Sale of Plastics Business for $1.825 Billion - PERRYSBURG, Ohio,
Oct. 24 /PRNewswire-FirstCall/ -- Owens-Illinois, Inc. (NYSE:OI)
today reported financial results for the third quarter ending
September 30, 2007. Third Quarter Net Sales Increase 12.2% The
Company reported net sales from continuing operations of $1.928
billion for the third quarter of 2007 compared with $1.718 billion
a year ago, an increase of $210 million or 12.2%. 6.6% of the sales
increase is attributable to favorable currency translation.
Improved prices and product sales mix accounted for the remaining
5.6%. Sales volume measured in tons of glass shipped was nearly
flat in the third quarter 2007 compared with the same quarter last
year. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050412/CLTU028LOGO) On July
31, 2007, the Company completed the sale of its plastics packaging
business and recorded a gain of $1.072 billion. In accordance with
generally accepted accounting principles, this gain and the results
of operations related to O-I's plastics packaging segment have been
reported as discontinued operations. As a result, the Company's net
sales from continuing operations equal the net sales of its glass
containers segment. Third Quarter Earnings from Continuing
Operations Increase to $130.6 Million Net earnings for the third
quarter 2007 were $1.157 billion, compared with $8.4 million for
the third quarter of 2006. This includes the gain from the sale of
the former plastics packaging business. Also during the quarter,
the Company recorded an after tax charge of $55 million for
restructuring and impairment related to certain glass container
investments and operations in the Caribbean and Europe. This
charge, which management considers not representative of ongoing
operations, is listed in the Note 1 table accompanying this
release. On a continuing operations basis, exclusive of the items
listed in Note 1, the Company earned $130.6 million during the
third quarter 2007 compared with $44.7 million in the same quarter
last year, an increase of nearly 200%. This increase is primarily
attributable to improvements in the price and product sales mix
resulting from adjustments to contractual sales prices to take into
account the prior years' cost inflation. Improvements in
operational efficiencies at multiple glass factories also
contributed to the earnings increase. Net earnings in the third
quarter 2007 also reflected a lower worldwide effective tax rate
caused by a shift in the mix of earnings to jurisdictions where the
Company is subject to lower effective rates. Third Quarter Earnings
per Share from Continuing Operations Rise to $0.78 The Company
reported net earnings per share (diluted) of $6.86 for the third
quarter of 2007 compared with $0.02 per share (diluted) for the
same quarter last year. Exclusive of the items listed in Note 1,
earnings per share (diluted) from continuing operations increased
threefold from $0.26 in the third quarter 2006 to $0.78 in the
third quarter 2007. A description of the items management considers
not representative of ongoing operations and a reconciliation of
the GAAP to non-GAAP earnings and net earnings per share can be
found in the tables accompanying this release and in charts on the
Company's Web site (http://www.o-i.com/). "We are very pleased and
encouraged by the progress we've made this year," said Al
Stroucken, Chairman and Chief Executive Officer. "As intended, the
net proceeds from the sale of our plastics business along with cash
from operations will be used to repay approximately $2.0 billion in
long term debt by year end. This will significantly decrease our
annual interest expense and lower our overall risk profile.
Additionally, and most importantly, we continued to execute against
our glass container business plan to deliver both improved
efficiencies and financial results." "Our employees have proven
that through their unremitting efforts and commitment to O-I, we
can build a better company", said Stroucken. "We will enter 2008
with greater financial flexibility than we have enjoyed in some
time. This will allow us to focus on future opportunities like
customer responsiveness, new product development and geographic
expansion, all of which bring additional value to our customers and
our shareholders." Cash Flow, Working Capital and Capital Spending
Show Improvement Cash provided by continuing operating activities
was $337.5 million in the third quarter of 2007, compared with
$121.5 million in the same quarter of 2006. Free Cash Flow (defined
as cash provided by continuing operating activities, plus
collections on receivables arising from securitization, less
capital spending for continuing operations) was a source of $274.9
million in the third quarter of 2007, compared with a source of
$52.9 million during the same quarter last year. This improvement
reflects higher operating profit and management's continuing focus
on improving the components of working capital. The Company expects
Free Cash Flow for the full year to exceed $250 million. During the
third quarter of 2007, working capital was a $205.8 million source
of cash for the Company, compared with $58.0 million during the
same period in 2006, a nearly threefold improvement. For the first
nine months of 2007, the Company used $17.7 million in cash for
working capital in its continuing operations. This compares
favorably to a use of $246.7 million for the first nine months of
2006 ($374 million for working capital, offset by $127.3 million
from the accounts receivable securitization program). During the
third quarter of 2007 the Company reported $62.6 million in capital
expenditures for continuing operations and $119.7 million of
depreciation and amortization expense. The Company expects that
capital expenditures for continuing operations in 2007 will be
approximately $300 million, and it expects to report approximately
$450 million of depreciation and amortization expense for the full
year 2007. Debt Reduced Significantly O-I reduced total debt by
$785.5 million during the third quarter 2007 to $4.840 billion.
