Financial Information for Subsidiary Guarantors and Non-Guarantors

6 Months Ended

Jun. 30, 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 100% owned direct and indirect subsidiaries of the Parent and their guarantees are full, unconditional and joint and several.  The Parent is also a guarantor, and its guarantee is full, unconditional and joint and several.

Certain reclassifications have been made to conform all of the financial information to the financial presentation on a consolidated basis.  The principal eliminations relate to investments in subsidiaries and intercompany balances and transactions.

	June 30, 2012
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	108	$	(14	)	$	1,079	$	—		$	1,173
Inventories			215					1,008					1,223
Other current assets			12		86			353					451
Total current assets	—		335		72			2,440		—			2,847
Investments in and advances to subsidiaries	1,765		2,936		(136		)			(4,565		)	—
Goodwill			555		8			1,460					2,023
Other non-current assets			151		87			1,008		(3		)	1,243
Total other assets	1,765		3,642		(41		)	2,468		(4,568		)	3,266
Property, plant and equipment, net			603		43			2,075					2,721
Total assets	$	1,765	$	4,580	$	74		$	6,983	$	(4,568	)	$	8,834
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	243	$	67		$	1,187	$	—		$	1,497
Short-term loans and long-term debt due within one year			30		1			421					452
Total current liabilities	—		273		68			1,608		—			1,949
Long-term debt	250		1,792		14			1,511					3,567
Other non-current liabilities			31		711			921		(2		)	1,661
Investments by and advances from parent			2,484		(719		)	2,801		(4,566		)	—
Total share owner’s equity of the Company	1,515												1,515
Noncontrolling interests								142					142
Total liabilities and share owners’ equity	$	1,765	$	4,580	$	74		$	6,983	$	(4,568	)	$	8,834

	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

	June 30, 2011
								Non-
					Guarantor			Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	115	$	(8	)	$	1,215	$	—		$	1,322
Inventories			151					963					1,114
Other current assets			18		5			341					364
Total current assets	—		284		(3		)	2,519		—			2,800
Investments in and advances to subsidiaries	2,840		3,581		247					(6,668		)	—
Goodwill			561		8			2,388					2,957
Other non-current assets			150		69			1,041					1,260
Total other assets	2,840		4,292		324			3,429		(6,668		)	4,217
Property, plant and equipment, net			650		45			2,481					3,176
Total assets	$	2,840	$	5,226	$	366		$	8,429	$	(6,668	)	$	10,193
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	299	$	81		$	1,271	$	—		$	1,651
Short-term loans and long-term debt due within one year					1			370					371
Total current liabilities	—		299		82			1,641		—			2,022
Long-term debt	250		1,927		15			1,777					3,969
Other non-current liabilities			86		344			1,025					1,455
Investments by and advances from parent			2,914		(75		)	3,829		(6,668		)	—
Total share owner’s equity of the Company	2,590												2,590
Noncontrolling interests								157					157
Total liabilities and share owners’ equity	$	2,840	$	5,226	$	366		$	8,429	$	(6,668	)	$	10,193

	Three months endedJune 30, 2012
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	497		$	—		$	1,269		$	—		$	1,766
Manufacturing, shipping, and delivery				(429		)	(3		)	(958		)				(1,390		)
Gross profit	—			68			(3		)	311			—			376
Research, engineering, selling, administrative, and other				(37		)	(18		)	(109		)				(164		)
Net intercompany interest	5			(5		)										—
Interest expense	(5		)	(27		)	—			(30		)				(62		)
Interest income										2						2
Equity earnings from subsidiaries	133			74									(207		)	—
Other equity earnings				4						14						18
Other income				86						(77		)				9
Earnings (loss) from continuing operations before income taxes	133			163			(21		)	111			(207		)	179
Provision for income taxes				(4		)	—			(37		)				(41		)
Earnings (loss) from continuing operations	133			159			(21		)	74			(207		)	138
Earnings from discontinued operations										(1		)				(1		)
Net earnings (loss)	133			159			(21		)	73			(207		)	137
Net earnings attributable to noncontrolling interests										(4		)				(4		)
Net earnings (loss) attributable to the Company	$	133		$	159		$	(21	)	$	69		$	(207	)	$	133

