendants	90,000,000
Number of defendants (in number of defendants)	4
Compensatory damages assessed against defendants	10,000,000
Punitive damages assessed against the Company	40,000,000
Asbestos related charges			$ 165,000,000
Damages unspecified or sufficient to invoke jurisdictional minimum
Percentage of asbestos plaintiffs
Percentage of asbestos plaintiffs, approximate percentage (as a percent)			71.00%
Damages of $15 million or less
Percentage of asbestos plaintiffs
Percentage of asbestos plaintiffs, approximate percentage (as a percent)			27.00%
Damages greater than $15 million but less than $100 million
Percentage of asbestos plaintiffs
Percentage of asbestos plaintiffs, approximate percentage (as a percent)			2.00%
Damages of $100 million or greater but less than $122 million
Percentage of asbestos plaintiffs
Percentage of asbestos plaintiffs, fewer than percentage (as a percent)			1.00%

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Discontinued Operations

3 Months Ended

Mar. 31, 2012

Discontinued Operations

Discontinued Operations

14.  Discontinued Operations

On October 26, 2010, the Venezuelan government, through Presidential Decree No. 7.751, expropriated the assets of Owens-Illinois de Venezuela and Fabrica de Vidrios Los Andes, C.A., two of the Company’s subsidiaries in that country, which in effect constituted a taking of the going concerns of those companies.  Shortly after the issuance of the decree, the Venezuelan government installed temporary administrative boards to control the expropriated assets.

Since the issuance of the decree, the Company has cooperated with the Venezuelan government, as it is compelled to do under Venezuelan law, to provide for an orderly transition while ensuring the safety and well-being of the employees and the integrity of the production facilities.  The Company has been engaged in negotiations with the Venezuelan government in relation to certain aspects of the expropriation, including the compensation payable by the government as a result of its expropriation. On September 26, 2011, the Company, having been unable to reach an agreement with the Venezuelan government regarding fair compensation, commenced an arbitration against Venezuela through the World Bank’s International Centre for Settlement of Investment Disputes.  The Company is unable at this stage to predict the amount, or timing of receipt, of compensation it will ultimately receive.