19. 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 5.00% senior notes, the 5.875% senior notes, the 5.375% senior notes, and the 6.375% 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, 2016
							Non-
					Guarantor		Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	38	$	9	$	250	$	37	$	334
Trade receivables, net				90		17		724				831
Inventories				203		35		813				1,051
Prepaid expenses and other current assets				26		12		320				358

Total current assets		—		357		73		2,107		37		2,574

Investments in and advances to subsidiaries		1,391		4,444		1,213				(7,048)		—

Goodwill				582		331		1,623				2,536

Intangibles								517				517

Other assets				124		245		739				1,108

Property, plant and equipment, net				696		5		2,231				2,932

Total assets	$	1,391	$	6,203	$	1,867	$	7,217	$	(7,011)	$	9,667

Current liabilities:
Accounts payable and accrued liabilities	$		$	176	$	19	$	847	$		$	1,042
Short-term loans and long-term debt due within one year				82				186		37		305
Other liabilities				105		44		369				518

Total current liabilities		—		363		63		1,402		37		1,865

Long-term debt		250		4,005				1,294				5,549
Other long-term liabilities				22		412		568				1,002
Investments by and advances from parent				1,813		1,392		3,843		(7,048)		—
Total share owner's equity of the Company		1,141										1,141
Noncontrolling interests								110				110

Total liabilities and share owners’ equity	$	1,391	$	6,203	$	1,867	$	7,217	$	(7,011)	$	9,667


	December 31, 2015
							Non-
					Guarantor		Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	—	$	6	$	393	$	—	$	399
Trade receivables, net				55		15		492				562
Inventories				205		35		767				1,007
Prepaid expenses and other current assets				25		13		328				366

Total current assets		—		285		69		1,980		—		2,334

Investments in and advances to subsidiaries		1,239		3,775		1,002				(6,016)		—

Goodwill				581		317		1,591				2,489

Intangibles								597				597

Other assets				123		267		650				1,040

Property, plant and equipment, net				703		8		2,250				2,961

Total assets	$	1,239	$	5,467	$	1,663	$	7,068	$	(6,016)	$	9,421

Current liabilities:
Accounts payable and accrued liabilities	$	—	$	184	$	18	$	1,010	$	—	$	1,212
Short-term loans and long-term debt due within one year				50				178				228
Other liabilities				139		35		378				552

Total current liabilities		—		373		53		1,566		—		1,992

Long-term debt		250		3,839				1,256				5,345
Other long-term liabilities				16		371		600		1		988
Investments by and advances from parent				1,239		1,239		3,538		(6,016)		—
Total share owner's equity of the Company		989								(1)		988
Noncontrolling interests								108				108

Total liabilities and share owners’ equity	$	1,239	$	5,467	$	1,663	$	7,068	$	(6,016)	$	9,421


	June 30, 2015
							Non-
					Guarantor		Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	—	$	119	$	259	$		$	378
Trade receivables, net				94				618				712
Inventories				207				778				985
Prepaid expenses and other current assets				36		5		269				310

Total current assets		—		337		124		1,924		—		2,385

Investments in and advances to subsidiaries		1,634		2,355		(6)				(3,983)		—

Goodwill				581		8		1,200				1,789

Other assets				137		71		850				1,058

Property, plant and equipment, net				709		34		1,643				2,386

Total assets	$	1,634	$	4,119	$	231	$	5,617	$	(3,983)	$	7,618

Current liabilities:
Short-term loans and long-term debt due within one year	$	—	$	328	$	2	$	225	$		$	555
Accounts payable and accrued liabilities				205		16		762				983
Other liabilities				95		42		321				458

Total current liabilities		—		628		60		1,308		—		1,996

Long-term debt		250		1,681		9		1,277				3,217
Other long-term liabilities				26		312		571				909
Investments by and advances from parent				1,784		(150)		2,349		(3,983)		—
Total share owner's equity of the Company		1,384										1,384
Noncontrolling interests								112				112

