Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2019shares | |
Document and Entity Information | |
Entity Registrant Name | OWENS ILLINOIS INC /DE/ |
Entity Central Index Key | 0000812074 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 155,230,560 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED RESULTS OF OPERATI
CONSOLIDATED RESULTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONSOLIDATED RESULTS OF OPERATIONS | ||
Net sales | $ 1,638 | $ 1,736 |
Cost of goods sold. | (1,340) | (1,417) |
Gross profit | 298 | 319 |
Selling and administrative expense | (115) | (126) |
Research, development and engineering expense | (16) | (16) |
Interest expense, net | (65) | (62) |
Equity earnings | 19 | 17 |
Other income (expense), net | (10) | 3 |
Earnings from continuing operations before income taxes | 111 | 135 |
Provision for income taxes | (27) | (32) |
Earnings from continuing operations | 84 | 103 |
Net earnings | 84 | 103 |
Net earnings attributable to noncontrolling interests | (5) | (5) |
Net earnings attributable to the Company | 79 | 98 |
Amounts attributable to the Company: | ||
Earnings from continuing operations | 79 | 98 |
Net earnings attributable to the Company | $ 79 | $ 98 |
Basic earnings per share: | ||
Earnings from continuing operations (in dollars per share) | $ 0.51 | $ 0.60 |
Net earnings (in dollars per share) | $ 0.51 | $ 0.60 |
Weighted average shares outstanding (thousands) (in shares) | 154,361 | 162,919 |
Diluted earnings per share: | ||
Earnings from continuing operations (in dollars per share) | $ 0.51 | $ 0.59 |
Net earnings (in dollars per share) | $ 0.51 | $ 0.59 |
Weighted average diluted shares outstanding (thousands) (in shares) | 156,635 | 165,186 |
CONSOLIDATED COMPREHENSIVE INCO
CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONSOLIDATED COMPREHENSIVE INCOME | ||
Net earnings | $ 84 | $ 103 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 49 | 126 |
Pension and other postretirement benefit adjustments, net of tax | 6 | 7 |
Change in fair value of derivative instruments, net of tax | 5 | (5) |
Other comprehensive income | 60 | 128 |
Total comprehensive income | 144 | 231 |
Comprehensive income attributable to noncontrolling interests | (8) | (11) |
Comprehensive income attributable to the Company | $ 136 | $ 220 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Current assets: | |||
Cash and cash equivalents | $ 326 | $ 512 | $ 418 |
Trade receivables, net of allowance of $34 million, $35 million, and $36 million at March 31, 2019, December 31, 2018 and March 31, 2018 | 939 | 549 | 1,045 |
Inventories | 1,038 | 1,018 | 1,065 |
Prepaid expenses and other current assets | 276 | 278 | 240 |
Total current assets | 2,579 | 2,357 | 2,768 |
Property, plant and equipment, net | 3,074 | 3,085 | 3,190 |
Goodwill | 2,507 | 2,513 | 2,649 |
Intangibles, net | 394 | 400 | 452 |
Other assets | 1,598 | 1,344 | 1,222 |
Total assets | 10,152 | 9,699 | 10,281 |
Current liabilities: | |||
Accounts payable | 1,065 | 1,321 | 1,115 |
Short-term loans and long-term debt due within one year | 91 | 160 | 194 |
Current portion of asbestos-related liabilities | 160 | 160 | 100 |
Other liabilities | 544 | 566 | 554 |
Other liabilities - discontinued operations | 115 | ||
Total current liabilities | 1,860 | 2,207 | 2,078 |
Long-term debt | 5,820 | 5,181 | 5,640 |
Asbestos-related liabilities | 372 | 442 | 475 |
Other long-term liabilities | 1,090 | 969 | 969 |
Share owners' equity | 1,010 | 900 | 1,119 |
Total liabilities and share owners' equity | $ 10,152 | $ 9,699 | $ 10,281 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | |||
Trade receivables allowance | $ 34 | $ 35 | $ 36 |
CONDENSED CONSOLIDATED CASH FLO
CONDENSED CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net earnings | $ 84 | $ 103 |
Non-cash charges | ||
Depreciation and amortization | 126 | 131 |
Pension expense | 8 | 10 |
Cash payments | ||
Pension contributions | (11) | (10) |
Asbestos-related payments | (71) | (7) |
Cash paid for restructuring activities | (15) | (6) |
Change in components of working capital | (697) | (622) |
Other, net (a) | (19) | 31 |
Cash utilized in operating activities | (595) | (370) |
Cash flows from investing activities: | ||
Cash payments for property, plant and equipment | (121) | (142) |
Contributions and advances to joint ventures | (15) | (26) |
Net cash proceeds on disposal of assets | 1 | 7 |
Other, net | 1 | |
Cash utilized in investing activities | (135) | (160) |
Cash flows from financing activities: | ||
Changes in borrowings, net | 589 | 488 |
Issuance of common stock and other | (3) | |
Treasury shares repurchased | (38) | (45) |
Dividends paid | (8) | |
Cash provided by financing activities | 540 | 443 |
Effect of exchange rate fluctuations on cash | 4 | 13 |
Decrease in cash | (186) | (74) |
Cash at beginning of period | 512 | 492 |
Cash at end of period | $ 326 | $ 418 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Information | |
Segment Information | 1. 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. 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 for the three months ended March 31, 2019 and 2018 regarding the Company’s reportable segments is as follows: Three months ended March 31, 2019 2018 Net sales: Americas $ 881 $ 908 Europe 596 643 Asia Pacific 151 173 Reportable segment totals 1,628 1,724 Other 10 12 Net sales $ 1,638 $ 1,736 Three months ended March 31, 2019 2018 Segment operating profit: Americas $ 113 $ 147 Europe 79 72 Asia Pacific 8 5 Reportable segment totals 200 224 Items excluded from segment operating profit: Retained corporate costs and other (24) (27) Interest expense, net (65) (62) Earnings from continuing operations before income taxes $ 111 $ 135 Financial information regarding the Company’s total assets is as follows: March 31, December 31, March 31, 2019 2018 2018 Total assets: Americas $ 5,621 $ 5,497 $ 5,637 Europe 3,273 3,036 3,387 Asia Pacific 1,012 918 1,056 Reportable segment totals 9,906 9,451 10,080 Other 246 248 201 Consolidated totals $ 10,152 $ 9,699 $ 10,281 |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue | |
Revenue | 2. Revenue 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 three month periods ended March 31, 2019 and March 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 Condensed Consolidated Balance Sheet. For the three month periods ended March 31, 2019 and March 31, 2018, revenue recognized from prior periods (for example, due to changes in transaction price) was not material. The following tables for the three months ended March 31, 2019 and 2018 disaggregates the Company’s revenue by customer end use: Three months ended March 31, 2019 Americas Europe Asia Pacific Total Alcoholic beverages (beer, wine, spirits) $ 564 $ 432 $ 109 $ 1,105 Food and other 180 103 25 308 Non-alcoholic beverages 137 61 17 215 Reportable segment totals $ 881 $ 596 $ 151 $ 1,628 Other 10 Net sales $ 1,638 Three months ended March 31, 2018 Americas Europe Asia Pacific Total Alcoholic beverages (beer, wine, spirits) $ 576 $ 471 $ 127 $ 1,174 Food and other 189 112 24 325 Non-alcoholic beverages 143 60 22 225 Reportable segment totals $ 908 $ 643 $ 173 $ 1,724 Other 12 Net sales $ 1,736 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventories | |
Inventories | 3. Inventories Major classes of inventory at March 31, 2019, December 31, 2018 and March 31, 2018 are as follows: March 31, December 31, March 31, 2019 2018 2018 Finished goods $ 868 $ 849 $ 901 Raw materials 126 125 120 Operating supplies 44 44 44 $ 1,038 $ 1,018 $ 1,065 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments | |
