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.


	September 30, 2017
			Guarantor		Non-Guarantor
Balance Sheet	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	—	$	339	$	—	$	339
Trade receivables, net						1,028				1,028
Inventories						1,046				1,046
Prepaid expenses and other current assets						254				254

Total current assets		—		—		2,667		—		2,667

Investments in and advances to subsidiaries		1,488		1,465				(2,953)		—
Property, plant and equipment, net						3,036				3,036
Goodwill						2,621				2,621
Intangibles, net						473				473
Other assets						1,202				1,202

Total assets	$	1,488	$	1,465	$	9,999	$	(2,953)	$	9,999

Current liabilities :
Short-term loans and long-term debt due within one year	$	22	$	—	$	243	$	(22)	$	243
Current portion of asbestos liability		115								115
Accounts payable						1,087				1,087
Other liabilities		1				617		(1)		617
Other liabilities - discontinued operations						115				115

Total current liabilities		138		—		2,062		(23)		2,177

Long-term debt						5,378				5,378
Asbestos-related liabilities		528								528
Other long-term liabilities						977				977
Share owners’ equity		822		1,465		1,465		(2,930)		822
Noncontrolling interests						117				117

Total liabilities and share owners’ equity	$	1,488	$	1,465	$	9,999	$	(2,953)	$	9,999


	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


	September 30, 2016
					Non-
			Guarantor		Guarantor
Balance Sheet	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	—	$	294	$	—	$	294
Trade receivables, net						857				857
Inventories						1,057				1,057
Prepaid expenses and other current assets						234				234

Total current assets		—		—		2,442		—		2,442

Investments in and advances to subsidiaries		1,431		1,174				(2,605)		—
Property, plant and equipment, net						2,917				2,917
Goodwill						2,534				2,534
Intangibles, net						490				490
Other assets						1,114				1,114

Total assets	$	1,431	$	1,174	$	9,497	$	(2,605)	$	9,497

Current liabilities :
Short-term loans and long-term debt due within one year	$	—	$	—	$	262	$	—	$	262
Current portion of asbestos liability		130								130
Accounts payable						1,059				1,059
Other liabilities		7				582		(7)		582

Total current liabilities		137		—		1,903		(7)		2,033

Long-term debt		250				5,333		(250)		5,333
Asbestos-related liabilities		643								643
Other long-term liabilities						973				973
Share owners’ equity		401		1,174		1,174		(2,348)		401
Noncontrolling interests						114				114

Total liabilities and share owners’ equity	$	1,431	$	1,174	$	9,497	$	(2,605)	$	9,497


	Three months ended September 30, 2017
					Non-
			Guarantor		Guarantor
Results of Operations	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	1,791	$	—	$	1,791
Cost of goods sold						(1,438)				(1,438)

Gross profit		—		—		353		—		353

Selling and administrative expense						(120)				(120)
Research, development and engineering expense						(15)				(15)
Net intercompany interest										—
Interest expense, net						(63)				(63)
Equity earnings from subsidiaries		126		126				(252)		—
Other equity earnings						22				22
Other expense, net						(5)				(5)

Earnings before income taxes		126		126		172		(252)		172
Provision for income taxes						(37)				(37)

Earnings from continuing operations		126		126		135		(252)		135
Loss from discontinued operations						(2)				(2)

Net earnings		126		126		133		(252)		133
Net (earnings) attributable to noncontrolling interests						(7)				(7)

Net earnings attributable to the Company	$	126	$	126	$	126	$	(252)	$	126


	Three months ended September 30, 2017
					Non-
			Guarantor		Guarantor
Comprehensive Income	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings	$	126	$	126	$	133	$	(252)	$	133
Other comprehensive income, net		12		12		20		(24)		20
Total comprehensive income		138		138		153		(276)		153

Comprehensive income attributable to noncontrolling interests						(8)				(8)

Comprehensive income attributable to the Company	$	138	$	138	$	145	$	(276)	$	145


	Three months ended September 30, 2016
					Non-
			Guarantor		Guarantor
Results of Operations	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	1,712	$	—	$	1,712
Cost of goods sold						(1,376)				(1,376)

Gross profit		—		—		336		—		336

Selling and administrative expense						(121)				(121)
Research, development and engineering expense						(16)				(16)
Net intercompany interest		5				(5)				—
Interest expense, net		(5)				(61)				(66)
Equity earnings from subsidiaries		108		108				(216)		—
Other equity earnings						15				15
Other expense, net						5				5

Earnings before income taxes		108		108		153		(216)		153
Provision for income taxes						(36)				(36)