	Three months ended June 30, 2012
									Non-
						Guarantor			Guarantor
Comprehensive Income	Parent			Issuer		Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net earnings (loss)	$	133		$	159	$	(21	)	$	73		$	(207	)	$	137
Other comprehensive income	(168		)	3					(199		)	193			(171		)
Total comprehensive income (loss)	(35		)	162		(21		)	(126		)	(14		)	(34		)
Comprehensive income attributable to noncontrolling interests									(1		)				(1		)
Comprehensive income (loss) attributable to the Company	$	(35	)	$	162	$	(21	)	$	(127	)	$	(14	)	$	(35	)

	Three months ended June 30, 2011
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	474		$	1		$	1,486		$	(2	)	$	1,959
Manufacturing, shipping, and delivery				(407		)	(2		)	(1,197		)	2			(1,604		)
Gross profit	—			67			(1		)	289			—			355
Research, engineering, selling, administrative, and other				(29		)	(13		)	(130		)				(172		)
Net intercompany interest	5			(5		)										—
Interest expense	(5		)	(55		)				(40		)				(100		)
Interest income										3						3
Equity earnings from subsidiaries	73			74									(147		)	—
Other equity earnings				2						17						19
Other income				49						(44		)				5
Earnings (loss) from continuing operations before income taxes	73			103			(14		)	95			(147		)	110
Provision for income taxes							12			(44		)				(32		)
Earnings (loss) from continuing operations	73			103			(2		)	51			(147		)	78
Earnings from discontinued operations										2						2
Net earnings (loss)	73			103			(2		)	53			(147		)	80
Net earnings attributable to noncontrolling interests										(7		)				(7		)
Net earnings (loss) attributable to the Company	$	73		$	103		$	(2	)	$	46		$	(147	)	$	73

	Three months ended June 30, 2011
									Non-
						Guarantor			Guarantor
Comprehensive Income	Parent		Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net earnings (loss)	$	73	$	103		$	(2	)	$	53		$	(147	)	$	80
Other comprehensive income	143		(7		)				133			(121		)	148
Total comprehensive income (loss)	216		96			(2		)	186			(268		)	228
Comprehensive income attributable to noncontrolling interests									(12		)				(12		)
Comprehensive income (loss) attributable to the Company	$	216	$	96		$	(2	)	$	174		$	(268	)	$	216

	Six months ended June 30, 2012
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	953		$	—		$	2,552		$	—		$	3,505
Manufacturing, shipping, and delivery				(759		)	(3		)	(1,989		)				(2,751		)
Gross profit	—			194			(3		)	563			—			754
Research, engineering, selling, administrative, and other				(84		)	(41		)	(205		)				(330		)
Net intercompany interest	10			(10		)										—
Interest expense	(10		)	(53		)				(63		)				(126		)
Interest income										5						5
Equity earnings from subsidiaries	254			171									(425		)	—
Other equity earnings				7						24						31
Other income				90						(75		)				15
Earnings (loss) from continuing operations before income taxes	254			315			(44		)	249			(425		)	349
Provision for income taxes				(7		)	(1		)	(77		)				(85		)
Earnings (loss) from continuing operations	254			308			(45		)	172			(425		)	264
Loss from discontinued operations										(2		)				(2		)
Net earnings (loss)	254			308			(45		)	170			(425		)	262
Net earnings attributable to noncontrolling interest										(8		)				(8		)
Net earnings (loss) attributable to the Company	$	254		$	308		$	(45	)	$	162		$	(425	)	$	254

	Six months ended June 30, 2012
									Non-
						Guarantor			Guarantor
Comprehensive Income	Parent			Issuer		Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net earnings (loss)	$	254		$	308	$	(45	)	$	170		$	(425	)	$	262
Other comprehensive income	(52		)	3					(100		)	101			(48		)
Total comprehensive income (loss)	202			311		(45		)	70			(324		)	214
Comprehensive income attributable to noncontrolling interests									(12		)				(12		)
Comprehensive income (loss) attributable to the Company	$	202		$	311	$	(45	)	$	58		$	(324	)	$	202

