<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 9, 1995
Owens-Illinois, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-9576 22-2781933
(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
Owens-Illinois Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 33-13061 34-1559348
(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
One SeaGate, Toledo, Ohio 43666
(Address of principal executive offices) (Zip code)
Registrants' telephone number,
including area code: 419-247-5000
Exhibit Index -- Page 4
Page 1 of 12 pages
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Item 5. Other Events.
On February 9, 1995 Owens-Illinois, Inc. issued a press release
announcing 1994 results and unusual fourth quarter charge to write down the
insurance asset for asbestos-related costs. The press release is set forth as
Exhibit 99 hereto.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 99 - Owens-Illinois press release dated February 9, 1995.
Page 2 of 12 pages
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
OWENS-ILLINOIS, INC.
OWENS-ILLINOIS GROUP, INC.
By (Lee A. Wesselmann)
----------------------
Lee A. Wesselmann
Senior Vice President, Chief
Financial Officer
(Principal Financial Officer)
Dated: February 9, 1995
Page 3 of 12 pages
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EXHIBIT INDEX
Exhibit
Number Exhibit Page
99 Owens-Illinois press release dated 5
February 9, 1995
Page 4 of 12 pages
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OWENS-ILLINOIS REPORTS 1994 RESULTS, ANNOUNCES CHARGE
Toledo, Ohio, February 9, 1995 -- Owens-Illinois, Inc., (NYSE: OI) today
reported improved financial results for the quarter and year ended December
31, 1994.
Excluding the effects of unusual fourth quarter items in both years,
Owens-Illinois reported earnings from continuing operations of $140.0 million,
or $1.16 per share, for the full year, up 15 percent from $121.6 million, or
$1.01 per share, for 1993.
Including the effects of the unusual fourth quarter items, O-I reported
net earnings of $78.3 million or $0.64 per share for 1994, compared with net
earnings of $4.9 million, or $0.03 per share for 1993.
The unusual item in 1994 was a fourth quarter pretax charge of $100
million to write down the insurance asset for asbestos-related costs.
Net sales for the year were $3.57 billion, up 7% from net sales of $3.34
billion in 1993, excluding net sales of $197.9 million by Kimble Glass.
Owens-Illinois sold a 51 percent interest in Kimble on December 31, 1993, and
as a result is accounting for its share of Kimble's results of operations on
an equity basis beginning in 1994.
BUSINESS REVIEW
Joseph H. Lemieux, Owens-Illinois chairman and chief executive officer,
said, "Since our initial public offering in December 1991, we now have
generated three straight years of double-digit increases in earnings from
continuing operations, excluding the effects of one-time or unusual items.
This includes 12 consecutive quarters of improved results over the comparable
prior-year period."
Mr. Lemieux said, "Improved 1994 results were achieved despite higher
spending in selected areas to streamline operations and lay the groundwork for
future growth. We also made significant progress in our comprehensive program
to reduce costs, which should begin contributing to our financial results in
1995."
Mr. Lemieux noted, "Our portfolio of businesses continues to become more
heavily weighted toward our growth-oriented operations. In 1994, for the
first time, combined sales of the higher-margin and faster-growing
international and plastics operations exceeded the sales of domestic glass."
All major operations reported increased unit shipments, dollar sales, and
operating profit in 1994. Domestic glass operations benefited from continuing
cost control, higher capacity utilization, and improved productivity.
Increased sales of beer, iced tea, and juice containers offset the continuing
shift of soft drinks to plastic.
A strong performance by the international operations was highlighted by
improved results in Brazil, Colombia, and the United Kingdom. Results of the
Venezuelan operations were affected by weak economic conditions.
Page 5 of 12 pages
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The plastic bottle operations benefited from strong demand by makers of
personal care and health care products but were adversely affected by
competitive pricing in selected end uses. Higher unit shipments and improved
manufacturing performance highlighted a strong performance by the closure and
specialty packaging operations.
FOURTH QUARTER
Excluding the effect of the fourth quarter charge, Owens-Illinois
reported earnings of $14.1 million, or $0.11 per share, for the quarter, up
from $8.9 million, or $0.07 per share, excluding unusual items, for 1993.
Including the effect of unusual fourth quarter items in both years, O-I
reported a net loss of $47.6 million, or $0.41 per share for the fourth
quarter, compared with a net loss of $317.8 million, or $2.67 per share in
1993.
Net sales for the fourth quarter were $884.8 million, up 7% from net
sales of $825.9 million in 1993, excluding net sales of $47.4 million by
Kimble Glass.
