Second quarter results meet management's expectation; closing the
gap with improved quarter-over-quarter comparisons TOLEDO, Ohio,
July 26 /PRNewswire-FirstCall/ -- Owens-Illinois, Inc. (NYSE:OI)
today reported its second quarter 2006 financial results. "Although
we expected the second quarter to be difficult, we are still
disappointed that our second quarter results were lower compared
with the prior year. We are encouraged, however, by our progress in
closing the quarter-over-quarter performance gap, which is even
more pronounced when adjusting for the final wind-down of our
Australian plastics business. We believe that we are making
fundamental improvements in our business that, while challenging in
the short term, will better position O-I for the long term," said
Steve McCracken, O-I Chairman and Chief Executive Officer. Second
Quarter Highlights: -- Net earnings of $0.24 per share (diluted)
vs. $0.53 per share (diluted) in 2005. -- Net earnings, exclusive
of the unusual items listed in Note (1), were $0.31 per share vs.
$0.56 per share in 2005 2nd Quarter 2006 2nd Quarter 2005 $
Millions EPS $ Millions EPS Net earnings $ 42.6 $0.24 $ 86.2 $0.53
Net earnings exclusive of items listed in Note (1) 54.0 0.31 90.2
0.56 -- Second quarter 2006 marks the second successive quarter of
reduction in unfavorable earnings comparisons to prior periods. --
Management working capital (defined below) at 22.0% of last twelve
months net sales this year vs. 24.4% last year demonstrates
continued progress. -- Free cash flow (defined below) was a use of
$15.0 million in the second quarter of 2006, compared with a use of
$30.7 million in the second quarter of 2005. -- Asbestos metrics
improved further in the quarter, with cash payments declining from
$40.8 million to $39.7 million, deferred amounts payable declining
by $3.0 million, significantly lower new filings and significant
reduction in cases pending. -- Continued growth in core plastics
packaging, combined with the completion of the wind-down of the
Australian plastics business, have created opportunity to drive
improved results going forward. -- The Company's financial
flexibility was significantly improved by the refinancing of the
Senior Secured Credit Facility during the quarter. The new facility
is larger, less expensive, extends maturities, allows greater
access to foreign currency borrowings, has more favorable covenants
compared to the previous facility, and provided the financing to
redeem $150 million of Senior Notes due 2009. -- European SAP
implementation continues to progress with four of twelve countries
now running SAP and a fifth country scheduled to "go- live" in the
third quarter. Reconciliation of Second Quarter 2006 Earnings to
Second Quarter 2005 Earnings per share, excluding the items listed
in Notes (1) and (2) as presented below, were $0.31 per share
(diluted) for the second quarter of 2006 compared with $0.57 per
share (diluted) for the second quarter of 2005. The major factors
contributing to the net $0.26 per share decline were as follows:
EPS 2005 EPS exclusive of items listed in Note (1) $0.56 Exclude
2005 non-operating items: - 2004 impact of 2005 BSN depreciation
adjustment (0.04) - Reduction of NOL tax benefit in Ohio 0.05 2005
EPS exclusive of unusual and non-operating items $0.57 Reconciling
items: - Price and product sales mix $0.31 - Productivity,
production volumes and cost savings 0.06 - Cost savings from
European capacity rationalization 0.04 - Unit sales volume 0.01 -
Energy cost inflation (0.21) - Raw material and other inflation
(0.19) - Effective tax rate (0.05) - Operating expenses (0.05) -
Pension expense (0.04) - European integration costs (0.03) -
Winding down of Australia plastics business (0.03) - Interest
expense (0.02) - Currency translation (0.02) - Stock option expense
(FAS No. 123R) (0.01) - Minority share owners' interests (0.01) -
All other - net (0.02) Total reconciling items $(0.26) 2006 EPS
exclusive of unusual and non-operating items $ 0.31 Consolidated
Net Debt and Free Cash Flow Consolidated net debt at June 30, 2006
was $5,260.0 million, compared with $4,998.5 million at December