Total liabilities and share owners’ equity	$	1,634	$	4,119	$	231	$	5,617	$	(3,983)	$	7,618


	Three months ended June 30, 2016
							Non-
					Guarantor		Guarantor
Results of Operations	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	504	$	76	$	1,224	$	(44)	$	1,760
Cost of goods sold				(414)		(58)		(989)		43		(1,418)

Gross profit		—		90		18		235		(1)		342

Research, engineering, selling, administrative and other				(26)		(27)		(89)				(142)
Net intercompany interest		5		(11)				1		5		—
Interest expense, net		(5)		(45)				(17)				(67)
Equity earnings from subsidiaries		105		94						(199)		—
Other equity earnings				3				12				15
Other expense, net				37		(5)		(39)				(7)

Earnings (loss) from continuing operations before income taxes		105		142		(14)		103		(195)		141
Provision for income taxes				—				(30)				(30)

Earnings (loss) from continuing operations		105		142		(14)		73		(195)		111
Loss from discontinued operations								(2)				(2)

Net earnings (loss)		105		142		(14)		71		(195)		109
Net earnings attributable to noncontrolling interests								(4)				(4)

Net earnings (loss) attributable to the Company	$	105	$	142	$	(14)	$	67	$	(195)	$	105


	Three months ended June 30, 2016
							Non-
					Guarantor		Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings (loss)	$	105	$	142	$	(14)	$	71	$	(195)	$	109
Other comprehensive income (loss)		(74)		6				(98)		92		(74)

Total comprehensive income (loss)		31		148		(14)		(27)		(103)		35

Comprehensive income attributable to noncontrolling interests								8				8

Comprehensive income (loss) attributable to the Company	$	31	$	148	$	(14)	$	(19)	$	(103)	$	43


	Three months ended June 30, 2015
							Non-
					Guarantor		Guarantor
Results of Operations	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	511	$	—	$	1,032	$	—	$	1,543
Cost of goods sold				(426)		2		(846)		1		(1,269)

Gross profit		—		85		2		186		1		274

Research, engineering, selling, administrative and other				(39)		(22)		(73)				(134)
Net intercompany interest		5		(6)				1				—
Interest expense, net		(5)		(52)		(1)		(17)		1		(74)
Equity earnings from subsidiaries		40		38						(78)		—
Other equity earnings				5				9				14
Other expense, net				44		(6)		(57)		1		(18)

Earnings (loss) from continuing operations before income taxes		40		75		(27)		49		(75)		62
Provision for income taxes				(2)		(2)		(12)		1		(15)

Earnings (loss) from continuing operations		40		73		(29)		37		(74)		47
Loss from discontinued operations								(1)		(1)		(2)

Net earnings (loss)		40		73		(29)		36		(75)		45
Net earnings attributable to noncontrolling interests								(5)				(5)

Net earnings (loss) attributable to the Company	$	40	$	73	$	(29)	$	31	$	(75)	$	40


	Three months ended June 30, 2015
							Non-
					Guarantor		Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings (loss)	$	40	$	73	$	(29)	$	36	$	(75)	$	45
Other comprehensive income (loss)		28		(1)				11		(9)		29

Total comprehensive income (loss)		68		72		(29)		47		(84)		74

Comprehensive income attributable to noncontrolling interests								(1)				(1)

Comprehensive income (loss) attributable to the Company	$	68	$	72	$	(29)	$	46	$	(84)	$	73


	Six months ended June 30, 2016
							Non-
					Guarantor		Guarantor
Results of Operations	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	971	$	144	$	2,328	$	(95)	$	3,348
Cost of goods sold				(800)		(114)		(1,867)		94		(2,687)

Gross profit		—		171		30		461		(1)		661

Research, engineering, selling, administrative and other				(60)		(56)		(170)				(286)
Net intercompany interest		10		(11)				1				—
Interest expense, net		(10)		(89)				(34)				(133)
Equity earnings from subsidiaries		172		167						(339)		—
Other equity earnings				5				24				29
Other expense, net				60		(9)		(80)				(29)

