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.


	September 30, 2016
							Non-
					Guarantor		Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$		$	15	$	279	$		$	294
Trade receivables, net				86		21		750				857
Inventories				198		30		829				1,057
Prepaid expenses and other current assets				22		10		202				234

Total current assets		—		306		76		2,060		—		2,442

Investments in and advances to subsidiaries		1,424		4,295		1,250				(6,969)		—

Goodwill				582		331		1,621				2,534

Intangibles, net								490				490

Other assets				123		243		748				1,114

Property, plant and equipment, net				698		5		2,214				2,917

Total assets	$	1,424	$	6,004	$	1,905	$	7,133	$	(6,969)	$	9,497

Current liabilities:
Accounts payable and accrued liabilities	$		$	179	$	18	$	862	$		$	1,059
Short-term loans and long-term debt due within one year				55				207				262
Other liabilities				111		52		419				582

Total current liabilities		—		345		70		1,488		—		1,903

Long-term debt		250		3,799				1,284				5,333
Other long-term liabilities				8		412		553				973
Investments by and advances from parent				1,852		1,423		3,694		(6,969)		—
Total share owner's equity of the Company		1,174										1,174
Noncontrolling interests								114				114

Total liabilities and share owners’ equity	$	1,424	$	6,004	$	1,905	$	7,133	$	(6,969)	$	9,497


	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, net								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


	September 30, 2015
							Non-
					Guarantor		Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	—	$	15	$	254	$	1	$	270
Trade receivables, net				76		14		662		1		753
Inventories				190		48		785				1,023
Prepaid expenses and other current assets				30		16		398		(2)		442

Total current assets		—		296		93		2,099		—		2,488

Investments in and advances to subsidiaries		1,395		1,119		1,651				(4,165)		—

Goodwill				54		9		2,734				2,797

Intangibles, net								404				404

Other assets				519		74		397		1		991

Property, plant and equipment, net				852		7		2,015				2,874

Total assets	$	1,395	$	2,840	$	1,834	$	7,649	$	(4,164)	$	9,554

Current liabilities:
Short-term loans and long-term debt due within one year	$	—	$	41	$		$	209	$		$	250
Accounts payable and accrued liabilities				197		28		779				1,004
Other liabilities				126		50		352		(1)		527

Total current liabilities		—		364		78		1,340		(1)		1,781

Long-term debt		250		4,069				1,290				5,609
Other long-term liabilities				59		297		552				908
Investments by and advances from parent				(1,652)		1,459		4,357		(4,164)		—
Total share owner's equity of the Company		1,145								1		1,146
Noncontrolling interests								110				110

Total liabilities and share owners’ equity	$	1,395	$	2,840	$	1,834	$	7,649	$	(4,164)	$	9,554


	Three months ended September 30, 2016
							Non-
					Guarantor		Guarantor
Results of Operations	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	498	$	73	$	1,181	$	(40)	$	1,712
Cost of goods sold				(414)		(58)		(943)		39		(1,376)

Gross profit		—		84		15		238		(1)		336

Research, engineering, selling, administrative and other				(29)		(20)		(88)				(137)
Net intercompany interest		5		(4)				(1)				—
Interest expense, net		(5)		(44)				(17)				(66)
Equity earnings from subsidiaries		108		88						(196)		—
Other equity earnings				3				12				15
Other expense, net				38		(4)		(29)				5

Earnings (loss) from continuing operations before income taxes		108		136		(9)		115		(197)		153
Provision for income taxes				—				(36)				(36)

Earnings (loss) from continuing operations		108		136		(9)		79		(197)		117
Loss from discontinued operations								(3)				(3)

Net earnings (loss)		108		136		(9)		76		(197)		114
Net earnings attributable to noncontrolling interests								(6)				(6)

Net earnings (loss) attributable to the Company	$	108	$	136	$	(9)	$	70	$	(197)	$	108


	Three months ended September 30, 2016
							Non-
					Guarantor		Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings (loss)	$	108	$	136	$	(9)	$	76	$	(197)	$	114
Other comprehensive income (loss)		(59)		(1)				(79)		80		(59)

Total comprehensive income (loss)		49		135		(9)		(3)		(117)		55

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

Comprehensive income (loss) attributable to the Company	$	49	$	135	$	(9)	$	(7)	$	(117)	$	51


	Three months ended September 30, 2015
							Non-
					Guarantor		Guarantor
Results of Operations	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	482	$	18	$	1,082	$	(16)	$	1,566
Cost of goods sold				(421)		(13)		(870)		14		(1,290)

Gross profit		—		61		5		212		(2)		276

Research, engineering, selling, administrative and other				(29)		(15)		(81)		1		(124)
Net intercompany interest		5		(5)								—
Interest expense, net		(5)		(45)				(17)				(67)
Equity earnings from subsidiaries		17		56						(73)		—
Other equity earnings				5				12				17
Other expense, net				10		(14)		(40)				(44)

Earnings (loss) from continuing operations before income taxes		17		53		(24)		86		(74)		58
Provision for income taxes				(1)				(32)				(33)

Earnings (loss) from continuing operations		17		52		(24)		54		(74)		25
Loss from discontinued operations								(1)				(1)

