Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 31, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | OWENS-ILLINOIS GROUP INC | ||
Entity Central Index Key | 812,233 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 100 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED RESULTS OF OPERATI
CONSOLIDATED RESULTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CONSOLIDATED RESULTS OF OPERATIONS | |||
Net sales | $ 6,702 | $ 6,156 | $ 6,784 |
Cost of goods sold | (5,490) | (5,046) | (5,531) |
Gross profit | 1,212 | 1,110 | 1,253 |
Selling and administrative expense | (503) | (476) | (523) |
Research, development and engineering expense | (65) | (64) | (63) |
Interest expense, net | (272) | (251) | (230) |
Equity earnings | 60 | 60 | 64 |
Other expense, net | (76) | (95) | (148) |
Earnings from continuing operations before income taxes | 356 | 284 | 353 |
Provision for income taxes | (119) | (106) | (92) |
Earnings from continuing operations | 237 | 178 | 261 |
Loss from discontinued operations | (7) | (4) | (23) |
Net earnings | 230 | 174 | 238 |
Net earnings attributable to noncontrolling interests | (21) | (23) | (28) |
Net earnings attributable to the Company | 209 | 151 | 210 |
Amounts attributable to the Company: | |||
Earnings from continuing operations | 216 | 155 | 233 |
Loss from discontinued operations | (7) | (4) | (23) |
Net earnings attributable to the Company | $ 209 | $ 151 | $ 210 |
CONSOLIDATED COMPREHENSIVE INCO
CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CONSOLIDATED COMPREHENSIVE INCOME | |||
Net earnings | $ 230 | $ 174 | $ 238 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (224) | (529) | (305) |
Pension and other postretirement benefit adjustments, net of tax | 52 | (4) | (90) |
Change in fair value of derivative instruments, net of tax | 13 | (6) | 1 |
Other comprehensive income (loss) | (159) | (539) | (394) |
Total comprehensive income (loss) | 71 | (365) | (156) |
Comprehensive income (loss) attributable to noncontrolling interests | (17) | (7) | (7) |
Comprehensive income (loss) attributable to the Company | $ 54 | $ (372) | $ (163) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 492 | $ 399 |
Trade receivables, net of allowances of $32 million and $29 million at December 31, 2016 and 2015, respectively | 580 | 562 |
Inventories | 983 | 1,007 |
Prepaid expenses and other current assets | 199 | 366 |
Total current assets | 2,254 | 2,334 |
Other assets: | ||
Equity investments | 433 | 409 |
Pension assets | 40 | 32 |
Other assets | 602 | 599 |
Intangibles | 464 | 597 |
Goodwill | 2,462 | 2,489 |
Total other assets | 4,001 | 4,126 |
Property, plant and equipment: | ||
Land, at cost | 241 | 252 |
Buildings and equipment, at cost: | ||
Buildings and building equipment | 1,090 | 1,123 |
Factory machinery and equipment | 4,496 | 4,526 |
Transportation, office and miscellaneous equipment | 85 | 88 |
Construction in progress | 238 | 238 |
Property, plant and equipment, at cost | 6,150 | 6,227 |
Less accumulated depreciation | 3,270 | 3,266 |
Net property, plant and equipment | 2,880 | 2,961 |
Total assets | 9,135 | 9,421 |
Current liabilities: | ||
Accounts payable | 1,135 | 1,212 |
Salaries and wages | 174 | 145 |
U.S. and foreign income taxes | 58 | 36 |
Other accrued liabilities | 383 | 371 |
Short-term loans | 162 | 160 |
Long-term debt due within one year | 33 | 68 |
Total current liabilities | 1,945 | 1,992 |
Long-term debt | 5,133 | 5,345 |
Deferred taxes | 100 | 124 |
Pension benefits | 552 | 504 |
Nonpension postretirement benefits | 162 | 155 |
Other liabilities | 188 | 205 |
Commitments and contingencies | ||
Share owner's equity of the Company: | ||
Common stock, par value $.01 per share, 1,000 shares authorized 100 shares issued | ||
Other contributed capital | 635 | 731 |
Retained earnings | 2,442 | 2,233 |
Accumulated other comprehensive loss | (2,131) | (1,976) |
Total share owner's equity of the Company | 946 | 988 |
Noncontrolling interests | 109 | 108 |
Total share owners' equity | 1,055 | 1,096 |
Total liabilities and share owners' equity | $ 9,135 | $ 9,421 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
Trade receivables allowance | $ 32 | $ 29 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 100 | 100 |
CONSOLIDATED SHARE OWNERS' EQUI
CONSOLIDATED SHARE OWNERS' EQUITY - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Contributed Capital | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | $ 731 | $ 964 | $ 1,112 |
Net distribution to parent | (96) | (215) | (148) |
Acquisitions of noncontrolling interests | (18) | ||
Balance | 635 | 731 | 964 |
Retained Earnings | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | 2,233 | 2,082 | 1,872 |
Net earnings | 209 | 151 | 210 |
Balance | 2,442 | 2,233 | 2,082 |
Accumulated Other Comprehensive Loss. | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | (1,976) | (1,453) | (1,080) |
Other comprehensive income (loss) | (155) | (523) | (373) |
Balance | (2,131) | (1,976) | (1,453) |
Noncontrolling Interests | |||
Increase (Decrease) in Share Owners' Equity | |||
Balance | 108 | 117 | 147 |
Net earnings | 21 | 23 | 28 |
Other comprehensive income (loss) | (4) | (16) | (21) |
Distributions to noncontrolling interests | (16) | (22) | (37) |
Acquisitions of noncontrolling interests | 6 | ||
Balance | 109 | 108 | 117 |
Balance | 1,096 | 1,710 | 2,051 |
Net distribution to parent | (96) | (215) | (148) |
Net earnings | 230 | 174 | 238 |
Other comprehensive income (loss) | (159) | (539) | (394) |
Distributions to noncontrolling interests | (16) | (22) | (37) |
Acquisitions of noncontrolling interests | (12) | ||
Balance | $ 1,055 | $ 1,096 | $ 1,710 |
CONSOLIDATED CASH FLOWS
CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net earnings | $ 230 | $ 174 | $ 238 |
Loss from discontinued operations | 7 | 4 | 23 |
Non-cash charges (credits): | |||
Depreciation | 375 | 323 | 335 |
Amortization of intangibles and other deferred items | 103 | 86 | 83 |
Amortization of finance fees and debt discount | 13 | 15 | 30 |
Deferred tax provision (benefit) | (4) | 12 | (18) |
Pension expense | 31 | 31 | 43 |
Restructuring, asset impairment and related charges | 98 | 63 | 76 |
Pension settlement charge | 98 | 65 | |
Impairment of equity investment | 25 | ||
Gain on China land sale | (71) | ||
Non-income tax charge | 69 | ||
Acquisition-related fair value inventory adjustments | 22 | ||
Acquisition-related fair value intangible adjustments | 10 | ||
Pension contributions | (38) | (17) | (28) |
Cash paid for restructuring activities | (24) | (38) | (58) |
Change in components of working capital | 90 | 88 | 117 |
Other | (50) | (23) | (129) |
Cash provided by continuing operating activities | 883 | 750 | 846 |
Cash utilized in discontinued operating activities | (7) | (4) | (23) |
Total cash provided by operating activities | 876 | 746 | 823 |
Investing activities: | |||
Additions to property, plant and equipment | (454) | (402) | (369) |
Acquisitions, net of cash acquired | (56) | (2,351) | (114) |
Net cash proceeds related to sale of assets and other | 85 | 1 | 19 |
Net foreign exchange derivative activity | 8 | 4 | |
Net activity for non-controlling partner loans | 9 | ||
Cash utilized in investing activities | (417) | (2,748) | (455) |
Financing activities: | |||
Additions to long-term debt | 1,235 | 4,538 | 1,247 |
Repayments of long-term debt | (1,453) | (2,321) | (1,101) |
Increase (decrease) in short-term loans | 10 | 51 | (139) |
Payment of finance fees | (9) | (90) | (11) |
Distributions paid to noncontrolling interests | (16) | (22) | (37) |
Distribution to parent | (120) | (237) | (177) |
Cash provided by (utilized in) financing activities | (353) | 1,919 | (218) |
Effect of exchange rate fluctuations on cash | (13) | (30) | (21) |
Increase (decrease) in cash | 93 | (113) | 129 |
Cash and cash equivalents at beginning of period | 399 | 512 | 383 |
Cash and cash equivalents at end of period | $ 492 | $ 399 | $ 512 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies | |
Significant Accounting Policies | 1. Significant Accounting Polic Basis of Consolidated Statements The consolidated financial statements of Owens-Illinois Group, Inc. (the “Company”) include the accounts of its subsidiaries. Newly acquired subsidiaries have been included in the consolidated financial statements from dates of acquisition. The Company uses the equity method of accounting for investments in which it has a significant ownership interest, generally 20% to 50%. Other investments are accounted for at cost. The Company monitors other than temporary declines in fair value and records reductions in carrying values when appropriate. Relationship with Owens-Illinois, Inc. The Company is a 100% - owned subsidiary of Owens-Illinois, Inc. (“OI Inc.”). Although OI Inc. does not conduct any operations, it has substantial obligations related to outstanding indebtedness and asbestos‑related payments. OI Inc. relies primarily on distributions from its direct and indirect subsidiaries to meet these obligations. For federal and certain state income tax purposes, the taxable income of the Company is included in the consolidated tax returns of OI Inc. and income taxes are allocated to the Company on a basis consistent with separate returns. Nature of Operations The Company is a leading manufacturer of glass container products. The Company’s principal product lines are glass containers for the food and beverage industries. The Company has glass container operations located in 23 countries. The principal markets and operations for the Company’s products are in Europe, North America, Latin America and Asia Pacific. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management of the Company to make estimates and assumptions that affect certain amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates, at which time the Company would revise its estimates accordingly. Foreign Currency Translation The assets and liabilities of non-U.S. subsidiaries are translated into U.S. dollars at year-end exchange rates. Any related translation adjustments are recorded in accumulated other comprehensive income in share owner’s equity. Revenue Recognition The Company recognizes sales, net of estimated discounts and allowances, when the title to the products and risk of loss are transferred to customers. Provisions for rebates to customers are provided in the same period that the related sales are recorded. Shipping and Handling Costs Shipping and handling costs are included with cost of goods sold in the Consolidated Results of Operations. Stock-Based Compensation The Company participates in OI Inc.’s stock-based compensation plans consisting of stock option grants and restricted share awards. Costs resulting from all share-based compensation plans are required to be recognized in the financial statements. A public entity is required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the required service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the required service. Cash The Company defines “cash” as cash and time deposits with maturities of three months or less when purchased. Outstanding checks in excess of funds on deposit are included in accounts payable. Accounts Receivable Receivables are stated at amounts estimated by management to be the net realizable value. The Company charges off accounts receivable when it becomes apparent based upon age or customer circumstances that amounts will not be collected. Allowance for Doubtful Accounts The allowance for doubtful accounts is established through charges to the provision for bad debts. The Company evaluates the adequacy of the allowance for doubtful accounts on a periodic basis. The evaluation includes historical trends in collections and write-offs, management’s judgment of the probability of collecting accounts and management’s evaluation of business risk. Inventory Valuation Inventories are valued at the lower of average costs or market. Goodwill Goodwill represents the excess of cost over fair value of net assets of businesses acquired. Goodwill is evaluated annually, as of October 1, for impairment or more frequently if an impairment indicator exists. Intangible Assets and Other Long-Lived Assets Intangible assets are amortized over the expected useful life of the asset. Amortization expense directly attributed to the manufacturing of the Company’s products is included in cost of goods sold. Amortization expense related to non-manufacturing activities is included in selling and administrative and other. The Company evaluates the recoverability of intangible assets and other long-lived assets based on undiscounted projected cash flows, excluding interest and taxes, when factors indicate that impairment may exist. If impairment exists, the asset is written down to fair value. Property, Plant and Equipment Property, plant and equipment (“PP&E”) is carried at cost and includes expenditures for new facilities and equipment and those costs which substantially increase the useful lives or capacity of existing PP&E. In general, depreciation is computed using the straight-line method and recorded over the estimated useful life of the asset. Factory machinery and equipment is depreciated over periods ranging from 5 to 25 years with the majority of such assets (principally glass-melting furnaces and forming machines) depreciated over 7 to 15 years. Buildings and building equipment are depreciated over periods ranging from 10 to 50 years. Depreciation expense directly attributed to the manufacturing of the Company’s products is included in cost of goods sold. Depreciation expense related to non-manufacturing activities is included in selling and administrative. Depreciation expense includes the amortization of assets recorded under capital leases. Maintenance and repairs are expensed as incurred. Costs assigned to PP&E of acquired businesses are based on estimated fair values at the date of acquisition. The Company evaluates the recoverability of PP&E based on undiscounted projected cash flows, excluding interest and taxes, when factors indicate that impairment may exist. If impairment exists, the asset is written down to fair value. Derivative Instruments The Company uses forward exchange contracts, options and commodity forward contracts to manage risks generally associated with foreign exchange rate and commodity market volatility. Derivative financial instruments are included on the balance sheet at fair value. When appropriate, derivative instruments are designated as and are effective as hedges, in accordance with accounting principles generally accepted in the United States. If the underlying hedged transaction ceases to exist, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. The Company does not enter into derivative financial instruments for trading purposes and is not a party to leveraged derivatives. Cash flows from forward exchange contracts not designated as hedges are classified as an investing activity. Cash flows of commodity forward contracts are classified as operating activities. Fair Value Measurements Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Generally accepted accounting principles defines a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs for which there is little or no market data, which requires the Company to develop assumptions. The carrying amounts reported for cash and short-term loans approximate fair value. In addition, carrying amounts approximate fair value for certain long-term debt obligations subject to frequently redetermined interest rates. Fair values for the Company’s significant fixed rate debt obligations are generally based on published market quotations. The Company’s derivative assets and liabilities consist of natural gas forwards and foreign exchange option and forward contracts. The Company uses an income approach to valuing these contracts. Natural gas forward rates and foreign exchange rates are the significant inputs into the valuation models. 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. The Company also evaluates counterparty risk in determining fair values. Reclassifications Certain reclassifications of prior years’ data have been made to conform to the current year presentation. New Accounting Standards Revenue from Contracts with Customers - In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers”, which delayed by one year the effective date of the new revenue recognition standard, which will be effective for the Company on January 1, 2018. The Company has started an implementation process, including a review of customer contracts, to evaluate the effect this standard will have on its consolidated financial statements and related disclosures. At this time, the Company does not expect that the implementation of this standard in 2018 will have a significant impact on the timing in which it recognizes revenue. While the Company continues to assess the potential impacts of the new standard, the Company does not currently expect the adoption of the new standard to have a material impact on consolidated net income or the consolidated balance sheet. The Company plans to select the modified retrospective transition method upon adoption effective January 1, 2018. Leases - In February 2016, the FASB issued ASU No. 2016-02, “Leases”. Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee's obligation to make lease payments arising from a lease, and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for the Company on January 1, 2019. ASU No. 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of ASU No. 2016-02 will have on the Company’s consolidated financial statements, and anticipates the new guidance will significantly impact its consolidated financial statements as the Company has a significant number of leases. As further described in Note 16, Operating Leases, as of December 31, 2016, the Company had minimum lease commitments under non-cancellable operating leases totaling $205 million. 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. Stock Compensation - In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which requires all excess tax benefits or deficiencies to be recognized as income tax expense or benefit in the income statement. In addition, excess tax benefits should be classified along with other income tax cash flows as an operating activity in the statement of cash flows. Application of the standard is required for the Company on January 1, 2017. The Company does not expect a significant impact in its Consolidated Financial Statements. Pension Asset Value - In May 2015, the FASB issued ASU No. 2015-07, “Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” Under the new guidance, investments measured at net asset value (“NAV”), as a practical expedient for fair value, are excluded from the fair value hierarchy. Removing investments measured using the practical expedient from the fair value hierarchy is intended to eliminate the diversity in practice that currently exists with respect to the categorization of these investments. The new guidance is effective for the Company on January 1, 2016. The guidance impacted the presentation of certain pension related assets that use NAV as a practical expedient. See Note 9 for additional information. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Segment Information | 2. Segment Information The Company has four reportable segments based on its geographic locations: Europe, North America, Latin America and Asia Pacific. In connection with the Company’s acquisition (the “Vitro Acquisition”) of the food and beverage glass container business of Vitro S.A.B. de C.V. and its subsidiaries as conducted in the United States, Mexico and Bolivia (the “Vitro Business”) on September 1, 2015 (see Note 18), the Company has renamed the former South America segment to the Latin America segment. These four 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 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 selected cash flow information, to evaluate performance and to allocate resources. Segment operating profit for reportable segments includes an allocation of some corporate expenses based on both a percentage of sales and direct billings based on the costs of specific services provided. Financial information regarding the Company’s reportable segments is as follows: 2016 2015 2014 Net sales: Europe $ $ $ North America Latin America Asia Pacific Reportable segment totals Other Net sales $ $ $ 2016 2015 2014 Segment operating profit: Europe $ $ $ North America Latin America Asia Pacific Reportable segment totals Items excluded from segment operating profit: Retained corporate costs and other Restructuring, asset impairment and other charges Pension settlement charges Gain on China land sale Strategic transaction costs Acquisition-related fair value inventory adjustments Acquisition-related fair value intangible adjustments Non-income tax charge Interest expense, net Earnings from continuing operations before income taxes $ $ $ Reportable Retained North Latin Asia Segment Corp Costs Consolidated Europe America America Pacific Totals and Other Totals Total assets: 2016 $ $ $ $ $ $ $ 2015 2014 Equity investments: 2016 $ $ $ — $ $ $ $ 2015 2014 Equity earnings: 2016 $ $ $ — $ $ $ $ 2015 2014 Capital expenditures: 2016 $ $ $ $ $ $ $ 2015 2014 Depreciation and amortization expense: 2016 $ $ $ $ $ $ $ 2015 2014 The Company’s net property, plant and equipment by geographic segment are as follows: U.S. Non-U.S. Total 2016 $ $ $ 2015 2014 The Company’s net sales by geographic segment are as follows: U.S. Non-U.S. Total 2016 $ $ $ 2015 2014 Intercompany sales in Latin America totaled $195 million, $101 million and $0 or the years ended December 31, 2016, 2015, and 2014, respectively. Operations outside the U.S. that accounted for more than 10% of consolidated net sales from continuing operations were in France (2015 — 10%, 2014 — 11%). |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Inventories | 3. Inventories Major classes of inventory are as follows: 2016 2015 Finished goods $ $ Raw materials Operating supplies $ $ |
Equity Investments
Equity Investments | 12 Months Ended |
Dec. 31, 2016 | |
Equity Investments | |
Equity Investments | 4. Equity Investments At December 31, 2016 the Company’s ownership percentage in affiliates include: O-I Ownership Affiliates Percentage Business Type BJC O-I Glass Pte. Ltd. % Glass container manufacturer CO Vidrieria SARL ("COV") % Glass container manufacturer Rocky Mountain Bottle Company % Glass container manufacturer Tata Chemical (Soda Ash) Partners % Soda ash supplier Vetrerie Meridionali SpA ("VeMe") % Glass container manufacturer Vetri Speciali SpA % Specialty glass manufacturer Summarized information pertaining to the Company’s equity affiliates follows: 2016 2015 2014 Equity in earnings: Non-U.S. $ $ $ U.S. Total $ $ $ Dividends received $ $ $ Summarized combined financial information for equity affiliates is as follows (unaudited): 2016 2015 At end of year: Current assets $ $ Non-current assets Total assets Current liabilities Other liabilities and deferred items Total liabilities and deferred items Net assets $ $ 2016 2015 2014 For the year: Net sales $ $ $ Gross profit $ $ $ Net earnings $ $ $ Based on an evaluation of each of the Company’s equity investments for the three years ending December 31, 2016, no investments exceeded the significant subsidiary thresholds per Rule 3-09 of Regulation S-X. As such, separate financial statements for the Company’s equity investments are not required to be filed. The Company made purchases of approximately $176 million and $161 million from equity affiliates in 2016 and 2015, respectively, and owed approximately $76 million and $66 million to equity affiliates as of December 31, 2016 and 2015, respectively. There is a difference of approximately $12 million as of December 31, 2016, between the amount at which certain investments are carried and the amount of underlying equity in net assets. The portion of the difference related to inventory or amortizable assets is amortized as a reduction of the equity earnings. The remaining difference is considered goodwill. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets Goodwill The changes in the carrying amount of goodwill for the years ended December 31, 2016, 2015 and 2014 are as follows: North Latin Europe America America Other Total Balance as of January 1, 2014 $ $ $ $ $ Translation effects Balance as of December 31, 2014 Acquisition related adjustments Translation effects Balance as of December 31, 2015 Acquisition related adjustments Translation effects Balance as of December 31, 2016 $ $ $ $ $ The acquisition related adjustments in 2016 and 2015 primarily relate to the Vitro Acquisition (see Note 18). Goodwill for the Asia Pacific segment is $0 and net of accumulated impairment losses of $1,135 million as of December 31, 2016, 2015 and 2014. Goodwill is tested for impairment annually as of October 1 (or more frequently if impairment indicators arise) using a two-step process. Step 1 compares the business enterprise value (“BEV”) of each reporting unit with its carrying value. The BEV is computed based on estimated future cash flows, discounted at the weighted average cost of capital of a hypothetical third-party buyer. If the BEV is less than the carrying value for any reporting unit, then Step 2 must be performed. Step 2 compares the implied fair value of goodwill with the carrying amount of goodwill. Any excess of the carrying value of the goodwill over the implied fair value will be recorded as an impairment loss. The calculations of the BEV in Step 1 and the implied fair value of goodwill in Step 2 are based on significant unobservable inputs, such as price trends, customer demand, material costs, discount rates and asset replacement costs, and are classified as Level 3 in the fair value hierarchy. During the fourth quarter of 2016, the Company completed its annual impairment testing and determined that no impairment existed. Intangible assets On September 1, 2015, the Company acquired customer list intangibles as part of the Vitro Acquisition (see Note 18). Customer list intangible assets are amortized using the accelerated amortization method over their 20 year lives. Net intangible asset values were $464 million and $597 million for the years ended December 31, 2016 and 2015, respectively. Amortization expense for intangible assets was $39 million, $21 million and $1 million for the years ended December 31, 2016, 2015 and 2014, respectively. Estimated amortization related to intangible assets through 2021 is as follows: 2017, $44 million; 2018, $44 million; 2019, $42 million; 2020, $41 million; and 2021, $39 million. No impairment existed on these assets at December 31, 2016. The Company has determined that the fair value measurements related to the customer list intangibles are based on significant unobservable inputs and are classified as Level 3 in the fair value hierarchy. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 12 Months Ended |