Derivative Instruments | 4. 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 $3 million at March 31, 2019, an unrecognized gain of $1 million at December 31, 2018 and an unrecognized gain of $4 million at March 31, 2018 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 the first quarter of 2019, one of the Company’s Euro-functional subsidiaries entered into a cross-currency swap that has a pay fixed notional amount of €184 million and a receive notional amount of $210 million. The swap reaches maturity in the fourth quarter of 2019. 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 $11 million at March 31, 2019, an unrecognized loss of $9 million at December 31, 2018 and an unrecognized loss of $6 million at March 31, 2018, 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 March 31, 2019 and 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 March 31, 2019, December 31, 2018 and March 31, 2018: Fair Value of Fair Value of Hedge Assets Hedge Liabilities March 31, December 31, March 31, March 31, December 31, March 31, 2019 2018 2018 2019 2018 2018 Derivatives designated as hedging instruments: Commodity forward contracts (a) $ $ 1 $ $ - $ - $ - Interest rate swaps - fair value hedges (b) 18 6 4 1 15 Cash flow hedges of foreign exchange risk (c) 18 10 6 4 1 26 Interest rate swaps - cash flow hedges (d) 1 Net investment hedges (e) 6 6 4 4 8 1 Total derivatives accounted for as hedges $ 45 $ 23 $ 18 $ 9 $ 10 $ 42 Derivatives not designated as hedges: Foreign exchange derivative contracts (f) 2 2 Total derivatives $ 47 $ 25 $ 18 $ 10 $ 12 $ 42 Current $ 23 $ 19 $ 14 $ 3 $ 3 $ - Noncurrent 24 6 4 7 9 42 Total derivatives $ 47 $ 25 $ 18 $ 10 $ 12 $ 42 ______________________________________ (a) The notional amounts of the commodity forward contracts were $20 million, $21 million and $31 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. The maximum maturity dates were in 2020 for all three periods. (b) The notional amounts of the interest rate swaps designated as fair value hedges were €725 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. The maximum maturity dates were in 2024 for all three periods. (c) The notional amounts of the cash flow hedges of foreign exchange risk were $797 million, $587 million and $310 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. The maximum maturity dates were in 2023 for all three periods. (d) The notional amounts of the interest rate swaps designated as cash flow hedges were $180 million and maximum maturity dates were 2020 at March 31, 2019 and December 31, 2018. (e) The notional amounts of the net investment hedges were €160 million and maximum maturity dates were 2020 at March 31, 2019 and December 31, 2018. (f) The notional amounts of the foreign exchange derivative contracts were $625 million, $470 million and $350 million and maximum maturity dates were 2019, 2019, and 2018 at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. Gain (Loss) Recognized in OCI (Effective Portion) Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1) March 31, March 31, March 31, March 31, Derivatives designated as hedging instruments: 2019 2018 2019 2018 Cash Flow Hedges Commodity forward contracts (a) $ 2 $ $ — $ — Cash flow hedges of foreign exchange risk (b) 7 (13) (10) (8) Cash flow hedges of interest rate risk (c) Net Investment Hedges Net Investment Hedges 5 (2) $ 14 $ (12) $ (12) $ (8) Amount of Gain (Loss) Recognized in Other income (expense), net March 31, March 31, Derivatives not designated as hedges: 2019 2018 Foreign exchange derivative contracts $ 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 Accruals
Restructuring Accruals | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring Accruals | |
Restructuring Accruals | 5. Restructuring Accruals Selected information related to the restructuring accruals for the three months ended March 31, 2019 and 2018 is as follows: Employee Other Total Costs Exit Costs Restructuring Balance at January 1, 2019 $ 47 $ 22 $ 69 Net cash paid, principally severance and related benefits (13) (2) (15) Other, including foreign exchange translation (1) (1) Balance at March 31, 2019 $ $ $ Employee Other Total Costs Exit Costs Restructuring Balance at January 1, 2018 $ 52 $ 33 $ 85 Net cash paid, principally severance and related benefits (5) (1) (6) Other, including foreign exchange translation 1 — 1 Balance at March 31, 2018 $ 48 $ 32 $ 80 In the past several years, the Company implemented several discrete restructuring initiatives and recorded restructuring, asset impairment and other charges associated with those actions. 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. For the three months ended March 31, 2019 and 2018, the Company has paid severance and related benefits that were associated with the past restructuring actions. The Company expects that the majority of the remaining cash expenditures related to the accrued employee costs will be paid out over the next several years. |
Pension Benefit Plans
Pension Benefit Plans | 3 Months Ended |
Mar. 31, 2019 | |
Pension Benefit Plans | |
Pension Benefit Plans | 6. Pension Benefit Plans The components of the net periodic pension cost for the three months ended March 31, 2019 and 2018 are as follows: U.S. Non-U.S. 2019 2018 2019 2018 Service cost $ 3 $ 4 $ 3 $ 4 Interest cost 15 15 8 8 Expected asset return (22) (25) (12) (13) Amortization of actuarial loss 10 13 3 4 Net periodic pension cost $ 6 $ 7 $ 2 $ 3 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Leases | 7. Leases In the first quarter of 2019, the Company adopted ASC 842, Leases, and selected the modified retrospective transition as of the effective date of January 1, 2019 (the effective date method). Under the effective date method, financial results reported in periods prior to 2019 are unchanged. The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company uses an estimated incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The Company’s incremental borrowing rate reflects a fully secured rate based on recent debt issuances, the credit rating of the Company, changes in currency, repayment timing of the lease, as well as publicly available data for instruments with similar characteristics when calculating incremental borrowing rates. Certain lease agreements include terms with options to extend the lease, however none of these have been recognized in the Company’s right-of-use assets or lease liabilities since those options were not reasonably certain to be exercised. Leases with a term of 12 months or less are not recorded on the balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. The Company’s lease agreements include lease payments that are largely fixed, do not contain material residual value guarantees or variable lease payments and no lease transactions with related parties. For the three months ended March 31, 2019, the Company’s lease costs associated with leases with terms less than 12 months or variable lease costs were immaterial. Certain leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s leases do not contain restrictions or covenants that restrict the Company from incurring other financial obligations. The Company leases warehouses, office buildings and equipment under both operating and finance lease arrangements. Information related to leases is as follows: Three months ended March 31, 2019 Lease cost Finance lease cost: Amortization of right-of-use assets (included in Cost of goods sold and Selling and administrative expense) $ 2 Interest on lease liabilities (included in Interest expense, net) 1 Operating lease cost (included in Cost of goods sold and Selling and administrative expense) 20 Total lease cost $ 23 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 20 Operating cash flows from finance leases 1 Financing cash flows from finance leases 2 Right-of-use assets obtained in exchange for new operating lease liabilities 5 March 31, 2019 Supplemental balance sheet information Operating leases: Operating lease right-of-use assets (included in Other assets) $ 199 Current operating lease liabilities (included in Other current liabilities) Noncurrent operating lease liabilities (included in Other long-term liabilities) Total operating lease liabilities $ 199 Finance leases: Property, plant and equipment $ Accumulated amortization (27) Property, plant and equipment, net Current finance lease liabilities (included in Long-term debt due within one year) Noncurrent finance lease liabilities (included in Long-term debt) Total finance lease liabilities $ 43 Weighted-average remaining lease term (in years): Operating leases Finance leases Weighted-average discount rate: Operating leases % Finance leases % Maturity of lease liabilities Operating leases Finance leases $ $ 2024 and thereafter Total lease payments Less: imputed interest (19) (10) Total lease obligations $ $ Minimum payments related to leases not yet commenced as of March 31, 2019 $ - $ |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Income Taxes | 8. Income Taxes The Company calculates its interim tax provision using the estimated annual effective tax rate (“EAETR”) methodology in accordance with ASC 