Document and Entity Information
| Document and Entity Information | 3 Months Ended |
| Mar. 31, 2018shares | |
| Document and Entity Information | |
| Entity Registrant Name | OWENS-ILLINOIS GROUP INC |
| Entity Central Index Key | 812,233 |
| Document Type | 10-Q |
| Document Period End Date | Mar. 31, 2018 |
| Amendment Flag | false |
| Current Fiscal Year End Date | --12-31 |
| Entity Current Reporting Status | Yes |
| Entity Filer Category | Non-accelerated Filer |
| Entity Common Stock, Shares Outstanding | 100 |
| Document Fiscal Year Focus | 2,018 |
| Document Fiscal Period Focus | Q1 |
CONSOLIDATED RESULTS OF OPERATI
| CONSOLIDATED RESULTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| CONSOLIDATED RESULTS OF OPERATIONS | ||
| Net sales | $ 1,736 | $ 1,615 |
| Cost of goods sold | (1,417) | (1,300) |
| Gross profit | 319 | 315 |
| Selling and administrative expense | (126) | (119) |
| Research, development and engineering expense | (16) | (15) |
| Interest expense, net | (62) | (78) |
| Equity earnings | 17 | 15 |
| Other income (expense), net | 3 | (45) |
| Earnings from continuing operations before income taxes | 135 | 73 |
| Provision for income taxes | (32) | (20) |
| Earnings from continuing operations | 103 | 53 |
| Net earnings | 103 | 53 |
| Net earnings attributable to noncontrolling interests | (5) | (4) |
| Net earnings attributable to the Company | 98 | 49 |
| Amounts attributable to the Company: | ||
| Earnings from continuing operations | 98 | 49 |
| Net earnings attributable to the Company | $ 98 | $ 49 |
CONSOLIDATED COMPREHENSIVE INCO
| CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| CONSOLIDATED COMPREHENSIVE INCOME | ||
| Net earnings | $ 103 | $ 53 |
| Other comprehensive income: | ||
| Foreign currency translation adjustments | 126 | 189 |
| Pension and other postretirement benefit adjustments, net of tax | 7 | 11 |
| Change in fair value of derivative instruments, net of tax | (5) | (6) |
| Other comprehensive income | 128 | 194 |
| Total comprehensive income | 231 | 247 |
| Comprehensive income attributable to noncontrolling interests | (11) | (7) |
| Comprehensive income attributable to the Company | $ 220 | $ 240 |
CONDENSED CONSOLIDATED BALANCE
| CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
| Current assets: | |||
| Cash and cash equivalents | $ 418 | $ 492 | $ 312 |
| Trade receivables, net of allowance of $36 million, $34 million, and $36 million at March 31, 2018, December 31, 2017 and March 31, 2017 | 1,045 | 663 | 844 |
| Inventories | 1,065 | 1,036 | 1,051 |
| Prepaid expenses and other current assets | 240 | 229 | 212 |
| Total current assets | 2,768 | 2,420 | 2,419 |
| Property, plant and equipment, net | 3,190 | 3,131 | 2,926 |
| Goodwill | 2,649 | 2,590 | 2,524 |
| Intangibles, net | 452 | 439 | 485 |
| Other assets | 1,222 | 1,176 | 1,105 |
| Total assets | 10,281 | 9,756 | 9,459 |
| Current liabilities: | |||
| Short-term loans and long-term debt due within one year | 194 | 162 | 196 |
| Accounts payable | 1,115 | 1,324 | 1,017 |
| Other liabilities | 554 | 579 | 531 |
| Other liabilities - discontinued operations | 115 | 115 | |
| Total current liabilities | 1,978 | 2,180 | 1,744 |
| Long-term debt | 5,640 | 5,121 | 5,431 |
| Other long-term liabilities | 969 | 946 | 988 |
| Share owners' equity | 1,694 | 1,509 | 1,296 |
| Total liabilities and share owners' equity | $ 10,281 | $ 9,756 | $ 9,459 |
CONSOLIDATED BALANCE SHEETS (Pa
| CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
| CONSOLIDATED BALANCE SHEETS | |||
| Trade receivables allowance | $ 36 | $ 34 | $ 36 |
CONDENSED CONSOLIDATED CASH FLO
| CONDENSED CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| Cash flows from operating activities: | ||
| Net earnings | $ 103 | $ 53 |
| Non-cash charges | ||
| Depreciation and amortization | 131 | 127 |
| Pension expense | 10 | 7 |
| Restructuring, asset impairment and related charges | 38 | |
| Cash payments | ||
| Pension contributions | (10) | (14) |
| Cash paid for restructuring activities | (6) | (8) |
| Change in components of working capital | (622) | (542) |
| Other, net (a) | 31 | 14 |
| Cash utilized in operating activities | (363) | (325) |
| Cash flows from investing activities: | ||
| Additions to property, plant and equipment | (142) | (98) |
| Acquisitions, net of cash acquired | (26) | (17) |
| Net cash proceeds on disposal of assets | 7 | |
| Other, net | 1 | 1 |
| Cash utilized in investing activities | (160) | (114) |
| Cash flows from financing activities: | ||
| Changes in borrowings, net | 488 | 273 |
| Distributions to parent | (52) | (12) |
| Payment of finance fees | (19) | |
| Other | 3 | |
| Cash provided by financing activities | 436 | 245 |
| Effect of exchange rate fluctuations on cash | 13 | 14 |
| Decrease in cash | (74) | (180) |
| Cash at beginning of period | 492 | 492 |
| Cash at end of period | $ 418 | $ 312 |
Basis of Presentation
| Basis of Presentation | 3 Months Ended |
| Mar. 31, 2018 | |
| Basis of Presentation | |
| Basis of Presentation | 1. Basis of Presentation 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 asbestos-related payments. OI Inc. relies primarily on distributions from its direct and indirect subsidiaries to meet these obligations. |
Segment Information
| Segment Information | 3 Months Ended |
| Mar. 31, 2018 | |
| Segment Information | |
| Segment Information | 2. Segment Information The Company has three reportable segments and three operating segments based on its geographic locations: Americas, Europe, and Asia Pacific. These three segments are aligned with the Company’s internal approach to managing, reporting, and evaluating performance of its global glass operations. As previously disclosed, to better leverage its scale and presence across a larger geography and market, the Company completed the consolidation of the former North America and Latin America segments into one segment, named the Americas, effective January 1, 2018. The consolidation resulted in the leadership roles of the former North America and Latin America segments being combined into one position, President of the Americas, reporting to the Company’s chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer. Beginning January 1, 2018, the CODM reviews the operating results at the Americas level to make resource allocation decisions and to assess performance. The consolidation also resulted in the elimination of duplicative costs as certain functions of the former North America and Latin America segments were combined to simplify the management of the new Americas segment. For example, the Company consolidated its business shared service centers in North America and Latin America into one Americas shared service center. 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 net sales and selected cash flow information, to evaluate performance and to allocate resources. Segment operating profit for reportable segments includes an allocation of some corporate expenses based on both a percentage of sales and direct billings based on the costs of specific services provided. Financial information for the three months ended March 31, 2018 and 2017 regarding the Company’s reportable segments is as follows: Three months ended March 31, 2018 2017 Net sales: Americas $ 908 $ 869 Europe 643 554 Asia Pacific 173 173 Reportable segment totals 1,724 1,596 Other 12 19 Net sales $ 1,736 $ 1,615 Three months ended March 31, 2018 2017 Segment operating profit: Americas $ 147 $ 139 Europe 72 59 Asia Pacific 5 20 Reportable segment totals 224 218 Items excluded from segment operating profit: Retained corporate costs and other (27) (28) Restructuring, asset impairment and other (39) Interest expense, net (62) (78) Earnings from continuing operations before income taxes $ 135 $ 73 Financial information regarding the Company’s total assets is as follows: March 31, December 31, March 31, 2018 2017 2017 Total assets: Americas $ 5,637 $ 5,411 $ 5,433 Europe 3,387 3,133 2,858 Asia Pacific 1,056 1,001 998 Reportable segment totals 10,080 9,545 9,289 Other 201 211 170 Consolidated totals $ 10,281 $ 9,756 $ 9,459 |
Revenue
| Revenue | 3 Months Ended |
| Mar. 31, 2018 | |
| Revenue | |
| Revenue | 3. Revenue On January 1, 2018, the Company adopted accounting standard ASC 606, Revenue from Contracts with Customers, and selected the modified retrospective transition method. The adoption of this new standard did not impact the Company’s results of operations or balance sheet and there was no cumulative effect of initially applying this new revenue standard to the opening balance of retained earnings. Revenue is recognized when obligations under the terms of the Company’s contracts and related purchase orders with its customers are satisfied. This occurs with the transfer of control of glass containers, which primarily takes place when products are shipped from the Company’s manufacturing or warehousing facilities to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimated provisions for rebates, discounts, returns and allowances. Sales, value added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s payment terms are based on customary business practices and can vary by customer type. The term between invoicing and when payment is due is not significant. Also, the Company elected to account for shipping and handling costs as a fulfillment cost at the time of shipment. For the three months ended March 31, 2018, the Company had no material bad debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the Condensed Consolidated Balance Sheet. For the three months ended March 31, 2018, revenue recognized from prior periods (for example, due to changes in transaction price) was not material. The following table disaggregates the Company’s revenue by customer end use: Three months ended March 31, 2018 Americas Europe Asia Pacific Total Alcoholic beverages (beer, wine, spirits) $ 576 $ 471 $ 127 $ 1,174 Food and other 189 112 24 325 Non-alcoholic beverages 143 60 22 225 Reportable segment totals $ 908 $ 643 $ 173 $ 1,724 Other 12 Net sales $ 1,736 |
