812233--3/16/2006--OWENS_ILLINOIS_GROUP

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{cost, regulation, environmental}

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{regulation, change, law}

{cost, operation, labor}

{acquisition, growth, future}

{operation, international, foreign}

{loss, insurance, financial}

Cash Used to Satisfy Other Obligations A portion of the Company s cash flow will be used to make payments to OI Inc. to satisfy certain debt, preferred stock and litigation-related obligations, including settlement of asbestos-related claims. Debt Restrictions The Company may not be able to finance future needs or adapt its business plans to changes because of restrictions contained in the secured credit agreement and the indentures and instruments governing other indebtedness. International Operations The Company is subject to risks associated with operating in foreign countries. Competition The Company faces intense competition from other glass container producers, as well as from makers of alternative forms of packaging. Competitive pressures could adversely affect the Company s financial health. High Energy Costs Higher energy costs worldwide and interrupted power supplies may have a material adverse effect on operations. Integration Risks The Company may not be able to effectively integrate BSN or additional businesses it acquires in the future. Customer Consolidation The continuing consolidation of the Company s customer base may intensify pricing pressures and have a material adverse effect on operations. Seasonality and Raw Materials Profitability could be affected by varied seasonal demands and the availability of raw materials. Environmental Risks The Company is subject to various environmental legal requirements and may be subject to new legal requirements in the future. These requirements may have a material adverse effect on operations. Labor Relations Some of the Company s employees are unionized or represented by workers councils. Accounting The Company s financial results are based upon estimates and assumptions that may differ from actual results. Accounting Standards The adoption of new accounting standards or interpretations could adversely impact the Company s financial results. Funded Status of Pension Plans Recognition of a minimum pension liability may cause a significant reduction in net worth. Deferred Tax Assets Recognition of minimum pension liabilities may require a deferred tax valuation allowance. Goodwill A significant write down of goodwill would have a material adverse effect on the Company s reported results of operations and net worth.

Full 10-K form ▸

812233--3/16/2006--OWENS_ILLINOIS_GROUP_INC