O-I Glass (OI) 10-Q 29 Apr 10 2010 Q1 Quarterly report Financial data

CONDENSED CONSOLIDATED RESULTS

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS (USD $)
In Millions, except Share data in Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
Net sales	1582.5	$1,519
Manufacturing, shipping, and delivery expense	-1271.7	-1222.2
Gross profit	310.8	296.8
Selling and administrative expense	(121)	-118.5
Research, development, and engineering expense	-13.9	-13.9
Interest expense	-55.6	-48.1
Interest income	4.4	8.5
Equity earnings	12.5	13.6
Royalties and net technical assistance	3.8	2.8
Other income	1.1	1.6
Other expense	-13.5	-52.8
Earnings from continuing operations before income taxes	128.6	90
Provision for income taxes	-34.2	-31.2
Net earnings	94.4	58.8
Net earnings attributable to noncontrolling interests	-9.1	-13.7
Net earnings attributable to the Company	85.3	45.1
Basic earnings per share (in dollars per share)	0.51	0.27
Weighted average shares outstanding (thousands) (in shares)	167,381	167,080
Diluted earnings per share (in dollars per share)	0.5	0.27
Weighted diluted average shares (thousands) (in shares)	170,671	168,469

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009	12 Months Ended Dec. 31, 2009
Current assets:
Cash and cash equivalents	521.4	362.3	811.7
Short-term investments, at cost which approximates market	0.6	15.9	0.9
Receivables, less allowances for losses and discounts ($34.8 at March 31, 2010, $36.5 at December 31, 2009, and $35.2 at March 31, 2009)	1,048	945.5	1004.2
Inventories	902.1	1044.8	900.3
Prepaid expenses	64.6	48.4	79.6
Total current assets	2536.7	2416.9	2796.7
Investments and other assets:
Equity investments	116.3	105.3	114.3
Repair parts inventories	131.5	134.5	125.1
Prepaid pension	41.6		46.3
Deposits, receivables, and other assets	502.4	478.2	521.7
Goodwill	2346.7	2130.3	2,381
Total other assets	3138.5	2848.3	3188.4
Property, plant, and equipment, at cost	6510.2	5,711	6618.9
Less accumulated depreciation	3813.7	3224.6	3876.6
Net property, plant, and equipment	2696.5	2486.4	2742.3
Total assets	8371.7	7751.6	8727.4
Current liabilities:
Short-term loans and long-term debt due within one year	283.1	353.6	352
Current portion of asbestos-related liabilities	175	175	175
Accounts payable	825.6	754.4	863.2
Other liabilities	614.9	554.1	644.1
Total current liabilities	1898.6	1837.1	2034.3
Long-term debt	3184.9	2,972	3257.5
Deferred taxes	175.1	138.6	186.3
Pension benefits	553	703.4	577.6
Nonpension postretirement benefits	268.4	234.4	266.7
Other liabilities	328.9	324.4	358.5
Asbestos-related liabilities	276.2	285.5	310.1
Commitments and contingencies
The Company's share owners' equity:
Common stock, par value $.01 per share 250,000,000 shares authorized, 180,584,042, 179,923,309, and 179,754,178 shares issued and outstanding, respectively	1.8	1.8	1.8
Capital in excess of par value	2948.9	2921.8	2941.9
Treasury stock, at cost 15,621,337, 11,322,544, and 11,467,837 shares, respectively	-360.4	-219.9	-217.1
Retained earnings	214.7	12.7	129.4
Accumulated other comprehensive loss	(1,328)	-1700.4	-1317.8
Total share owners' equity of the Company	1,477	1,016	1538.2
Noncontrolling interests	209.6	240.2	198.2
Total share owners' equity	1686.6	1256.2	1736.4
Total liabilities and share owners' equity	8371.7	7751.6	8727.4

1_CONDENSED CONSOLIDATED BALANC

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Share data	Mar. 31, 2010	Dec. 31, 2009	Mar. 31, 2009
CONDENSED CONSOLIDATED BALANCE SHEETS
Receivables, allowances for losses and discounts (in dollars)	34.8	36.5	35.2
Common stock, par value (in dollars per share)	0.01	0.01	0.01
Common stock, shares authorized	250,000,000	250,000,000	250,000,000
Common stock, shares issued	180,584,042	179,923,309	179,754,178
Common stock, shares outstanding	180,584,042	179,923,309	179,754,178
Treasury stock, shares	15,621,337	11,322,544	11,467,837