740-270. The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effect of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pretax ordinary income or loss in each tax jurisdiction in which the Company operates. The tax effects of discrete items are recognized in the tax provision in the quarter they occur in accordance with GAAP. Depending on various factors such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter can materially impact the reported effective tax rate. The Company’s annual effective tax rate may be affected by the mix of earnings in the U.S. and foreign jurisdictions and such factors as changes in tax laws, tax rates or regulations, changes in business, changing interpretation of existing tax laws or regulations, the finalization of tax audits and reviews, as well as other factors. As such, there can be significant volatility in interim tax provisions. The annual effective tax rate differs from the statutory U.S. Federal tax rate of 21% primarily because of varying non-U.S. tax rates. The Company is currently under examination in various tax jurisdictions in which it operates, including Bolivia, Brazil, Canada, China, 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 on the Company’s results of operations, financial position or cash flows. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt | |
Debt | 9. Debt The following table summarizes the long-term debt of the Company: March 31, December 31, March 31, 2019 2018 2018 Secured Credit Agreement: Revolving Credit Facility: Revolving Loans $ 553 $ — $ — Term Loans: Term Loan A 897 897 Previous Secured Credit Agreement: Revolving Credit Facility: Revolving Loans 462 Term Loans: Term Loan A 1,149 Other secured debt 504 404 Senior Notes: 6.75%, due 2020 (€500 million) 560 570 613 4.875%, due 2021 (€330 million) 369 376 404 5.00%, due 2022 497 497 496 4.00%, due 2023 307 306 305 5.875%, due 2023 688 688 686 3.125%, due 2024 (€725 million) 824 825 872 6.375%, due 2025 296 295 295 5.375%, due 2025 298 297 297 Finance leases 43 45 53 Other 18 14 19 Total long-term debt 5,854 5,214 5,651 Less amounts due within one year 34 33 11 Long-term debt $ 5,820 $ 5,181 $ 5,640 The Company presents debt issuance costs in the balance sheet as a deduction of the carrying amount of the related debt liability. 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 in the second quarter of 2018. The Agreement provides for up to $1.910 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 March 31, 2019, 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 March 31, 2019, the Company had unused credit of $434 million available under the Agreement. The weighted average interest rate on borrowings outstanding under the Agreement at March 31, 2019 was 3.88%. 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 March 31, 2019, 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 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 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 4). 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. 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 March 31, 2019 of the Company’s significant fixed rate debt obligations are as follows: Principal Indicated Amount Market Price Fair Value Senior Notes: 6.75%, due 2020 (€500 million) $ 562 $ 109.50 $ 615 4.875%, due 2021 (€330 million) 371 109.09 405 5.00%, due 2022 500 102.64 513 5.875%, due 2023 700 104.88 734 4.00%, due 2023 310 105.36 327 3.125%, due 2024 (€725 million) 814 98.51 802 6.375%, due 2025 300 105.88 318 5.375%, due 2025 300 101.97 306 |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Contingencies | |
Contingencies | 10 . 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. As of March 31, 2019, the Company had approximately 1,070 asbestos lawsuits pending. These pending lawsuits 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 requirements 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 March 31, 2019, the Company in the aggregate has disposed of approximately 400,600 Asbestos Claims at an average indemnity payment of approximately $10,000 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 March 31, 2019, 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 Other litigation is pending against the Company, in many 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. |
Share Owners' Equity
Share Owners' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Share Owners' Equity | |
Share Owners' Equity | 11. Share Owners’ Equity The activity in share owners’ equity for the three months ended March 31, 2019 and 2018 is as follows: Share Owners’ Equity of the Company Accumulated Capital in Other Non- Total Share Common Excess of Treasury Retained Comprehensive controlling Owners' Stock Par Value Stock Earnings Loss Interests Equity Balance on January 1, 2019 $ 2 3,124 (705) 333 (1,968) 114 $ 900 Reissuance of common stock (0.1 million shares) 2 3 5 Treasury shares purchased (2.1 million shares) (38) (38) Stock compensation (0.5 million shares) 4 4 Net earnings 79 5 84 Other comprehensive income 57 3 60 Other (5) (5) Balance on March 31, 2019 $ 2 $ 3,130 $ (745) $ 412 $ (1,911) $ 122 $ 1,010 Share Owners’ Equity of the Company Accumulated Capital in Other Non- Total Share Common Excess of Treasury Retained Comprehensive controlling Owners' Stock Par Value Stock Earnings Loss Interests Equity Balance on January 1, 2018 $ 2 3,099 (551) 84 (1,826) 119 $ 927 Reissuance of common stock (.03 million shares) 1 1 Treasury shares purchased (2.0 million shares) (45) (45) Stock compensation (0.5 million shares) 5 5 Net earnings 98 5 103 Other comprehensive income 122 6 128 Balance on March 31, 2018 $ 2 $ 3,104 $ (595) $ 182 $ (1,704) $ 130 $ 1,119 During the three months ended March 31, 2019 and 2018, the Company purchased 2,064,652 and 1,999,759 shares of its common stock for approximately $38 million and $45 million, respectively. The stock purchases were pursuant to the authorization by its Board of Directors that had approximately $512 million in remaining purchase authority as of March 31, 2019. The Company has 250,000,000 shares of common stock authorized with a par value of $.01 per share. Shares outstanding are as follows: Shares Outstanding (in thousands) March 31, December 31, March 31, 2019 2018 2018 Shares of common stock issued (including treasury shares) 188,348 186,576 186,324 Treasury shares 33,117 30,918 24,617 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2019 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | 12. Accumulated Other Comprehensive Loss The activity in accumulated other comprehensive loss for the three months ended March 31, 2019 and 2018 is as follows: Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Loss Balance on January 1, 2019 $ (889) (18) (1,061) $ (1,968) Change before reclassifications 46 (2) (2) 42 Amounts reclassified from accumulated other comprehensive income 3 (a) 13 (b) 16 Translation effect 2 (5) (3) Tax effect 2 2 Other comprehensive income attributable to the Company 46 5 6 57 Balance on March 31, 2019 $ (843) $ (13) $ (1,055) $ (1,911) Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Loss Balance on January 1, 2018 $ (723) $ (12) $ (1,091) $ (1,826) Change before reclassifications 120 (4) 116 Amounts reclassified from accumulated other comprehensive income (4) (a) 17 (b) 13 Translation effect (1) (6) (7) Tax effect — Other comprehensive income (loss) attributable to the Company 120 (5) 7 122 Balance on March 31, 2018 $ (603) $ (17) $ (1,084) $ (1,704) (a) Amount is included in Cost of goods sold and Other expense, net on the Condensed Consolidated Results of Operations (see Note 4 for additional information). (b) Amount is included in the computation of net periodic pension cost (see Note 6 for additional information) and net postretirement benefit cost. |
Other Expense (Income), net
Other Expense (Income), net | 3 Months Ended |
Mar. 31, 2019 | |
Other Expense (Income), net | |
Other Expense (Income), net | 13. Other Expense (Income), net Other expense (income), net for the three months ended March 31, 2019 and 2018 included the following: Three months ended March 31, 2019 2018 Foreign currency exchange loss $ 3 2 Intangible amortization expense 10 10 Royalty income (3) (3) Other expense (income), net (12) $ 10 $ (3) |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share | |
