Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Jan. 31, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | OWENS ILLINOIS INC /DE/ | ||
Entity Central Index Key | 812,074 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,852,928,000 | ||
Entity Common Stock, Shares Outstanding | 153,622,239 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED RESULTS OF OPERATI
CONSOLIDATED RESULTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED RESULTS OF OPERATIONS | |||
Net sales | $ 6,877 | $ 6,869 | $ 6,702 |
Cost of goods sold. | (5,594) | (5,536) | (5,392) |
Gross profit | 1,283 | 1,333 | 1,310 |
Selling and administrative expense | (483) | (484) | (503) |
Research, development and engineering expense | (70) | (60) | (65) |
Interest expense, net | (261) | (268) | (272) |
Equity earnings | 77 | 77 | 60 |
Other expense, net | (269) | (323) | (174) |
Earnings from continuing operations before income taxes | 277 | 275 | 356 |
Provision for income taxes | (108) | (70) | (119) |
Earnings from continuing operations | 169 | 205 | 237 |
Gain (loss) from discontinued operations | 113 | (3) | (7) |
Net earnings | 282 | 202 | 230 |
Net earnings attributable to noncontrolling interests | (25) | (22) | (21) |
Net earnings attributable to the Company | 257 | 180 | 209 |
Amounts attributable to the Company: | |||
Earnings from continuing operations | 144 | 183 | 216 |
Gain (loss) from discontinued operations | 113 | (3) | (7) |
Net earnings attributable to the Company | $ 257 | $ 180 | $ 209 |
Basic earnings per share: | |||
Earnings from continuing operations (in dollars per share) | $ 0.90 | $ 1.12 | $ 1.33 |
Gain (loss) from discontinued operations (in dollars per share) | 0.71 | (0.01) | (0.04) |
Net earnings (in dollars per share) | 1.61 | 1.11 | 1.29 |
Diluted earnings per share: | |||
Earnings from continuing operations (in dollars per share) | 0.89 | 1.11 | 1.32 |
Gain (loss) from discontinued operations (in dollars per share) | 0.70 | (0.01) | (0.04) |
Net earnings (in dollars per share) | 1.59 | $ 1.10 | $ 1.28 |
Dividends declared per common share | $ 0.05 |
CONSOLIDATED COMPREHENSIVE INCO
CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED COMPREHENSIVE INCOME | |||
Net earnings | $ 282 | $ 202 | $ 230 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (174) | 70 | (224) |
Pension and other postretirement benefit adjustments, net of tax | 30 | 289 | 52 |
Change in fair value of derivative instruments, net of tax | (6) | (8) | 13 |
Other comprehensive income (loss) | (150) | 351 | (159) |
Total comprehensive income | 132 | 553 | 71 |
Comprehensive income attributable to noncontrolling interests | (17) | (27) | (17) |
Comprehensive income attributable to the Company | $ 115 | $ 526 | $ 54 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 512 | $ 492 |
Trade receivables, net of allowances of $35 million and $34 million at December 31, 2018 and 2017, respectively | 549 | 663 |
Inventories | 1,018 | 1,036 |
Prepaid expenses and other current assets | 278 | 229 |
Total current assets | 2,357 | 2,420 |
Other assets: | ||
Equity investments | 698 | 525 |
Pension assets | 44 | 49 |
Other assets | 602 | 602 |
Intangibles | 400 | 439 |
Goodwill | 2,513 | 2,590 |
Total other assets | 4,257 | 4,205 |
Property, plant and equipment: | ||
Land, at cost | 244 | 255 |
Buildings and equipment, at cost: | ||
Buildings and building equipment | 1,141 | 1,180 |
Factory machinery and equipment | 5,193 | 5,015 |
Transportation, office and miscellaneous equipment | 102 | 96 |
Construction in progress | 344 | 303 |
Property, plant and equipment, at cost | 7,024 | 6,849 |
Less accumulated depreciation | 3,939 | 3,718 |
Net property, plant and equipment | 3,085 | 3,131 |
Total assets | 9,699 | 9,756 |
Current liabilities: | ||
Accounts payable | 1,321 | 1,324 |
Salaries and wages | 157 | 166 |
U.S. and foreign income taxes | 34 | 35 |
Current portion of asbestos-related liabilities | 160 | 100 |
Other accrued liabilities | 375 | 378 |
Other liabilities - discontinued operations | 115 | |
Short-term loans | 127 | 151 |
Long-term debt due within one year | 33 | 11 |
Total current liabilities | 2,207 | 2,280 |
Long-term debt | 5,181 | 5,121 |
Deferred taxes | 96 | 99 |
Pension benefits | 534 | 471 |
Nonpension postretirement benefits | 145 | 167 |
Other liabilities | 194 | 209 |
Asbestos-related liabilities | 442 | 482 |
Share owners' equity of the Company: | ||
Common stock, par value $.01 per share, 250,000,000 shares authorized, 186,575,999 and 185,727,663 shares issued (including treasury shares), respectively | 2 | 2 |
Capital in excess of par value | 3,124 | 3,099 |
Treasury stock, at cost, 30,917,603 and 22,648,606 shares, respectively | (705) | (551) |
Retained earnings | 333 | 84 |
Accumulated other comprehensive loss | (1,968) | (1,826) |
Total share owners' equity of the Company | 786 | 808 |
Noncontrolling interests | 114 | 119 |
Total share owners' equity | 900 | 927 |
Total liabilities and share owners' equity | $ 9,699 | $ 9,756 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Trade receivables allowance | $ 35 | $ 34 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 186,575,999 | 185,727,663 |
Treasury stock, shares | 30,917,603 | 22,648,606 |
CONSOLIDATED SHARE OWNERS' EQUI
CONSOLIDATED SHARE OWNERS' EQUITY - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Common Stock | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | $ 2 | $ 2 | $ 2 |
Balance | 2 | 2 | 2 |
Capital in Excess of Par Value | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | 3,099 | 3,080 | 3,064 |
Issuance of common stock | 1 | 5 | |
Reissuance of common stock | (2) | ||
Stock compensation | 27 | 18 | 11 |
Balance | 3,124 | 3,099 | 3,080 |
Treasury Stock | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | (551) | (560) | (573) |
Reissuance of common stock | 9 | 9 | 13 |
Treasury shares purchased | (163) | ||
Balance | (705) | (551) | (560) |
Retained Earnings (accumulated deficit) | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | 84 | (96) | (305) |
Dividends declared (a) | (8) | ||
Net earnings | 257 | 180 | 209 |
Balance | 333 | 84 | (96) |
Accumulated Other Comprehensive Loss. | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | (1,826) | (2,172) | (2,017) |
Other comprehensive income (loss) | (142) | 346 | (155) |
Balance | (1,968) | (1,826) | (2,172) |
Non-Controlling Interests | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | 119 | 109 | 108 |
Net earnings | 25 | 22 | 21 |
Other comprehensive income (loss) | (8) | 5 | (4) |
Distributions to noncontrolling interests | (22) | (17) | (16) |
Balance | 114 | 119 | 109 |
Balance | 927 | 363 | 279 |
Issuance of common stock | 1 | 5 | |
Reissuance of common stock | 7 | 9 | 13 |
Treasury shares purchased | (163) | ||
Stock compensation | 27 | 18 | 11 |
Dividends declared (a) | (8) | ||
Net earnings | 282 | 202 | 230 |
Other comprehensive income (loss) | (150) | 351 | (159) |
Distributions to noncontrolling interests | (22) | (17) | (16) |
Balance | $ 900 | $ 927 | $ 363 |
CONSOLIDATED SHARE OWNERS' EQ_2
CONSOLIDATED SHARE OWNERS' EQUITY (Parenthetical) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED SHARE OWNERS' EQUITY | |||
Issuance of common stock (in shares) | 30 | 100 | 500 |
Reissuance of common stock (in shares) | 400 | 400 | 500 |
Stock compensation shares issued (in shares) | 800 | 300 | 200 |
Treasury shares purchased (in shares) | 8,600 | ||
Dividends declared per common share | $ 0.05 |
CONSOLIDATED CASH FLOWS
CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | |||
Net earnings | $ 282 | $ 202 | $ 230 |
Loss (gain) from discontinued operations | (113) | 3 | 7 |
Non-cash charges (credits): | |||
Depreciation | 388 | 387 | 375 |
Amortization of intangibles and other deferred items | 106 | 101 | 103 |
Amortization of finance fees and debt discount | 13 | 13 | 13 |
Deferred tax provision (benefit) | (9) | (12) | (4) |
Pension expense | 32 | 29 | 31 |
Restructuring, asset impairment and related charges | 92 | 72 | 98 |
Pension settlement charges | 74 | 218 | 98 |
Asbestos-related costs | 125 | ||
Impairment of equity investment | 25 | ||
Gain on China land sale | (71) | ||
Pension contributions | (34) | (31) | (38) |
Asbestos-related payments | (105) | (110) | (125) |
Cash paid for restructuring activities | (32) | (62) | (24) |
Change in components of working capital | 15 | (89) | 90 |
Other, net | (41) | 3 | (50) |
Cash provided by continuing operating activities | 793 | 724 | 758 |
Cash utilized in discontinued operating activities | (2) | (3) | (7) |
Total cash provided by operating activities | 791 | 721 | 751 |
Investing activities: | |||
Cash payments for property, plant and equipment | (536) | (441) | (454) |
Acquisitions, net of cash acquired | (175) | (39) | (56) |
Net cash proceeds on disposal of assets | 11 | 14 | 85 |
Net foreign exchange derivative activity | 2 | 8 | |
Cash utilized in continuing investing activities | (698) | (466) | (417) |
Cash provided by discontinued investing activities | 115 | ||
Total cash utilized in investing activities | (698) | (351) | (417) |
Financing activities: | |||
Additions to long-term debt | 2,511 | 1,458 | 1,235 |
Repayments of long-term debt | (2,353) | (1,764) | (1,453) |
Increase (decrease) in short-term loans | (18) | (36) | 10 |
Payment of finance fees | (13) | (28) | (9) |
Distributions paid to noncontrolling interests | (22) | (17) | (16) |
Treasury shares repurchased | (163) | ||
Issuance of common stock and other | 5 | (5) | 5 |
Cash utilized in financing activities | (53) | (392) | (228) |
Effect of exchange rate fluctuations on cash | (20) | 22 | (13) |
Increase in cash | 20 | 93 | |
Cash and cash equivalents at beginning of period | 492 | 492 | 399 |
Cash and cash equivalents at end of period | $ 512 | $ 492 | $ 492 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies | |
Significant Accounting Policies | 1. Significant Accounting Poli Basis of Consolidated Statements The consolidated financial statements of Owens-Illinois, Inc. (the “Company”) include the accounts of its subsidiaries. Newly acquired subsidiaries have been included in the consolidated financial statements from dates of acquisition. The Company uses the equity method of accounting for investments in which it has a significant influence and generally an ownership interest of 20% to 50%. The Company monitors other than temporary declines in fair value and records reductions in carrying values when appropriate. Nature of Operations The Company is a leading manufacturer of glass container products. The Company’s principal product lines are glass containers for the food and beverage industries. The Company has glass container operations located in 23 countries. The principal markets and operations for the Company’s products are in the Americas, Europe and Asia Pacific. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management of the Company to make estimates and assumptions that affect certain amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates, at which time the Company would revise its estimates accordingly. Foreign Currency Translation The assets and liabilities of non-U.S. subsidiaries are translated into U.S. dollars at year-end exchange rates and their results of operations are converted on an ongoing basis at the monthly average rate. Any related translation adjustments are recorded in accumulated other comprehensive income in share owners’ equity. Revenue Recognition Revenue is recognized when obligations under the terms of the Company’s contracts and related purchase orders with its customers are satisfied, which primarily takes place when products are shipped from the Company’s manufacturing or warehousing facilities to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimated provisions for rebates, discounts, returns and allowances. Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Shipping and Handling Costs Shipping and handling costs are included with cost of goods sold in the Consolidated Results of Operations. Stock-Based Compensation The Company has various stock-based compensation plans consisting of stock option grants and restricted share awards. Costs resulting from all share-based compensation plans are required to be recognized in the financial statements. A public entity is required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the required service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the required service. Cash The Company defines “cash” as cash and time deposits with maturities of three months or less when purchased. Outstanding checks in excess of funds on deposit are included in accounts payable. Accounts Receivable Receivables are stated at amounts estimated by management to be the net realizable value. The Company charges off accounts receivable when it becomes apparent based upon age or customer circumstances that amounts will not be collected. Allowance for Doubtful Accounts The allowance for doubtful accounts is established through charges to the provision for bad debts. The Company evaluates the adequacy of the allowance for doubtful accounts on a periodic basis. The evaluation includes historical trends in collections and write-offs, management’s judgment of the probability of collecting accounts and management’s evaluation of business risk. Inventory Valuation Inventories are valued at the lower of average costs or market. Goodwill Goodwill represents the excess of cost over fair value of net assets of businesses acquired. Goodwill is evaluated annually, as of October 1, for impairment or more frequently if an impairment indicator exists. Intangible Assets and Other Long-Lived Assets Intangible assets are amortized over the expected useful life of the asset. Amortization expense directly attributed to the manufacturing of the Company’s products is included in cost of goods sold. Amortization expense related to non-manufacturing activities is included in Selling and administrative expense and Other expense, net. The Company evaluates the recoverability of intangible assets and other long-lived assets based on undiscounted projected cash flows, excluding interest and taxes, when factors indicate that impairment may exist. If impairment exists, the asset is written down to fair value. Property, Plant and Equipment Property, plant and equipment (“PP&E”) is carried at cost and includes expenditures for new facilities and equipment and those costs which substantially increase the useful lives or capacity of existing PP&E. In general, depreciation is computed using the straight-line method and recorded over the estimated useful life of the asset. Factory machinery and equipment is depreciated over periods ranging from 5 to 25 years with the majority of such assets (principally glass-melting furnaces and forming machines) depreciated over 7 to 15 years. Buildings and building equipment are depreciated over periods ranging from 10 to 50 years. Depreciation expense directly attributed to the manufacturing of the Company’s products is included in cost of goods sold. Depreciation expense related to non-manufacturing activities is included in selling and administrative. Depreciation expense includes the amortization of assets recorded under capital leases. Maintenance and repairs are expensed as incurred. Costs assigned to PP&E of acquired businesses are based on estimated fair values at the date of acquisition. The Company evaluates the recoverability of PP&E based on undiscounted projected cash flows, excluding interest and taxes, when factors indicate that impairment may exist. If impairment exists, the asset is written down to fair value. Derivative Instruments The Company uses derivative instruments to manage risks generally associated with foreign exchange rate, interest rate and commodity market volatility. Derivative financial instruments are included on the balance sheet at fair value. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether a hedge has been designated. For those derivative instruments that qualify for hedge accounting, the Company designates the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, fair value hedge, or a hedge of a net investment in a foreign operation. For a derivative instrument designated as a fair value hedge, the gain or loss on the derivative is recognized in earnings immediately with the offsetting gain or loss on the hedged item. For a derivative instrument designated as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of Accumulated other comprehensive loss and is subsequently recognized in earnings when the hedged exposure affects earnings. If there is an ineffective portion of the change in fair value of the derivative it is recognized directly in earnings. For a derivative instrument designated as a hedge of a net investment in a foreign operation, the effective portion of the derivative's gain or loss is reported in Accumulated other comprehensive loss as part of the cumulative translation adjustment and amounts are reclassified out of accumulated other comprehensive loss into earnings when the hedged net investment is either sold or substantially liquidated. Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings. The Company does not enter into derivative financial instruments for trading purposes and is not a party to leveraged derivatives. In the consolidated statement of cash flows, the settlement of derivative instruments designated as hedges is typically recorded in the category that is consistent with the nature of the underlying item being hedged. See Note 8 to the Consolidated Financial Statements for additional information about hedges and derivative financial instruments. Fair Value Measurements Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Generally accepted accounting principles defines a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs for which there is little or no market data, which requires the Company to develop assumptions. The carrying amounts reported for cash and short-term loans approximate fair value. In addition, carrying amounts approximate fair value for certain long-term debt obligations subject to frequently redetermined interest rates. Fair values for the Company’s significant fixed rate debt obligations are generally based on published market quotations. Reclassifications Certain reclassifications of prior years’ data have been made to conform to the current year presentation. As a result of the Company’s implementation of Accounting Standards Update No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” the Company reclassified $200 million and $98 million of pension settlement charges from Cost of goods sold to Other expense, net on the Consolidated Results of Operations for the years ended December 31, 2017 and 2016, respectively. The Company also reclassified $18 million of pension settlement charges from Selling and administrative expense to Other expense, net on the Consolidated Results of Operations for the year ended December 31, 2017. New Accounting Standards Revenue from Contracts with Customers - In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. On January 1, 2018, the Company adopted this accounting standard. See Note 3, Revenue, for additional information. Leases - In February 2016, the FASB issued ASU No. 2016-02, “Leases” effective January 1, 2019. Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee's obligation to make lease payments arising from a lease, and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. ASU No. 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date. The Company expects to adopt this guidance using the additional, optional transition method, the package of transitional practical expedients relating to the identification, classification and initial direct costs of leases commencing before the effective date of ASU No. 2016-02, and the transitional practical expedient for the treatment of existing land easements; however, the Company does not expect to elect the hindsight transitional practical expedient. The Company anticipates the new guidance will significantly impact its consolidated financial statements as the Company has a significant number of leases. As of December 31, 2018, the Company had minimum lease commitments under non-cancellable operating leases approximating $265 million. The Company formed an implementation team, identified its lease population and implemented a new software to manage its leases in accordance with this new accounting standard. Credit Losses - In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The new guidance is effective for the Company on January 1, 2020. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. Statement of Cash Flows - In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” which was intended to reduce diversity in practice on how certain transactions are classified in the statement of cash flows. Application of the standard is required for annual periods beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. Compensation - Retirement Benefits - In March 2017, the FASB issued ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” which requires the service cost component to be presented with other employee compensation costs in operating income within the income statement while the other components will be reported separately outside of operations. Application of the standard is required for annual periods beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements, except for in the Consolidated Results of Operations for the prior periods in which there were pension settlement charges. These prior period pension settlement charges were reclassified from the Cost of goods sold and Selling and administrative expense to Other expense, net for the years ended December 31, 2017 and 2016, respectively. See the Reclassifications section of Note 1 for additional details. Derivatives and Hedging - In August 2017, the FASB issued ASU No. 2017-12, “Targeted Improvements to Accounting for Hedging Activities” which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. Application of the standard is required for annual periods beginning after December 15, 2018. The Company adopted this standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. Income Taxes - In January 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which gives entities the option to reclassify to retained earnings the tax effects resulting from the U.S. Tax Cuts and Jobs Act (the “Act”) related to items in Accumulated other comprehensive income (“AOCI”) that the FASB refers to as having been stranded in AOCI. The new guidance may be applied retrospectively to each period in which the effect of the Act is recognized in the period of adoption. The Company must adopt this guidance for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for periods for which financial statements have not yet been issued or made available for issuance, including the period the Act was enacted. The guidance, when adopted, will require new disclosures regarding a company’s accounting policy for releasing the tax effects in AOCI and permit a company the option to reclassify to retained earnings the tax effects resulting from the Act that are stranded in AOCI. The Company is currently evaluating how to apply the new guidance and has not determined whether it will elect to reclassify stranded amounts, if any. The adoption of ASU 2018-02 is not expected to have a material effect on the Company’s consolidated financial statements. Disclosure Requirements for Fair Value Measurement - In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” which modifies the fair value disclosure requirements. Application of the standard is required for annual periods beginning after December 15, 2019. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. Disclosure Requirements for Defined Benefit Plans - In August 2018, the FASB issued ASU No. 2018-14, “Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” which modifies the defined benefit plan disclosure requirements. Application of the standard is required for annual periods beginning after December 15, 2020. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information | |
Segment Information | 2. Segment Information The Company has three reportable segments and three operating segments based on its geographic locations: Americas, Europe, and Asia Pacific. These three segments are aligned with the Company’s internal approach to managing, reporting, and evaluating performance of its global glass operations. As previously disclosed, to better leverage its scale and presence across a larger geography and market, the Company completed the consolidation of the former North America and Latin America segments into one segment, named the Americas, effective January 1, 2018. The consolidation resulted in the leadership roles of the former North America and Latin America segments being combined into one position, President of the Americas, reporting to the Company’s chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer. Beginning January 1, 2018, the CODM reviews the operating results at the Americas level to make resource allocation decisions and to assess performance. The consolidation also resulted in the elimination of duplicative costs as certain functions of the former North America and Latin America segments were combined to simplify the management of the new Americas segment. For example, the Company consolidated its business shared service centers in North America and Latin America into one Americas shared service center. Amounts for 2017 and 2016 in the following tables are presented on the redefined basis for the Americas segment. 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 certain 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 Company’s measure of profit for its reportable segments is segment operating profit, which is a non-GAAP financial measure that 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 Company’s 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 regarding the Company’s reportable segments is as follows (dollars in millions): 2018 2017 2016 Net sales: Americas $ 3,638 $ 3,711 $ 3,652 Europe 2,489 2,375 2,300 Asia Pacific 675 714 684 Reportable segment totals 6,802 6,800 6,636 Other 75 69 66 Net sales $ 6,877 $ 6,869 $ 6,702 2018 2017 2016 Segment operating profit: Americas $ 585 $ 614 $ 568 Europe 316 263 237 Asia Pacific 44 65 77 Reportable segment totals 945 942 882 Items excluded from segment operating profit: Retained corporate costs and other charges (106) (104) (98) Charge for asbestos-related costs (125) Pension settlement charges (74) (218) (98) Restructuring, asset impairment and other (102) (77) (129) Gain on China land sale 71 Interest expense, net (261) (268) (272) Earnings from continuing operations before income taxes $ 277 $ 275 $ 356 Reportable Retained Consoli- Asia Segment Corp Costs dated Americas Europe Pacific Totals and Other Totals Total assets: 2018 $ 5,497 $ 3,036 $ 918 $ 9,451 $ 248 $ 9,699 2017 5,411 3,133 1,001 9,545 211 9,756 2016 5,059 2,792 926 8,777 358 9,135 Equity investments: 2018 $ 429 $ 98 $ 106 $ 633 $ 65 $ 698 2017 259 95 114 468 57 525 2016 21 78 117 216 217 433 Equity earnings: 2018 $ 39 $ 21 $ — $ 60 $ 17 $ 77 2017 41 18 59 18 77 2016 12 15 4 31 29 60 Capital expenditures: 2018 $ 255 $ 187 $ 92 $ 534 $ 2 $ 536 2017 233 152 55 440 1 441 2016 231 163 59 453 1 454 Depreciation and amortization expense: 2018 $ 293 $ 136 $ 55 $ 484 $ 10 $ 494 2017 310 125 43 478 10 488 2016 312 118 37 467 11 478 The Company’s net property, plant and equipment by geographic segment are as follows: U.S. Non-U.S. Total 2018 $ 681 $ 2,404 $ 3,085 2017 757 2,374 3,131 2016 749 2,131 2,880 The Company’s net sales by geographic segment are as follows: U.S. Non-U.S. Total 2018 $ 2,020 $ 4,857 $ 6,877 2017 2,072 4,797 6,869 2016 2,124 4,578 6,702 None of the years presented had a country with operations outside of the U.S. that accounted for more than 10% or more of consolidated net sales. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Revenue | 3. Revenue On January 1, 2018, the Company adopted accounting standard ASC 606, “Revenue from Contracts with Customers,” and selected the modified retrospective transition method. The adoption of this new standard did not impact the Company’s consolidated results of operations or balance sheet and there was no cumulative effect of initially applying this new revenue standard to the opening balance of retained earnings. Revenue is recognized when obligations under the terms of the Company’s contracts and related purchase orders with its customers are satisfied. This occurs with the transfer of control of glass containers, which primarily takes place when products are shipped from the Company’s manufacturing or warehousing facilities to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimated provisions for rebates, discounts, returns and allowances. Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s payment terms are based on customary business practices and can vary by customer type. The term between invoicing and when payment is due is not significant. Also, the Company elected to account for shipping and handling costs as a fulfillment cost at the time of shipment. For the year ended December 31, 2018, the Company had no material bad debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the Consolidated Balance Sheet. For the year ended December 31, 2018, revenue recognized from prior periods (for example, due to changes in transaction price) was not material. The following table for the year ended December 31, 2018 disaggregates the Company’s revenue by customer end use: Americas Europe Asia Pacific Total Alcoholic beverages (beer, wine, spirits) $ 2,281 $ 1,780 $ 493 $ 4,554 Food and other 780 461 101 1,342 Non-alcoholic beverages 577 248 81 906 Reportable segment totals $ 3,638 $ 2,489 $ 675 $ 6,802 Other 75 Net sales $ 6,877 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventories | |
Inventories | 4. Inventories Major classes of inventory are as follows: 2018 2017 Finished goods $ 849 $ 873 Raw materials 125 122 Operating supplies 44 41 $ 1,018 $ 1,036 |
Equity Investments
Equity Investments | 12 Months Ended |
Dec. 31, 2018 | |
Equity Investments | |
Equity Investments | 5. Equity Investments At December 31, 2018 the Company’s ownership percentage in affiliates include: O-I Ownership Affiliates Percentage Business Type Empresas Comegua S.A. % Glass container manufacturer BJC O-I Glass Pte. Ltd. % Glass container manufacturer CO Vidrieria SARL ("COV") % Glass container manufacturer Rocky Mountain Bottle Company % Glass container manufacturer Tata Chemical (Soda Ash) Partners % Soda ash supplier Vetrerie Meridionali SpA ("VeMe") % Glass container manufacturer Vetri Speciali SpA % Specialty glass manufacturer Summarized information pertaining to the Company’s equity affiliates follows: 2018 2017 2016 Equity in earnings: Non-U.S. $ 52 $ 45 $ 19 U.S. 25 32 41 Total $ 77 $ 77 $ 60 Dividends received $ 72 $ 48 $ 38 Summarized combined financial information for equity affiliates is as follows (unaudited): 2018 2017 At end of year: Current assets $ 655 $ 466 Non-current assets 1,306 1,021 Total assets 1,961 1,487 Current liabilities 342 232 Other liabilities and deferred items 242 198 Total liabilities and deferred items 584 430 Net assets $ 1,377 $ 1,057 For the year: 2018 2017 2016 Net sales $ 972 $ 883 $ 755 Gross profit $ 234 $ 242 $ 182 Net earnings $ 184 $ 165 $ 145 Based on an evaluation of each of the Company’s equity investments for the three years ending December 31, 2018, no investments exceeded the significant subsidiary thresholds per Rule 3-09 of Regulation S-X. As such, separate financial statements for the Company’s equity investments are not required to be filed with the Securities and Exchange Commission. The Company made purchases of approximately $255 million and $180 million from equity affiliates in 2018 and 2017, respectively, and owed approximately $111 million and $90 million to equity affiliates as of December 31, 2018 and 2017, respectively. There is a difference of approximately $9 million as of December 31, 2018, between the amount at which certain investments are carried and the amount of underlying equity in net assets. The portion of the difference related to inventory or amortizable assets is amortized as a reduction of the equity earnings. The remaining difference is considered goodwill. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets Goodwill The changes in the carrying amount of goodwill for the years ended December 31, 2018, 2017, and 2016 are as follows: Europe Americas Other Total Balance as of January 1, 2016 $ 840 $ 1,644 $ 5 $ 2,489 Acquisition related adjustments 41 41 Translation effects (32) (36) (68) Balance as of December 31, 2016 808 1,649 5 2,462 Translation effects 105 23 128 Balance as of December 31, 2017 913 1,672 5 2,590 Translation effects (39) (38) (77) Balance as of December 31, 2018 $ 874 $ 1,634 $ 5 $ 2,513 The acquisition related adjustments in 2016 primarily relate to the Vitro acquisition that the Company completed on September 1, 2015. Goodwill for the Asia Pacific segment is $0 and net of accumulated impairment losses of $1,135 million as of December 31, 2018, 2017, and 2016. Goodwill is tested for impairment annually as of October 1 (or more frequently if impairment indicators arise) by comparing the business enterprise value (“BEV”) of each reporting unit with its carrying value. The BEV is computed based on estimated future cash flows, discounted at the weighted average cost of capital of a hypothetical third-party buyer. If the BEV is less than the carrying value for any reporting unit, then any excess of the BEV of the goodwill over the carrying value will be recorded as an impairment loss. The calculations of the BEV are based on significant unobservable inputs, such as projected future cash flows of the reporting units, discount rates, terminal business value, and are classified as Level 3 in the fair value hierarchy. The Company’s projected future cash flows incorporates management’s best estimates of the expected future results including, but not limited to, price trends, customer demand, material costs, asset replacement costs and any other known factors. During the fourth quarter of 2018, the Company completed its annual impairment testing and determined that no impairment existed. Intangible Assets Customer list intangible assets are amortized using the accelerated amortization method over their 20 year lives. Net intangible asset values were $400 million and $439 million, which included accumulated amortization of $142 million and $102 million, for the years ended December 31, 2018 and 2017, respectively. Amortization expense for intangible assets was $40 million, $41 million and $39 million for the years ended December 31, 2018, 2017, and 2016, respectively. Estimated amortization related to intangible assets through 2023 is as follows: 2019, $42 million; 2020, $41 million; 2021, $39 million; 2022, $36 million; and 2023, $32 million. No impairment existed on these assets at December 31, 2018. The Company has determined that the fair value measurements related to the customer list intangibles are based on significant unobservable inputs and are classified as Level 3 in the fair value hierarchy. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2018 | |
Other Assets | |
Other Assets | 7. Other Assets Other assets (noncurrent) consist of the following at December 31, 2018 and 2017: 2018 2017 Deferred tax assets $ 191 $ 194 Deferred returnable packaging costs 109 119 Repair part inventories 102 106 Capitalized software 79 82 Value added taxes 26 24 Other 95 77 $ 602 $ 602 Capitalized software includes costs related to the acquisition and development of internal-use software. These costs are amortized over the estimated useful life of the software. Amortization expense for capitalized software was $12 million, $12 million and $13 million for 2018, 2017, and 2016, respectively. Estimated amortization related to capitalized software through 2023 is as follows: 2019, $14 million; 2020, $12 million; 2021, $12 million; 2022, $11 million; and 2023, $10 million. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments | |
Derivative Instruments | 8. Derivative Instruments The Company has certain derivative assets and liabilities which consist of natural gas forwards, foreign exchange option and forward contracts, interest rate swaps and cross currency swaps. The valuation of these instruments is determined primarily using the income approach, including discounted cash flow analysis on the expected cash flows of each derivative. Natural gas forward rates, foreign exchange rates and interest rates are the significant inputs into the valuation models. The Company also evaluates counterparty risk in determining fair values. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. These inputs are observable in active markets over the terms of the instruments the Company holds, and accordingly, the Company classifies its derivative assets and liabilities as Level 2 in the hierarchy. Commodity Forward Contracts Designated as Cash Flow Hedges The Company enters into commodity forward contracts related to forecasted natural gas requirements, the objectives of which are to limit the effects of fluctuations in the future market price paid for natural gas and the related volatility in cash flows. An unrecognized gain of $1 million at December 31, 2018 and an unrecognized gain of $3 million at December 31, 2017, related to the commodity forward contracts were included in Accumulated OCI, and will be reclassified into earnings in the period when the commodity forward contracts expire. Foreign Exchange Derivative Contracts Not Designated as Hedging Instruments The Company uses short-term forward exchange or option agreements to purchase foreign currencies at set rates in the future. These agreements are used to limit exposure to fluctuations in foreign currency exchange rates for significant planned purchases of fixed assets or commodities that are denominated in currencies other than the subsidiaries’ functional currency. The Company also uses foreign exchange agreements to offset the foreign currency risk for receivables and payables, including intercompany receivables, payables, and loans, not denominated in, or indexed to, their functional currencies. Cash Flow Hedges of Foreign Exchange Risk The Company has variable-interest rate borrowings denominated in currencies other than the functional currency of the borrowing subsidiaries. As a result, the Company is exposed to fluctuations in the currency of the borrowing against the subsidiaries’ functional currency. The Company uses derivatives to manage these exposures and designates these derivatives as cash flow hedges of foreign exchange risk. During 2018, two of the Company’s subsidiaries, a New Zealand dollar functional currency subsidiary and an Australian dollar functional currency subsidiary, entered into a series of cross-currency swaps to U.S. dollar instruments with a fixed notional amount of $109 million and $168 million, respectively. They reach final maturity in 2022. During 2017, one of the Company’s Euro-functional subsidiaries entered into a series of cross-currency swaps that have a pay fixed notional amount of €263 million and a receive notional amount of $310 million. They reach final maturity in 2023. An unrecognized loss of $9 million at December 31, 2018 and an unrecognized loss of less than $1 million at December 31, 2017, related to these cross-currency swaps, were included in Accumulated OCI, and will be reclassified into earnings within the next twelve months. Interest Rate Swaps Designated as Fair Value Hedges The Company enters into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. The Company’s fixed-to-variable interest rate swaps are accounted for as fair value hedges. The relevant terms of the swap agreements match the corresponding terms of the notes and therefore there is no hedge ineffectiveness. The Company recorded the net of the fair market values of the swaps as a long-term liability and short-term asset along with a corresponding net decrease in the carrying value of the hedged debt. Cash Flow Hedges of Interest Rate Risk The Company enters into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments. These interest rate swap agreements were used to hedge the variable cash flows associated with variable-rate debt. An unrecognized loss of less than $1 million at year ended December 31, 2018 related to these interest rate swaps, was included in Accumulated OCI, and will be reclassified into earnings within the next twelve months. Net Investment Hedges The Company is exposed to fluctuations in foreign exchange rates on investments it holds in non-U.S. subsidiaries and uses cross currency swaps to partially hedge this exposure. Balance Sheet Classification The following table shows the amount and classification (as noted above) of the Company’s derivatives at December 31, 2018 and 2017: Fair Value of Maximum Notional Amount Hedge Assets Hedge Liabilities Maturity Date 2018 2017 2018 2017 2018 2017 2018 2017 Derivatives designated as hedging instruments: Commodity forward contracts $ 21 $ 30 $ 1 $ 3 $ — $ 13 various various Interest rate swaps (fair value hedges) € 725 € 725 6 6 1 10 Cash flow hedges of foreign exchange risk $ 587 $ 310 10 4 1 various various Interest rate swaps (cash flow hedges) $ 180 Net investment hedges € 160 6 8 Total derivatives accounted for as hedges $ 23 $ 13 $ 10 $ 23 Derivatives not designated as hedges: Foreign exchange derivative contracts $ 470 $ 460 2 4 2 1 various various Total derivatives $ 25 $ 17 $ 12 $ 24 Current $ 19 $ 14 $ 3 $ — Noncurrent 6 3 9 24 Total derivatives $ 25 $ 17 $ 12 $ 24 The effects of derivative instruments on the Company’s Consolidated Statements of Income and Comprehensive Income for OCI for the years ended December 31, 2018, 2017 and 2016 are as follows: Gain (Loss) Recognized in OCI (Effective Portion) Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1) Derivatives designated as hedging instruments: 2018 2017 2016 2018 2017 2016 Cash Flow Hedges Commodity forward contracts (a) $ (6) $ $ $ 1 $ - $ - Cash flow hedges of foreign exchange risk (b) 12 9 Cash flow hedges of interest rate risk (c) (1) Net Investment Hedges Net Investment Hedges 5 1 $ 10 $ 6 $ 7 $ 11 $ — $ — Amount of Gain (Loss) Recognized in Other income (expense), net Derivatives not designated as hedges: 2018 2017 2016 Foreign exchange derivative contracts $ 1 $ 10 $ 6 (1) Gains and losses reclassified from accumulated OCI and recognized in income are recorded to (a) cost of goods sold, (b) other expense, net or (c) interest expense, net. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring | |
Restructuring | 9. Restructuring The Company continually reviews its manufacturing footprint and operating cost structure and may decide to close operations or reduce headcount to gain efficiencies, integrate acquired operations, reduce future expenses and address other market factors. The Company incurs costs associated with these actions including employee severance and benefits, other exit costs such as those related to contract terminations, and asset impairment charges. The Company also may incur other costs related to closed facilities including environmental remediation, clean up, dismantling and preparation for sale or other disposition. The Company accounts for restructuring and other costs under applicable provisions of generally accepted accounting principles. Charges for employee severance and related benefits are generally accrued based on contractual arrangements with employees or their representatives. Other exit costs are accrued based on the estimated cost to settle related contractual arrangements. Estimated environmental remediation costs are accrued when specific claims have been received or are probable of being received. The Company’s 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 in the period that the measurement was taken as Level 3 (third party appraisal) in the fair value hierarchy as set forth in the general accounting principles for fair value measurements. For the asset impairments recorded through December 31, 2018 and December 31, 2017, the remaining carrying value of the impaired assets was approximately $9 million and $0, respectively. When a decision is made to take restructuring actions, the Company manages and accounts for them programmatically apart from the on-going operations of the business. Information related to major programs are presented separately while minor initiatives are presented on a combined basis. As of December 31, 2018 and 2017, no major restructuring programs were in effect. In 2018, the Company implemented several discrete restructuring initiatives and recorded restructuring, asset impairment and other charges of $92 million. These charges consisted of employee costs, write-down of assets, and other exit costs primarily related to plant and furnace closures in the Americas region. These restructuring charges were discrete actions and are expected to approximate the total cumulative costs for those actions as no significant additional costs are expected to be incurred. These restructuring charges primarily relate to capacity curtailments and the Company reallocated the products produced at these facilities to other facilities. These charges were recorded to Cost of goods sold ($5 million) and Other expense, net ($87 million) on the Consolidated Results of Operations. The Company expects that the majority of the remaining cash expenditures related to the above charges will be paid out by the end of 2019. In 2017, the Company implemented several discrete restructuring initiatives and recorded restructuring, asset impairment and other charges of $72 million. These charges consisted of employee costs, write-down of assets, and other exit costs primarily related to a plant closure in the Americas region. These restructuring charges were discrete actions and are expected to approximate the total cumulative costs for those actions as no significant additional costs are expected to be incurred. These restructuring charges primarily relate to capacity curtailments and the Company reallocated the products produced at these facilities to other facilities. These charges were recorded to Other expense, net on the Consolidated Results of Operations. The Company expects that the majority of the remaining cash expenditures related to the above charges will be paid out by the end of 2019. The following table presents information related to restructuring, asset impairment and other costs related to closed facilities from January 1, 2017 through December 31, 2018: Employee Asset Other Total Costs Impairment Exit Costs Restructuring Balance at January 1, 2017 $ 67 $ $ 18 $ 85 Charges 45 11 16 72 Write-down of assets to net realizable value (11) (11) Net cash paid, principally severance and related benefits (49) (13) (62) Other, including foreign exchange translation 4 (3) 1 Balance at December 31, 2017 $ 67 $ — $ 18 $ 85 Charges 20 60 12 92 Write-down of assets to net realizable value (60) (60) Net cash paid, principally severance and related benefits (24) (8) (32) Transfers to other accounts (4) (4) Other, including foreign exchange translation (3) (9) (12) Balance at December 31, 2018 $ 60 $ — $ 9 $ 69 |
Pension Benefit Plans and Other
Pension Benefit Plans and Other Postretirement Benefits | 12 Months Ended |
Dec. 31, 2018 | |
Pension Benefit Plans and Other Postretirement Benefits | |
Pension Benefit Plans and Other Postretirement Benefits | 10. Pension Benefit Plans and Other Postretirement Benefits Pension Benefit Plans The Company has defined benefit pension plans covering a substantial number of employees located in the United States and several other non-U.S. jurisdictions. Benefits generally are based on compensation for salaried employees and on length of service for hourly employees. The Company’s policy is to fund pension plans such that sufficient assets will be available to meet future benefit requirements. The Company’s defined benefit pension plans use a December 31 measurement date. The changes in the pension benefit obligations for the year are as follows: U.S. Non-U.S. 2018 2017 2018 2017 Obligations at beginning of year $ 1,650 $ 1,956 $ 1,148 $ 1,235 Change in benefit obligations: Service cost 14 14 15 15 Interest cost 59 78 32 40 Actuarial (gain) loss, including the effect of change in discount rates (108) 123 (23) (15) Settlements (114) (393) (35) (171) Participant contributions 2 1 Benefit payments (91) (128) (51) (60) Other 3 (2) Foreign currency translation (64) 103 Net change in benefit obligations (237) (306) (126) (87) Obligations at end of year $ 1,413 $ 1,650 $ 1,022 $ 1,148 The changes in the fair value of the pension plans’ assets for the year are as follows: U.S. Non-U.S. 2018 2017 2018 2017 Fair value at beginning of year $ 1,394 $ 1,654 $ 975 $ 1,011 Change in fair value: Actual gain (loss) on plan assets (96) 254 (15) 87 Benefit payments (91) (128) (51) (60) Employer contributions 1 7 33 24 Participant contributions 2 1 Settlements (114) (393) (35) (171) Foreign currency translation (58) 83 Other (8) Net change in fair value of assets (300) (260) (132) (36) Fair value at end of year $ 1,094 $ 1,394 $ 843 $ 975 The Company recognizes the funded status of each pension benefit plan on the balance sheet. The funded status of each plan is measured as the difference between the fair value of plan assets and actuarially calculated benefit obligations as of the balance sheet date. Actuarial gains and losses are accumulated in Other Comprehensive Income and the portion of each plan that exceeds 10% of the greater of that plan’s assets or projected benefit obligation is amortized to income on a straight-line basis over the average remaining service period of employees still accruing benefits or the expected life of participants not accruing benefits if all, or almost all, of the plan’s participants are no longer accruing benefits. The funded status of the pension plans at year end is as follows: U.S. Non-U.S. 2018 2017 2018 2017 Plan assets at fair value $ 1,094 $ 1,394 $ 843 $ 975 Projected benefit obligations 1,413 1,650 1,022 1,148 Plan assets less than projected benefit obligations (319) (256) (179) (173) Items not yet recognized in pension expense: Actuarial loss 785 811 285 284 Prior service cost (credit) 1 4 (2) 785 812 289 282 Net amount recognized $ 466 $ 556 $ 110 $ 109 The net amount recognized is included in the Consolidated Balance Sheets at December 31, 2018 and 2017 as follows: U.S. Non-U.S. 2018 2017 2018 2017 Pension assets $ — $ — $ 44 $ 49 Current pension liability, included with other accrued liabilities (3) (2) (5) (5) Pension benefits (316) (254) (218) (217) Accumulated other comprehensive loss 785 812 289 282 Net amount recognized $ 466 $ 556 $ 110 $ 109 The following changes in plan assets and benefit obligations were recognized in accumulated other comprehensive income at December 31, 2018 and 2017 as follows (amounts are pretax): U.S. Non-U.S. 2018 2017 2018 2017 Current year actuarial (gain) loss $ 86 $ (2) $ 43 $ (40) Amortization of actuarial loss (51) (57) (11) (16) Settlement (61) (176) (13) (42) Other (1) 6 (27) (235) 25 (98) Translation (18) 30 Change in accumulated other comprehensive income $ (27) $ (235) $ 7 $ (68) The accumulated benefit obligation for all defined benefit pension plans was $2,379 million and $2,735 million at December 31, 2018 and 2017, respectively. The components of the net pension expense for the year are as follows: U.S. Non-U.S. 2018 2017 2016 2018 2017 2016 Service cost $ 14 $ 14 $ 15 $ 15 $ 15 $ 16 Interest cost 59 78 90 32 40 44 Expected asset return (98) (128) (149) (52) (63) (65) Amortization: Actuarial loss 51 57 67 11 16 13 Net expense $ 26 $ 21 $ 23 $ 6 $ 8 $ 8 Effective January 1, 2016, the Company amended its salary pension plan in North America to freeze future pension benefits. This action required an obligation remeasurement for the curtailment of benefits, which resulted in a reduction of the Company’s pension expense. In 2018, the Company settled a portion of its pension obligations in the U.S. and the United Kingdom, resulting in settlement charges of $61 million and $13 million, respectively. A retiree annuity contract purchase transaction in the U.S. amounting to approximately $94 million gave rise to the majority of the settlement charges, with lump-sum payments directly to plan participants comprising the remainder. In 2017, the Company settled a portion of its pension obligations in the U.S., Canada and the United Kingdom, resulting in settlement charges of $176 million, $27 million and $15 million, respectively. Retiree annuity contract purchase transactions in the U.S. and Canada amounting to approximately $369 million and $123 million, respectively, with several insurers, gave rise to the majority of the settlement transactions, with lump-sum payments directly to plan participants comprising the remainder. In 2016, the Company settled a portion of its U.S. pension obligation via a retiree annuity contract purchase of approximately $200 million, which resulted in a settlement charge of $98 million. The components of pension expense, other than the service cost component, as well as pension settlement charges are included in Other expense, net on the Consolidated Results of Operations. Amounts that are expected to be amortized from accumulated other comprehensive income into net pension expense during 2019: U.S. Non-U.S. Actuarial loss $ 40 $ 10 The following information is for plans with projected and accumulated benefit obligations in excess of the fair value of plan assets at year end: Projected Benefit Obligation Exceeds Accumulated Benefit Obligation Exceeds the Fair Value of Plan Assets the Fair Value of Plan Assets U.S. Non-U.S. U.S. Non-U.S. 2018 2017 2018 2017 2018 2017 2018 2017 Projected benefit obligations $ 1,413 $ 1,650 $ 815 $ 905 $ 1,413 $ 1,650 $ 815 $ 261 Accumulated benefit obligation 1,412 1,650 793 878 1,412 1,650 793 241 Fair value of plan assets 1,094 1,394 591 682 1,094 1,394 591 39 The weighted average assumptions used to determine benefit obligations are as follows: U.S. Non-U.S. 2018 2017 2018 2017 Discount rate 4.36 % 3.69 % 3.01 % 2.76 % Rate of compensation increase N/A N/A 2.75 % 2.78 % The weighted average assumptions used to determine net periodic