CONDENSED CONSOLIDATED CASH FLO

CONDENSED CONSOLIDATED CASH FLOWS (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash flows from operating activities:
Net earnings	94.4	58.8
Net earnings attributable to noncontrolling interests	-9.1	-13.7
Non-cash charges (credits):
Depreciation	90	88.4
Amortization of intangibles and other deferred items	6.2	4.3
Amortization of finance fees and debt discount	2.9	2.4
Deferred tax provision (benefit)	-0.8	10.5
Restructuring and asset impairment		50.4
Other	58.5	32.8
Asbestos-related payments	(34)	-34.8
Cash paid for restructuring activities	-18.9	-20.2
Change in non-current operating assets	-11.8	-2.4
Change in non-current liabilities	-13.1	-31.3
Change in components of working capital	-139.8	-173.7
Cash provided by (utilized in) operating activities	24.5	-28.5
Cash flows from investing activities:
Additions to property, plant, and equipment	-96.8	-46.6
Acquisitions, net of cash acquired	-25.8
Advances to equity affiliate - net		1.6
Change in short-term investments	0.3
Net cash proceeds related to divestitures and asset sales	0.2	0.1
Cash utilized in investing activities	-122.1	-44.9
Cash flows from financing activities:
Additions to long-term debt		274.9
Repayments of long-term debt	-4.2	-183.6
Decrease in short-term loans	-49.3	-17.6
Net receipts for hedging activity	12	4.4
Dividends paid to noncontrolling interests	-5.8	(17)
Treasury shares purchased	-144.2
Issuance of common stock and other	2.2	4
Cash provided by (utilized in) financing activities	-189.3	65.1
Effect of exchange rate fluctuations on cash	-3.4	-8.9
Decrease in cash	-290.3	-17.2
Cash at beginning of period	811.7	379.5
Cash at end of period	521.4	362.3

Earnings Per Share

Earnings Per Share
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Earnings Per Share	1. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Three months ended March31, 2010 2009 Numerator: Net earnings attributable to the Company $ 85.3 $ 45.1 Net earnings attributable to participating securities (0.3 ) (0.1 ) Numerator for basic earnings per share - income available to common share owners $ 85.0 $ 45.0 Denominator: Denominator for basic earnings per share - weighted average shares outstanding 167,381,457 167,079,573 Effect of dilutive securities: Stock options and other 3,290,015 1,388,952 Denominator for diluted earnings per share - adjusted weighted average shares outstanding 170,671,472 168,468,525 Basic earnings per share $ 0.51 $ 0.27 Diluted earnings per share $ 0.50 $ 0.27 Options to purchase 395,092 and 2,145,884 weighted average shares of common stock that were outstanding during the three months ended March31, 2010 and 2009, respectively, were not included in the computation of diluted earnings per share because the options exercise price was greater than the average market price of the common shares.