Inventories
| Inventories | 3 Months Ended |
| Mar. 31, 2018 | |
| Inventories | |
| Inventories | 4. Inventories Major classes of inventory at March 31, 2018, December 31, 2017 and March 31, 2017 are as follows: March 31, December 31, March 31, 2018 2017 2017 Finished goods $ 901 $ 873 $ 889 Raw materials 120 122 124 Operating supplies 44 41 38 $ 1,065 $ 1,036 $ 1,051 |
Derivative Instruments
| Derivative Instruments | 3 Months Ended |
| Mar. 31, 2018 | |
| Derivative Instruments | |
| Derivative Instruments | 5. 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 several regions, 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. In the Americas, some of its customer contracts contain provisions that pass the price of natural gas to its customers. In certain of these contracts, the customer has the option of fixing the natural gas price component for a specified period of time. To limit the effects of fluctuations in cash flows resulting from these customer contracts, the Company enters into commodity forward contracts related to forecasted natural gas requirements. In Asia Pacific, the Company implemented a hedging program that included the execution of commodity forward contracts for certain contracted natural gas requirements. The Company had entered into commodity forward contracts covering approximately 8,600,000 MM BTUs at March 31, 2018, 8,800,000 MM BTUs at December 31, 2017 and 11,200,000 MM BTUs at March 31, 2017. The Company accounts for the above forward contracts as cash flow hedges at March 31, 2018 and recognizes them on the Condensed Consolidated 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 owners’ equity (“OCI”) and reclassified into earnings in the same period or periods during which the underlying hedged item affects earnings. An unrecognized gain of $4 million at March 31, 2018, an unrecognized gain of $3 million at December 31, 2017 and an unrecognized gain of $1 million at March 31, 2017 related to the commodity forward contracts was included in Accumulated OCI, and will be reclassified into earnings in the period when the commodity forward contracts expire. 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 three months ended March 31, 2018 and 2017 was not material. The effect of the commodity forward contracts on the results of operations for the three months ended March 31, 2018 and March 31, 2017 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) 2018 2017 2018 2017 $ 1 $ 6 $ — $ — 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 foreign exchange agreements to offset the foreign currency risk for receivables and payables, including intercompany receivables, payables, and loans, not denominated in, or indexed to, their functional currencies. The Company records these short-term foreign exchange agreements on the balance sheet at fair value and changes in the fair value are recognized in current earnings. At March 31, 2018 and 2017, the Company had outstanding foreign exchange and option agreements denominated in various currencies covering the equivalent of approximately $350 million and $340 million, respectively, related primarily to intercompany transactions and loans. The effect of the foreign exchange derivative contracts on the results of operations for the three months ended March 31, 2018 and March 31, 2017 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 2018 2017 Other expense, net $ — $ — Hedges of Multiple Risks The Company has variable-interest rate borrowings denominated in currencies other than the functional currency of the borrowing subsidiaries. As a result, the Company is exposed to fluctuations in both the underlying variable interest rate and the currency of the borrowing against the subsidiaries’ functional currency. The Company uses derivatives to manage these exposures and designates these derivatives as cash flow hedges of both interest rate and foreign exchange risks. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges of both interest rate risk and foreign exchange risk is recorded in Accumulated OCI and is subsequently reclassified into earnings in the period for which the hedged forecasted transaction affects earnings. If there is an ineffective portion of the change in fair value of the derivative it is recognized directly in earnings. During the fourth quarter of 2017, one of the Company’s Euro-functional subsidiaries entered into a series of cross-currency interest rate swaps to manage its exposure to fluctuations in the Euro-U.S. dollar exchange rate arising from a U.S. dollar denominated borrowing. These swaps involve exchanging fixed rate Euro interest payments for fixed rate U.S. dollar interest receipts, both of which will occur at the forward exchange rates in effect upon entering into the instrument. An unrecognized loss of $6 million at March 31, 2018 and an unrecognized loss of less than $1 million at December 31, 2017, related to these cross-currency interest rate swaps, were included in Accumulated OCI, and will be reclassified into earnings within the next twelve months. These instruments, in the aggregate, have a pay fixed notional amount of €263 million and a receive notional amount of $310 million and reach final maturity in 2023. There was no ineffectiveness related to these cross-currency interest rate swaps for the three months ended March 31, 2018. The effect of the cross-currency interest rate swaps on the results of operations for the three months ended March 31, 2018 is as follows: Amount of gain (loss) Reclassified from Amount of gain (loss) Recognized in OCI on Accumulated OCI into Income Hedges of Multiple Risks (reported in Other expense, net) (Effective Portion) (Effective Portion) $ (13) $ (8) Interest Rate Swaps Designated as Fair Value Hedges During 2017, the Company entered into a series of interest rate swap agreements with a total notional amount of €725 million that reach final maturity in 2024. The swaps were executed in order to maintain a capital structure containing appropriate amounts of fixed and floating-rate debt. The Company’s fixed-to-variable interest rate swaps were accounted for as fair value hedges. The relevant terms of the swap agreements match the corresponding terms of the notes and therefore there is no hedge ineffectiveness. The Company recorded the net of the fair market values of the swaps as a long-term liability and short-term asset along with a corresponding net decrease in the carrying value of the hedged debt. Under the swaps, the Company receives fixed rate interest amounts (equal to the interest on the corresponding hedged note) and pays interest at a six-month Euribor rate (set in arrears) plus a margin spread (see table below). The interest rate differential on each swap is recognized as an adjustment of interest expense during each six-month period over the term of the agreement. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company has determined that the majority of the inputs used to value these derivatives fall within Level 2 of the fair value hierarchy. The following selected information relates to fair value swaps at March 31, 2018: Amount Hedged Receive Rate Average Spread Senior Notes due 2024 € 725 3.125 % 2.6 % 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, (c) other accrued liabilities or other liabilities (current) if the instrument has a negative fair value and maturity within one year, and (d) other accrued liabilities or other liabilities if the instrument has a negative fair value and maturity after one year. The following table shows the amount and classification (as noted above) of the Company’s derivatives at March 31, 2018, December 31, 2017 and March 31, 2017: Fair Value Balance Sheet March 31, December 31, March 31, Location 2018 2017 2017 Asset Derivatives: Derivatives designated as hedging instruments: Commodity futures contracts b $ 4 $ 3 $ 2 Interest rate swaps designated as fair value hedges a 4 6 Hedges of multiple risks designated as cash flow hedges a 6 4 Derivatives not designated as hedging instruments: Foreign exchange derivative contracts a 4 4 5 Total asset derivatives $ 18 $ 17 $ 7 Liability Derivatives: Derivatives designated as hedging instruments: Commodity futures contracts c $ — $ — $ 1 Interest rate swaps designated as fair value hedges d 15 13 Hedges of multiple risks designated as cash flow hedges d 26 10 Derivatives not designated as hedging instruments: Foreign exchange derivative contracts d 1 1 2 Total liability derivatives $ 42 $ 24 $ 3 |
Restructuring Accruals
| Restructuring Accruals | 3 Months Ended |
| Mar. 31, 2018 | |
| Restructuring Accruals | |
