<PAGE>
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D. C.   20549

                                   FORM 10-K
(Mark One)
  [x]             Annual Report Pursuant to Section 13 or 15(d) of the
                            Securities Exchange Act of 1934
                     For the fiscal year ended December 31, 1999
                                      or
  [ ]             Transition Report Pursuant to Section 13 or 15(d) of the
                            Securities Exchange Act of 1934

                             OWENS-ILLINOIS, INC.
            (Exact name of registrant as specified in its charter)

Delaware                                  1-9576           22-2781933
(State or other jurisdiction of        (Commission         (IRS Employer
incorporation or organization)         file number)        Identification No.)

One SeaGate, Toledo, Ohio                                   43666
(Address of principal executive offices)                    (Zip Code)

      Registrant's telephone number, including area code:  (419) 247-5000

          Securities registered pursuant to Section 12(b) of the Act:

                                                    Name of each exchange on
Title of each class                                     which registered    
-------------------                                 ------------------------
Common Stock, $.01 par value                        New York Stock Exchange
Convertible Preferred Stock, $.01 par value,        
   $50 liquidation preference                       New York Stock Exchange
7.85% Senior Notes due 2004                         New York Stock Exchange
7.15% Senior Notes due 2005                         New York Stock Exchange
8.10% Senior Notes due 2007                         New York Stock Exchange
7.35% Senior Notes due 2008                         New York Stock Exchange
7.50% Senior Debentures due 2010                    New York Stock Exchange
7.80% Senior Debentures due 2018                    New York Stock Exchange

       Securities registered pursuant to Section 12(g) of the Act:  None










                           (Cover page 1 of 2 pages)



<PAGE>
      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.


                Yes       x                  No                
                    --------------              --------------

      Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.                                               [ ]


      The aggregate market value (based on the consolidated tape closing price
on February 29, 2000) of the voting stock beneficially held by non-affiliates
of Owens-Illinois, Inc. was approximately $1,509,676,000.  For the sole
purpose of making this calculation, the term "non-affiliate" has been
interpreted to exclude directors and executive officers of the Company.  Such
interpretation is not intended to be, and should not be construed to be, an
admission by Owens-Illinois, Inc. or such directors or executive officers of
the Company that such directors and executive officers of the Company are
"affiliates" of Owens-Illinois, Inc., as that term is defined under the
Securities Act of 1934.


      The number of shares of Common Stock, $.01 par value, of Owens-Illinois,
Inc. outstanding as of February 29, 2000, was 146,952,743.





                      DOCUMENTS INCORPORATED BY REFERENCE


Part III    Owens-Illinois, Inc. Proxy Statement for The Annual Meeting of
            Share Owners To Be Held Wednesday, May 10, 2000 ("Proxy
            Statement").








                           (Cover page 2 of 2 pages)





<PAGE>
                              TABLE OF CONTENTS
                              -----------------

      PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
            ITEM 1.     BUSINESS . . . . . . . . . . . . . . . . . . . . .   1
            ITEM 2.     PROPERTIES . . . . . . . . . . . . . . . . . . . .  11
            ITEM 3.     LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . .  16
            ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                        HOLDERS. . . . . . . . . . . . . . . . . . . . . .  16
                        EXECUTIVE OFFICERS OF THE REGISTRANT . . . . . . .  17
      PART II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
            ITEM 5.     MARKET FOR OWENS-ILLINOIS, INC.'S COMMON STOCK 
                        AND RELATED SHARE OWNER MATTERS. . . . . . . . . .  21
            ITEM 6.     SELECTED FINANCIAL DATA. . . . . . . . . . . . . .  22
            ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                        FINANCIAL CONDITION AND RESULTS OF OPERATIONS. . .  26
            ITEM 7.(a). QUALITATIVE AND QUANTITATIVE DISCLOSURES 
                        ABOUT MARKET RISK. . . . . . . . . . . . . . . . .  35
            ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA  . . .  39
            ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                        ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . .  81
      PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  82
            ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE
                        REGISTRANT . . . . . . . . . . . . . . . . . . . .  82
            ITEMS 11.   EXECUTIVE COMPENSATION AND CERTAIN RELATIONSHIPS
                        AND RELATED TRANSACTIONS . . . . . . . . . . . . .  82
            ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                        AND MANAGEMENT . . . . . . . . . . . . . . . . . .  82
      PART IV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  83
            ITEM 14.(a).  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES . . .  83
            ITEM 14.(b).  REPORTS ON FORM 8-K. . . . . . . . . . . . . . .  88
      SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  89
      SCHEDULES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   S-1
      EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   E-1





















<PAGE>


                                   PART I


ITEM 1.     BUSINESS

General Development of Business

Owens-Illinois, Inc. (the "Company"), through its subsidiaries, is the
successor to a business established in 1903.  The Company is one of the
world's leading manufacturers of packaging products.  Approximately one of
every two glass containers made worldwide is made by the Company, its
affiliates or licensees.  In addition to being the largest manufacturer of
glass containers in the United States, North America, South America,
Australia, New Zealand, and China, and one of the largest in Europe, the
Company is a leading manufacturer in the United States of plastic containers,
plastic closures, plastic prescription containers, labels, and multipack
plastic carriers for beverage bottles.  The Company also has plastics
packaging operations in Latin America, Australia, Europe, and Asia.  Since
1993, through acquisitions and investments strategic to its core businesses,
the Company has expanded and furthered its market leadership position in the
geographic areas in which it competes.  During the years 1995 through 1999,
the Company has invested more than $2.0 billion in capital expenditures 
(excluding acquisition expenditures) and more than $300 million in research,
development and engineering to, among other things, increase capacity in key
locations, commercialize its technology into new products, and improve
productivity.

In connection with the 1998 acquisition of the worldwide glass and plastics
packaging businesses of BTR plc, the Company committed to sell BTR's United
Kingdom glass container manufacturer ("Rockware"). In early 1999, the Company
completed the sale of Rockware to a subsidiary of Ardagh plc, an Irish glass
container manufacturer based in Dublin, Ireland, for total consideration of
249 million pounds sterling (approximately $405 million). Proceeds from the
sale of Rockware were used for the reduction of debt and for general corporate
purposes.

In May 1999, the Company's Board of Directors authorized the management of the
Company to repurchase up to 10 million shares of the Company's common stock. 
The Company repurchased 10 million shares for $225.6 million under this
authorization during 1999.  In February 2000, the Company's Board of Directors
authorized the repurchase of up to an additional 10 million shares of the
Company's common stock.  The Company intends to purchase its common stock from
time to time on the open market depending on market conditions and other
factors.

Since 1991, the Company has acquired 17 glass container businesses in 17
countries, including businesses in Central and Eastern Europe and in the Asia
Pacific region, and six plastics packaging businesses with operations in 11
countries.  These acquisitions are consistent with the Company's strategy to
maintain leadership in glass and plastics packaging and to pursue revenue and
earnings growth opportunities around the world.  


                                      1

<PAGE>
The principal executive office of the Registrant is located at One SeaGate,
Toledo, Ohio 43666; the telephone number is (419) 247-5000.


Financial Information about Product Segments

Information as to sales, earnings before interest income, interest expense,
provision for income taxes, minority share owners' interests in earnings of
subsidiaires, and extraordinary charges ("EBIT"), and total assets by product
segment is included on pages 73 - 74.


Narrative Description of Business

The Company has two product segments: (1) Glass Containers and (2) Plastics
Packaging.  Below is a description of these segments and information to the
extent material to understanding the Company's business taken as a whole.  


Products and Services, Customers, Markets and Competitive Conditions, and
Methods of Distribution 

GLASS CONTAINERS PRODUCT SEGMENT

The Company is a leading manufacturer of glass containers throughout the
world.  In addition to being the largest maker of glass containers in the
United States, North America, South America, Australia, New Zealand, and
China, the Company also is a leading manufacturer of glass packaging in
Europe.  Worldwide glass container sales represented 66%, 68%, and 71% of the
Company's consolidated net sales for the years ended December 31, 1999, 1998,
and 1997, respectively.  The Company believes that its internally developed
machines are significantly more efficient and productive than those used by
its competitors, making it the low-cost manufacturer and a recognized
technological leader in the industry.  

The Company currently has technical assistance agreements with 23 different
companies in 25 countries.  These agreements, which cover areas ranging from
manufacturing and engineering assistance to support in functions such as
marketing, sales, and administration, allow the Company to participate in the
worldwide growth of the glass container industry.  The Company believes these
associations and its technical expertise will afford it opportunities to
participate in the glass business in regions of the world where the Company
does not have a presence, and expand in regions where the Company currently
has operations.  

Products and Services
---------------------
Glass containers are produced in a wide range of sizes, shapes and colors for
beer, food, tea, juice, soft drinks, liquor, wine, wine coolers and
pharmaceuticals.  The Company has been a leader in product innovation,
introducing products including long neck nonreturnable beer bottles, and in
developing containers for teas, juices, food, soft drinks and wine coolers.

                                      2

<PAGE>
The Company's product development efforts in glass containers are aimed at
providing custom designed packaging systems to customers and consumers. 
Product lines designed to complement glass containers include product
extensions related to single service packages for teas, juices and soft drinks
and innovative secondary packaging systems such as closures, carriers and
labeled containers.  

Customers
---------
Beer, food (which includes juice and teas), liquor (i.e. distilled spirits)
and wine producers comprise the majority of industry demand for U.S. glass
containers.  In addition to the just previously mentioned producers,
international glass container customers include soft drink bottlers.  In the
regions where the Company has operations, it has leading positions within
these industries.  The Company believes its position gives it the ability to
sustain market share and take advantage of new opportunities and areas of
growth for all customers within these industries.

Most glass production is sold to customers under arrangements with terms
varying from several months to several years which specify estimated
quantities to be shipped as a percentage of the customers' total annual
shipment requirements.  Containers are typically scheduled for production in
response to customers' orders for their quarterly requirements.

Markets and Competitive Conditions
----------------------------------
The Company has glass container operations located in 19 countries.  The
principal markets for the Company's glass products are in the United States,
Europe, Australia, and Latin America.  The Company has the leading market
share of the glass segment of United States beer and food (including juice 
and teas) packaging.  Excluding E & J Gallo Winery Inc., which manufactures
its own containers, the Company believes it is a leading supplier of glass for
wine and wine coolers.  Internationally, the Company is the leading producer
of glass containers in most of the geographic markets in which it is located. 

The Company's glass products compete on the basis of quality, service and
price with other forms of rigid packaging, principally aluminum and steel cans
and plastic bottles, as well as glass and plastic containers produced by other
large, well-established manufacturers.  The principal competitors producing
glass containers within the U.S. market are Ball-Foster Glass Container Co.,
L.L.C., a wholly-owned subsidiary of Paris-based Saint-Gobain ("Ball-Foster"),
and Anchor Glass Container Corporation, the assets of which are owned by
Canadian-based Consumers Packaging, Inc.  The principal competitor producing
glass containers outside the U.S. market is Saint-Gobain.  The principal
competitors producing metal containers are American National Can Group, Inc.,
Ball Corporation, Crown Cork & Seal Company, Inc., and Silgan Holdings Inc.. 
In the metal container market, no one competitor is dominant.  The principal
competitors supplying plastic containers are Consolidated Container Company





                                      3

<PAGE>
LLC, (a subsidiary of Consolidated Container Holdings formed to own all of the
plastics packaging assets of Reid Plastics and substantially all of the U.S.
plastic packaging assets of Suiza Foods, which consist of Franklin Plastics
and Plastic Containers), Graham Packaging Co., Plastipak Packaging, Inc., and
Silgan Corporation.  In the plastic containers market, no one competitor is
dominant.

Methods of Distribution
-----------------------
Due to the significance of transportation costs and the importance of timely
delivery, manufacturing facilities are located close to customers.  Most of
the Company's glass container products are shipped by common carrier to
customers within a 250-mile radius of a given production site.  In addition to
glass container manufacturing facilities, the Company operates several raw
materials plants and machine and mold shops which manufacture high-
productivity glass-making machines and equipment.  

Domestic Glass Operations
-------------------------
The Company has an approximate 45% share of the glass container category of
the U.S. rigid packaging market.  Domestically, the Company operates 21 glass
container manufacturing facilities, a sand plant and two machine shops which
manufacture high-productivity glass-making machines and equipment.  Marketing
under the trade name Owens-Brockway, the Company believes that its 1999 U.S.
glass container sales were significantly higher than the sales of its nearest
U.S. glass container competitor, Ball-Foster.  

Unit shipments in the U.S. to brewers and food producers, including producers
of juice and teas, approximated 90% of the Company's total U.S. glass
container unit shipments for 1999, 1998 and 1997.

During 1999, total glass container industry shipments within the United States
rigid packaging market were slightly above 1998 shipment levels.  Shipments
increased in 1999 as a result of higher demand for beer containers, partially
offset by decreased shipments of food containers.  The Company's share of the
United States glass container market increased slightly during this time. 
Overall, the Company expects glass containers' share of the United States
rigid packaging market to remain relatively stable compared to 1999 levels and
that the Company will maintain its share of the glass container segment due in
part to the Company's ongoing improvement in operating efficiencies and its
technological leadership.

The glass container industry in the United States continues to recycle used
glass containers into new glass containers.  The Company is an important part
of this effort and continues to melt substantial tonnage of recycled glass in
its glass furnaces.  The infrastructure for recycling glass also supplies
recycled glass containers to producers other than those in the glass container
industry for use in the manufacture of secondary products (i.e. fiberglass and
roadway material manufacturers).  Glass recycling helps relieve the burden on
the nation's landfills, while significantly reducing the need for virgin
materials.  Recycling also results in energy savings and reductions in air
emissions.  The Company has no technological barriers to using all of the

                                      4

<PAGE>
recycled glass it can reasonably expect to obtain from public/private
collection programs as long as such glass meets incoming material quality
standards.
    
International Glass Operations
------------------------------
The Company has added to its international operations by acquiring glass
container companies with leading positions in growing or established markets,
increasing capacity at selected foreign affiliates, and maintaining the global
network of glass container companies that license the Company's technology. 
The Company has significant ownership positions in 24 companies located in 18
foreign countries and Puerto Rico.  Most of the Company's international glass
affiliates are the leading container manufacturers in their respective
countries, producing a full line of containers for the soft drink, beer, wine,
liquor, food, drug and chemical industries.  Some of these companies also
produce molds, mold parts, sand and feldspar, limestone, machines and machine
parts, glass insulators, rolled glass, sheet glass and glass tableware.  The
Company's principal international glass affiliates are located in Europe,
Australia, and Latin America.

Although unusually severe economic and market conditions in Latin America and
Europe have adversely affected the Company's 1999 and 1998 operating results,
unit shipments of glass containers in countries outside of the United States 
have grown substantially from levels of the early 1990's.  In many regions,
international glass operations have benefited from increased consumer spending
power, increased privatization of industry, a favorable climate for foreign
investment, lowering of trade barriers, and global expansion programs by major
customers. In many developing countries glass has a significant cost advantage
over plastic and metal containers.  Technologies which have produced
productivity improvements in the Company's United States Glass Container
operations are also being applied to the operations of foreign affiliates. 
The Company is continuing to pursue additional strategic alliances with
international partners whose markets are growing and whose manufacturing
operations can be enhanced by the Company's state-of-the-art technology and
equipment, which enables such operations to improve quality, increase
productivity, reduce bottle weights, and decrease energy consumption. 
Revenues generated in countries where the Company does not have a direct
ownership position may also provide a benefit to the Company in the form of
royalties tied to sales volume of the Company's licensees.














                                      5

<PAGE>
The Company's significant ownership positions in international glass
affiliates are summarized below:

                                                              Owens-Illinois
Company/Country                                                 Ownership
---------------                                               --------------    
ACI Glass Packaging, Australia                                    100.0%
Avirunion, a.s., Czech Republic                                   100.0
Karhulan Lasi Oy, Finland                                         100.0
United Hungarian Glass Containers, Kft., Hungary                  100.0
Owens-Brockway (India) Limited, India                             100.0
AVIR S.p.A., Italy                                                100.0
ACI New Zealand Glass Manufacturers, New Zealand                  100.0
Vidrieria Rovira, S.A., Spain                                     100.0
United Glass Ltd., United Kingdom                                 100.0
Manufacturera de Vidrios Planos, C.A., Venezuela                  100.0
A/S Jarvakandi Klaas, Estonia                                      99.9
Vidrios Industriales, S.A., Peru                                   96.0
Huta Szkla Jaroslaw S.A., Poland                                   84.1
Owens-Illinois de Puerto Rico, Puerto Rico                         80.0
Comphania Industrial Sao Paulo e Rio, Brazil                       79.4
Owens-Illinois de Venezuela, C.A., Venezuela                       74.0
ACI Guangdong Glass Company Ltd., China                            70.0
ACI Shanghai Glass Company Ltd., China                             70.0 
Wuhan Owens Glass Container Company Ltd., China                    70.0
Cristaleria del Ecuador, S.A., Ecuador                             69.0
Huta Szkla Antoninek Sp.zo.o, Poland                               60.1
Cristaleria Peldar, S.A., Colombia                                 57.8
PT Kangar Consolidated Industries, Indonesia                       51.2



PLASTICS PACKAGING PRODUCT SEGMENT

The Company is a leading plastic container manufacturer in the United States,
with operations also located in Latin America, Australia, Europe, and Asia. 
The Company is the market leader in most plastic segments in which it
competes.  Plastic container sales represented 20%, 18%, and 15% of the
Company's consolidated net sales for the years ended December 31, 1999, 1998,
and 1997, respectively.  The Company's Plastics Packaging segment is comprised
of three business units.