Earnings Per Share | 14. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Three months ended March 31, 2019 2018 Numerator: Net earnings attributable to the Company $ 79 $ 98 Denominator (in thousands): Denominator for basic earnings per share-weighted average shares outstanding 154,361 162,919 Effect of dilutive securities: Stock options and other 2,274 2,267 Denominator for diluted earnings per share-adjusted weighted average shares outstanding 156,635 165,186 Basic earnings per share: Earnings from continuing operations $ 0.51 $ 0.60 Loss from discontinued operations — Net earnings $ 0.51 $ 0.60 Diluted earnings per share: Earnings from continuing operations $ 0.51 $ 0.59 Loss from discontinued operations — Net earnings $ 0.51 $ 0.59 Options to purchase 1,496,298 and 1,802,122 weighted average shares of common stock, which were outstanding during the three months ended March 31, 2019 and 2018, 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 | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | 15. Supplemental Cash Flow Information Income taxes paid (received) in cash were as follows: Three months ended March 31, 2019 2018 U.S. $ (7) $ 3 Non-U.S. 33 31 Total income taxes paid in cash $ 26 $ 34 Interest paid in cash for the three months ended March 31, 2019 and 2018 was $70 million and $69 million, respectively. The Company uses various factoring programs to sell certain receivables to financial institutions as part of managing its cash flows. At March 31, 2019, December 31, 2018 and March 31, 2018, the amount of receivables sold by the Company was $303 million, $600 million and $216 million, respectively. Any continuing involvement with the sold receivables is immaterial. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations | |
Discontinued Operations | 16. 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 recognized a $115 million gain from discontinued operations in the fourth quarter of 2018. The Loss from discontinued operations, which primarily reflects the ongoing costs for the Venezuelan expropriation, was less than $1 million for each of the three month periods ended March 31, 2019 and 2018. |
New Accounting Pronouncement
New Accounting Pronouncement | 3 Months Ended |
Mar. 31, 2019 | |
New Accounting Pronouncement | |
New Accounting Pronouncement | 17. New Accounting Pronouncement Leases - On January 1, 2019, the Company adopted ASU No. 2016-02, “Leases”. Under this guidance, lessees are 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 adoption of ASU No. 2016-02 had a significant impact on the Company’s consolidated balance sheet due to the recognition of approximately $214 million of lease liabilities with corresponding right-of-use assets for operating leases as of January 1, 2019. The adoption of ASU No. 2016-02 had no material impact on the Company’s retained earnings, consolidated results of operations or consolidated cash flows. The Company elected the package of practical expedients relating to the identification, classification and initial direct costs of leases commencing before the effective date, and the transitional practical expedient for the treatment of existing land easements; however, the Company did not elect the hindsight transitional practical expedient. The Company has also elected the practical expedient to not account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the nonlease components (e.g., common-area maintenance costs). See Note 7, Leases, for additional information. 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. 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. The Company adopted this standard in the first quarter of 2019. The Company has not elected to reclassify income tax effects of the Act from AOCI to retained earnings. 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) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Information | |
Net sales for the Company's reportable segments | Three months ended March 31, 2019 2018 Net sales: Americas $ 881 $ 908 Europe 596 643 Asia Pacific 151 173 Reportable segment totals 1,628 1,724 Other 10 12 Net sales $ 1,638 $ 1,736 |
Segment operating profit (loss) for the Company's reportable segments | Three months ended March 31, 2019 2018 Segment operating profit: Americas $ 113 $ 147 Europe 79 72 Asia Pacific 8 5 Reportable segment totals 200 224 Items excluded from segment operating profit: Retained corporate costs and other (24) (27) Interest expense, net (65) (62) Earnings from continuing operations before income taxes $ 111 $ 135 |
Total assets for the Company's reportable segments | March 31, December 31, March 31, 2019 2018 2018 Total assets: Americas $ 5,621 $ 5,497 $ 5,637 Europe 3,273 3,036 3,387 Asia Pacific 1,012 918 1,056 Reportable segment totals 9,906 9,451 10,080 Other 246 248 201 Consolidated totals $ 10,152 $ 9,699 $ 10,281 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue | |
Schedule of disaggregation of revenue by customer end use | Three months ended March 31, 2019 Americas Europe Asia Pacific Total Alcoholic beverages (beer, wine, spirits) $ 564 $ 432 $ 109 $ 1,105 Food and other 180 103 25 308 Non-alcoholic beverages 137 61 17 215 Reportable segment totals $ 881 $ 596 $ 151 $ 1,628 Other 10 Net sales $ 1,638 Three months ended March 31, 2018 Americas Europe Asia Pacific Total Alcoholic beverages (beer, wine, spirits) $ 576 $ 471 $ 127 $ 1,174 Food and other 189 112 24 325 Non-alcoholic beverages 143 60 22 225 Reportable segment totals $ 908 $ 643 $ 173 $ 1,724 Other 12 Net sales $ 1,736 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventories | |
Major classes of inventory | March 31, December 31, March 31, 2019 2018 2018 Finished goods $ 868 $ 849 $ 901 Raw materials 126 125 120 Operating supplies 44 44 44 $ 1,038 $ 1,018 $ 1,065 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments | |
Balance Sheet Classification of derivative instruments | Fair Value of Fair Value of Hedge Assets Hedge Liabilities March 31, December 31, March 31, March 31, December 31, March 31, 2019 2018 2018 2019 2018 2018 Derivatives designated as hedging instruments: Commodity forward contracts (a) $ $ 1 $ $ - $ - $ - Interest rate swaps - fair value hedges (b) 18 6 4 1 15 Cash flow hedges of foreign exchange risk (c) 18 10 6 4 1 26 Interest rate swaps - cash flow hedges (d) 1 Net investment hedges (e) 6 6 4 4 8 1 Total derivatives accounted for as hedges $ 45 $ 23 $ 18 $ 9 $ 10 $ 42 Derivatives not designated as hedges: Foreign exchange derivative contracts (f) 2 2 Total derivatives $ 47 $ 25 $ 18 $ 10 $ 12 $ 42 Current $ 23 $ 19 $ 14 $ 3 $ 3 $ - Noncurrent 24 6 4 7 9 42 Total derivatives $ 47 $ 25 $ 18 $ 10 $ 12 $ 42 ______________________________________ (a) The notional amounts of the commodity forward contracts were $20 million, $21 million and $31 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. The maximum maturity dates were in 2020 for all three periods. (b) The notional amounts of the interest rate swaps designated as fair value hedges were €725 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. The maximum maturity dates were in 2024 for all three periods. (c) The notional amounts of the cash flow hedges of foreign exchange risk were $797 million, $587 million and $310 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. The maximum maturity dates were in 2023 for all three periods. (d) The notional amounts of the interest rate swaps designated as cash flow hedges were $180 million and maximum maturity dates were 2020 at March 31, 2019 and December 31, 2018. (e) The notional amounts of the net investment hedges were €160 million and maximum maturity dates were 2020 at March 31, 2019 and December 31, 2018. (f) The notional amounts of the foreign exchange derivative contracts were $625 million, $470 million and $350 million and maximum maturity dates were 2019, 2019, and 2018 at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. |
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) March 31, March 31, March 31, March 31, Derivatives designated as hedging instruments: 2019 2018 2019 2018 Cash Flow Hedges Commodity forward contracts (a) $ 2 $ $ — $ — Cash flow hedges of foreign exchange risk (b) 7 (13) (10) (8) Cash flow hedges of interest rate risk (c) Net Investment Hedges Net Investment Hedges 5 (2) $ 14 $ (12) $ (12) $ (8) Amount of Gain (Loss) Recognized in Other income (expense), net March 31, March 31, Derivatives not designated as hedges: 2019 2018 Foreign exchange derivative contracts $ 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 Accruals (Tables)