CHARGE AGAINST EARNINGS
Thomas L. Young, Owens-Illinois executive vice president and general
counsel, said that the write-down of $100 million ($61.7 million after taxes)
of the insurance asset for asbestos-related costs reflects a discount from
coverage limits received by reinsurers participating in recent settlements and
certain other considerations.
As announced previously, the New Jersey Supreme Court, on December 22,
1994, in litigation concerning the company's insurance coverage, remanded for
determination by a special master the issue of how the asbestos-related costs
should be allocated. In addition, Owens-Illinois concluded in December 1994
and January 1995 settlement agreements under which certain reinsurers agreed
to provide cash reimbursements, totaling approximately $100 million, at
approximately 78.5 percent of policy limits.
Mr. Young said, "While the New Jersey Supreme Court provided specific
guidelines in its December, 1994 decision that we believe support our claims
for full coverage limits, we do expect that certain insurance defendants will
attempt to use the special master proceeding, as well as the trial of certain
other coverage issues remanded earlier by the appellate court, as the means of
delaying resolution of our coverage claims. We took this factor and the
settlements into account in adjusting our insurance asset valuation." Mr.
Young further stated, "The adjusted insurance asset valuation does not,
however, reflect the full value of all coverage and other claims Owens-
Illinois is asserting in the New Jersey litigation."
A former business unit of Owens-Illinois produced a high-temperature
insulating material containing asbestos from 1948 to 1958. O-I exited the
insulation business in April 1958. The number of asbestos cases against the
company has been reduced to 34,000 as of December 31, 1994, compared with
43,000 as of December 31, 1993, and a high of 81,000 in 1991.
Page 6 of 12 pages
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OWENS-ILLINOIS, INC.
Condensed Consolidated Results of Operations
(Millions of dollars, except per share amounts)
Year ended December 31,
----------------------------
1994 1993
-------- --------
Net sales $3,567.3 $3,535.0
======== ========
Earnings (loss) from continuing
operations before interest
expense, income taxes, minority
share owners' interests and
extraordinary items (a) $ 449.5 $ (4.5)
Interest expense 278.2 290.0
-------- --------
Earnings (loss) before items below 171.3 (294.5)
Provision (credit) for income taxes 68.9 (113.1)
Minority share owners' interests in
earnings of subsidiaries 24.1 19.4
-------- --------
Earnings (loss) from continuing
operations before extraordinary items 78.3 (200.8)
Net earnings from discontinued
operations 1.4
-------- --------
Earnings (loss) before gain on sale
of discontinued operations and
extraordinary items 78.3 (199.4)
Gain on sale of discontinued
operations 217.0
Extraordinary charges from early
extinguishment of debt (b) (12.7)
-------- --------
Net earnings $ 78.3 $ 4.9
======== ========
Page 7 of 12 pages
<PAGE>Earnings per share of common stock:
Earnings (loss) from continuing
operations before extraordinary
items (a) $ 0.64 $ (1.70)
Net earnings from discontinued
operations 0.01
Gain on sale of discontinued
operations 1.82
Extraordinary charges from early
extinguishment of debt (b) (0.10)
-------- --------
Net earnings $ 0.64 $ 0.03
======== ========
Average shares outstanding (000s) 119,005 118,978
(a) Amounts for 1994 include a pretax charge of $100 million to write down
the insurance asset for asbestos-related costs.
Amounts for 1993 include pretax charges of $253.2 million principally for
the estimated costs of a restructuring program and $325 million for estimated
uninsured future asbestos-related costs. Pretax net gains on sales of the
remaining 50% of the television glass business and 51% of the previously
wholly-owned Kimble Glass business amounted to $46.1 million.
The net aftertax effects of these items on earnings (loss) from
continuing operations before extraordinary items per share are as follows:
1994 1993
-------- --------
Earnings (loss) from continuing
operations before extraordinary
items $ 0.64 $ (1.70)
Unusual fourth-quarter charges:
Asbestos-related insurance 0.52
Asbestos-related costs 1.69
Restructuring program 1.31
Net gains on sale of Kimble and
television glass businesses (0.29)
-------- --------
Earnings from continuing
operations before unusual
fourth-quarter items $ 1.16 $ 1.01
======== ========
(b) In 1993, the Company used the proceeds from divestitures and from
borrowings under a new bank credit agreement to redeem various Notes and repay
all amounts outstanding under its previous bank credit agreement. As a
result, the Company recorded extraordinary charges for the write-off of
unamortized deferred finance fees and redemption premiums, net of applicable
taxes.
Page 8 of 12 pages
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OWENS-ILLINOIS, INC.