31, 2005 and $5,397.5 million at June 30, 2005. The increase of
$261.5 million for the first six months of 2006 principally
reflects the normal seasonal increase in working capital and the
cash impact of inflationary cost increases, as previously
communicated. Consolidated net debt at June 30, 2006 represents a
decrease of $137.5 million from June 30, 2005, reflecting strong
cash flow generation in the second half of 2005 coupled with lower
capital spending thus far in 2006. $ Millions 06/30/06 12/31/05
06/30/05 Consolidated debt $5,575.8 $5,297.0 $5,380.8 European
receivables securitization 228.5(a) Cash and short-term investments
( 315.8) ( 298.5) ( 211.8) Net debt $5,260.0 $4,998.5 $5,397.5 (a)
Off balance sheet prior to December 2005. Summarized cash flows for
the second quarter 2006 vs. second quarter 2005 were as follows: $
Millions Three months ended 06/30/06 06/30/05 Cash provided by
operating activities $ 55.9 $ 78.5 Additions to property, plant and
equip. ( 70.9) (109.2) Free Cash Flow $(15.0) $( 30.7)
Divestitures/asset sales 4.5 ( 30.1) Debt-related hedging activity
( 2.5) ( 81.6) Convertible preferred dividends ( 5.3) ( 5.3)
Payment of finance fees (12.3) ( 0.6) Issuance of common stock and
other 1.2 11.5 Increase in short-term investments 13.2 0.5 Cash
effects on net debt $(16.2) $(136.3) Capitalized lease obligations
( 5.1) Exchange rate fluctuations (43.0) 22.6 Decrease (increase)
in carrying value Of swapped debt 9.0 (28.8) Non cash effects on
net debt $( 39.1) $( 6.2) Increase in net debt $( 55.3) $(142.5)
The principal factors behind the lower increase in net debt during
the second quarter 2006, compared with the second quarter 2005
were: (a) lower capital spending in 2006; (b) lower debt-related
hedging payments; and (c) the non-recurrence of a post-closing
price adjustment related to the fourth quarter 2004 divestiture of
the blow-molded plastic container business. In addition, management
working capital (accounts receivable, plus inventory and repair
parts, less accounts payable) at June 30, 2006 was 22.0% of net
sales for the twelve months then ended, compared with 24.4% at June
30, 2005 Business Review Glass Containers Segment - Increased
selling prices and cost savings from European capacity
rationalization partially offset inflationary cost impacts. --
Competitive pressures in China and portions of Europe, combined
with contract limitations continued to limit price increase
capabilities in the short term. -- Experienced some short-term
customer service issues as the Company maintained its focus on
tight cash control. -- Significant increases in machine and job
changes. -- Elimination of lower margin pieces of business impacted
volumes. -- Innovation continues to be a key area of focus
throughout the organization. Although at an early stage, new
products are making small contributions to sales and earnings.
Segment Operating Profit of $220.2 million in the second quarter of
2006 for the Glass Containers Segment was $25.4 million, or 10.3%
lower than the Segment Operating Profit for second quarter of 2005
of $245.6 million. The principal factors contributing to this $25.4
million decline were as follows: $ Millions - Price and product
sales mix $ 66.7 - Cost savings from European capacity
rationalization 9.0 - Productivity, production volume and cost
savings 8.4 - Energy cost inflation (43.4) - Raw material and other
inflation (36.9) - Pension expense ( 6.6) - 2004 impact of 2005 BSN
depreciation adjustment ( 6.5) - European integration costs ( 6.2)
- Operating expenses ( 4.4) - Currency translation ( 1.3) - Unit
sales volumes ( 0.7) - All other - net ( 3.5) $ (25.4) Plastics
Packaging Segment - Higher production and shipment activity and
improved manufacturing efficiencies substantially offset the impact
of the exit from the Australian plastics business. -- Enrollment
confusion among Medicare Part D participants is beginning to turn
around. -- In our Prescription Products business we are seeing a
mix shift to mail order as well as a rise in 90 day prescriptions
in community retail pharmacies. -- Growth in proprietary products.