pension costs are as follows: U.S. Non-U.S. 2018 2017 2016 2018 2017 2016 Discount rate 3.69 % 4.17 % 4.43 % 2.76 % 2.94 % 3.68 % Rate of compensation increase N/A N/A N/A % 2.78 % 2.90 % 2.84 % Expected long-term rate of return on assets 7.25 % 7.50 % 7.50 % 5.52 % 6.32 % 7.15 % Future benefits are assumed to increase in a manner consistent with past experience of the plans, which, to the extent benefits are based on compensation, includes assumed salary increases as presented above. For 2018, the Company’s weighted average expected long-term rate of return on assets was 7.25% for the U.S. plans and 5.52% for the non-U.S. plans. In developing this assumption, the Company considered its historical 10-year average return (through December 31, 2018) and evaluated input from its third party pension plan asset consultants, including their review of asset class return expectations. It is the Company’s policy to invest pension plan assets in a diversified portfolio consisting of an array of asset classes within established target asset allocation ranges. The investment risk of the assets is limited by appropriate diversification both within and between asset classes. Plan assets are primarily invested in a broad mix of domestic and international equities, domestic and international bonds, and real estate, subject to target asset allocation ranges, which may differ by individual plan. The assets are managed with a view to ensuring that sufficient liquidity will be available to meet expected cash flow requirements. The investment valuation policy of the Company is to value investments at fair value. Equity securities for which market quotations are readily available are valued at the last reported sales price on their principal exchange on valuation date or official close for certain markets. Fixed income investments are valued by an independent pricing service. Investments in registered investment companies or collective pooled funds are valued at their respective net asset values. Short-term investments are stated at amortized cost, which approximates fair value. The fair value of real estate is determined by periodic appraisals. The assets of the U.S. plans are maintained in a group trust. The U.S. plans hold no individual assets other than the investment in the group trust. The Company’s U.S. pension plan assets held in the group trust are measured at net asset value in the fair value hierarchy. The total U.S. plan assets amounted to $1,094 million and $1,394 million as of December 31, 2018 and 2017, respectively. In 2018, the group trust assets consisted of approximately 62% equity securities, 32% debt securities, and 6% real estate and other. In 2018, the non-U.S. plan assets consisted of approximately 16% equity securities, 60% debt securities, and 24% real estate and other. The following table sets forth by level, within the fair value hierarchy, the Company’s non-U.S. pension plan assets at fair value as of December 31, 2018 and 2017: 2018 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 9 $ — $ — $ 9 $ 9 $ — $ — $ 9 Equity securities — — Debt securities 34 7 41 33 33 Real estate — — Other 30 30 27 27 Total $ 43 $ 37 $ — $ 42 $ 27 $ — Investments measured at net asset value $ 763 $ 906 Total non-U.S. assets at fair value $ 843 $ 975 The following is a reconciliation of the Company’s pension plan assets recorded at fair value using significant unobservable inputs (Level 3): 2018 2017 Beginning balance $ — $ 10 Net increase (decrease) (10) Ending balance $ — $ — The net increase (decrease) in the fair value of the Company’s Level 3 pension plan assets is primarily due to purchases and sales of unlisted real estate funds. The change in the fair value of Level 3 pension plan assets due to actual return on those assets was immaterial in 2018. In order to maintain minimum funding requirements, the Company is required to make contributions to its defined benefit pension plans of approximately $36 million in 2019. The following estimated future benefit payments, which reflect expected future service, as appropriate, are expected to be paid in the years indicated: Year(s) U.S. Non-U.S. 2019 $ 102 $ 47 2020 100 48 2021 99 51 2022 99 54 2023 97 56 2024-2028 463 279 The Company also sponsors several defined contribution plans for all salaried and hourly U.S. employees, and employees in Canada, the United Kingdom, the Netherlands and Australia. Participants’ contributions are based on their compensation. The Company matches contributions of participants, up to various limits, in substantially all plans. Company contributions to these plans amounted to $36 million in 2018, $33 million in 2017, and $34 million in 2016. Postretirement Benefits Other Than Pensions The Company provides retiree health care and life insurance benefits covering certain U.S. salaried and hourly employees, and substantially all employees in Canada. Benefits provided by the Company for hourly retirees are determined by collective bargaining. Employees are generally eligible for benefits upon retirement and completion of a specified number of years of creditable service. The Company uses a December 31 measurement date to measure its postretirement benefit obligations. The changes in the postretirement benefit obligations for the year are as follows: U.S. Non-U.S. 2018 2017 2018 2017 Obligations at beginning of year $ 89 $ 92 $ 89 $ 81 Change in benefit obligations: Service cost 1 1 Interest cost 3 4 3 3 Actuarial (gain) loss, including the effect of changing discount rates (9) (4) 1 Benefit payments (9) (7) (2) (2) Foreign currency translation (7) 5 Other Net change in benefit obligations (15) (3) (9) 8 Obligations at end of year $ 74 $ 89 $ 80 $ 89 The funded status of the postretirement benefit plans at year end is as follows: U.S. Non-U.S. 2018 2017 2018 2017 Postretirement benefit obligations $ (74) $ (89) $ (80) $ (89) Items not yet recognized in net postretirement benefit cost: Actuarial gain (loss) (8) (19) (2) (7) Prior service credit 15 22 7 3 (2) (7) Net amount recognized $ (67) $ (86) $ (82) $ (96) The net amount recognized is included in the Consolidated Balance Sheets at December 31, 2018 and 2017 as follows: U.S. Non-U.S. 2018 2017 2018 2017 Current nonpension postretirement benefit, included with Other accrued liabilities $ (6) $ (8) $ (3) $ (3) Nonpension postretirement benefits (68) (81) (77) (86) Accumulated other comprehensive income (loss) 7 3 (2) (7) Net amount recognized $ (67) $ (86) $ (82) $ (96) The following changes in benefit obligations were recognized in accumulated other comprehensive income at December 31, 2018 and 2017 as follows (amounts are pretax): U.S. Non-U.S. 2018 2017 2018 2017 Current year actuarial (gain) loss $ (8) $ — $ (4) $ 1 Amortization of actuarial loss (2) (2) Amortization of prior service credit 7 8 $ (3) $ 6 $ (4) $ 1 The components of the net postretirement benefit cost for the year are as follows: U.S. Non-U.S. 2018 2017 2016 2018 2017 2016 Service cost $ — $ — $ — $ 1 $ 1 $ 1 Interest cost 3 4 4 3 3 3 Amortization: Actuarial loss 2 2 2 Prior service credit (7) (8) (8) Net amortization (5) (6) (6) — — — Net postretirement benefit (income) cost $ (2) $ (2) $ (2) $ 4 $ 4 $ 4 Amounts that are expected to be amortized from accumulated other comprehensive income into net postretirement benefit cost during 2019: U.S. Non-U.S. Amortization: Actuarial loss $ 1 $ — Prior service credit (8) Net amortization $ (7) $ — Amortization included in net postretirement benefit cost is based on the average remaining service of employees. The weighted average discount rates used to determine the accumulated postretirement benefit obligation and net postretirement benefit cost are as follows: U.S. Non-U.S. 2018 2017 2016 2018 2017 2016 Accumulated postretirement benefit obligation 4.30 % 3.61 % 4.11 % 3.60 % 3.35 % 3.55 % Net postretirement benefit cost 3.61 % 4.11 % 4.35 % 3.35 % 3.55 % 3.80 % The weighted average assumed health care cost trend rates at December 31 are as follows: U.S. Non-U.S. 2018 2017 2018 2017 Health care cost trend rate assumed for next year 6.00 % 6.20 % 5.00 % 5.00 % Rate to which the cost trend rate is assumed to decline (ultimate trend rate) 5.00 % 5.00 % 5.00 % 5.00 % Year that the rate reaches the ultimate trend rate 2025 2024 N/A N/A Assumed health care cost trend rates affect the amounts reported for the postretirement benefit plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects: U.S. Non-U.S. 1-Percentage-Point 1-Percentage-Point Increase Decrease Increase Decrease Effect on total of service and interest cost $ — $ — $ 1 $ (1) Effect on accumulated postretirement benefit obligations 3 (2) 14 (11) Amortization included in net postretirement benefit cost is based on the average remaining service of employees. The following estimated future benefit payments, which reflect expected future service, as appropriate, are expected to be paid in the years indicated: Year(s) U.S. Non-U.S. 2019 $ 7 $ 3 2020 7 3 2021 6 3 2022 6 3 2023 6 4 2024 - 2028 25 19 Other U.S. hourly retirees receive health and life insurance benefits from a multi-employer trust established by collective bargaining. Payments to the trust as required by the bargaining agreements are based upon specified amounts per hour worked and were $6 million in 2018, $6 million in 2017 and $6 million in 2016. Postretirement health and life benefits for retirees of foreign subsidiaries are generally provided through the national health care programs of the countries in which the subsidiaries are located. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | 11. Income Taxes The provision for income taxes was calculated based on the following components of earnings (loss) before income taxes: Continuing operations 2018 2017 2016 U.S. $ (100) $ (43) $ (27) Non-U.S. 377 318 383 $ 277 $ 275 $ 356 Discontinued operations 2018 2017 2016 U.S. $ — $ — $ — Non-U.S. 113 (3) (7) $ 113 $ (3) $ (7) The provision (benefit) for income taxes consists of the following: 2018 2017 2016 Current: U.S. $ 8 $ (5) $ — Non-U.S. 109 87 123 117 82 123 Deferred: U.S. — 6 3 Non-U.S. (9) (18) (7) (9) (12) (4) Total: U.S. 8 1 3 Non-U.S. 100 69 116 Total for continuing operations 108 70 119 Total for discontinued operations — — — $ 108 $ 70 $ 119 A reconciliation of the provision for income taxes based on the statutory U.S. Federal tax rate of 21% for 2018 and 35% for 2017 and 2016 to the provision for income taxes is as follows: 2018 2017 2016 Tax provision on pretax earnings from continuing operations at statutory U.S. Federal tax rate $ 58 $ 96 $ 124 Increase (decrease) in provision for income taxes due to: Non-U.S. tax rates 25 (29) (22) Global intangible low taxed income 32 U.S. Tax Cuts and Jobs Act: transition tax, net of foreign tax credits (2) 2 Tax law changes 4 152 (3) Change in valuation allowance: U.S. tax law change (2) (162) Change in valuation allowance: other (18) (283) 3 Tax attribute expiration 6 330 Withholding tax 10 8 7 Non-deductible expenses 4 9 20 U.S. tax on intercompany dividends and interest 1 2 3 Tax exempt income (2) (3) (2) Intraperiod tax allocation (8) Tax credits and incentives (23) (37) (19) Changes in tax reserves 13 (18) 8 Mexico inflationary adjustments 8 13 6 Equity earnings (13) (13) (9) Intercompany financing 1 (4) (5) Other taxes based on income 7 10 11 Other items (1) (3) 5 Provision for income taxes $ 108 $ 70 $ 119 Deferred income taxes reflect: (1) the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their relevant tax basis; and (2) carryovers and credits for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2018 and 2017 are as follows: 2018 2017 Deferred tax assets: Accrued postretirement benefits $ 38 $ 44 Asbestos-related liabilities 127 122 Foreign tax credit carryovers 96 124 Operating and capital loss carryovers 286 342 Other credit carryovers 18 17 Accrued liabilities 65 69 Pension liabilities 92 77 Other 57 41 Total deferred tax assets 779 836 Deferred tax liabilities: Property, plant and equipment 97 101 Intangibles and deferred software 92 97 Total deferred tax liabilities 189 198 Valuation allowance (495) (543) Net deferred taxes $ 95 $ 95 Deferred taxes are included in the Consolidated Balance Sheets at December 31, 2018 and 2017 as follows: 2018 2017 Other assets $ 191 $ 194 Deferred taxes (96) (99) Net deferred taxes $ 95 $ 95 The deferred tax benefit associated with the reduction in the valuation allowance of $48 million was primarily allocated $41 million to income from continuing operations due to the primacy of continuing operations, changes in tax law and expiration of certain tax attribute carryovers, and $7 million to other comprehensive income. Deferred tax assets and liabilities are determined separately for each tax jurisdiction on a separate or on a consolidated tax filing basis, as applicable, in which the Company conducts its operations or otherwise incurs taxable income or losses. A valuation allowance is recorded when it is more likely than not that some portion or all of the gross deferred tax assets will not be realized. The realization of deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The Company considers the following possible sources of taxable income when assessing the realization of deferred tax assets: · taxable income in prior carryback years; · future reversals of existing taxable temporary differences; · future taxable income exclusive of reversing temporary differences and carryforwards; and · prudent and feasible tax planning strategies that the Company would be willing to undertake to prevent a deferred tax asset from otherwise expiring. The assessment regarding whether a valuation allowance is required or whether a change in judgment regarding the valuation allowance has occurred also considers all available positive and negative evidence, including but not limited to: · nature, frequency, and severity of cumulative losses in recent years; · duration of statutory carryforward and carryback periods; · statutory limitations against utilization of tax attribute carryforwards against taxable income; · historical experience with tax attributes expiring unused; and · near‑ and medium‑term financial outlook. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. Accordingly, it is generally difficult to conclude a valuation allowance is not required when there is significant objective and verifiable negative evidence, such as cumulative losses in recent years. The Company uses the actual results for the last two years and current year results as the primary measure of cumulative losses in recent years. The evaluation of deferred tax assets requires judgment in assessing the likely future tax consequences of events recognized in the financial statements or tax returns and future profitability. The recognition of deferred tax assets represents the Company’s best estimate of those future events. Changes in the current estimates, due to unanticipated events or otherwise, could have a material effect on the Company’s results of operations and financial condition. In certain tax jurisdictions, the Company’s analysis indicates that it has cumulative losses in recent years. This is considered significant negative evidence which is objective and verifiable and, therefore, difficult to overcome. However, the cumulative loss position is not solely determinative and, accordingly, the Company considers all other available positive and negative evidence in its analysis. Based on its analysis, the Company has recorded a valuation allowance for the portion of deferred tax assets where based on the weight of available evidence it is unlikely to realize those deferred tax assets. Based on the evidence available including a lack of sustainable earnings, the Company in its judgment previously recorded a valuation allowance against substantially all of its net deferred tax assets in the United States. If a change in judgment regarding this valuation allowance were to occur in the future, the Company will record a potentially material deferred tax benefit, which could result in a favorable impact on the effective tax rate in that period. The U.S. Tax Cuts and Jobs Act (“Act”) was enacted on December 22, 2017. The Act reduced the U.S. federal corporate tax rate to 21% from 35%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign sourced earnings. In 2017 and the first nine months of 2018, the Company recorded provisional amounts for certain enactment-date effects of the Act by applying the guidance in SAB 118 because the Company had not yet completed its enactment-date accounting for these effects. At December 31, 2018, the Company has now completed its accounting for all of the enactment-date income tax effects of the Act. At December 31, 2017, the Company originally recorded a provisional amount for its one-time transition tax of $331 million, which was expected to be substantially offset by available foreign tax credits resulting in a provisional net tax expense of $2 million, primarily attributable to state taxes. Upon further analyses of certain aspects of the Act and refinement of its calculations during 2018, the Company decreased its provisional amount of transition tax by $17 million, to $314 million. This resulted in no change to U.S. federal income tax expense due to the impact of foreign tax credits. In addition, the provisional net tax expense, which was estimated at approximately $2 million, primarily attributable to state taxes, was substantially eliminated. The Company recognized this favorable adjustment of $2 million as a component of income tax expense from continuing operations. As of December 31, 2017, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they were expected to reverse in the future (which was generally 21%) and based on the expected future benefit to be realized as a result of changes to the tax base provided in the Act. The Company recorded a provisional net tax charge of $162 million related to the remeasurement of net deferred tax assets, which was fully offset by an adjustment to valuation allowance. Upon further analysis of certain aspects of the Act and refinement of its calculations during 2018, the Company adjusted its provisional amount by $2 million, which is fully offset by an adjustment to valuation allowance. Additionally, as of December 31, 2017, the Company recorded a provisional deferred tax benefit of $11 million for the reduction of a deferred tax liability related to an indefinite lived intangible asset. No adjustment was made to this provisional amount. At December 31, 2018, before valuation allowance, the Company had unused foreign tax credits of $96 million expiring in 2020 through 2027 and research tax credits of $17 million expiring from 2019 to 2037. Approximately $146 million of the deferred tax assets related to operating and capital loss carryforwards can be carried over indefinitely, with the remaining $140 million expiring between 2019 and 2038. Approximately $14 million of other deferred tax assets are related to interest carryforwards that can be carried over indefinitely. As a result of the Act, in 2018, the Company has had a change in judgement regarding the gross book-tax basis differences in its non-U.S. consolidated subsidiaries. Since a majority of the pre-2018 non-U.S. earnings (net of losses) were substantially taxed under the Act, distributions of those net earnings no longer attract significant U.S. income taxes except for any associated currency gains. Therefore, the Company does not assert that these net earnings (to the extent of foreign distributable reserves) and any associated gross book-tax basis differences, if any, are indefinitely reinvested. For all remaining gross book-tax basis differences in its non-U.S. consolidated subsidiaries, the Company maintains its assertion that it intends these to be indefinitely reinvested. The Company also records deferred foreign taxes on gross book-tax basis differences to the extent of foreign distributable reserves for certain foreign subsidiaries. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings is not practicable. The Company records a liability for unrecognized tax benefits related to uncertain tax positions. The Company accrues interest and penalties associated with unrecognized tax benefits as a component of its income tax expense. The following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2018, 2017, and 2016: 2018 2017 2016 Balance at January 1 $ 79 $ 74 $ 74 Additions and reductions for tax positions of prior years (4) 1 Additions based on tax positions related to the current year 15 17 15 Reductions due to the lapse of the applicable statute of limitations (7) (3) Reductions due to settlements (9) (12) Foreign currency translation (3) 3 Balance at December 31 $ 87 $ 79 $ 74 Unrecognized tax benefits, which if recognized, would impact the Company’s effective income tax rate $ 78 $ 72 $ 66 Accrued interest and penalties at December 31 $ 10 $ 8 $ 23 Interest and penalties included in tax expense for the years ended December 31 $ 2 $ (15) $ (2) Based upon the outcome of tax examinations, judicial proceedings, or expiration of statute of limitations, it is reasonably possible that the ultimate resolution of these unrecognized tax benefits may result in a payment that is materially different from the current estimate of the tax liabilities. The Company believes that it is reasonably possible that the estimated liability could decrease up to $8 million within the next 12 months. This is primarily the result of anticipated audit settlements or statute expirations in several taxing jurisdictions. The Company is currently under income tax examination in various tax jurisdictions in which it operates, including Bolivia, Brazil, Canada, Colombia, France, Germany, Indonesia and Italy. The years under examination range from 2004 through 2017. The Company has received tax assessments in excess of established reserves. The Company is contesting these tax assessments, and will continue to do so, including pursuing all available remedies such as appeals and litigation, if necessary. The Company believes that adequate provisions for all income tax uncertainties have been made. However, if tax assessments are settled against the Company at amounts in excess of established reserves, it could have a material impact to the Company’s results of operations, financial position or cash flows. During 2018, the Company concluded income tax audits in several jurisdictions, including Czech Republic, France, Germany and Indonesia. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt | |
Debt | 12. Debt The following table summarizes the long-term debt of the Company at December 31, 2018 and 2017: 2018 2017 Secured Credit Agreement: Revolving Credit Facility: Revolving Loans $ — $ — Term Loans: Term Loan A 897 Previous Secured Credit Agreement: Revolving Credit Facility: Revolving Loans Term Loans: Term Loan A 1,148 Other secured debt 404 Senior Notes: 6.75%, due 2020 (€500 million) 570 594 4.875%, due 2021 (€330 million) 376 392 5.00%, due 2022 497 496 4.00%, due 2023 306 305 5.875%, due 2023 688 685 3.125%, due 2024 (€725 million) 825 849 6.375%, due 2025 295 295 5.375%, due 2025 297 297 Capital leases 45 54 Other 14 17 Total long-term debt 5,214 5,132 Less amounts due within one year 33 11 Long-term debt $ 5,181 $ 5,121 On June 27, 2018, certain of the Company’s subsidiaries entered into a new Senior Secured Credit Facility (the “Agreement”), which amended and restated the previous credit agreement (the “Previous Agreement”). The proceeds from the Agreement were used to repay all outstanding amounts under the Previous Agreement. The Company recorded $11 million of additional interest charges for the write-off of unamortized fees during 2018. The Agreement provides for up to $1.91 billion of borrowings pursuant to term loans and revolving credit facilities. The term loans mature, and the revolving credit facilities terminate, in June 2023. At December 31, 2018, the Agreement includes a $300 million revolving credit facility, a $700 million multicurrency revolving credit facility, and a $910 million term loan A facility ($897 million net of debt issuance costs). At December 31, 2018, the Company had unused credit of $988 million available under the Agreement. The weighted average interest rate on borrowings outstanding under the Agreement at December 31, 2018 was 3.97%. The Agreement contains various covenants that restrict, among other things and subject to certain exceptions, the ability of the Company to incur certain indebtedness and liens, make certain investments, become liable under contingent obligations in certain defined instances only, make restricted payments, make certain asset sales within guidelines and limits, engage in certain affiliate transactions, participate in sale and leaseback financing arrangements, alter its fundamental business, and amend certain subordinated debt obligations. The Agreement also contains one financial maintenance covenant, a Total Leverage Ratio (the “Leverage Ratio”), that requires the Company not to exceed a ratio of 4.5x calculated by dividing consolidated total debt, less cash and cash equivalents, by Consolidated EBITDA, as defined in the Agreement. The maximum Leverage Ratio is subject to an increase of 0.5x for (i) any fiscal quarter during which certain qualifying acquisitions (as specified in the Agreement) are consummated and (ii) the following three fiscal quarters. The Leverage Ratio could restrict the ability of the Company to undertake additional financing or acquisitions to the extent that such financing or acquisitions would cause the Leverage Ratio to exceed the specified maximum. Failure to comply with these covenants and other customary restrictions could result in an event of default under the Agreement. In such an event, the Company could not request borrowings under the revolving facilities, and all amounts outstanding under the Agreement, together with accrued interest, could then be declared immediately due and payable. Upon the occurrence and for the duration of a payment event of default, an additional default interest rate equal to 2.0% per annum will apply to all overdue obligations under the Agreement. If an event of default occurs under the Agreement and the lenders cause all of the outstanding debt obligations under the Agreement to become due and payable, this would result in a default under a number of other outstanding debt securities and could lead to an acceleration of obligations related to these debt securities. As of December 31, 2018, the Company was in compliance with all covenants and restrictions in the Agreement. In addition, the Company believes that it will remain in compliance and that its ability to borrow funds under the Agreement will not be adversely affected by the covenants and restrictions. The Leverage Ratio also determines pricing under the Agreement. The interest rate on borrowings under the Agreement is, at the Company’s option, the Base Rate or the Eurocurrency Rate, as defined in the Agreement, plus an applicable margin. The applicable margin is linked to the Leverage Ratio. The margins range from 1.00% to 1.50% for Eurocurrency Rate loans and from 0.00% to 0.50% for Base Rate Loans. In addition, a commitment fee is payable on the unused