| Restructuring Accruals | 6. Restructuring Accruals Selected information related to the restructuring accruals for the three months ended March 31, 2018 and 2017 is as follows: Total Restructuring Balance at January 1, 2018 $ 85 Net cash paid, principally severance and related benefits (6) Other, including foreign exchange translation 1 Balance at March 31, 2018 $ 80 Total Restructuring Balance at January 1, 2017 $ 85 Charges 38 Write-down of assets to net realizable value (9) Net cash paid, principally severance and related benefits (8) Other, including foreign exchange translation (2) Balance at March 31, 2017 $ 104 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 are presented separately while minor initiatives are presented on a combined basis. As of March 31, 2018 and 2017, no major restructuring programs were in effect. In the three months ended March 31, 2017, the Company implemented a number of minor restructuring initiatives and recorded restructuring, asset impairment and other charges of $38 million. These charges primarily consisted of employee costs, write-down of assets, and other exit costs in the following regions: Americas ($25 million) and Europe ($13 million). The restructuring charges recorded in the first quarter of 2017 were discrete actions and are expected to approximate the total cumulative costs for those actions as no significant additional costs are expected to be incurred. The restructuring charges recorded in the first quarter of 2017 in the Americas and European regions primarily relate to capacity curtailments. The Company plans to reallocate the products produced at these facilities to others in their respective regions. The Company expects that the majority of the remaining cash expenditures related to the above charges will be paid out by the end of 2018. |
Pension Benefit Plans
| Pension Benefit Plans | 3 Months Ended |
| Mar. 31, 2018 | |
| Pension Benefit Plans | |
| Pension Benefit Plans | 7. Pension Benefit Plans The components of the net periodic pension cost for the three months ended March 31, 2018 and 2017 are as follows: U.S. Non-U.S. 2018 2017 2018 2017 Service cost $ 4 $ 4 $ 4 $ 4 Interest cost 15 20 8 11 Expected asset return (25) (33) (13) (18) Amortization: Actuarial loss 13 14 4 5 Net periodic pension cost $ 7 $ 5 $ 3 $ 2 |
Income Taxes
| Income Taxes | 3 Months Ended |
| Mar. 31, 2018 | |
| Income Taxes | |
| Income Taxes | 8. Income Taxes The Company calculates its interim tax provision using the estimated annual effective tax rate (“EAETR”) methodology in accordance with ASC 740-270. The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effect of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pretax ordinary income or loss in each tax jurisdiction in which the Company operates. The tax effects of discrete items are recognized in the tax provision in the quarter they occur in accordance with GAAP. Depending on various factors such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter can materially impact the reported effective tax rate. The Company’s annual effective tax rate may be affected by the mix of earnings in the U.S. and foreign jurisdictions and such factors as changes in tax laws, tax rates or regulations, changes in business, changing interpretation of existing tax laws or regulations, the finalization of tax audits and reviews, as well as other factors. As such, there can be significant volatility in interim tax provisions. The annual effective tax rate differs from the statutory U.S. Federal tax rate of 21% for 2018 and 35% for 2017 primarily because of varying non-U.S. tax rates and valuation allowances in some jurisdictions, respectively. The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. The Company is applying the guidance in Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cut and Jobs Act, when accounting for the enactment-date effects of the Act. At March 31, 2018, the Company has not completed its accounting for the tax effects of the Act; however, it has made reasonable estimates of the tax effects. During the three months ended March 31, 2018, the Company has not recorded any adjustments to the provisional amounts recorded at December 31, 2017 related to the remeasurement of its deferred balances and the one-time transition tax. In all cases, the Company is continuing to make and refine its calculations as additional analysis is completed. In addition, the Company’s estimates may also be affected as it gains a more thorough understanding of the tax law and certain aspects of the Act are clarified by the taxing authorities. The Act subjects a U.S. shareholder to current tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. At December 31, 2017, the Company elected to recognize the resulting tax on GILTI as a period expense in the period the tax is incurred. The Company has made sufficient progress in its calculation to reasonably estimate the tax expense related to GILTI for the year ended December 31, 2018 and included it in the estimated annual effective tax rate. The impact of GILTI resulted in no incremental tax expense for the quarter ended March 31, 2018 due to net operating loss carryforwards, foreign tax credits and a full valuation allowance on U.S. net deferred tax assets. The Company will continue to refine its calculations, which may result in changes to the expected impact for 2018. The Company maintains its assertion on a provisional basis that it intends to continue to indefinitely reinvest the gross book-tax differences in its non-U.S. consolidated subsidiaries. However, the Company records deferred foreign taxes on gross book-tax basis differences to the extent of foreign distributable reserves for certain foreign subsidiaries. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis differences in these entities (i.e., basis difference in excess of that subject to the one-time transition tax) is not practicable. The Company is currently under examination in various tax jurisdictions in which it operates, including Bolivia, Brazil, Canada, China, Colombia, France, Germany, and Indonesia. The years under examination range from 2004 through 2015. The Company has received tax assessments in excess of established reserves for uncertain tax positions. The Company is contesting these tax assessments, and will continue to do so, including pursuing all available remedies such as appeals and litigation, if necessary. The Company believes that adequate provisions for all income tax uncertainties have been made. However, if income 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. |
Debt
| Debt | 3 Months Ended |
| Mar. 31, 2018 | |
| Debt | |
| Debt | 9. Debt The following table summarizes the long-term debt of the Company: March 31, December 31, March 31, 2018 2017 2017 Secured Credit Agreement: Revolving Credit Facility: Revolving Loans $ 462 $ — $ 285 Term Loans: Term Loan A 1,149 1,148 1,370 Term Loan A (€279 million at March 31, 2017) 284 Senior Notes: 6.75%, due 2020 (€500 million) 613 594 530 4.875%, due 2021 (€330 million) 404 392 350 5.00%, due 2022 496 496 495 4.00%, due 2023 305 305 5.875%, due 2023 686 685 683 3.125%, due 2024 (€725 million at March 31, 2018) 872 849 763 6.375%, due 2025 295 295 294 5.375%, due 2025 297 297 297 Payable to OI Inc. 22 Capital Leases 53 54 56 Other 19 17 26 Total long-term debt 5,651 5,132 5,455 Less amounts due within one year 11 11 24 Long-term debt $ 5,640 $ 5,121 $ 5,431 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 September 28, 2017 (the “Amended Agreement”). At March 31, 2018, the Amended Agreement includes a $300 million revolving credit facility, a $600 million multicurrency revolving credit facility, and a $1,575 million term loan A facility ($1,149 million net of debt issuance costs), each of which has a final maturity date of April 22, 2020. At March 31, 2018, the Company had unused credit of $412 million available under the Amended Agreement. The weighted average interest rate on borrowings outstanding under the Amended Agreement at March 31, 2018 was 2.98%. 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 (excluding ordinary course revolver borrowings, except to the extent such borrowings existed at the prior year end, and non-recourse factoring or securitization 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 4.0x for the first fiscal quarter ending March 31, 2018 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 March 31, 2018, 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. In March 2017, the Company expanded its borrowings under the Senior Notes due 2024 by issuing €225 million of additional notes that bear interest at 3.125% and are due November 15, 2024. The notes were issued via a private placement and are guaranteed by certain of the Company‘s domestic subsidiaries. The net proceeds, after deducting debt issuance costs, totaled approximately $237 million and were used to repay a portion of the Company’s revolving credit facility. During March 2017, OI Inc. purchased in a tender offer approximately $228 million aggregate principal amount of its 7.80% Senior Debentures due in 2018. In November 2017, the remaining $22 million of the 7.80% Senior Debentures were repurchased by OI Inc., the indenture relating thereto was discharged, and all collateral and guarantees thereunder were released. In 2017, the Company recorded $18 million of additional interest charges for note repurchase premiums and the write-off of unamortized finance fees related to these actions. During December 2017, the Company issued senior notes with a face value of $310 million that bear interest at 4.00% and are due March 15, 2023. The notes were issued via a private placement and are guaranteed by certain of the Company‘s domestic subsidiaries. The net proceeds, after deducting debt issuance costs, totaled approximately $305 million and were used to repay a portion of the term loan A facility under the Amended Agreement. In order to maintain a capital structure containing appropriate amounts of fixed and floating-rate debt, the Company has entered into a series of interest rate swap agreements. These swap agreements were accounted for as fair value hedges (see Note 5). 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 is as follows: March 31, December 31, March 31, 2018 2017 2017 Balance (included in short-term loans) $ 144 $ 133 $ 148 Weighted average interest rate 1.01 % 0.76 % 0.88 % 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. Fair values at March 31, 2018 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) $ 616 $ 114.41 $ 704 4.875%, due 2021 (€330 million) 406 110.78 450 5.00%, due 2022 500 101.50 508 5.875%, due 2023 700 103.89 727 4.00%, due 2023 310 95.53 296 3.125%, due 2024 (€725 million) 893 101.91 910 6.375%, due 2025 300 107.60 323 5.375%, due 2025 300 101.40 304 |