-- Recent announcement of joint venture in Malaysia will facilitate
growth opportunities in the Asia Pacific region. Segment Operating
Profit for the second quarter of 2006 for the Plastics Packaging
Segment was $28.0 million, compared with $33.8 million in the
second quarter of 2005, a reduction of $5.8 million. The underlying
progress in the strong Closure and Healthcare businesses has
significantly offset the $7.0 million year-over-year unfavorable
comparison related to the exit from the Australian Plastics
business. Excluding the quarter over quarter effects of the
Australian plastics business of $7.0 million, the Plastics
Packaging Segment reported Operating Profit $1.2 million better
than the prior year. A reconciliation of the second quarter 2006
versus second quarter 2005 Operating Profit for the Plastics
Packaging Segment is as follows: $ Millions - Winding down of
Australian plastics business $(7.0) - Productivity, production
volume and cost savings 3.5 - Unit sales volumes 2.0 - Currency
translation 0.2 - Price and product sales mix (0.3) - Energy cost
inflation (0.5) - Pension expense (0.8) - Other inflation (2.8) -
All other - net (0.1) $ (5.8) Capital Spending Capital spending for
the second quarter of 2006 totaled $70.9 million, compared with
$109.2 million for the year ago quarter. The lower capital spending
is principally due to the completion of the new glass container
manufacturing facility in Windsor, Colo., in the fourth quarter of
2005. Interest Expense Interest expense in the second quarter of
2006 was $130.4 million versus $116.6 million in the second quarter
of 2005. Included in the 2006 interest expense was $10.2 million
for the write-off of unamortized finance fees related to the June
2006 refinancing of the Senior Secured Credit Facility. Effective
Tax Rate Excluding the items presented in Notes 1 and 2, the
Company's effective tax rate in the second quarter of 2006 was
37.1%, compared with 28.3% for the second quarter of 2005. The
higher 2006 rate is principally due to the fact that the Company is
not recording tax benefits on its losses in the United States. Cash
tax payments for the second quarter of 2006 amounted to $38.5
million compared with $29.9 million for the second quarter of 2005.
Asbestos Asbestos-related cash payments to resolve cases and claims
in the ordinary course were $36.7 million during the second quarter
of 2006, down 10% compared with the second quarter of 2005. In
addition, the Company used a portion of previously collected
insurance proceeds to reduce the deferred amount payable on prior
settlements by $3.0 million, bringing total asbestos-related cash
payments in the quarter to $39.7 million. The deferred amount
payable was approximately $88 million at June 30, 2006, compared to
approximately $91 million at December 31, 2005. New filings during
the quarter were approximately 31% lower than the prior year
quarter. As of June 30, 2006, the number of pending
asbestos-related lawsuits and claims was approximately 24,000,
compared with approximately 32,000 at December 31, 2005. During the
quarter, approximately 6,000 lawsuits were dismissed in Mississippi
and Ohio on procedural grounds. The Company believes that a
significant number of the currently pending cases have exposure
dates after the Company's 1958 exit from the business, for which
the Company takes the position that it has no liability or are
subject to dismissal because they were filed in improper forums.
The Company anticipates that cash flows from operations and other
sources will be sufficient to meet its asbestos-related obligations
on a short-term and long-term basis. Refinancing Activities In
June, the Company completed a new $1.7 billion Senior Secured
Credit Facility. The new facility affords significant enhancements
to the flexibility of the Company's financial profile. It is 30%
larger than the approximately $1.3 billion facility it has
replaced. It includes a multi- currency $900 million revolving
loan, which is 50% larger than the $600 million revolver in the
former facility. The new revolving loan facility, which matures in
2012, is less expensive, as the Company's borrowing costs have
declined 100 basis points versus the former facility. The new
facility also includes $800 million in fully funded term loans.
These loans provide the Company with currency borrowings in
Australian dollars, Canadian dollars, Euros and U.S. dollars which
reduces the Company's need to hedge its U.S. dollar borrowings.