This was primarily accomplished by using a portion of the proceeds,
from the sale of the plastics business. The balance of sale
proceeds, along with cash provided by operations, will be used to
pay down debt by approximately $1.2 billion in the fourth quarter.
As a result of existing tax loss carryforwards, substantially all
of the sale proceeds are available for debt reduction. As of
September 30, 2007, the Company had more than $800 million of
unused capacity under its secured revolving credit facility.
Effective Tax Rate Decreases Excluding the items presented in Note
1, the Company expects its worldwide effective tax rate from
continuing operations for 2007 to be approximately 28%. This
compares to an effective tax rate for continuing operations in 2006
of 40.3%. The reduction is principally due to (1) a change in mix
of earnings to jurisdictions where the Company is subject to lower
effective rates, and (2) the effect of higher earnings and lower
interest costs in the U.S. where the Company recognizes a valuation
allowance on net deferred tax assets. Cash tax payments from
continuing operations for the third quarter of 2007 amounted to
$57.4 million compared to $27.0 million for the third quarter of
2006. The cash tax increase is a result of improved earnings,
including the effect of foreign currency translation, and
restructuring tax costs for the continuing business. The Company
expects that cash taxes from operations for 2007 will be
approximately $160 million, compared with $125.6 million in 2006.
Asbestos Payments Increase; Liability, Deferred Amounts Payable and
Pending Cases Decline Asbestos-related cash payments during the
third quarter and first nine months of 2007 totaled $132.5 million
and $226.2 million, respectively. This compares with $46.9 million
and $127.6 million for the same periods last year. Cash payments
increased in part to fund, on an accelerated basis, settlements of
certain claims, all of which had been accounted for previously in
establishing the accrual for future estimated asbestos-related
costs. The increased cash was also used, in part, to reduce the
deferred amounts payable for previously settled claims to $55.2
million as of September 30, 2007 from $82.6 million as of December
31, 2006. The balance of the accrual for future asbestos-related
costs as of September 30, 2007, was $461.4 million, compared with
$687.6 million as of December 31, 2006. As a consequence of the
Company's accelerated settlements, new asbestos- related lawsuits
and claims reported through the first nine months of 2007 were 33%
higher than the same period in 2006. However, the number of pending
asbestos-related lawsuits and claims was down 22% to approximately
14,000 as of September 30, 2007, compared with approximately 18,000
pending as of December 31, 2006. Nine Months Sales Up 13.3% and EPS
from Continuing Operations More than Doubles For the first nine
months of 2007, the Company reported net sales from continuing
operations of $5.609 billion, compared with $4.951 billion for the
same period in 2006, an increase of $658 million or 13.3%. Improved
price and product sales mix combined with increased shipments
account for 7.6% of the sales increase over prior year. Favorable
currency translations contributed the balance. Net earnings from
continuing operations for the first nine months of 2007 were $284.7
million or $1.70 per share (diluted), compared with $86.2 million
or $0.45 per share (diluted) for the first nine months of 2006.
