Financial Information for Subsidiary Guarantors and Non-Guarantors

9 Months Ended

Sep. 30, 2011

Financial Information for Subsidiary Guarantors and Non-Guarantors

Financial Information for Subsidiary Guarantors and Non-Guarantors

16.  Financial Information for Subsidiary Guarantors and Non-Guarantors

The following presents condensed consolidating financial information for the Company, segregating:  (1) Owens-Illinois, Inc., the issuer of senior debentures (the “Parent”); (2) the two subsidiaries which have guaranteed the senior debentures on a subordinated basis (the “Guarantor Subsidiaries”); and (3) all other subsidiaries (the “Non-Guarantor Subsidiaries”).  The Guarantor Subsidiaries are 100% owned direct and indirect subsidiaries of the Company and their guarantees are full, unconditional and joint and several.  They have no operations and function only as intermediate holding companies.

100% owned subsidiaries 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.

	September 30, 2011
					Non-
			Guarantor		Guarantor
Balance Sheet	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	—	$	1,218	$	—		$	1,218
Inventories					1,052					1,052
Other current assets					369					369
Total current assets	—		—		2,639		—			2,639
Investments in and advances to subsidiaries	2,564		2,314				(4,878		)	—
Goodwill					2,762					2,762
Other non-current assets					1,220					1,220
Total other assets	2,564		2,314		3,982		(4,878		)	3,982
Property, plant and equipment, net					2,931					2,931
Total assets	$	2,564	$	2,314	$	9,552	$	(4,878	)	$	9,552
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	—	$	1,598	$	—		$	1,598
Current portion of asbestos liability	170									170
Short-term loans and long-term debt due within one year					345					345
Total current liabilities	170		—		1,943		—			2,113
Long-term debt	250				3,743		(250		)	3,743
Asbestos-related liabilities	204									204
Other non-current liabilities					1,398					1,398
Total share owners’ equity of the Company	1,940		2,314		2,314		(4,628		)	1,940
Noncontrolling interests					154					154
Total liabilities and share owners’ equity	$	2,564	$	2,314	$	9,552	$	(4,878	)	$	9,552

	December 31, 2010
					Non-
			Guarantor		Guarantor
Balance Sheet	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	—	$	1,075	$	—		$	1,075
Inventories					946					946
Other current assets					717					717
Total current assets	—		—		2,738		—			2,738
Investments in and advances to subsidiaries	2,541		2,291				(4,832		)	—
Goodwill					2,821					2,821
Other non-current assets					1,088					1,088
Total other assets	2,541		2,291		3,909		(4,832		)	3,909
Property, plant and equipment, net					3,107					3,107
Total assets	$	2,541	$	2,291	$	9,754	$	(4,832	)	$	9,754
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	—	$	1,555	$	—		$	1,555
Current portion of asbestos liability	170									170
Short-term loans and long-term debt due within one year					354					354
Total current liabilities	170		—		1,909		—			2,079
Long-term debt	250				3,924		(250		)	3,924
Asbestos-related liabilities	306									306
Other non-current liabilities					1,419					1,419
Total share owners’ equity of the Company	1,815		2,291		2,291		(4,582		)	1,815
Noncontrolling interests					211					211
Total liabilities and share owners’ equity	$	2,541	$	2,291	$	9,754	$	(4,832	)	$	9,754

	September 30, 2010
					Non-
			Guarantor		Guarantor
Balance Sheet	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
Current assets:
Accounts receivable	$	—	$	—	$	1,165	$	—		$	1,165
Inventories					986					986
Other current assets					722					722
Assets of discontinued operations					93					93
Total current assets	—		—		2,966		—			2,966
Investments in and advances to subsidiaries	2,559		2,309				(4,868		)	—
Goodwill					2,744					2,744
Other non-current assets					1,096					1,096
Assets of discontinued operations					35					35
Total other assets	2,559		2,309		3,875		(4,868		)	3,875
Property, plant and equipment, net					3,042					3,042
Total assets	$	2,559	$	2,309	$	9,883	$	(4,868	)	$	9,883
Current liabilities :
Accounts payable and accrued liabilities	$	—	$	—	$	1,617	$	—		$	1,617
Current portion of asbestos liability	175									175
Short-term loans and long-term debt due within one year					339					339
Liabilities of discontinued operations					25					25
Total current liabilities	175		—		1,981		—			2,156
Liabilities of discontinued operations					15					15
Long-term debt	250				4,006		(250		)	4,006
Asbestos-related liabilities	196									196
Other non-current liabilities					1,354					1,354
Total share owners’ equity of the Company	1,938		2,309		2,309		(4,618		)	1,938
Noncontrolling interests					218					218
Total liabilities and share owners’ equity	$	2,559	$	2,309	$	9,883	$	(4,868	)	$	9,883