Approximately $350 million of these term loans mature in 2012, with
the remaining approximately $450 million maturing in 2013. The
borrowing cost of the new term loan facility is unchanged from that
of the former facility. Proceeds from the new facility were used to
fully retire the former senior secured credit facility in June as
well as retire $150 million of the 8.875% Senior Secured Notes due
2009 in the third quarter of 2006. The Company anticipates third
quarter reported results will include a charge of approximately
$7.5 million associated with the early retirement of the $150
million of 8.875% Senior Secured Notes, principally for the cash
repurchase premiums and transaction expenses. Six-Month Results For
the first six months of 2006, the Company reported earnings from
continuing operations of $66.9 million or $0.36 per share (diluted)
compared with $203.7 million, or $1.26 per share diluted for the
first six months of 2005. Earnings from continuing operations,
excluding the items listed in Note (1), were $81.6 million or $0.45
per share for the first half of 2006, compared with $162.6 million
or $1.00 per share for the comparable 2005 period. Results for the
first half of 2005 also included several non-operating items
presented in Note (2) below. Exclusive of these items, the Company
earned $0.94 per share in the first half of 2005. Outlook "We
expect to close the performance gap further, just as we did in this
difficult second quarter. Our focus on the fundamentals of cost
reduction, tight cash control and modest revenue growth should
serve us well moving forward through 2006 and into 2007," said
McCracken. Note (1) Three months ended June 30, 2006 2005 Net
earnings $ 0.24 $ 0.53 Items that management considers not
representative of ongoing operations, consistent with Segment
Operating Profit: 1. Loss from mark to market effect of natural gas
hedge contracts (A) 0.01 0.03 2. Write-off of finance fees 0.06 Net
earnings before items that management considers not representative
of ongoing operations $ 0.31 $ 0.56 Six months ended June 30, 2006
2005 Net earnings $ 0.36 $ 1.26 Items that management considers not
representative of ongoing operations (consistent with Segment
Operating Profit): 1) Gain on sale of Corsico, Italy, glass plant
(0.18) 2) Gains from mark to mark effect of natural gas hedge
contracts (A) 0.03 (0.08) 3) Write-off of finance fees 0.06 Net
earnings before items that Management considers not representative
of ongoing operations $ 0.45 $ 1.00 (A)Prior to April 1, 2005,
mark-to-market adjustments for changes in the unrealized value of
natural gas hedge contracts were reported in results of operations.
Beginning April 1, 2005, additional changes in the unrealized value
of these contracts are being reported as changes in the Other
Comprehensive Income component of share owners' equity through the
application of special hedge accounting. The cumulative
mark-to-market gain on the contracts that existed at April 1, 2005,
will continue to impact reported energy costs until the last of
those contracts expire in the fourth quarter of 2006. Both the
non-cash gains reported prior to April 1, 2005, and the offsetting
non-cash charges reported after that date are excluded from Segment
Operating Profit. The remaining non-cash charges in 2006 will be
$1.6 million in the third quarter and $2.0 million in the fourth
quarter. Note (2) Second Quarter 2005 Results - In addition to the
items presented in Note (1), the second quarter 2005 results also
included favorable adjustments of depreciation and amortization in
connection with finalizing the fair values of the BSN Glasspack
assets acquired in June 2004. The difference between the estimated
amounts recorded in 2004 and the final amounts related to 2004
accounted for a benefit of $0.04 per share in the second quarter.
Second quarter 2005 also included an additional tax expense of
$0.05 per share to reduce net operating loss benefits in Ohio,
where the corporate income tax is being phased out and replaced
with a gross receipts tax. Exclusive of these items, the Company
earned $0.57 per share in the second quarter of 2005. Six-Month
2005 Results - In addition to the items presented in Note (1) and
the second quarter items described above, the six month 2005
results included first quarter favorable adjustments of $0.04 per
share from a reduction of the Company's accruals for self-insured
risks and $0.03 per share from a reduction of the tax provision
primarily to recognize changes in deferred taxes at several
international subsidiaries, both recognized in the first quarter of
2005. Exclusive of these items, the Company earned $0.94 per share
in the first half of 2005. Forward Looking Statements This earnings
release contains "forward-looking" statements within the meaning of
Section 21E of the Securities Exchange Act of 1934 and Section 27A
of the Securities Act of 1933. Forward-looking statements reflect
the Company's current expectations and projections about future
events at the time, and thus involve uncertainty and risk. It is
possible the Company's future financial performance may differ from
expectations due to a variety of factors including, but not limited
to the following: (1) foreign currency fluctuations relative to the
U.S. dollar, (2) changes in capital availability or cost, including
interest rate fluctuations, (3) the general political, economic and
competitive conditions in markets and countries where the Company
has operations, including disruptions in the supply chain,
competitive pricing pressures, inflation or deflation, and changes
in tax rates and laws, (4) consumer preferences for alternative
forms of packaging, (5) fluctuations in raw material and labor
costs, (6) availability of raw materials, (7) costs and
availability of energy, (8) transportation costs, (9) consolidation
among competitors and customers, (10) the ability of the Company to
integrate operations of acquired businesses and achieve expected
synergies, (11) unanticipated expenditures with respect to
environmental, safety and health laws, (12) the performance by
customers of their obligations under purchase agreements, and (13)
the timing and occurrence of events which are beyond the control of
the Company, including events related to asbestos-related claims.