Earnings from continuing operations, exclusive of the items listed
in Note 2 which management considers not representative of ongoing
operations, were $326.2 million or $1.95 per share (diluted) in the
first nine months of 2007, compared with $137.5 million or $0.78
per share (diluted) in the same period last year. Note 1: The table
below represents the items in the third quarter of 2007 and 2006
which management considers not representative of ongoing
operations. $ Millions, except per share amounts Three months ended
Sept. 30 2007 2006 Earnings EPS Earnings EPS Earnings from
continuing operations $75.6 $0.45 $ 8.1 $0.02 Items that management
considers not representative of ongoing operations (consistent with
Segment Operating Profit): Charge for restructuring and impairment
in Caribbean & Europe 55.0 0.33 Loss from mark to market effect
of natural gas hedge contracts 1.6 0.01 Charge for write-off of
finance fees 7.3 0.05 Charge for Godfrey plant closure 27.7 0.18
Earnings from continuing operations exclusive of above items $130.6
$0.78 $44.7 $0.26 Note 2: The table below represents items in the
first nine months of 2007 and 2006 which management considers not
representative of ongoing operations. $ Millions, except per share
amounts Nine months ended Sept. 30 2007 2006 Earnings EPS Earnings
EPS Earnings from continuing operations $284.7 $1.70 $86.2 $0.45
Items that management considers not representative of ongoing
operations (consistent with Segment Operating Profit): Gain from
recognition of foreign tax credits (13.5) (0.08) Charge for
restructuring and impairment in Caribbean & Europe 55.0 0.33
Loss from mark to market effect of natural gas hedge contracts 6.5
0.04 Charge for write-off of finance fees 17.1 0.11 Charge for
Godfrey plant closure 27.7 0.18 Earnings from continuing operations
exclusive of above items $326.2 $1.95 $137.5 $0.78 Company Profile
Millions of times a day, O-I glass containers deliver many of the
world's best-known consumer products to people all around the
world. With the leading position in Europe, North America, Asia
Pacific and Latin America, O-I manufactures consumer-preferred, 100
percent recyclable glass containers that enable superior taste,
purity, visual appeal and value benefits for our customers'
products. Established in 1903, the company employs more than 25,000
people with 83 manufacturing facilities in 22 countries. In 2006,
net sales from continuing glass operations were $6.65 billion. For
more information, visit http://www.o-i.com/. Forward Looking
Statements This news 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 the tax rates and laws, (4)
consumer preferences for alternative forms of packaging, (5)
fluctuation in raw material and labor costs, (6) availability of
raw materials, (7) costs and availability of energy, (8)
transportation costs, (9) the ability of the Company to raise
selling prices, commensurate with energy and other cost increases,
without the loss of customers or sales volume, (10) consolidation
among competitors and customers, (11) the ability of the Company to
integrate operations of acquired businesses and achieve expected
synergies, (12) unanticipated expenditures with respect to
environmental, safety and health laws, (13) the performance by
customers of their obligations under purchase agreements, and (14)
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 intend to update any particular
forward-looking statements contained in this news release.
Conference Call Scheduled for October 25 O-I CEO Al Stroucken and
CFO Ed White will conduct a conference call to discuss the
Company's latest results on Thursday, October 25, 2007, at 8:30
a.m., Eastern Time. A live Webcast of the conference call will be
available on the O-I Web site (http://www.o-i.com/). The conference
call also may be accessed by dialing 888-733-1701 (U.S. and Canada)
or 706-634-4943 (international) by 8:20 a.m. Eastern Time on
October 25th. Ask for the O-I conference call. A replay of the call
will be available on the O-I Web site (http://www.o-i.com/) for 30
days following the call. Additional Information Additional
information regarding third quarter sales, Segment Operating Profit
and EPS comparisons to prior year is available on the O-I Web site,