Debt

Debt
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Debt	2. Debt The following table summarizes the long-term debt of the Company: March31, December31, March31, 2010 2009 2009 Secured Credit Agreement: Revolving Credit Facility: Revolving Loans $ $ $ 144.8 Term Loans: Term Loan A (160.0 million AUD at March31, 2010) 146.3 143.9 154.2 Term Loan B 189.5 189.5 191.5 Term Loan C (110.8 million CAD at March31, 2010) 108.7 105.4 87.8 Term Loan D (189.5 million at March31, 2010) 253.9 273.5 253.2 Senior Notes: 8.25%, due 2013 459.7 460.4 468.0 6.75%, due 2014 400.0 400.0 400.0 6.75%, due 2014 (225 million) 301.5 324.7 297.4 7.375%, due 2016 582.8 582.1 6.875%, due 2017 (300 million) 401.9 432.9 396.6 Senior Debentures: 7.50%, due 2010 28.1 28.3 257.5 7.80%, due 2018 250.0 250.0 250.0 Other 110.8 116.5 87.9 Total long-term debt 3,233.2 3,307.2 2,988.9 Less amounts due within one year 48.3 49.7 16.9 Long-term debt $ 3,184.9 $ 3,257.5 $ 2,972.0 On June14, 2006, the Companys subsidiary borrowers entered into the Secured Credit Agreement (the Agreement). At March31, 2010, the Agreement included a $900.0 million revolving credit facility, a 160.0 million Australian dollar term loan, and a 110.8 million Canadian dollar term loan, each of which has a final maturity date of June15, 2012. It also included a $189.5 million term loan and a 189.5 million term loan, each of which has a final maturity date of June14, 2013. At March31, 2010, the Companys subsidiary borrowers had unused credit of $766.1 million available under the Agreement. The weighted average interest rate on borrowings outstanding under the Agreement at March31, 2010 was 2.42%. During October2006, the Company entered into a 300 million European accounts receivable securitization program. The program extends through October2011, subject to annual renewal of backup credit lines. In addition, the Company participates in a receivables financing program in the Asia Pacific region with a revolving funding commitment of 10 million New Zealand dollars that expires November2010. Information related to the Companys accounts receivable securitization programs is as follows: March31, December31, March31, 2010 2009 2009 Balance (included in short-term loans) $ 228.7 $ 289.0 $ 255.2 Weighted average interest rate 2.57 % 2.52 % 3.72 % The carrying amounts reported for the accounts receivable securitization programs, and certain long-term debt obligations subject to frequently redetermined interest rates, approximate fair value. Fair values for the Companys significant fixed rate debt obligations are generally based on published market quotations. Fair values at March31, 2010 of the Companys significant fixed rate debt obligations are as follows: Principal Amount Indicated Fair Value (millions of Market (millions of dollars) Price dollars)

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Supplemental Cash Flow Information	3. Supplemental Cash Flow Information Three months ended March31, 2010 2009 Interest paid in cash $ 44.6 $ 27.2 Income taxes paid in cash 10.3 37.5

Share Owners' Equity

Share Owners' Equity
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Share Owners' Equity	4. Share Owners Equity The activity in share owners equity for the three months ended March31, 2010 and 2009 is as follows: Share Owners Equity of the Company Total Share Owners Equity Common Stock, Capital in Excess of Par Value, and Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss Non- controlling Interests Balance on January1, 2010 $ 1,736.4 $ 2,726.6 $ 129.4 $ (1,317.8 ) $ 198.2 Issuance of common stock 6.5 6.5 Reissuance of common stock 1.4 1.4 Treasury shares purchased (144.2 ) (144.2 ) Comprehensive income: Net earnings 94.4 85.3 9.1 Foreign currency translation adjustments (35.8 ) (36.0 ) 0.2 Pension and other postretirement benefit adjustments, net of tax 31.7 31.7 Change in fair value of derivative instruments, net of tax (5.9 ) (5.9 ) Total comprehensive income 84.4 Noncontrolling interests share of acquisition 7.9 7.9 Dividends paid to noncontrolling interests on subsidiary common stock (5.8 ) (5.8 ) Balance on March31, 2010 $ 1,686.6 $ 2,590.3 $ 214.7 $ (1,328.0 ) $ 209.6 Share Owners Equity of the Company Total Share Owners Equity Common Stock, Capital in Excess of Par Value, and Treasury Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Non- controlling Interests Balance on January1, 2009 $ 1,293.4 $ 2,693.6 $ (32.4 ) $ (1,620.6 ) $ 252.8 Issuance of common stock 8.5 8.5 Reissuance of common stock 1.6 1.6 Comprehensive income: Net earnings 58.8 45.1 13.7 Foreign currency translation adjustments (93.6 ) (84.3 ) (9.3 ) Pension and other postretirement benefit adjustments, net of tax 10.5 10.5 Change in fair value of derivative instruments, net of tax (6.0 ) (6.0 ) Total comprehensive loss (30.3 ) Dividends paid to noncontrolling interests on subsidiary common stock (17.0 ) (17.0 ) Balance on March31, 2009 $ 1,256.2 $ 2,703.7 $ 12.7 $ (1,700.4 ) $ 240.2 During the first quarter of 2010, the Company purchased 4.3 million shares of its common stock for $144.2 million pursuant to authorization by its Board of Directors in September2008 to purchase up to $350 million of the Company common stock.