revolving credit facility commitments ranging from 0.20% to 0.30% per annum linked to the Leverage Ratio. Obligations under the Agreement are secured by substantially all of the assets, excluding real estate and certain other excluded assets, of certain of the Company’s domestic subsidiaries and certain foreign subsidiaries. Such obligations are also secured by a pledge of intercompany debt and equity investments in certain of the Company’s domestic subsidiaries and, in the case of foreign obligations, of stock of certain foreign subsidiaries. All obligations under the Agreement are guaranteed by certain domestic subsidiaries of the Company, and certain foreign obligations under the Agreement are guaranteed by certain foreign subsidiaries of the Company. In March 2017, the Company expanded its borrowings under the Senior Notes due 2024 by issuing €225 million of additional notes that bear interest at 3.125% and are due November 15, 2024. The notes were issued via a private placement and are guaranteed by certain of the Company’s domestic subsidiaries. The net proceeds, after deducting debt issuance costs, totaled approximately $237 million and were used to repay a portion of the Company’s revolving credit facility. During March 2017, the Company purchased in a tender offer approximately $228 million aggregate principal amount of its 7.80% Senior Debentures due in 2018. In November 2017, the remaining $22 million of the 7.80% Senior Debentures were repurchased by the Company, the indenture relating thereto was discharged, and all collateral and guarantees thereunder were released. The Company recorded $18 million of additional interest charges for note repurchase premiums and the write-off of unamortized finance fees related to these actions. During December 2017, the Company issued senior notes with a face value of $310 million that bear interest at 4.00% and are due March 15, 2023. The notes were issued via a private placement and are guaranteed by certain of the Company’s domestic subsidiaries. The net proceeds, after deducting debt issuance costs, totaled approximately $305 million and were used to repay a portion of the term loan A facility under the Previous Agreement. In the third quarter of 2018, the Company terminated a €185 million European accounts receivable securitization program. In order to maintain a capital structure containing appropriate amounts of fixed and floating-rate debt, the Company has entered into a series of interest rate swap agreements. These interest rate swap agreements were accounted for as either fair value hedges or cash flow hedges (see Note 8 for more information). The Company assesses its capital raising and refinancing needs on an ongoing basis and may enter into additional credit facilities and seek to issue equity and/or debt securities in the domestic and international capital markets if market conditions are favorable. Also, depending on market conditions, the Company may elect to repurchase portions of its debt securities in the open market. Annual maturities for all of the Company’s long-term debt through 2023 and thereafter are as follows: 2019, $33 million; 2020, $1,018 million; 2021, $431 million; 2022, $549 million; 2023, $1,749 million; and 2024 and thereafter $1,434 million. The carrying amounts reported for certain long-term debt obligations subject to frequently redetermined interest rates, approximate fair value. Fair values for the Company’s significant fixed rate debt obligations are based on published market quotations, and are classified as Level 1 in the fair value hierarchy. Fair values at December 31, 2018, of the Company’s significant fixed rate debt obligations are as follows: Principal Amount Indicated Market Price Fair Value Senior Notes: 6.75%, due 2020 (€500 million) $ 571 $ 108.96 $ 622 4.875%, due 2021 (€330 million) 377 107.28 404 5.00%, due 2022 500 99.46 497 5.875%, due 2023 700 102.02 714 4.00%, due 2023 310 94.12 292 3.125%, due 2024 (€725 million) 828 98.88 819 6.375%, due 2025 300 100.99 303 5.375%, due 2025 300 97.08 291 |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Contingencies | |
Contingencies | 13. Contingencies Asbestos From 1948 to 1958, one of the Company's 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 sold its insulation business unit in April 1958. The Company receives claims from individuals alleging bodily injury and death as a result of exposure to asbestos from this product (“Asbestos Claims”). Some Asbestos Claims are brought as personal injury lawsuits that typically allege various theories of liability, including negligence, gross negligence and strict liability and seek compensatory and, in some cases, punitive damages. Predominantly, however, Asbestos Claims are presented to the Company under administrative claims-handling agreements, which the Company has in place with many plaintiffs’ counsel throughout the country (“Administrative Claims”). Administrative Claims require evaluation and negotiation regarding whether particular claimants qualify under the criteria established by the related claims-handling agreements. The criteria for Administrative Claims include verification of a compensable illness and a reasonable probability of exposure to a product manufactured by the Company's former business unit during its manufacturing period ending in 1958. Plaintiffs’ counsel present, and the Company negotiates, Administrative Claims under these various agreements in differing quantities, at different times, and under a variety of conditions. The following table shows the approximate number of plaintiffs who had asbestos lawsuits pending against the Company at the beginning of each listed year, the number of Asbestos Claims administratively presented or filed in the tort system, the number of Asbestos Claims disposed of during that year, and the number of lawsuits pending at the end of each listed year (eliminating duplicate filings): 2018 2017 2016 Pending at beginning of year 1,330 1,400 2,080 Disposed 1,220 1,320 1,750 Filed 960 1,250 1,070 Pending at end of year 1,070 1,330 1,400 The pending lawsuit figures do not include an estimate of potential Administrative Claims that may be presented under a claims-handling agreement due to the uncertainties around presentation timing, quantities, or qualification rates. The Company considers Administrative Claims to be “Filed” and “Disposed” when they are accepted for payment. The lack of uniform rules in lawsuit pleading practice, technical pleading requirement in some jurisdictions, local rules, and other factors cause considerable variation in the specific amounts of monetary damages asserted. In the Company’s experience, the monetary relief alleged in a lawsuit bears little relationship to an Asbestos Claim’s merits or its disposition value. Rather, several variables, including but not limited to, the type and severity of the asbestos disease, medical history, and exposure to other disease-causing agents; the product identification evidence against the Company and other co-defendants; the defenses available to the Company and other co-defendants; the specific jurisdiction in which the claim is made; the applicable law; and the law firm representing the claimant, affect the value. The Company has also been a defendant in other Asbestos Claims involving maritime workers, medical monitoring, co-defendants’ third-party actions, and property damage allegations. Based upon its experience, the Company believes that these categories of Asbestos Claims will not involve any material liability. Therefore, they are not included in the description of pending or disposed matters. Since receiving its first Asbestos Claim, as of December 31, 2018, the Company in the aggregate has disposed of approximately 400,000 Asbestos Claims at an average indemnity payment of approximately $9,800 per claim. The Company’s asbestos indemnity payments have varied on a per-claim basis and are expected to continue to vary considerably over time. Asbestos-related cash payments for 2018, 2017, and 2016 were $105 million, $110 million, and $125 million, respectively. The Company’s cash payments per claim disposed (inclusive of legal costs) were approximately $86,000, $83,000 and $71,000 for the years ended December 31, 2018, 2017, and 2016, respectively. The Company’s objective is to achieve, where possible, resolution of Asbestos Claims pursuant to claims-handling agreements. Failure of claimants to meet certain medical and product exposure criteria in claims-handling agreements generally has reduced the number of claims that would otherwise have been received by the Company in the tort system. In addition, changes in jurisdictional dynamics, legislative acts, asbestos docket management and procedures, the substantive law, the co-defendant pool, and other external factors have affected lawsuit volume, claim volume, qualification rates, claim values, and related matters. Collectively, these variables generally have had the effect of increasing the Company’s per-claim average indemnity payment over time. Beginning with the initial liability of $975 million established in 1993, the Company has accrued a total of approximately $5.0 billion through 2018, before insurance recoveries, for its asbestos-related liability. The Company’s estimates of its liability have been significantly affected by, among other factors, the volatility of asbestos-related litigation in the United States, the significant number of co-defendants that have filed for bankruptcy, changes in mortality rates, the inherent uncertainty of future disease incidence and claiming patterns against the Company, the significant expansion of the types of defendants that are now sued in this litigation, and the continuing changes in the extent to which these defendants participate in the resolution of cases in which the Company is also a defendant. The Company continues to monitor trends that may affect its ultimate liability and analyze the developments and variables likely to affect the resolution of Asbestos Claims against the Company. The material components of the Company’s total accrued liability are determined by the Company in connection with its annual comprehensive legal review and consist of the following estimates, to the extent it is probable that such liabilities have been incurred and can be reasonably estimated: (i) the liability for Asbestos Claims already asserted against the Company; (ii) the liability for Asbestos Claims not yet asserted against the Company; and (iii) the legal defense costs estimated to be incurred in connection with the Asbestos Claims already asserted and those Asbestos Claims the Company believes will be asserted. The Company conducts an annual comprehensive legal review of its asbestos-related liabilities and costs in connection with finalizing and reporting its annual results of operations, unless significant changes in trends or new developments warrant an earlier review. As part of its annual comprehensive legal review, the Company provides historical Asbestos Claims’ data to a third party with expertise in determining the impact of disease incidence and mortality on future filing trends to develop information to assist the Company in estimating the total number of future Asbestos Claims likely to be asserted against the Company. The Company uses this estimate, along with an estimation of disposition costs and related legal costs, as inputs to develop its best estimate of its total probable liability. If the results of the annual comprehensive legal review indicate that the existing amount of the accrued liability is lower (higher) than its reasonably estimable asbestos-related costs, then the Company will record an appropriate charge (credit) to the Company’s results of operations to increase (decrease) the accrued liability. The significant assumptions underlying the material components of the Company’s accrual are: a) settlements will continue to be limited almost exclusively to claimants who were exposed to the Company’s asbestos containing insulation prior to its exit from that business in 1958; b) Asbestos Claims will continue to be resolved primarily under the Company’s administrative claims-handling agreements or on terms comparable to those set forth in those agreements; c) the incidence of serious asbestos-related disease cases and claiming patterns against the Company for such cases do not change materially; d) the Company is substantially able to defend itself successfully at trial and on appeal; e) the number and timing of additional co-defendant bankruptcies do not change significantly the assets available to participate in the resolution of cases in which the Company is a defendant; and f) co-defendants with substantial resources and assets continue to participate significantly in the resolution of future Asbestos Claims. For the years ended December 31, 2018 and 2017, the Company concluded that accruals in the amounts of $602 million and $582 million, respectively, were required. These amounts have not been discounted for the time value of money. The Company’s comprehensive legal reviews resulted in charges of $125 million, $0 million and $0 million for the years ended December 31, 2018, 2017 and 2016, respectively. As previously disclosed, the Company anticipated that adjustments to its asbestos-related accruals were possible given the inherent uncertainties involved in asbestos litigation. In the fourth quarter of 2018, the Company determined that it was advantageous to accelerate the disposition of certain claims in light of additional information the Company obtained about higher estimated future claim volumes and values in certain of the affected discrete streams of potential liability. Factors impacting the increased likelihood of these additional losses included changes in the law, procedure, the expansion of judicial resources in certain jurisdictions, and renewed attention to dockets of non-mesothelioma cases. The Company also obtained new information about other Asbestos Claims, which had the effect of reducing its asbestos-related liability. The combined effect of these items resulted in a change in estimate of the Company’s asbestos-related liability. The Company believes that it is reasonably possible that it will incur a loss for its asbestos-related liabilities in excess of the amount currently recognized, which was $602 million as of December 31, 2018. The Company estimated that reasonably possible losses could result in asbestos-related liabilities of approximately $722 million. This estimate of additional reasonably possible loss reflects a qualitative judgment regarding the nature of contingencies that could impact future Asbestos Claims and legal costs, which include, but are not limited to, successful attempts by plaintiffs to challenge existing legal barriers to entry, enact plaintiff-oriented procedural rules or liability or damage-related legislation, establish new theories of liability, revive long-dormant inventories of non-mesothelioma cases, or leverage changing jurisdictional dynamics and a changing litigation environment to increase the volume of Asbestos Claims presented or per-claim indemnity values. However, it is also possible that the ultimate amount of asbestos-related liabilities could be above this estimate. The Company expects a significant majority of the total number of Asbestos Claims to be received in the next five to seven years. This timeframe appropriately reflects the mortality of current and expected claimants in light of the Company’s sale of its insulation business unit in 1958. The Company may continue to experience increased year-over-year variability with regard to the annual quantity of Asbestos Claims presented to and disposed by the Company. This increased variability, jurisdictional dynamics, a changing litigation environment, the size of the remaining pool of claimants, and the expected increase in mortality over the next five to seven years may present the Company with further opportunities to accelerate disposition of discrete parts of its claimant pool. These influences may create increased variability in the annual cash payments year-over-year. The Company’s asbestos-related liability is based on a projection of new Asbestos Claims that will eventually be filed against the Company and the estimated average disposition cost of these claims and related legal costs. Changes in these projections, and estimates, as well as changes in the significant assumptions noted above, have the potential to significantly impact the estimation of the Company’s asbestos-related liability. Other Matters On July 5, 2016, the Company learned that the Enforcement Division of the Securities and Exchange Commission (“SEC”) was conducting an investigation into certain accounting and control matters pertaining to the Company’s determination of its asbestos-related liabilities. On May 13, 2016, the Company restated its consolidated financial statements for the years ended December 31, 2015, 2014 and 2013 in order to correct an error related to the Company’s method for estimating its future asbestos-related liabilities. On May 11, 2018, the SEC informed the Company that it had concluded its investigation, and, based on the information the SEC had as of that date, it did not intend to recommend an enforcement action against the Company. Other litigation is pending against the Company, in some cases involving ordinary and routine claims incidental to the business of the Company and in others presenting allegations that are non-routine and involve compensatory, punitive or treble damage claims as well as other types of relief. The Company records a liability for such matters when it is both probable that the liability has been incurred and the amount of the liability can be reasonably estimated. Recorded amounts are reviewed and adjusted to reflect changes in the factors upon which the estimates are based, including additional information, negotiations, settlements and other events. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | 14. Accumulated Other Comprehensive Income (Loss) The components of comprehensive income are: (a) net earnings; (b) change in fair value of certain derivative instruments; (c) pension and other postretirement benefit adjustments; and (d) foreign currency translation adjustments. The net effect of exchange rate fluctuations generally reflects changes in the relative strength of the U.S. dollar against major foreign currencies between the beginning and end of the year. The following table lists the beginning balance, annual activity and ending balance of each component of accumulated other comprehensive income (loss): Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Income (Loss) Balance on January 1, 2017 $ (788) $ (4) $ (1,380) $ (2,172) Change before reclassifications 65 (3) (8) 54 Amounts reclassified from accumulated other comprehensive income (6) (a) 285 (b) 279 Translation effect 32 32 Tax effect 1 (20) (19) Other comprehensive income (loss) attributable to the Company 65 (8) 289 346 Balance on December 31, 2017 (723) (12) (1,091) (1,826) Change before reclassifications (166) (4) (114) (284) Amounts reclassified from accumulated other comprehensive income (1) (a) 131 (b) 130 Translation effect (1) 16 15 Tax effect (3) (3) Other comprehensive income (loss) attributable to the Company (166) (6) 30 (142) Balance on December 31, 2018 $ (889) $ (18) $ (1,061) $ (1,968) (a) Amount is included in Cost of goods sold on the Consolidated Results of Operations (see Note 8 for additional information). (b) Amount is included in the computation of net periodic pension cost and net postretirement benefit cost (see Note 10 for additional information). |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Stock Based Compensation | |
Stock Based Compensation | 15. Stock Based Compensation The Company has various nonqualified plans approved by share owners under which it has granted stock options, restricted shares and performance vested restricted share units. Starting with the 2017 equity awards, the Company has allocated these awards solely in the form of restricted shares and performance vested restricted share units. As such, the Company’s annual compensation expense related to stock option awards is immaterial . At December 31, 2018, there were 3,547,267 shares available for grants under these plans. Total compensation cost for all grants of shares and units under these plans was $27 million, $18 million and $11 million for the years ended December 31, 2018, 2017, and 2016, respectively. Restricted Shares and Restricted Share Units Restricted share units granted to employees vest 25% per year beginning on the first anniversary. Granted but unvested restricted share units are forfeited upon termination, unless certain retirement criteria are met. Holders of vested restricted share units receive one share of the Company’s common stock for each unit as units vest. Restricted share units granted to directors vest after one year. The fair value of the restricted shares and restricted share units is equal to the market price of the Company’s common stock on the date of the grant. The fair value of restricted shares and restricted share units, is amortized over the vesting periods which range from one to four years. The activity of restricted shares and restricted share units is as follows: Weighted Number of Average Restricted Grant-Date Shares Fair Value (thousands) (per share) Nonvested at January 1, 2018 1,108 $ 19.39 Granted 579 21.64 Vested (492) 19.73 Forfeited (116) 29.90 Nonvested at December 31, 2018 1,079 20.29 Awards granted during 2017 $ 20.01 Awards granted during 2016 $ 15.70 2018 2017 2016 Total fair value of shares vested $ 10 $ 5 $ 6 Performance Vested Restricted Share Units Performance vested restricted share units vest on January 1 of the third year following the year in which they are granted. Holders of vested units may receive up to two shares of the Company’s common stock for each unit, depending upon the attainment of consolidated performance goals established by the Compensation Committee of the Company’s Board of Directors. If minimum goals are not met, no shares will be issued. Granted but unvested restricted share units are forfeited upon termination of employment, unless certain retirement criteria are met. The fair value of each performance vested restricted share unit is equal to the product of the fair value of the Company’s common stock on the date of grant and the estimated number of shares into which the performance vested restricted share unit will be converted. The fair value of performance vested restricted share units is amortized ratably over the vesting period. Should the estimated number of shares into which the performance vested restricted share unit will be converted change, an adjustment will be recorded to recognize the accumulated difference in amortization between the revised and previous estimates. Performance vested restricted share unit activity is as follows: Number of Performance Weighted Average Vested Restricted Shares Grant-Date Fair Value Units (thousands) (per unit) Nonvested at January 1, 2018 1,594 $ 18.66 Granted 501 22.05 Vested (375) 23.58 Forfeited/Cancelled (88) 20.33 Nonvested at December 31, 2018 1,632 18.48 Awards granted during 2017 $ 19.57 Awards granted during 2016 $ 15.10 Approximately 501,000 shares were issued in 2018 with a fair value at issuance date of $9 million related to performance vested restricted share units. As of December 31, 2018, there was $19 million of total unrecognized compensation cost related to all unvested stock options, restricted shares, restricted share units and performance vested restricted share units. That cost is expected to be recognized over a weighted average period of approximately two years. |
Other Expense, net
Other Expense, net | 12 Months Ended |
Dec. 31, 2018 | |
Other Expense, net | |
Other Expense, net | 16. Other Expense, net Other expense, net for the years ended December 31, 2018, 2017, and 2016 included the following: 2018 2017 2016 Restructuring, asset impairment and other charges $ 97 $ 77 $ 104 Charge for asbestos-related costs 125 Pension settlement charges 74 218 98 Intangible amortization expense 40 41 39 Impairment of equity investment 25 Gain on China land compensation (71) Royalty income (13) (11) (13) Foreign currency exchange loss 6 5 6 Non-income tax gain (19) Other income (including gains on asset sales), net (41) (7) (14) $ 269 $ 323 $ 174 In 2018, other income, net includes a gain realized on a sale of an asset in Europe (approximately $11 million) and gains recorded on insurance proceeds in the Americas (approximately $11 million). In 2016, the Company evaluated the future estimated earnings and cash flow of an equity investment and determined that it was other-than-temporarily impaired. As such, the Company recorded an impairment charge of $25 million to reduce its carrying value down to its estimated fair value. The Company classified the significant assumptions used to determine the fair value of the impaired assets as Level 3 in the fair value hierarchy. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2018 | |
Operating Leases | |
Operating Leases | 17. Operating Leases Rent expense attributable to all warehouse, office buildings and equipment operating leases was $91 million in 2018, $91 million in 2017, and $80 million in 2016. Minimum future rentals under operating leases are as follows: 2019, $69 million; 2020, $53 million; 2021, $41 million; 2022, $36 million; 2023, $29 million; and 2024 and thereafter, $40 million. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share | |
Earnings Per Share | 18. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: 2018 2017 2016 Numerator: Net earnings attributable to the Company $ 257 $ 180 $ 209 Denominator (in thousands): Denominator for basic earnings per share-weighted average shares outstanding 160,125 162,737 161,857 Effect of dilutive securities: Stock options and other 1,963 1,910 968 Denominator for diluted earnings per share-adjusted weighted average shares outstanding 162,088 164,647 162,825 Basic earnings per share: Earnings from continuing operations $ 0.90 $ 1.12 $ 1.33 Gain (loss) from discontinued operations 0.71 (0.01) (0.04) Net earnings $ 1.61 $ 1.11 $ 1.29 Diluted earnings per share: Earnings from continuing operations $ 0.89 $ 1.11 $ 1.32 Gain (loss) from discontinued operations 0.70 (0.01) (0.04) Net earnings $ 1.59 $ 1.10 $ 1.28 Options to purchase 1,726,275, 1,522,928 and 2,770,458 weighted average shares of common stock which were outstanding during 2018, 2017, and 2016, 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. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | 19. Supplemental Cash Flow Information Changes in the components of working capital related to operations (net of the effects related to acquisitions and divestitures) were as follows: 2018 2017 2016 Decrease (increase) in current assets: Receivables $ 43 $ (37) $ (32) Inventories (29) 2 16 Prepaid expenses and other (58) (10) 145 Increase (decrease) in current liabilities: Accounts payable 67 69 (58) Accrued liabilities (16) (49) (31) Salaries and wages (1) (21) 32 U.S. and foreign income taxes 9 (43) 18 $ 15 $ (89) $ 90 The Company uses various factoring programs to sell certain receivables to financial institutions as part of managing its cash flows. At December 31, 2018 and 2017, the amount of receivables sold by the Company was $600 million and $454 million, respectively. Any continuing involvement with the sold receivables is immaterial. Income taxes paid in cash were as follows: 2018 2017 2016 U.S. $ 11 $ 4 $ — Non-U.S. 97 127 99 Total income taxes paid in cash $ 108 $ 131 $ 99 Interest paid in cash, including note repurchase premiums, for the years ended December 31, 2018, 2017 and 2016 was $236 million, $261 million and $261 million, respectively. Cash interest for the years ended December 31, 2018, 2017 and 2016 included $0 million, $18 million and $9 million of note repurchase premiums, respectively. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations | |
