Exhibit 99.2
Owens-Illinois, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Statements
The unaudited pro forma combined condensed financial statements set forth below for Owens-Illinois, Inc. give effect to the sale of its blow-molded plastic container operations in North America, South America and Europe to Graham Packaging Company, as if such sale had been completed on January 1, 2001 for income statement purposes and June 30, 2004 for balance sheet purposes, subject to the assumptions and adjustments in the accompanying notes to the pro forma financial statements. As of September 30, 2004, Owens-Illinois, Inc. will report the blow-molded plastic container operations as a discontinued operation, in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” See the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements for additional information.
The pro forma adjustments included herein are based on available information and certain assumptions that management believes are reasonable and are described in the accompanying notes to the pro forma financial statements. The unaudited pro forma condensed consolidated financial statements do not necessarily represent what Owens-Illinois, Inc.’s financial position or results of operations would have been had the sale of the blow-molded plastic container operations occurred on such dates or to project Owens-Illinois, Inc.’s financial position or results of operations at or for any future date or period. In the opinion of management, all adjustments necessary to present fairly the unaudited pro forma financial information have been made. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements of Owens-Illinois, Inc.
Owens-Illinois, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
| | June 30, 2004 | |
| | As
Reported | | Pro Forma
Adjustments (a) | | Pro Forma
Adjusted | |
Assets | | | | | | | |
Current assets: | | | | | | | |
Inventories | | $ | 1,187.4 | | $ | 134.4 | | $ | 1,053.0 | |
Other current assets | | 1,541.0 | | 155.2 | | 1,385.8 | |
| | | | | | | |
Total current assets | | 2,728.4 | | 289.6 | | 2,438.8 | |
| | | | | | | |
Investments and other assets: | | | | | | | |
Goodwill | | 2,872.9 | | 149.0 | | 2,723.9 | |
Other long-term assets | | 1,792.8 | | 73.2 | | 1,719.6 | |
| | | | | | | |
Total other assets | | 4,665.7 | | 222.2 | | 4,443.5 | |
| | | | | | | |
Property, plant, and equipment, at cost | | 6,947.8 | | 1,303.1 | | 5,644.7 | |
Less accumulated depreciation | | 3,106.8 | | 603.2 | | 2,503.6 | |
| | | | | | | |
Net property, plant, and equipment | | 3,841.0 | | 699.9 | | 3,141.1 | |
| | | | | | | |
Total assets | | $ | 11,235.1 | | $ | 1,211.7 | | $ | 10,023.4 | |
| | | | | | | |
Liabilities and Share Owners’ Equity | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable and other liabilities | | $ | 1,458.7 | | $ | 116.3 | | $ | 1,342.2 | |
Other current liabilities | | 601.8 | | | | 601.8 | |
| | | | | | | |
Total current liabilities | | 2,060.5 | | 116.3 | | 1,944.2 | |
| | | | | | | |
Long-term debt | | 6,270.5 | | 1,185.0 | (b) | 5,085.5 | |
Other long-term liabilities | | 1,865.9 | | 57.0 | | 1,808.9 | |
Share owners’ equity: | | | | | | | |
Convertible preferred stock, par value | | 452.5 | | | | 452.5 | |
Common stock, par value $.01 per share | | 1.6 | | | | 1.6 | |
Capital in excess of par value | | 2,240.5 | | | | 2,240.5 | |
Treasury stock, at cost | | (245.2 | ) | | | (245.2 | ) |
Retained deficit | | (1,069.1 | ) | (120.1 | ) | (949.0 | ) |
Accumulated other comprehensive loss | | (342.1 | ) | (26.5 | ) | (315.6 | ) |
| | | | | | | |
Total share owners’ equity | | 1,038.2 | | (146.6 | ) | 1,184.8 | |
| | | | | | | |
Total liabilities and share owners’ equity | | $ | 11,235.1 | | $ | 1,211.7 | | $ | 10,023.4 | |
See Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
Owens-Illinois, Inc.