Inventories

Inventories
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Inventories	5. Inventories Major classes of inventory are as follows: March31, December31, March31, 2010 2009 2009 Finished goods $ 742.3 $ 741.5 $ 875.6 Raw materials 109.9 107.4 116.9 Operating supplies 49.9 51.4 52.3 $ 902.1 $ 900.3 $ 1,044.8

Contingencies

Contingencies
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Contingencies	6. Contingencies The Company is one of a number of defendants in a substantial number of lawsuits filed in numerous state and federal courts by persons alleging bodily injury (including death) as a result of exposure to dust containing asbestos fibers. From 1948 to 1958, one of the Companys former business units commercially produced and sold approximately $40 million of a high-temperature, calcium-silicate based pipe and block insulation material containing asbestos. The Company exited the pipe and block insulation business in April1958. The traditional asbestos personal injury lawsuits and claims relating to such production and sale of asbestos material typically allege various theories of liability, including negligence, gross negligence and strict liability and seek compensatory and in some cases, punitive damages in various amounts (herein referred to as asbestos claims). As of March31, 2010, the Company has determined that it is a named defendant in asbestos lawsuits and claims involving approximately 6,700 plaintiffs and claimants. Based on an analysis of the lawsuits pending as of December31, 2009, approximately 79% of plaintiffs either do not specify the monetary damages sought, or in the case of court filings, claim an amount sufficient to invoke the jurisdictional minimum of the trial court. Approximately 20% of plaintiffs specifically plead damages of $15 million or less, and 1% of plaintiffs specifically plead damages greater than $15 million but less than $100 million. Fewer than 1% of plaintiffs specifically plead damages $100 million or greater but less than $122 million. As indicated by the foregoing summary, current pleading practice permits considerable variation in the assertion of monetary damages. The Companys experience resolving hundreds of thousands of asbestos claims and lawsuits over an extended period, demonstrates that the monetary relief which may be alleged in a complaint bears little relevance to a claims merits or disposition value. Rather, the amount potentially recoverable is determined by such factors as the plaintiffs severity of disease, the product identification evidence against specific defendants, the defenses available to those defendants, the specific jurisdiction in which the claim is made, and the plaintiffs history of smoking or exposure to other possible disease-causative factors. In addition to the pending claims set forth above, the Company has claims-handling agreements in place with many plaintiffs counsel throughout the country. These agreements require evaluation and negotiation regarding whether particular claimants qualify under the criteria established by such agreements. The criteria for such claims include verification of a compensable illness and a reasonable probability of exposure to a product manufactured by the Companys former business unit during its manufacturing period ending in 1958. Some plaintiffs counsel have historically withheld claims under these agreements for later presentation while focusing their attention on active litigation in the tort system. The Company believes that as of March31, 2010 there are approximately 800 claims against other defendants

Segment Information

Segment Information
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Segment Information	7. Segment Information The Company has four reportable segments based on its four geographic locations: (1)Europe; (2)North America; (3)South America; (4)Asia Pacific. These four segments are aligned with the Companys internal approach to managing, reporting, and evaluating performance of its global glass operations. Certain assets and activities not directly related to one of the regions or to glass manufacturing are reported with Retained Corporate Costs and Other. These include licensing, equipment manufacturing, global engineering, and non-glass equity investments. Retained Corporate Costs and Other also includes certain headquarters administrative and facilities costs and certain incentive compensation and other benefit plan costs that are global in nature and are not allocable to the reportable segments. The Companys measure of profit for its reportable segments is Segment Operating Profit, which consists of consolidated earnings from continuing operations before interest income, interest expense, and provision for income taxes and excludes amounts related to certain items that management considers not representative of ongoing operations as well as certain retained corporate costs. The Companys management uses Segment Operating Profit, in combination with net sales and selected cash flow information, to evaluate performance and to allocate resources. Segment Operating Profit for reportable segments includes an allocation of some corporate expenses based on both a percentage of sales and direct billings based on the costs of specific services provided. Financial information for the three-month periods ended March31, 2010 and 2009 regarding the Companys reportable segments is as follows: Net sales: 2010 2009 Europe $ 668.1 $ 612.9 North America 443.7 494.3 South America 210.9 214.0 Asia Pacific 250.5 182.0 Reportable segment totals 1,573.2 1,503.2 Other 9.3 15.8 Net sales $ 1,582.5 $ 1,519.0 Segment Operating Profit: 2010 2009 Europe $ 56.4 $ 44.2 North America 63.3 62.7 South America 41.7 60.0 Asia Pacific 36.8 25.0 Reportable segment totals 198.2 191.9 Items excluded from Segment Operating Profit: Retained corporate costs and other (18.4 ) (11.9 ) Restructuring and asset impairments (50.4 ) Interest income 4.4 8.5 Interest expense (55.6 ) (48.1 ) Earnings before income taxes $ 128.6 $ 90.0 Financial information regarding the Companys total assets is as follows: Total assets: March31, 2010 December31, 2009 March31, 2009 Europe $ 3,617.7 $ 3,852.3 $ 3,487.6 North America 1,959.2 1,899.8 1,888.0 South America 875.4 855.9 925.9 Asia Pacific 1,683.4 1,683.0 1,245.1 Reportable segment totals 8,135.7 8,291.0 7,546.6 Other 236.0 436.4 205.0 Consolidated totals $ 8,371.7 $ 8,727.4 $ 7,751.6