Earnings (loss) from continuing operations before income taxes		172		243		(35)		202		(340)		242
Provision for income taxes				(3)		(1)		(53)				(57)

Earnings (loss) from continuing operations		172		240		(36)		149		(340)		185
Loss from discontinued operations								(3)				(3)

Net earnings (loss)		172		240		(36)		146		(340)		182
Net earnings attributable to noncontrolling interests								(10)				(10)

Net earnings (loss) attributable to the Company	$	172	$	240	$	(36)	$	136	$	(340)	$	172


	Six months ended June 30, 2016
							Non-
					Guarantor		Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings (loss)	$	172	$	240	$	(36)	$	146	$	(340)	$	182
Other comprehensive income (loss)		(24)		4				8		(12)		(24)

Total comprehensive income (loss)		148		244		(36)		154		(352)		158

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

Comprehensive income (loss) attributable to the Company	$	148	$	244	$	(36)	$	152	$	(352)	$	156


	Six months ended June 30, 2015
							Non-
					Guarantor		Guarantor
Results of Operations	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	970	$	1	$	1,994	$	(1)	$	2,964
Cost of goods sold				(802)		4		(1,626)		2		(2,422)

Gross profit				168		5		368		1		542

Research, engineering, selling, administrative and other				(71)		(47)		(154)		(1)		(273)
Net intercompany interest		10		(11)				1				—
Interest expense, net		(10)		(78)		(1)		(32)				(121)
Equity earnings from subsidiaries		111		92						(203)		—
Other equity earnings				10				19				29
Other expense, net				68		(6)		(78)		1		(15)

Earnings (loss) from continuing operations before income taxes		111		178		(49)		124		(202)		162
Provision for income taxes				(4)		(3)		(33)				(40)

Earnings (loss) from continuing operations		111		174		(52)		91		(202)		122
Loss from discontinued operations								(2)				(2)

Net earnings (loss)		111		174		(52)		89		(202)		120
Net earnings attributable to noncontrolling interests								(9)				(9)

Net earnings (loss) attributable to the Company	$	111	$	174	$	(52)	$	80	$	(202)	$	111


	Six months ended June 30, 2015
							Non-
					Guarantor		Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings (loss)	$	111	$	174	$	(52)	$	89	$	(202)	$	120
Other comprehensive income (loss)		(192)		(1)				(228)		230		(191)

Total comprehensive income (loss)		(81)		173		(52)		(139)		28		(71)

Comprehensive income attributable to noncontrolling interests								(1)				(1)

Comprehensive income (loss) attributable to the Company	$	(81)	$	173	$	(52)	$	(140)	$	28	$	(72)


	Six months ended June 30, 2016
							Non-
					Guarantor		Guarantor
Cash Flows	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash provided by (utilized in) operating activities	$	—		(98)	$	40	$	(27)	$	(1)	$	(86)
Cash utilized in investing activities				(39)				(151)				(190)
Cash provided by (utilized in) financing activities				137				77				214

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

Net change in cash		—		—		40		(104)		(1)		(65)
Cash at beginning of period						6		393				399

Cash at end of period	$	—	$	—	$	46	$	289	$	(1)	$	334


	Six months ended June 30, 2015
							Non-
					Guarantor		Guarantor
Cash Flows	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash provided by (utilized in) operating activities	$	—	$	(98)	$	224	$	(226)	$	23	$	(77)
Cash utilized in investing activities				(80)				(159)		(15)		(254)
Cash provided by financing activities				178		(134)		181		(8)		217

Effect of exchange rate change on cash								(20)				(20)

Net change in cash		—		—		90		(224)		—		(134)
Cash at beginning of period						29		483				512

Cash at end of period	$	—	$	—	$	119	$	259	$	—	$	378