Earnings from continuing operations		108		108		117		(216)		117
Loss from discontinued operations						(3)				(3)

Net earnings		108		108		114		(216)		114
Net (earnings) attributable to noncontrolling interests						(6)				(6)

Net earnings attributable to the Company	$	108	$	108	$	108	$	(216)	$	108


	Three months ended September 30, 2016
					Non-
			Guarantor		Guarantor
Comprehensive Income	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings	$	108	$	108	$	114	$	(216)	$	114
Other comprehensive loss, net		(63)		(63)		(59)		126		(59)
Total comprehensive income		45		45		55		(90)		55

Comprehensive income attributable to noncontrolling interests						(4)				(4)

Comprehensive income attributable to the Company	$	45	$	45	$	51	$	(90)	$	51


	Nine months ended September 30, 2017
					Non-
			Guarantor		Guarantor
Results of Operations	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	5,157	$	—	$	5,157
Cost of goods sold						(4,143)				(4,143)

Gross profit		—		—		1,014		—		1,014

Selling and administrative expense						(362)				(362)
Research, development and engineering expense						(46)				(46)
Net intercompany interest		21				(21)				—
Interest expense, net		(21)				(183)				(204)
Equity earnings from subsidiaries		314		314				(628)		—
Other equity earnings						55				55
Other expense, net						(61)				(61)

Earnings before income taxes		314		314		396		(628)		396
Provision for income taxes						(65)				(65)

Earnings from continuing operations		314		314		331		(628)		331
Loss from discontinued operations						(2)				(2)

Net earnings		314		314		329		(628)		329
Net (earnings) attributable to noncontrolling interests						(15)				(15)

Net earnings attributable to the Company	$	314	$	314	$	314	$	(628)	$	314


	Nine months ended September 30, 2017
					Non-
			Guarantor		Guarantor
Comprehensive Income	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings	$	314	$	314	$	329	$	(628)	$	329
Other comprehensive income, net		219		219		227		(438)		227
Total comprehensive income		533		533		556		(1,066)		556

Comprehensive income attributable to noncontrolling interests						(8)				(8)

Comprehensive income attributable to the Company	$	533	$	533	$	548	$	(1,066)	$	548


	Nine months ended September 30, 2016
					Non-
			Guarantor		Guarantor
Results of Operations	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	—	$	5,060	$	—	$	5,060
Cost of goods sold						(4,063)				(4,063)

Gross profit		—		—		997		—		997

Selling and administrative expense						(375)				(375)
Research, development and engineering expense						(48)				(48)
Net intercompany interest		15				(15)				—
Interest expense, net		(15)				(184)				(199)
Equity earnings from subsidiaries		280		280				(560)		—
Other equity earnings						44				44
Other expense, net						(24)				(24)

Earnings before income taxes		280		280		395		(560)		395
Provision for income taxes						(93)				(93)

Earnings from continuing operations		280		280		302		(560)		302
Loss from discontinued operations						(6)				(6)

Net earnings		280		280		296		(560)		296
Net (earnings) attributable to noncontrolling interests						(16)				(16)

Net earnings attributable to the Company	$	280	$	280	$	280	$	(560)	$	280


	Nine months ended September 30, 2016
					Non-
			Guarantor		Guarantor
Comprehensive Income	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings	$	280	$	280	$	296	$	(560)	$	296
Other comprehensive loss, net		(89)		(89)		(83)		178		(83)
Total comprehensive income		191		191		213		(382)		213

Comprehensive income attributable to noncontrolling interests						(6)				(6)

Comprehensive income attributable to the Company	$	191	$	191	$	207	$	(382)	$	207


	Nine months ended September 30, 2017
					Non-
			Guarantor		Guarantor
Cash Flows	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash provided by (utilized in) operating activities	$	(50)	$	—		87	$	—	$	37
Cash utilized in investing activities						(200)				(200)
Cash provided by (utilized in) financing activities		50				(64)				(14)

Effect of exchange rate change on cash						24				24

Net change in cash		—		—		(153)		—		(153)
Cash at beginning of period						492				492

Cash at end of period	$	—	$	—	$	339	$	—	$	339


	Nine months ended September 30, 2016
					Non-
			Guarantor		Guarantor
Cash Flows	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash utilized in operating activities	$	(45)	$	—	$	265	$	—	$	220
Cash utilized in investing activities						(282)				(282)
Cash provided by financing activities		45				(84)				(39)

Effect of exchange rate change on cash						(4)				(4)

Net change in cash		—		—		(105)		—		(105)
Cash at beginning of period						399				399

Cash at end of period	$	—	$	—	$	294	$	—	$	294