Other Expense

Other Expense
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Other Expense	8. Other Expense Other expense for the first quarter of 2010 includes approximately $8 million of losses recognized by the Company to revalue its net monetary assets in Venezuela as the parallel market rate continued to devalue since December31, 2009. See Note 13 for additional information. During the first quarter of 2009, the Company recorded charges totaling $50.4 million ($47.7 million after tax amount attributable to the Company) for restructuring and asset impairment. The charges reflected the decisions reached in the Companys strategic review of its global manufacturing footprint. See Note 9 for additional information.

Restructuring Accruals

Restructuring Accruals
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Restructuring Accruals	9. Restructuring Accruals Beginning in 2007, the Company commenced a strategic review of its global profitability and manufacturing footprint. The combined 2007, 2008, and 2009 charges, amounting to $401.3 million ($333.1 million after tax amount attributable to the Company), reflect the decisions reached by the Company in its strategic review of its global manufacturing footprint. The related curtailment of plant capacity and realignment of selected operations will result in an overall reduction in the Companys workforce of approximately 3,250 jobs. Amounts recorded by the Company do not include any gains that may be realized upon the ultimate sale or disposition of closed facilities.The Companys decisions to curtail selected production capacity have resulted in write downs of certain long-lived assets to the extent their carrying amounts exceeded fair value or fair value less cost to sell. The Company classified the significant assumptions used to determine the fair value of the impaired assets, which was not material, as Level 3 in the fair value hierarchy as set forth in the general accounting principles for fair value measurements. The Company also recorded liabilities for certain employee separation costs to be paid under contractual arrangements and other exit costs. 2007 During the third and fourth quarters of 2007, the Company recorded charges totaling $55.3 million ($40.2 million after tax), for restructuring and asset impairment in Europe and North America. The curtailment of plant capacity resulted in elimination of approximately 560 jobs and a corresponding reduction in the Companys workforce. 2008 During 2008, the Company recorded charges totaling $132.4 million ($110.1 million after tax amount attributable to the Company), for restructuring and asset impairment across all segments as well as in Retained Corporate Costs and Other. The curtailment of plant capacity and realignment of selected operations resulted in elimination of approximately 1,240 jobs and a corresponding reduction in the Companys workforce. 2009 During 2009, the Company recorded charges totaling $213.6 million ($182.8 million after tax amount attributable to the Company), for restructuring and asset impairment across all segments. The curtailment of plant capacity will result in elimination of approximately 1,450 jobs and a corresponding reduction in the Companys workforce. As of December31, 2009, the Company had concluded its global manufacturing footprint review. The Company expects that the majority of the remaining estimated cash expenditures related to the above charges will be paid out by the end of 2010. Selected information related to the restructuring accrual is as follows: Employee Costs Asset Impairment Other Total 2007 Charges $ 26.1 $ 22.3 $ 6.9 $ 55.3 Write-down of assets to net realizable value (22.3 ) (2.4 ) (24.7 ) Balance at December31, 2007 26.1 4.5 30.6 2008 charges 70.1 32.5 29.8 132.4 Write-down of assets to net realizable value (32.5 ) (4.7 ) (37.2 ) Net cash paid, principally