Dec. 31, 2016 | |
Prepaid Expenses and Other Assets | |
Prepaid Expenses and Other Current Assets | 6. Prepaid Expenses and Other Assets Prepaid expenses and other current assets at December 31, 2016 and 2015 are as follows: 2016 2015 Prepaid expenses $ $ Value added taxes Other $ $ Other assets (noncurrent) consist of the following at December 31, 2016 and 2015: 2016 2015 Deferred tax assets $ $ Deferred returnable packaging costs Repair part inventories Capitalized software Value added taxes Deferred finance fees Other $ $ Capitalized software includes costs related to the acquisition and development of internal-use software. These costs are amortized over the estimated useful life of the software. Amortization expense for capitalized software was $13 million, $19 million and $17 million for 2016, 2015 and 2014, respectively. Estimated amortization related to capitalized software through 2021 is as follows: 2017, $14 million; 2018, $14 million; 2019, $13 million, 2020, $12 million, and 2021, $11 million. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments | |
Derivative Instruments | 7. Derivative Instruments The Company has certain derivative assets and liabilities which consist of natural gas forwards and foreign exchange option and forward contracts. The Company uses an income approach to value these contracts. Natural gas forward rates and foreign exchange rates are the significant inputs into the valuation models. 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. The Company also evaluates counterparty risk in determining fair values. Commodity Forward Contracts Designated as Cash Flow Hedges In North America, 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. The Company continually evaluates the natural gas market and related price risk and periodically enters into commodity forward contracts in order to hedge a portion of its usage requirements. The majority of the sales volume in North America is tied to customer contracts that contain provisions that pass the price of natural gas to the customer. In certain of these contracts, the customer has the option of fixing the natural gas price component for a specified period of time. At December 31, 2016 and 2015, the Company had entered into commodity forward contracts covering approximately 12,300,000 MM BTUs and 7,300,000 MM BTUs, respectively, primarily related to customer requests to lock the price of natural gas. The Company accounts for the above forward contracts as cash flow hedges at December 31, 2016 and recognizes them on the balance sheet at fair value. The effective portion of changes in the fair value of a derivative that is designated as, and meets the required criteria for, a cash flow hedge is recorded in the Accumulated Other Comprehensive Income component of share owner’s equity (“OCI”) and reclassified into earnings in the same period or periods during which the underlying hedged item affects earnings. An unrecognized gain of $6 million at December 31, 2016 and an unrecognized loss of $4 million at December 31, 2015 related to the commodity forward contracts were included in Accumulated OCI, and will be reclassified into earnings over the next twelve to twenty-four months. Any material portion of the change in the fair value of a derivative designated as a cash flow hedge that is deemed to be ineffective is recognized in current earnings. The ineffectiveness related to these natural gas hedges for the year ended December 31, 2016 and 2015 was not material. The effect of the commodity forward contracts on the results of operations for the years ended December 31, 2016, 2015 and 2014 is as follows: Amount of gain (loss) Reclassified from Amount of gain (loss) Recognized in OCI on Accumulated OCI into Income Commodity Forward Contracts (reported in cost of goods sold) (Effective Portion) (Effective Portion) 2016 2015 2014 2016 2015 2014 $ $ $ $ — $ (1) $ Foreign Exchange Derivative Contracts and not Designated as Hedging Instruments The Company may enter into 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 may also use forward 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. The Company records these short-term forward exchange agreements on the balance sheet at fair value and changes in the fair value are recognized in current earnings. At December 31, 2016 and 2015, the Company had outstanding forward exchange and option agreements denominated in various currencies covering the equivalent of approximately $490 million and $790 million, respectively, related primarily to intercompany transactions and loans. The effect of the foreign exchange derivative contracts on the results of operations for the years ended December 31, 2016, 2015 and 2014 is as follows: Amount of Gain (Loss) Location of Gain (Loss) Recognized in Income on Recognized in Income on Foreign Exchange Contracts Foreign Exchange Contracts 2016 2015 2014 Other expense, net $ $ $ Balance Sheet Classification The Company records the fair values of derivative financial instruments on the balance sheet as follows: (a) receivables if the instrument has a positive fair value and maturity within one year, (b) deposits, receivables, and other assets if the instrument has a positive fair value and maturity after one year, and (c) other accrued liabilities or other liabilities (current) if the instrument has a negative fair value and maturity within one year. The following table shows the amount and classification (as noted above) of the Company’s derivatives as of December 31, 2016 and 2015: Fair Value Balance Sheet Location 2016 2015 Asset Derivatives: Derivatives designated as hedging instruments: Commodity futures contracts b $ $ — Derivatives not designated as hedging instruments: Foreign exchange derivative contracts a $ $ Total asset derivatives $ $ Liability Derivatives: Derivatives designated as hedging instruments: Commodity futures contracts c $ — $ Derivatives not designated as hedging instruments: Foreign exchange derivative contracts c Total liability derivatives $ $ |
Restructuring Accruals, Asset I
Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities | |
Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities | 8. Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities The Company continually reviews its manufacturing footprint and operating cost structure and may decide to close operations or reduce headcount to gain efficiencies, integrate acquired operations, reduce future expenses and other market factors. The Company incurs costs associated with these actions including employee severance and benefits, other exit costs such as those related to contract terminations, and asset impairment charges. The Company also may incur other costs related to closed facilities including environmental remediation, clean up, dismantling and preparation for sale or other disposition. The Company accounts for restructuring and other costs under applicable provisions of generally accepted accounting principles. Charges for employee severance and related benefits are generally accrued based on contractual arrangements with employees or their representatives. Other exit costs are accrued based on the estimated cost to settle related contractual arrangements. Estimated environmental remediation costs are accrued when specific claims have been received or are probable of being received. The Company’s decisions to curtail selected production capacity have resulted in write downs of certain long-lived assets to the extent their carrying amounts exceeded fair value or fair value less cost to sell. The Company classified the significant assumptions used to determine the fair value of the impaired assets as Level 3 in the fair value hierarchy as set forth in the general accounting principles for fair value measurements. When a decision is made to take these actions, the Company manages and accounts for them programmatically apart from the on-going operations of the business. Information related to major programs (as in the case of the European Asset Optimization and Asia Pacific Restructuring programs below) are presented separately. Minor initiatives are presented on a combined basis as Other Restructuring Actions. These restructuring initiatives taken by the Company are not related to the European Asset Optimization program or the Asia Pacific restructuring plan. When charges related to major programs are completed, remaining accrual balances are classified with Other Restructuring Actions. European Asset Optimization In 2011, the Company initiated the European Asset Optimization program to increase the efficiency and capability of its European operations and to better align its European manufacturing footprint with market and customer needs. This program involved making additional investments in certain facilities and addressing assets with higher cost structures. As part of this program, the Company recorded charges of $0, $0 and $1 million for the years ended 2016, 2015 and 2014, respectively for employee costs, write-down of assets, and environmental remediation related to decisions to close furnaces and manufacturing facilities in Europe. The Company recorded total cumulative charges of $127 million and does not expect to execute any further actions under this program. Asia Pacific Restructuring Since 2011, the Company has implemented a restructuring plan in its Asia Pacific segment, primarily related to aligning its supply base with lower demand in the region. As part of this plan, the Company recorded charges of $4 million, $5 million and $73 million for the years ended 2016, 2015 and 2014, respectively, for employee costs, write-down of assets, and pension charges related to furnace closures and additional restructuring activities. The Company recorded total cumulative charges of $224 million and does not expect to execute any further actions under this program. Other Restructuring Actions In 2016, the Company recorded charges of $94 million for other restructuring actions. These charges primarily represented employee costs, write-down of assets, and other exit costs of $64 million for plant closures in Latin America, Europe and North America, and $30 million related to other restructuring actions. The Company took certain other restructuring actions and recorded charges in 2015 of $58 million. These charges primarily related to employee costs, write-down of assets and other exit costs totaling $14 million for a plant closure and furnace closure in Latin America, $38 million for a plant closure in North America and $6 million for other restructuring actions. In 2014, the Company took certain other restructuring actions and recorded charges of $2 million for employee costs related to global headcount reduction initiatives. The following table presents information related to restructuring, asset impairment and other costs related to closed facilities from January 1, 2015 through December 31, 2015: European Other Asset Asia Pacific Restructuring Total Optimization Restructuring Actions Restructuring Balance at January 1, 2015 $ $ $ $ Charges Write-down of assets to net realizable value Net cash paid, principally severance and related benefits Other, including foreign exchange translation Balance at December 31, 2015 $ $ $ $ The following table presents information related to restructuring, asset impairment and other costs related to closed facilities from January 1, 2016 through December 31, 2016: Other Asia Pacific Restructuring Total Restructuring Actions Restructuring Balance at January 1, 2016 $ $ $ Charges Write-down of assets to net realizable value Net cash paid, principally severance and related benefits Other, including foreign exchange translation Balance at December 31, 2016 $ $ $ The restructuring accrual balance represents the Company’s estimates of the remaining future cash amounts to be paid related to the actions noted above. As of December 31, 2016, the Company’s estimates include approximately $67 million for employee benefits costs, $16 million for environmental remediation costs, and $2 million for other exit costs. |
Pension Benefit Plans and Other
Pension Benefit Plans and Other Postretirement Benefits | 12 Months Ended |
Dec. 31, 2016 | |
Pension Benefit Plans and Other Postretirement Benefits | |
Pension Benefit Plans and Other Postretirement Benefits | 9. Pension Benefit Plans and Other Postretirement Benefits Pension Benefit Plans The Company has defined benefit pension plans covering a substantial number of employees located in the United States and several other non-U.S. jurisdictions. Benefits generally are based on compensation for salaried employees and on length of service for hourly employees. The Company’s policy is to fund pension plans such that sufficient assets will be available to meet future benefit requirements. The Company’s defined benefit pension plans use a December 31 measurement date. The following tables relate to the Company’s principal defined benefit pension plans. The changes in the pension benefit obligations for the year are as follows: U.S. Non-U.S. 2016 2015 2016 2015 Obligations at beginning of year $ $ $ $ Change in benefit obligations: Service cost Interest cost Actuarial (gain) loss, including the effect of change in discount rates Curtailment, settlement, and plan amendment Acquisitions Participant contributions Benefit payments Other Foreign currency translation Net change in benefit obligations Obligations at end of year $ $ $ $ The changes in the fair value of the pension plans’ assets for the year are as follows: U.S. Non-U.S. 2016 2015 2016 2015 Fair value at beginning of year $ $ $ $ Change in fair value: Actual gain (loss) on plan assets Benefit payments Employer contributions Participant contributions Settlements Acquisitions Foreign currency translation Other Net change in fair value of assets Fair value at end of year $ $ $ $ The Company recognizes the funded status of each pension benefit plan on the balance sheet. The funded status of each plan is measured as the difference between the fair value of plan assets and actuarially calculated benefit obligations as of the balance sheet date. Actuarial gains and losses are accumulated in Other Comprehensive Income and the portion of each plan that exceeds 10% of the greater of that plan’s assets or projected benefit obligation is amortized to income on a straight-line basis over the average remaining service period of employees still accruing benefits or the expected life of participants not accruing benefits if all, or almost all, of the plan’s participants are no longer accruing benefits. The funded status of the pension plans at year end is as follows: U.S. Non-U.S. 2016 2015 2016 2015 Plan assets at fair value $ $ $ $ Projected benefit obligations Plan assets less than projected benefit obligations Items not yet recognized in pension expense: Actuarial loss Prior service cost (credit) Net amount recognized $ $ $ $ The net amount recognized is included in the Consolidated Balance Sheets at December 31, 2016 and 2015 as follows: U.S. Non-U.S. 2016 2015 2016 2015 Pension assets $ — $ — $ $ Current pension liability, included with other accrued liabilities Pension benefits Accumulated other comprehensive loss Net amount recognized $ $ $ $ The following changes in plan assets and benefit obligations were recognized in accumulated other comprehensive income at December 31, 2016 and 2015 as follows (amounts are pretax): U.S. Non-U.S. 2016 2015 2016 2015 Current year actuarial (gain) loss $ $ $ $ Amortization of actuarial loss Settlement — Translation $ $ $ $ The accumulated benefit obligation for all defined benefit pension plans was $3,126 million and $3,306 million at December 31, 2016 and 2015, respectively. The components of the net pension expense for the year are as follows: U.S. Non-U.S. 2016 2015 2014 2016 2015 2014 Service cost $ $ $ $ $ $ Interest cost Expected asset return Amortization: Actuarial loss Prior service credit Net amortization Net expense $ $ $ $ $ $ Effective January 1, 2016 the Company amended its salary pension plan in North America to freeze future pension benefits. This action required an obligation remeasurement for the curtailment of benefits, which resulted in a reduction of the Company’s pension expense. In 2016, the Company settled a portion of the U.S. Hourly Pension Plan obligation, which resulted in a settlement charge of $98 million. In 2014, the Company settled a portion of the U.S. Salary Pension Plan pension obligation, which resulted in a settlement charge of $30 million. On October 1, 2014, the Company settled the liability associated with its pension plan in the Netherlands, resulting in a settlement charge of approximately $35 million. Non-U.S. pension expense excludes $3 million of pension settlement costs that were recorded in restructuring expense in 2014. The table above excludes these charges. Amounts that are expected to be amortized from accumulated other comprehensive income into net pension expense during 2017: U.S. Non-U.S. Amortization: Actuarial loss $ $ Prior service cost Net amortization $ $ The following information is for plans with projected and accumulated benefit obligations in excess of the fair value of plan assets at year end: Projected Benefit Obligation Exceeds Accumulated Benefit Obligation Exceeds the Fair Value of Plan Assets the Fair Value of Plan Assets U.S. Non-U.S. U.S. Non-U.S. 2016 2015 2016 2015 2016 2015 2016 2015 Projected benefit obligations $ $ $ $ $ $ $ $ Accumulated benefit obligation Fair value of plan assets The weighted average assumptions used to determine benefit obligations are as follows: U.S. Non-U.S. 2016 2015 2016 2015 Discount rate % % % % Rate of compensation increase N/A % % % The weighted average assumptions used to determine net periodic pension costs are as follows: U.S. Non-U.S. 2016 2015 2014 2016 2015 2014 Discount rate 4.43 % % % 3.68 % % % Rate of compensation increase 2.97 % % % 2.84 % % % Expected long-term rate of return on assets 7.50 % % % 7.15 % % % Future benefits are assumed to increase in a manner consistent with past experience of the plans, which, to the extent benefits are based on compensation, includes assumed salary increases as presented above. For 2016, the Company’s weighted average expected long-term rate of return on assets was 7.50% for the U.S. plans and 7.15% for the non-U.S. plans. In developing this assumption, the Company considered its historical 10-year average return (through December 31, 2016) and evaluated input from its third party pension plan asset consultants, including their review of asset class return expectations. It is the Company’s policy to invest pension plan assets in a diversified portfolio consisting of an array of asset classes within established target asset allocation ranges. The investment risk of the assets is limited by appropriate diversification both within and between asset classes. The assets for the U.S. plans are maintained in a group trust. The U.S. plans hold no individual assets other than the investment in the group trust. The assets of the group trust and the Company’s non-U.S. plans are primarily invested in a broad mix of domestic and international equities, domestic and international bonds, and real estate, subject to the target asset allocation ranges. The assets are managed with a view to ensuring that sufficient liquidity will be available to meet expected cash flow requirements. The investment valuation policy of the Company is to value investments at fair value. All investments are valued at their respective net asset values. Equity securities for which market quotations are readily available are valued at the last reported sales price on their principal exchange on valuation date or official close for certain markets. Fixed income investments are valued by an independent pricing service. Investments in registered investment companies or collective pooled funds are valued at their respective net asset values. Short-term investments are stated at amortized cost, which approximates fair value. The fair value of real estate is determined by periodic appraisals. In accordance with the Company’s adoption of ASU No. 2015-07 in 2016, certain investments measured at net asset value (“NAV”), as a practical expedient for fair value, have been excluded from the fair value hierarchy. The fair value measurements tables presented below have been amended to conform to the current year presentation under ASU No. 2015-07. See Note 1 for more information. The Company’s U.S. pension plan assets held in the group trust are measured at net asset value in the fair value hierarchy. The total U.S. plan assets amounted to $1,654 million and $1,909 million as of December 31, 2016 and 2015, respectively. In 2016, the U.S. plan assets consisted of approximately 62% equity securities, 31% debt securities, and 7% real estate and other. In 2016, the non-U.S. plan assets consisted of approximately 41% equity securities, 42% debt securities, and 17% real estate and other. The following table sets forth by level, within the fair value hierarchy, the Company’s non-U.S. pension plan assets at fair value as of December 31, 2016 and 2015: 2016 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ $ — $ — $ $ $ — $ — $ Equity securities — — Debt securities Real estate Other Total $ $ $ $ $ $ Investments measured at net asset value $ $ Total non-U.S. assets at fair value $ $ The following is a reconciliation of the Company’s pension plan assets recorded at fair value using significant unobservable inputs (Level 3): 2016 2015 Beginning balance $ $ Net increase (decrease) Ending balance $ $ The net increase (decrease) in the fair value of the Company’s Level 3 pension plan assets is primarily due to purchases and sales of unlisted real estate funds. The change in the fair value of Level 3 pension plan assets due to actual return on those assets was immaterial in 2016. In order to maintain minimum funding requirements, the Company is required to make contributions to its defined benefit pension plans of $32 million in 2017. The following estimated future benefit payments, which reflect expected future service, as appropriate, are expected to be paid in the years indicated: Year(s) U.S. Non-U.S. 2017 $ $ 2018 2019 2020 2021 2022 - 2026 The Company also sponsors several defined contribution plans for all salaried and hourly U.S. employees, and employees in Canada, the U.K., The Netherlands and Australia. Participants’ contributions are based on their compensation. The Company matches contributions of participants, up to various limits, in substantially all plans. Company contributions to these plans amounted to $34 million in 2016, $29 million in 2015, and $19 million in 2014. Postretirement Benefits Other Than Pensions The Company provides retiree health care and life insurance benefits covering certain U.S. salaried and hourly employees, and substantially all employees in Canada. Benefits provided by the Company for hourly retirees are determined by collective bargaining. Employees are generally eligible for benefits upon retirement and completion of a specified number of years of creditable service. The Company uses a December 31 measurement date to measure its postretirement benefit obligations. The changes in the postretirement benefit obligations for the year are as follows: U.S. Non-U.S. 2016 2015 2016 2015 Obligations at beginning of year $ $ $ $ Change in benefit obligations: Service cost Interest cost Actuarial (gain) loss, including the effect of changing discount rates Benefit payments Foreign currency translation Other Net change in benefit obligations Obligations at end of year $ $ $ $ The funded status of the postretirement benefit plans at year end is as follows: U.S. Non-U.S. 2016 2015 2016 2015 Postretirement benefit obligations $ $ $ $ Items not yet recognized in net postretirement benefit cost: Actuarial gain (loss) Prior service credit Net amount recognized $ $ $ $ The net amount recognized is included in the Consolidated Balance Sheets at December 31, 2016 and 2015 as follows: U.S. Non-U.S. 2016 2015 2016 2015 Current nonpension postretirement benefit, included with Other accrued liabilities $ $ $ $ Nonpension postretirement benefits Accumulated other comprehensive income (loss) Net amount recognized $ $ $ $ The following changes in benefit obligations were recognized in accumulated other comprehensive income at December 31, 2016 and 2015 as follows (amounts are pretax): U.S. Non-U.S. 2016 2015 2016 2015 Current year actuarial (gain) loss $ $ $ $ — Amortization of actuarial loss Amortization of prior service credit $ $ $ $ — The components of the net postretirement benefit cost for the year are as follows: U.S. Non-U.S. 2016 2015 2014 2016 2015 2014 Service cost $ — $ — $ — $ $ $ Interest cost Curtailment gain Amortization: Actuarial loss Prior service credit Net amortization — — — Net postretirement benefit (income) cost $ $ $ $ $ $ Amounts that are expected to be amortized from accumulated other comprehensive income into net postretirement benefit cost during 2017: U.S. Non-U.S. Amortization: Actuarial loss $ $ — Prior service credit Net amortization $ $ — Amortization included in net postretirement benefit cost is based on the average remaining service of employees. The weighted average discount rates used to determine the accumulated postretirement benefit obligation and net postretirement benefit cost are as follows: U.S. Non-U.S. 2016 2015 2014 2016 2015 2014 Accumulated postretirement benefit obligation % % % % % % Net postretirement benefit cost % % % % % % The weighted average assumed health care cost trend rates at December 31 are as follows: U.S. Non-U.S. 2016 2015 2016 2015 Health care cost trend rate assumed for next year % % % % Rate to which the cost trend rate is assumed to decline (ultimate trend rate) % % % % Year that the rate reaches the ultimate trend rate N/A N/A Assumed health care cost trend rates affect the amounts reported for the postretirement benefit plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects: U.S. Non-U.S. 1-Percentage-Point 1-Percentage-Point Increase Decrease Increase Decrease Effect on total of service and interest cost $ — $ — $ $ Effect on accumulated postretirement benefit obligations Amortization included in net postretirement benefit cost is based on the average remaining service of employees. The following estimated future benefit payments, which reflect expected future service, as appropriate, are expected to be paid in the years indicated: Year(s) U.S. Non-U.S. 2017 $ $ 2018 2019 2020 2021 2022 - 2026 Other U.S. hourly retirees receive health and life insurance benefits from a multi-employer trust established by collective bargaining. Payments to the trust as required by the bargaining agreements are based upon specified amounts per hour worked and were $6 million in 2016, $6 million in 2015 and $6 million in 2014. Postretirement health and life benefits for retirees of foreign subsidiaries are generally provided through the national health care programs of the countries in which the subsidiaries are located. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The provision for income taxes was calculated based on the following components of earnings (loss) before income taxes: Continuing operations 2016 2015 2014 U.S. $ $ $ Non-U.S. $ $ $ Discontinued operations 2016 2015 2014 U.S. $ — $ — $ Non-U.S. $ $ $ The provision (benefit) for income taxes consists of the following: 2016 2015 2014 Current: U.S. $ — $ $ Non-U.S. Deferred: U.S. — Non-U.S. Total: U.S. Non-U.S. Total for continuing operations Total for discontinued operations — — — $ $ $ A reconciliation of the provision for income taxes based on the statutory U.S. Federal tax rate of 35% to the provision for income taxes is as follows: 2016 2015 2014 Tax provision on pretax earnings from continuing operations at statutory U.S. Federal tax rate $ $ $ Increase (decrease) in provision for income taxes due to: Non-U.S. tax rates Changes in valuation allowance Withholding tax, net U.S. tax consolidation benefit Non-deductible acquisition costs U.S. tax on intercompany dividends and interest Tax exempt income Tax law changes Tax credit Changes in tax reserves Mexico inflationary adjustments Intraperiod tax allocation Other items Provision for income taxes $ $ $ Deferred income taxes reflect: (1) the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes; and (2) carryovers and credits for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2016 and 2015 are as follows: 2016 2015 Deferred tax assets: Accrued postretirement benefits $ $ Foreign tax credit Operating and capital loss carryovers Other credit carryovers Accrued liabilities Pension liability Other Total deferred tax assets Deferred tax liabilities: Property, plant and equipment Intangibles and deferred software Other Total deferred tax liabilities Valuation allowance Net deferred taxes $ $ Deferred taxes are included in the Consolidated Balance Sheets at December 31, 2016 and 2015 as follows: 2016 2015 Other assets $ $ Deferred taxes Net deferred taxes $ $ The Company reviews the likelihood that it will realize the benefit of its deferred tax assets and therefore the need for valuation allowances on a quarterly basis, or whenever events indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with other positive and negative evidence. At December 31, 2016, before valuation allowance, the Company had unused foreign tax credits of $413 million expiring in 2017 through 2026, research tax credits of $14 million expiring from 2019 to 2036, and alternative minimum tax credits of $18 million which do not expire and which will be available to offset future U.S. Federal income tax. Approximately $151 million of the deferred tax assets related to operating and capital loss carryforwards can be carried over indefinitely, with the remaining $238 million expiring between 2017 and 2036. In certain jurisdictions, the Company’s analysis indicates that it has cumulative losses in recent years. This is considered significant negative evidence which is objective and verifiable and, therefore, difficult to overcome. However, the cumulative loss position is not solely determinative and, accordingly, the Company considers all other available positive and negative evidence in its analysis. Based on its analysis, the Company has recorded a valuation allowance for the portion of deferred tax assets where based on the weight of available evidence it is unlikely to realize those deferred tax assets. At December 31, 2016, the Company’s equity in the undistributed earnings of foreign subsidiaries for which income taxes had not been provided approximated $2.2 billion. The Company intends to reinvest these earnings indefinitely in the non-U.S. operations. It is not practicable to estimate the U.S. and foreign tax which would be payable should these earnings be distributed. Deferred taxes are provided for earnings of non-U.S. jurisdictions when the Company plans to remit those earnings. The Company records a liability for unrecognized tax benefits related to uncertain tax positions. The Company accrues interest and penalties associated with unrecognized tax benefits as a component of its income tax expense. The following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2016, 2015 and 2014: 2016 2015 2014 Balance at January 1 $ $ $ Additions and reductions for tax positions of prior years Additions based on tax positions related to the current year Reductions due to the lapse of the applicable statute of limitations Reductions due to settlements Foreign currency translation Balance at December 31 $ $ $ Unrecognized tax benefits, which if recognized, would impact the Company’s effective income tax rate $ $ $ Accrued interest and penalties at December 31 $ $ $ Interest and penalties included in tax expense for the years ended December 31 $ $ $ Based upon the outcome of tax examinations, judicial proceedings, or expiration of statute of limitations, it is reasonably possible that the ultimate resolution of these unrecognized tax benefits may result in a payment that is materially different from the current estimate of the tax liabilities. The Company believes that it is reasonably possible that the estimated liability could decrease up to $11 million within the next 12 months. This is primarily the result of audit settlements or statute expirations in several taxing jurisdictions. The Company is currently under examination in various tax jurisdictions in which it operates, including Argentina, Bolivia, Brazil, China, Canada, Colombia, Ecuador, France, Germany, Indonesia, and Italy. The years under examination range from 2006 through 2014. The Company has received tax assessments in excess of established reserves. The Company believes that adequate provisions for all income tax uncertainties have been made. However, if tax assessments are settled against the Company at amounts in excess of established reserves, it could have a material impact to the Company’s results of operations, financial position or cash flows. During 2016, the Company concluded income tax audits in several jurisdictions, including the Czech Republic, Germany, Italy, and Hungary. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt | |
Debt | 11. Debt The following table summarizes the long-term debt of the Company at December 31, 2016 and 2015: 2016 2015 Secured Credit Agreement: Revolving Credit Facility: Revolving Loans $ — $ — Term Loans: Term Loan A Term Loan A (€279 million at December 31, 2016) Term Loan B Senior Notes: 6.75%, due 2020 (€500 million) 4.875%, due 2021 (€330 million) 5.00%, due 2022 5.875%, due 2023 3.125%, due 2024 (€500 million) 5.375%, due 2025 6.375%, due 2025 Payable to OI Inc. Capital leases Other Total long-term debt Less amounts due within one year Long-term debt $ $ On April 22, 2015, the Company entered into a Senior Secured Credit Facility, which subsequently has been amended several times with the most recent amendment being entered into on February 3, 2016 (the “Amended Agreement”). In connection with the closing of the Vitro Acquisition on September 1, 2015 (see Note 18), the Company incurred $1,250 million of senior secured incremental term loan facilities, comprised of (i) a $675 million term loan A facility on substantially the same terms and conditions (including as to maturity) as the term loan A facility in the Amended Agreement and (ii) a $575 million term loan B facility, which was subsequently repaid in full in November 2016 as described below. At December 31, 2016, the Amended Agreement includes a $300 million revolving credit facility, a $600 million multicurrency revolving credit facility, a $1,575 million term loan A facility ($1,395 million net of debt issuance costs), and a €279 million term loan A facility ($282 million net of debt issuance costs), each of which has a final maturity date of April 22, 2020. At December 31, 2016, the Company had unused credit of $884 million available under the Amended Agreement. The weighted average interest rate on borrowings outstanding under the Amended Agreement at December 31, 2016 was 2.39%. The Amended Agreement contains various covenants that restrict, among other things and subject to certain exceptions, the ability of the Company to incur certain 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 Amended Agreement also contains one financial covenant, a Total Leverage Ratio, that requires the Company not to exceed a ratio calculated by dividing consolidated total debt, less cash and cash equivalents, by consolidated EBITDA, as defined in the Amended Agreement. The Total 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 Total Leverage Ratio to exceed the specified maximum of (i) 4.5x for the four fiscal quarters ending December 31, 2016, March 31, 2017, June 30, 2017 and September 30, 2017, and (ii) 4.0x for the fourth fiscal quarter ending December 31, 2017 and each fiscal quarter thereafter. Failure to comply with these covenants and restrictions could result in an event of default under the Amended Agreement. In such an event, the Company would be unable to request borrowings under the revolving facility, and all amounts outstanding under the Amended Agreement, together with accrued interest, could then be declared immediately due and payable. If an event of default occurs under the Amended Agreement and the lenders cause all of the outstanding debt obligations under the Amended Agreement to become due and payable, this would result in a default under a number of other outstanding debt securities and could lead to an acceleration of obligations related to these debt securities. As of December 31, 2016, the Company was in compliance with all covenants and restrictions in the Amended Agreement. In addition, the Company believes that it will remain in compliance and that its ability to borrow funds under the Amended Agreement will not be adversely affected by the covenants and restrictions. The interest rates on borrowings under the Amended Agreement are, at the Company’s option, the Base Rate or the Eurocurrency Rate, as defined in the Amended Agreement, plus an applicable margin. The applicable margin for the term loan A facility and the revolving credit facility is linked to the Company’s Total Leverage Ratio and ranges from 1.25% to 1.75% for Eurocurrency Rate loans and from 0.25% to 0.75% for Base Rate loans. In addition, a facility fee is payable on the revolving credit facility commitments ranging from 0.20% to 0.30% per annum linked to the Total Leverage Ratio. Borrowings under the Amended 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. Borrowings 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 borrowings, of stock of certain foreign subsidiaries. All borrowings under the Amended Agreement are guaranteed by certain domestic subsidiaries of the Company. Also, in connection with the Vitro Acquisition, during August 2015, the Company issued senior notes with a face value of $700 million that bear interest at 5.875% and are due August 15, 2023 (the “Senior Notes due 2023”) and senior notes with a face value of $300 million that bear interest at 6.375% and are due August 15, 2025 (together with the Senior Notes due 2023, the “2015 Senior Notes”). The 2015 Senior Notes were issued via a private placement and are guaranteed by certain of the Company‘s domestic subsidiaries. The net proceeds from the 2015 Senior Notes, after deducting the debt discount and debt issuance costs, totaled approximately $972 million and were used to finance, in part, the Vitro Acquisition. During November 2016, the Company issued senior notes with a face value of €500 million that bear interest at 3.125% and are due November 15, 2024. The notes were issued via a private placement and are guaranteed by certain of the Company‘s domestic subsidiaries. The net proceeds, after deducting the debt discount and debt issuance costs, totaled approximately $520 million and were used to repay the term loan B facility under the Amended Agreement. 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 Company has a €185 million European accounts receivable securitization program, which extends through March 2019, subject to periodic renewal of backup credit lines. Information related to the Company’s accounts receivable securitization program as of December 31, 2016 and 2015 is as follows: 2016 2015 Balance (included in short-term loans) $ $ Weighted average interest rate % % The carrying amounts reported for the accounts receivable securitization program, and 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. Annual maturities for all of the Company’s long-term debt through 2021 are as follows: 2017, $33 million; 2018, $287 million; 2019, $101 million; 2020, $2,074 million and 2021, $354 million. Fair values at December 31, 2016, 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) $ $ $ 4.875%, due 2021 (€330 million) 5.00%, due 2022 5.875%, due 2023 3.125%, due 2024 (€500 million) 6.375%, due 2025 5.375%, due 2025 |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Contingencies | |
Contingencies | 12. Contingencies Asbestos OI Inc. is a defendant in numerous lawsuits alleging bodily injury and death as a result of exposure to asbestos. From 1948 to 1958, one of OI Inc.'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. OI Inc. sold its insulation business unit at the end of April 1958. The typical asbestos personal injury lawsuit alleges various theories of liability, including negligence, gross negligence and strict liability and seeks compensatory and, in some cases, punitive damages in various amounts (herein referred to as "asbestos claims"). The following table shows the approximate number of plaintiffs and claimants who had asbestos claims pending against OI Inc. at the beginning of each listed year, the number of claims disposed of during that year, the year’s filings and the claims pending at the end of each listed year (eliminating duplicate filings): 2016 2015 2014 Pending at beginning of year $ $ $ Disposed Filed Pending at end of year $ $ $ Based on an analysis of the lawsuits pending as of December 31, 2016, approximately 88% of plaintiffs either do not specify the monetary damages sought, or in the case of court filings, claim an amount sufficient to invoke the jurisdictional minimum of the trial court. Approximately 9% of plaintiffs specifically plead damages above the jurisdictional minimum up to, and including, $15 million or less, and 3% of plaintiffs specifically plead damages greater than $15 million but less than or equal to $100 million. As indicated by the foregoing summary, current pleading practice permits considerable variation in the assertion of monetary damages. OI Inc.’s experience resolving hundreds of thousands of asbestos claims and lawsuits over an extended period demonstrates that the monetary relief alleged in a complaint bears little relevance to a claim’s merits or disposition value. Rather, the amount potentially recoverable is determined by such factors as the type and severity of the plaintiff’s asbestos disease, the plaintiff’s medical history and exposure to other disease-causing agents, the product identification evidence against OI Inc. and other co-defendants, the defenses available to OI Inc. and other co-defendants, the specific jurisdiction in which the claim is made, and the plaintiff’s firm representing the claimant. In addition to the pending claims set forth above, OI Inc. has claims-handling agreements in place with many plaintiffs’ counsel throughout the country. These agreements require evaluation and negotiation regarding whether particular claimants qualify under the criteria established by such agreements. The criteria for such claims include verification of a compensable illness and a reasonable probability of exposure to a product manufactured by OI Inc.'s former business unit during its manufacturing period ending in 1958. OI Inc. has also been a defendant in other asbestos-related lawsuits or claims involving maritime workers, medical monitoring claimants, co-defendants and property damage claimants. Based upon its past experience, OI Inc. believes that these categories of lawsuits and claims will not involve any material liability and they are not included in the above description of pending matters or in the following description of disposed matters. Since receiving its first asbestos claim, OI Inc. as of December 31, 2016, has disposed of the asbestos claims of approximately 398,000 plaintiffs and claimants at an average indemnity payment per claim of approximately $9,000. OI Inc.’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 2016, 2015 and 2014 were $125 million, $138 million, and $148 million, respectively. OI Inc.’s cash payments per claim disposed (inclusive of legal costs) were approximately $71,000, $95,000 and $81,000 for the years ended December 31, 2016, 2015 and 2014, respectively. As discussed above, OI Inc.’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 OI Inc.’s administrative claims handling agreements has generally reduced the number of claims that would otherwise have been received by OI Inc. in the tort system. In addition, certain court orders and legislative acts have reduced or eliminated the number of claims that OI Inc. otherwise would have received by OI Inc. in the tort system. These developments generally have had the effect of increasing OI Inc.’s per-claim average indemnity payment over time. Beginning with the initial liability of $975 million established in 1993, OI Inc. has accrued a total of approximately $4.9 billion through 2016, before insurance recoveries, for its asbestos-related liability. OI Inc.’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, the inherent uncertainty of future disease incidence and claiming patterns against OI Inc., the significant expansion of the 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 OI Inc. is also a defendant. OI Inc. continues to monitor trends that may affect its ultimate liability and analyze the developments and variables likely to affect the resolution of pending and future asbestos claims against OI Inc. The material components of OI Inc.’s total accrued liability are determined by OI Inc. 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 OI Inc.; (ii) the liability for asbestos claims not yet asserted against OI Inc., and (iii) the legal defense costs estimated to be incurred in connection with the claims already asserted and those claims OI Inc. believes will be asserted. As noted above, OI Inc. conducts a comprehensive legal review of its asbestos-related liabilities and costs annually 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 current annual comprehensive legal review, OI Inc. provides historical claims filing 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 it in estimating the total number of future claims to be filed. OI Inc. uses this estimate of its total future claims, along with an estimation of disposition costs and related legal costs, as inputs to develop its best estimate of OI Inc.’s 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 OI Inc. will record an appropriate charge (credit) to OI Inc.’s results of operations to increase (decrease) the accrued liability. The significant assumptions underlying the material components of OI Inc.’s accrual are: a) settlements will continue to be limited almost exclusively to claimants who were exposed to OI Inc.’s asbestos‑containing insulation prior to its exit from that business in 1958; b) claims will continue to be resolved primarily under OI Inc.’s administrative claims 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 OI Inc. for such cases do not change materially; d) OI Inc. 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 OI Inc. is a defendant; and f) co‑defendants with substantial resources and assets continue to participate significantly in the resolution of future asbestos lawsuits and claims. For the years ended December 31, 2016 and 2015, OI Inc. concluded that accruals in the amounts of $692 million and $817 million, respectively, were required. These amounts have not been discounted for the time value of money. OI Inc.’s comprehensive legal reviews resulted in charges of $0, $16 million and $46 million for the years ended December 31, 2016, 2015 and 2014, respectively. OI Inc. believes it is reasonably possible that it will incur a loss for its asbestos-related liabilities in excess of the amount currently recognized, which is $692 million as of December 31, 2016. OI Inc. estimates that reasonably possible losses could be as high as $825 million. This estimate of additional reasonably possible loss reflects a legal judgment about the number and cost of potential future claims and legal costs. OI Inc. believes this estimate is consistent with the level of variability it has experienced when comparing actual results to recent near-term projections. However, it is also possible that the ultimate asbestos-related liability could be above this estimate. OI Inc. expects a significant majority of the total number of claims to be received in the next ten years. This timeframe appropriately reflects the mortality of current and expected claimants in light of OI Inc.’s sale of its insulation business unit in 1958. As noted above, OI Inc.’s asbestos-related liability is based on a projection of new claims that will eventually be filed against OI Inc. 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 OI Inc.’s asbestos-related liability. Other Matters The Company’s joint venture in China had been involved in litigation with its partner regarding whether the joint venture should be dissolved. Following an ownership change in 2016 with respect to the joint venture partner, this litigation has been withdrawn. On July 5, 2016, OI Inc. learned that the Enforcement Division of the SEC is conducting an investigation into certain accounting and control matters pertaining to OI Inc.’s determination of its asbestos-related liabilities. On May 13, 2016, OI Inc. restated its consolidated financial statements for the years ended December 31, 2015, 2014 and 2013 in order to correct an error related to the its method for estimating its future asbestos-related liabilities. OI Inc. is cooperating with the SEC’s investigation. At this time, OI Inc. is unable to predict the outcome of this matter or provide meaningful quantification of how the final resolution of this matter may impact its future consolidated financial statements, results of operations, or cash flows. 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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | 13. Accumulated Other Comprehensive Income (Loss) The components of comprehensive income are: (a) net earnings; (b) change in fair value of certain derivative instruments; (c) pension and other postretirement benefit adjustments; and (d) foreign currency translation adjustments. The net effect of exchange rate fluctuations generally reflects changes in the relative strength of the U.S. dollar against major foreign currencies between the beginning and end of the year. The following table lists the beginning balance, annual activity and ending balance of each component of accumulated other comprehensive income (loss): Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Income (Loss) Balance on January 1, 2015 $ $ $ $ Change before reclassifications Amounts reclassified from accumulated other comprehensive income (a) (b) Translation effect Tax effect Other comprehensive income (loss) attributable to the Company Balance on December 31, 2015 Change before reclassifications Amounts reclassified from accumulated other comprehensive income (a) (b) Translation effect Tax effect Intraperiod tax allocation Other comprehensive income (loss) attributable to the Company Balance on December 31, 2016 $ $ $ $ (a) Amount is included in Cost of goods sold on the Consolidated Results of Operations (see Note 7 for additional information). (b) Amount is included in the computation of net periodic pension cost and net postretirement benefit cost (see Note 9 for additional information). |
Stock Options and Other Stock B
Stock Options and Other Stock Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Stock Options and Other Stock Based Compensation | |