http://www.o-i.com/, in the North America: Investor Relations
section under "Annual Reports and Presentations." OWENS-ILLINOIS,
INC. Condensed Consolidated Results of Operations (a) (Dollars in
millions, except per share amounts) Three months ended Nine months
ended September 30, September 30, 2007 2006 2007 2006 Revenues: Net
sales $1,928.4 $1,717.5 $5,609.4 $4,951.0 Royalties and net
technical assistance 5.0 4.0 14.7 11.2 Equity earnings 8.4 6.3 22.3
19.3 Interest 21.4 4.5 30.0 14.2 Other 3.9 5.6 8.8 19.2 1,967.1
1,737.9 5,685.2 5,014.9 Costs and expenses: Manufacturing,
shipping, and delivery (b) 1,511.2 1,403.9 4,435.0 4,063.8 Research
and development 3.0 3.4 8.3 9.8 Engineering 12.3 11.8 38.2 30.2
Selling and administrative 130.5 128.9 388.3 375.6 Interest (c)
97.0 91.7 260.2 267.7 Other (d) 72.7 31.6 102.8 42.2 1,826.7
1,671.3 5,232.8 4,789.3 Earnings from continuing operations before
items below 140.4 66.6 452.4 225.6 Provision for income taxes (e)
46.7 45.6 123.5 107.5 Minority share owners' interests in earnings
of subsidiaries 18.1 12.9 44.2 31.9 Earnings from continuing
operations 75.6 8.1 284.7 86.2 Net earnings (loss) of discontinued
operations 9.0 0.3 2.8 (10.9) Gain on sale of discontinued
operations 1,071.9 1,071.9 Net earnings $1,156.5 $8.4 $1,359.4
$75.3 Less convertible preferred stock dividends (5.4) (5.4) (16.1)
(16.1) Available to common share owners $1,151.1 $3.0 $1,343.3
$59.2 Basic net earnings per share of common stock: Earnings from
continuing operations $0.46 $0.02 $1.75 $0.46 Net earnings (loss)
of discontinued operations 0.05 - 0.02 (0.07) Gain on sale of
discontinued operations 6.93 6.97 Net earnings $7.44 $0.02 $8.74
$0.39 Weighted average shares outstanding (000s) 154,730 151,150
153,744 151,937 Diluted net earnings per share of common stock:
Earnings from continuing operations $0.45 $0.02 $1.70 $0.45 Net
earnings (loss) of discontinued operations 0.05 - 0.02 (0.07) Gain
on sale of discontinued operations 6.36 6.41 Net earnings $6.86
$0.02 $8.13 $0.38 Diluted average shares (000s)(f) 168,681 153,876
167,167 153,960 (a) Amounts related to the Company's plastics
packaging business have been reclassified to discontinued
operations following the June 11, 2007 announcement of an agreement
to sell the business. The sale was completed on July 31, 2007. (b)
Amount for three months ended September 30, 2006 includes a loss of
$1.6 million (pretax and after tax) from the mark to market effect
of natural gas hedge contracts. The effect of this loss is a
decrease in earnings per share of $0.01. Amount for nine months
ended September 30, 2006 includes a loss of $6.7 million ($6.5
million after tax) from the mark to market effect of natural gas
hedge contracts. The effect of this loss is a decrease in earnings
per share of $0.04. (c) Amount for the three months ended September
30, 2006 includes a charge of $7.3 million (pretax and after tax)
for note repurchase premiums and the write-off of finance fees
related to debt that was repaid prior to its maturity. The effect
of this charge is a decrease in earnings per share of $0.05. Amount
for the nine months ended September 30, 2006 includes charges of
$17.5 million ($17.1 million after tax) for note repurchase
premiums and the write-off of finance fees related to debt that was
repaid prior to its maturity. The effect of these charges is a
reduction in earnings per share of $0.11. (d) Amount for the three
and nine months ended September 30, 2007 includes charges of $61.9
million ($55.0 million after tax) for restructuring and asset
impairment in the Caribbean and Europe. The effect of these charges
is a decrease in earnings per share of $0.33. Amount for the three
and nine months ended September 30, 2006 includes a charge of $29.7
million ($27.7 million after tax) for the closing of the Godfrey,
Illinois machine parts manufacturing operation. The effect of this
charge is a reduction in earnings per share of $0.18. (e) Amount
for nine months ended September 30, 2007 include a benefit of $13.5
million for the recognition of tax credits related to restructuring
of investments in certain European operations. The effect of this
benefit is an increase in earnings per share of $0.08. (f) The
number of diluted shares for the three and nine months ended