It is not possible to foresee or identify all such factors. Any
forward- looking statements in this news release are based on
certain assumptions and analyses made by the Company in light of
its experience and perception of historical trends, current
conditions, expected future developments, and other factors it
believes are appropriate in the circumstances. Forward-looking
statements are not a guarantee of future performance and actual
results or developments may differ materially from expectations.
While the Company continually reviews trends and uncertainties
affecting the Company's results of operations and financial
condition, the Company does not assume any obligation to supplement
any particular forward-looking statements contained in this news
release. Company Profile Millions of times a day, O-I glass
containers, healthcare packaging and specialty closure systems
deliver many of the world's best-known consumer products to people
all around the world. With leading positions in Europe, North
America, Asia Pacific and Latin America, O-I provides
consumer-preferred products that enable superior taste, purity,
visual appeal and value benefits for our customers' products.
Established in 1903, the company employs approximately 28,200
people and has 100 manufacturing facilities in 23 countries. In
2005, annual revenues were $7.2 billion. For more information,
visit http://www.o-i.com/. Conference Call As announced previously,
a conference call to discuss the Company's latest results will be
held Thursday, July 27, 2006, at 8:30 a.m., Eastern Time. A live
webcast and a replay of the conference call will be available on
the Internet at the O-I Web site (http://www.o-i.com/). The
conference call also may be accessed by dialing +1-888-733-1701
(U.S. and Canada) or 706-634-4943 (International) by 8:20 a.m.
(Eastern Time) on July 27. Ask for the O-I conference call. A
replay of the call will be available from approximately 11:30 a.m.
(Eastern Time) on July 27 through 11:59 p.m. on August 4. In
addition to the O-I Web site, the replay also may be accessed by
dialing 800-642-1687 (U.S. and Canada) or 706-645-9291
(International). The conference ID number to access the replay is
2966032. Additional information Certain additional information
regarding second quarter sales, Segment Operating Profit and EPS
comparisons to prior year is available at the O-I web site,
http://www.o-i.com/, in the Investor Relations section under
"Annual Reports and Presentations." OWENS-ILLINOIS, INC. Condensed
Consolidated Results of Operations (Dollars in millions, except per
share amounts) Three months ended Six months ended June 30, June
30, 2006 2005 2006 2005 Revenues: Net sales $1,945.5 $1,852.7
$3,633.8 $3,516.0 Royalties and net technical assistance 3.9 3.9
7.8 8.3 Equity earnings 8.2 7.0 13.7 11.3 Interest 4.8 3.5 9.8 7.7
Other (a) 3.2 5.7 13.6 37.9 1,965.6 1,872.8 3,678.7 3,581.2 Costs
and expenses: Manufacturing, shipping, and delivery (b) 1,585.6
1,474.9 2,970.6 2,763.4 Research and development 7.0 6.2 14.5 12.4
Engineering 9.3 9.5 18.0 19.7 Selling and administrative 134.6
119.0 263.9 236.2 Interest (c) 130.4 116.6 249.8 235.1 Other 9.0
6.6 15.5 13.4 1,875.9 1,732.8 3,532.3 3,280.2 Earnings before items
below 89.7 140.0 146.4 301.0 Provision for income taxes 37.2 45.5
60.5 81.9 Minority share owners' interests in earnings of
subsidiaries 9.9 8.3 19.0 15.4 Net earnings $42.6 $86.2 $66.9
$203.7 Net earnings $42.6 $86.2 $66.9 $203.7 Less convertible
preferred stock dividends (5.4) (5.4) (10.7) (10.7) Available to
common share owners $37.2 $80.8 $56.2 $193.0 Basic earnings per
share of common stock $0.25 $0.54 $0.37 $1.28 Weighted average
shares outstanding (000s) 151,975 150,804 151,828 150,443 Diluted
earnings per share of common stock: Diluted earnings per share of
common stock $0.24 $0.53 $0.36 $1.26 Diluted average shares (000s)
153,960 153,141 154,002 152,783 (a) Amount for six months ended
June 30, 2005 includes a first quarter gain of $28.1 million
(pretax and after tax) from the sale of the Company's glass