Stock Options and Other Stock Based Compensation | 14. Stock Options and Other Stock Based Compensation The Company participates in OI Inc.’s various nonqualified plans approved by share owners under which OI Inc. has granted stock options, restricted shares and performance vested restricted share units. At December 31, 2016, there were 5,081,000 shares available for grants under these plans. Total compensation cost for all grants of shares and units under these plans was $15 million, $15 million and $21 million for the years ended December 31, 2016, 2015 and 2014, respectively. Stock Options In general, subject to change in control, options become exercisable 25% per year beginning on the first anniversary of grant. No options may be exercised in whole or in part during the first year after the date granted. In general, options expire following termination of employment or the seventh anniversary of the option grant. The fair value of options is amortized over the vesting periods which range from one to four years. Stock option information at December 31, 2016 and for the year then ended is as follows: Weighted Weighted Average Average Remaining Number of Exercise Contractual Aggregate Shares Price Term Intrinsic (thousands) (per share) (years) Value Options outstanding at January 1, 2016 $ Granted Exercised Forfeited or expired Options outstanding at December 31, 2016 $ Options vested or expected to vest at December 31, 2016 $ $ Options exercisable at December 31, 2016 $ $ — Certain additional information related to stock options is as follows for the periods indicated: 2016 2015 2014 Weighted average grant-date fair value of options granted (per share) $ $ $ Aggregate intrinsic value of options exercised $ $ — $ Aggregate cash received from options exercised $ $ $ The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions: 2016 2015 2014 Expected life of options (years) Expected stock price volatility % % % Risk-free interest rate % % % Expected dividend yield % % % The expected life of options is determined from historical exercise and termination data. The expected stock price volatility is determined by reference to historical prices over a period equal to the expected life. Restricted Shares and Restricted Share Units Shares granted after March 21, 2005 and prior to 2011, vest 25% per year beginning on the first anniversary and unvested shares are forfeited upon termination of employment. Restricted share units granted to employees after 2010 vest 25% per year beginning on the first anniversary. Holders of vested restricted share units receive one share of the OI Inc.’s common stock for each unit as units vest. Granted but unvested restricted share units are forfeited upon termination, unless certain retirement criteria are met. Restricted share units granted to directors vest after one year. The fair value of the restricted shares and restricted share units is equal to the market price of OI Inc.’s common stock on the date of the grant. The fair value of restricted shares and restricted share units is amortized over the vesting periods which range from one to four years. The activity of restricted shares and restricted share units is as follows: Weighted Number of Average Restricted Grant-Date Shares Fair Value (thousands) (per share) Nonvested at January 1, 2016 $ Granted Vested Forfeited Nonvested at December 31, 2016 Awards granted during 2015 $ Awards granted during 2014 $ 2016 2015 2014 Total fair value of shares vested $ $ $ Performance Vested Restricted Share Units Performance vested restricted share units vest on January 1 of the third year following the year in which they are granted. Holders of vested units may receive up to 2 shares of OI Inc.’s common stock for each unit, depending upon the attainment of consolidated performance goals established by the Compensation Committee of OI Inc.’s Board of Directors. If minimum goals are not met, no shares will be issued. Granted but unvested restricted share units are forfeited upon termination of employment, unless certain retirement criteria are met. The fair value of each performance vested restricted share unit is equal to the product of the fair value of the OI Inc.’s common stock on the date of grant and the estimated number of shares into which the performance vested restricted share unit will be converted. The fair value of performance vested restricted share units is amortized ratably over the vesting period. Should the estimated number of shares into which the performance vested restricted share unit will be converted change, an adjustment will be recorded to recognize the accumulated difference in amortization between the revised and previous estimates. Performance vested restricted share unit activity is as follows: Number of Performance Weighted Average Vested Restricted Shares Grant-Date Fair Value Units (thousands) (per unit) Nonvested at January 1, 2016 $ Granted Vested Forfeited/Cancelled Nonvested at December 31, 2016 Awards granted during 2015 $ Awards granted during 2014 $ Approximately 158,000 shares were issued in 2016 with a fair value at issuance date of $4 million related to performance vested restricted share units. As of December 31, 2016, there was $17 million of total unrecognized compensation cost related to all unvested stock options, restricted shares, restricted share units and performance vested restricted share units. That cost is expected to be recognized over a weighted average period of approximately two years. |
Other Expense, net
Other Expense, net | 12 Months Ended |
Dec. 31, 2016 | |
Other Expense, net | |
Other Expense, net | 15. Other Expense, net Other expense, net for the years ended December 31, 2016, 2015 and 2014 included the following: 2016 2015 2014 Restructuring, asset impairment and other charges $ $ $ Intangible amortization expense Impairment of equity investment Gain on China land compensation Royalty income Strategic transaction costs Acquisition-related fair value intangible adjustments Non-income tax charge Foreign currency exchange loss (gain) Other expense (income) $ $ $ In 2016, the Company evaluated the future estimated earnings and cash flow of an equity investment and determined that it was other-than-temporarily impaired. As such, the Company recorded an impairment charge of $25 million to reduce its carrying value down to its estimated fair value. The Company classified the significant assumptions used to determine the fair value of the impaired assets as Level 3 in the fair value hierarchy as set forth in the general accounting principles for fair value measurements. In 2014, the Company recorded a charge of $69 million resulting from a non-income tax assessment from a foreign tax authority. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2016 | |
Operating Leases | |
Operating Leases | 16. Operating Leases Rent expense attributable to all warehouse, office buildings and equipment operating leases was $80 million in 2016, $72 million in 2015, and $63 million in 2014. Minimum future rentals under operating leases are as follows: 2017, $65 million; 2018, $47 million; 2019, $32 million; 2020, $23 million; 2021, $14 million; and 2022 and thereafter, $24 million. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | 17. Supplemental Cash Flow Information Changes in the components of working capital related to operations (net of the effects related to acquisitions and divestitures) were as follows: 2016 2015 2014 Decrease (increase) in current assets: Receivables $ $ $ Inventories Prepaid expenses and other Increase (decrease) in current liabilities: Accounts payable Accrued liabilities Salaries and wages U.S. and foreign income taxes $ $ $ The Company uses various factoring programs to sell certain receivables to financial institutions as part of managing its cash flows. At December 31, 2016 and 2015, the amount of receivables sold by the Company was $318 million and $317 million, respectively. Any continuing involvement with the sold receivables is immaterial. 2016 2015 2014 Interest paid in cash $ $ $ Income taxes paid in cash (all non-U.S.) Cash interest for the years ended December 31, 2016, 2015 and 2014 includes $9 million, $32 million and $9 million of note repurchase premiums, respectively. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations | |
Business Combinations | 18. Business Combinations On September 1, 2015, the Company completed the Vitro Acquisition in a cash transaction valued at approximately $2.297 billion in cash, subject to a working capital adjustment and certain other adjustments. The Vitro Business in Mexico is the largest supplier of glass containers in that country manufacturing glass containers across multiple end uses, including food, soft drinks, beer, wine and spirits. The Vitro Acquisition included five food and beverage glass container plants in Mexico, a plant in Bolivia and a North American distribution business, and provided the Company with a competitive position in the glass packaging market in Mexico. The results of the Vitro Business have been included in the Company’s consolidated financial statements since September 1, 2015 and contributed approximately $608 million of incremental net sales and $122 million of incremental segment operating profit in the year ended December 31, 2016. Vitro’s food and beverage glass container operations in Mexico and Bolivia are included in the Latin American operating segment while its distribution business is included in the North American operating segment. The Company financed the Vitro Acquisition with the proceeds from a senior notes offering, cash on hand and the incremental term loan facilities (see Note 11). The total purchase price was allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values. The purchase agreement contained customary provisions for working capital adjustments, which the Company resolved with the seller in the first quarter of 2016. The Company completed the purchase price allocation process in the third quarter of 2016. The following table summarizes the fair value of the assets and liabilities assumed on September 1, 2015 and subsequent adjustments identified through the purchase price allocation process and recorded through the measurement period: September 1, 2015 Measurement Period Adjustments September 30, 2016 Cash $ $ — $ Other current assets Goodwill Customer list intangibles Net property, plant and equipment Total assets Current liabilities Long-term debt Long-term liabilities Net assets acquired $ $ — $ The fair value of the tangible assets was estimated utilizing income and market approaches, considering remaining useful life. The customer list intangible asset includes the Company’s established relationships with its customers and the ability of these customers to generate future economic profits for the Company. The value assigned to customer list intangibles is based on the present value of future earnings attributable to the asset group after recognition of required returns to other contributory assets. Recognized goodwill is attributable to the assembled workforce, expected synergies and other intangible assets that do not qualify for separate recognition. The Vitro Acquisition goodwill is not deductible for tax purposes. The balance sheet adjustments identified above did not result in any significant adjustments to the periods’ income statements. |
Pro Forma Information - Vitro A
Pro Forma Information - Vitro Acquisition | 12 Months Ended |
Dec. 31, 2016 | |
Pro Forma Information - Vitro Acquisition | |
Pro Forma Information - Vitro Acquisition | 19. Pro Forma Information – Vitro Acquisition Had the Vitro Acquisition, described in Note 18 and the related financing described in Note 11, occurred at the beginning of each respective period, unaudited pro forma consolidated net sales and earnings from continuing operations would have been as follows: Year Ending December 31, 2015 As Acquisition Financing Pro Forma Reported Adjustments Adjustments As Adjusted Net sales $ $ $ — $ Earnings from continuing operations attributable to the Company $ $ $ $ |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations | |
Discontinued Operations | 20. Discontinued Operations On April 4, 2016, the annulment committee formed by the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) ruled that a subsidiary of the Company is free to pursue the enforcement of a prior arbitration award against Venezuela. That award amounts to more than $485 million after including interest from the date of the expropriation by Venezuela (October 26, 2010). Venezuela’s application to annul the award is still pending, although the annulment proceedings were suspended in October 2016 because Venezuela has not paid its fees owed to ICSID. If the proceeding is stayed for non-payment for a consecutive period in excess of six months, ICSID’s Secretary General could move that the committee discontinue the annulment proceeding altogether. The Company intends to take appropriate steps to vigorously enforce and collect the award, which is enforceable in approximately 150 member states that are party to the ICSID Convention. However, even with the lifting of the stay of enforcement, the Company recognizes that the collection of the award may present significant practical challenges. Because the award has yet to be satisfied and the annulment proceeding is pending, the Company is unable at this stage to reasonably predict the efforts that will be necessary to successfully enforce collection of the award, the amount of the award or the timing of any such collection efforts. Therefore, the Company has not recognized this award in its financial statements. A separate arbitration is pending with ICSID to obtain compensation primarily for third-party minority shareholders’ lost interests in the two expropriated plants. The loss from discontinued operations of $7 million and $4 million, for the years ended December 31, 2016 and 2015, respectively, relates to ongoing costs for the Venezuelan expropriation. The loss from discontinued operations of $23 million for the year ended December 31, 2014 included a settlement of a dispute with a purchaser of a previously disposed business, as well as ongoing costs related to the Venezuelan expropriation. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED) | 12 Months Ended |
Dec. 31, 2016 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED) | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED) | OWENS-ILLINOIS GROUP, INC. SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED) Years ended December 31, 2016, 2015, and 2014 (Millions of Dollars) Reserves deducted from assets in the balance sheets: Allowances for losses and discounts on receivables Additions Balance at Charged to Balance beginning costs and Deductions at end of of period expenses Other (Note 1) period 2016 $ $ $ $ $ 2015 $ $ $ $ $ 2014 $ $ $ $ $ 1) Deductions from allowances for losses and discounts on receivables represent uncollectible notes and accounts written off. Valuation allowance on net deferred tax assets Balance at Charged to other Balance at beginning of Charged to comprehensive Foreign currency end of period income income translation Other period 2016 $ $ $ $ $ $ 2015 $ $ $ $ $ $ 2014 $ $ $ $ $ $ |
Significant Accounting Polici29
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies | |
Basis of Consolidated Statements | Basis of Consolidated Statements The consolidated financial statements of Owens-Illinois Group, Inc. (the “Company”) include the accounts of its subsidiaries. Newly acquired subsidiaries have been included in the consolidated financial statements from dates of acquisition. The Company uses the equity method of accounting for investments in which it has a significant ownership interest, generally 20% to 50%. Other investments are accounted for at cost. The Company monitors other than temporary declines in fair value and records reductions in carrying values when appropriate. Relationship with Owens-Illinois, Inc. The Company is a 100% - owned subsidiary of Owens-Illinois, Inc. (“OI Inc.”). Although OI Inc. does not conduct any operations, it has substantial obligations related to outstanding indebtedness and asbestos‑related payments. OI Inc. relies primarily on distributions from its direct and indirect subsidiaries to meet these obligations. For federal and certain state income tax purposes, the taxable income of the Company is included in the consolidated tax returns of OI Inc. and income taxes are allocated to the Company on a basis consistent with separate returns. |
Nature of Operations | Nature of Operations The Company is a leading manufacturer of glass container products. The Company’s principal product lines are glass containers for the food and beverage industries. The Company has glass container operations located in 23 countries. The principal markets and operations for the Company’s products are in Europe, North America, Latin America and Asia Pacific. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management of the Company to make estimates and assumptions that affect certain amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates, at which time the Company would revise its estimates accordingly. |
Foreign Currency Translation | Foreign Currency Translation The assets and liabilities of non-U.S. subsidiaries are translated into U.S. dollars at year-end exchange rates. Any related translation adjustments are recorded in accumulated other comprehensive income in share owner’s equity. |
Revenue Recognition | Revenue Recognition The Company recognizes sales, net of estimated discounts and allowances, when the title to the products and risk of loss are transferred to customers. Provisions for rebates to customers are provided in the same period that the related sales are recorded. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included with cost of goods sold in the Consolidated Results of Operations. |
Stock-Based Compensation | Stock-Based Compensation The Company participates in OI Inc.’s stock-based compensation plans consisting of stock option grants and restricted share awards. Costs resulting from all share-based compensation plans are required to be recognized in the financial statements. A public entity is required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the required service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the required service. |
Cash | Cash The Company defines “cash” as cash and time deposits with maturities of three months or less when purchased. Outstanding checks in excess of funds on deposit are included in accounts payable. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable Receivables are stated at amounts estimated by management to be the net realizable value. The Company charges off accounts receivable when it becomes apparent based upon age or customer circumstances that amounts will not be collected. Allowance for Doubtful Accounts The allowance for doubtful accounts is established through charges to the provision for bad debts. The Company evaluates the adequacy of the allowance for doubtful accounts on a periodic basis. The evaluation includes historical trends in collections and write-offs, management’s judgment of the probability of collecting accounts and management’s evaluation of business risk. |
Inventory Valuation | Inventory Valuation Inventories are valued at the lower of average costs or market. |
Goodwill | Goodwill Goodwill represents the excess of cost over fair value of net assets of businesses acquired. Goodwill is evaluated annually, as of October 1, for impairment or more frequently if an impairment indicator exists. |
Intangible Assets and Other Long-Lived Assets | Intangible Assets and Other Long-Lived Assets Intangible assets are amortized over the expected useful life of the asset. Amortization expense directly attributed to the manufacturing of the Company’s products is included in cost of goods sold. Amortization expense related to non-manufacturing activities is included in selling and administrative and other. The Company evaluates the recoverability of intangible assets and other long-lived assets based on undiscounted projected cash flows, excluding interest and taxes, when factors indicate that impairment may exist. If impairment exists, the asset is written down to fair value. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment (“PP&E”) is carried at cost and includes expenditures for new facilities and equipment and those costs which substantially increase the useful lives or capacity of existing PP&E. In general, depreciation is computed using the straight-line method and recorded over the estimated useful life of the asset. Factory machinery and equipment is depreciated over periods ranging from 5 to 25 years with the majority of such assets (principally glass-melting furnaces and forming machines) depreciated over 7 to 15 years. Buildings and building equipment are depreciated over periods ranging from 10 to 50 years. Depreciation expense directly attributed to the manufacturing of the Company’s products is included in cost of goods sold. Depreciation expense related to non-manufacturing activities is included in selling and administrative. Depreciation expense includes the amortization of assets recorded under capital leases. Maintenance and repairs are expensed as incurred. Costs assigned to PP&E of acquired businesses are based on estimated fair values at the date of acquisition. The Company evaluates the recoverability of PP&E based on undiscounted projected cash flows, excluding interest and taxes, when factors indicate that impairment may exist. If impairment exists, the asset is written down to fair value. |
Derivative Instruments | Derivative Instruments The Company uses forward exchange contracts, options and commodity forward contracts to manage risks generally associated with foreign exchange rate and commodity market volatility. Derivative financial instruments are included on the balance sheet at fair value. When appropriate, derivative instruments are designated as and are effective as hedges, in accordance with accounting principles generally accepted in the United States. If the underlying hedged transaction ceases to exist, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. The Company does not enter into derivative financial instruments for trading purposes and is not a party to leveraged derivatives. Cash flows from forward exchange contracts not designated as hedges are classified as an investing activity. Cash flows of commodity forward contracts are classified as operating activities. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Generally accepted accounting principles defines a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs for which there is little or no market data, which requires the Company to develop assumptions. The carrying amounts reported for cash and short-term loans approximate fair value. In addition, carrying amounts approximate fair value for certain long-term debt obligations subject to frequently redetermined interest rates. Fair values for the Company’s significant fixed rate debt obligations are generally based on published market quotations. The Company’s derivative assets and liabilities consist of natural gas forwards and foreign exchange option and forward contracts. The Company uses an income approach to valuing these contracts. Natural gas forward rates and foreign exchange rates are the significant inputs into the valuation models. 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. The Company also evaluates counterparty risk in determining fair values. |
Reclassifications | Reclassifications Certain reclassifications of prior years’ data have been made to conform to the current year presentation. |
New Accounting Standards | New Accounting Standards Revenue from Contracts with Customers - In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers”, which delayed by one year the effective date of the new revenue recognition standard, which will be effective for the Company on January 1, 2018. The Company has started an implementation process, including a review of customer contracts, to evaluate the effect this standard will have on its consolidated financial statements and related disclosures. At this time, the Company does not expect that the implementation of this standard in 2018 will have a significant impact on the timing in which it recognizes revenue. While the Company continues to assess the potential impacts of the new standard, the Company does not currently expect the adoption of the new standard to have a material impact on consolidated net income or the consolidated balance sheet. The Company plans to select the modified retrospective transition method upon adoption effective January 1, 2018. Leases - In February 2016, the FASB issued ASU No. 2016-02, “Leases”. Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee's obligation to make lease payments arising from a lease, and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for the Company on January 1, 2019. ASU No. 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of ASU No. 2016-02 will have on the Company’s consolidated financial statements, and anticipates the new guidance will significantly impact its consolidated financial statements as the Company has a significant number of leases. As further described in Note 16, Operating Leases, as of December 31, 2016, the Company had minimum lease commitments under non-cancellable operating leases totaling $205 million. 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. Stock Compensation - In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which requires all excess tax benefits or deficiencies to be recognized as income tax expense or benefit in the income statement. In addition, excess tax benefits should be classified along with other income tax cash flows as an operating activity in the statement of cash flows. Application of the standard is required for the Company on January 1, 2017. The Company does not expect a significant impact in its Consolidated Financial Statements. Pension Asset Value - In May 2015, the FASB issued ASU No. 2015-07, “Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” Under the new guidance, investments measured at net asset value (“NAV”), as a practical expedient for fair value, are excluded from the fair value hierarchy. Removing investments measured using the practical expedient from the fair value hierarchy is intended to eliminate the diversity in practice that currently exists with respect to the categorization of these investments. The new guidance is effective for the Company on January 1, 2016. The guidance impacted the presentation of certain pension related assets that use NAV as a practical expedient. See Note 9 for additional information. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Net sales for the Company's reportable segments | 2016 2015 2014 Net sales: Europe $ $ $ North America Latin America Asia Pacific Reportable segment totals Other Net sales $ $ $ |