Unaudited Pro Forma Condensed Consolidated Results of Operations
| | Six months ended June 30, 2004 | |
| | As
Reported | | Pro Forma
Adjustments (a) | | Pro Forma
Adjusted | |
Revenues: | | | | | | | |
Net sales | | $ | 3,261.7 | | $ | 576.8 | | $ | 2,684.9 | |
Other revenue | | 67.5 | | 5.5 | | 62.0 | |
| | 3,329.2 | | 582.3 | | 2,746.9 | |
Costs and expenses: | | | | | | | |
Manufacturing, shipping, and delivery | | 2,654.0 | | 500.7 | | 2,153.3 | |
Research,development and engineering | | 40.0 | | 10.0 | | 30.0 | |
Selling and administrative | | 176.8 | | 13.4 | (d) | 163.4 | |
Interest | | 230.6 | | 27.0 | (c) | 203.6 | |
Other | | 26.1 | | 20.6 | | 5.5 | |
| | 3,127.5 | | 571.7 | | 2,555.8 | |
Earnings before items below | | 201.7 | | 10.6 | | 191.1 | |
Provision for income taxes | | 57.2 | | 4.3 | (e) | 52.9 | |
Minority share owners’ interests in earnings of subsidiaries | | 13.5 | | | | 13.5 | |
Net earnings | | $ | 131.0 | | $ | 6.3 | | $ | 124.7 | |
| | | | | | | |
Basic net earnings per share of common stock | | $ | 0.82 | | $ | 0.04 | | $ | 0.78 | |
Weighted average shares outstanding (thousands) | | 147,312 | | | | 147,312 | |
Diluted net earnings per share of common stock | | $ | 0.81 | | $ | 0.04 | | $ | 0.77 | |
Weighted average shares outstanding (thousands) | | 148,682 | | | | 148,682 | |
See Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
| | Year ended December 31, 2003 | |
| | As
Reported | | Pro Forma
Adjustments (a) | | Pro Forma
Adjusted | |
Revenues: | | | | | | | |
Net sales | | $ | 6,059.0 | | $ | 1,083.4 | | $ | 4,975.6 | |
Other revenue | | 99.2 | | 9.0 | | 90.2 | |
| | 6,158.2 | | 1,092.4 | | 5,065.8 | |
Costs and expenses: | | | | | | | |
Manufacturing, shipping, and delivery | | 4,917.2 | | 949.3 | | 3,967.9 | |
Research,development and engineering | | 84.8 | | 20.2 | | 64.6 | |
Selling and administrative | | 354.7 | | 33.8 | (d) | 320.9 | |
Interest | | 490.6 | | 60.8 | (c) | 429.8 | |
Other | | 1,401.6 | | 681.0 | | 720.6 | |
| | 7,248.9 | | 1,745.1 | | 5,503.8 | |
Loss before items below | | (1,090.7 | ) | (652.7 | ) | (438.0 | ) |
Provision (credit) for income taxes | | (125.7 | ) | 8.0 | (e) | (133.7 | ) |
Minority share owners’ interests in earnings of subsidiaries | | 25.8 | | | | 25.8 | |
Net loss | | $ | (990.8 | ) | $ | (660.7 | ) | $ | (330.1 | ) |
| | | | | | | |
Basic net loss per share of common stock | | $ | (6.89 | ) | $ | (4.50 | ) | $ | (2.39 | ) |
Weighted average shares outstanding (thousands) | | 146,914 | | | | 146,914 | |
Diluted net loss per share of common stock | | $ | (6.89 | ) | $ | (4.50 | ) | $ | (2.39 | ) |
Weighted average shares outstanding (thousands) | | 146,914 | | | | 146,914 | |
See Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
| | Year ended December 31, 2002 | |
| | As
Reported | | Pro Forma
Adjustments (a) | | Pro Forma
Adjusted | |
Revenues: | | | | | | | |
Net sales | | $ | 5,640.4 | | $ | 1,019.2 | | $ | 4,621.2 | |
Other revenue | | 119.7 | | 9.7 | | 110.0 | |
| | 5,760.1 | | 1,028.9 | | 4,731.2 | |
Costs and expenses: | | | | | | | |
Manufacturing, shipping, and delivery | | 4,413.4 | | 840.5 | | 3,572.9 | |
Research,development and engineering | | 80.0 | | 22.4 | | 57.6 | |
Selling and administrative | | 318.6 | | 30.7 | (d) | 287.9 | |
Interest | | 437.1 | | 64.9 | (c) | 372.2 | |
Other | | 509.8 | | 6.7 | | 503.1 | |
| | 5,758.9 | | 965.2 | | 4,793.7 | |