Discontinued Operations | 20. Discontinued Operations On December 6, 2018, an ad hoc committee for the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) rejected the request by the Bolivarian Republic of Venezuela (“Venezuela”) to annul the award issued by an ICSID tribunal in favor of OI European Group B.V. (“OIEG”) related to the 2010 expropriation of OIEG’s majority interest in two plants in Venezuela (the “Award”). The annulment proceeding with respect to the Award is now concluded. On July 31, 2017, OIEG sold its right, title and interest in amounts due under the Award to an Ireland-domiciled investment fund. Under the terms of the sale, OIEG received a payment, in cash, at closing equal to $115 million (the “Cash Payment”). OIEG may also receive additional payments in the future (“Deferred Amounts”) calculated based on the total compensation that is received from Venezuela as a result of collection efforts or as settlement of the Award with Venezuela. OIEG’s right to receive any Deferred Amounts is subject to the limitations described below. OIEG’s interest in any amounts received in the future from Venezuela in respect of the Award is limited to a percentage of such recovery after taking into account reimbursement of the Cash Payment to the purchaser and reimbursement of legal fees and expenses incurred by the Company and the purchaser. OIEG’s percentage of such recovery will also be reduced over time. Because the Award has yet to be satisfied and the ability to successfully enforce the Award in countries that are party to the ICSID Convention is subject to significant challenges, the Company is unable to reasonably predict the amount of recoveries from the Award, if any, to which the Company may be entitled in the future. Any future amounts that the Company may receive from the Award are highly speculative and the timing of any such future payments, if any, is highly uncertain. As such, there can be no assurance that the Company will receive any future payments under the Award beyond the Cash Payment. A separate arbitration involving other subsidiaries of the Company was initiated in 2012 to obtain compensation primarily for third-party minority shareholders’ lost interests in the two expropriated plants. However, on November 13, 2017, ICSID issued an award that dismissed this arbitration on jurisdiction grounds. In March 2018, the two subsidiaries of the Company submitted to ICSID an application to annul the November 13, 2017 award; they have since submitted a pleading seeking annulment. As a result of the favorable ruling by an ICSID ad hoc committee rejecting Venezuela’s request to annul the OIEG Award, and thereby concluding those annulment proceedings, the Company has recognized a $115 million gain from discontinued operations in 2018. The gain from discontinued operations of $113 million, and the losses from discontinued operations of $3 million and $7 million, for the years ended December 31, 2018, 2017 and 2016, respectively, reflect the gain in 2018 and the ongoing costs for the Venezuelan expropriation in all three years. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED) | 12 Months Ended |
Dec. 31, 2018 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED) | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED) | OWENS-ILLINOIS, INC. SCHEDULE II – VALUATIO Years ended December 31, 2018, 2017, and 2016 (Millions of Dollars) Reserves deducted from assets in the balance sheets: Allowances for losses and discounts on receivables Additions Balance at Charged to Balance beginning costs and Deductions at end of of period expenses Other (Note 1) period 2018 $ 34 $ 13 $ (4) $ (8) $ 35 2017 $ 32 $ 12 $ (2) $ (8) $ 34 2016 $ 29 $ 15 $ (2) $ (10) $ 32 (1) Deductions from allowances for losses and discounts on receivables represent uncollectible notes and accounts written off. Valuation allowance on net deferred tax assets Balance at Charged to other Balance at beginning of Charged to comprehensive Foreign currency Other end of period income income translation (Note 1) period 2018 $ 543 $ (20) $ (7) $ (9) $ (12) $ 495 2017 $ 1,094 $ 15 $ (79) $ 4 $ (491) $ 543 2016 $ 1,135 $ 3 $ (32) $ (3) $ (9) $ 1,094 (1) The U.S. Tax Cuts and Jobs Act ("the Act") was enacted on December 22, 2017. The Act reduced the U.S. federal corporate tax rate to 21% from 35%. The reduction in tax rates reduced certain net U.S. deferred tax assets by $162 million, with an offsetting impact to valuation allowance. In 2017, $327 million of foreign tax credits expired or were utilized against transition tax, against which a valuation allowance had previously been asserted. In 2018, the other change in valuation allowance on net deferred tax assets was primarily due to changes in tax law and expiration of certain tax attribute carryovers against which a valuation allowance had previously been asserted. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies | |
Basis of Consolidated Statements | Basis of Consolidated Statements The consolidated financial statements of Owens-Illinois, Inc. (the “Company”) include the accounts of its subsidiaries. Newly acquired subsidiaries have been included in the consolidated financial statements from dates of acquisition. The Company uses the equity method of accounting for investments in which it has a significant influence and generally an ownership interest of 20% to 50%. The Company monitors other than temporary declines in fair value and records reductions in carrying values when appropriate. |
Nature of Operations | Nature of Operations The Company is a leading manufacturer of glass container products. The Company’s principal product lines are glass containers for the food and beverage industries. The Company has glass container operations located in 23 countries. The principal markets and operations for the Company’s products are in the Americas, Europe and Asia Pacific. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management of the Company to make estimates and assumptions that affect certain amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates, at which time the Company would revise its estimates accordingly. |
Foreign Currency Translation | Foreign Currency Translation The assets and liabilities of non-U.S. subsidiaries are translated into U.S. dollars at year-end exchange rates and their results of operations are converted on an ongoing basis at the monthly average rate. Any related translation adjustments are recorded in accumulated other comprehensive income in share owners’ equity. |
Revenue Recognition | Revenue Recognition Revenue is recognized when obligations under the terms of the Company’s contracts and related purchase orders with its customers are satisfied, which primarily takes place when products are shipped from the Company’s manufacturing or warehousing facilities to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimated provisions for rebates, discounts, returns and allowances. Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included with cost of goods sold in the Consolidated Results of Operations. |
Stock-Based Compensation | Stock-Based Compensation The Company has various stock-based compensation plans consisting of stock option grants and restricted share awards. Costs resulting from all share-based compensation plans are required to be recognized in the financial statements. A public entity is required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the required service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the required service. |
Cash | Cash The Company defines “cash” as cash and time deposits with maturities of three months or less when purchased. Outstanding checks in excess of funds on deposit are included in accounts payable. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable Receivables are stated at amounts estimated by management to be the net realizable value. The Company charges off accounts receivable when it becomes apparent based upon age or customer circumstances that amounts will not be collected. Allowance for Doubtful Accounts The allowance for doubtful accounts is established through charges to the provision for bad debts. The Company evaluates the adequacy of the allowance for doubtful accounts on a periodic basis. The evaluation includes historical trends in collections and write-offs, management’s judgment of the probability of collecting accounts and management’s evaluation of business risk. |
Inventory Valuation | Inventory Valuation Inventories are valued at the lower of average costs or market. |
Goodwill | Goodwill Goodwill represents the excess of cost over fair value of net assets of businesses acquired. Goodwill is evaluated annually, as of October 1, for impairment or more frequently if an impairment indicator exists. |
Intangible Assets and Other Long-Lived Assets | Intangible Assets and Other Long-Lived Assets Intangible assets are amortized over the expected useful life of the asset. Amortization expense directly attributed to the manufacturing of the Company’s products is included in cost of goods sold. Amortization expense related to non-manufacturing activities is included in Selling and administrative expense and Other expense, net. The Company evaluates the recoverability of intangible assets and other long-lived assets based on undiscounted projected cash flows, excluding interest and taxes, when factors indicate that impairment may exist. If impairment exists, the asset is written down to fair value. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment (“PP&E”) is carried at cost and includes expenditures for new facilities and equipment and those costs which substantially increase the useful lives or capacity of existing PP&E. In general, depreciation is computed using the straight-line method and recorded over the estimated useful life of the asset. Factory machinery and equipment is depreciated over periods ranging from 5 to 25 years with the majority of such assets (principally glass-melting furnaces and forming machines) depreciated over 7 to 15 years. Buildings and building equipment are depreciated over periods ranging from 10 to 50 years. Depreciation expense directly attributed to the manufacturing of the Company’s products is included in cost of goods sold. Depreciation expense related to non-manufacturing activities is included in selling and administrative. Depreciation expense includes the amortization of assets recorded under capital leases. Maintenance and repairs are expensed as incurred. Costs assigned to PP&E of acquired businesses are based on estimated fair values at the date of acquisition. The Company evaluates the recoverability of PP&E based on undiscounted projected cash flows, excluding interest and taxes, when factors indicate that impairment may exist. If impairment exists, the asset is written down to fair value. |
Derivative Instruments | Derivative Instruments The Company uses derivative instruments to manage risks generally associated with foreign exchange rate, interest rate and commodity market volatility. Derivative financial instruments are included on the balance sheet at fair value. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether a hedge has been designated. For those derivative instruments that qualify for hedge accounting, the Company designates the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, fair value hedge, or a hedge of a net investment in a foreign operation. For a derivative instrument designated as a fair value hedge, the gain or loss on the derivative is recognized in earnings immediately with the offsetting gain or loss on the hedged item. For a derivative instrument designated as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of Accumulated other comprehensive loss and is subsequently recognized in earnings when the hedged exposure affects earnings. If there is an ineffective portion of the change in fair value of the derivative it is recognized directly in earnings. For a derivative instrument designated as a hedge of a net investment in a foreign operation, the effective portion of the derivative's gain or loss is reported in Accumulated other comprehensive loss as part of the cumulative translation adjustment and amounts are reclassified out of accumulated other comprehensive loss into earnings when the hedged net investment is either sold or substantially liquidated. Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings. The Company does not enter into derivative financial instruments for trading purposes and is not a party to leveraged derivatives. In the consolidated statement of cash flows, the settlement of derivative instruments designated as hedges is typically recorded in the category that is consistent with the nature of the underlying item being hedged. See Note 8 to the Consolidated Financial Statements for additional information about hedges and derivative financial instruments. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Generally accepted accounting principles defines a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs for which there is little or no market data, which requires the Company to develop assumptions. The carrying amounts reported for cash and short-term loans approximate fair value. In addition, carrying amounts approximate fair value for certain long-term debt obligations subject to frequently redetermined interest rates. Fair values for the Company’s significant fixed rate debt obligations are generally based on published market quotations. |
Reclassifications | Reclassifications Certain reclassifications of prior years’ data have been made to conform to the current year presentation. As a result of the Company’s implementation of Accounting Standards Update No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” the Company reclassified $200 million and $98 million of pension settlement charges from Cost of goods sold to Other expense, net on the Consolidated Results of Operations for the years ended December 31, 2017 and 2016, respectively. The Company also reclassified $18 million of pension settlement charges from Selling and administrative expense to Other expense, net on the Consolidated Results of Operations for the year ended December 31, 2017. |
New Accounting Standards | New Accounting Standards Revenue from Contracts with Customers - In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. On January 1, 2018, the Company adopted this accounting standard. See Note 3, Revenue, for additional information. Leases - In February 2016, the FASB issued ASU No. 2016-02, “Leases” effective January 1, 2019. Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee's obligation to make lease payments arising from a lease, and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. ASU No. 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date. The Company expects to adopt this guidance using the additional, optional transition method, the package of transitional practical expedients relating to the identification, classification and initial direct costs of leases commencing before the effective date of ASU No. 2016-02, and the transitional practical expedient for the treatment of existing land easements; however, the Company does not expect to elect the hindsight transitional practical expedient. The Company anticipates the new guidance will significantly impact its consolidated financial statements as the Company has a significant number of leases. As of December 31, 2018, the Company had minimum lease commitments under non-cancellable operating leases approximating $265 million. The Company formed an implementation team, identified its lease population and implemented a new software to manage its leases in accordance with this new accounting standard. Credit Losses - In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The new guidance is effective for the Company on January 1, 2020. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. Statement of Cash Flows - In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” which was intended to reduce diversity in practice on how certain transactions are classified in the statement of cash flows. Application of the standard is required for annual periods beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. Compensation - Retirement Benefits - In March 2017, the FASB issued ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” which requires the service cost component to be presented with other employee compensation costs in operating income within the income statement while the other components will be reported separately outside of operations. Application of the standard is required for annual periods beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements, except for in the Consolidated Results of Operations for the prior periods in which there were pension settlement charges. These prior period pension settlement charges were reclassified from the Cost of goods sold and Selling and administrative expense to Other expense, net for the years ended December 31, 2017 and 2016, respectively. See the Reclassifications section of Note 1 for additional details. Derivatives and Hedging - In August 2017, the FASB issued ASU No. 2017-12, “Targeted Improvements to Accounting for Hedging Activities” which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. Application of the standard is required for annual periods beginning after December 15, 2018. The Company adopted this standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. Income Taxes - In January 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which gives entities the option to reclassify to retained earnings the tax effects resulting from the U.S. Tax Cuts and Jobs Act (the “Act”) related to items in Accumulated other comprehensive income (“AOCI”) that the FASB refers to as having been stranded in AOCI. The new guidance may be applied retrospectively to each period in which the effect of the Act is recognized in the period of adoption. The Company must adopt this guidance for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for periods for which financial statements have not yet been issued or made available for issuance, including the period the Act was enacted. The guidance, when adopted, will require new disclosures regarding a company’s accounting policy for releasing the tax effects in AOCI and permit a company the option to reclassify to retained earnings the tax effects resulting from the Act that are stranded in AOCI. The Company is currently evaluating how to apply the new guidance and has not determined whether it will elect to reclassify stranded amounts, if any. The adoption of ASU 2018-02 is not expected to have a material effect on the Company’s consolidated financial statements. Disclosure Requirements for Fair Value Measurement - In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” which modifies the fair value disclosure requirements. Application of the standard is required for annual periods beginning after December 15, 2019. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. Disclosure Requirements for Defined Benefit Plans - In August 2018, the FASB issued ASU No. 2018-14, “Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” which modifies the defined benefit plan disclosure requirements. Application of the standard is required for annual periods beginning after December 15, 2020. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information | |
Net sales for the Company's reportable segments | 2018 2017 2016 Net sales: Americas $ 3,638 $ 3,711 $ 3,652 Europe 2,489 2,375 2,300 Asia Pacific 675 714 684 Reportable segment totals 6,802 6,800 6,636 Other 75 69 66 Net sales $ 6,877 $ 6,869 $ 6,702 |
Segment operating profit (loss) for the Company's reportable segments | 2018 2017 2016 Segment operating profit: Americas $ 585 $ 614 $ 568 Europe 316 263 237 Asia Pacific 44 65 77 Reportable segment totals 945 942 882 Items excluded from segment operating profit: Retained corporate costs and other charges (106) (104) (98) Charge for asbestos-related costs (125) Pension settlement charges (74) (218) (98) Restructuring, asset impairment and other (102) (77) (129) Gain on China land sale 71 Interest expense, net (261) (268) (272) Earnings from continuing operations before income taxes $ 277 $ 275 $ 356 |
Assets, equity investments, equity earnings, capital expenditures and depreciation and amortization expense for the Company's reportable segments | Reportable Retained Consoli- Asia Segment Corp Costs dated Americas Europe Pacific Totals and Other Totals Total assets: 2018 $ 5,497 $ 3,036 $ 918 $ 9,451 $ 248 $ 9,699 2017 5,411 3,133 1,001 9,545 211 9,756 2016 5,059 2,792 926 8,777 358 9,135 Equity investments: 2018 $ 429 $ 98 $ 106 $ 633 $ 65 $ 698 2017 259 95 114 468 57 525 2016 21 78 117 216 217 433 Equity earnings: 2018 $ 39 $ 21 $ — $ 60 $ 17 $ 77 2017 41 18 59 18 77 2016 12 15 4 31 29 60 Capital expenditures: 2018 $ 255 $ 187 $ 92 $ 534 $ 2 $ 536 2017 233 152 55 440 1 441 2016 231 163 59 453 1 454 Depreciation and amortization expense: 2018 $ 293 $ 136 $ 55 $ 484 $ 10 $ 494 2017 310 125 43 478 10 488 2016 312 118 37 467 11 478 |
Schedule of segment information by geographic segment | The Company’s net property, plant and equipment by geographic segment are as follows: U.S. Non-U.S. Total 2018 $ 681 $ 2,404 $ 3,085 2017 757 2,374 3,131 2016 749 2,131 2,880 The Company’s net sales by geographic segment are as follows: U.S. Non-U.S. Total 2018 $ 2,020 $ 4,857 $ 6,877 2017 2,072 4,797 6,869 2016 2,124 4,578 6,702 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Schedule of disaggregation of revenue by customer end use | Americas Europe Asia Pacific Total Alcoholic beverages (beer, wine, spirits) $ 2,281 $ 1,780 $ 493 $ 4,554 Food and other 780 461 101 1,342 Non-alcoholic beverages 577 248 81 906 Reportable segment totals $ 3,638 $ 2,489 $ 675 $ 6,802 Other 75 Net sales $ 6,877 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventories | |
Major classes of inventory | 2018 2017 Finished goods $ 849 $ 873 Raw materials 125 122 Operating supplies 44 41 $ 1,018 $ 1,036 |
Equity Investments (Tables)
Equity Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Investments | |
Company's ownership percentage in affiliates | At December 31, 2018 the Company’s ownership percentage in affiliates include: O-I Ownership Affiliates Percentage Business Type Empresas Comegua S.A. % Glass container manufacturer BJC O-I Glass Pte. Ltd. % Glass container manufacturer CO Vidrieria SARL ("COV") % Glass container manufacturer Rocky Mountain Bottle Company % Glass container manufacturer Tata Chemical (Soda Ash) Partners % Soda ash supplier Vetrerie Meridionali SpA ("VeMe") % Glass container manufacturer Vetri Speciali SpA % Specialty glass manufacturer |
Equity in earnings | 2018 2017 2016 Equity in earnings: Non-U.S. $ 52 $ 45 $ 19 U.S. 25 32 41 Total $ 77 $ 77 $ 60 Dividends received $ 72 $ 48 $ 38 |
Summary of balance sheet information of equity investments | 2018 2017 At end of year: Current assets $ 655 $ 466 Non-current assets 1,306 1,021 Total assets 1,961 1,487 Current liabilities 342 232 Other liabilities and deferred items 242 198 Total liabilities and deferred items 584 430 Net assets $ 1,377 $ 1,057 |
Summary of income statement information of equity investments | For the year: 2018 2017 2016 Net sales $ 972 $ 883 $ 755 Gross profit $ 234 $ 242 $ 182 Net earnings $ 184 $ 165 $ 145 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets | |
Schedule of changes in carrying amount of goodwill | Europe Americas Other Total Balance as of January 1, 2016 $ 840 $ 1,644 $ 5 $ 2,489 Acquisition related adjustments 41 41 Translation effects (32) (36) (68) Balance as of December 31, 2016 808 1,649 5 2,462 Translation effects 105 23 128 Balance as of December 31, 2017 913 1,672 5 2,590 Translation effects (39) (38) (77) Balance as of December 31, 2018 $ 874 $ 1,634 $ 5 $ 2,513 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Assets | |
Schedule of other assets (noncurrent) | 2018 2017 Deferred tax assets $ 191 $ 194 Deferred returnable packaging costs 109 119 Repair part inventories 102 106 Capitalized software 79 82 Value added taxes 26 24 Other 95 77 $ 602 $ 602 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments | |
Balance Sheet Classification of derivative instruments | Fair Value of Maximum Notional Amount Hedge Assets Hedge Liabilities Maturity Date 2018 2017 2018 2017 2018 2017 2018 2017 Derivatives designated as hedging instruments: Commodity forward contracts $ 21 $ 30 $ 1 $ 3 $ — $ 13 various various Interest rate swaps (fair value hedges) € 725 € 725 6 6 1 10 Cash flow hedges of foreign exchange risk $ 587 $ 310 10 4 1 various various Interest rate swaps (cash flow hedges) $ 180 Net investment hedges € 160 6 8 Total derivatives accounted for as hedges $ 23 $ 13 $ 10 $ 23 Derivatives not designated as hedges: Foreign exchange derivative contracts $ 470 $ 460 2 4 2 1 various various Total derivatives $ 25 $ 17 $ 12 $ 24 Current $ 19 $ 14 $ 3 $ — Noncurrent 6 3 9 24 Total derivatives $ 25 $ 17 $ 12 $ 24 |
Effects of derivative instruments on the results of operations | Gain (Loss) Recognized in OCI (Effective Portion) Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1) Derivatives designated as hedging instruments: 2018 2017 2016 2018 2017 2016 Cash Flow Hedges Commodity forward contracts (a) $ (6) $ $ $ 1 $ - $ - Cash flow hedges of foreign exchange risk (b) 12 9 Cash flow hedges of interest rate risk (c) (1) Net Investment Hedges Net Investment Hedges 5 1 $ 10 $ 6 $ 7 $ 11 $ — $ — Amount of Gain (Loss) Recognized in Other income (expense), net Derivatives not designated as hedges: 2018 2017 2016 Foreign exchange derivative contracts $ 1 $ 10 $ 6 (1) Gains and losses reclassified from accumulated OCI and recognized in income are recorded to (a) cost of goods sold, (b) other expense, net or (c) interest expense, net. |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring | |
Selected information related to the restructuring accruals | The following table presents information related to restructuring, asset impairment and other costs related to closed facilities from January 1, 2017 through December 31, 2018: Employee Asset Other Total Costs Impairment Exit Costs Restructuring Balance at January 1, 2017 $ 67 $ $ 18 $ 85 Charges 45 11 16 72 Write-down of assets to net realizable value (11) (11) Net cash paid, principally severance and related benefits (49) (13) (62) Other, including foreign exchange translation 4 (3) 1 Balance at December 31, 2017 $ 67 $ — $ 18 $ 85 Charges 20 60 12 92 Write-down of assets to net realizable value (60) (60) Net cash paid, principally severance and related benefits (24) (8) (32) Transfers to other accounts (4) (4) Other, including foreign exchange translation (3) (9) (12) Balance at December 31, 2018 $ 60 $ — $ 9 $ 69 |
Pension Benefit Plans and Oth_2
Pension Benefit Plans and Other Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Pension Benefit Plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Changes in the benefit obligations | U.S. Non-U.S. 2018 2017 2018 2017 Obligations at beginning of year $ 1,650 $ 1,956 $ 1,148 $ 1,235 Change in benefit obligations: Service cost 14 14 15 15 Interest cost 59 78 32 40 Actuarial (gain) loss, including the effect of change in discount rates (108) 123 (23) (15) Settlements (114) (393) (35) (171) Participant contributions 2 1 Benefit payments (91) (128) (51) (60) Other 3 (2) Foreign currency translation (64) 103 Net change in benefit obligations (237) (306) (126) (87) Obligations at end of year $ 1,413 $ 1,650 $ 1,022 $ 1,148 |
Changes in the fair value of the pension plans' assets | U.S. Non-U.S. 2018 2017 2018 2017 Fair value at beginning of year $ 1,394 $ 1,654 $ 975 $ 1,011 Change in fair value: Actual gain (loss) on plan assets (96) 254 (15) 87 Benefit payments (91) (128) (51) (60) Employer contributions 1 7 33 24 Participant contributions 2 1 Settlements (114) (393) (35) (171) Foreign currency translation (58) 83 Other (8) Net change in fair value of assets (300) (260) (132) (36) Fair value at end of year $ 1,094 $ 1,394 $ 843 $ 975 |
Funded status | U.S. Non-U.S. 2018 2017 2018 2017 Plan assets at fair value $ 1,094 $ 1,394 $ 843 $ 975 Projected benefit obligations 1,413 1,650 1,022 1,148 Plan assets less than projected benefit obligations (319) (256) (179) (173) Items not yet recognized in pension expense: Actuarial loss 785 811 285 284 Prior service cost (credit) 1 4 (2) 785 812 289 282 Net amount recognized $ 466 $ 556 $ 110 $ 109 |
Net amount recognized included in the Consolidated Balance Sheets | U.S. Non-U.S. 2018 2017 2018 2017 Pension assets $ — $ — $ 44 $ 49 Current pension liability, included with other accrued liabilities (3) (2) (5) (5) Pension benefits (316) (254) (218) (217) Accumulated other comprehensive loss 785 812 289 282 Net amount recognized $ 466 $ 556 $ 110 $ 109 |
Changes in plan assets and/or benefit obligations recognized in accumulated other comprehensive income | U.S. Non-U.S. 2018 2017 2018 2017 Current year actuarial (gain) loss $ 86 $ (2) $ 43 $ (40) Amortization of actuarial loss (51) (57) (11) (16) Settlement (61) (176) (13) (42) Other (1) 6 (27) (235) 25 (98) Translation (18) 30 Change in accumulated other comprehensive income $ (27) $ (235) $ 7 $ (68) |
Components of net periodic pension cost | U.S. Non-U.S. 2018 2017 2016 2018 2017 2016 Service cost $ 14 $ 14 $ 15 $ 15 $ 15 $ 16 Interest cost 59 78 90 32 40 44 Expected asset return (98) (128) (149) (52) (63) (65) Amortization: Actuarial loss 51 57 67 11 16 13 Net expense $ 26 $ 21 $ 23 $ 6 $ 8 $ 8 |
Amounts amortized from accumulated other comprehensive income during 2015 | U.S. Non-U.S. Actuarial loss $ 40 $ 10 |
Information for plans with projected and accumulated benefit obligations in excess of the fair value of plan assets | Projected Benefit Obligation Exceeds Accumulated Benefit Obligation Exceeds the Fair Value of Plan Assets the Fair Value of Plan Assets U.S. Non-U.S. U.S. Non-U.S. 2018 2017 2018 2017 2018 2017 2018 2017 Projected benefit obligations $ 1,413 $ 1,650 $ 815 $ 905 $ 1,413 $ 1,650 $ 815 $ 261 Accumulated benefit obligation 1,412 1,650 793 878 1,412 1,650 793 241 Fair value of plan assets 1,094 1,394 591 682 1,094 1,394 591 39 |
Weighted average assumptions used to determine benefit obligations and net periodic pension costs for pension plans, and accumulated postretirement benefit obligation and net postretirement benefit cost for postretirement plans | The weighted average assumptions used to determine benefit obligations are as follows: U.S. Non-U.S. 2018 2017 2018 2017 Discount rate 4.36 % 3.69 % 3.01 % 2.76 % Rate of compensation increase N/A N/A 2.75 % 2.78 % The weighted average assumptions used to determine net periodic pension costs are as follows: U.S. Non-U.S. 2018 2017 2016 2018 2017 2016 Discount rate 3.69 % 4.17 % 4.43 % 2.76 % 2.94 % 3.68 % Rate of compensation increase N/A N/A N/A % 2.78 % 2.90 % 2.84 % Expected long-term rate of return on assets 7.25 % 7.50 % 7.50 % 5.52 % 6.32 % 7.15 % |
Fair value of defined benefit pension plan assets and target allocations | 2018 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 9 $ — $ — $ 9 $ 9 $ — $ — $ 9 Equity securities — — Debt securities 34 7 41 33 33 Real estate — — Other 30 30 27 27 Total $ 43 $ 37 $ — $ 42 $ 27 $ — Investments measured at net asset value $ 763 $ 906 Total non-U.S. assets at fair value $ 843 $ 975 |
Reconciliation of pension plan assets recorded at fair value using significant unobservable inputs (Level 3) | 2018 2017 Beginning balance $ — $ 10 Net increase (decrease) (10) Ending balance $ — $ — |
Estimated future benefit payments, reflecting expected future service, as appropriate, expected to be paid | Year(s) U.S. Non-U.S. 2019 $ 102 $ 47 2020 100 48 2021 99 51 2022 99 54 2023 97 56 2024-2028 463 279 |
Other Postretirement Benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Changes in the benefit obligations | U.S. Non-U.S. 2018 2017 2018 2017 Obligations at beginning of year $ 89 $ 92 $ 89 $ 81 Change in benefit obligations: Service cost 1 1 Interest cost 3 4 3 3 Actuarial (gain) loss, including the effect of changing discount rates (9) (4) 1 Benefit payments (9) (7) (2) (2) Foreign currency translation (7) 5 Other Net change in benefit obligations (15) (3) (9) 8 Obligations at end of year $ 74 $ 89 $ 80 $ 89 |
Funded status | U.S. Non-U.S. 2018 2017 2018 2017 Postretirement benefit obligations $ (74) $ (89) $ (80) $ (89) Items not yet recognized in net postretirement benefit cost: Actuarial gain (loss) (8) (19) (2) (7) Prior service credit 15 22 7 3 (2) (7) Net amount recognized $ (67) $ (86) $ (82) $ (96) |
Net amount recognized included in the Consolidated Balance Sheets | U.S. Non-U.S. 2018 2017 2018 2017 Current nonpension postretirement benefit, included with Other accrued liabilities $ (6) $ (8) $ (3) $ (3) Nonpension postretirement benefits (68) (81) (77) (86) Accumulated other comprehensive income (loss) 7 3 (2) (7) Net amount recognized $ (67) $ (86) $ (82) $ (96) |
Changes in plan assets and/or benefit obligations recognized in accumulated other comprehensive income | U.S. Non-U.S. 2018 2017 2018 2017 Current year actuarial (gain) loss $ (8) $ — $ (4) $ 1 Amortization of actuarial loss (2) (2) Amortization of prior service credit 7 8 $ (3) $ 6 $ (4) $ 1 |
Components of net periodic pension cost | U.S. Non-U.S. 2018 2017 2016 2018 2017 2016 Service cost $ — $ — $ — $ 1 $ 1 $ 1 Interest cost 3 4 4 3 3 3 Amortization: Actuarial loss 2 2 2 Prior service credit (7) (8) (8) Net amortization (5) (6) (6) — — — Net postretirement benefit (income) cost $ (2) $ (2) $ (2) $ 4 $ 4 $ 4 |
Amounts amortized from accumulated other comprehensive income during 2015 | U.S. Non-U.S. Amortization: Actuarial loss $ 1 $ — Prior service credit (8) Net amortization $ (7) $ — |
Weighted average assumptions used to determine benefit obligations and net periodic pension costs for pension plans, and accumulated postretirement benefit obligation and net postretirement benefit cost for postretirement plans | U.S. Non-U.S. 2018 2017 2016 2018 2017 2016 Accumulated postretirement benefit obligation 4.30 % 3.61 % 4.11 % 3.60 % 3.35 % 3.55 % Net postretirement benefit cost 3.61 % 4.11 % 4.35 % 3.35 % 3.55 % 3.80 % |
Estimated future benefit payments, reflecting expected future service, as appropriate, expected to be paid | Year(s) U.S. Non-U.S. 2019 $ 7 $ 3 2020 7 3 2021 6 3 2022 6 3 2023 6 4 2024 - 2028 25 19 |
Weighted average assumed health care cost trend rates | U.S. Non-U.S. 2018 2017 2018 2017 Health care cost trend rate assumed for next year 6.00 % 6.20 % 5.00 % 5.00 % Rate to which the cost trend rate is assumed to decline (ultimate trend rate) 5.00 % 5.00 % 5.00 % 5.00 % Year that the rate reaches the ultimate trend rate 2025 2024 N/A N/A |
Effects of one-percentage-point change in assumed health care cost trend rates on amount reported for the postretirement benefit plans | U.S. Non-U.S. 1-Percentage-Point 1-Percentage-Point Increase Decrease Increase Decrease Effect on total of service and interest cost $ — $ — $ 1 $ (1) Effect on accumulated postretirement benefit obligations 3 (2) 14 (11) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Provision (benefit) for income taxes calculated based on components of earnings (loss) before income taxes | Continuing operations 2018 2017 2016 U.S. $ (100) $ (43) $ (27) Non-U.S. 377 318 383 $ 277 $ 275 $ 356 Discontinued operations 2018 2017 2016 U.S. $ — $ — $ — Non-U.S. 113 (3) (7) $ 113 $ (3) $ (7) |
Provision (benefit) for income taxes | 2018 2017 2016 Current: U.S. $ 8 $ (5) $ — Non-U.S. 109 87 123 117 82 123 Deferred: U.S. — 6 3 Non-U.S. (9) (18) (7) (9) (12) (4) Total: U.S. 8 1 3 Non-U.S. 100 69 116 Total for continuing operations 108 70 119 Total for discontinued operations — — — $ 108 $ 70 $ 119 |
Reconciliation of the provision for income taxes | 2018 2017 2016 Tax provision on pretax earnings from continuing operations at statutory U.S. Federal tax rate $ 58 $ 96 $ 124 Increase (decrease) in provision for income taxes due to: Non-U.S. tax rates 25 (29) (22) Global intangible low taxed income 32 U.S. Tax Cuts and Jobs Act: transition tax, net of foreign tax credits (2) 2 Tax law changes 4 152 (3) Change in valuation allowance: U.S. tax law change (2) (162) Change in valuation allowance: other (18) (283) 3 Tax attribute expiration 6 330 Withholding tax 10 8 7 Non-deductible expenses 4 9 20 U.S. tax on intercompany dividends and interest 1 2 3 Tax exempt income (2) (3) (2) Intraperiod tax allocation (8) Tax credits and incentives (23) (37) (19) Changes in tax reserves 13 (18) 8 Mexico inflationary adjustments 8 13 6 Equity earnings (13) (13) (9) Intercompany financing 1 (4) (5) Other taxes based on income 7 10 11 Other items (1) (3) 5 Provision for income taxes $ 108 $ 70 $ 119 |
Significant components of deferred tax assets and liabilities and deferred taxes included in the Consolidated Balance Sheets | 2018 2017 Deferred tax assets: Accrued postretirement benefits $ 38 $ 44 Asbestos-related liabilities 127 122 Foreign tax credit carryovers 96 124 Operating and capital loss carryovers 286 342 Other credit carryovers 18 17 Accrued liabilities 65 69 Pension liabilities 92 77 Other 57 41 Total deferred tax assets 779 836 Deferred tax liabilities: Property, plant and equipment 97 101 Intangibles and deferred software 92 97 Total deferred tax liabilities 189 198 Valuation allowance (495) (543) Net deferred taxes $ 95 $ 95 Deferred taxes are included in the Consolidated Balance Sheets at December 31, 2018 and 2017 as follows: 2018 2017 Other assets $ 191 $ 194 Deferred taxes (96) (99) Net deferred taxes $ 95 $ 95 |
Reconciliation of the gross unrecognized tax benefits | 2018 2017 2016 Balance at January 1 $ 79 $ 74 $ 74 Additions and reductions for tax positions of prior years (4) 1 Additions based on tax positions related to the current year 15 17 15 Reductions due to the lapse of the applicable statute of limitations (7) (3) Reductions due to settlements (9) (12) Foreign currency translation (3) 3 Balance at December 31 $ 87 $ 79 $ 74 Unrecognized tax benefits, which if recognized, would impact the Company’s effective income tax rate $ 78 $ 72 $ 66 Accrued interest and penalties at December 31 $ 10 $ 8 $ 23 Interest and penalties included in tax expense for the years ended December 31 $ 2 $ (15) $ (2) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt | |
Long-term Debt | 2018 2017 Secured Credit Agreement: Revolving Credit Facility: Revolving Loans $ — $ — Term Loans: Term Loan A 897 Previous Secured Credit Agreement: Revolving Credit Facility: Revolving Loans Term Loans: Term Loan A 1,148 Other secured debt 404 Senior Notes: 6.75%, due 2020 (€500 million) 570 594 4.875%, due 2021 (€330 million) 376 392 5.00%, due 2022 497 496 4.00%, due 2023 306 305 5.875%, due 2023 688 685 3.125%, due 2024 (€725 million) 825 849 6.375%, due 2025 295 295 5.375%, due 2025 297 297 Capital leases 45 54 Other 14 17 Total long-term debt 5,214 5,132 Less amounts due within one year 33 11 Long-term debt $ 5,181 $ 5,121 |
Fair values of the Company's significant fixed rate debt obligations | Principal Amount Indicated Market Price Fair Value Senior Notes: 6.75%, due 2020 (€500 million) $ 571 $ 108.96 $ 622 4.875%, due 2021 (€330 million) 377 107.28 404 5.00%, due 2022 500 99.46 497 5.875%, due 2023 700 102.02 714 4.00%, due 2023 310 94.12 292 3.125%, due 2024 (€725 million) 828 98.88 819 6.375%, due 2025 300 100.99 303 5.375%, due 2025 300 97.08 291 |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Contingencies | |
Asbestos filings and the claims pending at the end of each listed year | 2018 2017 2016 Pending at beginning of year 1,330 1,400 2,080 Disposed 1,220 1,320 1,750 Filed 960 1,250 1,070 Pending at end of year 1,070 1,330 1,400 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) | |
Component of accumulated other comprehensive loss | Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Income (Loss) Balance on January 1, 2017 $ (788) $ (4) $ (1,380) $ (2,172) Change before reclassifications 65 (3) (8) 54 Amounts reclassified from accumulated other comprehensive income (6) (a) 285 (b) 279 Translation effect 32 32 Tax effect 1 (20) (19) Other comprehensive income (loss) attributable to the Company 65 (8) 289 346 Balance on December 31, 2017 (723) (12) (1,091) (1,826) Change before reclassifications (166) (4) (114) (284) Amounts reclassified from accumulated other comprehensive income (1) (a) 131 (b) 130 Translation effect (1) 16 15 Tax effect (3) (3) Other comprehensive income (loss) attributable to the Company (166) (6) 30 (142) Balance on December 31, 2018 $ (889) $ (18) $ (1,061) $ (1,968) (a) Amount is included in Cost of goods sold on the Consolidated Results of Operations (see Note 8 for additional information). Amount is included in the computation of net periodic pension cost and net postretirement benefit cost (see Note 10 for additional information). |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Based Compensation | |
Restricted shares and restricted share units activity | Weighted Number of Average Restricted Grant-Date Shares Fair Value (thousands) (per share) Nonvested at January 1, 2018 1,108 $ 19.39 Granted 579 21.64 Vested (492) 19.73 Forfeited (116) 29.90 Nonvested at December 31, 2018 1,079 20.29 Awards granted during 2017 $ 20.01 Awards granted during 2016 $ 15.70 2018 2017 2016 Total fair value of shares vested $ 10 $ 5 $ 6 |
Performance vested restricted share unit activity | Number of Performance Weighted Average Vested Restricted Shares Grant-Date Fair Value Units (thousands) (per unit) Nonvested at January 1, 2018 1,594 $ 18.66 Granted 501 22.05 Vested (375) 23.58 Forfeited/Cancelled (88) 20.33 Nonvested at December 31, 2018 1,632 18.48 Awards granted during 2017 $ 19.57 Awards granted during 2016 $ 15.10 |
Other Expense, net (Tables)
Other Expense, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Expense, net | |
Schedule of other expense (income), net | 2018 2017 2016 Restructuring, asset impairment and other charges $ 97 $ 77 $ 104 Charge for asbestos-related costs 125 Pension settlement charges 74 218 98 Intangible amortization expense 40 41 39 Impairment of equity investment 25 Gain on China land compensation (71) Royalty income (13) (11) (13) Foreign currency exchange loss 6 5 6 Non-income tax gain (19) Other income (including gains on asset sales), net (41) (7) (14) $ 269 $ 323 $ 174 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share | |
Computation of basic and diluted earnings per share | 2018 2017 2016 Numerator: Net earnings attributable to the Company $ 257 $ 180 $ 209 Denominator (in thousands): Denominator for basic earnings per share-weighted average shares outstanding 160,125 162,737 161,857 Effect of dilutive securities: Stock options and other 1,963 1,910 968 Denominator for diluted earnings per share-adjusted weighted average shares outstanding 162,088 164,647 162,825 Basic earnings per share: Earnings from continuing operations $ 0.90 $ 1.12 $ 1.33 Gain (loss) from discontinued operations 0.71 (0.01) (0.04) Net earnings $ 1.61 $ 1.11 $ 1.29 Diluted earnings per share: Earnings from continuing operations $ 0.89 $ 1.11 $ 1.32 Gain (loss) from discontinued operations 0.70 (0.01) (0.04) Net earnings $ 1.59 $ 1.10 $ 1.28 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information | |
Supplemental cash flow information | 2018 2017 2016 Decrease (increase) in current assets: Receivables $ 43 $ (37) $ (32) Inventories (29) 2 16 Prepaid expenses and other (58) (10) 145 Increase (decrease) in current liabilities: Accounts payable 67 69 (58) Accrued liabilities (16) (49) (31) Salaries and wages (1) (21) 32 U.S. and foreign income taxes 9 (43) 18 $ 15 $ (89) $ 90 |
Income taxes paid (received) in cash | 2018 2017 2016 U.S. $ 11 $ 4 $ — Non-U.S. 97 127 99 Total income taxes paid in cash $ 108 $ 131 $ 99 |
Significant Accounting Polici_3
Significant Accounting Policies - Equity Method Investments and Stock-Based Compensation (Details) | Dec. 31, 2018country |
Equity Method Investments | |
Number of countries in which the entity operates | 23 |
Maximum | |
Equity Method Investments | |
General ownership percentage for equity method investments | 50.00% |
Minimum | |
Equity Method Investments | |
General ownership percentage for equity method investments | 20.00% |
Significant Accounting Polici_4
Significant Accounting Policies - Property, Plant and Equipment (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
New Accounting Pronouncement | |
Minimum lease commitments under non-cancellable operating leases | $ 265 |
Factory machinery and equipment | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives | 5 years |
Factory machinery and equipment | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives | 25 years |
Glass-melting furnaces and forming machines | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives | 7 years |
Glass-melting furnaces and forming machines | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives | 15 years |
Buildings and building equipment | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives | 10 years |
Buildings and building equipment | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives | 50 years |
Significant Accounting Polici_5
Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle | |||
Cost of goods sold | $ 5,594 | $ 5,536 | $ 5,392 |
Selling and administrative expense | 483 | 484 | 503 |
Other expense, net | $ (269) | (323) | (174) |
Proforma Adjustment [Member] | Reclassification Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Cost of goods sold | (200) | (98) | |
Selling and administrative expense | (18) | ||
Other expense, net | $ 218 | $ 98 |
Segment Information - Reportabl
Segment Information - Reportable Segments (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)positionsegmentitem | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting Information | |||
Number of reportable segments | segment | 3 | ||
Number of operating segments | segment | 3 | ||
Number of combined segments as a result of consolidating the former North America and Latin America segments | segment | 1 | ||
Number of leadership roles as a result of consolidating the former North America and Latin America segments | position | 1 | ||
Number of shared service centers as a result of consolidating the former North America and Latin America segments | item | 1 | ||
Regions not directly related to operations | segment | 1 | ||
Net sales: | |||
Net sales | $ 6,877 | $ 6,869 | $ 6,702 |
Items excluded from Segment Operating Profit: | |||
Retained corporate costs and other charges | (106) | (104) | (98) |
Charge for asbestos-related costs | (125) | ||
Pension settlement charges | (74) | (218) | (98) |
Restructuring, asset impairment and other | (102) | (77) | (129) |
Gain on China land sale | 71 | ||
Interest expense, net | (261) | (268) | (272) |
Earnings from continuing operations before income taxes | |||
Earnings from continuing operations before income taxes | 277 | 275 | 356 |
Reportable Segment Totals | |||
Net sales: | |||
Net sales | 6,802 | 6,800 | 6,636 |
Segment operating profit: | |||
Segment operating profit | 945 | 942 | 882 |
Americas | |||
Net sales: | |||
Net sales | 3,638 | 3,711 | 3,652 |
Segment operating profit: | |||
Segment operating profit | 585 | 614 | 568 |
Europe | |||
Net sales: | |||
Net sales | 2,489 | 2,375 | 2,300 |
Segment operating profit: | |||
Segment operating profit | 316 | 263 | 237 |
Asia Pacific | |||
Net sales: | |||
Net sales | 675 | 714 | 684 |
Segment operating profit: | |||
Segment operating profit | 44 | 65 | 77 |
Other | |||
Net sales: | |||
Net sales | $ 75 | $ 69 | $ 66 |
Segment Information - Assets, I
Segment Information - Assets, Investments, Equity, Capital Expenses and Depreciation and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Assets | |||
Total assets: | $ 9,699 | $ 9,756 | $ 9,135 |
Equity investments | |||
Equity investments: | 698 | 525 | 433 |
Equity earnings: | |||
Equity earnings | 77 | 77 | 60 |
Capital expenditures: | |||
Capital expenditures: | 536 | 441 | 454 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense: | 494 | 488 | 478 |
Reportable Segment Totals | |||
Assets | |||
Total assets: | 9,451 | 9,545 | 8,777 |
Equity investments | |||
Equity investments: | 633 | 468 | 216 |
Equity earnings: | |||
Equity earnings | 60 | 59 | 31 |
Capital expenditures: | |||
Capital expenditures: | 534 | 440 | 453 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense: | 484 | 478 | 467 |
Americas | |||
Assets | |||
Total assets: | 5,497 | 5,411 | 5,059 |
Equity investments | |||
Equity investments: | 429 | 259 | 21 |
Equity earnings: | |||
Equity earnings | 39 | 41 | 12 |
Capital expenditures: | |||
Capital expenditures: | 255 | 233 | 231 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense: | 293 | 310 | 312 |
Europe | |||
Assets | |||
Total assets: | 3,036 | 3,133 | 2,792 |
Equity investments | |||
Equity investments: | 98 | 95 | 78 |
Equity earnings: | |||
Equity earnings | 21 | 18 | 15 |
Capital expenditures: | |||
Capital expenditures: | 187 | 152 | 163 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense: | 136 | 125 | 118 |
Asia Pacific | |||
Assets | |||
Total assets: | 918 | 1,001 | 926 |
Equity investments | |||
Equity investments: | 106 | 114 | 117 |
Equity earnings: | |||
Equity earnings | 4 | ||
Capital expenditures: | |||
Capital expenditures: | 92 | 55 | 59 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense: | 55 | 43 | 37 |
Other | |||
Assets | |||
Total assets: | 248 | 211 | 358 |
Equity investments | |||
Equity investments: | 65 | 57 | 217 |
Equity earnings: | |||
Equity earnings | 17 | 18 | 29 |
Capital expenditures: | |||
Capital expenditures: | 2 | 1 | 1 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense: | $ 10 | $ 10 | $ 11 |
Segment Information - PPE and G
Segment Information - PPE and Geographical Sales (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information | |||
Property, plant and equipment, net | $ 3,085 | $ 3,131 | $ 2,880 |
Net sales | 6,877 | 6,869 | 6,702 |
U.S. | |||
Segment Reporting Information | |||
Property, plant and equipment, net | 681 | 757 | 749 |
Net sales | 2,020 | 2,072 | 2,124 |
Non-U.S. | |||
Segment Reporting Information | |||
Property, plant and equipment, net | 2,404 | 2,374 | 2,131 |
Net sales | $ 4,857 | $ 4,797 | $ 4,578 |
Segment Information - Concentra
Segment Information - Concentration by Geography (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | |
Segment Reporting Information | |
Percentage of consolidated net sales from continuing operations (as a percent) | 10.00% |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue | |||
Net sales | $ 6,877 | $ 6,869 | $ 6,702 |
Reportable Segment Totals | |||
Disaggregation of Revenue | |||
Net sales | 6,802 | 6,800 | 6,636 |
Americas | |||
Disaggregation of Revenue | |||
Net sales | 3,638 | 3,711 | 3,652 |
Europe | |||
Disaggregation of Revenue | |||
Net sales | 2,489 | 2,375 | 2,300 |
Asia Pacific | |||
Disaggregation of Revenue | |||
Net sales | 675 | 714 | 684 |
Other | |||
Disaggregation of Revenue | |||
Net sales | 75 | $ 69 | $ 66 |
Alcoholic beverages (beer, wine, spirits) | |||
Disaggregation of Revenue | |||
Net sales | 4,554 | ||
Alcoholic beverages (beer, wine, spirits) | Americas | |||
Disaggregation of Revenue | |||
Net sales | 2,281 | ||
Alcoholic beverages (beer, wine, spirits) | Europe | |||
Disaggregation of Revenue | |||
Net sales | 1,780 | ||
Alcoholic beverages (beer, wine, spirits) | Asia Pacific | |||
Disaggregation of Revenue | |||
Net sales | 493 | ||
Food and other | |||
Disaggregation of Revenue | |||
Net sales | 1,342 | ||
Food and other | Americas | |||
Disaggregation of Revenue | |||
Net sales | 780 | ||
Food and other | Europe | |||
Disaggregation of Revenue | |||
Net sales | 461 | ||
Food and other | Asia Pacific | |||
Disaggregation of Revenue | |||
Net sales | 101 | ||
Non-alcoholic beverages | |||
Disaggregation of Revenue | |||
Net sales | 906 | ||
Non-alcoholic beverages | Americas | |||
Disaggregation of Revenue | |||
Net sales | 577 | ||
Non-alcoholic beverages | Europe | |||
Disaggregation of Revenue | |||
Net sales | 248 | ||
Non-alcoholic beverages | Asia Pacific | |||
Disaggregation of Revenue | |||
Net sales | $ 81 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Inventories | ||
Finished goods | $ 849 | $ 873 |
Raw materials | 125 | 122 |
Operating supplies | 44 | 41 |
Inventories | $ 1,018 | $ 1,036 |
Equity Investments - Ownership
Equity Investments - Ownership Percentage (Details) | Dec. 31, 2018 |
Empresas Comegua S.A | |
Equity Investments Information | |
Percentage of equity method investments | 49.70% |
BJC O-I Glass Pte. Ltd | |
Equity Investments Information | |
Percentage of equity method investments | 50.00% |
CO Vidrieria SARL ("COV") | |
Equity Investments Information | |
Percentage of equity method investments | 50.00% |
Rocky Mountain Bottle Company | |
Equity Investments Information | |
Percentage of equity method investments | 50.00% |
Tata Chemical (Soda Ash) Partners | |
Equity Investments Information | |
Percentage of equity method investments | 25.00% |
Vetrerie Meridionali SpA ("VeMe") | |
Equity Investments Information | |
Percentage of equity method investments | 50.00% |
Vetri Speciali SpA | |
Equity Investments Information | |
Percentage of equity method investments | 50.00% |
Equity Investments (Details)
Equity Investments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity Investments Information | |||
Equity earnings | $ 77 | $ 77 | $ 60 |
Dividends received | 72 | 48 | 38 |
Equity method investments, assets | |||