September 30, 2007 was increased by 8,589,000 because the assumed
conversion of the convertible preferred shares is dilutive to the
related earnings per share amount for those periods. Accordingly,
dividends were not deducted from earnings in calculating diluted
earnings per share for those periods. Earnings per share amounts
are calculated discretely for each period and quarterly amounts do
not necessarily total the year to date amounts because of dilution
and rounding. OWENS-ILLINOIS, INC. Condensed Consolidated Cash
Flows (Dollars in millions) Three months ended Nine months ended
September 30, September 30, 2007 2006 2007 2006 Cash flows from
operating activities: Net earnings $1,156.5 $8.4 $1,359.4 $75.3 Net
(earnings) loss of discontinued operations (9.0) (0.3) (2.8) 10.9
Gain on sale of discontinued operations (1,071.9) (1,071.9)
Non-cash charges: Depreciation 111.2 107.7 320.9 321.7 Amortization
of intangibles and other deferred items 8.5 5.3 18.9 16.8
Amortization of finance fees 1.4 1.6 6.6 4.4 Caribbean and European
restructuring and asset impairment 61.9 61.9 Mark to market effect
of natural gas hedge contracts 1.6 6.7 Charge for closing the
Godfrey, Illinois plant 29.7 29.7 Other 34.3 (7.3) 65.0 8.0
Asbestos-related payments (132.5) (46.9) (226.2) (127.6) Change in
non-current operating assets 3.3 (27.1) 13.3 (42.4) Change in
non-current liabilities (32.0) (9.2) (56.9) (50.9) Change in
components of working capital 205.8 58.0 (17.7) (374.0) Cash
provided by (utilized in) continuing operating activities 337.5
121.5 470.5 (121.4) Cash provided by discontinued operating
activities 8.5 16.1 11.3 36.0 Cash flows from investing activities:
Additions to property, plant, and equipment - continuing (62.6)
(68.6) (164.7) (178.7) Additions to property, plant, and equipment
- discontinued (7.3) (23.3) (21.5) Collections on receivables
arising from consolidation of receivables securitization program
(a) 127.3 Acquisitions, net of cash acquired (9.8) Net cash
proceeds from divestitures and asset sales 1,790.5 6.8 1,798.0 14.4
Cash provided by (utilized in) investing activities 1,727.9 (69.1)
1,600.2 (58.5) Cash flows from financing activities: Additions to
long-term debt 265.3 403.6 1,181.5 Repayments of long-term debt
(806.9) (290.6) (1,173.8) (1,073.4) Increase (decrease) in
short-term loans (98.7) (50.2) (28.7) 52.9 Net receipts (payments)
for hedging activity 3.9 7.3 (4.3) Payment of finance fees 0.3 -
(6.3) (12.3) Convertible preferred stock dividends (5.4) (5.4)
(16.1) (16.1) Issuance of common stock and other 20.6 0.7 43.8 4.7
Cash provided by (utilized in) financing activities (886.2) (72.9)
(777.5) 133.0 Effect of exchange rate fluctuations on cash 8.8 2.0
17.7 6.6 Increase (decrease) in cash 1,196.5 (2.4) 1,322.2 (4.3)
Cash at beginning of period 348.4 244.7 222.7 246.6 Cash at end of
period $1,544.9 $242.3 $1,544.9 $242.3 (a) During the fourth
quarter of 2005, the Company expanded the capacity of its European
accounts receivable securitization program. The terms of this
expansion resulted in changing the accounting for the program from
off-balance sheet to on-balance sheet accounting for the program by
consolidating both the trade accounts receivable in the program and
the secured indebtedness of the same amount. Cash inflows related
to receipts from customers in payment of the accounts receivable
consolidated at December 13, 2005 have been classified as investing
cash inflows in the accompanying Consolidated Statement of Cash
Flows. Certain amounts included in the Consolidated Statement of
Cash Flows for the nine months ended September 30, 2006 have been
reclassified to conform to the 2007 presentation. These amounts
have been reclassified from operating activities to investing
activities. OWENS-ILLINOIS, INC. Condensed Consolidated Balance
Sheets (Dollars in millions) Sept. 30, Dec. 31, Sept. 30, 2007 2006
2006 Assets Current assets: Cash, including time deposits $1,544.9
$222.7 $242.3 Short-term investments, at cost which approximates
market 60.4 32.7 82.6 Receivables, less allowances for losses and
discounts 1,170.4 1,041.1 1,186.1 Inventories 1,024.1 992.1 954.3
Prepaid expenses 46.3 39.3 44.5 Assets of discontinued operations
