OWENS-ILLINOIS GROUP INC | 2013 | FY | 3


5.  Equity Investments

 

Summarized information pertaining to the Company’s equity associates follows:

 

 

 

2013

 

2012

 

2011

 

For the year:

 

 

 

 

 

 

 

Equity in earnings:

 

 

 

 

 

 

 

Non-U.S.

 

$

27

 

$

20

 

$

24

 

U.S.

 

40

 

44

 

42

 

Total

 

$

67

 

$

64

 

$

66

 

 

 

 

 

 

 

 

 

Dividends received

 

$

67

 

$

50

 

$

50

 

 

Summarized combined financial information for equity associates is as follows (unaudited):

 

 

 

2013

 

2012

 

At end of year:

 

 

 

 

 

Current assets

 

$

419

 

$

327

 

Non-current assets

 

528

 

496

 

Total assets

 

947

 

823

 

Current liabilities

 

224

 

195

 

Other liabilities and deferred items

 

193

 

158

 

Total liabilities and deferred items

 

417

 

353

 

Net assets

 

$

530

 

$

470

 

 

 

 

2013

 

2012

 

2011

 

For the year:

 

 

 

 

 

 

 

Net sales

 

$

699

 

$

658

 

$

689

 

 

 

 

 

 

 

 

 

Gross profit

 

$

185

 

$

191

 

$

215

 

 

 

 

 

 

 

 

 

Net earnings

 

$

149

 

$

143

 

$

174

 

 

The Company’s significant equity method investments include:  (1) 50% of the common shares of Vetri Speciali SpA, a specialty glass manufacturer; (2) a 25% partnership interest in Tata Chemical (Soda Ash) Partners, a soda ash supplier; (3) a 50% partnership interest in Rocky Mountain Bottle Company, a glass container manufacturer; (4) a 50% partnership interest in BJC O-I Glass Pte. Ltd., a glass container manufacturer; and (5) 50% of the common shares of Vetrerie Meridionali SpA (“VeMe”), a glass container manufacturer. During the fourth quarter of 2013, changes were made to the VeMe joint venture agreement that resulted in the Company relinquishing control of the joint venture and, therefore, deconsolidating the entity. No gain or loss was recognized related to the deconsolidation as the fair value of the entity was equal to the carrying amount of the entity’s assets and liabilities. The fair value, which  the Company classified as Level 3 in the fair value hierarchy, was computed using a discounted cash flow analysis based on projected future cash flows of the joint venture.

 

There is a difference of approximately $13 million as of December 31, 2013 between the amount at which certain investments are carried and the amount of underlying equity in net assets.  The portion of the difference related to inventory or amortizable assets is amortized as a reduction of the equity earnings.  The remaining difference is considered goodwill.


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