Contingencies
| Contingencies | 3 Months Ended |
| Mar. 31, 2018 | |
| Contingencies | |
| Contingencies | 10. 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"). As of March 31, 2018, OI Inc. has determined that it is a named defendant in asbestos lawsuits and claims involving approximately 1,270 plaintiffs and claimants. Based on an analysis of the lawsuits pending as of December 31, 2017, approximately 89% 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 8% 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 March 31, 2018, has disposed of asbestos claims of approximately 399,000 plaintiffs and claimants at an average indemnity payment per claim of approximately $9,600. 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 2017, 2016 and 2015 were $110 million, $125 million and $138 million, respectively. OI Inc.’s cash payments per claim disposed (inclusive of legal costs) were approximately $83,000, $71,000, and $95,000 for the years ended December 31, 2017, 2016 and 2015, 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 March 31, 2018, 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 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 OI Inc. in estimating the total number of future claims to be filed. OI Inc. uses this estimate of total future claims, along with an estimation of disposition costs and related legal costs as inputs to develop its best estimate of its total probable liability. If the results of the annual comprehensive legal review indicate that the existing amount of the accrued liability is lower (higher) than its reasonably estimable asbestos-related costs, then 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 the 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, 2017 and 2016, OI Inc. concluded that accruals in the amounts of $582 million and $692 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 million, $0 million and $16 million for the years ended December 31, 2017, 2016 and 2015, 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 was $582 million as of December 31, 2017. OI Inc. estimated that reasonably possible losses could result in asbestos-related liabilities up to $725 million. This estimate of additional reasonably possible loss reflects a qualitative legal judgment regarding the nature of contingencies that could impact future claims and legal costs, which include, but are not limited to, successful attempts by plaintiffs to challenge existing legal barriers to liability, enact plaintiff-oriented liability or damage-related legislation, establish new theories of liability, or revive long-dormant inventories of non-mesothelioma cases. However, it is also possible that the ultimate amount of asbestos-related liabilities 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 the Company’s asbestos-related liability. Other Matters On July 5, 2016, OI Inc. learned that the Enforcement Division of the Securities and Exchange Commission (“SEC”) is conducting an investigation into certain accounting and control matters pertaining to the 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 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. |
Share Owners' Equity
| Share Owners' Equity | 3 Months Ended |
| Mar. 31, 2018 | |
| Share Owners' Equity | |
| Share Owners' Equity | 11. Share Owners’ Equity The activity in share owners’ equity for the three months ended March 31, 2018 and 2017 is as follows: Share Owners’ Equity of the Company Accumulated Other Other Non- Total Share Contributed Retained Comprehensive controlling Owners' Capital Earnings Loss Interests Equity Balance on January 1, 2018 $ 553 $ 2,622 $ (1,785) $ 119 $ 1,509 Net distribution to parent (46) (46) Net earnings 98 5 103 Other comprehensive income 122 6 128 Balance on March 31, 2018 $ 507 $ 2,720 $ (1,663) $ 130 $ 1,694 Share Owners’ Equity of the Company Accumulated Other Other Non- Total Share Contributed Retained Comprehensive controlling Owners' Capital Earnings Loss Interests Equity Balance on January 1, 2017 $ 635 $ 2,442 $ (2,131) $ 109 $ 1,055 Net distribution to parent (6) (6) Net earnings 49 4 53 Other comprehensive income 191 3 194 Balance on March 31, 2017 $ 629 $ 2,491 $ (1,940) $ 116 $ 1,296 l l |
Accumulated Other Comprehensive
| Accumulated Other Comprehensive Loss | 3 Months Ended |
| Mar. 31, 2018 | |
| Accumulated Other Comprehensive Loss | |
| Accumulated Other Comprehensive Loss | 12. Accumulated Other Comprehensive Loss The activity in accumulated other comprehensive loss for the three months ended March 31, 2018 and 2017 is as follows: Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Loss Balance on January 1, 2018 $ (723) $ (5) $ (1,057) $ (1,785) Change before reclassifications (4) 116 Amounts reclassified from accumulated other comprehensive income (4) (a) 17 (b) 13 Translation effect (1) (6) (7) Other comprehensive income attributable to the Company 120 (5) 7 122 Balance on March 31, 2018 $ (603) $ (10) $ (1,050) $ (1,663) Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Loss Balance on January 1, 2017 $ (788) $ 3 $ (1,346) $ (2,131) Change before reclassifications 186 (12) 174 Amounts reclassified from accumulated other comprehensive income (6) (a) 19 (b) 13 Translation effect 4 4 Other comprehensive income attributable to the Company 186 (6) 11 191 Balance on March 31, 2017 $ (602) $ (3) $ (1,335) $ (1,940) (a) Amount is included in Cost of goods sold on the Condensed Consolidated Results of Operations (see Note 5 for additional information). (b) Amount is included in the computation of net periodic pension cost (see Note 7 for additional information) and net postretirement benefit cost. |
Other Expense (Income), net
| Other Expense (Income), net | 3 Months Ended |
| Mar. 31, 2018 | |
| Other Expense, net | |
| Other Expense, net | 13. Other Expense (Income), net Other expense (income), net for the three months ended March 31, 2018 and 2017 included the following: Three months ended March 31, 2018 2017 Restructuring, asset impairment and other charges $ — $ 39 Foreign currency exchange (gain) loss 2 (1) Intangible amortization expense 10 10 Royalty income (3) (4) Other (income)/expense (12) 1 $ (3) $ 45 |
Supplemental Cash Flow Informat
| Supplemental Cash Flow Information | 3 Months Ended |
| Mar. 31, 2018 | |
| Supplemental Cash Flow Information | |
| Supplemental Cash Flow Information | 14. Supplemental Cash Flow Information Income taxes paid in cash were as follows: Three months ended March 31, 2018 2017 U.S. $ 3 $ 3 Non-U.S. 31 30 Total income taxes paid in cash 34 33 Interest paid in cash for the three months ended March 31, 2018 and 2017 was $88 million and $98 million, respectively. Cash interest for the three months ended March 31, 2017 included $16 million of note repurchase premiums related to debt that was repaid prior to its maturity. The Company uses various factoring programs to sell certain receivables to financial institutions as part of managing its cash flows. At March 31, 2018 and March 31, 2017, the amount of receivables sold by the Company was $216 million and $202 million, respectively. Any continuing involvement with the sold receivables is immaterial. |
Discontinued Operations
| Discontinued Operations | 3 Months Ended |
| Mar. 31, 2018 | |
| Discontinued Operations | |