	Six months ended June 30, 2011
										Non-
							Guarantor			Guarantor
Results of Operations	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	923		$	2		$	2,755		$	(2	)	$	3,678
Manufacturing, shipping, and delivery				(771		)	(4		)	(2,207		)	2			(2,980		)
Gross profit	—			152			(2		)	548			—			698
Research, engineering, selling, administrative, and other				(72		)	(26		)	(250		)				(348		)
Net intercompany interest	10			(10		)										—
Interest expense	(10		)	(92		)				(74		)				(176		)
Interest income										6						6
Equity earnings from subsidiaries	155			100									(255		)	—
Other equity earnings				4						29						33
Other income				125						(113		)				12
Earnings (loss) from continuing operations before income taxes	155			207			(28		)	146			(255		)	225
Provision for income taxes				(4		)	8			(64		)				(60		)
Earnings (loss) from continuing operations	155			203			(20		)	82			(255		)	165
Earnings from discontinued operations										1						1
Net earnings (loss)	155			203			(20		)	83			(255		)	166
Net earnings attributable to noncontrolling interests										(11		)				(11		)
Net earnings (loss) attributable to the Company	$	155		$	203		$	(20	)	$	72		$	(255	)	$	155

	Six months ended June 30, 2011
									Non-
						Guarantor			Guarantor
Comprehensive Income	Parent		Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net earnings (loss)	$	155	$	203		$	(20	)	$	83		$	(255	)	$	166
Other comprehensive income	234		(24		)				224			(191		)	243
Total comprehensive income (loss)	389		179			(20		)	307			(446		)	409
Comprehensive income attributable to noncontrolling interests									(20		)				(20		)
Comprehensive income (loss) attributable to the Company	$	389	$	179		$	(20	)	$	287		$	(446	)	$	389

	Six months ended Juner 30, 2012
										Non-
							Guarantor			Guarantor
Cash Flows	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash provided by (utilized in) operating activities	$	—		$	82		$	23		$	(52	)	$	9		$	62
Investing Activities:
Additions to property, plant, and equipment -				(35		)	(1		)	(88		)				(124		)
Acquisitions, net of cash acquired										(5		)				(5		)
Net cash proceeds from asset sales and other										20						20
Proceeds from collection of minority partner loan										9						9
Cash utilized in investing activities	—			(35		)	(1		)	(64		)	—			(100		)
Financing Activities:
Net distribution to OI Inc.	(57		)													(57		)
Change in intercompany transactions	57			(47		)	42			(43		)	(9		)	—
Additions to short term debt										31						31
Borrowings of long term debt				110						9						119
Payments of long term debt				(110		)				(18		)				(128		)
Net receipts for hedging activity										27						27
Dividends paid to noncontrolling interests										(23		)				(23		)
Cash provided by (utilized in) financing activities	—			(47		)	42			(17		)	(9		)	(31		)
Effect of exchange rate change on cash										5						5
Increase (decrease) in cash	—			—			64			(128		)	—			(64		)
Cash at beginning of period							21			379						400
Cash at end of period	$	—		$	—		$	85		$	251		$	—		$	336

	Six months ended June 30, 2011
										Non-
							Guarantor			Guarantor
Cash Flows	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash provided by (utilized in) operating activities	$	—		$	190		$	34		$	(56	)	$	(6	)	$	162
Investing Activities:
Additions to property, plant, and equipment -				(34		)	(2		)	(117		)				(153		)
Acquisitions, net of cash acquired				(8		)				(139		)				(147		)
Cash utilized in investing activities	—			(42		)	(2		)	(256		)	—			(300		)
Financing Activities:
Net distribution to OI Inc.	(66		)													(66		)
Change in intercompany transactions	66			65			(211		)	74			6			—
Additions to short term debt										61						61
Borrowings of long term debt				933						518						1,451
Payments of long term debt				(1,137		)	(1		)	(506		)				(1,644		)
Net payments for hedging activity										(9		)				(9		)
Dividends paid to noncontrolling interests										(31		)				(31		)
Payment of finance fees				(9		)				(9		)				(18		)
Cash provided by (utilized in) financing activities	—			(148		)	(212		)	98			6			(256		)
Effect of exchange rate change on cash										14						14
Decrease in cash	—			—			(180		)	(200		)	—			(380		)
Cash at beginning of period							230			410						640
Cash at end of period	$	—		$	—		$	50		$	210		$	—		$	260