container facility in Corsico, Italy. The effect of this adjustment
is an increase in earnings per share of $0.18. The sale of the
Company's glass container facility in Castellar, Spain did not
result in a gain; the carrying value allocated to that facility, as
part of the BSN acquisition, was adjusted to equal the sales
proceeds. (b) Amount for three months ended June 30, 2006 includes
a loss of $1.6 million ($1.6 million after tax) from the mark to
market effect of natural gas hedge contracts. The aftertax effect
of this loss is a decrease in earnings per share of $0.01. Amount
for three months ended June 30, 2005 includes a loss of $7.0
million ($4.0 million after tax) from the mark to market effect of
natural gas hedge contracts. The aftertax effect of this loss is a
decrease in earnings per share of $0.03. Amount for six months
ended June 30, 2006 includes a loss of $5.1 million ($4.9 million
after tax) from the mark to market effect of natural gas hedge
contracts. The aftertax effect of this loss is a decrease in
earnings per share of $0.03. Amount for six months ended June 30,
2005 includes a gain of $21.4 million ($13.0 million after tax)
from the mark to market effect of natural gas hedge contracts. The
aftertax effect of this gain is an increase in earnings per share
of $0.08. (c) Amount for three and six months ended June 30, 2006
includes a loss of $10.2 million ($9.8 million after tax) for the
write-off of finance fees related to debt that was repaid prior to
its maturity. The aftertax effect of this loss is a decrease in
earnings per share of $0.06. OWENS-ILLINOIS, INC. Condensed
Consolidated Cash Flows (Dollars in millions) Three months ended
Six months ended June 30, June 30, 2006 2005 2006 2005 Cash flows
from operating activities: Net earnings $42.6 $86.2 $66.9 $203.7
Non-cash charges (credits): Depreciation 118.2 111.6 234.4 240.9
Amortization of intangibles and other deferred items 6.7 5.4 14.1
13.1 Amortization of finance fees 3.8 4.2 7.8 8.4 Gain on sale of
certain real property (28.1) Mark to market effect of natural gas
hedge contracts 1.6 7.0 5.1 (21.4) Other 7.3 9.4 18.2 (12.6) Change
in non-current operating assets 2.8 3.3 (11.9) (7.7)
Asbestos-related payments (39.7) (40.8) (80.7) (86.3) Change in
non-current liabilities (20.0) (32.3) (41.7) (43.0) Change in
components of working capital (67.4) (75.5) (307.9) (318.8) Cash
provided by (utilized in) operating activities 55.9 78.5 (95.7)
(51.8) Cash flows from investing activities: Additions to property,
plant, and equipment (70.9) (109.2) (124.3) (185.5) Net cash
proceeds (payments) related to divestitures and asset sales 4.5
(30.1) 7.6 150.4 Cash utilized in investing activities (66.4)
(139.3) (116.7) (35.1) Cash flows from financing activities:
Additions to long-term debt 789.4 343.9 916.2 441.6 Repayments of
long-term debt (729.2) (241.2) (782.8) (403.7) Increase in
short-term loans 4.4 19.8 103.1 24.1 Net payments for debt-related
hedging activity (2.5) (81.6) (11.6) (70.0) Payment of finance fees
(12.3) (0.6) (12.3) (0.8) Convertible preferred stock dividends
(5.3) (5.3) (10.7) (10.7) Issuance of common stock and other 1.2
11.5 4.0 21.7 Cash provided by financing activities 45.7 46.5 205.9
2.2 Effect of exchange rate fluctuations on cash 1.8 (3.7) 4.6
(13.1) Increase (decrease) in cash 37.0 (18.0) (1.9) (97.8) Cash at
beginning of period 207.7 198.1 246.6 277.9 Cash at end of period
$244.7 $180.1 $244.7 $180.1 OWENS-ILLINOIS, INC. Condensed
Consolidated Balance Sheets (Dollars in millions) June 30, Dec. 31,
June 30, 2006 2005 2005 Assets Current assets: Cash, including time
deposits $244.7 $246.6 $180.1 Short-term investments, at cost which
approximates market 71.1 51.9 31.7 Receivables, less allowances for
losses and discounts 1,262.5 1,006.2 965.5 Inventories 1,017.3
940.4 1,057.8 Prepaid expenses 32.9 37.2 124.4 Total current assets
2,628.5 2,282.3 2,359.5 Investments and other assets: Equity
investments 100.0 114.9 108.1 Repair parts inventories 166.1 170.3
180.4 Prepaid pension 990.8 988.1 974.8 Deposits, receivables, and