Plastic Containers.  This unit, with 49 factories, manufactures rigid, semi-
rigid, flexible and multi-layer plastic containers for a wide variety of uses,
including household products, personal care products, health care products,
chemicals and automotive products and food.  This unit includes the CPT
operations, which produces mono and multi-material PET containers for a number
of applications that require special processing to ensure heat resistance for
food and beverage containers that are filled at high temperatures, and to
enhance barrier protection in order to increase shelf life.



                                      6

<PAGE>
Closure and Specialty Products.  This unit, with 19 manufacturing facilities,
develops and produces closures and closure systems which incorporate
functional features such as tamper evidence, child resistance and dispensing.
In addition, this unit's diverse product line includes trigger sprayers,
finger pumps, and lotion pumps, as well as finger pumps for the fragrance and
cosmetic industry.  In the United States, the Company has a sole license for
Alcoa's technology for compression molded, tamper evident, thermoplastic
closures.  This unit also manufactures custom injection molded products, such
as deodorant canisters and toothpaste dispensers.

Prescription Products.  The Company's Prescription Products unit manufactures
prescription containers.  These products are sold primarily to drug
wholesalers, major drug chains and the government.  Containers for
prescriptions include plastic and glass ovals, vials, rounds, squares and
ointment jars.  The only other major producer in the plastic containers
segment of prescription drug packaging is Kerr Group, Inc.


Markets.  Major markets for these units include the household products,
personal care products, health care products, and food and beverage
industries.

The plastic segment of the rigid packaging market is competitive and
fragmented due to generally available technology, low costs of entry and
customer emphasis on low package cost.  A large number of competitors exists
on both a national and regional basis.  The Company competes by emphasizing
total package supply (i.e. bottle, closure system, and label), diversified
market positions, proprietary technology and products, new package
development, and packaging innovation.  The market for closures is divided
into various categories in which several suppliers compete for business on the
basis of price and product design.

The Company's strategy has been to compete in the segments of the plastic
packaging market where customers seek to use distinctive packaging to
differentiate their products among a growing array of choices offered to
consumers.  The Company believes it is a leader in technology and development
of custom products and has a leading market position for such products.  The
Company believes its plastic container and closure businesses have a
competitive advantage as a result of one of the shortest new product
development cycles in the industry, enabling the Company to provide superior
service in the service-sensitive custom plastic container market.  The
Company's product innovations in plastic containers and closures include in-
mold labeling for custom molded bottles, multilayer structured bottles
containing post consumer recycled resin, Flex-Band and PlasTop tamper-
evident closures, Clic Loc child-resistant closures, and 1-Clic vial system
which can be used in either child-resistant or non-child-resistant modes. 
Recycling content legislation, which has been enacted in several states,
requires that a certain specified minimum percentage of recycled plastic be
included in new plastic containers.  The Company has met such legislated
standards in part due to its material and multilayer process technology.  



                                      7

<PAGE>
The Company's Plastics Packaging segment currently has technical assistance
agreements or cross-licenses with 38 companies in 20 countries.  These
agreements, which cover areas ranging from manufacturing and engineering
assistance to support in functions such as marketing, sales, and
administration, allow the Company to participate in the worldwide growth of
the plastic packaging industry.

OTHER PRODUCTS

Label and Carrier Products.  The broad line of labels produced by this unit
includes polyethylene labels for in-mold labeling (IML) and laminated labels
for beverage containers.  The proprietary Contour-Pak plastic carrier line
for bottles is also produced by this unit.  This carrier line is predominantly
used as six-pack and four-pack carriers for iced teas and other fruit drinks. 


ADDITIONAL INFORMATION

New Products

New products and numerous refinements of existing products are developed and
introduced in each segment every year.  No single new product or refinement,
or group of new products and refinements, have been recently introduced or are
scheduled for introduction which required the investment of a material amount
of the Company's assets or which otherwise would be considered material.

Sources and Availability of Raw Materials

All of the raw materials the Company uses have historically been available in
adequate supply from multiple sources.  However, for certain raw materials,
there may be temporary shortages due to weather or other factors, including
disruptions in supply caused by raw material transportation or production
delays; such shortages are not expected to have a material effect on the
Company's operations.

Patents and Licenses

The Company has a large number of patents which relate to a wide variety of
products and processes, has pending a substantial number of patent
applications, and is licensed under several patents of others.  While in the
aggregate its patents are of material importance to its business, the Company
does not consider that any patent or group of patents relating to a particular
product or process is of material importance when judged from the standpoint
of any segment or its business as a whole.

Seasonality

Sales of particular products of the Glass Containers and Plastics Group
business segments such as beer and certain food containers are seasonal. 
Shipments in the United States and Europe are typically greater in the second
and third quarters of the year, while shipments in Latin America and the Asia


                                      8

<PAGE>
Pacific region are typically greater in the first and fourth quarters of the
year.  

Working Capital

In general, the working capital practices followed by the Company are typical
of the businesses in which it operates.  During the first and second quarters
of the year the accumulation of inventories of certain products in advance of
expected shipments reflects the seasonal nature of those businesses and may
require periodic borrowings.

Customers

Major customers exist for each of the Company's industry segments, and in each
industry segment the loss of a few of these customers might have a material
adverse effect on the segment.  Major customers of the Company include such
companies as Anheuser-Busch Companies, Inc., Philip Morris Companies Inc., The
Quaker Oats Company, The Procter & Gamble Company, Unilever, N.V. and other
leading companies which manufacture and market a variety of consumer products.

Research and Development

Research and development constitutes an important part of the Company's
activities.  Research and development expenditures were $37.5 million, $36.4
million, and $28.9 million for 1999, 1998, and 1997, respectively.  Operating
engineering expenditures were $42.2 million, $34.8 million, and $29.9 million
for 1999, 1998, and 1997, respectively.  In addition to new product
development, substantial portions of the technical effort are devoted to
increased process control, automatic inspection, and automation.  No material
amount of money was spent on customer-sponsored research activities during
1999, 1998, or 1997.

Environment

The Company's operations, in common with those of the industry generally, are
subject to numerous existing and proposed laws and governmental regulations
designed to protect the environment, particularly regarding plant wastes and
emissions and solid waste disposal.  Capital expenditures for property, plant,
and equipment for environmental control activities were not material during
1999.

A number of states have enacted, or are considering, legislation to promote
curbside recycling and recycled content legislation as alternatives to
mandatory deposit laws.  Although such legislation is not uniformly developed,
the Company believes that states will continue to enact and develop curbside
recycling and recycling content legislation.

Sales of non-refillable glass beverage bottles and other convenience packages
are affected by mandatory deposit laws and other types of restrictive
legislation.  As of January 1, 2000, there are nine states with mandatory
deposit laws in effect.


                                      9

<PAGE>
Plastic containers have also been the subject of legislation in various
states.  The Company utilizes recycled plastic resin in its manufacturing
processes.  During 1999 and 1998, many plastic containers for products other
than food, drugs, and cosmetics contained 25% post consumer resin.  The
Company believes it is an industry leader in such technology.

Although the Company is unable to predict what legislation or regulations may
be adopted in the future with respect to environmental protection and waste
disposal, compliance with existing legislation and regulations has not had,
and is not expected to have, a material adverse effect on its capital
expenditures, results of operations, or competitive position.

Number of Employees

The Company's operations employed approximately 36,600 persons at December 31,
1999.  A majority of these employees are hourly workers covered by collective
bargaining agreements, the principal one of which was renewed early in 1999
for three years.  The Company considers its employee relations to be good. 
The Company has not had any material labor disputes in the last five years,
and does not anticipate any material work stoppages in the near term.

Financial Information about Foreign and Domestic Operations and Export Sales

Information as to net sales, EBIT, and assets of the Company's product and
geographic segments is included on pages 72 - 76.  Export sales, in the
aggregate or by geographic area, were not material for the years 1999, 1998,
or 1997.


























                                      10 

<PAGE>

I
TEM 2.  PROPERTIES

The principal manufacturing facilities and other material important physical
properties of the continuing operations of the Company at December 31, 1999
are listed below and grouped by product segment.  All properties shown are
owned in fee except where otherwise noted.   

Glass Containers
  Domestic Operations
    Glass Container Plants
      Atlanta, GA                         Muskogee, OK (1)
      Auburn, NY                          Oakland, CA
      Brockway, PA                        Portland, OR
      Charlotte, MI                       Streator, IL
      Clarion, PA (1)                     Toano, VA
      Crenshaw, PA                        Tracy, CA
      Danville, VA                        Volney, NY
      Hayward, CA                         Waco, TX
      Lakeland, FL                        Winston-Salem, NC
      Lapel, IN                           Zanesville, OH
      Los Angeles, CA                     

    Machine Shops
      Brockway, PA                        Godfrey, IL

    Sand Plant
      Ione, CA (2)

  Asia Pacific Operations
    Australia
      Glass Container Plants
        Adelaide                          Perth
        Brisbane                          Sydney
        Melbourne

      Mold Shop
        Melbourne

      Raw Materials Plants
        Beachworth                        Port Stephens
        Caroline                          North Stradbroke Island
        Dandenong                         Tantanoola
        Glenshera                         Upper Wakefield
        Lang Lang                         Williamstown
        Port Parham








                                      11

<PAGE>
    China
      Glass Container Plants
        Guangzhou                         Wuhan   
        Shanghai                          

      Mold Shop
        Tianjin

    India
      Glass Container Plants
        Pondicherry                       Rishikesh
        Pune

    Indonesia
      Glass Container Plant
        Jakarta

    New Zealand
      Glass Container Plant
        Auckland

  European Operations
    Czech Republic
      Glass Container Plants
        Sokolov                           Teplice

    Estonia
      Glass Container Plant
        Jarvakandi

    Finland
      Glass Container Plant
        Karhula

    Hungary
      Glass Container Plant
        Oroshaza

    Italy
      Glass Container Plants
        Asti                              Pordenone
        Bari (2 plants)                   Rome
        Bologna                           Terni
        Cagliari                          Trento
        Milan                             Treviso
        Napoli                            Verese
        
      Mold Shop
        Napoli




                                      12

<PAGE>
    Poland
      Glass Container Plants
        Jaroslaw                          Poznan

    Spain
      Glass Container Plants
        Barcelona

    United Kingdom
      Glass Container Plants
        Alloa                             St. Albans          
        Harlow

      Sand Plant
        Devilla

  Latin American Operations
    Brazil
      Glass Container Plants
        Rio de Janeiro                    Sao Paulo

      Machine Shop
        Manaus

    Colombia
      Glass Container Plants
        Envigado                          Zipaquira

    Ecuador
      Glass Container Plant
        Guayaquil

    Peru
      Glass Container Plant
        Callao

    Puerto Rico
      Glass Container Plant
        Vega Alta

    Venezuela
      Glass Container Plants
        Caracas                           Valencia
        La Victoria









                                      13

<PAGE>
Plastics Packaging
  Domestic Operations
    HDPE (High Density Polyethylene) and
     PET (Polyethylene Terephthalate) 
     Container Plants
      Atlanta, GA                         Kansas City, MO (2)
      Baltimore, MD                       Kissimmee, FL
      Bedford, NH                         La Mirada, CA (2)   
      Belvidere, NJ                       Modesto, CA  
      Cartersville, GA                    Nashua, NH
      Chicago, IL                         Newburyport, MA
      Cincinnati, OH (1)                  Rockwall, TX
      Edison, NJ                          Rocky Mount, NC
      Findlay, OH                         Rossville, GA (2)
      Florence, KY (2 plants) (1)         St. Louis, MO (2)
      Fremont, OH                         Sullivan, IN 
      Greenville, SC                      Tolleson, AZ
      Harrisonburg, VA                    Vandalia, IL (1)
      Hazleton, PA                        Washington, NJ (2)
      Henderson, NV                       
                  
            
  
    Closure and Specialty Products Plants
      Bridgeport, CT                      Erie, PA
      Brookville, PA                      Franklin, IN
      Chattanooga, TN                     Hamlet, NC
      Constantine, MI (1)                 Maumee, OH (2)
      El Paso, TX (2)                                  

    Prescription Products Plant
      Berlin, OH (1)

  Asia Pacific Operations
    Plastic Container Plants
      Australia
        Adelaide                          Perth
        Brisbane                          Sydney (3 plants)
        Melbourne (2 plants)              Wadonga

      New Zealand
        Auckland                          Christchurch











                                      14

<PAGE>
    Closure Plants
      Australia
        Brisbane (2 plants)               Perth 
        Drouin                            Sydney
        Melbourne (3 plants)

      New Zealand
        Auckland

      Thailand
        Bangkok


  European Operations
    Plastic Container Plants
      Finland
        Ryttyla

      Hungary
        Gyor
      
      Netherlands
        Etten-Leur

      United Kingdom
        Chalgrove

  Latin American Operations
    Plastic Container Plants
      Brazil
        Sorocaba

      Mexico
        Mexico City
        Pachuca

      Puerto Rico
        Las Piedras

Other
  Label and Carrier Products Plant
    Bardstown, KY











                                      15

<PAGE>
Corporate Facilities
  World Headquarters Building
  Toledo, OH (2)

  Levis Development Park
  Perrysburg, OH              
-------------------------------                               

(1)  This facility is financed in whole or in part under tax-exempt financing 
     agreements.
(2)  This facility is leased in whole or in part.


The Company believes that its facilities are well maintained and currently
adequate for its planned production requirements over the next three to five
years.



ITEM 3.     LEGAL PROCEEDINGS

See the section entitled "Contingencies" on pages 69 - 71.
            


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the last quarter
of the fiscal year ended December 31, 1999.


























                                      16

<PAGE>
             EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth below are the names and the ages, positions, and offices held (as of
the date hereof), and a brief account of the business experience of each
executive officer.  Officers serve at the discretion of the Board of
Directors.   

Name and Age                                      Position
------------                                      --------
Joseph H. Lemieux (69) . . . . .    Chairman since 1991; Chief Executive
                                    Officer since 1990; President and Chief
                                    Operating Officer, 1986-1990; Director
                                    since 1984.  Member of Class III of the
                                    Board of Directors of the Company, with a
                                    term expiring in 2000.

R. Scott Trumbull (51) . . . . .    Executive Vice President, International
                                    Operations since 1993; Executive Vice
                                    President, Corporate Development since
                                    1998; Vice President and Director of
                                    Corporate Planning, 1992-1993; Vice
                                    President and General Manager of Plastics
                                    and Closure Operations, 1986-1992.

Terry L. Wilkison (58) . . . . .    Executive Vice President, Latin American
                                    Operations since 1998; Executive Vice
                                    President, 1993-1997; Executive Vice
                                    President, Domestic Packaging Operations,
                                    1993-1996; Vice President and General
                                    Manager of Plastics, Closures, and
                                    Prescription Products, 1992-1993; Vice
                                    President and General Manager of
                                    Specialty Glass Operations, 1987-1992.

Thomas L. Young (56) . . . . . .    Executive Vice President, Administration
                                    and General Counsel since 1993;
                                    Secretary, 1990-1998; Vice President,
                                    General Counsel, General Manager -
                                    Operations Administration, 1992-1993;
                                    Vice President and General Counsel, 1990-
                                    1992; Member of Class I of the Board of
                                    Directors of the Company, with a term
                                    expiring in 2001.

David G. Van Hooser (53) . . . .    Senior Vice President and Chief Financial
                                    Officer since 1998; Senior Vice President
                                    and Director of Corporate Strategy, 1996-
                                    1998; Vice President and General Manager
                                    of Plastic Components Operations, 1994-
                                    1996; Vice President, Treasurer and
                                    Controller, 1990-1994; Vice President and
                                    Treasurer, 1988-1990.

                                      17

<PAGE>
Name and Age                                      Position
------------                                      --------
John Bachey (51) . . . . . . . .    Vice President since 1997; General
                                    Manager, European and Latin American
                                    Plastics Operations since 1999; General
                                    Manager, Europe and Latin America,
                                    Continental PET Technologies, 1998-1999;
                                    Managing Director of United Glass, 1997;
                                    Vice President of Glass Container Sales
                                    and Marketing, 1996-1997; Vice President
                                    and General Manager, West Coast, 1993-
                                    1996.

James W. Baehren (49). . . . . .    Corporate Secretary since 1998; Associate
                                    General Counsel since 1996; Assistant
                                    General Counsel, 1992-1996.

Russell C. Berkoben (58) . . . .    Vice President since 1992; Vice President
                                    and General Manager of Plastics Group
                                    since 1997; Vice President and General
                                    Manager of Plastic Containers Operations,
                                    1991-1996; Vice President and Plastic
                                    Containers Business Unit Manager, 1985-
                                    1991.

Joseph V. Conda (58) . . . . . .    Vice President since 1998; Vice President
                                    of Glass Container Sales and Marketing
                                    since 1997; Vice President and General
                                    Manager of Prescription Products, 1996-
                                    1997.

Thomas E. Coyle (49) . . . . . .    Vice President since 1999; Vice President
                                    and General Manager of Prescription
                                    Products since 1997; Vice President of
                                    Plastic Containers Operations, 1991-1997.

Jeffrey A. Denker (52) . . . . .    Treasurer since 1998; Assistant
                                    Treasurer, 1988-1998; Director of
                                    International Finance, 1987-1998.

Larry A. Griffith (54) . . . . .    Vice President since 1990; Vice President
                                    and General Manager of Closure and
                                    Specialty Products since 1998; Vice
                                    President of International Operations,
                                    1997-1998; Vice President and Chief
                                    Information Officer, 1996-1998; General
                                    Manager of Plastic Components Operations,
                                    1996-1997; General Manager of Kimble,
                                    1992-1995; Vice President of Corporate
                                    Staff and Director of Corporate Planning,
                                    1988-1990.


