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