Segment operating profit (loss) for the Company's reportable segments | 2016 2015 2014 Segment operating profit: Europe $ $ $ North America Latin America Asia Pacific Reportable segment totals Items excluded from segment operating profit: Retained corporate costs and other Restructuring, asset impairment and other charges Pension settlement charges Gain on China land sale Strategic transaction costs Acquisition-related fair value inventory adjustments Acquisition-related fair value intangible adjustments Non-income tax charge Interest expense, net Earnings from continuing operations before income taxes $ $ $ |
Assets, equity investments, equity earnings, capital expenditures and depreciation and amortization expense for the Company's reportable segments | Reportable Retained North Latin Asia Segment Corp Costs Consolidated Europe America America Pacific Totals and Other Totals Total assets: 2016 $ $ $ $ $ $ $ 2015 2014 Equity investments: 2016 $ $ $ — $ $ $ $ 2015 2014 Equity earnings: 2016 $ $ $ — $ $ $ $ 2015 2014 Capital expenditures: 2016 $ $ $ $ $ $ $ 2015 2014 Depreciation and amortization expense: 2016 $ $ $ $ $ $ $ 2015 2014 |
Schedule of segment information by geographic segment | Reportable Retained North Latin Asia Segment Corp Costs Consolidated Europe America America Pacific Totals and Other Totals Total assets: 2016 $ $ $ $ $ $ $ 2015 2014 Equity investments: 2016 $ $ $ — $ $ $ $ 2015 2014 Equity earnings: 2016 $ $ $ — $ $ $ $ 2015 2014 Capital expenditures: 2016 $ $ $ $ $ $ $ 2015 2014 Depreciation and amortization expense: 2016 $ $ $ $ $ $ $ 2015 2014 The Company’s net property, plant and equipment by geographic segment are as follows: U.S. Non-U.S. Total 2016 $ $ $ 2015 2014 The Company’s net sales by geographic segment are as follows: U.S. Non-U.S. Total 2016 $ $ $ 2015 2014 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Major classes of inventory | 2016 2015 Finished goods $ $ Raw materials Operating supplies $ $ |
Equity Investments (Tables)
Equity Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity Investments | |
Company's ownership percentage in affiliates | O-I Ownership Affiliates Percentage Business Type BJC O-I Glass Pte. Ltd. % Glass container manufacturer CO Vidrieria SARL ("COV") % Glass container manufacturer Rocky Mountain Bottle Company % Glass container manufacturer Tata Chemical (Soda Ash) Partners % Soda ash supplier Vetrerie Meridionali SpA ("VeMe") % Glass container manufacturer Vetri Speciali SpA % Specialty glass manufacturer |
Equity in earnings | 2016 2015 2014 Equity in earnings: Non-U.S. $ $ $ U.S. Total $ $ $ Dividends received $ $ $ |
Summary of balance sheet information of equity investments | 2016 2015 At end of year: Current assets $ $ Non-current assets Total assets Current liabilities Other liabilities and deferred items Total liabilities and deferred items Net assets $ $ |
Summary of income statement information of equity investments | 2016 2015 2014 For the year: Net sales $ $ $ Gross profit $ $ $ Net earnings $ $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets | |
Schedule of changes in the carrying amount of goodwill | North Latin Europe America America Other Total Balance as of January 1, 2014 $ $ $ $ $ Translation effects Balance as of December 31, 2014 Acquisition related adjustments Translation effects Balance as of December 31, 2015 Acquisition related adjustments Translation effects Balance as of December 31, 2016 $ $ $ $ $ |
Prepaid Expenses and Other As34
Prepaid Expenses and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Prepaid Expenses and Other Assets | |
Schedule of Prepaid expenses and other current assets | 2016 2015 Prepaid expenses $ $ Value added taxes Other $ $ |
Schedule of other assets | 2016 2015 Deferred tax assets $ $ Deferred returnable packaging costs Repair part inventories Capitalized software Value added taxes Deferred finance fees Other $ $ |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments | |
Effect of commodity futures contracts designated as cash flow hedges on the results of operations | Amount of gain (loss) Reclassified from Amount of gain (loss) Recognized in OCI on Accumulated OCI into Income Commodity Forward Contracts (reported in cost of goods sold) (Effective Portion) (Effective Portion) 2016 2015 2014 2016 2015 2014 $ $ $ $ — $ (1) $ |
Effect of the forward exchange contracts not designated as hedging instruments on the results of operations | Amount of Gain (Loss) Location of Gain (Loss) Recognized in Income on Recognized in Income on Foreign Exchange Contracts Foreign Exchange Contracts 2016 2015 2014 Other expense, net $ $ $ |
Balance Sheet Classification of derivative instruments | Fair Value Balance Sheet Location 2016 2015 Asset Derivatives: Derivatives designated as hedging instruments: Commodity futures contracts b $ $ — Derivatives not designated as hedging instruments: Foreign exchange derivative contracts a $ $ Total asset derivatives $ $ Liability Derivatives: Derivatives designated as hedging instruments: Commodity futures contracts c $ — $ Derivatives not designated as hedging instruments: Foreign exchange derivative contracts c Total liability derivatives $ $ |
Restructuring Accruals, Asset36
Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities | |
Selected information related to the restructuring accruals | European Other Asset Asia Pacific Restructuring Total Optimization Restructuring Actions Restructuring Balance at January 1, 2015 $ $ $ $ Charges Write-down of assets to net realizable value Net cash paid, principally severance and related benefits Other, including foreign exchange translation Balance at December 31, 2015 $ $ $ $ |
Pension Benefit Plans and Oth37
Pension Benefit Plans and Other Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Pension Benefit Plans and Other Postretirement Benefit Plans | |
Weighted average assumptions used to determine benefit obligations and net periodic pension costs for pension plans, and accumulated postretirement benefit obligation and net postretirement benefit cost for postretirement plans | U.S. Non-U.S. 2016 2015 2016 2015 Discount rate % % % % Rate of compensation increase N/A % % % The weighted average assumptions used to determine net periodic pension costs are as follows: U.S. Non-U.S. 2016 2015 2014 2016 2015 2014 Discount rate 4.43 % % % 3.68 % % % Rate of compensation increase 2.97 % % % 2.84 % % % Expected long-term rate of return on assets 7.50 % % % 7.15 % % % |
Pension Benefit Plans | |
Pension Benefit Plans and Other Postretirement Benefit Plans | |
Changes in the benefit obligations | U.S. Non-U.S. 2016 2015 2016 2015 Obligations at beginning of year $ $ $ $ Change in benefit obligations: Service cost Interest cost Actuarial (gain) loss, including the effect of change in discount rates Curtailment, settlement, and plan amendment Acquisitions Participant contributions Benefit payments Other Foreign currency translation Net change in benefit obligations Obligations at end of year $ $ $ $ |
Changes in the fair value of the pension plans' assets | U.S. Non-U.S. 2016 2015 2016 2015 Fair value at beginning of year $ $ $ $ Change in fair value: Actual gain (loss) on plan assets Benefit payments Employer contributions Participant contributions Settlements Acquisitions Foreign currency translation Other Net change in fair value of assets Fair value at end of year $ $ $ $ |
Funded status | U.S. Non-U.S. 2016 2015 2016 2015 Plan assets at fair value $ $ $ $ Projected benefit obligations Plan assets less than projected benefit obligations Items not yet recognized in pension expense: Actuarial loss Prior service cost (credit) Net amount recognized $ $ $ $ |
Net amount recognized included in the Consolidated Balance Sheets | U.S. Non-U.S. 2016 2015 2016 2015 Pension assets $ — $ — $ $ Current pension liability, included with other accrued liabilities Pension benefits Accumulated other comprehensive loss Net amount recognized $ $ $ $ |
Changes in plan assets and/or benefit obligations recognized in accumulated other comprehensive income | U.S. Non-U.S. 2016 2015 2016 2015 Current year actuarial (gain) loss $ $ $ $ Amortization of actuarial loss Settlement — Translation $ $ $ $ |
Components of net periodic pension cost | U.S. Non-U.S. 2016 2015 2014 2016 2015 2014 Service cost $ $ $ $ $ $ Interest cost Expected asset return Amortization: Actuarial loss Prior service credit Net amortization Net expense $ $ $ $ $ $ |
Amounts expected to be amortized from accumulated other comprehensive income during 2015 | U.S. Non-U.S. Amortization: Actuarial loss $ $ Prior service cost Net amortization $ $ |
Information for plans with projected and accumulated benefit obligations in excess of the fair value of plan assets | Projected Benefit Obligation Exceeds Accumulated Benefit Obligation Exceeds the Fair Value of Plan Assets the Fair Value of Plan Assets U.S. Non-U.S. U.S. Non-U.S. 2016 2015 2016 2015 2016 2015 2016 2015 Projected benefit obligations $ $ $ $ $ $ $ $ Accumulated benefit obligation Fair value of plan assets |
Fair values of defined benefit pension plan assets and target allocations | 2016 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ $ — $ — $ $ $ — $ — $ Equity securities — — Debt securities Real estate Other Total $ $ $ $ $ $ Investments measured at net asset value $ $ Total non-U.S. assets at fair value $ $ |
Reconciliation of pension plan assets recorded at fair value using significant unobservable inputs (Level 3) | 2016 2015 Beginning balance $ $ Net increase (decrease) Ending balance $ $ |
Estimated future benefit payments, reflecting expected future service, as appropriate, expected to be paid | Year(s) U.S. Non-U.S. 2017 $ $ 2018 2019 2020 2021 2022 - 2026 |
Postretirement Benefits Other Than Pensions | |
Pension Benefit Plans and Other Postretirement Benefit Plans | |
Changes in the benefit obligations | U.S. Non-U.S. 2016 2015 2016 2015 Obligations at beginning of year $ $ $ $ Change in benefit obligations: Service cost Interest cost Actuarial (gain) loss, including the effect of changing discount rates Benefit payments Foreign currency translation Other Net change in benefit obligations Obligations at end of year $ $ $ $ |
Funded status | U.S. Non-U.S. 2016 2015 2016 2015 Postretirement benefit obligations $ $ $ $ Items not yet recognized in net postretirement benefit cost: Actuarial gain (loss) Prior service credit Net amount recognized $ $ $ $ |
Net amount recognized included in the Consolidated Balance Sheets | U.S. Non-U.S. 2016 2015 2016 2015 Current nonpension postretirement benefit, included with Other accrued liabilities $ $ $ $ Nonpension postretirement benefits Accumulated other comprehensive income (loss) Net amount recognized $ $ $ $ |
Changes in plan assets and/or benefit obligations recognized in accumulated other comprehensive income | U.S. Non-U.S. 2016 2015 2016 2015 Current year actuarial (gain) loss $ $ $ $ — Amortization of actuarial loss Amortization of prior service credit $ $ $ $ — |
Components of net periodic pension cost | U.S. Non-U.S. 2016 2015 2014 2016 2015 2014 Service cost $ — $ — $ — $ $ $ Interest cost Curtailment gain Amortization: Actuarial loss Prior service credit Net amortization — — — Net postretirement benefit (income) cost $ $ $ $ $ $ |
Amounts expected to be amortized from accumulated other comprehensive income during 2015 | U.S. Non-U.S. Amortization: Actuarial loss $ $ — Prior service credit Net amortization $ $ — |
Weighted average assumptions used to determine benefit obligations and net periodic pension costs for pension plans, and accumulated postretirement benefit obligation and net postretirement benefit cost for postretirement plans | U.S. Non-U.S. 2016 2015 2014 2016 2015 2014 Accumulated postretirement benefit obligation % % % % % % Net postretirement benefit cost % % % % % % |
Weighted average assumed health care cost trend rates | U.S. Non-U.S. 2016 2015 2016 2015 Health care cost trend rate assumed for next year % % % % Rate to which the cost trend rate is assumed to decline (ultimate trend rate) % % % % Year that the rate reaches the ultimate trend rate N/A N/A |
Effects of one-percentage-point change in assumed health care cost trend rates on amount reported for the postretirement benefit plans | U.S. Non-U.S. 1-Percentage-Point 1-Percentage-Point Increase Decrease Increase Decrease Effect on total of service and interest cost $ — $ — $ $ Effect on accumulated postretirement benefit obligations |
Estimated future benefit payments, reflecting expected future service, as appropriate, expected to be paid | Year(s) U.S. Non-U.S. 2017 $ $ 2018 2019 2020 2021 2022 - 2026 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Provision for income taxes calculated based on components of earnings (loss) before income taxes | Continuing operations 2016 2015 2014 U.S. $ $ $ Non-U.S. $ $ $ Discontinued operations 2016 2015 2014 U.S. $ — $ — $ Non-U.S. $ $ $ |
Provision (benefit) for income taxes | 2016 2015 2014 Current: U.S. $ — $ $ Non-U.S. Deferred: U.S. — Non-U.S. Total: U.S. Non-U.S. Total for continuing operations Total for discontinued operations — — — $ $ $ |
Reconciliation of the provision for income taxes | 2016 2015 2014 Tax provision on pretax earnings from continuing operations at statutory U.S. Federal tax rate $ $ $ Increase (decrease) in provision for income taxes due to: Non-U.S. tax rates Changes in valuation allowance Withholding tax, net U.S. tax consolidation benefit Non-deductible acquisition costs U.S. tax on intercompany dividends and interest Tax exempt income Tax law changes Tax credit Changes in tax reserves Mexico inflationary adjustments Intraperiod tax allocation Other items Provision for income taxes $ $ $ |
Significant components of deferred tax assets and liabilities and deferred taxes included in the Consolidated Balance Sheets | 2016 2015 Deferred tax assets: Accrued postretirement benefits $ $ Foreign tax credit Operating and capital loss carryovers Other credit carryovers Accrued liabilities Pension liability Other Total deferred tax assets Deferred tax liabilities: Property, plant and equipment Intangibles and deferred software Other Total deferred tax liabilities Valuation allowance Net deferred taxes $ $ Deferred taxes are included in the Consolidated Balance Sheets at December 31, 2016 and 2015 as follows: 2016 2015 Other assets $ $ Deferred taxes Net deferred taxes $ $ |
Reconciliation of the gross unrecognized tax benefits | 2016 2015 2014 Balance at January 1 $ $ $ Additions and reductions for tax positions of prior years Additions based on tax positions related to the current year Reductions due to the lapse of the applicable statute of limitations Reductions due to settlements Foreign currency translation Balance at December 31 $ $ $ Unrecognized tax benefits, which if recognized, would impact the Company’s effective income tax rate $ $ $ Accrued interest and penalties at December 31 $ $ $ Interest and penalties included in tax expense for the years ended December 31 $ $ $ |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt | |
Long-term Debt | 2016 2015 Secured Credit Agreement: Revolving Credit Facility: Revolving Loans $ — $ — Term Loans: Term Loan A Term Loan A (€279 million at December 31, 2016) Term Loan B Senior Notes: 6.75%, due 2020 (€500 million) 4.875%, due 2021 (€330 million) 5.00%, due 2022 5.875%, due 2023 3.125%, due 2024 (€500 million) 5.375%, due 2025 6.375%, due 2025 Payable to OI Inc. Capital leases Other Total long-term debt Less amounts due within one year Long-term debt $ $ |
Information related to accounts receivable securitization program | 2016 2015 Balance (included in short-term loans) $ $ Weighted average interest rate % % |
Fair values of the Company's significant fixed rate debt obligations | Principal Indicated Amount Market Price Fair Value Senior Notes: 6.75%, due 2020 (€500 million) $ $ $ 4.875%, due 2021 (€330 million) 5.00%, due 2022 5.875%, due 2023 3.125%, due 2024 (€500 million) 6.375%, due 2025 5.375%, due 2025 |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Contingencies | |
Asbestos filings and the claims pending at the end of each listed year | 2016 2015 2014 Pending at beginning of year $ $ $ Disposed Filed Pending at end of year $ $ $ |
Stock Options and Other Stock41
Stock Options and Other Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock Options and Other Stock Based Compensation | |
Summary of option activity | Weighted Weighted Average Average Remaining Number of Exercise Contractual Aggregate Shares Price Term Intrinsic (thousands) (per share) (years) Value Options outstanding at January 1, 2016 $ Granted Exercised Forfeited or expired Options outstanding at December 31, 2016 $ Options vested or expected to vest at December 31, 2016 $ $ Options exercisable at December 31, 2016 $ $ — |
Additional information related to stock options | 2016 2015 2014 Weighted average grant-date fair value of options granted (per share) $ $ $ Aggregate intrinsic value of options exercised $ $ — $ Aggregate cash received from options exercised $ $ $ |
Schedule of weighted average assumptions used to estimate the fair value of each option grant on the date of grant using the Black-Scholes option pricing model | 2016 2015 2014 Expected life of options (years) Expected stock price volatility % % % Risk-free interest rate % % % Expected dividend yield % % % |
Restricted shares and restricted share units activity | Weighted Number of Average Restricted Grant-Date Shares Fair Value (thousands) (per share) Nonvested at January 1, 2016 $ Granted Vested Forfeited Nonvested at December 31, 2016 Awards granted during 2015 $ Awards granted during 2014 $ 2016 2015 2014 Total fair value of shares vested $ $ $ |
Performance vested restricted share unit activity | Number of Performance Weighted Average Vested Restricted Shares Grant-Date Fair Value Units (thousands) (per unit) Nonvested at January 1, 2016 $ Granted Vested Forfeited/Cancelled Nonvested at December 31, 2016 Awards granted during 2015 $ Awards granted during 2014 $ |
Other Expense, net (Tables)
Other Expense, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Expense, net | |
Schedule of other expense (income), net | 2016 2015 2014 Restructuring, asset impairment and other charges $ $ $ Intangible amortization expense Impairment of equity investment Gain on China land compensation Royalty income Strategic transaction costs Acquisition-related fair value intangible adjustments Non-income tax charge Foreign currency exchange loss (gain) Other expense (income) $ $ $ |
Supplemental Cash Flow Inform43
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | 2016 2015 2014 Decrease (increase) in current assets: Receivables $ $ $ Inventories Prepaid expenses and other Increase (decrease) in current liabilities: Accounts payable Accrued liabilities Salaries and wages U.S. and foreign income taxes $ $ $ |
Income taxes paid (received) in cash | 2016 2015 2014 Interest paid in cash $ $ $ Income taxes paid in cash (all non-U.S.) |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations | |
Schedule of preliminary estimates of fair value of the assets and liabilities | September 1, 2015 Measurement Period Adjustments September 30, 2016 Cash $ $ — $ Other current assets Goodwill Customer list intangibles Net property, plant and equipment Total assets Current liabilities Long-term debt Long-term liabilities Net assets acquired $ $ — $ |
Pro Forma Information - Vitro45
Pro Forma Information - Vitro Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Pro Forma Information - Vitro Acquisition | |
Schedule of pro-forma information | Year Ending December 31, 2015 As Acquisition Financing Pro Forma Reported Adjustments Adjustments As Adjusted Net sales $ $ $ — $ Earnings from continuing operations attributable to the Company $ $ $ $ |
Financial Information for Subsi
Financial Information for Subsidiary Guarantors and Non-Guarantors (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Financial Information for Subsidiary Guarantors and Non-Guarantors Disclosure | |
Balance Sheet | December 31, 2016 Non- Guarantor Guarantor Balance Sheet Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Current assets: Cash and cash equivalents $ — $ — $ $ $ — $ Trade receivables, net Inventories Prepaid expenses and other current assets Total current assets — — Investments in and advances to subsidiaries — Property, plant and equipment, net Intangibles Goodwill Other assets Total assets $ $ $ $ $ $ Current liabilities: Accounts payable and accrued liabilities $ $ $ $ $ $ Short-term loans and long-term debt due within one year Other liabilities Total current liabilities — — Long-term debt Other non-current liabilities Investments by and advances from parent — Total share owner's equity of the Company Noncontrolling interests Total liabilities and share owner's equity $ $ $ $ $ $ December 31, 2015 Non- Guarantor Guarantor Balance Sheet Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Current assets: Cash and cash equivalents $ — $ — $ $ $ — $ Trade receivables, net Inventories Prepaid expenses and other current assets Total current assets — — Investments in and advances to subsidiaries — Property, plant and equipment, net Intangibles Goodwill Other assets Total assets $ $ $ $ $ $ Current liabilities: Accounts payable and accrued liabilities $ $ $ $ $ $ Short-term loans and long-term debt due within one year Other liabilities Total current liabilities — — Long-term debt Other non-current liabilities Investments by and advances from parent — Total share owner's equity of the Company Noncontrolling interests Total liabilities and share owner's equity $ $ $ $ $ $ |
Results of Operations | Year ended December 31, 2016 Non- Guarantor Guarantor Results of Operations Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ $ $ Cost of goods sold Gross profit — Research, engineering, selling, administrative and other Net intercompany interest — Interest expense, net Equity earnings from subsidiaries — Other equity earnings Other expense, net Earnings before income taxes Provision for income taxes Earnings from continuing operations Loss from discontinued operations Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to the Company $ $ $ $ $ $ Year ended December 31, 2016 Non- Guarantor Guarantor Comprehensive Income Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Net earnings $ $ $ $ $ $ Other comprehensive income (loss) Total comprehensive income (loss) Comprehensive income attributable to noncontrolling interests Comprehensive income (loss) attributable to the Company $ $ $ $ $ $ Year ended December 31, 2015 Non- Guarantor Guarantor Results of Operations Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ $ $ Cost of goods sold Gross profit — Research, engineering, selling, administrative and other Net intercompany interest — Interest expense, net Equity earnings from subsidiaries — Other equity earnings Other expense, net Earnings before income taxes Provision for income taxes Earnings from continuing operations Loss from discontinued operations Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to the Company $ $ $ $ $ $ Year ended December 31, 2015 Non- Guarantor Guarantor Comprehensive Income Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Net earnings $ $ $ $ $ $ Other comprehensive income (loss) Total comprehensive income (loss) Comprehensive income attributable to noncontrolling interests Comprehensive income (loss) attributable to the Company $ $ $ $ $ $ Year ended December 31, 2014 Non- Guarantor Guarantor Results of Operations Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ $ $ Cost of goods sold Gross profit Research, engineering, selling, administrative and other Net intercompany interest — Interest expense, net Equity earnings from subsidiaries — Other equity earnings Other expense, net Earnings before income taxes Provision for income taxes Earnings from continuing operations Loss from discontinued operations Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to the Company $ $ $ $ $ $ Year ended December 31, 2014 Non- Guarantor Guarantor Comprehensive Income Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Net earnings $ $ $ $ $ $ Other comprehensive income (loss) Total comprehensive income (loss) Comprehensive income attributable to noncontrolling interests Comprehensive income (loss) attributable to the Company $ $ $ $ $ $ |