other assets 445.9 444.5 466.5 Goodwill 2,432.8 2,369.2 2,903.2
Total other assets 4,135.6 4,087.0 4,633.0 Property, plant, and
equipment, at cost 6,323.7 6,146.0 6,115.7 Less accumulated
depreciation 3,197.4 2,993.5 2,886.6 Net property, plant, and
equipment 3,126.3 3,152.5 3,229.1 Total assets $9,890.4 $9,521.8
$10,221.6 Liabilities and Share Owners' Equity Current liabilities:
Short-term loans and long-term debt due within one year $687.4
$278.3 $66.0 Current portion of asbestos- related liabilities 152.0
158.0 162.0 Accounts payable 865.4 843.0 753.3 Other accrued
liabilities 556.7 542.6 532.9 Total current liabilities 2,261.5
1,821.9 1,514.2 Long-term debt 4,888.4 5,018.7 5,314.8 Deferred
taxes 192.8 186.0 162.2 Nonpension postretirement benefits 282.6
277.1 276.4 Other liabilities 714.7 740.6 751.5 Asbestos-related
liabilities 497.4 572.1 517.9 Minority share owners' interests
186.5 181.5 169.8 Share owners' equity: Convertible preferred stock
452.5 452.5 452.5 Common stock 1.7 1.7 1.6 Capital in excess of par
value 2,311.8 2,297.0 2,284.5 Treasury stock, at cost (232.4)
(236.0) (238.8) Retained deficit (1,499.2) (1,555.4) (782.4)
Accumulated other comprehensive loss (167.9) (235.9) (202.6) Total
share owners' equity 866.5 723.9 1,514.8 Total liabilities and
share owners' equity $9,890.4 $9,521.8 $10,221.6 OWENS-ILLINOIS,
INC. Consolidated Supplemental Financial Data (Dollars in millions)
Three months ended Six months ended June 30, June 30, 2006 2005
2006 2005 Selected Segment Information Net sales: Glass Containers
$1,744.8 $1,641.2 $3,233.5 $3,104.3 Plastics Packaging 200.7 211.5
400.3 411.7 Consolidated net sales $1,945.5 $1,852.7 $3,633.8
$3,516.0 Product Segment Operating Profit (a): Glass Containers (b)
(c) $220.2 $245.6 $386.4 $447.9 Plastics Packaging 28.0 33.8 59.7
64.7 248.2 279.4 446.1 512.6 Eliminations and other retained items
(31.3) (19.3) (54.6) (33.7) Segment Operating Profit 216.9 260.1
391.5 478.9 Sale of the Corsico, Italy glass container facility
28.1 Mark to market effect of natural gas hedge contracts (1.6)
(7.0) (5.1) 21.4 Consolidated Operating Profit 215.3 253.1 386.4
528.4 Interest income 4.8 3.5 9.8 7.7 Interest expense (130.4)
(116.6) (249.8) (235.1) Provision for income taxes (37.2) (45.5)
(60.5) (81.9) Minority share owner's interests (9.9) (8.3) (19.0)
(15.4) in earnings of subsidiaries Net earnings $42.6 $86.2 $66.9
$203.7 (a) Operating Profit consists of consolidated net earnings
before interest income, interest expense, provision for income
taxes and minority share owners' interests in earnings of
subsidiaries. Segment Operating Profit excludes amounts related to
certain items that management considers not representative of
ongoing operations. The Company presents Operating Profit because
management believes that it provides investors with a measure of
operating performance without regard to level of indebtedness or
other related costs of capital. The most directly comparable GAAP
financial measure to Operating Profit is net earnings (continuing
operations). The Company presents Segment Operating Profit because
management uses the measure, in combination with selected cash flow
information, to evaluate performance and to allocate resources. A
reconciliation from Segment Operating Profit to Consolidated
Operating Profit to net earnings is included in the tables above.
(b) Excludes a loss of $1.6 million and $5.1 million for the three
months and six months ended June 30, 2006, respectively, from the
mark to market effect of natural gas hedge contracts. Excludes a
loss of $7.0 million and a gain of $21.4 million for the three
months and six months ended June 30, 2005, respectively, from the
mark to market effect of natural gas hedge contracts. (c) Amount
for the six months ended June 30, 2005 excludes a gain of $28.1
million for the sale of the Company's glass container facility in
Corsico, Italy. DATASOURCE: Owens-Illinois, Inc. CONTACT: Kelley
Yoder of O-I, +1-419-247-1388 Web site: http://www.o-i.com/
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