Restructuring Accruals (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring Accruals | |
Selected information related to the restructuring accruals | Selected information related to the restructuring accruals for the three months ended March 31, 2019 and 2018 is as follows: Employee Other Total Costs Exit Costs Restructuring Balance at January 1, 2019 $ 47 $ 22 $ 69 Net cash paid, principally severance and related benefits (13) (2) (15) Other, including foreign exchange translation (1) (1) Balance at March 31, 2019 $ $ $ Employee Other Total Costs Exit Costs Restructuring Balance at January 1, 2018 $ 52 $ 33 $ 85 Net cash paid, principally severance and related benefits (5) (1) (6) Other, including foreign exchange translation 1 — 1 Balance at March 31, 2018 $ 48 $ 32 $ 80 |
Pension Benefit Plans (Tables)
Pension Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Pension Benefit Plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Components of net periodic pension cost | The components of the net periodic pension cost for the three months ended March 31, 2019 and 2018 are as follows: U.S. Non-U.S. 2019 2018 2019 2018 Service cost $ 3 $ 4 $ 3 $ 4 Interest cost 15 15 8 8 Expected asset return (22) (25) (12) (13) Amortization of actuarial loss 10 13 3 4 Net periodic pension cost $ 6 $ 7 $ 2 $ 3 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Schedule of components of lease expense | Three months ended March 31, 2019 Lease cost Finance lease cost: Amortization of right-of-use assets (included in Cost of goods sold and Selling and administrative expense) $ 2 Interest on lease liabilities (included in Interest expense, net) 1 Operating lease cost (included in Cost of goods sold and Selling and administrative expense) 20 Total lease cost $ 23 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 20 Operating cash flows from finance leases 1 Financing cash flows from finance leases 2 Right-of-use assets obtained in exchange for new operating lease liabilities 5 |
Schedule of supplemental balance sheet information | March 31, 2019 Supplemental balance sheet information Operating leases: Operating lease right-of-use assets (included in Other assets) $ 199 Current operating lease liabilities (included in Other current liabilities) Noncurrent operating lease liabilities (included in Other long-term liabilities) Total operating lease liabilities $ 199 Finance leases: Property, plant and equipment $ Accumulated amortization (27) Property, plant and equipment, net Current finance lease liabilities (included in Long-term debt due within one year) Noncurrent finance lease liabilities (included in Long-term debt) Total finance lease liabilities $ 43 Weighted-average remaining lease term (in years): Operating leases Finance leases Weighted-average discount rate: Operating leases % Finance leases % |
Schedule of operating leases maturities of lease liabilities | Maturity of lease liabilities Operating leases Finance leases $ $ 2024 and thereafter Total lease payments Less: imputed interest (19) (10) Total lease obligations $ $ Minimum payments related to leases not yet commenced as of March 31, 2019 $ - $ |
Schedule of finance leases maturities of lease liabilities | Maturity of lease liabilities Operating leases Finance leases $ $ 2024 and thereafter Total lease payments Less: imputed interest (19) (10) Total lease obligations $ $ Minimum payments related to leases not yet commenced as of March 31, 2019 $ - $ |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt | |
Long-term Debt | March 31, December 31, March 31, 2019 2018 2018 Secured Credit Agreement: Revolving Credit Facility: Revolving Loans $ 553 $ — $ — Term Loans: Term Loan A 897 897 Previous Secured Credit Agreement: Revolving Credit Facility: Revolving Loans 462 Term Loans: Term Loan A 1,149 Other secured debt 504 404 Senior Notes: 6.75%, due 2020 (€500 million) 560 570 613 4.875%, due 2021 (€330 million) 369 376 404 5.00%, due 2022 497 497 496 4.00%, due 2023 307 306 305 5.875%, due 2023 688 688 686 3.125%, due 2024 (€725 million) 824 825 872 6.375%, due 2025 296 295 295 5.375%, due 2025 298 297 297 Finance leases 43 45 53 Other 18 14 19 Total long-term debt 5,854 5,214 5,651 Less amounts due within one year 34 33 11 Long-term debt $ 5,820 $ 5,181 $ 5,640 |
Fair values of the Company's significant fixed rate debt obligations | Fair values at March 31, 2019 of the Company’s significant fixed rate debt obligations are as follows: Principal Indicated Amount Market Price Fair Value Senior Notes: 6.75%, due 2020 (€500 million) $ 562 $ 109.50 $ 615 4.875%, due 2021 (€330 million) 371 109.09 405 5.00%, due 2022 500 102.64 513 5.875%, due 2023 700 104.88 734 4.00%, due 2023 310 105.36 327 3.125%, due 2024 (€725 million) 814 98.51 802 6.375%, due 2025 300 105.88 318 5.375%, due 2025 300 101.97 306 |
Share Owners' Equity (Tables)
Share Owners' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share Owners' Equity | |
Activity in share owner's equity | The activity in share owners’ equity for the three months ended March 31, 2019 and 2018 is as follows: Share Owners’ Equity of the Company Accumulated Capital in Other Non- Total Share Common Excess of Treasury Retained Comprehensive controlling Owners' Stock Par Value Stock Earnings Loss Interests Equity Balance on January 1, 2019 $ 2 3,124 (705) 333 (1,968) 114 $ 900 Reissuance of common stock (0.1 million shares) 2 3 5 Treasury shares purchased (2.1 million shares) (38) (38) Stock compensation (0.5 million shares) 4 4 Net earnings 79 5 84 Other comprehensive income 57 3 60 Other (5) (5) Balance on March 31, 2019 $ 2 $ 3,130 $ (745) $ 412 $ (1,911) $ 122 $ 1,010 Share Owners’ Equity of the Company Accumulated Capital in Other Non- Total Share Common Excess of Treasury Retained Comprehensive controlling Owners' Stock Par Value Stock Earnings Loss Interests Equity Balance on January 1, 2018 $ 2 3,099 (551) 84 (1,826) 119 $ 927 Reissuance of common stock (.03 million shares) 1 1 Treasury shares purchased (2.0 million shares) (45) (45) Stock compensation (0.5 million shares) 5 5 Net earnings 98 5 103 Other comprehensive income 122 6 128 Balance on March 31, 2018 $ 2 $ 3,104 $ (595) $ 182 $ (1,704) $ 130 $ 1,119 |
Schedule of shares outstanding | Shares Outstanding (in thousands) March 31, December 31, March 31, 2019 2018 2018 Shares of common stock issued (including treasury shares) 188,348 186,576 186,324 Treasury shares 33,117 30,918 24,617 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accumulated Other Comprehensive Loss | |
Component of accumulated other comprehensive loss | The activity in accumulated other comprehensive loss for the three months ended March 31, 2019 and 2018 is as follows: Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Loss Balance on January 1, 2019 $ (889) (18) (1,061) $ (1,968) Change before reclassifications 46 (2) (2) 42 Amounts reclassified from accumulated other comprehensive income 3 (a) 13 (b) 16 Translation effect 2 (5) (3) Tax effect 2 2 Other comprehensive income attributable to the Company 46 5 6 57 Balance on March 31, 2019 $ (843) $ (13) $ (1,055) $ (1,911) Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Loss Balance on January 1, 2018 $ (723) $ (12) $ (1,091) $ (1,826) Change before reclassifications 120 (4) 116 Amounts reclassified from accumulated other comprehensive income (4) (a) 17 (b) 13 Translation effect (1) (6) (7) Tax effect — Other comprehensive income (loss) attributable to the Company 120 (5) 7 122 Balance on March 31, 2018 $ (603) $ (17) $ (1,084) $ (1,704) (a) Amount is included in Cost of goods sold and Other expense, net on the Condensed Consolidated Results of Operations (see Note 4 for additional information). Amount is included in the computation of net periodic pension cost (see Note 6 for additional information) and net postretirement benefit cost. |
Other Expense (Income), net (Ta
Other Expense (Income), net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Expense (Income), net | |
Schedule of other expense (income), net | Three months ended March 31, 2019 2018 Foreign currency exchange loss $ 3 2 Intangible amortization expense 10 10 Royalty income (3) (3) Other expense (income), net (12) $ 10 $ (3) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share | |
