17. 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.

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, 2017
			Guarantor		Non-Guarantor
Balance Sheet	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	—	$	335	$	—	$	335
Trade receivables, net						956				956
Inventories						1,049				1,049
Prepaid expenses and other current assets						214				214

Total current assets		—		—		2,554		—		2,554

Investments in and advances to subsidiaries		1,358		1,336		—		(2,694)		—
Property, plant and equipment, net						2,996				2,996
Goodwill						2,588				2,588
Intangibles, net						486				486
Other assets						1,156				1,156

Total assets	$	1,358	$	1,336	$	9,780	$	(2,694)	$	9,780

Current liabilities :
Short-term loans and long-term debt due within one year	$	22	$	—	$	271	$	(22)	$	271
Current portion of asbestos liability		115				—				115
Accounts payable						1,065				1,065
Other liabilities						564		—		564

Total current liabilities		137		—		1,900		(22)		2,015

Long-term debt						5,471		—		5,471
Asbestos-related liabilities		551								551
Other long-term liabilities						964				964
Share owners’ equity		670		1,336		1,336		(2,672)		670
Noncontrolling interests						109				109

Total liabilities and share owners’ equity	$	1,358	$	1,336	$	9,780	$	(2,694)	$	9,780


	December 31, 2016
					Non-
			Guarantor		Guarantor
Balance Sheet	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	—	$	492	$	—	$	492
Trade receivables, net						580				580
Inventories						983				983
Prepaid expenses and other current assets						199				199

Total current assets		—		—		2,254		—		2,254

Investments in and advances to subsidiaries		1,198		946				(2,144)		—
Property, plant and equipment, net						2,880				2,880
Goodwill						2,462				2,462
Intangibles, net						464				464
Other assets						1,075				1,075

Total assets	$	1,198	$	946	$	9,135	$	(2,144)	$	9,135

Current liabilities :
Short-term loans and long-term debt due within one year	$	—	$	—	$	195	$	—	$	195
Current portion of asbestos liability		115								115
Accounts payable						1,135				1,135
Other liabilities		2				615		(2)		615

Total current liabilities		117		—		1,945		(2)		2,060

Long-term debt		250				5,133		(250)		5,133
Asbestos-related liabilities		577								577
Other long-term liabilities						1,002				1,002
Share owners’ equity		254		946		946		(1,892)		254
Noncontrolling interests						109				109

Total liabilities and share owners’ equity	$	1,198	$	946	$	9,135	$	(2,144)	$	9,135


	June 30, 2016
					Non-
			Guarantor		Guarantor
Balance Sheet	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	—	$	334	$	—	$	334
Trade receivables, net						831				831
Inventories						1,051				1,051
Prepaid expenses and other current assets						358				358

Total current assets		—		—		2,574		—		2,574

Investments in and advances to subsidiaries		1,394		1,142				(2,536)		—
Property, plant and equipment, net						2,932				2,932
Goodwill						2,536				2,536
Intangibles, net						517				517
Other assets						1,108				1,108

Total assets	$	1,394	$	1,142	$	9,667	$	(2,536)	$	9,667

Current liabilities :
Short-term loans and long-term debt due within one year	$	—	$	—	$	305	$	—	$	305
Current portion of asbestos liability		130								130
Accounts payable						1,042				1,042
Other liabilities		2				518		(2)		518

Total current liabilities		132		—		1,865		(2)		1,995

Long-term debt		250				5,549		(250)		5,549
Asbestos-related liabilities		663								663
Other long-term liabilities						1,002				1,002
Share owners’ equity		349		1,142		1,142		(2,284)		349
Noncontrolling interests						109				109

Total liabilities and share owners’ equity	$	1,394	$	1,142	$	9,667	$	(2,536)	$	9,667


	Three months ended June 30, 2017
					Non-
			Guarantor		Guarantor
Results of Operations	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	1,751	$	—	$	1,751
Cost of goods sold						(1,405)				(1,405)

Gross profit		—		—		346		—		346

Selling and administrative expense						(123)				(123)
Research, development and engineering expense						(16)				(16)
Net intercompany interest										—
Interest expense, net						(62)				(62)
Equity earnings from subsidiaries		143		143				(286)		—
Other equity earnings						18				18
Other expense, net						(11)				(11)

Earnings before income taxes		143		143		152		(286)		152
Provision for income taxes						(9)				(9)

Earnings from continuing operations		143		143		143		(286)		143
Loss from discontinued operations										—

Net earnings		143		143		143		(286)		143
Net (earnings) attributable to noncontrolling interests						(3)				(3)

Net earnings attributable to the Company	$	143	$	143	$	140	$	(286)	$	140


	Three months ended June 30, 2017
					Non-
			Guarantor		Guarantor
Comprehensive Income	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings	$	143	$	143	$	143	$	(286)	$	143
Other comprehensive income (loss), net		20		20		14		(40)		14
Total comprehensive loss		163		163		157		(326)		157

Comprehensive income attributable to noncontrolling interests						7				7

Comprehensive income attributable to the Company	$	163	$	163	$	164	$	(326)	$	164


	Three months ended June 30, 2016
					Non-
			Guarantor		Guarantor
Results of Operations	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	1,760	$	—	$	1,760
Cost of goods sold						(1,418)				(1,418)

