This represents a 16% increase over first quarter 2001 pro forma earnings before unusual items of $0.38 per share (diluted), adjusted on a pro forma basis for the accounting change.
The first quarter results also include a charge of $475.0 million ($308.8 million after tax), or $2.11 per share, discussed below, to adjust the reserve for estimated future asbestos-related costs. Including this charge, the company reported a loss before extraordinary item and cumulative effect of accounting change of $238.6 million, or $1.67 per share. The first quarter 2002 results also include the following items: 1) an extraordinary charge of $6.7 million after tax, or $0.05 per share, for the write-off of unamortized deferred financing fees related to repayment of a term loan in January 2002; and 2) a non-cash charge of $460.0 million, or $3.14 per share, for the change in method of accounting for goodwill required by SFAS 142, as discussed below. Including the effects of these items, the company reported a first quarter net loss of $705.3 million, or $4.86 per share.
The year-over-year increase in first quarter operating results to $0.44 per share from $0.38 per share was due principally to lower energy costs, improved manufacturing efficiencies, the incremental benefit of recently acquired Canadian glass container operations, and lower interest expense. The first quarter also showed moderately lower spending for asbestos claims.
Joseph H. Lemieux, Owens-Illinois chairman and chief executive officer, said, "This is our third straight quarter of improved year-over-year operating results and we're on track to continue that trend. As a result of ongoing investments in technology and high-productivity equipment, our operations continue to lower their cost structures and improve manufacturing performance. At the same time, lower energy costs, lower interest rates, and reduced volatility in foreign currency translation rates are providing a favorable climate for continued improvement."
For the first quarter of 2001, the company reported net earnings of $48.9 million, or $0.30 per share (diluted). The 2001 first quarter results included a favorable $0.08 per share effect from asset sales. In addition, goodwill amortization in the first quarter of 2001 amounted to $0.16 per share. O-I discontinued the amortization of goodwill effective January 1, 2002, upon the adoption of SFAS 142.