                                      18

<PAGE>
Name and Age                                      Position
------------                                      --------
W. Bruce Larsen (46) . . . . . .    Vice President since 1997; Vice President
                                    and General Manager of Plastic Containers
                                    since 1999; Vice President and Director
                                    of Operations, Plastic Containers 1998-
                                    1999; Vice President and Director of
                                    Manufacturing, Plastic Containers, 1993-
                                    1998.

Gerald J. Lemieux (42) . . . . .    Vice President since 1997; Vice President
                                    and General Manager of Domestic Glass
                                    Container since 1997; Vice President,
                                    Domestic Glass Container Finance and
                                    Administration, 1992-1997.

    Mr. Gerald J. Lemieux is the son of Mr. Joseph H. Lemieux.

Michael D. McDaniel (51) . . . .    Vice President since 1992; Vice President
                                    and General Manager of Continental PET
                                    Technologies since 1998; Vice President
                                    and General Manager of Closure and
                                    Specialty Products, 1991-1998; Vice
                                    President and Director of Manufacturing
                                    and Engineering of Closure Operations,
                                    1990-1991; Vice President and
                                    Manufacturing Manager of Closure
                                    Operations, 1985-1990.
                                               
Philip McWeeny (60). . . . . . .    Vice President and General Counsel -
                                    Corporate since 1988.

Peter J. Robinson (56) . . . . .    Vice President since 1999; General
                                    Manager of Asia Pacific Operations since
                                    1998; Chief Executive of ACI Packaging
                                    Group, 1988-1998.

Robert A. Smith (58) . . . . . .    Vice President since 1993; Vice President
                                    and Technical Director since 1998; Vice
                                    President of International Operations
                                    1997-1998; Vice President of Glass
                                    Container Manufacturing, 1993-1997; Vice
                                    President and General Manager, West
                                    Coast, 1990-1993; Vice President and Area
                                    Manufacturing Manager, 1986-1990.

Franco Todisco (56). . . . . . .    Vice President since 1999; General
                                    Manager of Southern and Central Europe
                                    Operations since 1999; President of Avir
                                    S.p.A. 1994-1999; Vice President of Avir
                                    S.p.A., 1977-1994.


                                      19

<PAGE>
Name and Age                                      Position
------------                                      --------
Edward C. White (52) . . . . . .    Controller since 1999; Vice President
                                    and Director of Finance, Planning, and
                                    Administration - International
                                    Operations, 1997-1999; Financial Director
                                    of the Company's affiliates in Finland
                                    and Poland, 1996-1997; President, Coe
                                    Press Equipment Company, 1995-1996.












































                                      20

<PAGE>

                                  PART II


ITEM 5.     MARKET FOR OWENS-ILLINOIS, INC.'S COMMON STOCK 
            AND RELATED SHARE OWNER MATTERS

The price range for the Company's Common Stock on the New York Stock Exchange,
as reported by National Association of Securities Dealers, was as follows:



                                          1999                   1998        
                                   -------------------    --------------------
                                    High         Low       High         Low  
                                   -------     -------    -------     --------
First Quarter                      32-3/4      22         46-3/16     33-3/4
Second Quarter                     33-7/16     23-5/8     47-9/16     38-15/16
Third Quarter                      32-3/16     19-7/16    49          23-3/4
Fourth Quarter                     25-7/16     19-5/16    35-3/4      24


The number of share owners of record on January 31, 2000 was 1,193. 
Approximately 75 percent of the outstanding shares were registered in the name
of Depository Trust company, or CEDE, which held such shares on behalf of 242
brokerage firms, banks, and other financial institutions.  The shares
attributed to these financial institutions, in turn, represented the interests
of more than 25,000 unidentified beneficial owners.  No dividends have been
declared or paid since the Company's initial public offering in December 1991. 
For restrictions on payment of dividends on Common Stock, see the fourth
paragraph of the section entitled "Long-Term Debt" on page 54.
























                                      21

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

The selected consolidated financial data presented below relates to each of
the five years in the period ended December 31, 1999.  Such data was derived
from the Consolidated Financial Statements, of which the most recent three
years are included elsewhere in this document and were audited by Ernst &
Young LLP, independent auditors, whose report with respect to the financial
statements appears elsewhere in this document.  See Consolidated Financial
Statements -- Statement of Significant Accounting Policies and Financial
Review.
                                       Years Ended December 31,             
                        ----------------------------------------------------
                          1999     1998 (a)   1997 (b)     1996       1995  
                        --------   --------   --------   --------   --------
Consolidated operating             (Dollar amounts in millions)
  results:         . 
Net sales. . . . . .    $5,522.9   $5,306.3   $4,658.5   $3,845.7   $3,763.2
Other revenue (c). .       263.8      193.0      169.9      130.5      117.8
                        --------   --------   --------   --------   --------
                         5,786.7    5,449.3    4,828.4    3,976.2    3,881.0

Costs and expenses:
Manufacturing, shipping
  and delivery . . .     4,296.4    4,075.6    3,666.4    3,025.6    2,948.5
Research, engineering,
  selling, administra-
  tive and other (d)       566.6      834.7      407.0      323.9      322.9
Earnings before         --------   --------   --------   --------   --------
  interest expense 
  and items below. .       923.7      589.0      755.0      626.7      609.6 
Interest expense . .       425.9      380.0      302.7      302.6      299.6
                        --------   --------   --------   --------   --------
Earnings before items
  below. . . . . . .       497.8      209.0      452.3      324.1      310.0 
Provision for income 
  taxes (e). . . . .       185.5       66.7      148.5      104.9      100.8 
Minority share owners'
  interests in
  earnings of
  subsidiaries . . .        13.2       20.2       31.4       28.1       40.1
Earnings before         --------   --------   --------   --------   --------
  extraordinary 
  items  . . . . .         299.1      122.1      272.4      191.1      169.1 

Extraordinary charges
  from early
  extinguishment of
  debt, net of
  applicable income
  taxes  . . . . . .         (.8)     (14.1)    (104.5)                       
                        --------   --------   --------   --------   --------
Net earnings . . . .    $  298.3   $  108.0   $  167.9   $  191.1   $  169.1 
                        ========   ========   ========   ========   ========

                                      22

<PAGE>
SELECTED FINANCIAL DATA -- continued

                                       Years ended December 31,             
                        ----------------------------------------------------  
                          1999     1998 (a)   1997 (b)     1996       1995  
                        --------   --------   --------   --------   -------- 
                         (Dollar amounts in millions, except per share data)

Basic earnings 
  per share of 
  common stock:
  Earnings before
    extraordinary
    items. . . . . .    $   1.80   $   0.71   $   2.03   $   1.58   $   1.40 
  Extraordinary charges     (.01)     (0.09)     (0.78)                      
                        --------   --------   --------   --------   --------
  Net earnings . . .    $   1.79   $   0.62   $   1.25   $   1.58   $   1.40 
                        ========   ========   ========   ========   ========
Weighted average
  shares outstanding
  (in thousands) . .     153,804    149,970    133,597    120,276    119,343
                         =======    =======    =======    =======    =======
Diluted earnings  
  per share of 
  common stock:
  Earnings before
    extraordinary
    items. . . . . .    $   1.79   $   0.71   $   2.01   $   1.55   $   1.37 
  Extraordinary charges     (.01)     (0.09)     (0.77)                      
                        --------   --------   --------   --------   --------
  Net earnings . . .    $   1.78   $   0.62   $   1.24   $   1.55   $   1.37 
                        ========   ========   ========   ========   ========
Weighted diluted average
  shares (in thousands)  155,209    150,944    135,676    123,567    123,161
                         =======    =======    =======    =======    =======

The Company's convertible preferred stock was not included in the computation
of 1999 and 1998 diluted earnings per share since the result would have been
antidilutive.  The Company's exchangeable preferred stock was not included in
the computation of 1998 diluted earnings per share since the result would have
been antidilutive.  Options to purchase 3,357,449, 1,160,667, 11,429, 146,975,
and 781,290 weighted average shares of common stock which were outstanding
during 1999, 1998, 1997, 1996, and 1995, respectively, were not included in
the computation of diluted earnings per share because the options' exercise
price was greater than the average market price of the common shares.








                                      23

<PAGE>
SELECTED FINANCIAL DATA -- continued

                                       Years ended December 31,             
                        ----------------------------------------------------
                          1999     1998 (a)   1997 (b)     1996       1995  
                        --------   --------   --------   --------   --------
                                    (Dollar amounts in millions)
Other data:
The following are included in
  net earnings:
  Depreciation . . .    $  403.7   $  358.5   $  283.5   $  219.8   $  188.3
  Amortization of
    excess cost and
    intangibles. . .       132.7       98.0       55.9       46.8       44.8
  Amortization of
    deferred finance
    fees (included
    in interest
    expense) . . . .         8.9        7.4        4.1        5.0        5.0
                        --------   --------   --------   --------   --------
                        $  545.3   $  463.9   $  343.5   $  271.6   $  238.1
                        ========   ========   ========   ========   ========
Balance sheet data (at end of period):
  Working capital. .    $    837   $    850   $    604   $    380   $    328
  Total assets . . .      10,756     11,061      6,845      6,105      5,439
  Total debt . . . .       5,939      5,917      3,324      3,395      2,833
  Share owners' equity     2,350      2,472      1,342        730        532 

(a)  Results of operations and other data since April 1998 include the
     acquisition of the worldwide glass and plastics packaging businesses of
     BTR plc, and the related financings.  For further information, see
     Acquisition of Worldwide Packaging Businesses of BTR plc, and Pro Forma
     Information - Acquisition of BTR Packaging on pages 67 - 68.

(b)  Results of operations since January 1997 include the acquisition of AVIR
     S.p.A.  Also during 1997, the Company implemented a refinancing plan.

(c)  Other revenue in 1999 includes gains totaling $40.8 million ($23.6
     million after tax and minority share owners' interests) related to the
     sales of a U.S. glass container plant and a mold manufacturing business
     in Colombia.

     Other revenue in 1998 includes:  (1) a gain of $18.5 million ($11.4
     million aftertax) related to the termination of a license agreement, net
     of charges for related equipment write-offs and capacity adjustments,
     under which the Company had produced plastic multipack carriers for
     beverage cans; and (2) a loss of $5.7 million ($3.5 million aftertax) on
     the sale of a discontinued operation by an equity investee.  Other
     revenue in 1997 includes a gain of $16.3 million ($16.3 million aftertax)
     from the sale of the remaining 49% interest in Kimble Glass. 



                                      24

<PAGE>
(d)  Amount for 1999 includes second quarter charges totaling $20.8 million
     ($14.0 million after tax and minority share owners' interests) related
     principally to restructuring costs and write-offs of certain assets in
     Europe and Latin America.

     In 1998, the Company recorded:  (1) a charge of $250.0 million ($154.4
     million aftertax) related to adjustment of the reserve for estimated
     future asbestos-related costs; (2) charges of $72.6 million ($47.4
     million after tax and minority share owners' interests) related
     principally to a plant closing in the United Kingdom and restructuring
     costs at certain international affiliates; (3) a net charge of $0.9
     million ($0.6 million aftertax) for the settlement of certain
     environmental litigation and the reduction of previously established
     reserves for guarantees of certain obligations of a previously divested
     business.

     In 1998, the Company also recorded charges of $42.0 million ($31.5
     million after tax and minority share owners' interests) principally for
     write-offs of certain assets associated with business conditions in
     emerging markets. 

     In 1997, the Company recorded charges of $14.1 million ($8.7 million
     aftertax) principally for guarantees of certain lease obligations of a
     previously divested business.  In 1995, the Company recorded a charge of
     $40.0 million ($24.7 million aftertax) to write down the asbestos
     insurance asset and a net credit of $40.0 million ($24.7 million
     aftertax) primarily from the reduction of previously established
     restructuring reserves.  In 1994, the Company recorded a charge of $100.0
     million ($61.7 million aftertax) to write down the asbestos insurance
     asset.  

(e)  In 1998, the Company recorded a credit of $15.1 million to adjust net
     deferred income tax liabilities as a result of a reduction in Italy's
     statutory income tax rate.



















                                      25

<PAGE>

ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
            CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Comparison of 1999 with 1998

For the year ended December 31, 1999, the Company recorded earnings before
extraordinary items of $299.1 million compared to $122.1 million for 1998. 
Net earnings of $298.3 million for 1999 and $108.0 million for 1998 reflect
$.8 million and $14.1 million, respectively, of extraordinary charges from the
early extinguishment of debt.  Excluding the effects of unusual items for both
1999 and 1998 discussed in the table below, the Company's 1999 earnings before
extraordinary items of $289.5 million decreased $12.0 million, or 4.0%, from
1998 earnings before extraordinary items of $301.5 million.  

The following table lists unusual items (in millions of dollars) recorded in
1999 and 1998, and their related effects on both EBIT and earnings before
extraordinary items.  EBIT is defined as earnings before interest income,
interest expense, provision for income taxes, minority share owners' interest
in earnings of subsidiaries, and extraordinary charges.
































                                      26

<PAGE>
--------------------------------------------------    -----------------------
                                     1999                       1998         
--------------------------------------------------    -----------------------
                                       Earnings                   Earnings
                                        before                     before
                                     extraordinary              extraordinary
                             EBIT        items        EBIT          items    
--------------------------------------------------    -----------------------
As reported                $895.2           $299.1    $559.8           $122.1

Unusual items - charges
  (credits):               
  Net gains on the sales 
    of a U.S. glass con-
    tainer plant and a 
    mold manufacturing
    business in
    Colombia                (40.8)           (23.6)
  Charges for restructuring
    costs and write-offs
    of certain assets in
    Europe and Latin
    America                  20.8             14.0
  Adjustment of reserve
    for estimated future
    asbestos-related costs                             250.0            154.4
  Plant closing and
    restructuring costs
    at certain interna-
    tional affiliates                                   72.6             47.4
  Loss on sale of discon-
    tinued operation by
    equity investee                                      5.7              3.5
  Net charge for settle-
    ment of environmental
    litigation and reduction
    of previously 
    established reserves                                 0.9              0.6
  Net gain on sale of 
    license agreement                                  (18.5)           (11.4)
  Adjustment of net 
    deferred income tax   
    liabilities as a result
    of a reduction in 
    Italy's statutory 
    income tax rate                                                     (15.1)
--------------------------------------------------    -----------------------
Before unusual items       $875.2           $289.5    $870.5           $301.5
==================================================    =======================

The year ended 1998 also includes charges which reduced earnings before
extraordinary items by $31.5 million.  Such charges relate principally to

                                      27

<PAGE>
write-offs of certain assets associated with business conditions in emerging
markets.

The years ended 1999 and 1998 include amounts relating to the April 30, 1998
acquisition of the worldwide glass and plastics packaging businesses of BTR
plc. Consolidated EBIT, excluding both the 1999 and 1998 unusual items, was
$875.2 million for 1999, an increase of $4.7 million, or 0.5%, compared to
$870.5 million for 1998.  The increase is attributable to higher EBIT for the
Plastics Packaging segment, partially offset by lower EBIT in the Glass
Containers segment.  Results of both segments are discussed further below. 
Interest expense, net of interest income, increased $46.6 million in 1999 due
principally to the financings related to the acquisition of the BTR glass and
plastics packaging businesses.  The $7.0 million decrease in minority share
owners' interests in earnings of subsidiaries resulted from lower net earnings
of certain foreign affiliates, principally the affiliate in Colombia. 
Exclusive of unusual items, the Company's effective tax rate for 1999 was
36.9% compared to a rate of 37.3% for 1998.

Capsule segment results (in millions of dollars) for 1999 and 1998 are as
follows (a): 
----------------------------------------------------------------------------
Net sales to unaffiliated customers                       1999          1998
----------------------------------------------------------------------------
Glass Containers                                      $3,762.6      $3,809.9
Plastics Packaging                                     1,686.7       1,414.5
Other                                                     73.6          81.9
----------------------------------------------------------------------------
Segment and consolidated net sales                    $5,522.9      $5,306.3
============================================================================

----------------------------------------------------------------------------
EBIT                                                      1999      1998 (c)
----------------------------------------------------------------------------
Glass Containers                                      $  602.4 (b)  $  547.7
Plastics Packaging                                       281.8         232.0
Other                                                      5.1          29.1 
----------------------------------------------------------------------------
Segment EBIT                                             889.3         808.8
  Eliminations and other retained costs (d)                5.9        (249.0)
----------------------------------------------------------------------------
Consolidated EBIT                                     $  895.2      $  559.8
============================================================================

(a)  See Segment Information included on pages 72 - 76.

(b)  EBIT for 1999 includes:  (1) gains totaling $40.8 million related to the
     sales of a U.S. glass container plant and a mold manufacturing business
     in Colombia, and (2) charges totaling $20.8 million related principally
     to restructuring costs and write-offs of certain assets in Europe and
     Latin America.  



                                      28

<PAGE>
(c)  Segment EBIT in 1998 includes the following unusual items:  (1) charges
     of $72.6 million related principally to a plant closing in the United
     Kingdom and restructuring costs at certain international affiliates; (2)
     a loss of $5.7 million on the sale of a discontinued operation by an
     equity investee; and (3) a gain of $18.5 million related to the
     termination of a license agreement, net of charges for related equipment
     write-offs and capacity adjustments, under which the Company had produced
     plastic multipack carriers for beverage cans.  These items increased
     (decreased) segment EBIT as follows:  Glass Containers -- $(78.3)
     million; Other -- $18.5 million.