Gross profit		—		—		342		—		342

Selling and administrative expense						(126)				(126)
Research, development and engineering expense						(16)				(16)
Net intercompany interest		5				(5)				—
Interest expense, net		(5)				(62)				(67)
Equity earnings from subsidiaries		105		105				(210)		—
Other equity earnings						15				15
Other expense, net						(7)				(7)

Earnings before income taxes		105		105		141		(210)		141
Provision for income taxes						(30)				(30)

Earnings from continuing operations		105		105		111		(210)		111
Loss from discontinued operations						(2)				(2)

Net earnings		105		105		109		(210)		109
Net (earnings) attributable to noncontrolling interests						(4)				(4)

Net earnings attributable to the Company	$	105	$	105	$	105	$	(210)	$	105


	Three months ended June 30, 2016
					Non-
			Guarantor		Guarantor
Comprehensive Income	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings	$	105	$	105	$	109	$	(210)	$	109
Other comprehensive income (loss), net		(66)		(66)		(74)		132		(74)
Total comprehensive loss		39		39		35		(78)		35

Comprehensive income attributable to noncontrolling interests						8				8

Comprehensive loss attributable to the Company	$	39	$	39	$	43	$	(78)	$	43


	Six months ended June 30, 2017
					Non-
			Guarantor		Guarantor
Results of Operations	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	3,366	$	—	$	3,366
Cost of goods sold						(2,705)				(2,705)

Gross profit		—		—		661		—		661

Selling and administrative expense						(242)				(242)
Research, development and engineering expense						(31)				(31)
Net intercompany interest		21				(21)				—
Interest expense, net		(21)				(120)				(141)
Equity earnings from subsidiaries		192		192				(384)		—
Other equity earnings						33				33
Other expense, net						(56)				(56)

Earnings before income taxes		192		192		224		(384)		224
Provision for income taxes						(28)				(28)

Earnings from continuing operations		192		192		196		(384)		196
Loss from discontinued operations										—

Net earnings		192		192		196		(384)		196
Net (earnings) attributable to noncontrolling interests						(8)				(8)

Net earnings attributable to the Company	$	192	$	192	$	188	$	(384)	$	188


	Six months ended June 30, 2017
					Non-
			Guarantor		Guarantor
Comprehensive Income	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings	$	192	$	192	$	196	$	(384)	$	196
Other comprehensive income (loss), net		207		207		207		(414)		207
Total comprehensive income (loss)		399		399		403		(798)		403

Comprehensive income attributable to noncontrolling interests										—

Comprehensive income (loss) attributable to the Company	$	399	$	399	$	403	$	(798)	$	403


	Six months ended June 30, 2016
					Non-
			Guarantor		Guarantor
Results of Operations	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	3,348	$	—	$	3,348
Cost of goods sold						(2,687)				(2,687)

Gross profit		—		—		661		—		661

Selling and administrative expense						(254)				(254)
Research, development and engineering expense						(32)				(32)
Net intercompany interest		10				(10)				—
Interest expense, net		(10)				(123)				(133)
Equity earnings from subsidiaries		172		172				(344)		—
Other equity earnings						29				29
Other expense, net						(29)				(29)

Earnings before income taxes		172		172		242		(344)		242
Provision for income taxes						(57)				(57)

Earnings from continuing operations		172		172		185		(344)		185
Loss from discontinued operations						(3)				(3)

Net earnings		172		172		182		(344)		182
Net (earnings) attributable to noncontrolling interests						(10)				(10)

Net earnings attributable to the Company	$	172	$	172	$	172	$	(344)	$	172


	Six months ended June 30, 2016
					Non-
			Guarantor		Guarantor
Comprehensive Income	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings	$	172	$	172	$	182	$	(344)	$	182
Other comprehensive income (loss), net		(26)		(26)		(24)		52		(24)
Total comprehensive loss		146		146		158		(292)		158

Comprehensive income attributable to noncontrolling interests						(2)				(2)

Comprehensive income (loss) attributable to the Company	$	146	$	146	$	156	$	(292)	$	156


	Six months ended June 30, 2017
					Non-
			Guarantor		Guarantor
Cash Flows	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash utilized in operating activities	$	(26)	$	—		(130)	$	—	$	(156)
Cash utilized in investing activities						(205)				(205)
Cash provided by financing activities		26				159				185

Effect of exchange rate change on cash						19				19

Net change in cash		—		—		(157)		—		(157)
Cash at beginning of period						492				492

Cash at end of period	$	—	$	—	$	335	$	—	$	335


	Six months ended June 30, 2016
					Non-
			Guarantor		Guarantor
Cash Flows	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash utilized in operating activities	$	(24)	$	—	$	(86)	$	—	$	(110)
Cash utilized in investing activities						(190)				(190)
Cash provided by financing activities		24				214				238

Effect of exchange rate change on cash						(3)				(3)

Net change in cash		—		—		(65)		—		(65)
Cash at beginning of period						399				399

Cash at end of period	$	—	$	—	$	334	$	—	$	334