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Owens-Illinois' CEO Discusses Q1 2012 Results - Earnings Call Transcript

Stocks in this article: OI

Today we will discuss key business development, review our financial results for the first quarter, and discuss future trends affecting our business in 2012. Following our prepared remarks, we'll host a question-and-answer session. Presentation materials for this earnings call are also being simulcast from the company's new website at o-i.com. Please review the Safe Harbor comments and disclosure of our use of non-GAAP financial measures included in those materials. Unless otherwise noted, the financial results we are presenting today relate to adjusted net earnings, which exclude certain items that management considers not representative of ongoing operations. And reconciliation of GAAP to non-GAAP earnings can be found in our earnings press release and in the appendix to this presentation. I'll now turn the call over to Al, who will start on Chart 2.

Albert P. L. Stroucken

Thank you, Jason, and good morning. Our adjusted net earnings were $0.73 per share in the first quarter of 2012 compared to $0.53 last year. As we announced in the first quarter update 2 weeks ago, our manufacturing operations performed very well this quarter. Cost control measures implemented last year and high operating rates in most regions resulted in very good performance as we enter the stronger upcoming shipping season.

We also benefited in the first quarter this year from the nonrecurrence of significant flooding in Australia that impacted prior year results. Global sales volumes vary by region. Shipments were flat in Europe, up slightly in South America and up a little bit more in North America however, Asia Pacific sales volumes were down compared to the prior year quarter.

This was largely driven by lower shipment levels in China as a result of several furnace rebuilds and the residual impact from the 2010 closure of our Guangzhou facility. Overall, global volumes were down almost 2% but excluding the impact of China, our volumes would have been flat in the first quarter. While our selling prices were up and covered this year's inflation, their average impact was somewhat muted in the first quarter because increases went into effect at different times over the course of the first 3 months.

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