| Discontinued Operations | 15. 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 OI European Group B.V. (“OIEG”), a subsidiary of the Company, is free to pursue the enforcement of a prior arbitration award (the “Award”) against Venezuela. As of March 31, 2018, that Award amounts to more than $500 million, including reimbursement of expenses and accrued interest. Venezuela’s application to annul the Award was heard by an ad hoc committee of the ICSID in September 2017, but no decision has been rendered yet. On July 31, 2017, OIEG sold its right, title and interest in amounts due under the Award to an Ireland-domiciled investment fund. Under the terms of the sale, OIEG received a payment, in cash, at closing equal to $115 million (the “Cash Payment”). OIEG may also receive additional payments in the future (“Deferred Amounts”) calculated based on the total compensation that is received from Venezuela as a result of collection efforts or as settlement of the Award with Venezuela. In the event that the Award is partially or completely annulled by the ICSID ad hoc annulment committee, OIEG may be required to repay to the purchaser up to the entire amount of the Cash Payment based on a formula tied to the amount of the Award (if any) that is annulled. In addition, OIEG’s right to receive any Deferred Amounts is subject to the limitations described below. OIEG’s interest in any amounts received in the future from Venezuela in respect of the Award is limited to a percentage of such recovery after taking into account reimbursement of the Cash Payment to the purchaser and reimbursement of legal fees and expenses incurred by the Company and the purchaser. OIEG’s percentage of such recovery will also be reduced over time. Because the Award has yet to be satisfied, the annulment proceeding is pending, and the ability to successfully enforce the Award in countries that are party to the ICSID Convention is subject to significant challenges, the Company is unable to reasonably predict the amount of recoveries from the Award, if any, to which the Company may be entitled in the future. Any future amounts that the Company may receive from the Award are highly speculative and the timing of any such future payments, if any, is highly uncertain. As such, there can be no assurance that the Company will receive any future payments under the Award beyond the Cash Payment. Except as noted above in connection with the annulment proceeding that is pending before the ICSID ad hoc committee, the Cash Payment is not subject to any forfeiture or future adjustment. A separate arbitration involving other subsidiaries of the Company was initiated in 2012 to obtain compensation primarily for third-party minority shareholders’ lost interests in the two expropriated plants. However, on November 13, 2017, ICSID issued an award that dismissed this arbitration on jurisdiction grounds. In March 2018, the Company submitted to ICSID an application to annul the November 13, 2017 award. As of March 31, 2018, the Company deferred the gain contingency on the sale of its rights in amounts due under the Award pending the ad hoc committee of the ICSID rendering its decision regarding Venezuela’s application to annul the Award. The loss from discontinued operations was less than $1 million for the three months ended March 31, 2018 and March 31, 2017 and related to ongoing costs of the Venezuelan expropriation. |
New Accounting Pronouncement
| New Accounting Pronouncement | 3 Months Ended |
| Mar. 31, 2018 | |
| New Accounting Pronouncement | |
| New Accounting Pronouncement | 16. New Accounting Pronouncement Revenue from Contracts with Customers - In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. On January 1, 2018, the Company adopted this accounting standard. See Note 3, Revenue, for additional information. Leases - In February 2016, the FASB issued ASU No. 2016-02, “Leases”. 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 that the Company plans to elect. The Company anticipates the new guidance will significantly impact its consolidated financial statements as the Company has a significant number of leases. As of December 31, 2017, the Company had minimum lease commitments under non-cancellable operating leases totaling $258 million. The Company formed an implementation team, commenced identification of its lease population and has begun the implementation of new software to manage its leases in accordance with this new accounting standard. Credit Losses - In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The new guidance is effective for the Company on January 1, 2020. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. Statement of Cash Flows - In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” which was intended to reduce diversity in practice on how certain transactions are classified in the statement of cash flows. Application of the standard is required for annual periods beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. Compensation - Retirement Benefits - In March 2017, the FASB issued ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” which requires the service cost component to be presented with other employee compensation costs in operating income within the income statement while the other components will be reported separately outside of operations. Application of the standard is required for annual periods beginning after December 15, 2017. The Company adopted this standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements, except for in the Consolidated Results of Operations for the prior periods in which there were pension settlement charges. These prior period pension settlement charges will be reclassed from the Cost of goods sold and Selling and administrative expense lines into the Other expenses, net line. Derivatives and Hedging - In August 2017, the FASB issued ASU No. 2017-12, “Targeted Improvements to Accounting for Hedging Activities” which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. Application of the standard is required for annual periods beginning after December 15, 2018. The Company adopted this standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. Income Taxes - In January 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which gives entities the option to reclassify to retained earnings the tax effects resulting from the Act related to items in AOCI that the FASB refers to as having been stranded in AOCI. The new guidance may be applied retrospectively to each period in which the effect of the Act is recognized in the period of adoption. The Company must adopt this guidance for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for periods for which financial statements have not yet been issued or made available for issuance, including the period the Act was enacted. The guidance, when adopted, will require new disclosures regarding a company’s accounting policy for releasing the tax effects in AOCI and permit a company the option to reclassify to retained earnings the tax effects resulting from the Act that are stranded in AOCI. The Company is currently evaluating how to apply the new guidance and has not determined whether it will elect to reclassify stranded amounts, if any. The adoption of ASU 2018-02 is not expected to have a material effect on the Company’s consolidated financial statements . |
Segment Information (Tables)
| Segment Information (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Segment Information | |
| Net sales for the Company's reportable segments | Three months ended March 31, 2018 2017 Net sales: Americas $ 908 $ 869 Europe 643 554 Asia Pacific 173 173 Reportable segment totals 1,724 1,596 Other 12 19 Net sales $ 1,736 $ 1,615 |
| Segment operating profit (loss) for the Company's reportable segments | Three months ended March 31, 2018 2017 Segment operating profit: Americas $ 147 $ 139 Europe 72 59 Asia Pacific 5 20 Reportable segment totals 224 218 Items excluded from segment operating profit: Retained corporate costs and other (27) (28) Restructuring, asset impairment and other (39) Interest expense, net (62) (78) Earnings from continuing operations before income taxes $ 135 $ 73 |
| Total assets for the Company's reportable segments | March 31, December 31, March 31, 2018 2017 2017 Total assets: Americas $ 5,637 $ 5,411 $ 5,433 Europe 3,387 3,133 2,858 Asia Pacific 1,056 1,001 998 Reportable segment totals 10,080 9,545 9,289 Other 201 211 170 Consolidated totals $ 10,281 $ 9,756 $ 9,459 |
Revenue (Tables)
| Revenue (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Revenue | |
| Schedule of disaggregation of revenue by customer end use | The following table disaggregates the Company’s revenue by customer end use: Three months ended March 31, 2018 Americas Europe Asia Pacific Total Alcoholic beverages (beer, wine, spirits) $ 576 $ 471 $ 127 $ 1,174 Food and other 189 112 24 325 Non-alcoholic beverages 143 60 22 225 Reportable segment totals $ 908 $ 643 $ 173 $ 1,724 Other 12 Net sales $ 1,736 |
Inventories (Tables)
| Inventories (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Inventories | |
| Major classes of inventory | March 31, December 31, March 31, 2018 2017 2017 Finished goods $ 901 $ 873 $ 889 Raw materials 120 122 124 Operating supplies 44 41 38 $ 1,065 $ 1,036 $ 1,051 |
Derivative Instruments (Tables)
| Derivative Instruments (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Effect of the foreign exchange contracts not designated as hedging instruments on the results of operations | The effect of the foreign exchange derivative contracts on the results of operations for the three months ended March 31, 2018 and March 31, 2017 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 2018 2017 Other expense, net $ — $ — |
| Schedule of selected information relating to fair value swaps | Amount Hedged Receive Rate Average Spread Senior Notes due 2024 € 725 3.125 % 2.6 % |
| Balance Sheet Classification of derivative instruments | Fair Value Balance Sheet March 31, December 31, March 31, Location 2018 2017 2017 Asset Derivatives: Derivatives designated as hedging instruments: Commodity futures contracts b $ 4 $ 3 $ 2 Interest rate swaps designated as fair value hedges a 4 6 Hedges of multiple risks designated as cash flow hedges a 6 4 Derivatives not designated as hedging instruments: Foreign exchange derivative contracts a 4 4 5 Total asset derivatives $ 18 $ 17 $ 7 Liability Derivatives: Derivatives designated as hedging instruments: Commodity futures contracts c $ — $ — $ 1 Interest rate swaps designated as fair value hedges d 15 13 Hedges of multiple risks designated as cash flow hedges d 26 10 Derivatives not designated as hedging instruments: Foreign exchange derivative contracts d 1 1 2 Total liability derivatives $ 42 $ 24 $ 3 |
| Commodity forwards contracts | |
| Effect of derivative on the results of operations | The effect of the commodity forward contracts on the results of operations for the three months ended March 31, 2018 and March 31, 2017 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) 2018 2017 2018 2017 $ 1 $ 6 $ — $ — |
