17. 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, 2017
							Non-
					Guarantor		Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	—	$	66	$	273	$	—	$	339
Trade receivables, net				126		21		881				1,028
Inventories				194		27		825				1,046
Prepaid expenses and other current assets				19		15		220				254

Total current assets		—		339		129		2,199		—		2,667

Investments in and advances to subsidiaries		1,487		3,006		1,248				(5,741)		—
Property, plant and equipment, net				717		4		2,315				3,036
Goodwill				582		332		1,707				2,621
Intangibles, net								473				473
Other assets				107		225		871		(1)		1,202

Total assets	$	1,487	$	4,751	$	1,938	$	7,565	$	(5,742)	$	9,999

Current liabilities:
Short-term loans and long-term debt due within one year	$	22	$	1	$		$	220	$	—	$	243
Accounts payable				172		18		897				1,087
Other liabilities				106		57		454				617
Other liabilities - discontinued operations								115				115

Total current liabilities		22		279		75		1,686		—		2,062

Long-term debt				2,981				2,397				5,378
Other long-term liabilities				4		376		597				977
Investments by and advances from parent				1,487		1,487		2,768		(5,742)		—
Total share owner's equity of the Company		1,465										1,465
Noncontrolling interests								117				117

Total liabilities and share owners’ equity	$	1,487	$	4,751	$	1,938	$	7,565	$	(5,742)	$	9,999


	December 31, 2016
							Non-
					Guarantor		Guarantor
Balance Sheet	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Current assets:
Cash and cash equivalents	$	—	$	—	$	33	$	459	$	—	$	492
Trade receivables, net				64		14		502				580
Inventories				202		27		754				983
Prepaid expenses and other current assets				27		16		156				199

Total current assets		—		293		90		1,871		—		2,254

Investments in and advances to subsidiaries		1,196		2,980		1,028				(5,204)		—
Property, plant and equipment, net				721		6		2,153				2,880
Goodwill				582		332		1,548				2,462
Intangibles, net								464				464
Other assets				111		237		727				1,075

Total assets	$	1,196	$	4,687	$	1,693	$	6,763	$	(5,204)	$	9,135

Current liabilities:
Short-term loans and long-term debt due within one year	$		$	12	$		$	183	$		$	195
Accounts payable				177		22		936				1,135
Other liabilities				129		68		418				615

Total current liabilities		—		318		90		1,537		—		1,945

Long-term debt		250		3,163				1,720				5,133
Other long-term liabilities				11		408		583				1,002
Investments by and advances from parent				1,195		1,195		2,814		(5,204)		—
Total share owner's equity of the Company		946										946
Noncontrolling interests								109				109

Total liabilities and share owners’ equity	$	1,196	$	4,687	$	1,693	$	6,763	$	(5,204)	$	9,135


	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)		—
Property, plant and equipment, net				698		5		2,214				2,917
Goodwill				582		331		1,621				2,534
Intangibles, net								490				490
Other assets				123		243		748				1,114

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

Current liabilities:
Short-term loans and long-term debt due within one year	$	—	$	55	$	—		207	$	—	$	262
Accounts payable				179		18		862				1,059
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


	Three months ended September 30, 2017
							Non-
					Guarantor		Guarantor
Results of Operations	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	485	$	64	$	1,282	$	(40)	$	1,791
Cost of goods sold				(412)		(49)		(1,017)		40		(1,438)

Gross profit		—		73		15		265		—		353

Research, engineering, selling, administrative and other				(26)		(24)		(84)		(1)		(135)
Net intercompany interest		1		(1)				—				—
Interest expense, net		(1)		(37)		(1)		(24)				(63)
Equity earnings from subsidiaries		171		122						(293)		—
Other equity earnings				3				19				22
Other expense, net				43		(4)		(44)				(5)

Earnings from continuing operations before income taxes		171		177		(14)		132		(294)		172
Provision for income taxes				(1)		—		(35)		(1)		(37)

Earnings from continuing operations		171		176		(14)		97		(295)		135
Loss from discontinued operations								(2)				(2)

Net earnings		171		176		(14)		95		(295)		133
Net earnings attributable to noncontrolling interests								(7)				(7)

Net earnings (loss) attributable to the Company	$	171	$	176	$	(14)	$	88	$	(295)	$	126


	Three months ended September 30, 2017
							Non-
					Guarantor		Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings (loss)	$	171	$	176	$	(14)	$	95	$	(295)	$	133
Other comprehensive income		20						9		(9)		20
Total comprehensive income (loss)		191		176		(14)		104		(304)		153

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

Comprehensive income (loss) attributable to the Company	$	191	$	176	$	(14)	$	96	$	(304)	$	145


	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


	Nine months ended September 30, 2017
							Non-
					Guarantor		Guarantor
Results of Operations	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	1,446	$	199	$	3,626	$	(114)	$	5,157
Cost of goods sold				(1,204)		(147)		(2,906)		114		(4,143)

Gross profit		—		242		52		720		—		1,014

Research, engineering, selling, administrative and other				(83)		(78)		(247)				(408)
Net intercompany interest		22		(23)				1				—
Interest expense, net		(22)		(114)		(1)		(67)				(204)
Equity earnings from subsidiaries		314		276						(590)		—
Other equity earnings				10				45				55
Other expense, net				110		(5)		(166)				(61)

Earnings (loss) from continuing operations before income taxes		314		418		(32)		286		(590)		396
Provision for income taxes				(5)		(2)		(58)				(65)

Earnings (loss) from continuing operations		314		413		(34)		228		(590)		331
Loss from discontinued operations								(2)				(2)

Net earnings (loss)		314		413		(34)		226		(590)		329
Net earnings attributable to noncontrolling interests								(15)				(15)

Net earnings (loss) attributable to the Company	$	314	$	413	$	(34)	$	211	$	(590)	$	314


	Nine months ended September 30, 2017
							Non-
					Guarantor		Guarantor
Comprehensive Income	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net earnings (loss)	$	314	$	413	$	(34)	$	226	$	(590)	$	329
Other comprehensive income (loss)		227		(7)				186		(179)		227
Total comprehensive income (loss)		541		406		(34)		412		(769)		556

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

Comprehensive income (loss) attributable to the Company	$	541	$	406	$	(34)	$	404	$	(769)	$	548


	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, 2017
							Non-
					Guarantor		Guarantor
Cash Flows	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash provided by (utilized in) operating activities	$	—		282	$	35	$	(231)	$	—	$	86
Cash utilized in investing activities				(82)				(118)				(200)
Cash utilized in (provided) by financing activities				(200)				137				(63)

Effect of exchange rate change on cash								24				24

Net change in cash		—		—		35		(188)		—		(153)
Cash at beginning of period						33		459				492

Cash at end of period	$	—	$	—	$	68	$	271	$	—	$	339


	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