(d)  Eliminations and other retained costs for 1998 include the following
     unusual items:  (1) a charge of $250.0 million related to adjustment of
     the reserve for estimated future asbestos-related costs; and (2) net
     charges of $0.9 million for the settlement of certain environmental
     litigation and the reduction of previously established reserves for
     guarantees of certain obligations of a previously divested business.  

Consolidated net sales for 1999 increased $216.6 million, or 4.1%, over the
prior year.  Net sales of the Glass Containers segment decreased $47.3
million, or 1.2%, from 1998.  The combined U.S. dollar sales of the segment's
foreign affiliates were nearly equal to the prior year.  Increased reported
sales from the Asia Pacific glass container businesses acquired from BTR on
April 30, 1998 (an increase of approximately $235 million from 1998 to 1999)
were offset by weak economic conditions in markets served by the Company's
operations in Latin America and Europe.  The effect of changing foreign
currency exchange rates reduced 1999 U.S. dollar sales of the segment's
foreign affiliates by approximately $165 million.  In the United States,
increased unit shipments of glass containers for the beer industry partially
offset the year to year comparative effects of the April 1, 1999 sale of a
specialized glass manufacturing facility and lower shipments of food
containers. Net sales of the Plastics Packaging segment increased $272.2
million, or 19.2%, over 1998, reflecting the plastics businesses acquired on
April 30, 1998 from BTR (an increase of approximately $200 million from 1998
to 1999), and increased unit shipments from all business units.

Segment EBIT for 1999, excluding the 1999 and 1998 unusual items, increased
$.7 million to $869.3 million, or 15.7% of net sales, from 1998 segment EBIT
of $868.6 million, or 16.4% of net sales.  Consolidated operating expense
(consisting of selling and administrative, engineering, and research and
development expenses) as a percentage of net sales was 6.8% in 1999 compared
to 6.5% in 1998.  EBIT of the Glass Containers segment, excluding the 1999 and
1998 unusual items, decreased $43.6 million to $582.4 million, compared to
$626.0 million in 1998.  EBIT of the Asia Pacific glass container businesses
acquired from BTR on April 30, 1998 increased approximately $40 million from
the eight months of 1998 to the full year of 1999.  The contributions of the
acquired businesses and gains on sales of non-strategic assets in Europe were
more than offset by soft market conditions for most of the affiliates located
in Europe and Latin America.  The effect of changing foreign currency exchange
rates reduced 1999 U.S. dollar EBIT, before unusual items, of the segment's
foreign affiliates by approximately $15 million in comparison to 1998.  In the
United States, Glass Container EBIT increased from 1998 as a result of

                                      29

<PAGE>
increased unit shipments of beer containers.  The EBIT of the Plastics
Packaging segment increased $49.8 million, or 21.5%, compared to 1998. 
Contributing to this increase were the plastics businesses acquired on April
30, 1998 from BTR (an increase of approximately $22 million from the eight
months of 1998 to the full year of 1999), increased shipments of containers
for health care and personal care products, food containers, closures and
trigger pumps, and strong demand for prescription packaging, including the new
1-Clic(TM) prescription vial.  The Other segment EBIT in comparison to prior
year, excluding the 1998 unusual item, was adversely affected by the end of
the first quarter 1998 termination of a license agreement under which the
Company had produced plastic multipack carriers for beverage cans, and lower
shipments of labels.

Eliminations and other retained costs were $5.9 million for 1999, reflecting
higher net financial services income, compared to $1.9 million for 1998,
excluding the 1998 unusual items.

The 1999 results include the following unusual items: (1) gains totaling $40.8
million ($23.6 million after tax and minority share owners' interests) related
to the sales of a U.S. glass container plant and a mold manufacturing business
in Colombia; and (2) charges totaling $20.8 million ($14.0 million after tax
and minority share owners' interests) related principally to restructuring
costs and write-offs of certain assets in Europe and Latin America.

In 1998, the Company recorded pretax charges of $72.6 million ($47.4 million
after tax and minority share owners' interests).  Included in these charges
are employee severance costs at certain international affiliates and write-
downs of assets which will no longer be used, including the closure of a plant
in the United Kingdom.  The actions associated with these charges were
substantially completed in the first half of 1999.  Cash expenditures
associated with these charges, principally for severance, were approximately
$50 million.

The 1998 results also include fourth quarter non-cash charges of $42.0 million
($31.5 million after tax and minority share owners' interests) principally for
write-offs of certain assets associated with business conditions in emerging
markets.

Comparison of 1998 with 1997

For the year ended December 31, 1998, the Company recorded earnings before
extraordinary items of $122.1 million compared to $272.4 million for 1997. 
Excluding the effects of unusual items for both 1998 and 1997 discussed below,
the Company's 1998 earnings before extraordinary items of $301.5 million
increased $36.7 million, or 13.9%, over 1997 earnings before extraordinary
items of $264.8 million.  

The 1998 results include the unusual items discussed on page 27.  The 1997
results include the following unusual items:  (1) a gain of $16.3 million
($16.3 million aftertax) on the sale of the Company's remaining 49% interest
in Kimble Glass; and (2) charges of $14.1 million ($8.7 million afertax)


                                      30

<PAGE>
principally for the estimated cost of guaranteed lease obligations of a
previously divested business.  

Consolidated EBIT for 1998, excluding the effects of unusual items, was $870.5
million, an increase of $141.3 million, or 19.4%, compared to the same period
in 1997.  The increase is attributable to higher EBIT for both the Glass
Containers segment and the Plastics Packaging segment as discussed further
below.  Interest expense, net of interest income, increased $71.7 million from
the 1997 period due principally to the financings related to the acquisition
of the BTR glass and plastics packaging businesses.  The increase in interest
expense resulting from the acquisition was partially offset by lower borrowing
costs resulting from the 1997 refinancing of higher cost debt, which began in
May 1997.  The $11.2 million decrease in minority share owners' interests in
earnings of subsidiaries resulted from lower net earnings of certain foreign
affiliates, principally the affiliate in Colombia.  The Company's effective
tax rate for 1998, excluding the effects of the unusual items previously
discussed, was 37.3%.  This compares with 34.1% for the full year 1997,
excluding the effect of the gain on the 1997 sale of the remaining 49%
interest in Kimble Glass.  Increased goodwill amortization resulting from the
acquisition of the former BTR packaging businesses and operating losses
incurred at certain international affiliates for which no related tax benefit
was recorded were the primary reasons for the increase.  Net earnings of
$108.0 million and $167.9 million for 1998 and 1997, respectively, reflect
$14.1 million and $104.5 million, respectively, of extraordinary charges from
the early extinguishment of debt.  

Capsule segment results (in millions of dollars) for 1998 and 1997 are as
follows (a): 
----------------------------------------------------------------------------
Net sales to unaffiliated customers                       1998          1997
----------------------------------------------------------------------------
Glass Containers                                      $3,809.9      $3,528.4
Plastics Packaging                                     1,414.5       1,029.8
Other                                                     81.9         100.3
----------------------------------------------------------------------------
Segment and consolidated net sales                    $5,306.3      $4,658.5
============================================================================

----------------------------------------------------------------------------
EBIT                                                  1998 (b)          1997
----------------------------------------------------------------------------
Glass Containers                                      $  547.7      $  543.2
Plastics Packaging                                       232.0         173.8
Other                                                     29.1          15.1 
----------------------------------------------------------------------------
Segment EBIT                                             808.8         732.1
  Eliminations and other retained costs (c)             (249.0)         (0.7)
----------------------------------------------------------------------------
Consolidated EBIT                                     $  559.8      $  731.4
============================================================================

(a)  See Segment Information included on pages 72 - 76.

                                      31

<PAGE>
(b)  Segment EBIT in 1998 includes the following unusual items:  (1) charges
     of $72.6 million related principally to a plant closing in the United
     Kingdom and restructuring costs at certain international affiliates; (2)
     a loss of $5.7 million on the sale of a discontinued operation by an
     equity investee; and (3) a gain of $18.5 million related to the
     termination of a license agreement, net of charges for related equipment
     write-offs and capacity adjustments, under which the Company had produced
     plastic multipack carriers for beverage cans.  These items increased
     (decreased) segment EBIT as follows:  Glass Containers -- $(78.3)
     million; Other -- $18.5 million.

(c)  Eliminations and other retained costs for 1998 include the following
     unusual items:  (1) a charge of $250.0 million related to adjustment of
     the reserve for estimated future asbestos-related costs; and (2) net
     charges of $0.9 million for the settlement of certain environmental
     litigation and the reduction of previously established reserves for
     guarantees of certain obligations of a previously divested business. 
     Eliminations and other retained costs for 1997 include the following
     unusual items:  (1) a gain of $16.3 million on the sale of the remaining
     49% interest in Kimble Glass; and (2) charges of $14.1 million
     principally for guarantees of certain lease obligations of a previously
     divested business.


Consolidated net sales for 1998 increased $647.8 million, or 13.9%, over the
prior year.  Net sales of the Glass Containers segment increased $281.5
million, or 8.0%, from 1997.  The combined U.S. dollar sales of the segment's
foreign affiliates increased over the prior year, reflecting the Asia Pacific
glass container businesses acquired from BTR on April 30, 1998 (which
contributed approximately $362 million to 1998 U.S. dollar sales), the
February 1997 acquisition of AVIR S.p.A., the largest manufacturer of glass
containers in Italy, and increased unit shipments in Poland and Venezuela, all
of which were partially offset by soft market conditions in Brazil, Colombia,
and the United Kingdom.  The effect of changing foreign currency exchange
rates reduced 1998 U.S. dollar sales of the segment's foreign affiliates by
approximately $100 million in comparison to 1997.  In the United States, glass
container unit volume nearly equaled the prior year, reflecting increased
shipments of containers for the beer, tea and juice, and liquor and wine
industries, offset by lower shipments of certain food containers.  Net sales
of the Plastics Packaging segment increased $384.7 million, or 37.4%, over
1997, reflecting the plastics businesses acquired from BTR (which contributed
approximately $372 million to 1998 U.S. dollar sales), and increased unit
shipments of closures along with plastic containers for health care and
household end uses, partially offset by the effects of lower resin costs on
pass-through arrangements with customers.  The Other segment net sales
comparison to prior year was adversely affected by the first quarter 1998
termination of a license agreement under which the Company had produced
plastic multipack carriers for beverage cans.   

Segment EBIT for 1998, excluding unusual items, increased $136.5 million to
$868.6 million, or 16.4% of net sales, from 1997 segment EBIT of $732.1
million, or 15.7% of net sales.  Consolidated operating expense as a

                                      32

<PAGE>
percentage of net sales was 6.5% in 1998 compared to 6.3% in 1997.  EBIT of
the Glass Containers segment, excluding the 1998 unusual items, increased
$82.8 million to $626.0 million, compared to $543.2 million in 1997.  The Asia
Pacific glass container businesses acquired from BTR on April 30, 1998
contributed approximately $91 million to 1998 U.S. dollar EBIT.  Improved
results at the segment's affiliate in Italy was more than offset by soft
market conditions in the United Kingdom, Hungary, and most of the affiliates
located in Latin America.  The effect of changing foreign currency exchange
rates reduced 1998 U.S. dollar EBIT, before unusual items, of the segment's
foreign affiliates by approximately $15 million in comparison to 1997.  In the
United States, EBIT increased from 1997 as a result of an improved cost struc-
ture.  The EBIT of the Plastics Packaging segment increased $58.2 million, or
33.5%, compared to 1997.  The plastics businesses acquired from BTR contrib-
uted approximately $55 million to 1998 EBIT.  The Other segment EBIT,
excluding the 1998 unusual items, was lower due to lower shipments of labels
and carriers, including plastic multipack carriers for beverage cans.

Eliminations and other retained costs, excluding both 1998 and 1997 unusual
items, were $1.9 million of income for 1998 compared to $2.9 million of
expense for 1997, reflecting higher net financial services income, offset by
the nonrecurrence of a reported gain on an asset sale in 1997. 

Capital Resources and Liquidity

The Company's total debt at December 31, 1999 was $5.94 billion, compared to
$5.92 billion at December 31, 1998.

At December 31, 1999, the Company had available credit totaling $4.5 billion
under its agreement with a group of banks ("Bank Credit Agreement") expiring
in December 2001, of which $565.3 million had not been utilized.  At December
31, 1998, the Company had $731.0 million of credit which had not been utilized
under the Bank Credit Agreement.  The increased utilization resulted in large
part from borrowings incurred in connection with the 1999 repurchase of 10
million shares of the Company's common stock for $225.6 million. Cash provided
by operating activities was $563.0 million for 1999 compared to $647.3 million
for 1998.  

The Company anticipates that cash flow from its operations and from
utilization of credit available through December 2001 under the Bank Credit
Agreement will be sufficient to fund its operating and seasonal working
capital needs, debt service and other obligations.  The Company faces
additional demands upon its liquidity for asbestos-related payments.  Based on
the Company's expectations regarding future payments for lawsuits and claims
and its expectation of the collection of its insurance coverage and
reimbursement for such lawsuits and claims, and also based on the Company's
expected operating cash flow, the Company believes that the payment of any
deferred amounts of previously settled or otherwise determined lawsuits and
claims, and the resolution of presently pending and anticipated future
lawsuits and claims associated with asbestos, will not have a material adverse
effect upon the Company's liquidity on a short-term or long-term basis.



                                      33

<PAGE>
In May 1999, the Company's Board of Directors authorized the management of the
Company to repurchase up to 10 million shares of the Company's common stock. 
The Company repurchased 10 million shares for $225.6 million under this
authorization during 1999. In February 2000, the Board of Directors authorized
the repurchase of up to an additional 10 million shares of the Company's
common stock.  The Company intends to purchase its common stock from time to
time on the open market depending on market conditions and other factors.  The
Company believes that cash flows from its operations and from utilization of
credit available under the Bank Credit Agreement will be sufficient to fund
such purchases in addition to the obligations mentioned in the previous
paragraph.

Excess of Purchase Cost over Net Assets Acquired

The excess of purchase cost over net assets acquired, net of accumulated
amortization ("goodwill") was $3.29 billion and $3.31 billion at December 31,
1999 and 1998, respectively.  This represents 31% and 30% of total assets, and
140% and 134% of share owners' equity at December 31, 1999 and 1998, respec-
tively.  Goodwill represents the excess of purchase price and related costs
over the fair values assigned to the net tangible and identifiable intangible
assets of businesses acquired, and is amortized over 40 years.  In assigning a
benefit period to goodwill, the Company considers regulatory provisions, the
technological environment in which the acquired company operates, including
barriers to new competing entities, the maturity of the products manufactured
by the businesses acquired, and the effects of obsolescence, demand,
competition and other economic factors.  The Company has determined that no
events or circumstances occurred in 1999 to warrant revised estimates of the
goodwill benefit period.  

Impact of Year 2000

As a result of planning and implementation efforts, the Company experienced no
significant disruptions in mission critical information technology and non-
information technology systems due to the Year 2000 date change.  The Company
is not aware of any material problems resulting from Year 2000 issues, either
with its products, its internal systems, or the products and services of third
parties.  The majority of the costs incurred for Year 2000 modifications were
for the purchase of new software and operating equipment, and were, therefore,
capitalized.  The Company will continue to monitor its mission critical
computer applications and those of its suppliers and vendors throughout the
year 2000 to ensure that any latent Year 2000 matters that may arise are
addressed promptly.

Introduction of Euro Currency

On January 1, 1999, the Euro was introduced in eleven of the fifteen Economic
and Monetary Union countries.  The Company has affiliates located in the
following countries which participated in the Euro introduction:  Finland,
Italy, the Netherlands, and Spain.  In addition, the Company transacts
business in other countries in which the Euro has been introduced.  The
Company does not believe the conversion to the Euro and the cost of


                                      34

<PAGE>
implementing required system changes will be material to the Company's
consolidated financial statements.

I
TEM 7.(a). QUALITATIVE AND QUANTITATIVE DISCLOSURES 
            ABOUT MARKET RISK

Market risks relating to the Company's operations result primarily from
fluctuations in foreign currency exchange rates and changes in interest rates. 
The Company is not a party to any material derivative financial instruments.

Foreign Currency Exchange Rate Risk

A substantial portion of the Company's operations consists of manufacturing
and sales activities conducted by affiliates in foreign jurisdictions.  The
primary foreign markets served by the Company's affiliates are in Australia,
Latin America (principally Colombia, Brazil and Venezuela), and Europe
(principally Italy, the United Kingdom, and Poland).  In general, revenues
earned and costs incurred by the Company's major foreign affiliates are
denominated in their respective local currencies.  Consequently, the Company's
reported financial results could be affected by factors such as changes in
foreign currency exchange rates or highly inflationary economic conditions in
the foreign markets in which the Company's affiliates operate.  When the U.S.
dollar strengthens against foreign currencies, the reported dollar value of
local currency EBIT generally decreases; when the U.S. dollar weakens against
foreign currencies, the reported U.S. dollar value of local currency EBIT
generally increases.

Subject to other business and tax considerations, the Company's strategy is to
mitigate the economic effects of currency exchange rate fluctuations on that
portion of foreign currency EBIT which is expected to be invested elsewhere or
remitted to the parent company.  The Company's foreign affiliates generally
invest their excess funds in U.S. dollars or dollar-based instruments, where
such instruments are available with acceptable interest rates and terms.  In
those countries where the local currency is the designated functional
currency, however, this strategy exposes the Company to reported losses or
gains in the event the foreign currency strengthens or weakens against the
U.S. dollar.  The Company believes that the benefit of investing excess cash
in U.S. dollars or their equivalent outweighs the risk of reporting losses or
gains from currency exchange rate fluctuations.  In those countries with
hyper-inflationary economies, where the U.S. dollar is the designated
functional currency, this investment strategy for excess funds mitigates the
risk of reported losses or gains.