| Cross-currency interest rate swap | |
| Effect of derivative on the results of operations | The effect of the cross-currency interest rate swaps on the results of operations for the three months ended March 31, 2018 is as follows: Amount of gain (loss) Reclassified from Amount of gain (loss) Recognized in OCI on Accumulated OCI into Income Hedges of Multiple Risks (reported in Other expense, net) (Effective Portion) (Effective Portion) $ (13) $ (8) |
Restructuring Accruals (Tables)
| Restructuring Accruals (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Restructuring Accruals | |
| Selected information related to the restructuring accruals | Selected information related to the restructuring accruals for the three months ended March 31, 2018 and 2017 is as follows: Total Restructuring Balance at January 1, 2018 $ 85 Net cash paid, principally severance and related benefits (6) Other, including foreign exchange translation 1 Balance at March 31, 2018 $ 80 Total Restructuring Balance at January 1, 2017 $ 85 Charges 38 Write-down of assets to net realizable value (9) Net cash paid, principally severance and related benefits (8) Other, including foreign exchange translation (2) Balance at March 31, 2017 $ 104 |
Pension Benefit Plans (Tables)
| Pension Benefit Plans (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Pension Benefit Plans | |
| Components of net periodic pension cost | The components of the net periodic pension cost for the three months ended March 31, 2018 and 2017 are as follows: U.S. Non-U.S. 2018 2017 2018 2017 Service cost $ 4 $ 4 $ 4 $ 4 Interest cost 15 20 8 11 Expected asset return (25) (33) (13) (18) Amortization: Actuarial loss 13 14 4 5 Net periodic pension cost $ 7 $ 5 $ 3 $ 2 |
Debt (Tables)
| Debt (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Debt | |
| Long-term debt | March 31, December 31, March 31, 2018 2017 2017 Secured Credit Agreement: Revolving Credit Facility: Revolving Loans $ 462 $ — $ 285 Term Loans: Term Loan A 1,149 1,148 1,370 Term Loan A (€279 million at March 31, 2017) 284 Senior Notes: 6.75%, due 2020 (€500 million) 613 594 530 4.875%, due 2021 (€330 million) 404 392 350 5.00%, due 2022 496 496 495 4.00%, due 2023 305 305 5.875%, due 2023 686 685 683 3.125%, due 2024 (€725 million at March 31, 2018) 872 849 763 6.375%, due 2025 295 295 294 5.375%, due 2025 297 297 297 Payable to OI Inc. 22 Capital Leases 53 54 56 Other 19 17 26 Total long-term debt 5,651 5,132 5,455 Less amounts due within one year 11 11 24 Long-term debt $ 5,640 $ 5,121 $ 5,431 |
| Information related to accounts receivable securitization program | March 31, December 31, March 31, 2018 2017 2017 Balance (included in short-term loans) $ 144 $ 133 $ 148 Weighted average interest rate 1.01 % 0.76 % 0.88 % |
| 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) $ 616 $ 114.41 $ 704 4.875%, due 2021 (€330 million) 406 110.78 450 5.00%, due 2022 500 101.50 508 5.875%, due 2023 700 103.89 727 4.00%, due 2023 310 95.53 296 3.125%, due 2024 (€725 million) 893 101.91 910 6.375%, due 2025 300 107.60 323 5.375%, due 2025 300 101.40 304 |
Share Owners' Equity (Tables)
| Share Owners' Equity (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Share Owners' Equity | |
| Activity in share owners' equity | Share Owners’ Equity of the Company Accumulated Other Other Non- Total Share Contributed Retained Comprehensive controlling Owners' Capital Earnings Loss Interests Equity Balance on January 1, 2018 $ 553 $ 2,622 $ (1,785) $ 119 $ 1,509 Net distribution to parent (46) (46) Net earnings 98 5 103 Other comprehensive income 122 6 128 Balance on March 31, 2018 $ 507 $ 2,720 $ (1,663) $ 130 $ 1,694 Share Owners’ Equity of the Company Accumulated Other Other Non- Total Share Contributed Retained Comprehensive controlling Owners' Capital Earnings Loss Interests Equity Balance on January 1, 2017 $ 635 $ 2,442 $ (2,131) $ 109 $ 1,055 Net distribution to parent (6) (6) Net earnings 49 4 53 Other comprehensive income 191 3 194 Balance on March 31, 2017 $ 629 $ 2,491 $ (1,940) $ 116 $ 1,296 l |
Accumulated Other Comprehensi31
| Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Accumulated Other Comprehensive Loss | |
| Schedule of activity in accumulated other comprehensive loss | The activity in accumulated other comprehensive loss for the three months ended March 31, 2018 and 2017 is as follows: Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Loss Balance on January 1, 2018 $ (723) $ (5) $ (1,057) $ (1,785) Change before reclassifications (4) 116 Amounts reclassified from accumulated other comprehensive income (4) (a) 17 (b) 13 Translation effect (1) (6) (7) Other comprehensive income attributable to the Company 120 (5) 7 122 Balance on March 31, 2018 $ (603) $ (10) $ (1,050) $ (1,663) Total Accumulated Net Effect of Change in Certain Other Exchange Rate Derivative Employee Comprehensive Fluctuations Instruments Benefit Plans Loss Balance on January 1, 2017 $ (788) $ 3 $ (1,346) $ (2,131) Change before reclassifications 186 (12) 174 Amounts reclassified from accumulated other comprehensive income (6) (a) 19 (b) 13 Translation effect 4 4 Other comprehensive income attributable to the Company 186 (6) 11 191 Balance on March 31, 2017 $ (602) $ (3) $ (1,335) $ (1,940) (a) Amount is included in Cost of goods sold on the Condensed Consolidated Results of Operations (see Note 5 for additional information). (b) Amount is included in the computation of net periodic pension cost (see Note 7 for additional information) and net postretirement benefit cost. |
Other Expense (Income), net (Ta
| Other Expense (Income), net (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Other Expense, net | |
| Schedule of other expense (income), net | Three months ended March 31, 2018 2017 Restructuring, asset impairment and other charges $ — $ 39 Foreign currency exchange (gain) loss 2 (1) Intangible amortization expense 10 10 Royalty income (3) (4) Other (income)/expense (12) 1 $ (3) $ 45 |
Supplemental Cash Flow Inform33
| Supplemental Cash Flow Information (Tables) | 3 Months Ended |
| Mar. 31, 2018 | |
| Supplemental Cash Flow Information | |
| Supplemental Cash Flow Information | Three months ended March 31, 2018 2017 U.S. $ 3 $ 3 Non-U.S. 31 30 Total income taxes paid in cash 34 33 |
Basis of Presentation (Details)
| Basis of Presentation (Details) | Mar. 31, 2018 |
| Basis of Presentation | |
| Owens-Illinois, Inc.'s ownership percentage in the Company | 100.00% |
Segment Information - Reportabl
| Segment Information - Reportable Segments (Details) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018USD ($)positionsegmentitem | Mar. 31, 2017USD ($) | |
| Segment Reporting Information | ||
| Number of reportable segments | segment | 3 | |
| Number of operating segments | segment | 3 | |
| Number of combined segments as a result of consolidating the former North America and Latin America segments | segment | 1 | |
| Number of leadership roles as a result of consolidating the former North America and Latin America segments | position | 1 | |
| Number of shared service centers as a result of consolidating the former North America and Latin America segments | item | 1 | |
| Net sales: | ||
| Net sales | $ 1,736 | $ 1,615 |
| Segment Operating Profit: | ||
| Segment operating profit | 224 | 218 |
| Items excluded from segment operating profit: | ||
| Retained corporate costs and other | (27) | (28) |
| Restructuring, asset impairment and other | (39) | |
| Interest expense, net | ||
| Interest expense, net | (62) | (78) |
| Earnings from continuing operations before income taxes | ||
| Earnings from continuing operations before income taxes | 135 | 73 |
| Reportable Segment Totals | ||
| Net sales: | ||
| Net sales | 1,724 | 1,596 |
| Americas | ||
| Net sales: | ||
| Net sales | 908 | 869 |
| Segment Operating Profit: | ||
| Segment operating profit | 147 | 139 |
| Europe | ||
| Net sales: | ||
| Net sales | 643 | 554 |
| Segment Operating Profit: | ||
| Segment operating profit | 72 | 59 |
| Asia Pacific | ||
| Net sales: | ||
| Net sales | 173 | 173 |
| Segment Operating Profit: | ||
| Segment operating profit | 5 | 20 |
| Other | ||
| Net sales: | ||
| Net sales | $ 12 | $ 19 |
Segment Information - Total Ass
| Segment Information - Total Assets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
| Assets | |||
| Total assets: | $ 10,281 | $ 9,756 | $ 9,459 |
| Reportable Segment Totals | |||
| Assets | |||
| Total assets: | 10,080 | 9,545 | 9,289 |
| Americas | |||
| Assets | |||
| Total assets: | 5,637 | 5,411 | 5,433 |
| Europe | |||
| Assets | |||
| Total assets: | 3,387 | 3,133 | 2,858 |
| Asia Pacific | |||
| Assets | |||
| Total assets: | 1,056 | 1,001 | 998 |
| Other | |||
| Assets | |||
| Total assets: | $ 201 | $ 211 | $ 170 |
Revenue (Details)
| Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| Disaggregation of Revenue | ||
| Net sales | $ 1,736 | $ 1,615 |
| Alcoholic beverages (beer, wine, spirits) | ||
| Disaggregation of Revenue | ||
| Net sales | 1,174 | |
| Food and other | ||
| Disaggregation of Revenue | ||
| Net sales | 325 | |
| Non-alcoholic beverages | ||
| Disaggregation of Revenue | ||
| Net sales | 225 | |
| Reportable Segment Totals | ||
| Disaggregation of Revenue | ||
| Net sales | 1,724 | 1,596 |
| Americas | ||
| Disaggregation of Revenue | ||
| Net sales | 908 | 869 |
| Americas | Alcoholic beverages (beer, wine, spirits) | ||
| Disaggregation of Revenue | ||