Net earnings (loss)		17		52		(24)		53		(74)		24
Net earnings attributable to noncontrolling interests								(7)				(7)

Net earnings (loss) attributable to the Company	$	17	$	52	$	(24)	$	46	$	(74)	$	17


	Three months ended September 30, 2015
							Non-
					Guarantor		Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings (loss)	$	17	$	52	$	(24)	$	53	$	(74)	$	24
Other comprehensive income (loss)		(226)		(2)				(261)		246		(243)

Total comprehensive income (loss)		(209)		50		(24)		(208)		172		(219)

Comprehensive income attributable to noncontrolling interests								1				1

Comprehensive income (loss) attributable to the Company	$	(209)	$	50	$	(24)	$	(207)	$	172	$	(218)


	Nine months ended September 30, 2016
							Non-
					Guarantor		Guarantor
Results of Operations	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	1,469	$	217	$	3,509	$	(135)	$	5,060
Cost of goods sold				(1,215)		(172)		(2,811)		135		(4,063)

Gross profit		—		254		45		698		—		997

Research, engineering, selling, administrative and other				(89)		(76)		(258)				(423)
Net intercompany interest		15		(15)								—
Interest expense, net		(15)		(133)				(51)				(199)
Equity earnings from subsidiaries		280		255						(535)		—
Other equity earnings				8				36				44
Other expense, net				98		(13)		(109)				(24)

Earnings (loss) from continuing operations before income taxes		280		378		(44)		316		(535)		395
Provision for income taxes				(4)				(89)				(93)

Earnings (loss) from continuing operations		280		374		(44)		227		(535)		302
Loss from discontinued operations								(6)				(6)

Net earnings (loss)		280		374		(44)		221		(535)		296
Net earnings attributable to noncontrolling interests								(16)				(16)

Net earnings (loss) attributable to the Company	$	280	$	374	$	(44)	$	205	$	(535)	$	280


	Nine months ended September 30, 2016
							Non-
					Guarantor		Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings (loss)	$	280	$	374	$	(44)	$	221	$	(535)	$	296
Other comprehensive income (loss)		(83)		4				(70)		66		(83)

Total comprehensive income (loss)		197		378		(44)		151		(469)		213

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

Comprehensive income (loss) attributable to the Company	$	197	$	378	$	(44)	$	145	$	(469)	$	207


	Nine months ended September 30, 2015
							Non-
					Guarantor		Guarantor
Results of Operations	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	1,452	$	19	$	3,076	$	(17)	$	4,530
Cost of goods sold				(1,223)		(9)		(2,496)		16		(3,712)

Gross profit				229		10		580		(1)		818

Research, engineering, selling, administrative and other				(100)		(62)		(235)				(397)
Net intercompany interest		15		(16)				1				—
Interest expense, net		(15)		(123)		(1)		(49)				(188)
Equity earnings from subsidiaries		128		148						(276)		—
Other equity earnings				15				31				46
Other expense, net				78		(20)		(118)		1		(59)

Earnings (loss) from continuing operations before income taxes		128		231		(73)		210		(276)		220
Provision for income taxes				(5)		(3)		(65)				(73)

Earnings (loss) from continuing operations		128		226		(76)		145		(276)		147
Loss from discontinued operations								(3)				(3)

Net earnings (loss)		128		226		(76)		142		(276)		144
Net earnings attributable to noncontrolling interests								(16)				(16)

Net earnings (loss) attributable to the Company	$	128	$	226	$	(76)	$	126	$	(276)	$	128


	Nine months ended September 30, 2015
							Non-
					Guarantor		Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings (loss)	$	128	$	226	$	(76)	$	142	$	(276)	$	144
Other comprehensive income (loss)		(418)		(3)				(489)		476		(434)

Total comprehensive income (loss)		(290)		223		(76)		(347)		200		(290)

Comprehensive income attributable to noncontrolling interests

Comprehensive income (loss) attributable to the Company	$	(290)	$	223	$	(76)	$	(347)	$	200	$	(290)


	Nine months ended September 30, 2016
							Non-
					Guarantor		Guarantor
Cash Flows	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash provided by (utilized in) operating activities	$	—		108	$	10	$	147	$	—	$	265
Cash utilized in investing activities				(66)		(1)		(215)				(282)
Cash provided by (utilized in) financing activities				(42)				(42)				(84)

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

Net change in cash		—		—		9		(114)		—		(105)
Cash at beginning of period						6		393				399

Cash at end of period	$	—	$	—	$	15	$	279	$	—	$	294


	Nine months ended September 30, 2015
							Non-
					Guarantor		Guarantor
Cash Flows	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash provided by (utilized in) operating activities	$	—	$	72	$	143	$	(74)	$	20	$	161
Cash utilized in investing activities				(2,393)		(1)		(2,525)		2,281		(2,638)
Cash provided by financing activities				2,321		(157)		2,401		(2,301)		2,264

Effect of exchange rate change on cash								(29)				(29)

Net change in cash		—		—		(15)		(227)		—		(242)
Cash at beginning of period						29		483				512

Cash at end of period	$	—	$	—	$	14	$	256	$	—	$	270