104.8 117.4 Total current assets 3,846.1 2,432.7 2,627.2
Investments and other assets: Equity investments 76.5 96.3 90.3
Repair parts inventories 140.4 135.3 158.1 Prepaid pension 529.9
488.5 994.2 Deposits, receivables, and other assets 460.3 466.5
413.3 Goodwill 2,388.0 2,255.2 2,229.8 Assets of discontinued
operations 571.7 568.9 Total other assets 3,595.1 4,013.5 4,454.6
Property, plant, and equipment, at cost 6,251.8 5,842.6 5,664.2
Less accumulated depreciation 3,358.5 2,968.1 2,874.4 Net property,
plant, and equipment 2,893.3 2,874.5 2,789.8 Total assets $10,334.5
$9,320.7 $9,871.6 Liabilities and Share Owners' Equity Current
liabilities: Short-term loans and long-term debt due within one
year $1,862.1 $737.2 $612.6 Current portion of asbestos- related
liabilities 250.0 149.0 149.0 Accounts payable 945.4 890.2 828.5
Other liabilities 643.2 518.4 604.0 Liabilities of discontinued
operations 70.9 83.2 Total current liabilities 3,700.7 2,365.7
2,277.3 Liabilities of discontinued operations 1.6 1.4 Long-term
debt 2,977.8 4,719.4 4,908.9 Deferred taxes 101.9 111.1 191.5
Pension benefits 330.9 335.0 307.5 Nonpension postretirement
benefits 283.4 293.1 282.6 Other liabilities 405.2 392.9 361.2
Asbestos-related liabilities 211.4 538.6 453.5 Minority share
owners' interests 237.7 206.6 196.3 Share owners' equity:
Convertible preferred stock 452.5 452.5 452.5 Common stock 1.7 1.7
1.7 Capital in excess of par value 2,393.8 2,329.5 2,316.5 Treasury
stock, at cost (225.2) (228.4) (230.2) Retained deficit (261.1)
(1,604.4) (1,496.2) Accumulated other comprehensive loss (276.2)
(594.2) (152.9) Total share owners' equity 2,085.5 356.7 891.4
Total liabilities and share owners' equity $10,334.5 $9,320.7
$9,871.6 OWENS-ILLINOIS, INC. Consolidated Supplemental Financial
Data (Dollars in millions) Three months ended Nine months ended
September 30, September 30, 2007 2006 2007 2006 Selected Segment
Information (a) Consolidated net sales $1,928.4 $1,717.5 $5,609.4
$4,951.0 Segment Operating Profit (b) Glass Containers (c) $309.6
$207.6 $842.8 $594.0 Other retained items (31.7) (22.5) (98.3)
(78.5) 277.9 185.1 744.5 515.5 Caribbean and European restructuring
and asset impairment (61.9) (61.9) Mark to market effect of natural
gas hedge contracts (1.6) (6.7) Charge for closing the Godfrey,
Illinois plant (29.7) (29.7) Consolidated Operating Profit 216.0
153.8 682.6 479.1 Interest income 21.4 4.5 30.0 14.2 Interest
expense (97.0) (91.7) (260.2) (267.7) Provision for income taxes
(46.7) (45.6) (123.5) (107.5) Minority share owners' interests
(18.1) (12.9) (44.2) (31.9) in earnings of subsidiaries Earnings
from continuing operations $75.6 $8.1 $284.7 $86.2 (a) Amounts
related to the Company's plastics packaging business have been
reclassified to discontinued operations following the June 11, 2007
announcement of an agreement to sell the business. The sale was
completed on July 31, 2007. (b) Operating Profit consists of
consolidated earnings from continuing operations 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 information on "Operating Profit" because
management believes that it provides investors with a measure of
operating performance separate from the level of indebtedness or
other related costs of capital. The most directly comparable GAAP
financial measure to Operating Profit is net earnings. 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. (c) Amount for the
three and nine months ended September 30, 2007 excludes charges of
$61.9 million for restructuring and asset impairment in the
Caribbean and Europe. Amount excludes a loss of $1.6 million and
$6.7 million for the three months and nine months ended September
30, 2006, respectively, from the mark to market effect of natural
gas hedge contracts. (d) Amount for the three and nine months ended
September 30, 2006 excludes a charge of $29.7 million for the
closing of the Godfrey, Illinois machine parts manufacturing
operation. http://www.newscom.com/cgi-bin/prnh/20050412/CLTU028LOGO
http://photoarchive.ap.org/ DATASOURCE: Owens-Illinois, Inc.
CONTACT: Sasha Sekpeh, +1-567-336-2355 - Investor Relations, or
Lauren Dubilzig, +1-567-336-1312 - Corp. Communications, both of
O-I Web site: http://www.o-i.com/
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