| Net sales | 576 | |
| Americas | Food and other | ||
| Disaggregation of Revenue | ||
| Net sales | 189 | |
| Americas | Non-alcoholic beverages | ||
| Disaggregation of Revenue | ||
| Net sales | 143 | |
| Europe | ||
| Disaggregation of Revenue | ||
| Net sales | 643 | 554 |
| Europe | Alcoholic beverages (beer, wine, spirits) | ||
| Disaggregation of Revenue | ||
| Net sales | 471 | |
| Europe | Food and other | ||
| Disaggregation of Revenue | ||
| Net sales | 112 | |
| Europe | Non-alcoholic beverages | ||
| Disaggregation of Revenue | ||
| Net sales | 60 | |
| Asia Pacific | ||
| Disaggregation of Revenue | ||
| Net sales | 173 | 173 |
| Asia Pacific | Alcoholic beverages (beer, wine, spirits) | ||
| Disaggregation of Revenue | ||
| Net sales | 127 | |
| Asia Pacific | Food and other | ||
| Disaggregation of Revenue | ||
| Net sales | 24 | |
| Asia Pacific | Non-alcoholic beverages | ||
| Disaggregation of Revenue | ||
| Net sales | 22 | |
| Other | ||
| Disaggregation of Revenue | ||
| Net sales | $ 12 | $ 19 |
Inventories (Details)
| Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
| Inventories | |||
| Finished goods | $ 901 | $ 873 | $ 889 |
| Raw materials | 120 | 122 | 124 |
| Operating supplies | 44 | 41 | 38 |
| Inventories | $ 1,065 | $ 1,036 | $ 1,051 |
Derivative Instruments - Deriva
| Derivative Instruments - Derivatives and Hedges (Details) € in Millions, $ in Millions | 3 Months Ended | |||||
| Mar. 31, 2018USD ($)MMBTU | Mar. 31, 2017USD ($) | Dec. 31, 2017EUR (€)MMBTU | Dec. 31, 2017USD ($)MMBTU | Mar. 31, 2017EUR (€)MMBTU | Mar. 31, 2017USD ($)MMBTU | |
| Commodity futures contracts | Cash Flow Hedges | ||||||
| Derivatives and Hedges | ||||||
| Commodity forward contracts gain (loss) recognized in OCI | $ 1 | $ 6 | ||||
| Commodity forwards contracts | Cash Flow Hedges | ||||||
| Derivatives and Hedges | ||||||
| Coverage of commodity forward contracts (in MM BTUs) | MMBTU | 8,600,000 | 8,800,000 | 8,800,000 | 11,200,000 | 11,200,000 | |
| Unrecognized gain (loss) included in Accumulated OCI | $ 4 | $ 3 | $ 1 | |||
| Foreign exchange contracts | Derivatives not designated as hedging instruments | ||||||
| Derivatives and Hedges | ||||||
| Notional amount | 350 | $ 340 | ||||
| Cross-currency interest rate swap | Cash Flow Hedges | ||||||
| Derivatives and Hedges | ||||||
| Unrecognized gain (loss) included in Accumulated OCI | (6) | |||||
| Commodity forward contracts gain (loss) recognized in OCI | (13) | |||||
| Commodity forward contracts gain (loss) reclassified from accumulated OCI into income | $ (8) | |||||
| Notional amount | € 263 | 310 | ||||
| Cross-currency interest rate swap | Cash Flow Hedges | Maximum | ||||||
| Derivatives and Hedges | ||||||
| Unrecognized gain (loss) included in Accumulated OCI | $ (1) | |||||
| Interest rate swaps | Derivatives designated as hedging instruments | ||||||
| Derivatives and Hedges | ||||||
| Notional amount | € | € 725 | |||||
Derivative Instruments - Balanc
| Derivative Instruments - Balance Sheet Classification (Details) € in Millions, $ in Millions | Mar. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) |
| Derivatives, Fair Value | |||||
| Total asset derivatives | $ 18 | $ 17 | $ 7 | ||
| Total liability derivatives | $ 42 | $ 24 | $ 3 | ||
| 3.125%, due 2024 (€725 million at March 31, 2018) | |||||
| Derivatives, Fair Value | |||||
| Amount Hedged | € | € 725 | € 725 | |||
| Receive Rate | 3.125% | 3.125% | 3.125% | 3.125% | 3.125% |
| Average Spread | 2.60% | 2.60% | 2.60% | 2.60% | |
| Derivatives not designated as hedging instruments | Foreign exchange contracts | Current receivables | |||||
| Derivatives, Fair Value | |||||
| Total asset derivatives | $ 4 | $ 4 | $ 5 | ||
| Derivatives not designated as hedging instruments | Foreign exchange contracts | Other liabilities (noncurrent) | |||||
| Derivatives, Fair Value | |||||
| Total liability derivatives | 1 | 1 | 2 | ||
| Derivatives designated as hedging instruments | Commodity futures contracts | Noncurrent Receivables. | |||||
| Derivatives, Fair Value | |||||
| Total asset derivatives | 4 | 3 | 2 | ||
| Derivatives designated as hedging instruments | Commodity futures contracts | Other liabilities (current) | |||||
| Derivatives, Fair Value | |||||
| Total liability derivatives | $ 1 | ||||
| Derivatives designated as hedging instruments | Interest rate swaps | Current receivables | |||||
| Derivatives, Fair Value | |||||
| Total asset derivatives | 4 | 6 | |||
| Derivatives designated as hedging instruments | Interest rate swaps | Other liabilities (noncurrent) | |||||
| Derivatives, Fair Value | |||||
| Total liability derivatives | 15 | 13 | |||
| Derivatives designated as hedging instruments | Hedges of multiple risks | Current receivables | |||||
| Derivatives, Fair Value | |||||
| Total asset derivatives | 6 | 4 | |||
| Derivatives designated as hedging instruments | Hedges of multiple risks | Other liabilities (noncurrent) | |||||
| Derivatives, Fair Value | |||||
| Total liability derivatives | $ 26 | $ 10 |
Restructuring Accruals (Details
| Restructuring Accruals (Details) - USD ($) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| Restructuring accrual | ||
| Beginning balance, restructuring reserve | $ 85 | $ 85 |
| Charges | 38 | |
| Write-down of assets to net realizable value | (9) | |
| Net cash paid, principally severance and related benefits | (6) | (8) |
| Other, including foreign exchange translation | 1 | (2) |
| Ending balance, restructuring reserve | $ 80 | 104 |
| Americas | ||
| Restructuring, Additional Information | ||
| Employee costs, asset impairments and other exit costs | 25 | |
| Europe | ||
| Restructuring, Additional Information | ||
| Employee costs, asset impairments and other exit costs | $ 13 | |
Pension Benefit Plans (Details)
| Pension Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| U.S Pension Plans | ||
| Components of the net pension expense and postretirement benefit cost | ||
| Service cost | $ 4 | $ 4 |
| Interest cost | 15 | 20 |
| Expected asset return | (25) | (33) |
| Amortization: | ||
| Actuarial loss | 13 | 14 |
| Net periodic pension cost | 7 | 5 |
| Non-U.S. Pension Plans | ||
| Components of the net pension expense and postretirement benefit cost | ||
| Service cost | 4 | 4 |
| Interest cost | 8 | 11 |
| Expected asset return | (13) | (18) |
| Amortization: | ||
| Actuarial loss | 4 | 5 |
| Net periodic pension cost | $ 3 | $ 2 |
Income Taxes (Details)
| Income Taxes (Details) | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| Income Taxes | ||
| Statutory U.S. Federal tax rate (as a percent) | 21.00% | 35.00% |
Debt - Long-term Debt Summary (
| Debt - Long-term Debt Summary (Details) $ / shares in Units, € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | ||||||
| Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018EUR (€)agreement | Mar. 31, 2018USD ($)$ / shares | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) | Mar. 31, 2017EUR (€) | Mar. 31, 2017USD ($) | |
| Debt Instrument | ||||||||
| Total long-term debt | $ 5,651 | $ 5,132 | $ 5,455 | |||||
| Less amounts due within one year | 11 | 11 | 24 | |||||
| Long-term debt | 5,640 | 5,121 | 5,431 | |||||
| Short-term loans and long-term debt due within one year | 194 | 162 | 196 | |||||
| Amended Agreement | ||||||||
| Debt Instrument | ||||||||
| Unused Credit | $ 412 | |||||||
| Weighted average interest rate, short-term debt (as a percent) | 2.98% | 2.98% | ||||||
| Leverage ratio, Q1 | 4.00% | 4.00% | ||||||
| Number financial maintenance covenants | agreement | 1 | |||||||
| Secured Credit Agreement | Minimum | ||||||||
| Debt Instrument | ||||||||
| Interest rate margin, Eurocurrency Rate loans (as a percent) | 1.25% | 1.25% | ||||||
| Interest rate margin, Base Rate loans (as a percent) | 0.25% | |||||||
| Secured Credit Agreement | Maximum | ||||||||
| Debt Instrument | ||||||||
| Interest rate margin, Eurocurrency Rate loans (as a percent) | 1.75% | 1.75% | ||||||
| Interest rate margin, Base Rate loans (as a percent) | 0.75% | |||||||
| Revolving Loans | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | $ 462 | 285 | ||||||
| Term Loan A | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | 1,149 | 1,148 | 1,370 | |||||
| Face Value | 1,575 | |||||||
| Term Loan A (279 million EUR at March 31, 2017) | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | € 279 | 284 | ||||||
| Senior Notes 6.75%, due 2020 (500 million EUR) | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | € 500 | $ 613 | € 500 | 594 | 500 | 530 | ||
| Interest rate, stated percentage | 6.75% | 6.75% | ||||||
| Principal Amount | $ 616 | |||||||
| Indicated Market Price (in dollars per share) | $ / shares | $ 114.41 | |||||||
| Fair Value | $ 704 | |||||||
| Senior Notes 4.875%, due 2021 (330 million EUR) | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | € 330 | $ 404 | € 330 | 392 | € 330 | 350 | ||
| Interest rate, stated percentage | 4.875% | 4.875% | ||||||
| Principal Amount | $ 406 | |||||||
| Indicated Market Price (in dollars per share) | $ / shares | $ 110.78 | |||||||
| Fair Value | $ 450 | |||||||
| Senior Notes 5.00%, due 2022 | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | 496 | 496 | 495 | |||||
| Senior Notes 4.00%, due 2023 | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | $ 305 | $ 305 | ||||||
| Interest rate, stated percentage | 4.00% | 4.00% | 4.00% | 4.00% | ||||
| Face Value | $ 310 | |||||||
| Net proceeds, after deducting debt issuance costs | $ 305 | |||||||
| Principal Amount | $ 310 | |||||||