Cash Flows | Year ended December 31, 2016 Non- Guarantor Guarantor Cash Flows Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Cash provided by continuing operating activities $ — $ $ $ — $ Cash utilized in discontinued operating activities Cash utilized in investing activities Cash utilized in financing activities Effect of exchange rate change on cash Net change in cash — — — Cash at beginning of period Cash at end of period $ — $ — $ $ $ — $ Year ended December 31, 2015 Non- Guarantor Guarantor Cash Flows Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Cash provided by continuing operating activities $ — $ $ $ $ Cash utilized in discontinued operating activities Cash provided by (utilized in) investing activities Cash provided by (utilized in) financing activities Effect of exchange rate change on cash Net change in cash — — — Cash at beginning of period Cash at end of period $ — $ — $ $ $ — $ Year ended December 31, 2014 Non- Guarantor Guarantor Cash Flows Parent Issuer Subsidiaries Subsidiaries Eliminations Consolidated Cash provided by (utilized in) continuing operating activities $ — $ $ $ $ $ Cash utilized in discontinued operating activities — — — Cash utilized in investing activities — — Cash provided by (utilized in) financing activities — Effect of exchange rate change on cash — — — — Net change in cash — — — Cash at beginning of period — — — Cash at end of period $ — $ — $ $ $ — $ |
Significant Accounting Polici47
Significant Accounting Policies (Details) | Dec. 31, 2016item |
Equity Method Investments | |
Owens-Illinois, Inc.'s ownership percentage in the Company | 100.00% |
Number of countries in which the entity operates | 23 |
Maximum | |
Equity Method Investments | |
General ownership percentage for equity method investments | 50.00% |
Minimum | |
Equity Method Investments | |
General ownership percentage for equity method investments | 20.00% |
Significant Accounting Polici48
Significant Accounting Policies - Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Factory machinery and equipment | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives | 5 years |
Factory machinery and equipment | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives | 25 years |
Glass-melting furnaces and forming machines | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives | 7 years |
Glass-melting furnaces and forming machines | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives | 15 years |
Buildings and building equipment | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives | 10 years |
Buildings and building equipment | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives | 50 years |
Significant Accounting Polici49
Significant Accounting Policies - Other Assets (Details) $ in Millions | Dec. 31, 2016USD ($) |
New Accounting Pronouncement | |
Operating leases total | $ 205 |
Segment Information - Net Sales
Segment Information - Net Sales and Operating Profit (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)segmentregion | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting Information | |||
Number of reportable segments | segment | 4 | ||
Regions not directly related to operations | region | 1 | ||
Net sales: | |||
Net sales | $ 6,702 | $ 6,156 | $ 6,784 |
Items excluded from segment operating profit: | |||
Retained corporate costs and other | (98) | (70) | (100) |
Restructuring, asset impairment and other | (129) | (80) | (91) |
Strategic transaction costs | (23) | ||
Acquisition-related fair value inventory adjustments | (22) | ||
Acquisition-related fair value intangible adjustments | (10) | ||
Pension settlement charges | (98) | (65) | |
Non-income tax charge | (69) | ||
Gain on China land sale | 71 | ||
Interest expense, net | (272) | (251) | (230) |
Earnings from continuing operations before income taxes | 356 | 284 | 353 |
Reportable Segment Totals | |||
Net sales: | |||
Net sales | 6,636 | 6,098 | 6,749 |
Segment Operating Profit: | |||
Segment operating profit | 882 | 740 | 908 |
Europe | |||
Net sales: | |||
Net sales | 2,300 | 2,324 | 2,794 |
Segment Operating Profit: | |||
Segment operating profit | 237 | 209 | 353 |
North America | |||
Net sales: | |||
Net sales | 2,220 | 2,039 | 2,003 |
Segment Operating Profit: | |||
Segment operating profit | 299 | 265 | 240 |
Latin America | |||
Net sales: | |||
Net sales | 1,432 | 1,064 | 1,159 |
Segment Operating Profit: | |||
Segment operating profit | 269 | 183 | 227 |
Asia Pacific | |||
Net sales: | |||
Net sales | 684 | 671 | 793 |
Segment Operating Profit: | |||
Segment operating profit | 77 | 83 | 88 |
Other | |||
Net sales: | |||
Net sales | $ 66 | $ 58 | $ 35 |
Segment Information - Assets, I
Segment Information - Assets, Investments, Equity, Capital Expenses and Depreciation and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Assets | |||
Total assets: | $ 9,135 | $ 9,421 | $ 7,843 |
Equity investments | |||
Equity investments: | 433 | 409 | 427 |
Equity earnings: | |||
Equity earnings | 60 | 60 | 64 |
Capital expenditures: | |||
Capital expenditures | 454 | 402 | 369 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense | 478 | 409 | 418 |
Reportable Segment Totals | |||
Assets | |||
Total assets: | 8,777 | 9,126 | 7,503 |
Equity investments | |||
Equity investments: | 216 | 245 | 258 |
Equity earnings: | |||
Equity earnings | 31 | 42 | 40 |
Capital expenditures: | |||
Capital expenditures | 453 | 400 | 366 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense | 467 | 395 | 403 |
Europe | |||
Assets | |||
Total assets: | 2,792 | 2,902 | 3,214 |
Equity investments | |||
Equity investments: | 78 | 78 | 81 |
Equity earnings: | |||
Equity earnings | 15 | 16 | 19 |
Capital expenditures: | |||
Capital expenditures | 163 | 164 | 188 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense | 118 | 120 | 140 |
North America | |||
Assets | |||
Total assets: | 2,522 | 2,500 | 1,971 |
Equity investments | |||
Equity investments: | 21 | 22 | 24 |
Equity earnings: | |||
Equity earnings | 12 | 19 | 17 |
Capital expenditures: | |||
Capital expenditures | 108 | 97 | 89 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense | 139 | 128 | 131 |
Latin America | |||
Assets | |||
Total assets: | 2,537 | 2,807 | 1,300 |
Capital expenditures: | |||
Capital expenditures | 123 | 89 | 55 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense | 173 | 107 | 79 |
Asia Pacific | |||
Assets | |||
Total assets: | 926 | 917 | 1,018 |
Equity investments | |||
Equity investments: | 117 | 145 | 153 |
Equity earnings: | |||
Equity earnings | 4 | 7 | 4 |
Capital expenditures: | |||
Capital expenditures | 59 | 50 | 34 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense | 37 | 40 | 53 |
Other | |||
Assets | |||
Total assets: | 358 | 295 | 340 |
Equity investments | |||
Equity investments: | 217 | 164 | 169 |
Equity earnings: | |||
Equity earnings | 29 | 18 | 24 |
Capital expenditures: | |||
Capital expenditures | 1 | 2 | 3 |
Depreciation and amortization expense: | |||
Depreciation and amortization expense | $ 11 | $ 14 | $ 15 |
Segment Information - PPE and N
Segment Information - PPE and Net Sales (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information | |||
Property, plant and equipment, net | $ 2,880 | $ 2,961 | $ 2,445 |
Net sales | 6,702 | 6,156 | 6,784 |
Latin America | |||
Segment Reporting Information | |||
Net sales | 1,432 | 1,064 | 1,159 |
Latin America | Intercompany sales | |||
Segment Reporting Information | |||
Net sales | 195 | 101 | 0 |
U.S. | |||
Segment Reporting Information | |||
Property, plant and equipment, net | 749 | 736 | 713 |
Net sales | 2,124 | 1,939 | 1,852 |
Non-U.S. | |||
Segment Reporting Information | |||
Property, plant and equipment, net | 2,131 | 2,225 | 1,732 |
Net sales | $ 4,578 | $ 4,217 | $ 4,932 |
Segment Information - Percentag
Segment Information - Percentage of Consolidated Net Sales From Continuing Operations (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Minimum | |||
Segment Reporting Information | |||
Percentage of consolidated net sales from continuing operations (as a percent) | 10.00% | ||
France | |||
Segment Reporting Information | |||
Percentage of consolidated net sales from continuing operations (as a percent) | 10.00% | 11.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Inventories | ||
Finished goods | $ 827 | $ 858 |
Raw materials | 118 | 113 |
Operating supplies | 38 | 36 |
Inventories | $ 983 | $ 1,007 |
Equity Investments (Details)
Equity Investments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity Investments Information | |||
Equity earnings | $ 60 | $ 60 | $ 64 |
Summarized combined financial information for equity associates at end of year: | |||
Current assets | 451 | 430 | |
Non-current assets | 1,025 | 959 | |
Total assets | 1,476 | 1,389 | |
Current liabilities | 200 | 203 | |
Other liabilities and deferred items | 368 | 211 | |
Total liabilities and deferred items | 568 | 414 | |
Net assets | 908 | 975 | |
Summarized combined financial information for equity associates for the year: | |||
Net sales | 755 | 719 | 752 |
Gross profit | 182 | 193 | 198 |
Net earnings | 134 | 139 | 150 |
Dividends received | 38 | 53 | 54 |
Difference between investment carrying value and amount of underlying equity in net assets | 12 | ||
Purchased equity from affiliates | 176 | 161 | |
Due to Affiliate | 76 | 66 | |
Non-U.S. | |||
Equity Investments Information | |||
Equity earnings | 28 | 23 | 23 |
U.S. | |||
Equity Investments Information | |||
Equity earnings | $ 32 | $ 37 | $ 41 |
BJC O-I Glass Pte. Ltd | |||
Equity Investments Information | |||
Percentage of equity method investments | 50.00% | ||
CO Vidrieria SARL ("COV") | |||
Equity Investments Information | |||
Percentage of equity method investments | 50.00% | ||
Rocky Mountain Bottle Company | |||
Equity Investments Information | |||
Percentage of equity method investments | 50.00% | ||
Tata Chemical (Soda Ash) Partners | |||
Equity Investments Information | |||
Percentage of equity method investments | 25.00% | ||
Vetrerie Meridionali SpA ("VeMe") | |||
Equity Investments Information | |||
Percentage of equity method investments | 50.00% | ||
Vetri Speciali SpA | |||
Equity Investments Information | |||
Percentage of equity method investments | 50.00% |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets - Goodwill Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at beginning of period | $ 2,489 | $ 1,893 | $ 2,059 | |
Acquisitions | 41 | 796 | ||
Translation effects | (68) | (200) | (166) | |
Balance of Goodwill at end of the period | $ 2,462 | 2,462 | 2,489 | 1,893 |
Impairment charge | 0 | |||
Europe | ||||
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at beginning of period | 840 | 926 | 1,044 | |
Translation effects | (32) | (86) | (118) | |
Balance of Goodwill at end of the period | 808 | 808 | 840 | 926 |
North America | ||||
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at beginning of period | 1,020 | 723 | 734 | |
Acquisitions | 15 | 316 | ||
Translation effects | 3 | (19) | (11) | |
Balance of Goodwill at end of the period | 1,038 | 1,038 | 1,020 | 723 |
Latin America | ||||
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at beginning of period | 624 | 239 | 276 | |
Acquisitions | 26 | 480 | ||
Translation effects | (39) | (95) | (37) | |
Balance of Goodwill at end of the period | 611 | 611 | 624 | 239 |
Asia Pacific | ||||
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at end of the period | 0 | 0 | ||
Accumulated impairment losses | 1,135 | 1,135 | 1,135 | 1,135 |
Other | ||||
Changes in the carrying amount of goodwill | ||||
Balance of Goodwill at beginning of period | 5 | 5 | 5 | |
Balance of Goodwill at end of the period | $ 5 | $ 5 | $ 5 | $ 5 |
Goodwill and Intangible Asset57
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets | |||
Net Carrying Amount | $ 464 | $ 597 | |
Amortization expense | $ 39 | 21 | $ 1 |
Customer list intangibles | |||
Finite-Lived Intangible Assets | |||
Useful life | 20 years | ||
Amortization expense | $ 39 | $ 21 | $ 1 |
2,017 | 44 | ||
2,018 | 44 | ||
2,019 | 42 | ||
2,020 | 41 | ||
2,021 | 39 | ||
Impairment of intangible assets | $ 0 |
Prepaid Expenses and Other As58
Prepaid Expenses and Other Assets - Noncurrent assets and Capitalized Software (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Prepaid expenses and other current assets: | |||
Prepaid expenses | $ 50 | $ 52 | |
Value added taxes | 46 | 195 | |
Other | 103 | 119 | |
Prepaid expenses and other current assets | 199 | 366 | |
Other assets | |||
Deferred tax assets | 185 | 177 | |
Deferred returnable packaging costs | 115 | 110 | |
Repair parts inventories | 107 | 118 | |
Capitalized software | 85 | 86 | |
Value added taxes | 22 | 17 | |
Deferred finance fees | 5 | 6 | |
Other | 83 | 85 | |
Total other assets | 602 | 599 | |
Capitalized software | |||
Other information related to capitalized software | |||
Amortization expense for capitalized software | 13 | $ 19 | $ 17 |
Estimated amortization expense | |||
2,017 | 11 | ||
2,018 | 14 | ||
2,019 | 14 | ||
2,020 | 13 | ||
2,021 | $ 12 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)MMBTU | Dec. 31, 2015USD ($)MMBTU | Dec. 31, 2014USD ($) | |
Derivatives and Hedges | |||
Foreign exchange contracts gain (loss) recognized in income | $ 6 | $ 10 | $ (8) |
Commodity forward contracts | Cash Flow Hedges | |||
Derivatives and Hedges | |||
Coverage of commodity forward contracts (in MM BTUs) | MMBTU | 12,300,000 | 7,300,000 | |
Unrecognized gain (loss) included in Accumulated OCI | $ 6 | $ (4) | |
Commodity forward contracts gain (loss) recognized in OCI | $ 7 | (4) | 3 |
Commodity forward contracts gain (loss) reclassified from accumulated OCI into income | (1) | $ 2 | |
Commodity forward contracts | Cash Flow Hedges | Minimum | |||
Derivatives and Hedges | |||
Period during which unrecognized loss included in Accumulated OCI will be reclassified into earnings | 12 months | ||
Commodity forward contracts | Cash Flow Hedges | Maximum | |||
Derivatives and Hedges | |||
Period during which unrecognized loss included in Accumulated OCI will be reclassified into earnings | 24 months | ||
Forward exchange derivative contracts | Derivatives not designated as hedging instruments | |||
Derivatives and Hedges | |||
Forward exchange contracts in various currencies | $ 490 | $ 790 |
Derivative Instruments - Design
Derivative Instruments - Designation (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value | ||
Total asset derivatives | $ 15 | $ 14 |
Total liability derivatives | 5 | 5 |
Commodity futures contracts | Other liabilities (current) | ||
Derivatives, Fair Value | ||
Total asset derivatives | 6 | |
Total liability derivatives | 3 | |
Forward exchange derivative contracts | Receivables. | ||
Derivatives, Fair Value | ||
Total asset derivatives | 9 | 14 |
Forward exchange derivative contracts | Other liabilities (current) | ||
Derivatives, Fair Value | ||
Total liability derivatives | $ 5 | $ 2 |
Restructuring Accruals, Asset61
Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring accrual | |||
Beginning balance, restructuring reserve | $ 43 | $ 60 | |
Charges | 98 | 63 | $ 76 |
Write-down of assets to net realizable value | (28) | (31) | |
Net cash paid, principally severance and related benefits | (24) | (38) | (58) |
Other, including foreign exchange translation | (4) | 11 | |
Ending balance, restructuring reserve | 85 | 43 | 60 |
European Asset Optimization | |||
Restructuring accrual | |||
Beginning balance, restructuring reserve | 3 | 12 | |
Net cash paid, principally severance and related benefits | (5) | ||
Other, including foreign exchange translation | 4 | ||
Ending balance, restructuring reserve | 3 | 12 | |
Restructuring, Additional Information | |||
Cumulative employee costs and asset impairments | 127 | ||
Employee costs and asset impairments | 0 | 0 | 1 |
Asia Pacific Restructuring | |||
Restructuring accrual | |||
Beginning balance, restructuring reserve | 7 | 12 | |
Charges | 4 | 5 | 73 |
Write-down of assets to net realizable value | (4) | ||
Net cash paid, principally severance and related benefits | (3) | (5) | |
Other, including foreign exchange translation | (1) | 1 | |
Ending balance, restructuring reserve | 7 | 7 | 12 |
Restructuring, Additional Information | |||
Cumulative employee costs and asset impairments | 224 | ||
Other Restructuring Actions | |||
Restructuring accrual | |||
Beginning balance, restructuring reserve | 33 | 36 | |
Charges | 58 | ||
Write-down of assets to net realizable value | (27) | ||
Net cash paid, principally severance and related benefits | (28) | ||
Other, including foreign exchange translation | 6 | ||
Ending balance, restructuring reserve | 33 | 36 | |
Restructuring, Additional Information | |||
Other restructuring costs | 30 | 6 | |
Headcount reduction charges | $ 2 | ||
Other Restructuring Actions | Latin America | |||
Restructuring, Additional Information | |||
Employee costs, asset impairments and other exit costs | 64 | 14 | |
Other Restructuring Actions | North America | |||
Restructuring, Additional Information | |||
Employee costs and asset impairments | 38 | ||
Other Restructuring Actions | |||
Restructuring accrual | |||
Beginning balance, restructuring reserve | 36 | ||
Charges | 94 | ||
Write-down of assets to net realizable value | (28) | ||
Net cash paid, principally severance and related benefits | (21) | ||
Other, including foreign exchange translation | (3) | ||
Ending balance, restructuring reserve | 78 | $ 36 | |
Severance and other employee separation costs | |||
Restructuring, Additional Information | |||
Estimated amount of restructuring accrual balance | 67 | ||
Environmental remediation costs | |||
Restructuring, Additional Information | |||
Estimated amount of restructuring accrual balance | 16 | ||
Other exit costs | |||
Restructuring, Additional Information | |||
Estimated amount of restructuring accrual balance | $ 2 |
Pension Benefit Plans and Oth62
Pension Benefit Plans and Other Postretirement Benefits - Changes in the Benefit Obligation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
U.S Pension Plans | |||
Changes in the pension and postretirement benefit obligations | |||
Obligations at beginning of year | $ 2,190 | $ 2,428 | |
Change in benefit obligations: | |||
Service cost | 15 | 24 | $ 22 |
Interest cost | 90 | 96 | 105 |
Actuarial (gain) loss, including the effect of change in discount rates | 36 | (107) | |
Curtailment and plan amendment | (200) | ||
Benefit payments | (175) | (252) | |
Other | 1 | ||
Net change in benefit obligations | (234) | (238) | |
Obligations at end of year | 1,956 | 2,190 | 2,428 |
Non-U.S. Pension Plans | |||
Changes in the pension and postretirement benefit obligations | |||
Obligations at beginning of year | 1,210 | 1,311 | |
Change in benefit obligations: | |||
Service cost | 16 | 15 | 23 |
Interest cost | 44 | 44 | 69 |
Actuarial (gain) loss, including the effect of change in discount rates | 160 | (9) | |
Acquisitions | 37 | ||
Participant contributions | 2 | 1 | |
Benefit payments | (71) | (58) | |
Other | 3 | ||
Foreign currency translation | (129) | (131) | |
Net change in benefit obligations | 25 | (101) | |
Obligations at end of year | 1,235 | 1,210 | 1,311 |
U.S Postretirement Benefit Plans | |||
Changes in the pension and postretirement benefit obligations | |||
Obligations at beginning of year | 97 | 111 | |
Change in benefit obligations: | |||
Interest cost | 4 | 4 | 5 |
Actuarial (gain) loss, including the effect of change in discount rates | (1) | (10) | |
Benefit payments | (9) | (8) | |
Other | 1 | ||
Net change in benefit obligations | (5) | (14) | |
Obligations at end of year | 92 | 97 | 111 |
Non-U.S. Postretirement Benefit Plans | |||
Changes in the pension and postretirement benefit obligations | |||
Obligations at beginning of year | 68 | 81 | |
Change in benefit obligations: | |||
Service cost | 1 | 1 | 1 |
Interest cost | 3 | 3 | 4 |
Actuarial (gain) loss, including the effect of change in discount rates | 9 | (1) | |
Benefit payments | (2) | (3) | |
Foreign currency translation | 2 | (13) | |
Net change in benefit obligations | 13 | (13) | |
Obligations at end of year | $ 81 | $ 68 | $ 81 |
Pension Benefit Plans and Oth63
Pension Benefit Plans and Other Postretirement Benefits - Changes in Fair Value of Pension Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
U.S Pension Plans | ||
Changes in fair value of pension plan assets | ||
Fair value at beginning of year | $ 1,909 | $ 2,190 |
Actual gain (loss) on plan assets | 118 | (32) |
Benefit payments | (175) | (252) |
Employer contributions | 2 | 2 |
Settlements | (200) | |
Other | 1 | |
Net change in fair value of assets | (255) | (281) |
Fair value at end of year | 1,654 | 1,909 |
Non-U.S. Pension Plans | ||
Changes in fair value of pension plan assets | ||
Fair value at beginning of year | 1,012 | 1,094 |
Actual gain (loss) on plan assets | 139 | 42 |
Benefit payments | (71) | (58) |
Employer contributions | 38 | 15 |
Acquisitions | 22 | |
Participant contributions | 2 | 1 |
Foreign currency translation | (111) | (104) |
Other | 2 | |
Net change in fair value of assets | (1) | (82) |
Fair value at end of year | $ 1,011 | $ 1,012 |
Pension Benefit Plans and Oth64
Pension Benefit Plans and Other Postretirement Benefits - Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Benefit Plans | |||
Defined Benefit Plan Disclosure | |||
Percentage of minimum target plan asset allocations | 10.00% | ||
U.S Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 1,654 | $ 1,909 | $ 2,190 |
Projected benefit and postretirement benefit obligations | (1,956) | (2,190) | (2,428) |
Plan assets less than projected benefit obligations | (302) | (281) | |
Items not yet recognized in pension expense | |||
Actuarial loss | 1,046 | 1,145 | |
Prior service cost (credit) | 1 | 2 | |
Total | 1,047 | 1,147 | |
Net amount recognized | 745 | 866 | |
Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 1,011 | 1,012 | 1,094 |
Projected benefit and postretirement benefit obligations | (1,235) | (1,210) | (1,311) |
Plan assets less than projected benefit obligations | (224) | (198) | |
Items not yet recognized in pension expense | |||
Actuarial loss | 352 | 320 | |
Prior service cost (credit) | (1) | (1) | |
Total | 351 | 319 | |
Net amount recognized | 127 | 121 | |
U.S Postretirement Benefit Plans | |||
Defined Benefit Plan Disclosure | |||
Projected benefit and postretirement benefit obligations | (92) | (97) | (111) |
Items not yet recognized in pension expense | |||
Actuarial loss | (21) | (23) | |
Prior service cost (credit) | 30 | 38 | |
Total | 9 | 15 | |
Net amount recognized | (83) | (82) | |
Non-U.S. Postretirement Benefit Plans | |||
Defined Benefit Plan Disclosure | |||
Projected benefit and postretirement benefit obligations | (81) | (68) | $ (81) |
Items not yet recognized in pension expense | |||
Actuarial loss | (6) | 3 | |
Total | (6) | 3 | |
Net amount recognized | $ (87) | $ (65) |
Pension Benefit Plans - Net amo
Pension Benefit Plans - Net amount Recognized Included in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
U.S Pension Plans | ||
Net amount recognized included in the Consolidated Balance Sheets | ||
Current pension liability and nonpension postretirement benefit, included with Other accrued liabilities | $ (7) | $ (1) |
Pension benefits and nonpension postretirement benefits | (295) | (280) |
Accumulated other comprehensive loss | 1,047 | 1,147 |
Net amount recognized | 745 | 866 |
Non-U.S. Pension Plans | ||
Net amount recognized included in the Consolidated Balance Sheets | ||
Pension assets | 40 | 32 |
Current pension liability and nonpension postretirement benefit, included with Other accrued liabilities | (7) | (6) |
Pension benefits and nonpension postretirement benefits | (257) | (224) |
Accumulated other comprehensive loss | 351 | 319 |
Net amount recognized | 127 | 121 |
U.S Postretirement Benefit Plans | ||
Net amount recognized included in the Consolidated Balance Sheets | ||
Current pension liability and nonpension postretirement benefit, included with Other accrued liabilities | (8) | (8) |
Pension benefits and nonpension postretirement benefits | (84) | (89) |
Accumulated other comprehensive loss | 9 | 15 |
Net amount recognized | (83) | (82) |
Non-U.S. Postretirement Benefit Plans | ||
Net amount recognized included in the Consolidated Balance Sheets | ||
Current pension liability and nonpension postretirement benefit, included with Other accrued liabilities | (3) | (2) |
Pension benefits and nonpension postretirement benefits | (78) | (66) |
Accumulated other comprehensive loss | (6) | 3 |
Net amount recognized | $ (87) | $ (65) |
Pension Benefit Plans - Changes
Pension Benefit Plans - Changes in Plan Assets and Benefit Obligations Recognized in AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
U.S Pension Plans | ||
Changes in plan assets and benefit obligations were recognized in accumulated other comprehensive income | ||
Current year actuarial (gain) loss | $ 66 | $ 95 |
Amortization of actuarial loss | (67) | (74) |
Settlement | (98) | |
Total | (99) | 21 |
Changes in benefit obligations were recognized in accumulated other comprehensive income | (99) | 21 |
Non-U.S. Pension Plans | ||
Changes in plan assets and benefit obligations were recognized in accumulated other comprehensive income | ||
Current year actuarial (gain) loss | 87 | 15 |
Amortization of actuarial loss | (12) | (15) |
Total | 75 | |
Translation | (43) | (31) |
Changes in benefit obligations were recognized in accumulated other comprehensive income | 32 | (31) |
U.S Postretirement Benefit Plans | ||
Changes in plan assets and benefit obligations were recognized in accumulated other comprehensive income | ||
Current year actuarial (gain) loss | (1) | (10) |
Amortization of actuarial loss | (1) | (2) |
Amortization of prior service credit | 8 | 8 |
Total | 6 | $ (4) |
Non-U.S. Postretirement Benefit Plans | ||
Changes in plan assets and benefit obligations were recognized in accumulated other comprehensive income | ||
Current year actuarial (gain) loss | 9 | |
Total | $ 9 |
Pension Benefit Plans - Compone
Pension Benefit Plans - Components of Net Pension Expense and Postretirement Benefit Cost (Details) - USD ($) $ in Millions | Oct. 01, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Pension Benefit Plans | ||||
Amortization: | ||||
Accumulated benefit obligation | $ 3,126 | $ 3,306 | ||
U.S. Hourly Pension Plan | ||||
Amortization: | ||||
Settlement cost | 98 | |||
U.S Pension Plans | ||||
Components of the net pension expense and postretirement benefit cost | ||||
Service cost | 15 | 24 | $ 22 | |
Interest cost | 90 | 96 | 105 | |
Expected asset return | (149) | (170) | (176) | |
Amortization: | ||||
Actuarial loss | 67 | 74 | 68 | |
Net amortization | 67 | 74 | 68 | |