Because most of the Company's foreign affiliates operate within their local
economic environment, the Company believes it is appropriate to finance those
operations with local currency borrowings to the extent practicable.  Consid-
erations which influence the amount of such borrowings include long- and
short-term business plans, tax implications, and the availability of borrow-
ings with acceptable interest rates and terms.  In those countries where the
local currency is the designated functional currency, this strategy mitigates
the risk of reported losses or gains in the event the foreign currency
strengthens or weakens against the U.S. dollar.  In those countries where the

                                      35

<PAGE>
U.S. dollar is the designated functional currency, however, local currency
borrowings expose the Company to reported losses or gains in the event the
foreign currency strengthens or weakens against the U.S. dollar.  

The Company's Bank Credit Agreement provides for a $1.75 billion loan
revolving facility which is available to certain of the Company's foreign
subsidiaries and denominated in certain foreign currencies.  As of December
31, 1999, amounts outstanding under the offshore loan revolving facility were
as follows:

                                                   Millions of
          Foreign Currency Amount                 U.S. Dollars
     ---------------------------------            ------------
     1.42 billion Australian dollars                $  904.4
     230.0  million British pounds                     369.5
     100.0  billion Italian lire                        52.0
                                                    --------
                                                    $1,325.9
                                                    ========
The remaining portion of the Company's consolidated debt which was denominated
in foreign currencies was not significant.

The Company believes it does not have material foreign currency exchange rate
risk related to the financial instruments (i.e. cash, short-term investments,
and long-term debt) of its foreign affiliates.

Interest Rate Risk

The Company's interest expense is most sensitive to changes in the general
level of U.S. interest rates applicable to its U.S. dollar indebtedness.  To
mitigate the impact of fluctuations in variable interest rates, the Company
could, at its option, convert to fixed interest rates by either refinancing
variable rate debt with fixed rate debt or entering into interest rate swaps.




















                                      36

<PAGE>
The following table provides information about the Company's significant
interest rate risk at December 31, 1999:
----------------------------------------------------------------------------
                                                 Outstanding      Fair Value
----------------------------------------------------------------------------
                                                    (Millions of dollars)
Variable rate debt:
  Bank Credit Agreement, matures December 2001:                      
    Revolving Loans and Bid Rate Loans bear 
      interest at a Eurodollar based rate 
      plus .50%                                    $2,559.4         $2,559.4
    Offshore Loans bear interest at the 
      applicable Offshore Base Rate (as defined
      in the Bank Credit Agreement) as follows:
        1.42 billion Australian dollars -- 5.79%   $  904.4         $  904.4
        230.0 million British pounds -- 6.57%      $  369.5         $  369.5
        100.0 billion Italian lira -- 3.58%        $   52.0         $   52.0
       
Fixed rate debt:
  Senior Notes:
    Due May 2004, interest at 7.85%                $   300.0        $  289.9   
    Due May 2005, interest at 7.15%                $   350.0        $  324.6
    Due May 2007, interest at 8.10%                $   300.0        $  287.6
    Due May 2008, interest at 7.35%                $   250.0        $  226.6
  Senior Debentures:
    Due May 2010, interest at 7.50%                $   250.0        $  222.2
    Due May 2018, interest at 7.80%                $   250.0        $  214.4
----------------------------------------------------------------------------
Forward Looking Statements

This document may contain "forward looking" statements as defined in the
Private Securities Litigation Reform Act of 1995.  Forward looking statements
reflect the Company's best assessment at the time, and thus involve
uncertainty and risk.  It is possible the Company's future financial
performance may differ from expectations due to a variety of factors
including, but not limited to the following:  (1) foreign currency
fluctuations relative to the U.S. dollar, (2) change in capital availability
or cost, including interest rate fluctuations, (3) the general political,
economic and competitive conditions in markets and countries where the Company
has operations, including competitive pricing pressures, inflation or
deflation, and changes in tax rates, (4) consumer preferences for alternative
forms of packaging, (5) fluctuations in raw material and labor costs, 
(6) availability of raw materials, (7) costs and availability of energy, 
(8) transportation costs, (9) consolidation among competitors and customers,
(10) the ability of the Company to integrate operations of acquired
businesses, (11) the performance by customers of their obligations under
purchase agreements, and (12) the timing and occurrence of events which are
beyond the control of the Company.  It is not possible to foresee or identify
all such factors.  Any forward looking statements in this document are based
on certain assumptions and analyses made by the Company in light of its
experience and perception of historical trends, current conditions, expected
future developments, and other factors it believes are appropriate in the

                                      37

<PAGE>
circumstances.  Forward looking statements are not a guarantee of future
performance and actual results or developments may differ materially from
expectations.  While the Company continually reviews trends and uncertainties
affecting the Company's results of operations and financial condition, the
Company does not intend to update any particular forward looking statements
contained in this document.















































                                      38

<PAGE>

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

                                                                          Page
                                                                          ----

Report of Independent Auditors                                              40

Consolidated Balance Sheets at December 31, 1999 and 1998                42-43

For the years ended December 31, 1999, 1998, and 1997:

            Consolidated Results of Operations                              41
            Consolidated Share Owners' Equity                            44-45
            Consolidated Cash Flows                                      46-47

Statement of Significant Accounting Policies                             48-49

Financial Review                                                         50-76

Selected Quarterly Financial Data                                        77-80

































                                      39

<PAGE>     
==============================================================================

                        REPORT OF INDEPENDENT AUDITORS
==============================================================================


The Board of Directors and Share Owners
Owens-Illinois, Inc.

We have audited the accompanying consolidated balance sheets of Owens-
Illinois, Inc. as of December 31, 1999 and 1998, and the related consolidated
statements of results of operations, share owners' equity, and cash flows for
each of the three years in the period ended December 31, 1999.  Our audits
also included the financial statement schedule listed in the Index at Item
14.(a).  These financial statements and schedule are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audits provide
a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Owens-Illinois,
Inc. at December 31, 1999 and 1998, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.  Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.





                                                   /s/ Ernst & Young LLP
                                                   ---------------------
                                                   Ernst & Young LLP   

Toledo, Ohio
February 3, 2000







                                      40

<PAGE>
===========================================================================
CONSOLIDATED RESULTS OF OPERATIONS  Owens-Illinois, Inc.
Millions of dollars, except per share amounts
Years ended December 31,                       1999        1998        1997
---------------------------------------------------------------------------
Revenues:
  Net sales                                $5,522.9    $5,306.3    $4,658.5
  Royalties and net technical assistance       30.3        26.6        21.6
  Equity earnings                              22.3        16.0        17.9
  Interest                                     28.5        29.2        23.6
  Other                                       182.7       121.2       106.8
---------------------------------------------------------------------------
                                            5,786.7     5,499.3     4,828.4
Costs and expenses:
  Manufacturing, shipping, and delivery     4,296.4     4,075.6     3,666.4
  Research and development                     37.5        36.4        28.9
  Engineering                                  42.2        34.8        29.9
  Selling and administrative                  295.6       274.2       232.8
  Interest                                    425.9       380.0       302.7
  Other                                       191.3       489.3       115.4
---------------------------------------------------------------------------
                                            5,288.9     5,290.3     4,376.1
---------------------------------------------------------------------------
Earnings before items below                   497.8       209.0       452.3 
Provision for income taxes                    185.5        66.7       148.5 
---------------------------------------------------------------------------
                                              312.3       142.3       303.8 
Minority share owners' interests
  in earnings of subsidiaries                  13.2        20.2        31.4
---------------------------------------------------------------------------
Earnings before extraordinary items           299.1       122.1       272.4
Extraordinary charges from early 
  extinguishment of debt, net of 
  applicable income taxes                       (.8)      (14.1)     (104.5)
---------------------------------------------------------------------------
Net earnings                               $  298.3    $  108.0    $  167.9
===========================================================================
Basic earnings per share of common stock:
  Earnings before extraordinary items      $   1.80    $   0.71    $   2.03
  Extraordinary charges                        (.01)      (0.09)      (0.78)
---------------------------------------------------------------------------
  Net earnings                             $   1.79    $   0.62    $   1.25
===========================================================================
Diluted earnings per share of common stock:
  Earnings before extraordinary items      $   1.79    $   0.71    $   2.01
  Extraordinary charges                        (.01)      (0.09)      (0.77)
---------------------------------------------------------------------------
  Net earnings                             $   1.78    $   0.62    $   1.24
===========================================================================
See accompanying Statement of Significant Accounting Policies and Financial
Review.


                                      41

<PAGE>                                    
=============================================================================
CONSOLIDATED BALANCE SHEETS  Owens-Illinois, Inc. 
Millions of dollars, except share amounts
December 31,                                                1999         1998
-----------------------------------------------------------------------------
Assets
Current assets:
  Cash, including time deposits of $113.4
    ($95.1 in 1998)                                    $   257.1    $   271.4
  Short-term investments                                    32.1         21.1
  Receivables, less allowances of $56.9                    
    ($56.9 in 1998) for losses and discounts               856.4        877.7
  Inventories                                              826.6        838.1
  Prepaid expenses                                         137.6        168.8
-----------------------------------------------------------------------------
    Total current assets                                 2,109.8      2,177.1

Other assets:
  Equity investments                                       195.2        195.3
  Repair parts inventories                                 234.1        254.2
  Prepaid pension                                          745.6        686.1
  Insurance receivable for asbestos-related costs          205.3        212.8
  Deposits, receivables, and other assets                  527.8        383.7
  Net assets held for sale                                              409.6
  Excess of purchase cost over net assets
    acquired, net of accumulated amortization 
    of $502.8 ($405.3 in 1998)                           3,294.4      3,314.9
-----------------------------------------------------------------------------
    Total other assets                                   5,202.4      5,456.6

Property, plant, and equipment:
  Land, at cost                                            163.8        169.1
  Buildings and equipment, at cost:
    Buildings and building equipment                       813.6        835.2
    Factory machinery and equipment                      4,121.6      3,960.4
    Transportation, office, and miscellaneous equipment    156.0        138.1 
    Construction in progress                               335.8        291.3
-----------------------------------------------------------------------------
                                                         5,590.8      5,394.1
  Less accumulated depreciation                          2,146.7      1,967.1
-----------------------------------------------------------------------------
    Net property, plant, and equipment                   3,444.1      3,427.0
-----------------------------------------------------------------------------
Total assets                                           $10,756.3    $11,060.7
=============================================================================








                                      42

<PAGE>                            
=============================================================================
CONSOLIDATED BALANCE SHEETS  Owens-Illinois, Inc. (continued)
Millions of dollars, except share amounts
December 31,                                                 1999        1998
-----------------------------------------------------------------------------
Liabilities and Share Owners' Equity
Current liabilities:
  Short-term loans                                      $   128.9   $   158.3
  Accounts payable                                          520.1       534.9
  Salaries and wages                                         95.0        92.9
  U.S. and foreign income taxes                              26.5        30.9
  Current portion of asbestos-related liabilities            85.0        85.0
  Other accrued liabilities                                 340.8       333.9
  Long-term debt due within one year                         76.8        91.2
-----------------------------------------------------------------------------
    Total current liabilities                             1,273.1     1,327.1

Long-term debt                                            5,733.1     5,667.2

Deferred taxes                                              407.4       325.0

Nonpension postretirement benefits                          314.9       338.4

Other liabilities                                           483.0       690.4

Commitments and contingencies

Minority share owners' interests                            194.9       240.6

Share owners' equity:
  Convertible preferred stock, par value $.01 per
    share, liquidation preference $50 per share,
    9,050,000 shares authorized, issued and
    outstanding                                             452.5       452.5
  Exchangeable preferred stock                                4.0        18.3
  Common stock, par value $.01 per share, 250,000,000
    shares authorized, 156,851,337 shares issued and 
    outstanding, less 10,000,000 treasury shares,
    (155,450,173 issued and outstanding in 1998)              1.6         1.5
  Capital in excess of par value                          2,201.9     2,183.1
  Treasury stock, at cost                                  (225.6)
  Retained earnings                                         284.1         7.3 
  Accumulated other comprehensive income                   (368.6)     (190.7)
-----------------------------------------------------------------------------
    Total share owners' equity                            2,349.9     2,472.0
-----------------------------------------------------------------------------
Total liabilities and share owners' equity              $10,756.3   $11,060.7
=============================================================================


See accompanying Statement of Significant Accounting Policies and Financial
Review.

                                      43

<PAGE>
=============================================================================
CONSOLIDATED SHARE OWNERS' EQUITY  Owens-Illinois, Inc.
Millions of dollars, except per share amounts
Years ended December 31,                         1999        1998        1997
-----------------------------------------------------------------------------
Convertible preferred stock
  Balance at beginning of year               $  452.5                        
  Issuance of convertible preferred stock                $  452.5            
-----------------------------------------------------------------------------
    Balance at end of year                      452.5       452.5            
=============================================================================
Exchangeable preferred stock
  Balance at beginning of year                   18.3        20.4    $   21.4
  Exchange of preferred stock                     
    for common stock                            (14.3)       (2.1)       (1.0)
-----------------------------------------------------------------------------
    Balance at end of year                        4.0        18.3        20.4
=============================================================================
Common stock                                 
  Balance at beginning of year                    1.5         1.4         1.2 
  Issuance of common stock                                     .1          .2
  Exchange of preferred stock
    for common stock                               .1                        
-----------------------------------------------------------------------------
    Balance at end of year                        1.6         1.5         1.4
=============================================================================
Capital in excess of par value
  Balance at beginning of year                2,183.1     1,558.4     1,047.6
  Issuance of common stock                        4.6       622.6       509.8 
  Exchange of preferred stock
    for common stock                             14.2         2.1         1.0
-----------------------------------------------------------------------------
    Balance at end of year                    2,201.9     2,183.1     1,558.4
=============================================================================
Treasury stock
  Balance at beginning of year
  Repurchases of common stock                  (225.6)                       
-----------------------------------------------------------------------------
    Balance at end of year                     (225.6)                       
=============================================================================
Retained earnings (deficit)
  Balance at beginning of year                    7.3       (90.3)     (258.2)
  Cash dividends on convertible 
    preferred stock -- $2.375 per share
    ($1.15 per share in 1998)                   (21.5)      (10.4)
  Net earnings                                  298.3       108.0       167.9 
-----------------------------------------------------------------------------
    Balance at end of year                      284.1         7.3       (90.3
=============================================================================




                                      44

<PAGE>
=============================================================================
CONSOLIDATED SHARE OWNERS' EQUITY  Owens-Illinois, Inc. (continued)
Millions of dollars
Years ended December 31,                         1999        1998        1997
-----------------------------------------------------------------------------
Accumulated other comprehensive income
  Balance at beginning of year                 (190.7)     (148.0)      (82.3)
  Foreign currency translation adjustments     (177.9)      (42.7)      (65.7)
-----------------------------------------------------------------------------
    Balance at end of year                     (368.6)     (190.7)     (148.0)
=============================================================================
Total share owners' equity                   $2,349.9    $2,472.0    $1,341.9 
=============================================================================
Total comprehensive income
  Net earnings                                  298.3       108.0       167.9
  Foreign currency translation adjustments     (177.9)      (42.7)      (65.7)
-----------------------------------------------------------------------------
    Total                                    $  120.4    $   65.3    $  102.2
=============================================================================
                                             
See accompanying Statement of Significant Accounting Policies and Financial 
Review.































                                      45

<PAGE>
=============================================================================
CONSOLIDATED CASH FLOWS  Owens-Illinois, Inc.
Millions of dollars
Years ended December 31,                           1999       1998       1997
-----------------------------------------------------------------------------
Operating activities:
  Earnings before extraordinary items         $   299.1  $   122.1    $ 272.4 
  Non-cash charges (credits):
    Depreciation                                  403.7      358.5      283.5
    Amortization of deferred costs                141.6      105.4       60.0
    Deferred tax provision (credit)               110.8      (17.4)      83.9 
    Restructuring costs, writeoffs of certain                             
      assets and settlement of environmental
      litigation                                   20.8      114.6
    Gains on asset sales                          (40.8)     (18.5)
    Future asbestos-related costs                            250.0
    Other                                         (69.8)     (19.8)     (30.1)
  Change in non-current operating assets          (47.1)     (36.9)     (51.8)
  Asbestos-related payments                      (121.8)     (96.1)    (104.1)
  Asbestos-related insurance proceeds               7.5       26.5       32.1
  Reduction of non-current liabilities            (18.6)      (5.0)      (8.9)
  Change in components of working capital        (122.4)    (136.1)     (91.8)
-----------------------------------------------------------------------------
    Cash provided by operating activities         563.0      647.3      445.2

Investing activities:
  Additions to property, plant and equipment     (650.4)    (573.5)    (471.3)
  Acquisitions, net of cash acquired              (34.0)  (3,700.2)    (137.1)
  Net cash proceeds from divestitures and other   337.1       41.1       57.4
-----------------------------------------------------------------------------
    Cash utilized in investing activities        (347.3)  (4,232.6)    (551.0)

Financing activities:
  Additions to long-term debt                     617.0    5,232.5    1,954.1
  Repayments of long-term debt                   (567.1)  (2,659.8)  (2,106.4)
  Increase (decrease) in short-term loans         (19.6)      61.3       (4.5)
  Treasury shares purchased                      (225.6)
  Payment of convertible preferred stock     
    dividends                                     (21.5)     (10.4)
  Issuance of common stock                          4.6      641.1      503.8
  Payment of finance fees and debt retirement
    costs                                          (1.0)     (61.7)    (164.7)
  Issuance of convertible preferred stock                    439.6           
-----------------------------------------------------------------------------
     Cash provided by (utilized in) financing 
       activities                                (213.2)   3,642.6      182.3

Effect of exchange rate fluctuations on cash      (16.8)      (4.1)     (19.2)
-----------------------------------------------------------------------------




                                      46

<PAGE>
=============================================================================
CONSOLIDATED CASH FLOWS  Owens-Illinois, Inc. (continued)
Millions of dollars
Years ended December 31,                           1999       1998       1997
-----------------------------------------------------------------------------
Increase (decrease) in cash                       (14.3)      53.2       57.3 

Cash at beginning of year                         271.4      218.2      160.9
-----------------------------------------------------------------------------
Cash at end of year                           $   257.1  $   271.4    $ 218.2
=============================================================================






































See accompanying Statement of Significant Accounting Policies and Financial
Review.