Computation of basic and diluted earnings per share | Three months ended March 31, 2019 2018 Numerator: Net earnings attributable to the Company $ 79 $ 98 Denominator (in thousands): Denominator for basic earnings per share-weighted average shares outstanding 154,361 162,919 Effect of dilutive securities: Stock options and other 2,274 2,267 Denominator for diluted earnings per share-adjusted weighted average shares outstanding 156,635 165,186 Basic earnings per share: Earnings from continuing operations $ 0.51 $ 0.60 Loss from discontinued operations — Net earnings $ 0.51 $ 0.60 Diluted earnings per share: Earnings from continuing operations $ 0.51 $ 0.59 Loss from discontinued operations — Net earnings $ 0.51 $ 0.59 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Information | |
Supplemental cash flow information | Three months ended March 31, 2019 2018 U.S. $ (7) $ 3 Non-U.S. 33 31 Total income taxes paid in cash $ 26 $ 34 |
Segment Information - Reportabl
Segment Information - Reportable Segments (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | |
Segment Reporting Information | ||
Number of reportable segments | segment | 3 | |
Number of operating segments | segment | 3 | |
Net sales: | ||
Net sales | $ 1,638 | $ 1,736 |
Segment operating profit: | ||
Segment operating profit | 200 | 224 |
Items excluded from Segment Operating Profit: | ||
Retained corporate costs and other charges | (24) | (27) |
Interest expense, net | (65) | (62) |
Earnings from continuing operations before income taxes | ||
Earnings from continuing operations before income taxes | 111 | 135 |
Reportable Segment Totals | ||
Net sales: | ||
Net sales | 1,628 | 1,724 |
Americas | ||
Net sales: | ||
Net sales | 881 | 908 |
Segment operating profit: | ||
Segment operating profit | 113 | 147 |
Europe | ||
Net sales: | ||
Net sales | 596 | 643 |
Segment operating profit: | ||
Segment operating profit | 79 | 72 |
Asia Pacific | ||
Net sales: | ||
Net sales | 151 | 173 |
Segment operating profit: | ||
Segment operating profit | 8 | 5 |
Other | ||
Net sales: | ||
Net sales | $ 10 | $ 12 |
Segment Information - Total Ass
Segment Information - Total Assets (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Assets | |||
Total assets: | $ 10,152 | $ 9,699 | $ 10,281 |
Reportable Segment Totals | |||
Assets | |||
Total assets: | 9,906 | 9,451 | 10,080 |
Americas | |||
Assets | |||
Total assets: | 5,621 | 5,497 | 5,637 |
Europe | |||
Assets | |||
Total assets: | 3,273 | 3,036 | 3,387 |
Asia Pacific | |||
Assets | |||
Total assets: | 1,012 | 918 | 1,056 |
Other | |||
Assets | |||
Total assets: | $ 246 | $ 248 | $ 201 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue | ||
Net sales | $ 1,638 | $ 1,736 |
Reportable Segment Totals | ||
Disaggregation of Revenue | ||
Net sales | 1,628 | 1,724 |
Americas | ||
Disaggregation of Revenue | ||
Net sales | 881 | 908 |
Europe | ||
Disaggregation of Revenue | ||
Net sales | 596 | 643 |
Asia Pacific | ||
Disaggregation of Revenue | ||
Net sales | 151 | 173 |
Other | ||
Disaggregation of Revenue | ||
Net sales | 10 | 12 |
Alcoholic beverages (beer, wine, spirits) | ||
Disaggregation of Revenue | ||
Net sales | 1,105 | 1,174 |
Alcoholic beverages (beer, wine, spirits) | Americas | ||
Disaggregation of Revenue | ||
Net sales | 564 | 576 |
Alcoholic beverages (beer, wine, spirits) | Europe | ||
Disaggregation of Revenue | ||
Net sales | 432 | 471 |
Alcoholic beverages (beer, wine, spirits) | Asia Pacific | ||
Disaggregation of Revenue | ||
Net sales | 109 | 127 |
Food and other | ||
Disaggregation of Revenue | ||
Net sales | 308 | 325 |
Food and other | Americas | ||
Disaggregation of Revenue | ||
Net sales | 180 | 189 |
Food and other | Europe | ||
Disaggregation of Revenue | ||
Net sales | 103 | 112 |
Food and other | Asia Pacific | ||
Disaggregation of Revenue | ||
Net sales | 25 | 24 |
Non-alcoholic beverages | ||
Disaggregation of Revenue | ||
Net sales | 215 | 225 |
Non-alcoholic beverages | Americas | ||
Disaggregation of Revenue | ||
Net sales | 137 | 143 |
Non-alcoholic beverages | Europe | ||
Disaggregation of Revenue | ||
Net sales | 61 | 60 |
Non-alcoholic beverages | Asia Pacific | ||
Disaggregation of Revenue | ||
Net sales | $ 17 | $ 22 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Inventories | |||
Finished goods | $ 868 | $ 849 | $ 901 |
Raw materials | 126 | 125 | 120 |
Operating supplies | 44 | 44 | 44 |
Inventories | $ 1,038 | $ 1,018 | $ 1,065 |
Derivative Instruments - Deriva
Derivative Instruments - Derivatives and Hedges (Details) € in Millions, $ in Millions | Mar. 31, 2019USD ($) | Mar. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017EUR (€) |
Commodity forwards contracts | Derivatives designated as hedging instruments | ||||||
Derivatives and Hedges | ||||||
Notional amount | $ 20 | $ 21 | $ 31 | |||
Commodity forwards contracts | Cash Flow Hedges | ||||||
Derivatives and Hedges | ||||||
Unrecognized (loss) gain included in Accumulated OCI | 3 | 1 | 4 | |||
Foreign exchange contracts | Derivatives not designated as hedging instruments | ||||||
Derivatives and Hedges | ||||||
Notional amount | 625 | 470 | 350 | |||
Cross-currency swap | Euro-functional subsidiaries | ||||||
Derivatives and Hedges | ||||||
Notional amount | 210 | € 184 | $ 310 | € 263 | ||
Cross-currency swap | AUD functional subsidiary | ||||||
Derivatives and Hedges | ||||||
Notional amount | 168 | |||||
Cross-currency swap | NZD functional subsidiary | ||||||
Derivatives and Hedges | ||||||
Notional amount | 109 | |||||
Cross-currency swap | Cash Flow Hedges | ||||||
Derivatives and Hedges | ||||||
Unrecognized (loss) gain included in Accumulated OCI | (11) | (9) | $ (6) | |||
Interest Rate Risk | Cash Flow Hedges | Maximum | ||||||
Derivatives and Hedges | ||||||
Unrecognized (loss) gain included in Accumulated OCI | $ (1) | $ (1) |
Derivative Instruments - Balanc
Derivative Instruments - Balance Sheet Classification (Details) € in Millions, $ in Millions | Mar. 31, 2019USD ($) | Mar. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Mar. 31, 2018EUR (€) |
Derivatives, Fair Value | ||||||
Total asset derivatives | $ 47 | $ 25 | $ 18 | |||
Total liability derivatives | 10 | 12 | 42 | |||
Current derivative asset | 23 | 19 | 14 | |||
Current derivative liability | 3 | 3 | ||||
Noncurrent derivative asset | 24 | 6 | 4 | |||
Noncurrent derivative liability | 7 | 9 | 42 | |||
Derivatives designated as hedging instruments | ||||||
Derivatives, Fair Value | ||||||
Total asset derivatives | 45 | 23 | 18 | |||
Total liability derivatives | 9 | 10 | 42 | |||
Derivatives designated as hedging instruments | Commodity forwards contracts | ||||||
Derivatives, Fair Value | ||||||
Notional amount | 20 | 21 | 31 | |||
Total asset derivatives | 3 | 1 | 4 | |||
Derivatives designated as hedging instruments | Interest rate swaps - fair value hedges | ||||||
Derivatives, Fair Value | ||||||
Notional amount | € | € 725 | € 725 | € 725 | |||
Total asset derivatives | 18 | 6 | 4 | |||
Total liability derivatives | 1 | 15 | ||||
Derivatives designated as hedging instruments | Interest rate swaps - cash flow hedges | ||||||
Derivatives, Fair Value | ||||||
Notional amount | 180 | 180 | ||||
Total liability derivatives | 1 | |||||
Derivatives designated as hedging instruments | Cash flow hedges of foreign exchange risk | ||||||
Derivatives, Fair Value | ||||||
Notional amount | 797 | 587 | 310 | |||
Total asset derivatives | 18 | 10 | 6 | |||
Total liability derivatives | 4 | 1 | 26 | |||
Derivatives designated as hedging instruments | Net investment hedges | ||||||
Derivatives, Fair Value | ||||||
Notional amount | € | € 160 | € 160 | ||||
Total asset derivatives | 6 | 6 | 4 | |||
Total liability derivatives | 4 | 8 | 1 | |||
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||||||
Derivatives, Fair Value | ||||||
Notional amount | 625 | 470 | $ 350 | |||
Total asset derivatives | 2 | 2 | ||||
Total liability derivatives | $ 1 | $ 2 |
Derivative Instruments - Effect
Derivative Instruments - Effects of Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Derivatives and Hedges | ||
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | $ 14 | $ (12) |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | (12) | (8) |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||
Derivatives and Hedges | ||
Amount of Gain (Loss) Recognized in Other income (expense), net | 6 | |
Derivatives designated as hedging instruments | Net Investment Hedges | ||