Net periodic pension cost | 23 | 24 | 19 | |
Settlement cost | 30 | |||
Non-U.S. Pension Plans | ||||
Components of the net pension expense and postretirement benefit cost | ||||
Service cost | 16 | 15 | 23 | |
Interest cost | 44 | 44 | 69 | |
Expected asset return | (65) | (67) | (86) | |
Amortization: | ||||
Actuarial loss | 13 | 15 | 18 | |
Net amortization | 13 | 15 | 18 | |
Net periodic pension cost | 8 | 7 | 24 | |
Settlement cost | $ 35 | 3 | ||
U.S Postretirement Benefit Plans | ||||
Components of the net pension expense and postretirement benefit cost | ||||
Interest cost | 4 | 4 | 5 | |
Amortization: | ||||
Actuarial loss | 1 | 2 | 2 | |
Prior service credit | (7) | (8) | (8) | |
Net amortization | (6) | (6) | (6) | |
Net periodic pension cost | (2) | (2) | (1) | |
Non-U.S. Postretirement Benefit Plans | ||||
Components of the net pension expense and postretirement benefit cost | ||||
Service cost | 1 | 1 | 1 | |
Interest cost | 3 | 3 | 4 | |
Amortization: | ||||
Net periodic pension cost | $ 4 | $ 4 | $ 5 |
Pension Benefit Plans and Oth68
Pension Benefit Plans and Other Postretirement Benefits - Amortized from AOCI (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
U.S Pension Plans | |
Amortization: | |
Actuarial loss | $ 57 |
Prior service cost (credit) | 1 |
Net amortization | 58 |
Non-U.S. Pension Plans | |
Amortization: | |
Actuarial loss | 16 |
Net amortization | 16 |
U.S Postretirement Benefit Plans | |
Amortization: | |
Actuarial loss | (1) |
Prior service cost (credit) | 7 |
Net amortization | $ 6 |
Pension Benefit Plans and Oth69
Pension Benefit Plans and Other Postretirement Benefits - Projected and Accumulated Benefit Obligations, Fair Value(Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
U.S Pension Plans | ||
Projected Benefit Obligation Exceeds the Fair Value of Plan Assets | ||
Projected benefit obligations | $ 1,956 | $ 2,190 |
Accumulated benefit obligation | 1,956 | 2,160 |
Fair value of plan assets | 1,654 | 1,909 |
Accumulated Benefit Obligations Exceeds the Fair Value of Plan Assets | ||
Projected benefit obligations | 1,956 | 2,190 |
Accumulated benefit obligation | 1,956 | 2,160 |
Fair value of plan assets | 1,654 | 1,909 |
Non-U.S. Pension Plans | ||
Projected Benefit Obligation Exceeds the Fair Value of Plan Assets | ||
Projected benefit obligations | 897 | 876 |
Accumulated benefit obligation | 867 | 850 |
Fair value of plan assets | 632 | 645 |
Accumulated Benefit Obligations Exceeds the Fair Value of Plan Assets | ||
Projected benefit obligations | 897 | 876 |
Accumulated benefit obligation | 867 | 850 |
Fair value of plan assets | $ 632 | $ 645 |
Pension Benefit Plans and Oth70
Pension Benefit Plans and Other Postretirement Benefits - Weighted Average Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted average assumptions used to determine net periodic pension costs and net postretirement benefit cost | |||
Tenure used for computing historical long-term rate of return assumption | 10 years | ||
U.S Pension Plans | |||
Weighted average assumptions used to determine pension and accumulated postretirement benefit obligations | |||
Discount rate used to determine pension and accumulated postretirement benefit obligations (as a percent) | 4.17% | 4.43% | |
Rate of compensation increase (as a percent) | 2.97% | ||
Weighted average assumptions used to determine net periodic pension costs and net postretirement benefit cost | |||
Discount rate used to determine net periodic pension costs and net postretirement benefit cost (as a percent) | 4.43% | 4.05% | 4.81% |
Rate of compensation increase (as a percent) | 2.97% | 2.96% | 2.97% |
Expected long-term rate of return on assets (as a percent) | 7.50% | 8.00% | 8.00% |
Non-U.S. Pension Plans | |||
Weighted average assumptions used to determine pension and accumulated postretirement benefit obligations | |||
Discount rate used to determine pension and accumulated postretirement benefit obligations (as a percent) | 2.94% | 3.68% | |
Rate of compensation increase (as a percent) | 2.90% | 2.84% | |
Weighted average assumptions used to determine net periodic pension costs and net postretirement benefit cost | |||
Discount rate used to determine net periodic pension costs and net postretirement benefit cost (as a percent) | 3.68% | 3.65% | 4.14% |
Rate of compensation increase (as a percent) | 2.84% | 2.89% | 3.31% |
Expected long-term rate of return on assets (as a percent) | 7.15% | 7.21% | 7.23% |
U.S Postretirement Benefit Plans | |||
Weighted average assumptions used to determine pension and accumulated postretirement benefit obligations | |||
Discount rate used to determine pension and accumulated postretirement benefit obligations (as a percent) | 4.11% | 4.35% | 4.00% |
Weighted average assumptions used to determine net periodic pension costs and net postretirement benefit cost | |||
Discount rate used to determine net periodic pension costs and net postretirement benefit cost (as a percent) | 4.34% | 3.99% | 4.63% |
Non-U.S. Postretirement Benefit Plans | |||
Weighted average assumptions used to determine pension and accumulated postretirement benefit obligations | |||
Discount rate used to determine pension and accumulated postretirement benefit obligations (as a percent) | 3.55% | 3.80% | 3.75% |
Weighted average assumptions used to determine net periodic pension costs and net postretirement benefit cost | |||
Discount rate used to determine net periodic pension costs and net postretirement benefit cost (as a percent) | 3.80% | 3.75% | 4.47% |
Pension Benefit Plans and Oth71
Pension Benefit Plans and Other Postretirement Benefits - U.S. Plan Assets By Hierarchy (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
U.S Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 1,654 | $ 1,909 | $ 2,190 |
Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 1,011 | 1,012 | 1,094 |
Investments measured at net asset value | 901 | 931 | |
Total non-U.S. assets at fair value | 1,011 | 1,012 | |
Cash and cash equivalents | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 24 | 30 | |
Equity securities | U.S Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Percentage of pension plan assets | 62.00% | ||
Equity securities | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Percentage of pension plan assets | 41.00% | ||
Debt securities | U.S Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Percentage of pension plan assets | 31.00% | ||
Debt securities | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Percentage of pension plan assets | 42.00% | ||
Plan assets at fair value | $ 39 | 16 | |
Real estate | U.S Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Percentage of pension plan assets | 7.00% | ||
Real estate | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 4 | 5 | |
Other | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 43 | 30 | |
Real estate and other | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Percentage of pension plan assets | 17.00% | ||
Level 1 | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 61 | 46 | |
Level 1 | Cash and cash equivalents | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 24 | 30 | |
Level 1 | Debt securities | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 37 | 16 | |
Level 2 | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 39 | 24 | |
Level 2 | Debt securities | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 2 | ||
Level 2 | Other | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 37 | 24 | |
Level 3 | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 10 | 11 | $ 5 |
Level 3 | Real estate | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | 4 | 5 | |
Level 3 | Other | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Plan assets at fair value | $ 6 | $ 6 |
Pension Benefit Plans and Oth72
Pension Benefit Plans and Other Postretirement Benefits - Fair Value and Estimated Future Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure | |||
Defined contribution plans for salaried and hourly U.S. employees | $ 34 | $ 29 | $ 19 |
U.S Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Fair value at beginning of year | 1,909 | 2,190 | |
Net increase (decrease) | (255) | (281) | |
Fair value at end of year | 1,654 | 1,909 | 2,190 |
Estimated future benefit payments | |||
2,017 | 157 | ||
2,018 | 146 | ||
2,019 | 145 | ||
2,020 | 143 | ||
2,021 | 140 | ||
2022 - 2026 | 656 | ||
Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Fair value at beginning of year | 1,012 | 1,094 | |
Net increase (decrease) | (1) | (82) | |
Fair value at end of year | 1,011 | 1,012 | 1,094 |
Contribution to defined benefit plan in 2017 | 32 | ||
Estimated future benefit payments | |||
2,017 | 53 | ||
2,018 | 51 | ||
2,019 | 54 | ||
2,020 | 57 | ||
2,021 | 60 | ||
2022 - 2026 | 343 | ||
U.S Postretirement Benefit Plans | |||
Estimated future benefit payments | |||
2,017 | 8 | ||
2,018 | 8 | ||
2,019 | 8 | ||
2,020 | 8 | ||
2,021 | 7 | ||
2022 - 2026 | 30 | ||
Non-U.S. Postretirement Benefit Plans | |||
Estimated future benefit payments | |||
2,017 | 3 | ||
2,018 | 3 | ||
2,019 | 3 | ||
2,020 | 3 | ||
2,021 | 3 | ||
2022 - 2026 | 18 | ||
Other | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Fair value at beginning of year | 30 | ||
Fair value at end of year | 43 | 30 | |
Level 3 | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Fair value at beginning of year | 11 | 5 | |
Net increase (decrease) | (1) | 6 | |
Fair value at end of year | 10 | 11 | $ 5 |
Level 3 | Other | Non-U.S. Pension Plans | |||
Defined Benefit Plan Disclosure | |||
Fair value at beginning of year | 6 | ||
Fair value at end of year | $ 6 | $ 6 |
Pension Benefit Plans and Oth73
Pension Benefit Plans and Other Postretirement Benefits - Health Care Cost Trends and Percentage Changes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure | |||
Payments to the trust as required by the bargaining agreements are based upon specified amounts per hour worked | $ 6 | $ 6 | $ 6 |
U.S Postretirement Benefit Plans | |||
Weighted average assumed health care cost trend (in percent) | |||
Health care cost trend rate assumed for next year (as a percent) | 6.40% | 6.60% | |
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) (as a percent) | 5.00% | 5.00% | |
Year that the rate reaches the ultimate trend rate | 2,024 | 2,024 | |
Effect of one-percentage-point change in assumed health care cost trend rates (in percent) | |||
One-Percentage-Point Increase, effect on accumulated postretirement benefit obligations | $ 4 | ||
One-Percentage-Point Decrease, effect on accumulated postretirement benefit obligations | $ (3) | ||
Non-U.S. Postretirement Benefit Plans | |||
Weighted average assumed health care cost trend (in percent) | |||
Health care cost trend rate assumed for next year (as a percent) | 5.00% | 5.00% | |
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) (as a percent) | 5.00% | 5.00% | |
Effect of one-percentage-point change in assumed health care cost trend rates (in percent) | |||
One-Percentage-Point Increase, effect on total of service and interest cost | $ 1 | ||
One-Percentage-Point Decrease, effect on total of service and interest cost | (1) | ||
One-Percentage-Point Increase, effect on accumulated postretirement benefit obligations | 13 | ||
One-Percentage-Point Decrease, effect on accumulated postretirement benefit obligations | $ (10) |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes Calculated Based on Components of Earnings (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Continuing operations | |||
U.S. | $ (27) | $ 15 | $ 82 |
Non-U.S. | 383 | 269 | 271 |
Earnings from continuing operations before income taxes | 356 | 284 | 353 |
Discontinued operations; | |||
U.S. | (19) | ||
Non-U.S. | (7) | (4) | (4) |
Discontinued operations total | (7) | (4) | (23) |
Current: | |||
U.S. | 9 | 7 | |
Non-U.S. | 123 | 85 | 103 |
Total | 123 | 94 | 110 |
Deferred: | |||
U.S. | 3 | 10 | |
Non-U.S. | (7) | 2 | (18) |
Total | (4) | 12 | (18) |
Total: | |||
U.S. | 3 | 19 | 7 |
Non-U.S. | 116 | 87 | 85 |
Total for continuing operations | 119 | 106 | 92 |
Total | $ 119 | $ 106 | $ 92 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
A reconciliation of the provision (benefit) for income taxes | |||
Statutory U.S. Federal tax rate (as a percent) | 35.00% | ||
Increase (decrease) in provision for income taxes due to: | |||
Tax provision on pretax earnings (loss) from continuing operations at statutory U.S. Federal tax rate | $ 124 | $ 100 | $ 124 |
Non-U.S. tax rates | (22) | (12) | (22) |
Changes in valuation allowance | 3 | 1 | (2) |
Withholding tax, net | 22 | 18 | 18 |
U.S. tax consolidation benefit | (6) | (16) | |
Non-deductible acquisition costs | 6 | ||
U.S. tax on intercompany dividends and interest | 3 | 16 | 1 |
Tax exempt income | (2) | (3) | (5) |
Tax law changes | (3) | (3) | |
Tax credit | (19) | (14) | (3) |
Changes in tax reserves | 8 | 5 | (13) |
Mexico inflationary adjustments | 6 | 3 | |
Intraperiod tax allocation | (8) | ||
Other items | 7 | (5) | 10 |
Total for continuing operations | $ 119 | $ 106 | $ 92 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Accrued postretirement benefits | $ 53 | $ 51 |
Foreign tax credit | 413 | 389 |
Operating and capital loss carryovers | 389 | 435 |
Other credit carryovers | 34 | 38 |
Accrued liabilities | 95 | 82 |
Pension liability | 138 | 128 |
Other | 53 | 22 |
Total deferred tax assets | 1,175 | 1,145 |
Deferred tax liabilities: | ||
Property, plant, and equipment | 131 | 128 |
Intangibles and deferred software | 119 | 131 |
Other | 2 | |
Total deferred tax liabilities | 252 | 259 |
Valuation allowance | (838) | (833) |
Net deferred taxes | 85 | 53 |
Deferred taxes are included in the Consolidated Balance Sheets: | ||
Other assets | 185 | 177 |
Deferred taxes | (100) | (124) |
Net deferred taxes | $ 85 | $ 53 |
Income Taxes - Reconciliation a
Income Taxes - Reconciliation and Possible Change in Unrecognized Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reasonably possible change in unrecognized tax benefits | |||
Unused foreign tax credits expiring in 2017 through 2026 | $ 413 | $ 389 | |
Unused research tax credits expiring from 2019 to 2036 | 14 | ||
Alternative minimum tax credits | 18 | ||
Operating and capital loss carryforwards with indefinite life | 151 | ||
Operating and capital loss carryforwards expiring between 2017 and 2036 | 238 | ||
Valuation allowance | 838 | 833 | |
Equity in undistributed earnings of foreign subsidiaries | 2,200 | ||
Reconciliation of the Company's total gross unrecognized tax benefits | |||
Balance at beginning of the period | 74 | 77 | $ 100 |
Additions for tax positions of prior years | 1 | ||
Reductions for tax positions of prior years | (13) | ||
Additions based on tax positions related to the current year | 15 | 10 | 10 |
Reduction due to lapse of the applicable statute of limitations | (3) | (5) | (8) |
Reductions due to settlements | (12) | (1) | (1) |
Foreign currency translation | (8) | (11) | |
Balance at ending of the period | 74 | 74 | 77 |
Unrecognized tax benefits, which if recognized, would impact the Company's effective income tax rate | 66 | 67 | 70 |
Accrued interest and penalties | 23 | 25 | 29 |
Interest and penalties included in tax expense | $ (2) | $ (1) | $ (2) |
Period during which unrecognized tax benefits are reasonably possible of being settled as a result of audit settlements or statute expirations | 12 months | ||
Maximum | |||
Reconciliation of the Company's total gross unrecognized tax benefits | |||
Reasonably possible decrease in unrecognized tax benefits related to audit settlements or statute expirations | $ 11 |
Debt - Long-term Debt Summary (
Debt - Long-term Debt Summary (Details) $ / shares in Units, $ in Thousands, € in Millions | Apr. 22, 2015item | Nov. 30, 2016USD ($) | Aug. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016EUR (€) | Dec. 31, 2016USD ($)$ / shares | Nov. 30, 2016EUR (€) | Sep. 01, 2015USD ($) |
Debt Instrument | ||||||||||
Total long-term debt | $ 5,413,000 | $ 5,166,000 | ||||||||
Less amounts due within one year | 68,000 | 33,000 | ||||||||
Long-term debt | 5,345,000 | 5,133,000 | ||||||||
Net proceeds, after deducting debt issuance costs | $ 1,235,000 | 4,538,000 | $ 1,247,000 | |||||||
Short-term loans and long-term debt due within one year | 228,000 | $ 195,000 | ||||||||
The Agreement, Senior Secured Credit Facility | ||||||||||
Debt Instrument | ||||||||||
Leverage ratio, period one | 4.50% | 4.50% | ||||||||
Leverage ratio, period two | 4.00% | 4.00% | ||||||||
Number financial maintenance covenants | item | 1 | |||||||||
Minimum | The Agreement, Senior Secured Credit Facility | ||||||||||
Debt Instrument | ||||||||||
Interest rate margin, Eurocurrency Rate loans (as a percent) | 1.25% | |||||||||
Interest rate margin, Base Rate loans (as a percent) | 0.25% | |||||||||
Maximum | The Agreement, Senior Secured Credit Facility | ||||||||||
Debt Instrument | ||||||||||
Interest rate margin, Eurocurrency Rate loans (as a percent) | 1.75% | |||||||||
Interest rate margin, Base Rate loans (as a percent) | 0.75% | |||||||||
Senior Secured Credit Agreement | ||||||||||
Debt Instrument | ||||||||||
Unused Credit | $ 884,000 | |||||||||
Weighted average interest rate, short-term debt (as a percent) | 2.39% | 2.39% | ||||||||
Term Loan A | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 1,546,000 | $ 1,395,000 | ||||||||
Face Value | 1,575,000 | |||||||||
Net proceeds, after deducting debt issuance costs | 1,395,000 | |||||||||
Term Loan A (€279 million at December 31, 2016) | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 301,000 | € 279 | 282,000 | |||||||
Face Value | € | 279 | |||||||||
Net proceeds, after deducting debt issuance costs | $ 282,000 | |||||||||
Term Loan B (USD tranche) | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 563,000 | |||||||||
Senior Notes 6.75%, due 2020 (500 million EUR) | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 542,000 | € 500 | $ 523,000 | |||||||
Interest rate, stated percentage | 6.75% | 6.75% | ||||||||
Principal Amount | $ 526,000 | |||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 120.63 | |||||||||
Fair Value | $ 635,000 | |||||||||
Senior Notes 4.875%, due 2021 (330 million EUR) | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 357,000 | € 330 | $ 345,000 | |||||||
Interest rate, stated percentage | 4.875% | 4.875% | ||||||||
Principal Amount | $ 347,000 | |||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 114 | |||||||||
Fair Value | $ 396,000 | |||||||||
Senior Notes 5.00% due 2022 | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 494,000 | $ 495,000 | ||||||||
Interest rate, stated percentage | 5.00% | 5.00% | ||||||||
Senior Notes 5.375%, due 2025 | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 296,000 | $ 297,000 | ||||||||
Interest rate, stated percentage | 5.375% | 5.375% | ||||||||
Senior Notes 5.875%, due 2023 | ||||||||||
Debt Instrument | ||||||||||
Interest rate, stated percentage | 5.875% | 5.875% | ||||||||
Senior Notes 3.125%, due 2024 (€500 million) | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | € 500 | $ 520,000 | ||||||||
Interest rate, stated percentage | 3.125% | 3.125% | 3.125% | |||||||
Face Value | € | € 500 | |||||||||
Net proceeds, after deducting debt issuance costs | $ 520,000 | |||||||||
Principal Amount | $ 526,000 | |||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 100.01 | |||||||||
Fair Value | $ 526,000 | |||||||||
Senior Notes 5.375% due 2025 | ||||||||||
Debt Instrument | ||||||||||
Principal Amount | $ 300,000 | |||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 101.17 | |||||||||
Fair Value | $ 304,000 | |||||||||
Senior Notes 6.375%, due 2025 | ||||||||||
Debt Instrument | ||||||||||
Interest rate, stated percentage | 6.375% | 6.375% | ||||||||
Principal Amount | $ 300,000 | |||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 106.28 | |||||||||
Fair Value | $ 319,000 | |||||||||
Senior Notes 5.00%, due 2022 | ||||||||||
Debt Instrument | ||||||||||
Interest rate, stated percentage | 5.00% | 5.00% | ||||||||
Principal Amount | $ 500,000 | |||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 103.49 | |||||||||
Fair Value | $ 517,000 | |||||||||
Senior Notes 5.875%, due 2023 | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 680,000 | $ 682,000 | ||||||||
Interest rate, stated percentage | 5.875% | 5.875% | ||||||||
Principal Amount | $ 700,000 | |||||||||
Indicated Market Price (in dollars per share) | $ / shares | $ 105.37 | |||||||||
Fair Value | $ 738,000 | |||||||||
Senior Notes 6.375%, due 2025 | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 293,000 | $ 294,000 | ||||||||
Interest rate, stated percentage | 6.375% | 6.375% | ||||||||
Capital leases | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 62,000 | $ 57,000 | ||||||||
Other | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 29,000 | 26,000 | ||||||||
Revolving Credit Facility | The Agreement, Senior Secured Credit Facility | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 300,000 | |||||||||
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 | The Agreement, Senior Secured Credit Facility | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | 600,000 | |||||||||
Accounts Receivable Securitization Program | ||||||||||
Debt Instrument | ||||||||||
Short-term loans and long-term debt due within one year | $ 158,000 | $ 152,000 | ||||||||
Weighted average interest rate, short-term debt (as a percent) | 1.21% | 0.74% | 0.74% | |||||||
European Accounts Receivable Securitization Program | ||||||||||
Debt Instrument | ||||||||||
Maximum Borrowing Capacity | € | € 185 | |||||||||
Payable to OI Inc. | ||||||||||
Debt Instrument | ||||||||||
Total long-term debt | $ 250,000 | $ 250,000 | ||||||||
Vitro Acquisition | The Agreement, Senior Secured Credit Facility | ||||||||||
Debt Instrument | ||||||||||
Face Value | $ 1,250,000 | |||||||||
Net proceeds, after deducting debt issuance costs | $ 972,000 | |||||||||
Vitro Acquisition | Term Loan A | ||||||||||
Debt Instrument | ||||||||||
Face Value | 675,000 | |||||||||
Vitro Acquisition | Term Loan B (USD tranche) | ||||||||||
Debt Instrument | ||||||||||
Face Value | $ 575,000 | |||||||||
Vitro Acquisition | Senior Notes 5.875%, due 2023 | ||||||||||
Debt Instrument | ||||||||||
Interest rate, stated percentage | 5.875% | |||||||||
Face Value | $ 700,000 | |||||||||
Vitro Acquisition | Senior Notes 6.375%, due 2025 | ||||||||||
Debt Instrument | ||||||||||
Interest rate, stated percentage | 6.375% | |||||||||
Face Value | $ 300,000 |
Debt - Annual Maturities of Lon
Debt - Annual Maturities of Long-term Debt (Details) $ in Millions | Dec. 31, 2016USD ($) |
Annual maturities of long-term debt through 2021 | |
2,017 | $ 33 |
2,018 | 287 |
2,019 | 101 |
2,020 | 2,074 |
2,021 | $ 354 |
Contingencies - Asbestos (Detai
Contingencies - Asbestos (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)item | Dec. 31, 1993USD ($) | |
Asbestos | ||||
Sale of goods containing asbestos from 1948 to 1958 | $ 40,000,000 | |||
Payments for Asbestos-Related Liabilities | 125,000,000 | $ 138,000,000 | $ 148,000,000 | |
Asbestos related charges | 0 | 16,000,000 | 46,000,000 | |
Cash payments per claim disposed including legal costs | 71,000 | 95,000 | $ 81,000 | |
Accrual of asbestos related liabilty | $ 692,000,000 | $ 817,000,000 | ||
OI Inc. | ||||
Asbestos | ||||
Approximate number of claims disposed of to date | item | 398,000 | |||
Average indemnity payment per claim | $ 9,000 | |||
Asbestos-related liability, total amount accrued beginning in 1993 through 2016 before insurance recoveries | $ 4,900,000,000 | $ 975,000,000 | ||
Approximate number of plaintiffs and claimants asbestos claims pending against the entity | ||||
Pending at beginning of year (in number of litigants) | item | 2,080 | 2,260 | 2,620 | |
Disposed (in number of litigants) | item | 1,750 | 1,460 | 1,830 | |
Filed (in number of litigants) | item | 1,070 | 1,280 | 1,470 | |
Pending at end of year (in number of litigants) | item | 1,400 | 2,080 | 2,260 | |
Damages unspecified or sufficient to invoke jurisdictional minimum | OI Inc. | ||||
Asbestos | ||||
Percentage of asbestos plaintiffs, approximate percentage | 88.00% | |||
Damages of $15 million or less | OI Inc. | ||||
Asbestos | ||||
Percentage of asbestos plaintiffs, approximate percentage | 9.00% | |||
Damages greater than $15 million but less than $100 million | OI Inc. | ||||
Asbestos | ||||
Percentage of asbestos plaintiffs, approximate percentage | 3.00% | |||
Minimum | Damages greater than $15 million but less than $100 million | ||||
Asbestos | ||||
Estimated amount of income-tax assessment including penalties and interest | $ 15,000,000 | |||
Maximum | ||||
Asbestos | ||||
Estimated amount of income-tax assessment including penalties and interest | 825,000,000 | |||
Maximum | Damages of $15 million or less | ||||
Asbestos | ||||
Estimated amount of income-tax assessment including penalties and interest | 15,000,000 | |||
Maximum | Damages greater than $15 million but less than $100 million | ||||
Asbestos | ||||
Estimated amount of income-tax assessment including penalties and interest | $ 100,000,000 |
Accumulated Other Comprehensi81
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
Balance | $ 988 | |
Intraperiod tax allocation | (8) | |
Balance | 946 | $ 988 |
Net Effect of Exchange Rate Fluctuations | ||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
Balance | (568) | (55) |
Change before reclassifications | (220) | (513) |
Other comprehensive income (loss) attributable to the Company | (220) | (513) |
Balance | (788) | (568) |
Change in Certain Derivative Instruments | ||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
Balance | (10) | (4) |
Change before reclassifications | 7 | (4) |
Amounts reclassified from accumulated other comprehensive income | 6 | (1) |
Tax effect | (1) | |
Other comprehensive income (loss) attributable to the Company | 13 | (6) |
Balance | 3 | (10) |
Employee Benefit Plans | ||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
Balance | (1,398) | (1,394) |