                                      47

<PAGE>
==============================================================================
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES                                   
------------------------------------------------------------------------------

Basis of Consolidated Statements.  The consolidated financial statements of
Owens-Illinois, Inc. ("Company") include the accounts of its subsidiaries. 
Newly acquired subsidiaries have been included in the consolidated financial
statements from dates of acquisition.  Consolidated foreign subsidiaries are
principally reported on the basis of fiscal years ending November 30.

The Company uses the equity method of accounting for investments in which it
has a significant ownership interest, generally 20% to 50%.  Other investments
are accounted for at cost.

Nature of Operations.  The Company is a leading manufacturer of glass
container and plastics packaging products operating in two product segments. 
The Company's principal product lines in the Glass Containers product segment
are glass containers for the food and beverage industries.  Sales of the Glass
Containers product segment were 68% of the Company's 1999 consolidated sales. 
The Company has glass container operations located in 19 countries, while the
plastics packaging products operations are located in 11 countries.  The
principal markets and operations for the Company's glass products are in the
United States, Europe, Latin America, and Australia.  The Company's principal
product lines in the Plastics Packaging product segment include plastic
containers, plastic closures, and plastic prescription containers.  Major
markets for the Company's plastics packaging products include the United
States household products, personal care products, health care products, and
food and beverage industries.  

Use of Estimates.  The preparation of financial statements in conformity with
generally accepted accounting principles requires management of the Company to
make estimates and assumptions that affect certain amounts reported in the
financial statements and accompanying notes.  Actual results may differ from
those estimates, at which time the Company would revise its estimates
accordingly.  For further information on certain of the Company's significant
estimates, see Contingencies on page 69.

Cash.  The Company defines "cash" as cash and time deposits with maturities of
three months or less when purchased.

Fair Values of Financial Instruments.  The carrying amounts reported for cash,
short-term investments and short-term loans approximate fair value.  In
addition, carrying amounts approximate fair value for certain long-term debt
obligations subject to frequently redetermined interest rates.  Fair values
for the Company's significant fixed rate debt obligations are generally based
on published market quotations.  The Company is not a party to any material   
derivative financial instruments.






                                      48

<PAGE>
Inventory Valuation.  The Company values most U.S. inventories at the lower of
last-in, first-out (LIFO) cost or market.  Other inventories are valued at the
lower of standard costs (which approximate average costs), average costs, or
market.  

Excess of Purchase Cost over Net Assets Acquired.  The excess of purchase cost
over net assets acquired is being amortized over 40 years.  The Company
evaluates the recoverability of long-lived assets based on undiscounted
projected cash flows, excluding interest and taxes, when factors indicate that
an impairment may exist.

Property, Plant, and Equipment.  In general, depreciation is computed using
the straight-line method.

Revenue Recognition.  The Company recognizes sales upon the shipment of its
products.

Income Taxes on Undistributed Earnings.  In general, the Company plans to
continue to invest in the business the undistributed earnings of foreign
subsidiaries and foreign corporate joint ventures accounted for by the equity
method.  Accordingly, taxes are provided only on that amount of undistributed
earnings in excess of planned reinvestments.  

Foreign Currency Translation.  The assets and liabilities of certain
affiliates and associates are translated at current exchange rates and any
related translation adjustments are recorded directly in share owners' equity. 
The Company's affiliates located in Venezuela operate in "highly inflationary"
economies.  In such cases, certain assets of these affiliates are translated
at historical exchange rates and all translation adjustments are reflected in
the statements of Consolidated Results of Operations.























                                      49

<PAGE>     
==============================================================================
FINANCIAL REVIEW
Tabular data in millions of dollars, except share and per share amounts        
------------------------------------------------------------------------------
Earnings Per Share.  The following table sets forth the computation of basic
and diluted earnings per share:
---------------------------------------------------------------------------
Years ended December 31,                  1999           1998          1997
---------------------------------------------------------------------------
Numerator:
  Earnings before extraordinary 
    items                               $299.1         $122.1        $272.4
  Preferred stock dividends:
    Convertible                          (21.5)         (13.1)              
    Exchangeable                           (.8)          (1.4)         (1.5)
---------------------------------------------------------------------------
                                         (22.3)         (14.5)         (1.5)
---------------------------------------------------------------------------
  Numerator for basic earnings per 
    share - income available to common
    share owners                         276.8          107.6         270.9
  Effect of dilutive securities - 
    preferred stock dividends               .8                          1.5
---------------------------------------------------------------------------
  Numerator for diluted earnings per
    share - income available to common
    share owners after assumed 
    exchanges of preferred stock
    for common stock                    $277.6         $107.6        $272.4
===========================================================================
Denominator:
  Denominator for basic earnings per
    share - weighted average 
    shares outstanding             153,803,732    149,970,468   133,596,755
  Effect of dilutive securities:
    Stock options and other            649,766        973,096     1,131,911
    Exchangeable preferred stock       755,804                      947,437
---------------------------------------------------------------------------
  Dilutive potential common shares   1,405,570        973,096     2,079,348
---------------------------------------------------------------------------
  Denominator for diluted earnings
    per share - adjusted weighted 
    average shares and assumed 
    exchanges of preferred stock
    for common stock               155,209,302    150,943,564   135,676,103
===========================================================================
Basic earnings per share                 $1.80          $0.71         $2.03
===========================================================================
Diluted earnings per share               $1.79          $0.71         $2.01
===========================================================================
See "Convertible Preferred Stock" and "Exchangeable Preferred Stock" on pages
59-60 for additional information.

                                      50

<PAGE>
The convertible preferred stock was not included in the computation of 1999
and 1998 diluted earnings per share since the result would have been
antidilutive.  The exchangeable preferred stock was not included in the
computation of 1998 diluted earnings per share since the result would have
been antidilutive.  Options to purchase 3,357,449, 1,160,667, and 11,429,
weighted average shares of common stock which were outstanding during 1999,
1998, and 1997, respectively, were not included in the computation of diluted
earnings per share because the options' exercise price was greater than the
average market price of the common shares.

Changes in Components of Working Capital Related to Operations.  Changes in
the components of working capital related to operations (net of the effects
related to acquisitions and divestitures) were as follows:
----------------------------------------------------------------------------
                                                1999        1998        1997
----------------------------------------------------------------------------
Decrease (increase) in current assets:
  Short-term investments                     $ (14.9)    $  (6.4)     $  1.1 
  Receivables                                  (50.2)      (18.2)      (76.2)  
  Inventories                                  (46.9)      (69.7)       17.9 
  Prepaid expenses                               4.4       (29.8)        (.2)
Increase (decrease) in current liabilities:
  Accounts payable and accrued liabilities     (29.2)      (37.8)      (19.7)
  Salaries and wages                             3.2         7.5        (4.1)
  U.S. and foreign income taxes                 11.2        18.3       (10.6)
----------------------------------------------------------------------------
                                             $(122.4)    $(136.1)     $(91.8)
============================================================================

Inventories.  Major classes of inventory are as follows:
----------------------------------------------------------------------------
                                                            1999        1998
----------------------------------------------------------------------------
Finished goods                                            $580.0      $608.9
Work in process                                             36.3        35.0
Raw materials                                              131.3       123.6
Operating supplies                                          79.0        70.6
----------------------------------------------------------------------------
                                                          $826.6      $838.1
============================================================================

If the inventories which are valued on the LIFO method had been valued at
standard or average costs, which approximate current costs, consolidated
inventories would be higher than reported by $17.7 million and $6.1 million at
December 31, 1999 and 1998, respectively.  

Inventories which are valued at the lower of standard costs (which approximate
average costs), average costs, or market at December 31, 1999 and 1998 were
approximately $454.3 million and $506.4 million, respectively. 




                                      51

<PAGE>
Equity Investments.  Summarized information pertaining to the Company's equity
associates follows:
----------------------------------------------------------------------------
                                                            1999        1998
----------------------------------------------------------------------------
At end of year:
    Equity in undistributed earnings:
      Foreign                                             $ 85.4      $ 80.6
      Domestic                                              17.3         8.4
----------------------------------------------------------------------------
        Total                                             $102.7      $ 89.0
============================================================================
    Equity in cumulative translation adjustment           $(38.7)     $(35.5)
============================================================================

----------------------------------------------------------------------------
                                                      1999     1998     1997
----------------------------------------------------------------------------
For the year:
    Equity in earnings:
      Foreign                                        $ 9.5    $ 6.9    $15.1
      Domestic                                        12.8      9.1      2.8
----------------------------------------------------------------------------
        Total                                        $22.3    $16.0    $17.9
============================================================================
    Dividends received                               $10.1    $ 6.6    $ 4.8
============================================================================


























                                      52

<PAGE>
Long-Term Debt.  The following table summarizes the long-term debt of the
Company at December 31, 1999 and 1998:
-----------------------------------------------------------------------------
                                                           1999          1998
-----------------------------------------------------------------------------
Bank Credit Agreement:
  Revolving Credit Facility:
    Revolving Loans                                    $2,559.4      $2,207.0
      Offshore Loans:
        1.42 billion (1.39 billion in 1998)
          Australian dollars                              904.4         874.0
        230.0 million (333.0 million in 1998)
          British pounds                                  369.5         549.8
        100.0 billion (129.0 billion in 1998)
          Italian lira                                     52.0          77.0
Senior Notes:                                                          
  7.85%, due 2004                                         300.0         300.0
  7.15%, due 2005                                         350.0         350.0
  8.10%, due 2007                                         300.0         300.0
  7.35%, due 2008                                         250.0         250.0
Senior Debentures:
  7.50%, due 2010                                         250.0         250.0
  7.80%, due 2018                                         250.0         250.0
Other                                                     224.6         350.6
-----------------------------------------------------------------------------
                                                        5,809.9       5,758.4
  Less amounts due within one year                         76.8          91.2
-----------------------------------------------------------------------------
    Long-term debt                                     $5,733.1      $5,667.2
=============================================================================

In April 1998, the Company entered into the Second Amended and Restated Credit
Agreement (the "Bank Credit Agreement" or "Agreement") with a group of banks
which expires on December 31, 2001.  The Agreement provides for a $4.5 billion
revolving credit facility (the "Revolving Credit Facility"), which includes a
$1.75 billion fronted offshore loan revolving facility (the "Offshore
Facility") denominated in certain foreign currencies, subject to certain
sublimits, available to certain of the Company's foreign subsidiaries.  The
Agreement includes an Overdraft Account facility providing for aggregate
borrowings up to $100 million which reduce the amount available for borrowing
under the Revolving Credit Facility.  In addition, the terms of the Bank
Credit Agreement permit the Company to request Bid Rate Loans from banks
participating in the Agreement.  Borrowings outstanding under Bid Rate Loans
are limited to $750 million and reduce the amount available for borrowing
under the Revolving Credit Facility.  The Agreement also provides for the
issuance of letters of credit totaling up to $500 million, which also reduce
the amount available for borrowing under the Revolving Credit Facility.  At
December 31, 1999, the Company had unused credit of $565.3 million available
under the Bank Credit Agreement.  

Borrowings under the Revolving Loans commitment bear interest, at the
Company's option, at the prime rate or a reserve adjusted Eurodollar rate. 
Loans under the Offshore Facility bear interest, at the applicable borrower's

                                      53

<PAGE>
option, at the applicable Offshore Base Rate or the Adjusted Offshore Periodic
Rate (as those terms are defined in the Bank Credit Agreement).  Borrowings
under the Revolving Credit Facility also bear a margin linked to the Company's
Consolidated Leverage Ratio, as defined in the Agreement.  The margin is
currently .500% and is limited to a range of .275% to 1.000%.  Overdraft
Account loans bear interest at the prime rate minus the facility fee
percentage, defined below.  The weighted average interest rate on borrowings
outstanding under the Revolving Loans commitment at December 31, 1999, was
6.94%.  The weighted average interest rate on borrowings outstanding under the
Offshore Facility at December 31, 1999, was 5.92%.  While no compensating
balances are required by the Agreement, the Company must pay a facility fee on
the Revolving Credit Facility commitments.  The facility fee, currently .250%,
is limited to a range of .125% and .500%, based on the Company's Consolidated
Leverage Ratio.

Borrowings outstanding under the Bank Credit Agreement are unsecured.  All of
the obligations of the Company's foreign subsidiaries under the Offshore
Facility are guaranteed by the Company.  The Company's Senior Notes and Senior
Debentures rank pari passu with the obligations of the Company under the Bank
Credit Agreement.  The Bank Credit Agreement, Senior Notes, and Senior
Debentures are senior in right of payment to all existing and future
subordinated debt of the Company.

Under the terms of the Bank Credit Agreement, dividend payments with respect
to the Company's Preferred or Common Stock and payments for redemption of
shares of its Common Stock are subject to certain limitations.  At 
December 31, 1999, the maximum remaining allowable amount of such payments was
$289.2 million.  The Agreement also requires, among other things, the
maintenance of certain financial ratios, and restricts the creation of liens
and certain types of business activities and investments.

Annual maturities for all of the Company's long-term debt through 2004 are as
follows:  2000, $76.8 million; 2001, $3,973.5 million; 2002, $36.0 million;
2003, $6.7 million; and 2004, $313.3 million.

Interest paid in cash aggregated $388.1 million for 1999, $326.6 million for
1998, and $303.8 million for 1997.
















                                      54

<PAGE>
Fair values at December 31, 1999, of the Company's significant fixed rate debt
obligations are as follows:
-----------------------------------------------------------------------------
                              Principal Amount    Indicated       Fair Value
                                (millions of        Market       (millions of
                                   dollars)         Price          dollars)  
-----------------------------------------------------------------------------
Senior Notes:
  7.85%                             $300.0           $96.63            $289.9  
  7.15%                              350.0            92.75             324.6
  8.10%                              300.0            95.88             287.6
  7.35%                              250.0            90.63             226.6
Senior Debentures:
  7.50%                              250.0            88.88             222.2
  7.80%                              250.0            85.75             214.4
-----------------------------------------------------------------------------

Operating Leases.  Rent expense attributable to all operating leases was $73.7
million in 1999, $68.5 million in 1998, and $57.3 million in 1997.  Minimum
future rentals under operating leases are as follows:  2000, $43.8 million;
2001, $34.8 million; 2002, $30.2 million; 2003, $27.1 million; 2004, $21.9
million, and 2005 and later, $36.1 million.

Foreign Currency Translation.  Aggregate foreign currency exchange gains
(losses) included in other costs and expenses were $4.9 million in 1999,
$(2.8) million in 1998, and $(8.1) million in 1997.

Accumulated Other Comprehensive Income.  Foreign currency translation
adjustments comprise accumulated other comprehensive income.  Changes in the
cumulative foreign currency translation adjustments were as follows:

----------------------------------------------------------------------------
                                                  1999        1998      1997
----------------------------------------------------------------------------
Balance at beginning of year                   $(190.7)    $(148.0)  $ (82.3)
Net effect of exchange rate
  fluctuations                                  (175.8)      (45.1)    (79.6)
Deferred income taxes                             (2.1)        2.4      13.9
----------------------------------------------------------------------------
Balance at end of year                         $(368.6)    $(190.7)  $(148.0) 
============================================================================

The net effect of exchange rate fluctuations generally reflects changes in the
relative strength of the U.S. dollar against major foreign currencies between
the beginning and end of the year.    