Earnings (loss) before items below | | 1.2 | | 63.7 | | (62.5 | ) |
Provision (credit) for income taxes | | (24.1 | ) | 25.7 | (e) | (49.8 | ) |
Minority share owners’ interests in earnings of subsidiaries | | 25.5 | | | | 25.5 | |
Earnings (loss) before cumulative effect of accounting change | | $ | (0.2 | ) | $ | 38.0 | | $ | (38.2 | ) |
| | | | | | | |
Basic earnings (loss) per share of common stock before cumulative effect of accounting change | | $ | (0.15 | ) | $ | 0.26 | | $ | (0.41 | ) |
Weighted average shares outstanding (thousands) | | 146,616 | | | | 146,616 | |
Diluted earnings (loss) per share of common stock before cumulative effect of accounting change | | $ | (0.15 | ) | $ | 0.26 | | $ | (0.41 | ) |
Weighted average shares outstanding (thousands) | | 146,616 | | | | 146,616 | |
See Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
| | Year ended December 31, 2001 | |
| | As
Reported | | Pro Forma
Adjustments (a) | | Pro Forma
Adjusted | |
Revenues: | | | | | | | |
Net sales | | $ | 5,402.5 | | $ | 1,058.8 | | $ | 4,343.7 | |
Other revenue | | 610.8 | | 11.6 | | 599.2 | |
| | 6,013.3 | | 1,070.4 | | 4,942.9 | |
Costs and expenses: | | | | | | | |
Manufacturing, shipping, and delivery | | 4,218.4 | | 859.1 | | 3,359.3 | |
Research,development and engineering | | 72.6 | | 23.4 | | 49.2 | |
Selling and administrative | | 341.3 | | 27.2 | (d) | 314.1 | |
Interest | | 440.6 | | 80.3 | (c) | 360.3 | |
Other | | 279.8 | | 70.7 | | 209.1 | |
| | 5,352.7 | | 1,060.7 | | 4,292.0 | |
Earnings before items below | | 660.6 | | 9.7 | | 650.9 | |
Provision (credit) for income taxes | | 283.9 | | 17.5 | (e) | 266.4 | |
Minority share owners’ interests in earnings of subsidiaries | | 20.1 | | 0.6 | | 19.5 | |
Net earnings | | $ | 356.6 | | $ | (8.4 | ) | $ | 365.0 | |
| | | | | | | |
Basic net earnins per share of common stock | | $ | 2.30 | | $ | (0.06 | ) | $ | 2.36 | |
Weighted average shares outstanding (thousands) | | 145,661 | | | | 145,661 | |
Diluted net earnings per share of common stock | | $ | 2.30 | | $ | (0.06 | ) | $ | 2.36 | |
Weighted average shares outstanding (thousands) | | 145,661 | | | | 145,661 | |
See Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
Owens-Illinois, Inc.
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
(a) The Pro Forma Adjustments represents the June 30, 2004 balances of the assets and liabilities of the blow-molded plastic container operations that were divested on October 7, 2004, as well as the related cash proceeds received from the divestiture.
(b) Represents the total cash received from Graham Packaging Company of $1.2 billion, less divestiture fees paid in conjunction with the closing, which was used to permanently reduce capacity under the Company’s Secured Credit Agreement.
(c) Represents an allocation of interest expense to the blow-molded plastic container operations based on the actual net proceeds from the divestiture used to reduce debt under the Secured Credit Agreement and applying the actual interest rate for the respective periods under the Secured Credit Agreement. This amount was added to the actual third party interest incurred by certain foreign subsidiaries.
(d) Represents actual selling and general administrative costs for the divested operations including certain allocated corporate charges that will be eliminated following the divestiture.
(e) Represents the provision for income taxes allocable to discontinued operations accounting.