Derivatives and Hedges | ||
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | 5 | |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | (2) | |
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 (Effective Portion) | 2 | 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 (Effective Portion) | 7 | (13) |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | $ (10) | $ (8) |
Restructuring Accruals (Details
Restructuring Accruals (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring accrual | ||
Beginning balance, restructuring reserve | $ 69 | $ 85 |
Net cash paid, principally severance and related benefits | (15) | (6) |
Other, including foreign exchange translation | (1) | 1 |
Ending balance, restructuring reserve | 53 | 80 |
Employee Costs | ||
Restructuring accrual | ||
Beginning balance, restructuring reserve | 47 | 52 |
Net cash paid, principally severance and related benefits | (13) | (5) |
Other, including foreign exchange translation | 1 | |
Ending balance, restructuring reserve | 34 | 48 |
Other Exit Costs | ||
Restructuring accrual | ||
Beginning balance, restructuring reserve | 22 | 33 |
Net cash paid, principally severance and related benefits | (2) | (1) |
Other, including foreign exchange translation | (1) | |
Ending balance, restructuring reserve | $ 19 | $ 32 |
Pension Benefit Plans (Details)
Pension Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
U.S. | ||
Components of net periodic pension cost | ||
Service cost | $ 3 | $ 4 |
Interest cost | 15 | 15 |
Expected asset return | (22) | (25) |
Amortization: | ||
Amortization of Actuarial loss | 10 | 13 |
Net periodic pension cost | 6 | 7 |
Non-U.S. | ||
Components of net periodic pension cost | ||
Service cost | 3 | 4 |
Interest cost | 8 | 8 |
Expected asset return | (12) | (13) |
Amortization: | ||
Amortization of Actuarial loss | 3 | 4 |
Net periodic pension cost | $ 2 | $ 3 |
Leases (Details)
Leases (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Finance leases - option to extend | true |
Operating leases - option to extend | true |
Lease Cost (Details)
Lease Cost (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases | |
Amortization of right-of-use assets | $ 2 |
Interest on lease liabilities | 1 |
Operating lease cost | 20 |
Total lease cost | $ 23 |
Leases - Other information (Det
Leases - Other information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases | |
Operating cash flows from operating leases | $ 20 |
Operating cash flows from finance leases | 1 |
Financing cash flows from finance leases | 2 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 5 |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Operating leases: | ||||
Operating lease right-of-use assets (included in Other assets) | $ 199 | $ 214 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Operating lease right-of-use assets (included in Other assets) | |||
Current operating lease liabilities (included in Other current liabilities) | $ 61 | |||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current operating lease liabilities (included in Other current liabilities) | |||
Noncurrent operating lease liabilities (included in Other long-term liabilities) | $ 138 | |||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Noncurrent operating lease liabilities (included in Other long-term liabilities) | |||
Total operating lease liabilities | $ 199 | $ 214 | ||
Finance leases: | ||||
Property, plant and equipment, net | 3,074 | $ 3,085 | $ 3,190 | |
Current finance lease liabilities (included in Long-term debt due within one year) | $ 6 | |||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current finance lease liabilities (included in Long-term debt due within one year) | |||
Noncurrent finance lease liabilities (included in Long-term debt) | $ 37 | |||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Noncurrent finance lease liabilities (included in Long-term debt) | |||
Total finance lease liabilities | $ 43 | |||
Weighted-average remaining lease term (in years): | ||||
Operating leases weighted-average remaining lease term (in years) | 5 years 1 month 6 days | |||
Finance leases weighted-average remaining lease term (in years) | 7 years 2 months 12 days | |||
Weighted-average discount rate: | ||||
Operating leases (as a percent) | 3.90% | |||
Finance leases (as a percent) | 5.20% | |||
Property, plant and equipment finance leases | ||||
Finance leases: | ||||
Property, plant and equipment | $ 74 | |||
Accumulated amortization | (27) | |||
Property, plant and equipment, net | $ 47 |
Leases - Maturity of lease liab
Leases - Maturity of lease liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 |
Operating leases | ||
2019 | $ 52 | |
2020 | 55 | |
2021 | 35 | |
2022 | 27 | |
2023 | 18 | |
2024 and thereafter | 31 | |
Total lease payments | 218 | |
Less: imputed interest | (19) | |
Total operating lease liabilities | 199 | $ 214 |
Finance leases | ||
2019 | 8 | |
2020 | 8 | |
2021 | 8 | |
2022 | 6 | |
2023 | 6 | |
2024 and thereafter | 17 | |
Total lease payments | 53 | |
Less: imputed interest | (10) | |
Total finance lease liabilities | 43 | |
Minimum payments related to leases not yet commenced | $ 85 |
Income Taxes - (Details)
Income Taxes - (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Statutory U.S. Federal tax rate (as a percent) | 21.00% |
Debt (Details)
Debt (Details) $ / shares in Units, € in Millions, $ in Millions | 3 Months Ended | ||||||
Mar. 31, 2019USD ($)itemagreement$ / shares | Jun. 30, 2018USD ($) | Mar. 31, 2019EUR (€)item | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Mar. 31, 2018EUR (€) | |
Debt Instrument | |||||||
Total long-term debt | $ 5,854 | $ 5,214 | $ 5,651 | ||||
Less amounts due within one year | 34 | 33 | 11 | ||||
Long-term debt | $ 5,820 | 5,181 | 5,640 | ||||
Number financial maintenance covenants | agreement | 1 | ||||||
Leverage Ratio | item | 4.5 | 4.5 | |||||
Short-term loans and long-term debt due within one year | $ 91 | 160 | 194 | ||||
Maximum | |||||||
Debt Instrument | |||||||
Maximum Leverage Ratio may increase | item | 0.5 | ||||||
Maximum Borrowing Capacity | $ 1,910 | ||||||
Prior Agreement | |||||||
Debt Instrument | |||||||
Interest charges for write-off of finance fees | $ 11 | ||||||
Secured Credit Agreement | |||||||
Debt Instrument | |||||||
Unused Credit | $ 434 | ||||||
Weighted average interest rate (as a percent) | 3.88% | 3.88% | |||||
Secured Credit 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% | ||||||
Secured Credit 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% | ||||||
Revolving Loans | |||||||
Debt Instrument | |||||||
Total long-term debt | $ 553 | ||||||
Revolving Loans | Prior Agreement | |||||||
Debt Instrument | |||||||
Total long-term debt | 462 | ||||||
Term Loan A | |||||||
Debt Instrument | |||||||
Total long-term debt | 897 | 897 | |||||
Face Value | 910 | ||||||
Net proceeds, after deducting debt issuance costs | 897 | ||||||
Term Loan A | Prior Agreement | |||||||
Debt Instrument | |||||||
Total long-term debt | 1,149 | ||||||
Other secured debt | |||||||
Debt Instrument | |||||||
Total long-term debt | 504 | 404 | |||||
Senior Notes 6.75%, due 2020 (500 million EUR) | |||||||
Debt Instrument | |||||||
Total long-term debt | $ 560 | € 500 | 570 | € 500 | 613 | € 500 | |
Interest rate, stated percentage | 6.75% | 6.75% | |||||
Fair values of fixed rate debt obligations | |||||||
Principal Amount | $ 562 | ||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 109.50 | ||||||
Fair Value | $ 615 | ||||||
Senior Notes 4.875%, due 2021 (330 million EUR) | |||||||
Debt Instrument | |||||||
Total long-term debt | $ 369 | € 330 | 376 | 330 | 404 | 330 | |
Interest rate, stated percentage | 4.875% | 4.875% | |||||
Fair values of fixed rate debt obligations | |||||||
Principal Amount | $ 371 | ||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 109.09 | ||||||
Fair Value | $ 405 | ||||||
Senior Notes 5.00%, due 2022 | |||||||
Debt Instrument | |||||||
Total long-term debt | $ 497 | 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 | $ 102.64 | ||||||
Fair Value | $ 513 | ||||||
Senior Notes 4.00%, due 2023 | |||||||
Debt Instrument | |||||||
Total long-term debt | $ 307 | 306 | 305 | ||||
Interest rate, stated percentage | 4.00% | 4.00% | |||||
Fair values of fixed rate debt obligations | |||||||
Principal Amount | $ 310 | ||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 105.36 | ||||||