Condensed Consolidated Results of Operations
(Millions of dollars, except per share amounts)
Three Months ended December 31,
--------------------------------
1994 1993
-------- --------
Net sales $ 884.8 $ 873.3
======== ========
Earnings (loss) before interest
expense, income taxes, minority
share owners' interests and
extraordinary items (a) $ 5.3 $ (435.3)
Interest expense 70.3 71.7
-------- --------
Loss before items below (65.0) (507.0)
Credit for income taxes (27.2) (199.8)
Minority share owners' interests in
earnings of subsidiaries 9.8 6.3
-------- --------
Loss before extraordinary items (47.6) (313.5)
Extraordinary charges from early
extinguishment of debt (b) (4.3)
-------- --------
Net loss $ (47.6) $ (317.8)
======== ========
Page 9 of 12 pages
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Loss per share of common stock:
Loss before extraordinary items (a) $ (0.41) $ (2.64)
Extraordinary charges from early
extinguishment of debt (b) (0.03)
-------- --------
Net loss $ (0.41) $ (2.67)
======== ========
Average shares outstanding (000s) 119,069 118,978
(a) Amounts for 1994 include a pretax charge of $100 million to write down
the insurance asset for asbestos-related costs.
Amounts for 1993 include pretax charges of $253.2 million principally for
the estimated costs of a restructuring program and $325 million for estimated
uninsured future asbestos-related costs. Pretax net gains on sales of the
remaining 50% of the television glass business and 51% of the previously
wholly-owned Kimble Glass business amounted to $46.1 million.
The net aftertax effects of these items on the loss before extraordinary
items are as follows:
1994 1993
-------- --------
Loss before extraordinary items $ (0.41) $ (2.64)
Unusual fourth-quarter charges:
Asbestos-related insurance 0.52
Asbestos-related costs 1.69
Restructuring program 1.31
Net gains on sale of Kimble
and television glass businesses (0.29)
-------- --------
Earnings before unusual
fourth quarter items $ 0.11 $ 0.07
======== ========
(b) In 1993, the Company used the proceeds from divestitures and from
borrowings under a new bank credit agreement to redeem various Notes and repay
all amounts outstanding under its previous bank credit agreement. As a
result, the Company recorded extraordinary charges for the write-off of
unamortized deferred finance fees and redemption premiums, net of applicable
taxes.
Page 10 of 12 pages
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OWENS-ILLINOIS, INC.
Consolidated Supplemental Financial Data
(Preliminary - subject to change)
Millions of Dollars (a)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
1994 1993 1994 1993
-------- -------- -------- --------
Net sales:
Glass Containers $ 639.7 $ 608.7 $2,590.1 $2,427.3
Plastics and Closures 244.8 216.9 976.1 908.6
Specialized Glass -- 47.4 -- 197.9
Eliminations and other .3 .3 1.1 1.2
-------- -------- -------- --------
Consolidated total $ 884.8 $ 873.3 $3,567.3 $3,535.0
======== ======== ======== ========
Operating profit:
Glass Containers $ 75.8 $ (150.4) $ 393.8 $ 117.4
Plastics and Closures 25.6 6.3 140.4 123.3
Specialized Glass -- 1.6 -- 18.9
Eliminations and other
retained costs (107.5) (301.9) (126.0) (305.0)
-------- -------- -------- --------
Consolidated total (b) $ (6.1) $ (444.4) $ 408.2 $ (45.4)
======== ======== ======== ========
Equity earnings $ 6.6 $ 4.3 $ 22.3 $ 25.3
======== ======== ======== ========
Amortization of
deferred costs $ 14.6 $ 12.8 $ 50.3 $ 52.3
======== ======== ======== ========
Depreciation $ 44.3 $ 42.3 $ 183.3 $ 180.0
======== ======== ======== ========
Additions to property,
plant, and
equipment $ 99.4 $ 103.2 $ 286.0 $ 266.2
======== ======== ======== ========
December 31, 1994 December 31, 1993
------------------ ------------------
Total debt $2,689.7 $2,486.9
======== ========
Share owners' equity $ 375.9 $ 294.8
======== ========
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(a) The Specialized Glass segment consists of the 1993 results of the Kimble
Glass business. The company completed the sale of a 51 percent interest in the
Kimble business on December 31, 1993. As a result, the company is accounting
for its share of Kimble's results of operations on an equity basis beginning in
1994.
(b) Eliminations and other retained costs for 1994 includes a fourth quarter
charge of $100 million to write down the insurance asset for asbestos-related
costs.
Segment operating profit for 1993 reflects fourth quarter charges for
restructuring and asbestos-related costs of $578.2 million and gains on asset
sales of $46.1 million as follows:
Glass Containers $ (214.0)
Plastics and Closures (16.0)
Specialized Glass (3.2)
Eliminations and other
retained costs (298.9)
--------
Total $ (532.1)
========
Page 12 of 12 pages