| Indicated Market Price (in dollars per share) | $ / shares | $ 95.53 | |||||||
| Fair Value | $ 296 | |||||||
| Senior Notes 5.875%, due 2023 | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | $ 686 | 685 | 683 | |||||
| Interest rate, stated percentage | 5.875% | 5.875% | ||||||
| 3.125%, due 2024 (€725 million at March 31, 2018) | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | € 725 | $ 872 | $ 849 | $ 763 | ||||
| Interest rate, stated percentage | 3.125% | 3.125% | 3.125% | 3.125% | 3.125% | 3.125% | ||
| Face Value | € | € 225 | |||||||
| Net proceeds, after deducting debt issuance costs | $ 237 | |||||||
| Principal Amount | $ 893 | |||||||
| Indicated Market Price (in dollars per share) | $ / shares | $ 101.91 | |||||||
| Fair Value | $ 910 | |||||||
| Senior Notes 6.375%, due 2025 | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | $ 295 | $ 295 | $ 294 | |||||
| Interest rate, stated percentage | 6.375% | 6.375% | ||||||
| Senior Notes 5.00%, due 2022 | ||||||||
| Debt Instrument | ||||||||
| Interest rate, stated percentage | 5.00% | 5.00% | ||||||
| Principal Amount | $ 500 | |||||||
| Indicated Market Price (in dollars per share) | $ / shares | $ 101.50 | |||||||
| Fair Value | $ 508 | |||||||
| Senior Notes 5.875%, due 2023 | ||||||||
| Debt Instrument | ||||||||
| Principal Amount | $ 700 | |||||||
| Indicated Market Price (in dollars per share) | $ / shares | $ 103.89 | |||||||
| Fair Value | $ 727 | |||||||
| Senior Notes 6.375%, due 2025 | ||||||||
| Debt Instrument | ||||||||
| Principal Amount | $ 300 | |||||||
| Indicated Market Price (in dollars per share) | $ / shares | $ 107.60 | |||||||
| Fair Value | $ 323 | |||||||
| Senior Notes 5.375% due 2025 | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | $ 297 | 297 | 297 | |||||
| Interest rate, stated percentage | 5.375% | 5.375% | ||||||
| Principal Amount | $ 300 | |||||||
| Indicated Market Price (in dollars per share) | $ / shares | $ 101.40 | |||||||
| Fair Value | $ 304 | |||||||
| Capital leases | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | 53 | 54 | 56 | |||||
| Other debt | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | 19 | 17 | 26 | |||||
| Revolving Credit Facility | ||||||||
| Debt Instrument | ||||||||
| Face Value | 300 | |||||||
| Revolving Credit Facility | Minimum | ||||||||
| Debt Instrument | ||||||||
| Facility fee payable (as a percent) | 0.20% | |||||||
| Revolving Credit Facility | Maximum | ||||||||
| Debt Instrument | ||||||||
| Facility fee payable (as a percent) | 0.30% | |||||||
| Multicurrency Revolving Credit Facility | ||||||||
| Debt Instrument | ||||||||
| Face Value | 600 | |||||||
| Accounts Receivable Securitization Program | ||||||||
| Debt Instrument | ||||||||
| Short-term loans and long-term debt due within one year | $ 144 | $ 133 | $ 148 | |||||
| Weighted average interest rate, short-term debt (as a percent) | 1.01% | 1.01% | 0.76% | 0.76% | 0.88% | 0.88% | ||
| European Accounts Receivable Securitization Program | ||||||||
| Debt Instrument | ||||||||
| Maximum Borrowing Capacity | € | € 185 | |||||||
| Payable to OI Inc. | ||||||||
| Debt Instrument | ||||||||
| Total long-term debt | $ 22 | |||||||
Contingencies - Asbestos (Detai
| Contingencies - Asbestos (Details) | 3 Months Ended | 12 Months Ended | |||
| Mar. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 1993USD ($) | |
| Asbestos | |||||
| Sale of goods containing asbestos from 1948 to 1958 | $ 40,000,000 | ||||
| OI Inc. | |||||
| Asbestos | |||||
| Number of pending plaintiffs and claimants | item | 1,270 | ||||
| Approximate number of claims disposed of to date | item | 399,000 | ||||
| Average indemnity payment per claim | $ 9,600 | ||||
| Payments for Asbestos-Related Liabilities | $ 110,000,000 | $ 125,000,000 | $ 138,000,000 | ||
| Asbestos-related liability, total amount accrued beginning in 1993 through 2016 before insurance recoveries | $ 4,900,000,000 | $ 975,000,000 | |||
| Asbestos related charges | 0 | 0 | 16,000,000 | ||
| Cash payments per claim disposed including legal costs | 83,000 | 71,000 | $ 95,000 | ||
| Accrual of asbestos related liability | $ 582,000,000 | $ 692,000,000 | |||
| Period for number of claims to be received | 10 years | ||||
| Damages unspecified or sufficient to invoke jurisdictional minimum | OI Inc. | |||||
| Asbestos | |||||
| Percentage of asbestos plaintiffs, approximate percentage | 89.00% | ||||
| Damages of $15 million or less | OI Inc. | |||||
| Asbestos | |||||
| Percentage of asbestos plaintiffs, approximate percentage | 8.00% | ||||
| 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 | OI Inc. | |||||
| Asbestos | |||||
| Loss contingency, plaintiffs damages | $ 15,000,000 | ||||
| Maximum | |||||
| Asbestos | |||||
| Loss contingency, plaintiffs damages | 725,000,000 | ||||
| Maximum | Damages of $15 million or less | OI Inc. | |||||
| Asbestos | |||||
| Loss contingency, plaintiffs damages | 15,000,000 | ||||
| Maximum | Damages greater than $15 million but less than $100 million | OI Inc. | |||||
| Asbestos | |||||
| Loss contingency, plaintiffs damages | $ 100,000,000 | ||||
Share Owners' Equity (Details)
| Share Owners' Equity (Details) - USD ($) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| Increase (Decrease) in Share Owners' Equity | ||
| Balance | $ 1,509 | $ 1,055 |
| Net distribution to parent | (46) | (6) |
| Net earnings | 103 | 53 |
| Other comprehensive income (loss) | 128 | 194 |
| Balance | 1,694 | 1,296 |
| Other Contributed Capital | ||
| Increase (Decrease) in Share Owners' Equity | ||
| Balance | 553 | 635 |
| Net distribution to parent | (46) | (6) |
| Balance | 507 | 629 |
| Retained Earnings (Loss) | ||
| Increase (Decrease) in Share Owners' Equity | ||
| Balance | 2,622 | 2,442 |
| Net earnings | 98 | 49 |
| Balance | 2,720 | 2,491 |
| Accumulated Other Comprehensive Loss | ||
| Increase (Decrease) in Share Owners' Equity | ||
| Balance | (1,785) | (2,131) |
| Other comprehensive income (loss) | 122 | 191 |
| Balance | (1,663) | (1,940) |
| Non-controlling Interests | ||
| Increase (Decrease) in Share Owners' Equity | ||
| Balance | 119 | 109 |
| Net earnings | 5 | 4 |
| Other comprehensive income (loss) | 6 | 3 |
| Balance | $ 130 | $ 116 |
Accumulated Other Comprehensi47
| Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
| Other comprehensive income | $ 128 | $ 194 |
| Net Effect of Exchange Rate Fluctuations | ||
| Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
| Balance at beginning of the period | (723) | (788) |
| Change before reclassifications | 120 | 186 |
| Other comprehensive income | 120 | 186 |
| Balance at end of the period | (603) | (602) |
| Change in Certain Derivative Instruments | ||
| Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
| Balance at beginning of the period | (5) | 3 |
| Amounts reclassified from accumulated other comprehensive income | (4) | (6) |
| Translation effect | (1) | |
| Other comprehensive income | (5) | (6) |
| Balance at end of the period | (10) | (3) |
| Employee Benefit Plans | ||
| Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
| Balance at beginning of the period | (1,057) | (1,346) |
| Change before reclassifications | (4) | (12) |
| Amounts reclassified from accumulated other comprehensive income | 17 | 19 |
| Translation effect | (6) | 4 |
| Other comprehensive income | 7 | 11 |
| Balance at end of the period | (1,050) | (1,335) |
| Accumulated Other Comprehensive Loss | ||
| Increase (Decrease) Accumulated Other Comprehensive Loss, Net of Tax | ||
| Balance at beginning of the period | (1,785) | (2,131) |
| Change before reclassifications | 116 | 174 |
| Amounts reclassified from accumulated other comprehensive income | 13 | 13 |
| Translation effect | (7) | 4 |
| Other comprehensive income | 122 | 191 |
| Balance at end of the period | $ (1,663) | $ (1,940) |
Other Expense (Income), net (De
| Other Expense (Income), net (Details) - USD ($) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| Other Expense, net | ||
| Restructuring, asset impairment and other charges | $ 39 | |
| Foreign currency exchange loss (gain) | $ 2 | (1) |
| Intangible amortization expense | 10 | 10 |
| Royalty income | (3) | (4) |
| Other (income)/expense | (12) | 1 |
| Other Expense (Income), net | $ (3) | $ 45 |
Supplemental Cash Flow Inform49
| Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
| Mar. 31, 2018 | Mar. 31, 2017 | |
| Supplemental Cash Flow Information | ||
| Interest paid in cash | $ 88 | $ 98 |
| Income taxes paid in cash | 34 | 33 |
| Interest paid for note repurchase premiums related to debt repaid prior to maturity | 16 | |
| Amount of receivables sold | 216 | 202 |
| U.S. | ||
| Supplemental Cash Flow Information | ||
| Income taxes paid in cash | 3 | 3 |
| Non-U.S. | ||
| Supplemental Cash Flow Information | ||
| Income taxes paid in cash | $ 31 | $ 30 |
Discontinued Operations (Detail
| Discontinued Operations (Details) $ in Millions | Jul. 31, 2017USD ($) | Apr. 04, 2016Plant | Mar. 31, 2018USD ($) |
| Subsidiaries | |||
| Litigation settlement amount | $ 500 | ||
| Discontinued Operations, Disposed of by Sale | OI European Group B.V. (“OIEG”) | |||
| Subsidiaries | |||
| Litigation settlement amount | $ 115 | ||
| Disposed Venezuelan Subsidiaries | |||
| Subsidiaries | |||
| Expropriated plants | Plant | 2 |
New Accounting Pronouncement (D
| New Accounting Pronouncement (Details) $ in Millions | Dec. 31, 2017USD ($) |
| New Accounting Pronouncement | |
| Minimum lease commitments under non-cancellable operating leases | $ 258 |