Current assets | 655 | 466 | |
Non-current assets | 1,306 | 1,021 | |
Total assets | 1,961 | 1,487 | |
Equity method investments, liabilities and equity | |||
Current liabilities | 342 | 232 | |
Other liabilities and deferred items | 242 | 198 | |
Total liabilities and deferred items | 584 | 430 | |
Net assets | 1,377 | 1,057 | |
Summarized combined financial information for equity associates for the year: | |||
Net sales | 972 | 883 | 755 |
Gross profit | 234 | 242 | 182 |
Net earnings | 184 | 165 | 145 |
Purchased equity from affiliates | 255 | 180 | |
Due to affiliates | 111 | 90 | |
Difference between investment carrying value and amount of underlying equity in net assets | 9 | ||
Non-U.S. | |||
Equity Investments Information | |||
Equity earnings | 52 | 45 | 19 |
U.S. | |||
Equity Investments Information | |||
Equity earnings | $ 25 | $ 32 | $ 41 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at beginning of period | $ 2,590 | $ 2,462 | $ 2,489 | |
Acquisition related adjustments | 41 | |||
Translation effects | (77) | 128 | (68) | |
Balance of Goodwill at end of the period | $ 2,513 | 2,513 | 2,590 | 2,462 |
Impairment charge | 0 | |||
Europe | ||||
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at beginning of period | 913 | 808 | 840 | |
Translation effects | (39) | 105 | (32) | |
Balance of Goodwill at end of the period | 874 | 874 | 913 | 808 |
Americas | ||||
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at beginning of period | 1,672 | 1,649 | 1,644 | |
Acquisition related adjustments | 41 | |||
Translation effects | (38) | 23 | (36) | |
Balance of Goodwill at end of the period | 1,634 | 1,634 | 1,672 | 1,649 |
Other | ||||
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at beginning of period | 5 | 5 | 5 | |
Balance of Goodwill at end of the period | 5 | 5 | 5 | 5 |
Asia Pacific | ||||
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at beginning of period | 0 | 0 | 0 | |
Balance of Goodwill at end of the period | 0 | 0 | ||
Accumulated impairment losses | $ 1,135 | $ 1,135 | $ 1,135 | $ 1,135 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets | |||
Accumulated amortization | $ 142 | $ 102 | |
Net Carrying Amount | 400 | 439 | |
Amortization expense | 40 | $ 41 | $ 39 |
Impairment of intangible assets | $ 0 | ||
Customer list intangibles | |||
Finite-Lived Intangible Assets | |||
Useful life | 20 years | ||
2,019 | $ 42 | ||
2,020 | 41 | ||
2,021 | 39 | ||
2,022 | 36 | ||
2,023 | $ 32 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other assets (non current): | |||
Deferred tax asset | $ 191 | $ 194 | |
Deferred returnable packaging costs | 109 | 119 | |
Repair parts inventories | 102 | 106 | |
Capitalized software | 79 | 82 | |
Value added taxes | 26 | 24 | |
Other | 95 | 77 | |
Total other assets | 602 | 602 | |
Capitalized software | |||
Other information related to capitalized software | |||
Amortization expense for capitalized software | 12 | $ 12 | $ 13 |
Estimated amortization expense | |||
2,019 | 14 | ||
2,020 | 12 | ||
2,021 | 12 | ||
2,022 | 11 | ||
2,023 | $ 10 |
Derivative Instruments - Deriva
Derivative Instruments - Derivatives and Hedges (Details) - Cash Flow Hedges € in Millions, $ in Millions | Dec. 31, 2018USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) |
Commodity forwards contracts | |||
Derivatives and Hedges | |||
Unrecognized (loss) gain included in Accumulated OCI | $ 1 | $ 3 | |
Cross-currency interest rate swap | |||
Derivatives and Hedges | |||
Unrecognized (loss) gain included in Accumulated OCI | (9) | ||
Cross-currency interest rate swap | Euro-functional subsidiaries | |||
Derivatives and Hedges | |||
Notional amount | € 263 | 310 | |
Cross-currency interest rate swap | AUD functional subsidiary | |||
Derivatives and Hedges | |||
Notional amount | 168 | ||
Cross-currency interest rate swap | NZD functional subsidiary | |||
Derivatives and Hedges | |||
Notional amount | 109 | ||
Cross-currency interest rate swap | Maximum | |||
Derivatives and Hedges | |||
Unrecognized (loss) gain included in Accumulated OCI | $ (1) | ||
Interest Rate Swaps | Maximum | |||
Derivatives and Hedges | |||
Unrecognized (loss) gain included in Accumulated OCI | $ (1) |
Derivative Instruments - Balanc
Derivative Instruments - Balance Sheet Classification (Details) € in Millions, $ in Millions | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) |
Derivatives, Fair Value | ||||
Total asset derivatives | $ 25 | $ 17 | ||
Total liability derivatives | 12 | 24 | ||
Current derivative asset | 19 | 14 | ||
Current derivative liability | 3 | |||
Noncurrent derivative asset | 6 | 3 | ||
Noncurrent derivative liability | 9 | 24 | ||
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other assets (current) | ||||
Derivatives, Fair Value | ||||
Notional amount | 470 | 460 | ||
Total asset derivatives | 2 | 4 | ||
Total liability derivatives | 2 | 1 | ||
Derivatives designated as hedging instruments | ||||
Derivatives, Fair Value | ||||
Total asset derivatives | 23 | 13 | ||
Total liability derivatives | 10 | 23 | ||
Derivatives designated as hedging instruments | Commodity forwards contracts | Other assets (noncurrent) | ||||
Derivatives, Fair Value | ||||
Notional amount | 21 | 30 | ||
Total asset derivatives | 1 | 3 | ||
Total liability derivatives | 13 | |||
Derivatives designated as hedging instruments | Interest Rate Swaps | Other assets (current) | ||||
Derivatives, Fair Value | ||||
Notional amount | € | € 725 | € 725 | ||
Total asset derivatives | 6 | 6 | ||
Total liability derivatives | 1 | 10 | ||
Derivatives designated as hedging instruments | Cash flow hedges of foreign exchange risk | Other assets (current) | ||||
Derivatives, Fair Value | ||||
Notional amount | 587 | 310 | ||
Total asset derivatives | 10 | $ 4 | ||
Total liability derivatives | 1 | |||
Derivatives designated as hedging instruments | Cash flow hedges of interest rate risk | Other assets (current) | ||||
Derivatives, Fair Value | ||||
Notional amount | 180 | |||
Derivatives designated as hedging instruments | Net investment hedges | Other assets (current) | ||||
Derivatives, Fair Value | ||||
Notional amount | € | € 160 | |||
Total asset derivatives | 6 | |||
Total liability derivatives | $ 8 |
Derivative Instruments - Effect
Derivative Instruments - Effects of Derivative Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivatives not designated as hedging instruments | Foreign exchange contracts | |||
Derivatives and Hedges | |||
Amount of Gain (Loss) Recognized in Other income (expense), net | $ 1 | $ 10 | $ 6 |
Derivatives designated as hedging instruments | |||
Derivatives and Hedges | |||
Amount of Gain (Loss) Recognized in OCI | 10 | 6 | 7 |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | 11 | ||
Derivatives designated as hedging instruments | Net Investment Hedges | |||
Derivatives and Hedges | |||
Amount of Gain (Loss) Recognized in OCI | 5 | ||
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | 1 | ||
Derivatives designated as hedging instruments | Commodity forwards contracts | Cash Flow Hedges | Cost of goods sold | |||
Derivatives and Hedges | |||
Amount of Gain (Loss) Recognized in OCI | (6) | $ 6 | $ 7 |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | 1 | ||
Derivatives designated as hedging instruments | Foreign exchange contracts | Cash Flow Hedges | Other expense, net | |||
Derivatives and Hedges | |||
Amount of Gain (Loss) Recognized in OCI | 12 | ||
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | 9 | ||
Derivatives designated as hedging instruments | Interest Rate Swaps | Cash Flow Hedges | Interest expense, net | |||
Derivatives and Hedges | |||
Amount of Gain (Loss) Recognized in OCI | $ (1) |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring accrual | |||
Beginning balance, restructuring reserve | $ 85 | $ 85 | |
Charges | 92 | 72 | $ 98 |
Write-down of assets to net realizable value | (60) | (11) | |
Net cash paid, principally severance and related benefits | (32) | (62) | (24) |
Transfers to other accounts | (4) | ||
Other, including foreign exchange translation | (12) | 1 | |
Ending balance, restructuring reserve | 69 | 85 | 85 |
Restructuring, Additional Information | |||
Carrying value of impaired assets | 9 | 0 | |
Cost of goods sold | |||
Restructuring accrual | |||
Charges | 5 | ||
Other expense, net | |||
Restructuring accrual | |||
Charges | 87 | ||
Employee Costs | |||
Restructuring accrual | |||
Beginning balance, restructuring reserve | 67 | 67 | |
Charges | 20 | 45 | |
Net cash paid, principally severance and related benefits | (24) | (49) | |
Other, including foreign exchange translation | (3) | 4 | |
Ending balance, restructuring reserve | 60 | 67 | 67 |
Asset Impairment | |||
Restructuring accrual | |||
Charges | 60 | 11 | |
Write-down of assets to net realizable value | (60) | (11) | |
Other Exit Costs | |||
Restructuring accrual | |||
Beginning balance, restructuring reserve | 18 | 18 | |
Charges | 12 | 16 | |
Net cash paid, principally severance and related benefits | (8) | (13) | |
Transfers to other accounts | (4) | ||
Other, including foreign exchange translation | (9) | (3) | |
Ending balance, restructuring reserve | $ 9 | $ 18 | $ 18 |
Pensions Benefit Plans and Othe
Pensions Benefit Plans and Other Postretirement Benefits - Changes in the Benefit Obligation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Benefit Plans | U.S. | |||
Changes in the pension and postretirement benefit obligations | |||
Obligations at beginning of year | $ 1,650 | $ 1,956 | |
Change in benefit obligations: | |||
Service cost | 14 | 14 | $ 15 |
Interest cost | 59 | 78 | 90 |
Actuarial (gain) loss, including the effect of change in discount rates | (108) | 123 | |
Settlements | (114) | (393) | |
Benefit payments | (91) | (128) | |
Other | 3 | ||
Net change in benefit obligations | (237) | (306) | |
Obligations at end of year | 1,413 | 1,650 | 1,956 |
Pension Benefit Plans | Non-U.S. | |||
Changes in the pension and postretirement benefit obligations | |||
Obligations at beginning of year | 1,148 | 1,235 | |
Change in benefit obligations: | |||
Service cost | 15 | 15 | 16 |
Interest cost | 32 | 40 | 44 |
Actuarial (gain) loss, including the effect of change in discount rates | (23) | (15) | |
Settlements | (35) | (171) | |
Participant contributions | 2 | 1 | |
Benefit payments | (51) | (60) | |
Foreign currency translation | (64) | 103 | |
Other | (2) | ||
Net change in benefit obligations | (126) | (87) | |
Obligations at end of year | 1,022 | 1,148 | 1,235 |
Other Postretirement Benefits | U.S. | |||
Changes in the pension and postretirement benefit obligations | |||
Obligations at beginning of year | 89 | 92 | |
Change in benefit obligations: | |||
Interest cost | 3 | 4 | 4 |
Actuarial (gain) loss, including the effect of change in discount rates | (9) | ||
Benefit payments | (9) | (7) | |
Net change in benefit obligations | (15) | (3) | |
Obligations at end of year | 74 | 89 | 92 |
Other Postretirement Benefits | Non-U.S. | |||
Changes in the pension and postretirement benefit obligations | |||
Obligations at beginning of year | 89 | 81 | |
Change in benefit obligations: | |||
Service cost | 1 | 1 | 1 |
Interest cost | 3 | 3 | 3 |
Actuarial (gain) loss, including the effect of change in discount rates | (4) | 1 | |
Benefit payments | (2) | (2) | |
Foreign currency translation | (7) | 5 | |
Net change in benefit obligations | (9) | 8 | |
Obligations at end of year | $ 80 | $ 89 | $ 81 |
Pensions Benefit Plans and Ot_2
Pensions Benefit Plans and Other Postretirement Benefits - Changes in Fair Value of Pension Plan Assets (Details) - Pension Benefit Plans - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
U.S. | ||
Changes in fair value of pension plan assets | ||
Fair value at beginning of year | $ 1,394 | $ 1,654 |
Actual gain (loss) on plan assets | (96) | 254 |
Benefit payments | (91) | (128) |
Employer contributions | 1 | 7 |
Settlements | (114) | (393) |
Net change in fair value of assets | (300) | (260) |
Fair value at end of year | 1,094 | 1,394 |
Non-U.S. | ||
Changes in fair value of pension plan assets | ||
Fair value at beginning of year | 975 | 1,011 |
Actual gain (loss) on plan assets | (15) | 87 |
Benefit payments | (51) | (60) |
Employer contributions | 33 | 24 |
Participant contributions | 2 | 1 |
Settlements | (35) | (171) |
Foreign currency translation | (58) | 83 |
Other | (8) | |
Net change in fair value of assets | (132) | (36) |
Fair value at end of year | $ 843 | $ 975 |
Pensions Benefit Plans and Ot_3
Pensions Benefit Plans and Other Postretirement Benefits - Funded Status (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Pension Benefit Plans | Minimum | |||
Defined Benefit Plan Disclosure | |||
Percentage of pension plan assets | 10.00% | ||
U.S. | Pension Benefit Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 1,094 | $ 1,394 | $ 1,654 |
Postretirement benefit obligations | (1,413) | (1,650) | (1,956) |
Plan assets less than projected benefit obligations | (319) | (256) | |
Items not yet recognized in pension expense and net postretirement benefit cost: | |||
Actuarial gain (loss) | 785 | 811 | |
Prior service cost (credit) | 1 | ||
Total | 785 | 812 | |
Net amount recognized | 466 | 556 | |
U.S. | Other Postretirement Benefits | |||
Defined Benefit Plan Disclosure | |||
Postretirement benefit obligations | (74) | (89) | (92) |
Items not yet recognized in pension expense and net postretirement benefit cost: | |||
Actuarial gain (loss) | (8) | (19) | |
Prior service cost (credit) | 15 | 22 | |
Total | 7 | 3 | |
Net amount recognized | (67) | (86) | |
Non-U.S. | Pension Benefit Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 843 | 975 | 1,011 |
Postretirement benefit obligations | (1,022) | (1,148) | (1,235) |
Plan assets less than projected benefit obligations | (179) | (173) | |
Items not yet recognized in pension expense and net postretirement benefit cost: | |||
Actuarial gain (loss) | 285 | 284 | |
Prior service cost (credit) | 4 | (2) | |
Total | 289 | 282 | |
Net amount recognized | 110 | 109 | |
Non-U.S. | Other Postretirement Benefits | |||
Defined Benefit Plan Disclosure | |||
Postretirement benefit obligations | (80) | (89) | $ (81) |
Items not yet recognized in pension expense and net postretirement benefit cost: | |||
Actuarial gain (loss) | (2) | (7) | |
Total | (2) | (7) | |
Net amount recognized | $ (82) | $ (96) |
Pensions Benefit Plans and Ot_4
Pensions Benefit Plans and Other Postretirement Benefits - Net Amount Recognized Included in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Net amount recognized included in the Consolidated Balance Sheets | ||
Pension assets | $ 44 | $ 49 |
U.S. | Pension Benefit Plans | ||
Net amount recognized included in the Consolidated Balance Sheets | ||
Current pension liability and nonpension postretirement benefit, included with Other accrued liabilities | (3) | (2) |
Pension benefits and nonpension postretirement benefits | (316) | (254) |
Accumulated other comprehensive loss | 785 | 812 |
Net amount recognized | 466 | 556 |
U.S. | Other Postretirement Benefits | ||
Net amount recognized included in the Consolidated Balance Sheets | ||
Current pension liability and nonpension postretirement benefit, included with Other accrued liabilities | (6) | (8) |
Pension benefits and nonpension postretirement benefits | (68) | (81) |
Accumulated other comprehensive loss | 7 | 3 |
Net amount recognized | (67) | (86) |
Non-U.S. | Pension Benefit Plans | ||
Net amount recognized included in the Consolidated Balance Sheets | ||
Pension assets | 44 | 49 |
Current pension liability and nonpension postretirement benefit, included with Other accrued liabilities | (5) | (5) |
Pension benefits and nonpension postretirement benefits | (218) | (217) |
Accumulated other comprehensive loss | 289 | 282 |
Net amount recognized | 110 | 109 |
Non-U.S. | Other Postretirement Benefits | ||
Net amount recognized included in the Consolidated Balance Sheets | ||
Current pension liability and nonpension postretirement benefit, included with Other accrued liabilities | (3) | (3) |
Pension benefits and nonpension postretirement benefits | (77) | (86) |
Accumulated other comprehensive loss | (2) | (7) |
Net amount recognized | $ (82) | $ (96) |
Pension Benefit Plans and Oth_3
Pension Benefit Plans and Other Postretirement Benefits - Changes in Plan Assets and Benefit Obligations Recognized in AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
U.S. | Pension Benefit Plans | ||
Changes in plan assets and benefit obligations were recognized in accumulated other comprehensive income | ||
Current year actuarial (gain) loss | $ 86 | $ (2) |
Amortization of prior service credit | (51) | (57) |
Loss due to settlement | (61) | (176) |
Other adjustments | (1) | |
Total | (27) | (235) |
Changes in benefit obligations were recognized in accumulated other comprehensive income | (27) | (235) |
U.S. | Other Postretirement Benefits | ||
Changes in plan assets and benefit obligations were recognized in accumulated other comprehensive income | ||
Current year actuarial (gain) loss | (8) | |
Amortization of actuarial loss | (2) | (2) |
Amortization of prior service credit | 7 | 8 |
Total | (3) | 6 |
Non-U.S. | Pension Benefit Plans | ||
Changes in plan assets and benefit obligations were recognized in accumulated other comprehensive income | ||
Current year actuarial (gain) loss | 43 | (40) |
Amortization of prior service credit | (11) | (16) |
Loss due to settlement | (13) | (42) |
Other adjustments | 6 | |
Total | 25 | (98) |
Translation | (18) | 30 |
Changes in benefit obligations were recognized in accumulated other comprehensive income | 7 | (68) |
Non-U.S. | Other Postretirement Benefits | ||
Changes in plan assets and benefit obligations were recognized in accumulated other comprehensive income | ||
Current year actuarial (gain) loss | (4) | 1 |
Total | $ (4) | $ 1 |
Pensions Benefit Plans and Ot_5
Pensions Benefit Plans and Other Postretirement Benefits - Components of Net Periodic Pension and Postretirement Cost (Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Benefit Plans | |||
Amortization: | |||
Accumulated benefit obligation | $ 2,379 | $ 2,735 | |
U.S. | Pension Benefit Plans | |||
Components of net periodic pension cost | |||
Service cost | 14 | 14 | $ 15 |
Interest cost | 59 | 78 | 90 |
Expected asset return | (98) | (128) | (149) |
Amortization: | |||
Amortization of Actuarial loss | 51 | 57 | 67 |
Net periodic pension cost | 26 | 21 | 23 |
Settlement cost | 176 | 98 | |
Annuity contract purchase for settlement of pension obligation | 94 | 369 | 200 |
U.S. | Other Postretirement Benefits | |||
Components of net periodic pension cost | |||
Interest cost | 3 | 4 | 4 |
Amortization: | |||
Amortization of Actuarial loss | 2 | 2 | 2 |
Prior service cost | (7) | (8) | (8) |
Net amortization | (5) | (6) | (6) |
Net periodic pension cost | (2) | (2) | (2) |
Non-U.S. | Pension Benefit Plans | |||
Components of net periodic pension cost | |||
Service cost | 15 | 15 | 16 |
Interest cost | 32 | 40 | 44 |
Expected asset return | (52) | (63) | (65) |
Amortization: | |||
Amortization of Actuarial loss | 11 | 16 | 13 |
Net periodic pension cost | 6 | 8 | 8 |
Non-U.S. | Other Postretirement Benefits | |||
Components of net periodic pension cost | |||
Service cost | 1 | 1 | 1 |
Interest cost | 3 | 3 | 3 |
Amortization: | |||
Net periodic pension cost | $ 4 | 4 | $ 4 |
Canadian Pension Plans | Pension Benefit Plans | |||
Amortization: | |||
Settlement cost | 27 | ||
Annuity contract purchase for settlement of pension obligation | 123 | ||
Pension Plan of the United Kingdom | Pension Benefit Plans | |||
Amortization: | |||
Settlement cost | $ 15 |
Pensions Benefit Plans and Ot_6
Pensions Benefit Plans and Other Postretirement Benefits - Amortized From AOCI (Details) $ in Millions | Dec. 31, 2018USD ($) |
U.S. | Pension Benefit Plans | |
Amortization: | |
Actuarial loss | $ 40 |
U.S. | Other Postretirement Benefits | |
Amortization: | |
Actuarial loss | 1 |
Prior service credit | (8) |
Net amortization | (7) |
Non-U.S. | Pension Benefit Plans | |
Amortization: | |
Actuarial loss | $ 10 |
Pensions Benefit Plans and Ot_7
Pensions Benefit Plans and Other Postretirement Benefits - Projected and Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets (Details) - Pension Benefit Plans - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
U.S. | ||
Projected Benefit Obligation Exceeds the Fair Value of Plan Assets | ||
Projected benefit obligations | $ 1,413 | $ 1,650 |
Accumulated benefit obligation | 1,412 | 1,650 |
Fair value of plan assets | 1,094 | 1,394 |
Accumulated Benefit Obligations Exceeds the Fair Value of Plan Assets | ||
Projected benefit obligations | 1,413 | 1,650 |
Accumulated benefit obligation | 1,412 | 1,650 |
Fair value of plan assets | 1,094 | 1,394 |
Non-U.S. | ||
Projected Benefit Obligation Exceeds the Fair Value of Plan Assets | ||
Projected benefit obligations | 815 | 905 |
Accumulated benefit obligation | 793 | 878 |
Fair value of plan assets | 591 | 682 |
Accumulated Benefit Obligations Exceeds the Fair Value of Plan Assets | ||
Projected benefit obligations | 815 | 261 |
Accumulated benefit obligation | 793 | 241 |
Fair value of plan assets | $ 591 | $ 39 |
Pensions Benefit Plans and Ot_8
Pensions Benefit Plans and Other Postretirement Benefits - Weighted Average Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted average assumptions used to determine net periodic pension costs and net postretirement benefit cost | |||
Tenure used for computing historical long-term rate of return assumption | 10 years | ||
U.S. | Pension Benefit Plans | |||
Weighted average assumptions used to determine pension and accumulated postretirement benefit obligations | |||
Discount rate used to determine pension and accumulated postretirement benefit obligations (as a percent) | 4.36% | 3.69% | |
Weighted average assumptions used to determine net periodic pension costs and net postretirement benefit cost | |||
Discount rate used to determine net periodic pension costs and net postretirement benefit cost (as a percent) | 3.69% | 4.17% | 4.43% |
Expected long-term rate of return on assets (as a percent) | 7.25% | 7.50% | 7.50% |
U.S. | Other Postretirement Benefits | |||
Weighted average assumptions used to determine pension and accumulated postretirement benefit obligations | |||
Discount rate used to determine pension and accumulated postretirement benefit obligations (as a percent) | 4.30% | 3.61% | 4.11% |
Weighted average assumptions used to determine net periodic pension costs and net postretirement benefit cost | |||
Discount rate used to determine net periodic pension costs and net postretirement benefit cost (as a percent) | 3.61% | 4.11% | 4.35% |
Non-U.S. | Pension Benefit Plans | |||
Weighted average assumptions used to determine pension and accumulated postretirement benefit obligations | |||
Discount rate used to determine pension and accumulated postretirement benefit obligations (as a percent) | 3.01% | 2.76% | |
Rate of compensation increase (as a percent) | 2.75% | 2.78% | |
Weighted average assumptions used to determine net periodic pension costs and net postretirement benefit cost | |||
Discount rate used to determine net periodic pension costs and net postretirement benefit cost (as a percent) | 2.76% | 2.94% | 3.68% |
Rate of compensation increase (as a percent) | 2.78% | 2.90% | 2.84% |
Expected long-term rate of return on assets (as a percent) | 5.52% | 6.32% | 7.15% |
Non-U.S. | Other Postretirement Benefits | |||
Weighted average assumptions used to determine pension and accumulated postretirement benefit obligations | |||
Discount rate used to determine pension and accumulated postretirement benefit obligations (as a percent) | 3.60% | 3.35% | 3.55% |
Weighted average assumptions used to determine net periodic pension costs and net postretirement benefit cost | |||
Discount rate used to determine net periodic pension costs and net postretirement benefit cost (as a percent) | 3.35% | 3.55% | 3.80% |
Pensions Benefit Plans and Ot_9
Pensions Benefit Plans and Other Postretirement Benefits - U.S. Plan Assets By Hierarchy (Details) - Pension Benefit Plans - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Minimum | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Target Plan Asset Allocations | 10.00% | ||
Level 3 | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 10 | ||
U.S. | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 1,094 | $ 1,394 | 1,654 |
U.S. | Equity securities | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Target Plan Asset Allocations | 62.00% | ||
U.S. | Debt securities | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Target Plan Asset Allocations | 32.00% | ||
U.S. | Real estate and other | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Target Plan Asset Allocations | 6.00% | ||
Non-U.S. | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 843 | 975 | $ 1,011 |
Investments measured at net asset value | 763 | 906 | |
Non-U.S. | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 9 | 9 | |
Non-U.S. | Equity securities | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Target Plan Asset Allocations | 16.00% | ||
Non-U.S. | Debt securities | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 41 | 33 | |
Defined Benefit Plan, Target Plan Asset Allocations | 60.00% | ||
Non-U.S. | Other | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 30 | 27 | |
Non-U.S. | Real estate and other | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Target Plan Asset Allocations | 24.00% | ||
Non-U.S. | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 43 | 42 | |
Non-U.S. | Level 1 | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 9 | 9 | |
Non-U.S. | Level 1 | Debt securities | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 34 | 33 | |
Non-U.S. | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 37 | 27 | |
Non-U.S. | Level 2 | Debt securities | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 7 | ||
Non-U.S. | Level 2 | Other | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 30 | $ 27 |
Pensions Benefit Plans and O_10
Pensions Benefit Plans and Other Postretirement Benefits - Reconciliation of Pension Plan Assets Using Significant Unobservable Inputs (Details) - Level 3 - Pension Benefit Plans $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Defined Benefit Plan Disclosure | |
Fair value at beginning of year | $ 10 |
Net increase (decrease) | $ (10) |
Pensions Benefit Plans and O_11
Pensions Benefit Plans and Other Postretirement Benefits - Minimum Funding Requirements and Estimated Future Benefit Payments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2019 | |
Defined Benefit Plan Disclosure | ||||
Defined contribution plans for salaried and hourly U.S. employees | $ 36 | $ 33 | $ 34 | |
U.S. | Pension Benefit Plans | ||||
Estimated future benefit payments | ||||
2,019 | 102 | |||
2,020 | 100 | |||
2,021 | 99 | |||
2,022 | 99 | |||
2,023 | 97 | |||
2024 - 2028 | 463 | |||
U.S. | Other Postretirement Benefits | ||||
Estimated future benefit payments | ||||
2,019 | 7 | |||
2,020 | 7 | |||
2,021 | 6 | |||
2,022 | 6 | |||
2,023 | 6 | |||
2024 - 2028 | 25 | |||
Non-U.S. | Pension Benefit Plans | ||||
Estimated future benefit payments | ||||