	Three months ended September 30, 2011
						Non-
				Guarantor		Guarantor
Results of Operations	Parent			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—	$	1,862		$	—		$	1,862
Manufacturing, shipping, and delivery						(1,475		)				(1,475		)
Gross profit	—			—		387			—			387
Research, engineering, selling, administrative, and other						(196		)				(196		)
Net intercompany interest	5					(5		)				—
Interest expense	(5		)			(65		)				(70		)
Interest income						2						2
Equity earnings from subsidiaries	116			116					(232		)	—
Other equity earnings						19						19
Other income						6						6
Earnings before income taxes	116			116		148			(232		)	148
Provision for income taxes						(25		)				(25		)
Earnings from continuing operations	116			116		123			(232		)	123
Loss from discontinued operations						(3		)				(3		)
Net earnings	116			116		120			(232		)	120
Net earnings attributable to noncontrolling interest						(4		)				(4		)
Net earnings attributable to the Company	$	116		$	116	$	116		$	(232	)	$	116

	Three months ended September 30, 2010
						Non-
				Guarantor		Guarantor
Results of Operations	Parent			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—	$	1,689		$	—		$	1,689
Manufacturing, shipping, and delivery						(1,329		)				(1,329		)
Gross profit	—			—		360			—			360
Research, engineering, selling, administrative, and other						(144		)				(144		)
Net intercompany interest	5					(5		)				—
Interest expense	(5		)			(56		)				(61		)
Interest income						2						2
Equity earnings from subsidiaries	139			139					(278		)	—
Other equity earnings						20						20
Other income						11						11
Earnings from continuing operations before income taxes	139			139		188			(278		)	188
Provision for income taxes						(53		)				(53		)
Earnings from continuing operations	139			139		135			(278		)	135
Earnings from discontinued operations						16						16
Net earnings	139			139		151			(278		)	151
Net earnings attributable to noncontrolling interest						(12		)				(12		)
Net earnings attributable to the Company	$	139		$	139	$	139		$	(278	)	$	139

	Nine months ended September 30, 2011
						Non-
				Guarantor		Guarantor
Results of Operations	Parent			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—	$	5,540		$	—		$	5,540
Manufacturing, shipping, and delivery						(4,465		)				(4,465		)
Gross profit	—			—		1,075			—			1,075
Research, engineering, selling, administrative, and other						(544		)				(544		)
Net intercompany interest	15					(15		)	—			—
Interest expense	(15		)			(231		)				(246		)
Interest income						8			—			8
Equity earnings from subsidiaries	261			261					(522		)	—
Other equity earnings						52						52
Other income						18						18
Earnings from continuing operations before income taxes	261			261		363			(522		)	363
Provision for income taxes						(85		)				(85		)
Earnings from continuing operations	261			261		278			(522		)	278
Loss from discontinued operations						(2		)				(2		)
Net earnings	261			261		276			(522		)	276
Net earnings attributable to noncontrolling interest						(15		)				(15		)
Net earnings attributable to the Company	$	261		$	261	$	261		$	(522	)	$	261

	Nine months ended September 30, 2010
						Non-
				Guarantor		Guarantor
Results of Operations	Parent			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—	$	4,905		$	—		$	4,905
Manufacturing, shipping, and delivery						(3,863		)				(3,863		)
Gross profit	—			—		1,042			—			1,042
Research, engineering, selling, administrative, and other						(438		)				(438		)
Net intercompany interest	16					(16		)				—
Interest expense	(16		)			(161		)				(177		)
Interest income						10						10
Equity earnings from subsidiaries	365			365					(730		)	—
Other equity earnings						46						46
Other income						22						22
Earnings from continuing operations before income taxes	365			365		505			(730		)	505
Provision for income taxes						(136		)				(136		)
Earnings from continuing operations	365			365		369			(730		)	369
Earnings from discontinued operations						31						31
Net earnings	365			365		400			(730		)	400
Net earnings attributable to noncontrolling interest						(35		)				(35		)
Net earnings attributable to the Company	$	365		$	365	$	365		$	(730	)	$	365

	Nine months ended September 30, 2011
						Non-
				Guarantor		Guarantor
Cash Flows	Parent			Subsidiaries		Subsidiaries			Eliminations		Consolidated
Cash provided by (used in) operating activities	$	(102	)	$	—	$	382		$	—	$	280
Cash used in investing activities						(351		)			(351		)
Cash provided by (used in) financing activities	102					(418		)			(316		)
Effect of exchange rate change on cash						3					3
Net change in cash	—			—		(384		)	—		(384		)
Cash at beginning of period						640					640
Cash at end of period	$	—		$	—	$	256		$	—	$	256

	Nine months ended September 30, 2010
						Non-
				Guarantor		Guarantor
Cash Flows	Parent			Subsidiaries		Subsidiaries			Eliminations		Consolidated
Cash provided by (used in) operating activities	$	(114	)	$	—	$	519		$	—	$	405
Cash used in investing activities						(1,145		)			(1,145		)
Cash provided by financing activities	114					514					628
Effect of exchange rate change on cash											—
Net change in cash	—			—		(112		)	—		(112		)
Cash at beginning of period						812					812
Cash at end of period	$	—		$	—	$	700		$	—	$	700