Derivative Instruments

Derivative Instruments
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Derivative Instruments	10. Derivative Instruments The Company has certain derivative assets and liabilities which consist of interest rate swaps, natural gas forwards, and foreign exchange option and forward contracts. The Company records derivative assets and liabilities at fair value and classifies them as Level 2 in the fair value hierarchy. Interest Rate Swaps Designated as Fair Value Hedges In the fourth quarter of 2003 and the first quarter of 2004, the Company entered into a series of interest rate swap agreements with a total notional amount of $700million that were to mature in 2010 and2013. The swaps were executed in order to: (i)convert a portion of the senior notes and senior debentures fixed-rate debt into floating-rate debt; (ii)maintain a capital structure containing appropriate amounts of fixed and floating-rate debt; and (iii)reduce net interest payments and expense in the near-term. The Companys fixed-to-floating interest rate swaps were accounted for as fair value hedges. Because the relevant terms of the swap agreements matched the corresponding terms of the notes, there was no hedge ineffectiveness. Accordingly, the Company recorded the net of the fair market values of the swaps as a long-term asset (liability) along with a corresponding net increase (decrease) in the carrying value of the hedged debt. For derivative instruments that are designated and qualify as fair value hedges, the change in the fair value of the derivative instrument related to the future cash flows (gain or loss on the derivative) as well as the offsetting change in the fair value of the hedged item attributable to the hedged risk are recognized in current earnings. The Company includes the gain or loss on the hedged items (i.e. long-term debt) in the same line item (interest expense) as the offsetting loss or gain on the related interest rate swaps. During the second quarter of 2009, the Company completed a tender offer for its $250 million senior debentures due 2010. As a result of the tender offer, the Company extinguished $221.9 million of the senior debentures and terminated the related interest rate swap agreements for proceeds of $5.0 million. The Company recognized $4.4 million of the proceeds as a reduction to interest expense upon the termination of the interest rate swap agreements, while the remaining $0.6 million was recorded as an adjustment to debt and is being recognized as a reduction to interest expense over the remaining life of the outstanding senior debentures due 2010. During the second quarter of 2009, the Companys interest rate swaps related to the $450 million senior notes due 2013 were terminated. The Company received proceeds of $12.4 million which were recorded as an adjustment to debt and will be recognized as a reduction to interest expense over the remaining life of the senior notes due 2013. As of March31, 2010, the balance of unamortized proceeds from terminated interest rate swaps included in long-term debt is $9.7 million. The effect of the interest rate swaps on the results of operations for the three months ended March31, 2010 and 2009 is as follows: Amount of Gain (Loss) Recognized in Interest Expense

Pensions Benefit Plans and Othe

Pensions Benefit Plans and Other Postretirement Benefits
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Pensions Benefit Plans and Other Postretirement Benefits	11. Pensions Benefit Plans and Other Postretirement Benefits The components of the net periodic pension cost for the three months ended March31, 2010 and 2009 are as follows: 2010 2009 Service cost $ 11.6 $ 9.9 Interest cost 52.9 51.5 Expected asset return (68.3 ) (67.3 ) Amortization: Prior service credit (0.2 ) (0.2 ) Actuarial loss 22.8 10.9 Net amortization 22.6 10.7 Net periodic pension cost $ 18.8 $ 4.8 The components of the net postretirement benefit cost for the three months ended March31, 2010 and 2009 are as follows: 2010 2009 Service cost $ 0.6 $ 0.4 Interest cost 4.0 4.0 Amortization: Prior service credit (0.8 ) (0.8 ) Actuarial loss 1.3 1.0 Net amortization 0.5 0.2 Net postretirement benefit cost $ 5.1 $ 4.6 In March2010, the Patient Protection and Affordable Care Act and the Health Care Education and Affordability Reconciliation Act (the Acts) were signed into law. The Acts contain provisions which could impact the Companys accounting for retiree medical benefits in future periods. However, the extent of that impact, if any, cannot be determined until additional interpretations of the Acts become available. Based on the analysis to date, the impact of provisions in the Acts which are reasonably determinable is not expected to have a material impact on the Companys other postretirement benefit plans. Accordingly, a remeasurement of the Companys postretirement benefit obligation is not required at this time. The Company will continue to assess the provisions of the Acts and may consider plan amendments in future periods to better align these plans with the provisions of the Acts.