                                      55

<PAGE>
Income Taxes.  Deferred income taxes reflect:  (1) the net tax effects of
temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax purposes,
and (2) carryovers and credits for income tax purposes.  Significant
components of the Company's deferred tax assets and liabilities at December
31, 1999 and 1998 are as follows:

----------------------------------------------------------------------------
                                                           1999         1998
----------------------------------------------------------------------------

Deferred tax assets:
  Accrued postretirement benefits                       $ 110.2      $ 118.4
  Other accrued liabilities                               102.8        138.0
  Asbestos-related liabilities                             61.7        104.3 
  U.S. federal tax loss carryovers                         68.1         93.0
  Alternative minimum tax credits                          23.7         21.4
  Other                                                   125.8        105.7
----------------------------------------------------------------------------
    Total deferred tax assets                             492.3        580.8

Deferred tax liabilities:
  Property, plant and equipment                           342.7        339.8
  Prepaid pension costs                                   252.1        231.8
  Insurance for asbestos-related costs                     67.4         68.7
  Inventory                                                34.2         33.8
  Receivables and other assets                             26.6         24.3
  Other                                                    74.0         73.3
----------------------------------------------------------------------------
    Total deferred tax liabilities                        797.0        771.7
----------------------------------------------------------------------------
    Net deferred tax liabilities                        $(304.7)     $(190.9)
============================================================================

Deferred taxes are included in the Consolidated Balance Sheets at December 31, 
1999 and 1998 as follows:

----------------------------------------------------------------------------
                                                           1999         1998
----------------------------------------------------------------------------

Prepaid expenses                                        $  102.7     $ 134.1
Deferred tax liabilities                                  (407.4)     (325.0)
----------------------------------------------------------------------------
Net deferred tax liabilities                            $ (304.7)    $(190.9)
============================================================================







                                      56

<PAGE>
The provision (benefit) for income taxes consists of the following:
----------------------------------------------------------------------------
                                                  1999      1998        1997
----------------------------------------------------------------------------

Current:
  U.S. federal                                  $  3.8    $  4.0      $  1.0
  State                                            2.9       3.6         1.0
  Foreign                                         68.0      76.5        62.6
----------------------------------------------------------------------------
                                                  74.7      84.1        64.6
----------------------------------------------------------------------------

Deferred:
  U.S. federal                                   111.1      23.4        65.8 
  State                                           11.4      (2.7)        7.2 
  Foreign                                        (11.7)    (38.1)       10.9 
----------------------------------------------------------------------------
                                                 110.8     (17.4)       83.9 
----------------------------------------------------------------------------

Total:
  U.S. federal                                   114.9      27.4        66.8 
  State                                           14.3        .9         8.2 
  Foreign                                         56.3      38.4        73.5
----------------------------------------------------------------------------
                                                $185.5    $ 66.7      $148.5 
============================================================================

The provision for income taxes was calculated based on the following
components of earnings before income taxes:
----------------------------------------------------------------------------
                                                  1999      1998        1997
----------------------------------------------------------------------------

Domestic                                        $320.9    $ 40.2      $224.5 
Foreign                                          176.9     168.8       227.8
----------------------------------------------------------------------------
                                                $497.8    $209.0      $452.3 
============================================================================

Income taxes paid in cash were as follows:
----------------------------------------------------------------------------
                                                  1999      1998        1997
----------------------------------------------------------------------------

Domestic                                        $ 11.0    $  7.3      $  1.9 
Foreign                                           51.5      54.7        86.0
----------------------------------------------------------------------------
                                                $ 62.5    $ 62.0      $ 87.9
============================================================================


                                      57

<PAGE>
A reconciliation of the provision for income taxes based on the statutory U.S.
federal tax rate of 35% to the provision for income taxes is as follows
(certain amounts for the 1998 and 1997 presentation have been reclassified to
conform to the 1999 presentation):

----------------------------------------------------------------------------
                                                  1999      1998        1997 
----------------------------------------------------------------------------

Pretax earnings at statutory
  U.S. Federal tax rate                         $174.2    $ 73.1      $158.3 
Increase (decrease) in provision for
  income taxes due to:
  Amortization of goodwill                        33.1      24.8        12.7   
  State taxes, net of federal benefit              9.3        .6         5.3   
  Foreign earnings at different rates             (6.7)     (4.9)       (2.7) 
  Nontaxable foreign earnings                     (5.0)     (1.5)       (4.8)
  Foreign sales corporation and possession
    tax credits                                   (3.9)     (2.9)       (7.3)
  Research and development credits                (1.8)     (1.5)       (1.5)
  Adjustment for enacted change in tax rate                (15.1)             
  Divestiture                                                           (5.7)
  Other items                                    (13.7)     (5.9)       (5.8)
----------------------------------------------------------------------------
Provision for income taxes                      $185.5    $ 66.7      $148.5 
============================================================================
Effective tax rate                               37.3%     31.9%       32.8%
============================================================================

For U.S. Federal income tax purposes, approximately $195 million of net
operating loss is available as a carryover at December 31, 1999.  Carryovers
of the net operating loss expire beginning in 2005.  

Alternative minimum tax credits and research and development credits of
approximately $24 million and $11 million, respectively, are available to
offset future U.S. federal income tax.  The alternative minimum tax credits do
not expire while carryovers of the research and development credits expire
beginning in 2009.

At December 31, 1999, the Company's equity in the undistributed earnings of
foreign subsidiaries for which income taxes had not been provided approximated
$660 million.  It is not practicable to estimate the U.S. and foreign tax
which would be payable should these earnings be distributed.  










                                      58

<PAGE>
Convertible Preferred Stock.  Annual cumulative dividends of $2.375 per share
accruing from the date of issuance are payable in cash quarterly commencing
August 15, 1998.  The convertible preferred stock is convertible at the option
of the holder at any time, unless previously redeemed, into shares of common
stock of the Company at an initial conversion rate of 0.9491 shares of common
stock for each share of convertible stock, subject to adjustment based on
certain events.  The convertible preferred stock may not be redeemed prior to
May 15, 2001.  At any time on or after such date, the convertible preferred
stock may be redeemed only in shares of common stock of the Company at the
option of the Company at predetermined redemption prices plus accrued and
unpaid dividends, if any, to the redemption date.

Holders of the convertible preferred stock have no voting rights, except as
required by applicable law and except that among other things, whenever
accrued and unpaid dividends on the convertible preferred stock are equal to
or exceed the equivalent of six quarterly dividends payable on the convertible
preferred stock such holders will be entitled to elect two directors to the
Company's board of directors until the dividend arrearage has been paid or
amounts have been set apart for such payment.  In addition, certain changes
that would be materially adverse to the rights of holders of the convertible
preferred stock cannot be made without the vote of holders of two-thirds of
the outstanding convertible preferred stock.  The convertible preferred stock
is senior to the common stock and the exchangeable preferred stock with
respect to dividends and liquidation events.

Exchangeable Preferred Stock.  Exchangeable preferred stock, $.01 par value,
$7.00 cumulative dividend, issuable in series, at December 31, 1999 and 1998,
was as follows:

                                                            Number of Shares 
-----------------------------------------------------------------------------
                                                             1999        1998
-----------------------------------------------------------------------------
Series A Exchangeable
   Authorized                                              75,000      75,000
   Issued                                                  65,625      65,625
   Outstanding                                              5,584      15,956
Series B Exchangeable
   Authorized                                              75,000      75,000
   Issued                                                  65,625      65,625
   Outstanding                                             11,306      51,343
Series C Exchangeable
   Authorized                                             150,000     150,000
   Issued                                                 131,250     131,250
   Outstanding                                             22,612     115,402

The exchangeable preferred stock is exchangeable at the option of the holders
for a number of common shares determined by multiplying the total number of
exchangeable shares being exchanged by the sum of $100 plus all dividends
accumulated and unpaid on each share being exchanged and dividing such amount
by the last reported sales price of common stock on the New York Stock
Exchange at the close of business on the business day next preceding the day

                                      59

<PAGE>
of exchange.  Dividends accumulated and unpaid were approximately $2.0 million
and $7.9 million at December 31, 1999 and 1998, respectively.

Holders of the exchangeable preferred stock have no voting rights, except on
actions which would affect their rights to exchange shares for common shares,
or on actions to increase the authorized number of exchangeable shares.

Stock Options.  The Company has three nonqualified stock option plans:  (1)
1991 Stock Option Plan for Key Employees of Owens-Illinois, Inc., (2) 1994
Stock Option Plan for Directors of Owens-Illinois, Inc. and (3) 1997 Equity
Participation Plan of Owens-Illinois, Inc.  No options may be exercised in
whole or in part during the first year after the date granted.  In general,
subject to accelerated exercisability provisions related to the performance of
the Company's common stock or change of control, 50% of the options become
exercisable on the fifth anniversary of the date of the option grant, with the
remaining 50% becoming exercisable on the sixth anniversary date of the option
grant.  In general, options expire following termination of employment or the
day after the tenth anniversary date of the option grant.  

All options have been granted at prices equal to the market price of the
Company's common stock on the date granted.  Accordingly, the Company
recognizes no compensation expense related to the stock option plans.  The
Company has adopted the disclosure-only provisions of Statement of Financial
Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation."  If the Company had elected to recognize compensation cost
based on the fair value of the options granted at grant date as allowed by
SFAS No. 123, pro forma net income and earnings per share would have been as 
follows:

-----------------------------------------------------------------------------
                                                   1999        1998      1997
-----------------------------------------------------------------------------

Net income:
  As reported                                    $298.3      $108.0    $167.9
  Pro forma                                       291.4       103.6     166.3
Basic earnings per share:
  As reported                                      1.79        0.62      1.25
  Pro forma                                        1.75        0.59      1.23
Diluted earnings per share:
  As reported                                      1.78        0.62      1.24
  Pro forma                                        1.74        0.59      1.23
-----------------------------------------------------------------------------

The pro forma effect on net income is not representative of the pro forma
effect on net income in future years because it does not take into
consideration pro forma compensation expense related to grants made prior to
1995.  Assuming similar grants in future years, the pro forma effect will not
be fully reflected until 2000.




                                      60

<PAGE>
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following assumptions:
-----------------------------------------------------------------------------
                                                   1999        1998      1997
-----------------------------------------------------------------------------

Expected life of options                        5 years     5 years   5 years
Expected stock price volatility                   36.5%       31.9%     26.3%
Risk-free interest rate                           5.10%       5.70%     6.08%
Expected dividend yield                           0.00%       0.00%     0.00%
-----------------------------------------------------------------------------

Stock option activity is as follows:                                         
-----------------------------------------------------------------------------
                                                          Weighted   Weighted
                                                          Average    Average
                                              Number of   Exercise     Fair
                                                Shares     Price      Value  
-----------------------------------------------------------------------------

Options outstanding at December 31, 1996      5,374,849     $ 9.08
  Granted                                     1,188,787      31.73     $11.18
  Exercised                                  (3,192,874)      6.66
  Cancelled                                     (28,987)     21.43           
-----------------------------------------------------------------------------

Options outstanding at December 31, 1997      3,341,775      19.35
  Granted                                     1,788,550      39.74     $15.31
  Exercised                                    (317,131)     13.44
  Cancelled                                     (29,437)     25.39           
-----------------------------------------------------------------------------

Options outstanding at December 31, 1998      4,783,757      27.33           
  Granted                                     1,786,510      23.94     $ 9.68
  Exercised                                    (157,420)      8.15
  Cancelled                                     (91,813)     33.31           
-----------------------------------------------------------------------------

Options outstanding at December 31, 1999      6,321,034     $26.76           
=============================================================================
Options exercisable at:
  December 31, 1999                           1,992,136     $15.89
  December 31, 1998                           2,158,646     $15.37
  December 31, 1997                           2,202,125     $12.99
=============================================================================

Shares available for option grant at
  December 31, 1999                           6,217,087
  December 31, 1998                           8,376,652
  December 31, 1997                          10,135,765
=============================================================================


                                       61

<PAGE>
The following table summarizes significant option groups outstanding at
December 31, 1999, and related weighted average price and life information:

                             Options Outstanding          Options Exercisable 
                       --------------------------------  ---------------------
                                    Weighted
                                     Average
                                    Remaining  Weighted               Weighted
    Range of                        Contract-  Average                Average
    Exercise             Options     ual Life  Exercise    Options    Exercise
     Prices            Outstanding  (in years)  Price    Exercisable   Price  
-------------------------------------------------------  ---------------------

$ 7.50 to $16.50         1,691,507      4.3      $13.02    1,691,507    $13.02
$23.94 to $31.63         2,857,060      8.6      $26.87      274,062    $31.63
$31.64 to $41.50         1,772,467      8.4      $39.68       26,567    $36.31
-------------------------------------------------------  ---------------------
                         6,321,034                         1,992,136          
=======================================================  =====================

Pension Benefit Plans.  Net credits to results of operations for all of the 
Company's pension plans and certain deferred compensation arrangements
amounted to $58.6 million in 1999, $52.1 million in 1998, and $40.2 million in
1997.  

The Company has pension plans covering substantially all employees located in
the United States, the United Kingdom and Australia.  Benefits generally are
based on compensation for salaried employees and on length of service for
hourly employees.  The Company's policy is to fund pension plans such that
sufficient assets will be available to meet future benefit requirements.  The
following tables relate to the Company's principal United States, United
Kingdom, and Australian pension plans.  





















                                      62

<PAGE>
The changes in the pension benefit obligations for the year were as follows: 
-----------------------------------------------------------------------------
                                                         1999            1998
-----------------------------------------------------------------------------

Obligations at beginning of year                     $2,504.8        $2,254.0

Change in benefit obligations:
  Service cost                                           41.8            37.0
  Interest cost                                         155.2           156.0
  Actuarial loss (gain)                                (205.6)          172.0
  Acquisitions                                                           75.5
  Benefit payments                                     (197.5)         (192.4)
  Other                                                 (12.2)            2.7
-----------------------------------------------------------------------------
    Net increase (decrease) in benefit obligations     (218.3)          250.8
-----------------------------------------------------------------------------
Obligations at end of year                           $2,286.5        $2,504.8
=============================================================================

The changes in the fair value of the pension plans' assets for the year were
as follows:
-----------------------------------------------------------------------------
                                                         1999            1998
-----------------------------------------------------------------------------

Fair value at beginning of year                      $3,503.6        $3,345.7

Change in fair value:
  Actual return on plan assets                          428.9           296.3
  Acquisitions                                                           80.1
  Benefit payments                                     (197.5)         (192.4)
  Transfer of assets to a special trust to fund
    qualified current retiree health liabilities        (30.5)          (36.5)
  Other                                                   7.9            10.4
-----------------------------------------------------------------------------
    Net increase in fair value of assets                208.8           157.9
-----------------------------------------------------------------------------
Fair value at end of year                            $3,712.4        $3,503.6
=============================================================================













                                      63

<PAGE>
The funded status of the pension plans at year end was as follows:
-----------------------------------------------------------------------------
                                                           1999          1998
-----------------------------------------------------------------------------

Plan assets at fair value                              $3,712.4      $3,503.6
Projected benefit obligations                           2,286.5       2,504.8
-----------------------------------------------------------------------------
  Plan assets in excess of projected benefit 
    obligations                                         1,425.9         998.8

Net unrecognized items:
  Actuarial gain                                         (721.4)       (364.0)
  Prior service cost                                       41.1          51.3
-----------------------------------------------------------------------------
                                                         (680.3)       (312.7)
-----------------------------------------------------------------------------
Prepaid pension                                        $  745.6      $  686.1
=============================================================================

The components of the net pension credit for the year were as follows:
-----------------------------------------------------------------------------
                                             1999          1998          1997
-----------------------------------------------------------------------------

Service cost                             $   41.8      $   37.0      $   30.7
Interest cost                               155.2         156.0         152.1
Expected asset return                      (280.6)       (266.1)       (245.3)

Amortization:
  Prior service cost                          8.1           7.7           5.9
  Loss                                        1.1           0.7           0.5
-----------------------------------------------------------------------------
    Net amortization                          9.2           8.4           6.4
-----------------------------------------------------------------------------
Net credit                               $  (74.4)     $  (64.7)     $  (56.1)
=============================================================================

The actuarial present value of benefit obligations is based on a weighted
discount rate of approximately 7.50% for 1999 and 6.25% for 1998.  Future
benefits are assumed to increase in a manner consistent with past experience
of the plans, which, to the extent benefits are based on compensation,
includes assumed salary increases on a weighted scale of approximately 4.75%
for both 1999 and 1998.  The expected weighted long-term rate of return on
assets was approximately 9.50% for 1999 and 1998, and 9.75% for 1997. 
Amortization included in net pension credits is based on the average remaining
service of employees.  Plan assets include marketable equity securities (which
at December 31, 1999 and 1998 included 14,423,621 shares of the Company's
common stock), government and corporate debt securities, real estate and
commingled funds.  

The Company also sponsors several defined contribution plans for all salary
and hourly U.S. employees.  Participation is voluntary and participants'
contributions are based on their compensation.  The Company matches
substantially all plan participants' contributions up to various limits. 

                                      64

<PAGE>
Company contributions to these plans amounted to $10.5 million in 1999, $10.6
million in 1998, and $9.6 million in 1997.

Postretirement Benefits Other Than Pensions.  The Company provides certain
retiree health care and life insurance benefits covering substantially all
U.S. salaried and certain hourly employees.  Employees are generally eligible
for benefits upon retirement and completion of a specified number of years of
creditable service.  

The changes in the postretirement benefit obligations for the year were as
follows:
-----------------------------------------------------------------------------
                                                           1999          1998
-----------------------------------------------------------------------------

Obligations at beginning of year                         $306.9        $307.5

Change in benefit obligations:
  Service cost                                              2.3           2.2
  Interest cost                                            19.1          20.7
  Actuarial loss (gain)                                   (27.7)          3.5
  Divestiture                                              (0.6)             
  Benefit payments                                        (32.5)        (27.0)
-----------------------------------------------------------------------------
    Net change in benefit obligations                     (39.4)         (0.6)
-----------------------------------------------------------------------------
Obligations at end of year                               $267.5        $306.9
=============================================================================

The funded status of the postretirement benefit plans at year end was as
follows:
-----------------------------------------------------------------------------
                                                         1999            1998
-----------------------------------------------------------------------------

Accumulated postretirement benefit 
  obligations                                            $267.5        $306.9

Unrecognized net reduction in obligations:
  Prior service cost                                       59.7          73.4
  Actuarial loss                                          (12.3)        (41.9)
-----------------------------------------------------------------------------
                                                           47.4          31.5
-----------------------------------------------------------------------------
Nonpension postretirement 
  benefit obligations                                    $314.9        $338.4
=============================================================================






                                      65

<PAGE>
The components of the net postretirement benefit cost for the year were as
follows:
-----------------------------------------------------------------------------
                                             1999          1998          1997
-----------------------------------------------------------------------------

Service cost                               $  2.3        $  2.2        $  2.0
Interest cost                                19.1          20.7          21.8

Amortization:
  Prior service cost                        (13.7)        (13.7)        (13.7)
  Loss                                        1.9           1.4           0.7
-----------------------------------------------------------------------------
    Net amortization                        (11.8)        (12.3)        (13.0)
-----------------------------------------------------------------------------
Net postretirement benefit cost            $  9.6        $ 10.6        $ 10.8
=============================================================================

Assumed health care cost inflation was based on a rate of 6.50% in 1999 and
7.00% in 1998, declining to an ultimate rate of 6.00% in the year 2000.  A one
percentage point decrease in the rate would have decreased the accumulated
postretirement benefit obligation at December 31, 1999 by $7.8 million and
decreased the net postretirement benefit cost for 1999 by $0.8 million.  A one
percentage point increase in the rate would have increased the accumulated
postretirement benefit obligation at December 31, 1999 by $9.0 million and
increased the net postretirement benefit cost for 1999 by $0.9 million.  The
assumed discount rates used in determining the accumulated postretirement
benefit obligation were 8.00% and 6.50% at December 31, 1999 and 1998,
respectively.  Amortization included in net postretirement benefit cost is
based on the average remaining service of employees.