2,019 | 47 | |||
2,020 | 48 | |||
2,021 | 51 | |||
2,022 | 54 | |||
2,023 | 56 | |||
2024 - 2028 | 279 | |||
Non-U.S. | Pension Benefit Plans | Forecast | ||||
Defined Benefit Plan Disclosure | ||||
Contribution to defined benefit plan | $ 36 | |||
Non-U.S. | Other Postretirement Benefits | ||||
Estimated future benefit payments | ||||
2,019 | 3 | |||
2,020 | 3 | |||
2,021 | 3 | |||
2,022 | 3 | |||
2,023 | 4 | |||
2024 - 2028 | $ 19 |
Pensions Benefit Plans and O_12
Pensions Benefit Plans and Other Postretirement Benefits - Weighted Average Assumptions Assumed and Effect of Percentage Point Change in Health Care Cost Trend (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure | |||
Payments to the trust as required by the bargaining agreements are based upon specified amounts per hour worked | $ 6 | $ 6 | $ 6 |
U.S. | |||
Weighted average assumed health care cost trend (in percent) | |||
Health care cost trend rate assumed for next year (as a percent) | 6.00% | 6.20% | |
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) (as a percent) | 5.00% | 5.00% | |
Year that the rate reaches the ultimate trend rate | 2,025 | 2,024 | |
Effect of one-percentage-point change in assumed health care cost trend rates (in percent) | |||
One-Percentage-Point Increase, effect on accumulated postretirement benefit obligations | $ 3 | ||
One-Percentage-Point Decrease, effect on accumulated postretirement benefit obligations | $ (2) | ||
Non-U.S. | |||
Weighted average assumed health care cost trend (in percent) | |||
Health care cost trend rate assumed for next year (as a percent) | 5.00% | 5.00% | |
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) (as a percent) | 5.00% | 5.00% | |
Effect of one-percentage-point change in assumed health care cost trend rates (in percent) | |||
One-Percentage-Point Increase, effect on total of service and interest cost | $ 1 | ||
One-Percentage-Point Decrease, effect on total of service and interest cost | (1) | ||
One-Percentage-Point Increase, effect on accumulated postretirement benefit obligations | 14 | ||
One-Percentage-Point Decrease, effect on accumulated postretirement benefit obligations | $ (11) |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes, Continued and Discontinued Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Continuing operations | |||
U.S. | $ (100) | $ (43) | $ (27) |
Non-U.S. | 377 | 318 | 383 |
Earnings from continuing operations before income taxes | 277 | 275 | 356 |
Discontinued operations; | |||
Non-U.S. | 113 | (3) | (7) |
Discontinued operations total | $ 113 | $ (3) | $ (7) |
Income Taxes - Provision (Benef
Income Taxes - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
U.S. | $ 8 | $ (5) | |
Non-U.S. | 109 | 87 | $ 123 |
Total | 117 | 82 | 123 |
Deferred: | |||
U.S. | 6 | 3 | |
Non-U.S. | (9) | (18) | (7) |
Total | (9) | (12) | (4) |
Total: | |||
U.S. | 8 | 1 | 3 |
Non-U.S. | 100 | 69 | 116 |
Provision for income taxes | 108 | 70 | 119 |
Total | $ 108 | $ 70 | $ 119 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
A reconciliation of the provision (benefit) for income taxes | |||
Statutory U.S. Federal tax rate (as a percent) | 21.00% | 35.00% | 35.00% |
Increase (decrease) in provision for income taxes due to: | |||
Tax provision on pretax earnings (loss) from continuing operations at statutory U.S. Federal tax rate | $ 58 | $ 96 | $ 124 |
Non-U.S. tax rates | 25 | (29) | (22) |
Global intangible low taxed income | 32 | ||
U.S. Tax Cuts and Jobs Act: transition tax, net of foreign tax credits | (2) | 2 | |
Tax law changes | 4 | 152 | (3) |
Change in valuation allowance: U.S. tax law change | (2) | (162) | |
Change in valuation allowance: other | (18) | (283) | 3 |
Tax attribute expiration | 6 | 330 | |
Withholding tax, net | 10 | 8 | 7 |
Non-deductible expenses | 4 | 9 | 20 |
U.S. tax on intercompany dividends and interest | 1 | 2 | 3 |
Tax exempt income | (2) | (3) | (2) |
Intraperiod tax allocation | (8) | ||
Tax credits and incentives | (23) | (37) | (19) |
Changes in tax reserves | 13 | (18) | 8 |
Mexico inflationary adjustment | 8 | 13 | 6 |
Equity earnings | (13) | (13) | (9) |
Intercompany financing | 1 | (4) | (5) |
Other taxes based on income | 7 | 10 | 11 |
Other items | (1) | (3) | 5 |
Provision for income taxes | $ 108 | $ 70 | $ 119 |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred tax assets: | ||
Accrued postretirement benefits | $ 38 | $ 44 |
Asbestos-related liabilities | 127 | 122 |
Foreign tax credit carryovers | 96 | 124 |
Operating and capital loss carryovers | 286 | 342 |
Other credit carryovers | 18 | 17 |
Accrued liabilities | 65 | 69 |
Pension liability | 92 | 77 |
Other | 57 | 41 |
Total deferred tax assets | 779 | 836 |
Deferred tax liabilities: | ||
Property, plant, and equipment | 97 | 101 |
Intangibles and deferred software | 92 | 97 |
Total deferred tax liabilities | 189 | 198 |
Valuation allowance | (495) | (543) |
Net deferred taxes | 95 | 95 |
Deferred taxes are included in the Consolidated Balance Sheets: | ||
Other assets | 191 | 194 |
Deferred taxes | (96) | (99) |
Net deferred taxes | 95 | $ 95 |
Deferred tax benefit associated with reduction in valuation allowance | 48 | |
Deferred tax benefit associated with reduction in valuation allowance allocated to income from continuing operations | 41 | |
Deferred tax benefit associated with reduction in valuation allowance allocated to other comprehensive income | $ 7 |
Income Taxes - Tax Cuts and Job
Income Taxes - Tax Cuts and Jobs Act ("Act") (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes | |||
Statutory U.S. Federal tax rate (as a percent) | 21.00% | 35.00% | 35.00% |
Provisional amount recorded related to the remeasurement of the net deferred tax assets | $ 162 | ||
Provisional offset amount recorded related to the remeasurement of the net deferred tax assets | (162) | ||
Benefit for the reduction of a deferred tax liability related to an indefinite lived intangible asset | 11 | ||
Provisional amount expected to be offset by available foreign tax credits | $ 314 | 331 | |
Provisional amount expected to be offset by available foreign tax credits primarily attributable to state taxes | 2 | $ 2 | |
Change to income tax expense due to impact of foreign tax credits | 0 | ||
Adjustment of provisional amount of transition tax | $ 17 |
Income Taxes - Possible Changes
Income Taxes - Possible Changes and Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reasonably possible change in unrecognized tax benefits | |||
Unused foreign tax credits expiring in 2020 through 2027 | $ 96 | $ 124 | |
Unused research tax credits expiring from 2019 to 2037 | 17 | ||
Operating and capital loss carryforwards with indefinite life | 146 | ||
Operating and capital loss carryforwards expiring between 2019 and 2038 | 140 | ||
Interest carryforwards with indefinite life | 14 | ||
Reconciliation of the Company's total gross unrecognized tax benefits | |||
Balance at beginning of the period | 79 | 74 | $ 74 |
Additions and reductions for tax positions of prior years | 1 | ||
Additions and reductions for tax positions of prior years | (4) | ||
Additions based on tax positions related to the current year | 15 | 17 | 15 |
Reduction due to lapse of the applicable statute of limitations | (7) | (3) | |
Reductions due to settlements | (9) | (12) | |
Foreign currency translation | (3) | ||
Foreign currency translation | 3 | ||
Balance at ending of the period | 87 | 79 | 74 |
Unrecognized tax benefits, which if recognized, would impact the Company's effective income tax rate | 78 | 72 | 66 |
Accrued interest and penalties | 10 | 8 | 23 |
Interest and penalties included in tax expense | $ 2 | $ (15) | $ (2) |
Period during which unrecognized tax benefits are reasonably possible of being settled as a result of audit settlements or statute expirations | 12 months | ||
Maximum | |||
Reconciliation of the Company's total gross unrecognized tax benefits | |||
Reasonably possible decrease in unrecognized tax benefits related to audit settlements or statute expirations | $ 8 |
Debt (Details)
Debt (Details) $ / shares in Units, € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Nov. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2018EUR (€) | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018EUR (€)item | Dec. 31, 2018USD ($)item$ / shares | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) | Mar. 31, 2017EUR (€) | Mar. 31, 2017USD ($) | |
Debt Instrument | ||||||||||||||
Total long-term debt | $ 5,214 | $ 5,132 | ||||||||||||
Less amounts due within one year | 33 | 11 | ||||||||||||
Long-term debt | 5,181 | 5,121 | ||||||||||||
Unused Credit | $ 988 | |||||||||||||
Leverage Ratio | item | 4.5 | 4.5 | ||||||||||||
Net proceeds, after deducting debt issuance costs | $ 2,511 | $ 1,458 | $ 1,235 | |||||||||||
Accounts receivable securitization | ||||||||||||||
Weighted average interest rate, short-term debt (as a percent) | 3.97% | 3.97% | ||||||||||||
Maximum | ||||||||||||||
Debt Instrument | ||||||||||||||
Maximum Leverage Ratio may increase | item | 0.5 | |||||||||||||
Maximum Borrowing Capacity | $ 1,910 | |||||||||||||
Prior Agreement | ||||||||||||||
Debt Instrument | ||||||||||||||
Additional interest charges for note repurchase premiums and write-off of unamortized finance fees | $ 11 | |||||||||||||
Amended Agreement | ||||||||||||||
Debt Instrument | ||||||||||||||
Number financial maintenance covenants | item | 1 | |||||||||||||
Term Loan A | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | 897 | |||||||||||||
Face Value | $ 910 | |||||||||||||
Net proceeds, after deducting debt issuance costs | $ 897 | |||||||||||||
Term Loan A | Amended Agreement | Minimum | ||||||||||||||
Debt Instrument | ||||||||||||||
Interest rate margin, Eurocurrency Rate loans (as a percent) | 1.00% | 1.00% | ||||||||||||
Interest rate margin, Base Rate loans (as a percent) | 0.00% | |||||||||||||
Term Loan A | Amended Agreement | Maximum | ||||||||||||||
Debt Instrument | ||||||||||||||
Interest rate margin, Eurocurrency Rate loans (as a percent) | 1.50% | 1.50% | ||||||||||||
Interest rate margin, Base Rate loans (as a percent) | 0.50% | |||||||||||||
Term Loan A | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | 1,148 | |||||||||||||
Other secured debt | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | $ 404 | |||||||||||||
Senior Notes 6.75%, due 2020 (500 million EUR) | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | € 500 | $ 570 | € 500 | 594 | ||||||||||
Interest rate, stated percentage | 6.75% | 6.75% | ||||||||||||
Fair values of fixed rate debt obligations | ||||||||||||||
Principal Amount | $ 571 | |||||||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 108.96 | |||||||||||||
Fair Value | $ 622 | |||||||||||||
Senior Notes 4.875%, due 2021 (330 million EUR) | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | € 330 | $ 376 | € 330 | 392 | ||||||||||
Interest rate, stated percentage | 4.875% | 4.875% | ||||||||||||
Fair values of fixed rate debt obligations | ||||||||||||||
Principal Amount | $ 377 | |||||||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 107.28 | |||||||||||||
Fair Value | $ 404 | |||||||||||||
Senior Notes 5.00%, due 2022 | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | $ 497 | 496 | ||||||||||||
Interest rate, stated percentage | 5.00% | 5.00% | ||||||||||||
Fair values of fixed rate debt obligations | ||||||||||||||
Principal Amount | $ 500 | |||||||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 99.46 | |||||||||||||
Fair Value | $ 497 | |||||||||||||
Senior Notes 4.00%, due 2023 | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | $ 306 | $ 305 | ||||||||||||
Interest rate, stated percentage | 4.00% | 4.00% | 4.00% | 4.00% | ||||||||||
Face Value | $ 310 | |||||||||||||
Net proceeds, after deducting debt issuance costs | $ 305 | |||||||||||||
Fair values of fixed rate debt obligations | ||||||||||||||
Principal Amount | $ 310 | |||||||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 94.12 | |||||||||||||
Fair Value | $ 292 | |||||||||||||
Senior Notes 5.875%, due 2023 | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | $ 688 | 685 | ||||||||||||
Interest rate, stated percentage | 5.875% | 5.875% | ||||||||||||
Fair values of fixed rate debt obligations | ||||||||||||||
Principal Amount | $ 700 | |||||||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 102.02 | |||||||||||||
Fair Value | $ 714 | |||||||||||||
Senior Notes 3.125%, due 2024 (725 million EUR) | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | € 725 | $ 825 | € 725 | 849 | ||||||||||
Interest rate, stated percentage | 3.125% | 3.125% | 3.125% | 3.125% | ||||||||||
Face Value | € | € 225 | |||||||||||||
Net proceeds, after deducting debt issuance costs | $ 237 | |||||||||||||
Fair values of fixed rate debt obligations | ||||||||||||||
Principal Amount | $ 828 | |||||||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 98.88 | |||||||||||||
Fair Value | $ 819 | |||||||||||||
Senior Notes 6.375%, due 2025 | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | $ 295 | 295 | ||||||||||||
Interest rate, stated percentage | 6.375% | 6.375% | ||||||||||||
Fair values of fixed rate debt obligations | ||||||||||||||
Principal Amount | $ 300 | |||||||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 100.99 | |||||||||||||
Fair Value | $ 303 | |||||||||||||
Senior Notes, 5.375% due 2025 | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | $ 297 | 297 | ||||||||||||
Interest rate, stated percentage | 5.375% | 5.375% | ||||||||||||
Fair values of fixed rate debt obligations | ||||||||||||||
Principal Amount | $ 300 | |||||||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 97.08 | |||||||||||||
Fair Value | $ 291 | |||||||||||||
Senior Debentures 7.80%, due 2018 | ||||||||||||||
Debt Instrument | ||||||||||||||
Interest rate, stated percentage | 7.80% | 7.80% | ||||||||||||
Face Value | $ 228 | |||||||||||||
Additional interest charges for note repurchase premiums and write-off of unamortized finance fees | $ 18 | |||||||||||||
Fair values of fixed rate debt obligations | ||||||||||||||
Principal Amount | $ 22 | |||||||||||||
Capital leases | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | 45 | 54 | ||||||||||||
Other | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | 14 | $ 17 | ||||||||||||
Revolving Credit Facility | ||||||||||||||
Debt Instrument | ||||||||||||||
Additional default interest rate per annum applied to all obligations owed under the Agreement | 2.00% | |||||||||||||
Fair values of fixed rate debt obligations | ||||||||||||||
Principal Amount | 300 | |||||||||||||
Revolving Credit Facility | Minimum | ||||||||||||||
Debt Instrument | ||||||||||||||
Facility fee payable (as a percent) | 0.20% | |||||||||||||
Revolving Credit Facility | Maximum | ||||||||||||||
Debt Instrument | ||||||||||||||
Facility fee payable (as a percent) | 0.30% | |||||||||||||
Multicurrency Revolving Credit Facility | ||||||||||||||
Debt Instrument | ||||||||||||||
Total long-term debt | $ 700 | |||||||||||||
European Accounts Receivable Securitization Program | ||||||||||||||
Debt Instrument | ||||||||||||||
Termination of accounts receivable securitization | € | € 185 |
Debt - Annual Maturities of Lon
Debt - Annual Maturities of Long-Term Debt (Details) $ in Millions | Dec. 31, 2018USD ($) |
Annual maturities of long-term debt through 2018 | |
2,019 | $ 33 |
2,020 | 1,018 |
2,021 | 431 |
2,022 | 549 |
2,023 | 1,749 |
2024 and thereafter | $ 1,434 |
Contingencies - Asbestos (Detai
Contingencies - Asbestos (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)itemlawsuit | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item | Dec. 31, 1993USD ($) | |
Asbestos | ||||
Sale of goods containing asbestos from 1948 to 1958 | $ 40,000,000 | |||
Loss contingency, plaintiffs damages | $ 722,000,000 | |||
Approximate number of claims disposed of to date | lawsuit | 400,000 | |||
Average indemnity payment per claim | $ 9,800 | |||
Asbestos-related cash payments | 105,000,000 | $ 110,000,000 | $ 125,000,000 | |
Cash payments per claim disposed including legal costs | 86,000 | 83,000 | 71,000 | |
Asbestos-related liability, total amount accrued beginning in 1993 through 2018 before insurance recoveries | 5,000,000,000 | $ 975,000,000 | ||
Accrual of asbestos related liability | 602,000,000 | 582,000,000 | ||
Asbestos related charges | $ 125,000,000 | $ 0 | $ 0 | |
Approximate number of plaintiffs and claimants asbestos claims pending against the entity | ||||
Pending at beginning of year (in number of litigants) | item | 1,330 | 1,400 | 2,080 | |
Disposed (in number of litigants) | item | 1,220 | 1,320 | 1,750 | |
Filed (in number of litigants) | item | 960 | 1,250 | 1,070 | |
Pending at end of year (in number of litigants) | item | 1,070 | 1,330 | 1,400 | |
Minimum | ||||
Asbestos | ||||
Period in which significant majority of claims to be received | 5 years | |||
Maximum | ||||
Asbestos | ||||
Period in which significant majority of claims to be received | 7 years |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | |||
Balance at beginning of the period | $ (1,826) | ||
Other comprehensive income (loss) | (150) | $ 351 | $ (159) |
Balance at end of the period | (1,968) | (1,826) | |
Net Effect of Exchange Rate Fluctuations | |||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | |||
Balance at beginning of the period | (723) | (788) | |
Change before reclassifications | (166) | 65 | |
Other comprehensive income (loss) | (166) | 65 | |
Balance at end of the period | (889) | (723) | (788) |
Change in Certain Derivative Instruments | |||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | |||
Balance at beginning of the period | (12) | (4) | |
Change before reclassifications | (4) | (3) | |
Amounts reclassified from accumulated other comprehensive income (loss) | (1) | (6) | |
Translation effect | (1) | ||
Tax effect | 1 | ||
Other comprehensive income (loss) | (6) | (8) | |
Balance at end of the period | (18) | (12) | (4) |
Employee Benefit Plans | |||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | |||
Balance at beginning of the period | (1,091) | (1,380) | |
Change before reclassifications | (114) | (8) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 131 | 285 | |
Translation effect | 16 | 32 | |
Tax effect | (3) | (20) | |
Other comprehensive income (loss) | 30 | 289 | |
Balance at end of the period | (1,061) | (1,091) | (1,380) |
Accumulated Other Comprehensive Loss. | |||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | |||
Balance at beginning of the period | (1,826) | (2,172) | |
Change before reclassifications | (284) | 54 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 130 | 279 | |
Translation effect | 15 | 32 | |
Tax effect | (3) | (19) | |
Other comprehensive income (loss) | (142) | 346 | |
Balance at end of the period | $ (1,968) | $ (1,826) | $ (2,172) |
Stock Based Compensation - Shar
Stock Based Compensation - Share-based Compensation Arrangement by Share-based Payment Award (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares available for grants under the plans | 3,547,267 | ||
Compensation cost for all grants of shares and units | $ 27 | $ 18 | $ 11 |
Stock Based Compensation - Rest
Stock Based Compensation - Restricted share and Restricted Share Units and Performance Vested Restricted Share Units (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | |
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Shares issued | 800,000 | 300,000 | 200,000 |
Unrecognized compensation cost of unvested stock options, restricted shares, restricted share units and performance vested restricted share units (in dollars) | $ | $ 19 | ||
Weighted average period during which unrecognized compensation costs would be recognized | 2 years | ||
Restricted Shares and Restricted Share Units | |||
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Nonvested, beginning balance (in shares) | 1,108,000 | ||
Granted (in shares) | 579,000 | ||
Vested (in shares) | (492,000) | ||
Forfeited (in shares) | (116,000) | ||
Nonvested, ending balance (in shares) | 1,079,000 | 1,108,000 | |
Nonvested, Beginning balance (in dollars per share) | $ / shares | $ 19.39 | ||
Granted (in dollars per share) | $ / shares | 21.64 | $ 20.01 | $ 15.70 |
Vested (in dollars per share) | $ / shares | 19.73 | ||
Forfeited (in dollars per share) | $ / shares | 29.90 | ||
Nonvested, Closing balance (in dollars per share) | $ / shares | $ 20.29 | $ 19.39 | |
Total fair value of shares issued (in dollars) | $ | $ 10 | $ 5 | $ 6 |
Restricted Shares and Restricted Share Units | Shares granted to employees after March 21, 2005 | Minimum | |||
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Fair value of restricted shares, amortization period | 1 year | ||
Restricted Shares and Restricted Share Units | Shares granted to employees after March 21, 2005 | Maximum | |||
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Fair value of restricted shares, amortization period | 4 years | ||
Restricted Share Units | Shares granted to directors after 2007 | |||
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Shares of common stock granted vesting period | 1 year | ||
Restricted Share Units | Shares granted to employees after 2010 | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Percentage of shares vested per year beginning on first anniversary | 25.00% | ||
Common stock distribution ratio | 1 | ||
Performance Vested Restricted Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Period after which shares granted can be vested | 3 years | ||
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Nonvested, beginning balance (in shares) | 1,594,000 | ||
Granted (in shares) | 501,000 | ||
Vested (in shares) | (375,000) | ||
Forfeited (in shares) | (88,000) | ||
Nonvested, ending balance (in shares) | 1,632,000 | 1,594,000 | |
Nonvested, Beginning balance (in dollars per share) | $ / shares | $ 18.66 | ||
Granted (in dollars per share) | $ / shares | 22.05 | $ 19.57 | $ 15.10 |
Vested (in dollars per share) | $ / shares | 23.58 | ||
Forfeited (in dollars per share) | $ / shares | 20.33 | ||
Nonvested, Closing balance (in dollars per share) | $ / shares | $ 18.48 | $ 18.66 | |
Total fair value of shares vested (in dollars) | $ | $ 9 | ||
Shares of common stock holder may receive, per unit of vested units | 2 | ||
Shares issued | 501,000 |
Other Expense, net (Details)
Other Expense, net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Expense (Income), net | |||
Restructuring, asset impairment and other charges | $ 97 | $ 77 | $ 104 |
Charge for asbestos related costs | 125 | 0 | 0 |
Pension settlement charges | 74 | 218 | 98 |
Intangible amortization expense | 40 | 41 | 39 |
Impairment of equity investment | 25 | ||
Gain on China land compensation | (71) | ||
Royalty income | (13) | (11) | (13) |
Foreign currency exchange loss | 6 | 5 | 6 |
Non-income tax gain | (19) | ||
Other income (including gains on asset sales), net | (41) | (7) | (14) |
Other Expense, net | 269 | $ 323 | $ 174 |
Europe | |||
Other Expense (Income), net | |||
Net cash proceeds on disposal of assets | 11 | ||
Americas | |||
Other Expense (Income), net | |||
Net cash proceeds on disposal of assets | $ 11 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Leases | |||
Rent expense attributable to warehouse, office buildings and equipment operating leases | $ 91 | $ 91 | $ 80 |
Minimum future rentals under operating leases | |||
2,019 | 69 | ||
2,020 | 53 | ||
2,021 | 41 | ||
2,022 | 36 | ||
2,023 | 29 | ||
2024 and thereafter | $ 40 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||
Net earnings attributable to the Company | $ 257 | $ 180 | $ 209 |
Denominator (in thousands): | |||
Denominator for basic earnings per share - weighted average shares outstanding (in shares) | 160,125,000 | 162,737,000 | 161,857,000 |
Effect of dilutive securities: | |||
Stock options and other (in shares) | 1,963,000 | 1,910,000 | 968,000 |
Denominator for diluted earnings per share - adjusted weighted average shares outstanding (in shares) | 162,088,000 | 164,647,000 | 162,825,000 |
Basic earnings per share: | |||
Earnings from continuing operations (in dollars per share) | $ 0.90 | $ 1.12 | $ 1.33 |
Gain (loss) from discontinued operations (in dollars per share) | 0.71 | (0.01) | (0.04) |
Net earnings (in dollars per share) | 1.61 | 1.11 | 1.29 |
Diluted earnings per share: | |||
Earnings from continuing operations (in dollars per share) | 0.89 | 1.11 | 1.32 |
Loss from discontinued operations (in dollars per share) | 0.70 | (0.01) | (0.04) |
Net earnings (in dollars per share) | $ 1.59 | $ 1.10 | $ 1.28 |
Weighted average shares of common stock attributable to options not included in diluted earnings per share (in shares) | 1,726,275 | 1,522,928 | 2,770,458 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Decrease (increase) in current assets: | |||
Receivables | $ 43 | $ (37) | $ (32) |
Inventories | (29) | 2 | 16 |
Prepaid expenses and other | (58) | (10) | 145 |
Increase (decrease) in current liabilities: | |||
Accounts payable | 67 | 69 | (58) |
Accrued liabilities | (16) | (49) | (31) |
Salaries and wages | (1) | (21) | 32 |
U.S. and foreign income taxes | 9 | (43) | 18 |
Changes in components of working capital, total | 15 | (89) | 90 |
Amount of receivables sold | 600 | 454 | |
Interest paid in cash | 236 | 261 | 261 |
Income taxes paid in cash | |||
U.S. Income taxes paid in cash | 11 | 4 | |
Non-U.S. Income taxes paid in cash | 97 | 127 | 99 |
Total income taxes paid in cash | 108 | 131 | 99 |
Interest paid note repurchase premiums | $ 0 | $ 18 | $ 9 |
Discontinued Operations (Detail
Discontinued Operations (Details) $ in Millions | Dec. 06, 2018Plant | Jul. 31, 2017USD ($) | Mar. 31, 2018subsidiary | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Subsidiaries | ||||||
Gain (loss) from discontinued operations | $ 113 | $ (3) | $ (7) | |||
Discontinued Operations, Disposed of by Sale | OI European Group B.V. (“OIEG”) | ||||||
Subsidiaries | ||||||
Litigation settlement amount | $ 115 | |||||
Gain (loss) from discontinued operations | $ 115 | |||||
Disposed Venezuelan subsidiaries | ||||||
Subsidiaries | ||||||
Expropriated plants | Plant | 2 | |||||
Number of subsidiaries seeking an annulment | subsidiary | 2 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Additions | |||
Statutory U.S. Federal tax rate (as a percent) | 21.00% | 35.00% | 35.00% |
Change in valuation allowance: U.S. tax law change | $ 2 | $ 162 | |
Expired foreign tax credits | 327 | ||
Allowances for losses and discounts on receivables | |||
Reserves deducted from assets in the balance sheets: | |||
Balance at beginning of period | 34 | 32 | $ 29 |
Additions | |||
Charged to costs and expenses/charged to income | 13 | 12 | 15 |
Other | (4) | (2) | (2) |
Deductions | (8) | (8) | (10) |
Balance at end of period | 35 | 34 | 32 |
Valuation allowance on net deferred tax assets | |||
Reserves deducted from assets in the balance sheets: | |||
Balance at beginning of period | 543 | 1,094 | 1,135 |
Additions | |||
Charged to costs and expenses/charged to income | (20) | 15 | 3 |
Other | (7) | (79) | (32) |
Foreign currency translation | (9) | 4 | (3) |
Other | (12) | (491) | (9) |
Balance at end of period | $ 495 | $ 543 | $ 1,094 |