EX-99.2 3 a08-13075_1ex99d2.htm EX-99.2

 

First Quarter 2008 Highlights

 

•

Highest 1Q EPS since the 1991 IPO

 

 

•

1Q cash from operating activities positive for 1st time since 1Q 2002

 

 

•

Successful conversion of 9M preferred shares to common shares

 

 

•

Credit rating agency upgrades

 

 

 

•

S&P to BB from BB-

 

 

 

 

•

Moody’s to Ba3 from B2

 

 

•

Announced expansion of Lurin, Peru plant

 

 

•

Announced 4th regional engineering center to be located in Peru

 

 

1


 

Reconciliation of GAAP to non-GAAP Items

1tst Quarter 2008 and 1st Quarter 2007

 

 

 

1Q 08

 

1Q 07

 

$ Millions, except per share amounts

 

Earnings

 

EPS

 

Earnings

 

EPS

 

Net earnings

 

$

178.1

 

$

1.04

 

$

53.2

 

$

0.30

 

Add loss from discontinued operations

 

 

 

 

 

2.1

 

0.01

 

Less gain on sale of discontinued operations

 

(4.1

)

(0.02

)

 

 

 

 

Earnings from continuing operations

 

174.0

 

1.02

 

55.3

 

0.31

 

 

 

 

 

 

 

 

 

 

 

Excluding Note 1 item (a):

 

 

 

 

 

 

 

 

 

Charge for restructuring and asset impairment

 

9.7

 

0.06

 

 

 

 

 

Earnings from continuing operations exclusive of Note 1 items

 

$

183.7

 

$

1.08

 

$

55.3

 

$

0.31

 

Diluted shares outstanding (millions)

 

170.5

 

 

 

157.0

 

 

 

 

(a) Management considers Note 1 items not representative of ongoing operations

 

2


 

EPS Reconciliation

1st Quarter 2007 vs. 1st Quarter 2008

 

2007 EPS from continuing operations excluding items that management considers not representative of ongoing operations

 

$

0.31

 

 

 

 

 

Sales volume

 

(0.05

)

Price and product mix

 

0.48

 

Manufacturing and delivery

 

(0.23

)

Operating expenses

 

0.00

 

Currency translation

 

0.14

 

Retained corporate costs & other

 

0.12

 

Net interest expense

 

0.09

 

Minority share owners’ interest

 

(0.03

)

Effective tax rate

 

0.19

 

Share count dilution

 

(0.06

)

All other

 

0.12

 

Total reconciling items

 

0.77

 

 

 

 

 

2008 EPS from continuing operations excluding items that management considers not representative of ongoing operations

 

$

1.08

 

 

3


 

Net Sales Reconciliation

 

$ Millions

 

1Q 08

 

1Q 07

 

Prior segment sales

 

$

1,668

 

$

1,460

 

 

 

 

 

 

 

Sales volume

 

(49

)

67

 

Price and product mix

 

119

 

62

 

Currency translation

 

187

 

79

 

Total reconciling items

 

257

 

208

 

 

 

 

 

 

 

Current segment sales

 

1,925

 

1,668

 

Other sales

 

36

 

16

 

 

 

$

1,961

 

$

1,684

 

 

4


 

Segment Operating Profit Reconciliation

 

$ Millions

 

1Q 08

 

1Q 07

 

 

 

 

 

 

 

Prior Segment Operating Profit

 

$

210

 

$

164

 

 

 

 

 

 

 

Sales volume

 

(12

)

20

 

Price and product mix

 

119

 

62

 

Manufacturing and delivery

 

(55

)

(31

)

Operating expenses

 

(0

)

(5

)

Currency translation

 

35

 

8

 

All other

 

25

 

(8

)

Total reconciling items

 

112

 

46

 

 

 

 

 

 

 

Current Segment Operating Profit

 

322

 

210

 

Retained corporate costs & other

 

2

 

(27

)

 

 

$

324

 

$

183

 

 

5


 

Free Cash Flow

 

$ Millions

 

1Q 08

 

1Q 07

 

 

 

 

 

 

 

Net earnings

 

$

178.1

 

$

53.2

 

Loss from discontinued operations

 

 

 

2.1

 

Gain on sale of discontinued operations

 

(4.1

)

 

 

Earnings from continuing operating activities

 

174.0

 

55.3

 

 

 

 

 

 

 

Non-cash charges:

 

 

 

 

 

Depreciation and amortization

 

123.1

 

107.4

 

Restructuring and asset impairment

 

12.9

 

—

 

All other non-cash charges

 

(11.1

)

24.2

 

Asbestos-related payments

 

(40.2

)

(41.0

)

Change in components of working capital

 

(216.8

)

(172.5

)

Change in non-current assets and liabilities

 

(21.2

)

(13.6

)

Cash provided by (utilized in) continuing operating activities

 

20.7

 

(40.2

)

Additions to property, plant and equipment for continuing operations

 

(45.4

)

(32.6

)

Free Cash Flow (a)

 

$

(24.7

)

$

(72.8

)

 

(a) Management defines Free Cash Flow as cash provided by continuing operating activities less capital spending for continuing operating activities

 

6


 

Reportable Segment Results

 

 

 

2008

 

2007 (a)

 

$ Millions

 

1Q

 

1Q

 

2Q

 

3Q

 

4Q

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

$

888.9

 

$

728.4

 

$

901.6

 

$

825.2

 

$

843.5

 

$

3,298.7

 

North America

 

530.9

 

523.4

 

613.9

 

596.2

 

537.8

 

2,271.3

 

South America

 

254.2

 

203.2

 

231.1

 

253.0

 

283.4

 

970.7

 

Asia Pacific

 

250.0

 

212.5

 

210.5

 

239.4

 

271.9

 

934.3

 

Reportable segment totals

 

1,924.0

 

1,667.5

 

1,957.1

 

1,913.8

 

1,936.6

 

7,475.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other sales

 

36.5

 

16.5

 

39.9

 

14.6

 

20.7

 

91.7

 

Total

 

$

1,960.5

 

$

1,684.0

 

$

1,997.0

 

$

1,928.4

 

$

1,957.3

 

$

7,566.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

$

147.6

 

$

74.8

 

$

122.5

 

$

106.5

 

$

129.2

 

$

433.0

 

North America

 

55.5

 

62.5

 

85.0

 

84.1

 

33.5

 

265.1

 

South America

 

73.6

 

48.0

 

58.4

 

66.1

 

82.4

 

254.9

 

Asia Pacific

 

45.4

 

24.7

 

32.2

 

42.6

 

54.5

 

154.0

 

Reportable segment totals

 

322.1

 

210.0

 

298.1

 

299.3

 

299.6

 

1,107.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained corporate costs and other

 

1.5

 

(27.0

)

(14.5

)

(21.4

)

(15.9

)

(78.8

)

Total

 

$

323.6

 

$

183.0

 

$

283.6

 

$

277.9

 

$

283.7

 

$

1,028.2

 

 

(a) Amounts by segment from Note 21 to the 2007 financial statements (pgs. 92-93 of Form 10K) are presented in this table on a quarterly basis for historical reference.

 

7


 

Two Major Currencies v USD

 

 

FX Translation Impact on Segment Profit

compared to prior year

 

$ Millions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2007

 

2008

 

1Q

 

2Q

 

3Q

 

4Q

 

Year

 

1Q

 

$

8.0

 

$

10.9

 

$

8.3

 

$

24.8

 

$

52.0

 

$

35.0

 

 

source:  O-I Website Earnings Charts - 2007

 

8