Business Combination

Business Combination
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Business Combination	12. Business Combination On March11, 2010, the Company acquired the majority share of Cristalerias Rosario, a one-plant glass container manufacturer located in Rosario, Argentina. Cristalerias Rosario primarily produces wine and non-alcoholic beverage glass containers and employs approximately 230 people.

Venezuelan Operations

Venezuelan Operations
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Venezuelan Operations	13. Venezuelan Operations Beginning January1, 2010, Venezuelas economy is considered to be highly inflationary for accounting purposes. Accordingly, the Company has adopted the U.S. dollar as the functional currency for its Venezuelan operations. All bolivar-denominated transactions, as well as monetary assets and liabilities, are remeasured at the end of each reporting period into U.S. dollars using the parallel market rate at that date. The Company has elected to use the parallel market rate to remeasure its Venezuelan operations due to the continued restrictions on currency exchange in Venezuela at the official rates. The use of the parallel market rate for remeasurement in Venezuela resulted in a reduction to the South American segment operating profit compared to the first quarter of 2009 as bolivar-denominated revenues and costs of the Companys Venezuelan operations were translated into fewer U.S. dollars at the parallel market rate compared to the 2.15 official rate used for translation in 2009. Additionally, the adoption of the U.S. dollar as the functional currency in Venezuela decreased the South American segment operating profit as the remeasurement of the net monetary assets of the Companys Venezuelan operations was negatively impacted by a 17% devaluation of the parallel market rate during the first quarter of 2010.

Financial Information for Subsi

Financial Information for Subsidiary Guarantors and Non-Guarantors
	3 Months Ended Mar. 31, 2010
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Financial Information for Subsidiary Guarantors and Non-Guarantors	14. 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 two series 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. 100% owned subsidiaries are presented on the equity basis of accounting. 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. March31, 2010 Non- Guarantor Guarantor Balance Sheet Parent Subsidiaries Subsidiaries Eliminations Consolidated Current assets: Accounts receivable $ $ $ 1,048.0 $ $ 1,048.0 Inventories 902.1 902.1 Other current assets 586.6 586.6 Total current assets 2,536.7 2,536.7 Investments in and advances to subsidiaries 2,206.3 1,928.2 (4,134.5 ) Goodwill 2,346.7 2,346.7 Other non-current assets 791.8 791.8 Total other assets 2,206.3 1,928.2 3,138.5 (4,134.5 ) 3,138.5 Property, plant and equipment, net 2,696.5 2,696.5 Total assets $ 2,206.3 $ 1,928.2 $ 8,371.7 $ (4,134.5 ) $ 8,371.7 Current liabilities : Accounts payable and accrued liabilities $ $ $ 1,440.5 $ $ 1,440.5 Current portion of asbestos liability 175.0 175.0 Short-term loans and long-term debt due within one year 28.1 283.1 (28.1 ) 283.1 Total current liabilities 203.1 1,723.6 (28.1 ) 1,898.6 Long-term debt 250.0 3,184.9 (250.0 ) 3,184.9 Asbestos-related liabilities 276.2 276.2 Other non-current liabilities 1,325.4 1,325.4 Total share owners equity of the Company 1,477.0 1,928.2 1,928.2 (3,856.4 ) 1,477.0 Noncontrolling interests 209.6 209.6 Total liabilities and share owners equity $ 2,206.3 $ 1,928.2 $ 8,371.7 $ (4,134.5 ) $ 8,371.7 December31, 2009 Non- Guarantor Guarantor Balance Sheet Parent Subsidiaries Subsidiaries Eliminations Consolidated Current assets: Accounts receivable $ $ $ 1,004.2 $ $ 1,004.2 Inventories 900.3 900.3 Other current assets 892.2 892.2 Total current assets 2,796.7 2,796.7 Investments in and advances to subsidiaries 2,301.4 2,023.3 (4,324.7 ) Goodwill 2,381.0 2,381.0 Other non-current assets 807

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010
Document and Entity Information
Entity Registrant Name	OWENS ILLINOIS INC /DE/
Entity Central Index Key	0000812074
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	164,962,705
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1