Change before reclassifications | (52) | (58) |
Amounts reclassified from accumulated other comprehensive income | 72 | 83 |
Translation effect | 25 | (31) |
Tax effect | 15 | 2 |
Intraperiod tax allocation | (8) | |
Other comprehensive income (loss) attributable to the Company | 52 | (4) |
Balance | (1,346) | (1,398) |
Accumulated Other Comprehensive Loss. | ||
Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
Balance | (1,976) | (1,453) |
Change before reclassifications | (265) | (575) |
Amounts reclassified from accumulated other comprehensive income | 78 | 82 |
Translation effect | 25 | (31) |
Tax effect | 15 | 1 |
Intraperiod tax allocation | (8) | |
Other comprehensive income (loss) attributable to the Company | (155) | (523) |
Balance | $ (2,131) | $ (1,976) |
Stock Options and Other Stock82
Stock Options and Other Stock Based Compensation - Share-based Compensation Arrangement by Share-based Payment Award (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Options and Other Stock Based Compensation | |||
Shares available for grants under the plans | 5,081,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Compensation cost for all grants of shares and units | $ 15 | $ 15 | $ 21 |
Stock Options | Shares granted to employees after March 21, 2005 | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Percentage of options exercisable per year beginning on the first anniversary from date of option granted | 25.00% | ||
Stock Options | Shares granted to employees after March 21, 2005 | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Fair value of options, amortization period | 1 year | ||
Stock Options | Shares granted to employees after March 21, 2005 | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Fair value of options, amortization period | 4 years | ||
Restricted Shares and Restricted Share Units | Shares granted to employees after March 21, 2005 | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Percentage of options exercisable per year beginning on the first anniversary from date of option granted | 25.00% |
Stock Options and Other Stock83
Stock Options and Other Stock Based Compensation - Share-based Compensation Arrangement Share Information (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | |||
Options outstanding, Beginning balance (in shares) | 2,621 | ||
Granted (in shares) | 1,098 | ||
Exercised (in shares) | (504) | ||
Forfeited or expired (in shares) | (119) | ||
Options outstanding, ending balance (in shares) | 3,096 | 2,621 | |
Options vested or expected to vest (in shares) | 3,096 | ||
Options exercisable (in shares) | 1,342 | ||
Weighted Average Exercise Price (per share) | |||
Options outstanding, Beginning balance (in dollars per share) | $ 23.64 | ||
Granted (in dollars per share) | 15.10 | ||
Exercised (in dollars per share) | 10.13 | ||
Forfeited or expired (in dollars per share) | 21.24 | ||
Options outstanding, Closing balance (in dollars per share) | 22.91 | $ 23.64 | |
Options vested or expected to vest (in dollars per share) | 22.91 | ||
Options exercisable (in dollars per share) | $ 27.71 | ||
Weighted Average Remaining Contractual Term (in years) | |||
Options outstanding, Closing balance | 4 years 2 months 12 days | ||
Options vested or expected to vest | 2 years 3 months 18 days | ||
Options exercisable | 4 years 2 months 12 days | ||
Aggregate Intrinsic Value | |||
Options outstanding, Closing balance (in dollars) | $ 3 | ||
Options vested or expected to vest (in dollars) | $ 3 | ||
Weighted average grant-date fair value of options granted (in dollars per share) | $ 4.98 | $ 7.79 | $ 13.17 |
Aggregate intrinsic value of options exercised (in dollars) | $ 2 | $ 3 | |
Aggregate cash received from options exercised (in dollars) | $ 5 | $ 1 | $ 5 |
Weighted average assumptions used to estimate the fair value of each option grant | |||
Expected life of options (years) | 5 years 2 months 12 days | 5 years | 5 years |
Expected stock price volatility (as a percent) | 32.80% | 34.50% | 43.00% |
Risk-free interest rate (as a percent) | 1.50% | 1.70% | 1.60% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Stock Options and Other Stock84
Stock Options and Other Stock Based Compensation - Share Grants and Vesting (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / shares | |
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Unrecognized compensation cost of unvested stock options, restricted shares, restricted share units and performance vested restricted share units (in dollars) | $ | $ 17 | ||
Weighted average period during which unrecognized compensation costs would be recognized | 2 years | ||
Restricted Shares and Restricted Share Units | |||
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Nonvested, beginning balance (in shares) | 672,000 | ||
Granted (in shares) | 389,000 | ||
Vested (in shares) | (215,000) | ||
Forfeited (in shares) | (10,000) | ||
Nonvested, ending balance (in shares) | 836,000 | 672,000 | |
Nonvested, Beginning balance (in dollars per share) | $ / shares | $ 23.66 | ||
Granted (in dollars per share) | $ / shares | 15.70 | $ 22.69 | $ 33.36 |
Vested (in dollars per share) | $ / shares | 25.88 | ||
Forfeited (in dollars per share) | $ / shares | 21.11 | ||
Nonvested, Closing balance (in dollars per share) | $ / shares | $ 19.42 | $ 23.66 | |
Total fair value of shares issued (in dollars) | $ | $ 6 | $ 4 | $ 5 |
Restricted Shares and Restricted Share Units | Shares granted to employees after March 21, 2005 | Minimum | |||
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Fair value of restricted shares, amortization period | 1 year | ||
Restricted Shares and Restricted Share Units | Shares granted to employees after March 21, 2005 | Maximum | |||
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Fair value of restricted shares, amortization period | 4 years | ||
Restricted Share Units | Shares granted to employees after March 21, 2005 | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Percentage of shares vested per year beginning on first anniversary | 25.00% | ||
Restricted Share Units | Shares granted to directors after 2007 | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Period after which shares granted can be vested | 1 year | ||
Restricted Share Units | Shares granted to employees after 2010 | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Common stock distribution ratio | 1 | ||
Performance Vested Restricted Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Period after which shares granted can be vested | 3 years | ||
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Nonvested, beginning balance (in shares) | 933,000 | ||
Granted (in shares) | 726,000 | ||
Vested (in shares) | (158,000) | ||
Forfeited (in shares) | (146,000) | ||
Nonvested, ending balance (in shares) | 1,355,000 | 933,000 | |
Nonvested, Beginning balance (in dollars per share) | $ / shares | $ 26.80 | ||
Granted (in dollars per share) | $ / shares | 15.10 | $ 23.63 | $ 33.41 |
Vested (in dollars per share) | $ / shares | 26.10 | ||
Forfeited (in dollars per share) | $ / shares | 25.41 | ||
Nonvested, Closing balance (in dollars per share) | $ / shares | $ 20.76 | $ 26.80 | |
Total fair value of shares vested (in dollars) | $ | $ 4 | ||
Shares issued | 158,000 | ||
Performance Vested Restricted Share Units | Maximum | |||
Restricted share and Restricted Share Units and Performance Vested Restricted Share Units | |||
Shares of common stock holder may receive, per unit of vested units | 2 |
Other Expense, net (Details)
Other Expense, net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Expense, net | |||
Restructuring, asset impairment and other charges | $ 104 | $ 75 | $ 68 |
Intangible amortization expense | 39 | 21 | 1 |
Impairment of equity investment | 25 | ||
Asbestos Related Costs | 0 | 16 | 46 |
Gain on sale of land in China | (71) | ||
Royalty income | (13) | (12) | (12) |
Strategic transaction costs | 23 | ||
Acquisition-related fair value intangible adjustments | 10 | ||
Non-income tax charge | 69 | ||
Foreign currency exchange loss (gain) | 6 | (10) | (2) |
Other expense (income) | (14) | (12) | 24 |
Other Expense (Income), net | $ 76 | $ 95 | $ 148 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Leases | |||
Rent expense attributable to warehouse, office buildings and equipment operating leases | $ 80 | $ 72 | $ 63 |
Minimum future rentals under operating leases | |||
2,017 | 65 | ||
2,018 | 47 | ||
2,019 | 32 | ||
2,020 | 23 | ||
2,021 | 14 | ||
2022 and thereafter | $ 24 |
Supplemental Cash Flow Inform87
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Long-term Short-term Debt Instrument [Table] | |||
Interest paid note repurchase premiums | $ 9 | $ 32 | $ 9 |
Decrease (increase) in current assets: | |||
Receivables | (32) | (14) | 59 |
Inventories | 16 | (13) | (26) |
Prepaid expenses and other | 145 | (4) | (1) |
Increase (decrease) in current liabilities: | |||
Accounts payable | (58) | 100 | 103 |
Accrued liabilities | (31) | 21 | 12 |
Salaries and wages | 32 | 12 | (3) |
U.S. and foreign income taxes | 18 | (14) | (27) |
Changes in components of working capital, total | 90 | 88 | 117 |
Amount of receivables sold | 318 | 317 | |
Income taxes paid in cash | |||
Interest paid in cash | 261 | 227 | 199 |
Income taxes paid in cash (non-US) | $ 99 | $ 101 | $ 101 |
Business Combinations (Details)
Business Combinations (Details) $ in Millions | Sep. 01, 2015USD ($)facility | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2013USD ($) |
Business Combinations | |||||||
Net sales | $ 6,702 | $ 6,156 | $ 6,784 | ||||
Gross profit | 1,212 | 1,110 | 1,253 | ||||
Fair values of the assets and liabilities assumed | |||||||
Goodwill | $ 2,462 | 2,489 | $ 1,893 | $ 2,462 | $ 2,059 | ||
Vitro Acquisition | |||||||
Business Combinations | |||||||
Total consideration | $ 2,297 | ||||||
Number of plants acquired | facility | 5 | ||||||
Net sales | 608 | ||||||
Gross profit | $ 122 | ||||||
Fair values of the assets and liabilities assumed | |||||||
Cash | $ 17 | $ 17 | |||||
Other current assets | 344 | 334 | |||||
Goodwill | 1,073 | 837 | |||||
Customer list intangibles | 406 | 608 | |||||
Net property, plant, and equipment | 597 | 645 | |||||
Total assets | 2,437 | 2,441 | |||||
Current liabilities | 93 | 86 | |||||
Long-term debt | 11 | 11 | |||||
Long-term liabilities | 36 | 47 | |||||
Net assets acquired | $ 2,297 | $ 2,297 | |||||
Vitro Acquisition | As Adjusted | |||||||
Fair values of the assets and liabilities assumed | |||||||
Other current assets | (10) | ||||||
Goodwill | (236) | ||||||
Customer list intangibles | 202 | ||||||
Net property, plant, and equipment | 48 | ||||||
Total assets | 4 | ||||||
Current liabilities | (7) | ||||||
Long-term liabilities | $ 11 |
Pro Forma Information - Vitro89
Pro Forma Information - Vitro Acquisition (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Business Combinations, Pro Forma | |
Net sales | $ 6,730 |
Earnings from continuing operations attributable to the Company | 188 |
As Reported | |
Business Combinations, Pro Forma | |
Net sales | 6,156 |
Earnings from continuing operations attributable to the Company | 155 |
Acquisition Adjustments | |
Business Combinations, Pro Forma | |
Net sales | 574 |
Earnings from continuing operations attributable to the Company | 79 |
Financing Adjustments | |
Business Combinations, Pro Forma | |
Earnings from continuing operations attributable to the Company | $ (46) |
Discontinued Operations (Detail
Discontinued Operations (Details) $ in Millions | Apr. 04, 2016Plant | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Number of ICSID member states in which award is enforceable | item | 150 | |||
Loss from discontinued operations | $ (7) | $ (4) | $ (23) | |
Minimum | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Litigation Settlement, Amount | 485 | |||
Disposed Venezuelan subsidiaries | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Expropriated Plants Number | Plant | 2 | |||
Disposed Venezuelan subsidiaries | Discontinued Operations, Disposed of by Means Other than Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Loss from discontinued operations | $ 7 | $ 4 | $ 23 |
Financial Information for Sub91
Financial Information for Subsidiary Guarantors and Non-Guarantors - Debt Instrument Information (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Instrument | |
Ownership percentage in Guarantor Subsidiaries | 100.00% |
Senior Notes 5.00% due 2022 | |
Debt Instrument | |
Interest rate, stated percentage | 5.00% |
Senior Notes 5.875%, due 2023 | |
Debt Instrument | |
Interest rate, stated percentage | 5.875% |
Senior Notes 5.375%, due 2025 | |
Debt Instrument | |
Interest rate, stated percentage | 5.375% |
Senior Notes 6.375%, due 2025 | |
Debt Instrument | |
Interest rate, stated percentage | 6.375% |
Financial Information for Sub92
Financial Information for Subsidiary Guarantors and Non-Guarantors - Balance sheet (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||||
Cash and cash equivalents | $ 492 | $ 399 | ||
Trade receivables, net | 580 | 562 | ||
Inventories | 983 | 1,007 | ||
Prepaid expenses and other current assets | 199 | 366 | ||
Total current assets | 2,254 | 2,334 | ||
Goodwill | 2,462 | 2,489 | $ 1,893 | $ 2,059 |
Intangibles | 464 | 597 | ||
Other non-current assets | 1,075 | 1,040 | ||
Total other assets | 4,001 | 4,126 | ||
Property, plant and equipment, net | 2,880 | 2,961 | 2,445 | |
Total assets | 9,135 | 9,421 | $ 7,843 | |
Current liabilities: | ||||
Accounts Payable, Current | 1,135 | 1,212 | ||
Short-term loans and long-term debt due within one year | 195 | 228 | ||
Other liabilities | 615 | 552 | ||
Total current liabilities | 1,945 | 1,992 | ||
Long-term debt | 5,133 | 5,345 | ||
Other non-current liabilities | 1,002 | 988 | ||
Total share owners' equity of the Company | 946 | 988 | ||
Noncontrolling interests | 109 | 108 | ||
Total liabilities and share owners' equity | 9,135 | 9,421 | ||
Eliminations | ||||
Current assets: | ||||
Investments in and advances to subsidiaries | (5,204) | (6,016) | ||
Total assets | (5,204) | (6,016) | ||
Current liabilities: | ||||
Other non-current liabilities | 1 | |||
Investments by and advances from parent | (5,204) | (6,016) | ||
Total share owners' equity of the Company | (1) | |||
Total liabilities and share owners' equity | (5,204) | (6,016) | ||
Parent | ||||
Current assets: | ||||
Investments in and advances to subsidiaries | 1,196 | 1,239 | ||
Total assets | 1,196 | 1,239 | ||
Current liabilities: | ||||
Long-term debt | 250 | 250 | ||
Total share owners' equity of the Company | 946 | 989 | ||
Total liabilities and share owners' equity | 1,196 | 1,239 | ||
Issuer | ||||
Current assets: | ||||
Trade receivables, net | 64 | 55 | ||
Inventories | 202 | 205 | ||
Prepaid expenses and other current assets | 27 | 25 | ||
Total current assets | 293 | 285 | ||
Investments in and advances to subsidiaries | 2,980 | 3,775 | ||
Goodwill | 582 | 581 | ||
Other non-current assets | 111 | 123 | ||
Property, plant and equipment, net | 721 | 703 | ||
Total assets | 4,687 | 5,467 | ||
Current liabilities: | ||||
Accounts Payable, Current | 177 | 184 | ||
Short-term loans and long-term debt due within one year | 12 | 50 | ||
Other liabilities | 129 | 139 | ||
Total current liabilities | 318 | 373 | ||
Long-term debt | 3,163 | 3,839 | ||
Other non-current liabilities | 11 | 16 | ||
Investments by and advances from parent | 1,195 | 1,239 | ||
Total liabilities and share owners' equity | 4,687 | 5,467 | ||
Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 33 | 6 | ||
Trade receivables, net | 14 | 15 | ||
Inventories | 27 | 35 | ||
Prepaid expenses and other current assets | 16 | 13 | ||
Total current assets | 90 | 69 | ||
Investments in and advances to subsidiaries | 1,028 | 1,002 | ||
Goodwill | 332 | 317 | ||
Other non-current assets | 237 | 267 | ||
Property, plant and equipment, net | 6 | 8 | ||
Total assets | 1,693 | 1,663 | ||
Current liabilities: | ||||
Accounts Payable, Current | 22 | 18 | ||
Other liabilities | 68 | 35 | ||
Total current liabilities | 90 | 53 | ||
Other non-current liabilities | 408 | 371 | ||
Investments by and advances from parent | 1,195 | 1,239 | ||
Total liabilities and share owners' equity | 1,693 | 1,663 | ||
Non-Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 459 | 393 | ||
Trade receivables, net | 502 | 492 | ||
Inventories | 754 | 767 | ||
Prepaid expenses and other current assets | 156 | 328 | ||
Total current assets | 1,871 | 1,980 | ||
Goodwill | 1,548 | 1,591 | ||
Intangibles | 464 | 597 | ||
Other non-current assets | 727 | 650 | ||
Property, plant and equipment, net | 2,153 | 2,250 | ||
Total assets | 6,763 | 7,068 | ||
Current liabilities: | ||||
Accounts Payable, Current | 936 | 1,010 | ||
Short-term loans and long-term debt due within one year | 183 | 178 | ||
Other liabilities | 418 | 378 | ||
Total current liabilities | 1,537 | 1,566 | ||
Long-term debt | 1,720 | 1,256 | ||
Other non-current liabilities | 583 | 600 | ||
Investments by and advances from parent | 2,814 | 3,538 | ||
Noncontrolling interests | 109 | 108 | ||
Total liabilities and share owners' equity | $ 6,763 | $ 7,068 |
Financial Information for Sub93
Financial Information for Subsidiary Guarantors and Non-Guarantors - Results of operations and Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Results of Operations | |||
Net sales | $ 6,702 | $ 6,156 | $ 6,784 |
Cost of goods sold | (5,490) | (5,046) | (5,531) |
Gross profit | 1,212 | 1,110 | 1,253 |
Research, engineering, selling, administrative, and other | (568) | (540) | (586) |
Interest expense, net | (272) | (251) | (230) |
Other equity earnings | 60 | 60 | 64 |
Other expense, net | (76) | (95) | (148) |
Earnings from continuing operations before income taxes | 356 | 284 | 353 |
Provision for income taxes | (119) | (106) | (92) |
Earnings from continuing operations | 237 | 178 | 261 |
(Gain) loss from discontinued operations | (7) | (4) | (23) |
Net earnings | 230 | 174 | 238 |
Net earnings attributable to noncontrolling interests | (21) | (23) | (28) |
Net earnings attributable to the Company | 209 | 151 | 210 |
Comprehensive Income | |||
Net earnings | 230 | 174 | 238 |
Other comprehensive income (loss) | (159) | (539) | (394) |
Total comprehensive income (loss) | 71 | (365) | (156) |
Comprehensive income (loss) attributable to noncontrolling interests | (17) | (7) | (7) |
Comprehensive income (loss) attributable to the Company | 54 | (372) | (163) |
Parent | |||
Results of Operations | |||
Net intercompany interest | 20 | 20 | 20 |
Interest expense, net | (20) | (20) | (20) |
Equity earnings from subsidiaries | 209 | 151 | 210 |
Earnings from continuing operations before income taxes | 209 | 151 | 210 |
Earnings from continuing operations | 209 | 151 | 210 |
Net earnings | 209 | 151 | 210 |
Net earnings attributable to the Company | 209 | 151 | 210 |
Comprehensive Income | |||
Net earnings | 209 | 151 | 210 |
Other comprehensive income (loss) | (162) | (539) | (394) |
Total comprehensive income (loss) | 47 | (388) | (184) |
Comprehensive income (loss) attributable to the Company | 47 | (388) | (184) |
Issuer | |||
Results of Operations | |||
Net sales | 1,919 | 1,891 | 1,895 |
Cost of goods sold | (1,609) | (1,592) | (1,627) |
Gross profit | 310 | 299 | 268 |
Research, engineering, selling, administrative, and other | (123) | (138) | (122) |
Net intercompany interest | (21) | (21) | (21) |
Interest expense, net | (182) | (165) | (121) |
Equity earnings from subsidiaries | 336 | 195 | 198 |
Other equity earnings | 11 | 19 | 17 |
Other expense, net | 107 | 93 | 167 |
Earnings from continuing operations before income taxes | 438 | 282 | 386 |
Provision for income taxes | (7) | (16) | (10) |
Earnings from continuing operations | 431 | 266 | 376 |
Net earnings | 431 | 266 | 376 |
Net earnings attributable to the Company | 431 | 266 | 376 |
Comprehensive Income | |||
Net earnings | 431 | 266 | 376 |
Other comprehensive income (loss) | 10 | (4) | 1 |
Total comprehensive income (loss) | 441 | 262 | 377 |
Comprehensive income (loss) attributable to the Company | 441 | 262 | 377 |
Guarantor Subsidiaries | |||
Results of Operations | |||
Net sales | 276 | 80 | 3 |
Cost of goods sold | (319) | (68) | (11) |
Gross profit | (43) | 12 | (8) |
Research, engineering, selling, administrative, and other | (105) | (83) | (110) |
Interest expense, net | (1) | (1) | |
Other expense, net | (26) | (27) | (11) |
Earnings from continuing operations before income taxes | (174) | (99) | (130) |
Provision for income taxes | 4 | (4) | 2 |
Earnings from continuing operations | (170) | (103) | (128) |
Net earnings | (170) | (103) | (128) |
Net earnings attributable to the Company | (170) | (103) | (128) |
Comprehensive Income | |||
Net earnings | (170) | (103) | (128) |
Total comprehensive income (loss) | (170) | (103) | (128) |
Comprehensive income (loss) attributable to the Company | (170) | (103) | (128) |
Non-Guarantor Subsidiaries | |||
Results of Operations | |||
Net sales | 4,676 | 4,249 | 4,889 |
Cost of goods sold | (3,731) | (3,450) | (3,897) |
Gross profit | 945 | 799 | 992 |
Research, engineering, selling, administrative, and other | (340) | (319) | (354) |
Net intercompany interest | 1 | 1 | 1 |
Interest expense, net | (70) | (65) | (86) |
Other equity earnings | 49 | 41 | 47 |
Other expense, net | (157) | (161) | (305) |
Earnings from continuing operations before income taxes | 428 | 296 | 295 |
Provision for income taxes | (116) | (86) | (84) |
Earnings from continuing operations | 312 | 210 | 211 |
(Gain) loss from discontinued operations | (7) | (4) | (23) |
Net earnings | 305 | 206 | 188 |
Net earnings attributable to noncontrolling interests | (21) | (23) | (28) |
Net earnings attributable to the Company | 284 | 183 | 160 |
Comprehensive Income | |||
Net earnings | 305 | 206 | 188 |
Other comprehensive income (loss) | (169) | (529) | (347) |
Total comprehensive income (loss) | 136 | (323) | (159) |
Comprehensive income (loss) attributable to noncontrolling interests | (17) | (7) | (7) |
Comprehensive income (loss) attributable to the Company | 119 | (330) | (166) |
Eliminations | |||
Results of Operations | |||
Net sales | (169) | (64) | (3) |
Cost of goods sold | 169 | 64 | 4 |
Gross profit | 1 | ||
Interest expense, net | (2) | ||
Equity earnings from subsidiaries | (545) | (346) | (408) |
Other expense, net | 1 | ||
Earnings from continuing operations before income taxes | (545) | (346) | (408) |
Earnings from continuing operations | (545) | (346) | (408) |
Net earnings | (545) | (346) | (408) |
Net earnings attributable to the Company | (545) | (346) | (408) |
Comprehensive Income | |||
Net earnings | (545) | (346) | (408) |
Other comprehensive income (loss) | 162 | 533 | 346 |
Total comprehensive income (loss) | (383) | 187 | (62) |
Comprehensive income (loss) attributable to the Company | $ (383) | $ 187 | $ (62) |
Financial Information for Sub94
Financial Information for Subsidiary Guarantors and Non-Guarantors - Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows | |||
Cash provided by (used in) continuing operating activities | $ 883 | $ 750 | $ 846 |
Cash utilized in discontinued operating activities | (7) | (4) | (23) |
Cash utilized in investing activities | (417) | (2,748) | (455) |
Cash provided by (utilized in) financing activities | (353) | 1,919 | (218) |
Effect of exchange rate on cash | (13) | (30) | (21) |
Increase (decrease) in cash | 93 | (113) | 129 |
Cash and cash equivalents at beginning of period | 399 | 512 | 383 |
Cash and cash equivalents at end of period | 492 | 399 | 512 |
Issuer | |||
Cash Flows | |||
Cash provided by (used in) continuing operating activities | 168 | 318 | (70) |
Cash utilized in discontinued operating activities | (19) | ||
Cash utilized in investing activities | (92) | (2,416) | (74) |
Cash provided by (utilized in) financing activities | (76) | 2,098 | 163 |
Guarantor Subsidiaries | |||
Cash Flows | |||
Cash provided by (used in) continuing operating activities | 27 | 218 | 7 |
Cash utilized in investing activities | (1) | (566) | (4) |
Cash provided by (utilized in) financing activities | 328 | (1) | |
Increase (decrease) in cash | 26 | (20) | 2 |
Cash and cash equivalents at beginning of period | 9 | 29 | 27 |
Cash and cash equivalents at end of period | 35 | 9 | 29 |
Non-Guarantor Subsidiaries | |||
Cash Flows | |||
Cash provided by (used in) continuing operating activities | 688 | 194 | 910 |
Cash utilized in discontinued operating activities | (7) | (4) | (4) |
Cash utilized in investing activities | (324) | (2,047) | (377) |
Cash provided by (utilized in) financing activities | (277) | 1,794 | (381) |
Effect of exchange rate on cash | (13) | (30) | (21) |
Increase (decrease) in cash | 67 | (93) | 127 |
Cash and cash equivalents at beginning of period | 390 | 483 | 356 |
Cash and cash equivalents at end of period | $ 457 | 390 | 483 |
Eliminations | |||
Cash Flows | |||
Cash provided by (used in) continuing operating activities | 20 | (1) | |
Cash utilized in investing activities | 2,281 | ||
Cash provided by (utilized in) financing activities | $ (2,301) | $ 1 |
SCHEDULE II - VALUATION AND Q95
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED) (Details)-K - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowances for losses and discounts on receivables | |||
Reserves deducted from assets in the balance sheets: | |||
Balance at beginning of period | $ 29 | $ 34 | $ 39 |
Additions | |||
Charged to costs and expenses/charged to income | 15 | 12 | 15 |
Other/Charged to other comprehensive income | (2) | (5) | (12) |
Deductions | (10) | (12) | (8) |
Balance at end of period | 32 | 29 | 34 |
Valuation allowance on net deferred tax assets | |||
Reserves deducted from assets in the balance sheets: | |||
Balance at beginning of period | 833 | 884 | 833 |
Additions | |||
Charged to costs and expenses/charged to income | 3 | 1 | (1) |
Other/Charged to other comprehensive income | (32) | 5 | 55 |
Foreign currency translation | (3) | (20) | (15) |
Other | 37 | (37) | 12 |
Balance at end of period | $ 838 | $ 833 | $ 884 |