Fair Value | $ 327 | ||||||
Senior Notes 5.875%, due 2023 | |||||||
Debt Instrument | |||||||
Total long-term debt | $ 688 | 688 | 686 | ||||
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 | $ 104.88 | ||||||
Fair Value | $ 734 | ||||||
Senior Notes 3.125%, due 2024 (725 million EUR) | |||||||
Debt Instrument | |||||||
Total long-term debt | $ 824 | € 725 | 825 | € 725 | 872 | € 725 | |
Interest rate, stated percentage | 3.125% | 3.125% | |||||
Fair values of fixed rate debt obligations | |||||||
Principal Amount | $ 814 | ||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 98.51 | ||||||
Fair Value | $ 802 | ||||||
Senior Notes 6.375%, due 2025 | |||||||
Debt Instrument | |||||||
Total long-term debt | $ 296 | 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 | $ 105.88 | ||||||
Fair Value | $ 318 | ||||||
Senior Notes, 5.375% due 2025 | |||||||
Debt Instrument | |||||||
Total long-term debt | $ 298 | 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 | $ 101.97 | ||||||
Fair Value | $ 306 | ||||||
Finance leases | |||||||
Debt Instrument | |||||||
Total long-term debt | 43 | 45 | 53 | ||||
Other | |||||||
Debt Instrument | |||||||
Total long-term debt | 18 | $ 14 | $ 19 | ||||
Revolving Credit Facility | |||||||
Debt Instrument | |||||||
Total long-term debt | $ 300 | ||||||
Additional default interest rate per annum applied to all obligations owed under the Agreement | 2.00% | ||||||
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 |
Contingencies - Asbestos (Detai
Contingencies - Asbestos (Details) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019USD ($)lawsuit | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 1993USD ($) | |
Asbestos | |||||
Sale of goods containing asbestos from 1948 to 1958 | $ 40,000,000 | ||||
Number of pending plaintiffs and claimants | lawsuit | 1,070 | ||||
Approximate number of claims disposed of to date | lawsuit | 400,600 | ||||
Average indemnity payment per claim | $ 10,000 | ||||
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 current reporting period 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 | ||
Loss contingency, plaintiffs damages | $ 722,000,000 | ||||
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 |
Share Owners' Equity (Details)
Share Owners' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Increase (Decrease) in Share Owners' Equity | |||
Balance | $ 900 | $ 927 | |
Reissuance of common stock | $ 5 | $ 1 | |
Reissuance of common stock (in shares) | 100,000 | 30,000 | |
Treasury shares purchased | $ (38) | $ (45) | |
Treasury shares purchased (in shares) | 2,064,652 | 1,999,759 | |
Stock compensation | $ 4 | $ 5 | |
Stock compensation (in shares) | 500,000 | 500,000 | |
Net earnings | $ 84 | $ 103 | |
Other comprehensive income (loss) | 60 | 128 | |
Other | (5) | ||
Balance | 1,010 | $ 1,119 | |
Remaining repurchase of common stock available | $ 512 | ||
Authorization of common stock | |||
Common stock, shares authorized | 250,000,000 | ||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Shares of common stock issued (including treasury shares) | 188,348,000 | 186,324,000 | 186,576,000 |
Treasury stock, shares | 33,117,000 | 24,617,000 | 30,918,000 |
Common Stock | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | $ 2 | $ 2 | |
Balance | 2 | 2 | |
Capital in Excess of Par Value | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | 3,124 | 3,099 | |
Reissuance of common stock | 2 | ||
Stock compensation | 4 | 5 | |
Balance | 3,130 | 3,104 | |
Treasury Stock | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | (705) | (551) | |
Reissuance of common stock | 3 | 1 | |
Treasury shares purchased | (38) | (45) | |
Other | (5) | ||
Balance | (745) | (595) | |
Retained Earnings (accumulated deficit) | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | 333 | 84 | |
Net earnings | 79 | 98 | |
Balance | 412 | 182 | |
Accumulated Other Comprehensive Loss. | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | (1,968) | (1,826) | |
Other comprehensive income (loss) | 57 | 122 | |
Balance | (1,911) | (1,704) | |
Non-Controlling Interests | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | 114 | 119 | |
Net earnings | 5 | 5 | |
Other comprehensive income (loss) | 3 | 6 | |
Balance | $ 122 | $ 130 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
Other comprehensive income | $ 60 | $ 128 |
Net Effect of Exchange Rate Fluctuations | ||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
Balance at beginning of the period | (889) | (723) |
Change before reclassifications | 46 | 120 |
Other comprehensive income | 46 | 120 |
Balance at end of the period | (843) | (603) |
Change in Certain Derivative Instruments | ||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
Balance at beginning of the period | (18) | (12) |
Change before reclassifications | (2) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 3 | (4) |
Translation effect | 2 | (1) |
Tax effect | 2 | |
Other comprehensive income | 5 | (5) |
Balance at end of the period | (13) | (17) |
Employee Benefit Plans | ||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
Balance at beginning of the period | (1,061) | (1,091) |
Change before reclassifications | (2) | (4) |
Amounts reclassified from accumulated other comprehensive income (loss) | 13 | 17 |
Translation effect | (5) | (6) |
Other comprehensive income | 6 | 7 |
Balance at end of the period | (1,055) | (1,084) |
Accumulated Other Comprehensive Loss. | ||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
Balance at beginning of the period | (1,968) | (1,826) |
Change before reclassifications | 42 | 116 |
Amounts reclassified from accumulated other comprehensive income (loss) | 16 | 13 |
Translation effect | (3) | (7) |
Tax effect | 2 | |
Other comprehensive income | 57 | 122 |
Balance at end of the period | $ (1,911) | $ (1,704) |
Other Expense (Income), net (De
Other Expense (Income), net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other Expense (Income), net | ||
Foreign currency exchange loss | $ 3 | $ 2 |
Intangible amortization expense | 10 | 10 |
Royalty income | (3) | (3) |
Other expense (income), net | (12) | |
Other Expense, net | $ 10 | $ (3) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net earnings attributable to the Company | $ 79 | $ 98 |
Denominator (in thousands): | ||
Denominator for basic earnings per share - weighted average shares outstanding (in shares) | 154,361,000 | 162,919,000 |
Effect of dilutive securities: | ||
Stock options and other (in shares) | 2,274,000 | 2,267,000 |
Denominator for diluted earnings per share - adjusted weighted average shares outstanding (in shares) | 156,635,000 | 165,186,000 |
Basic earnings per share: | ||
Earnings from continuing operations (in dollars per share) | $ 0.51 | $ 0.60 |
Net earnings (in dollars per share) | 0.51 | 0.60 |
Diluted earnings per share: | ||
Earnings from continuing operations (in dollars per share) | 0.51 | 0.59 |
Net earnings (in dollars per share) | $ 0.51 | $ 0.59 |
Weighted average shares of common stock attributable to options not included in diluted earnings per share (in shares) | 1,496,298 | 1,802,122 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Income taxes paid (received) | $ 26 | $ 34 | |
Interest paid in cash | 70 | 69 | |
Amount of receivables sold | 303 | 216 | $ 600 |
U.S. | |||
Income taxes paid (received) | (7) | 3 | |
Non-U.S. | |||
Income taxes paid (received) | $ 33 | $ 31 |
Discontinued Operations (Detail
Discontinued Operations (Details) $ in Millions | Dec. 06, 2018Plant | Jul. 31, 2017USD ($) | Mar. 31, 2018subsidiary | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) |
Discontinued Operations, Disposed of by Sale | OI European Group B.V. (“OIEG”) | ||||||
Subsidiaries | ||||||
Litigation settlement amount | $ 115 | |||||
Loss from discontinued operations | $ 115 | |||||
Disposed Venezuelan subsidiaries | ||||||
Subsidiaries | ||||||
Expropriated plants | Plant | 2 | |||||
Number of subsidiaries seeking an annulment | subsidiary | 2 | |||||
Disposed Venezuelan subsidiaries | Maximum | ||||||
Subsidiaries | ||||||
Loss from discontinued operations | $ 1 | $ 1 |
New Accounting Pronouncement (D
New Accounting Pronouncement (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncement | ||
Operating lease liabilities | $ 199 | $ 214 |
Operating lease right-of-use assets (included in Other assets) | $ 199 | $ 214 |