Benefits provided by the Company for certain of the hourly retirees are
determined by collective bargaining.  Most other domestic hourly retirees
receive health and life insurance benefits from a multiemployer trust
established by collective bargaining.  Payments to the trust as required by
the bargaining agreements are based upon specified amounts per hour worked and
were $8.0 million in 1999, and $8.6 million in 1998 and 1997.  Postretirement
health and life benefits for retirees of foreign affiliates are generally
provided through the national health care programs of the countries in which
the affiliates are located.

Other Revenue.  Other revenue for the year ended December 31, 1999 includes
gains totaling $40.8 million related to the sales of a U.S. glass container
plant and a mold manufacturing business in Colombia.  Other revenue for the
year ended December 31, 1998, includes a gain of $18.5 million related to the
termination of a license agreement, net of charges for related equipment
write-offs and capacity adjustments, under which the Company had produced
plastic multipack carriers for beverage cans.  Other revenue for the year
ended December 31, 1997, includes a gain of $16.3 million on the sale of the
remaining 49% interest in Kimble Glass.



                                      66

<PAGE>
Other Costs and Expenses.  Other costs and expenses for the year ended
December 31, 1999 include charges totaling $20.8 million related principally
to restructuring costs and write-offs of certain assets in Europe and Latin
America.  Other costs and expenses for the year ended December 31, 1998,
includes:  (1) $250.0 million related to adjustment of the reserve for
estimated future asbestos-related costs, (2) $72.6 million, including
approximately $45 million of termination benefits for the elimination of about
1,500 jobs and aproximately $25 million for asset write-downs, related
principally to a plant closing in the United Kingdom and restructuring costs
at certain international affiliates, (3) a net charge of $0.9 million for the
settlement of certain environmental litigation and the reduction of previously
established reserves for guarantees of certain obligations of a previously
divested business.  The amount for 1998 also includes $42.0 million
principally for write-offs of certain assets associated with business
conditions in emerging markets.  Other costs and expenses for the year ended
December 31, 1997, include $14.1 million principally for guarantees of certain
lease obligations of a previously divested business.

Acquisition of Worldwide Packaging Businesses of BTR plc.  On April 30, 1998,
the Company completed the acquisition of the worldwide glass and plastics
packaging businesses of BTR plc ("BTR Packaging") in an all cash transaction
valued at approximately $3.6 billion (the "Acquisition").  The Acquisition is
being accounted for under the purchase method of accounting.  The total
purchase cost of approximately $3.6 billion was allocated to the tangible and
identifiable intangible assets and liabilities based upon their respective
fair values.  The accompanying Consolidated Results of Operations for the year
ended December 31, 1998, includes eight months of BTR Packaging operations.

The aggregate purchase cost and its allocation to the assets acquired and
liabilities assumed (see "Net Assets Held for Sale") are as follows (in
millions of dollars):

      Net working capital acquired                         $  215
      Property, plant and equipment                           857
      Net assets held for sale                                405
      Other non-current assets                                192
      Excess of purchase cost over net assets acquired      2,098
                                                           ------
                                                            3,767

      Long-term liabilities                                  (167)
                                                           ------
      Aggregate purchase cost                              $3,600
                                                           ======

Pro Forma Information - Acquisition of BTR Packaging (unaudited).  Had the
acquisition of BTR Packaging and the related debt and equity financing
occurred on January 1, 1998, unaudited pro forma consolidated net sales, net
earnings, and net earnings per share of common stock would have been as
follows:



                                      67

<PAGE>
                                     Year ended December 31, 1998            
                         ----------------------------------------------------
                            As      BTR Packaging    Financing     Pro Forma
                         Reported    Adjustments    Adjustments   As Adjusted
                         --------   -------------   -----------   -----------

Net sales                $5,306.3       $  384.1                    $5,690.4
                         ========                                   ========
Net earnings               $122.1       $   31.9       $(33.2)        $120.8
                           ======                                     ======
Basic net earnings per
  share of common stock     $0.71                                      $0.63
                            =====                                      =====
Basic weighted average
  shares outstanding
  (thousands)             149,970                                    155,286

Diluted net earnings per
  share of common stock     $0.71                                      $0.63
                            =====                                      =====
Diluted weighted average
  shares (thousands)      150,944                                    156,259


Shares of common stock issuable upon conversion of the convertible preferred
stock in the pro forma period were not included in the computation of pro
forma diluted earnings per share because the effect would have been
antidilutive.

The pro forma data does not purport to represent what the results of
operations would actually have been if the Acquisition and the related
financing had in fact occurred on the date indicated, or to project results of
operations for any future period.

Net Assets Held For Sale.  In connection with the Acquisition, the Company
committed to sell BTR's United Kingdom glass container manufacturer
("Rockware") obtained in the transaction.  Early in the second quarter of
1999, the Company completed the sale of Rockware to a subsidiary of Ardagh
plc, an Irish glass container manufacturer based in Dublin, Ireland, for total
consideration of 249 million pounds sterling (approximately $405 million). 
The accompanying Consolidated Results of Operations exclude Rockware and
related financing costs.  The carrying value of Rockware was based upon
estimated future cash flows associated with the assets.  In connection with
the sale of Rockware, the Company received notes of approximately $135
million.  Cash proceeds from the Rockware sale were used for the reduction of
debt and for general corporate purposes. 

Extraordinary Charges from Early Extinguishment of Debt.  During 1999, the
Company incurred redemption premiums and wrote off unamortized deferred
financing fees related to indebtedness repaid prior to its scheduled maturity. 
As a result, the Company recorded extraordinary charges totaling $1.2 million
less applicable income taxes of $.4 million.  During 1998, the Company used
proceeds from the May 1998 sale of shares of common stock, convertible

                                      68

<PAGE>
preferred stock, and the issuance of debt for the early retirement of debt
incurred in connection with the Acquisition.  As a result, the Company
recorded extraordinary charges for the write-off of unamortized deferred
finance fees totaling $22.8 million, net of applicable income taxes of $8.7
million.  During 1997, the Company used the proceeds from the sale of shares
of common stock, the issuance of $600 million of aggregate principal amount of
Senior Notes, and borrowings under its Bank Credit Agreement to redeem
$1,907.4 million aggregate principal amount of fixed cost debt, with annual
interest rates ranging from 9.75% - 11%.  As a result, the Company recorded
extraordinary charges for redemption premiums and the write-off of unamortized
deferred finance fees totaling $169.2 million, net of applicable income tax
effects of $64.7 million.

Contingencies.  The Company is one of a number of defendants (typically 10 to
20) in a substantial number of lawsuits filed in numerous state and federal
courts by persons alleging bodily injury (including death) as a result of
exposure to dust from asbestos fibers.  From 1948 to 1958, one of the
Company's former business units commercially produced and sold approximately
$40 million of a high-temperature, clay-based insulating material containing
asbestos.  The Company exited the insulation business in April 1958.  The
traditional asbestos personal injury lawsuits and claims relating to such
production and sale of asbestos material typically allege various theories of
liability, including negligence, gross negligence and strict liability and
seek compensatory and punitive damages in various amounts (herein referred to
as "asbestos claims").

The following table shows the approximate number of plaintiffs and claimants
involved in asbestos claims pending at the beginning of, disposed of and filed
during, and pending at the end of, each of the years listed (eliminating
duplicate filings):

                                               1999        1998        1997 
                                              ------      ------      ------
Pending at beginning of year                  15,000      15,000      17,000
Disposed                                      10,000       7,000       7,000
Filed                                         12,000       7,000       5,000
                                              ------      ------      ------
Pending at end of year                        17,000      15,000      15,000
                                              ======      ======      ======
The Company is also a defendant in other asbestos-related lawsuits or claims
involving maritime workers, medical monitoring claimants, co-defendants and
property damage claimants.  Based on its past experience, the Company believes
that the foregoing categories of claims will not involve any material
liability and they are not included in the above description of pending
claims.

Since receiving its first asbestos claim, the Company, as of December 31,
1999, has disposed of the asbestos claims of approximately 222,000 plaintiffs
and claimants at an average indemnity payment per claim of approximately
$4,550.  Certain of these dispositions have included deferred payment amounts
payable over periods ranging from one to seven years.  Deferred payments at
December 31, 1999, totaled $32.5 million and are included in the foregoing
average indemnity payment per claim.  The Company's indemnity payments for

                                      69

<PAGE>
these claims have varied on a per claim basis, and are expected to continue to
vary considerably over time.

In 1984, the Company initiated litigation in New Jersey against the Company's
insurers, including its wholly-owned captive insurer Owens Insurance Limited
("OIL"), and certain other parties for the years 1977 through 1985 in which
the Company sought damages and a declaration of coverage for both asbestos
bodily injury and property damage claims under insurance policies in effect
during those years (Owens-Illinois, Inc. v. United Insurance Co., et al,
Superior Court of New Jersey, Middlesex County, November 30, 1984).  Beginning
in December 1994 and continuing intermittently for approximately one year
thereafter, the Company entered into settlements for approximately $240
million of its coverage claim against OIL to the extent of reinsurance
provided to OIL by the settling reinsurance companies.  Following such
settlements, a settlement agreement (the "OIL Settlement") was reached with
OIL.  The OIL Settlement called for the payment of remaining non-settled
reinsurance at 78.5% of applicable reinsurance limits, increasing to 81% on
approximately March 1, 1996 and accruing interest thereafter at 10% per annum. 
In December 1995, the presiding judge in the United Insurance case entered a
Consent Judgment approving the OIL Settlement, and specifically finding that
it was a good faith settlement which was fair and reasonable as to OIL and all
of OIL's non-settling reinsurers.  

In November 1995, a reinsurer of OIL during the years affected by the United
Insurance case brought a separate suit against OIL seeking a declaratory
judgment that it had no reinsurance obligation to OIL (Employer's Mutual v.
Owens-Insurance Limited, Superior Court of New Jersey, Morris County, December
1995).  The Company was not a named party to this cause of action but was
subsequently joined in it as a necessary party defendant.  

Subsequent to the entry of the Consent Judgment Order in the United Insurance
case described above, OIL gave notice of the OIL Settlement to all non-
settling reinsurers affected by the United Insurance case, informing all such
reinsurers of the terms of the OIL Settlement and demanding timely payment
from such reinsurers pursuant to such terms.  Since the date of the OIL
Settlement, 28 previously non-settling reinsurers have made the payments
called for under the OIL Settlement or otherwise settled their obligations
thereunder.  Other non-settling solvent reinsurers, all of which are parties
to the Employers Mutual case described above, have not, however, made the
payments called for under the OIL Settlement.

As a result of payments and commitments that have been made by reinsurers
pursuant to the OIL Settlement and the earlier settlement agreements described
above in the United Insurance case and certain other available insurance, the
Company has to date confirmed coverage for its asbestos-related costs of
approximately $317.4 million.  Of the total amount confirmed to date, $304.7
million had been received through December 31, 1999; and the balance of
approximately $12.7 million will be received throughout 2000 and the next
several years.  The remainder of the insurance asset of approximately $192.6
million relates principally to the reinsurers who have not yet paid, and
continue to contest, their reinsurance obligations under the OIL Settlement. 


                                      70

<PAGE>
The Company believes, based on the rulings of the trial court, the Appellate
Division and the New Jersey Supreme Court in the United Insurance case, as
well as its understanding of the facts and legal precedents and based on
advice of counsel, McCarter & English L.L.P., that it is probable substantial
additional payments will be received to cover the Company's asbestos-related
claim losses. 

The Company believes that its ultimate asbestos-related contingent liability
(i.e., its indemnity or other claim disposition costs plus related litigation
expenses) is difficult to estimate with certainty.  However, in 1993, the
Company established a liability of $975 million to cover what it then
estimated would be the total indemnity payments and legal fees associated with
the resolution of then outstanding and all expected future asbestos lawsuits
and claims.  As part of its continual monitoring of asbestos-related matters,
the Company in 1998 conducted a comprehensive review to determine if
adjustments of asbestos-related assets or liabilities were appropriate.  As a
result of that review, the Company established an additional liability of $250
million to cover what it estimated to be the total indemnity payments and
legal fees associated with the resolution of outstanding asbestos personal
injury lawsuits and claims and asbestos personal injury lawsuits and claims
filed during the succeeding five years, after which any remaining liability
was not expected to be material in relation to the Company's Consolidated
Financial Statements.

Based on all the factors and matters relating to the Company's asbestos-
related litigation and claims, the Company presently believes that its
asbestos-related costs and liabilities will not exceed by a material amount
the sum of the available insurance reimbursement the Company believes it has
and will have principally as a result of the United Insurance case, and the
OIL Settlement, as described above, and the amount of the charges for
asbestos-related costs previously recorded.

Other litigation is pending against the Company, in many cases involving
ordinary and routine claims incidental to the business of the Company and in
others presenting allegations that are nonroutine and involve compensatory,
punitive or treble damage claims as well as other types of relief.  The
ultimate legal and financial liability of the Company in respect to the
lawsuits and proceedings referred to above, in addition to other pending
litigation, cannot be estimated with certainty.  However, the Company
believes, based on its examination and review of such matters and experience
to date, that such ultimate liability will not be material in relation to the
Company's Consolidated Financial Statements.











                                      71

<PAGE>
Segment Information.  The Company operates in the rigid packaging industry. 
The Company has two reportable product segments within the rigid packaging
industry:  (1) Glass Containers and (2) Plastics Packaging.  The Glass
Containers segment includes operations in the United States, Europe, the Asia
Pacific region, and Latin America.  The Plastics Packaging segment consists of
three business units -- plastic containers, closure and specialty products,
and prescription products.  The Other segment shown in the tables below
consists primarily of the Company's labels and carriers products business
unit.  

The Company evaluates performance and allocates resources based on earnings
before interest income, interest expense, provision for income taxes, minority
share owners' interests in earnings of subsidiaries, and extraordinary
charges, (collectively "EBIT") excluding unusual items.  EBIT includes an
allocation of corporate expenses based on both a percentage of sales and
direct billings based on the costs of specific services provided.  For the
Company's U.S. pension plans, net periodic pension cost (credit) has been
allocated to product segments while the related prepaid pension asset is
included in the caption Eliminations and Other Retained.  Net sales as shown
in the geographic segment information are based on the location of the
Company's affiliate which recorded the sales.  
































                                      72

<PAGE>
Financial information regarding the Company's product segments is as follows:
-----------------------------------------------------------------------------
                                                          Elimina-       
                                                           tions     
                                                 Total      and     Consoli-
                   Glass      Plastics          Product    Other     dated
                 Containers  Packaging   Other  Segments  Retained   Totals  
-----------------------------------------------------------------------------
Net sales:
  1999             $3,762.6   $1,686.7  $ 73.6  $5,522.9            $ 5,522.9
  1998              3,809.9    1,414.5    81.9   5,306.3              5,306.3
  1997              3,528.4    1,029.8   100.3   4,658.5              4,658.5
=============================================================================
EBIT, excluding unusual items:
  1999             $  582.4   $  281.8  $  5.1  $  869.3   $   5.9  $   875.2
  1998                626.0      232.0    10.6     868.6       1.9      870.5
  1997                543.2      173.8    15.1     732.1      (2.9)     729.2
=============================================================================
Unusual items:
  1999:
   Gains related
    to the sales of
    two manufactur-
    ing facilities   $ 40.8                     $   40.8             $   40.8
   Charges related
    principally to
    restructuring
    costs and write-
    offs of certain
    assets in 
    Europe and
    Latin America     (20.8)                       (20.8)               (20.8)

  1998:
   Charges for
    restructuring
    costs at
    certain
    international
    affiliates        (72.6)                       (72.6)               (72.6)
   Gain on ter-
    mination of
    license
    agreement                           $ 18.5      18.5                 18.5
   Loss on sale
    of discon-
    tinued
    operation
    by equity
    investee           (5.7)                        (5.7)                (5.7)
   Other (1)                                               $(250.9)    (250.9)
=============================================================================

                                      73

<PAGE>
-----------------------------------------------------------------------------
                                                          Elimina-       
                                                           tions     
                                                 Total      and     Consoli-
                   Glass      Plastics          Product    Other     dated
                 Containers  Packaging   Other  Segments  Retained   Totals  
-----------------------------------------------------------------------------

Depreciation and amortization expense:
  1999             $  348.8   $  168.9  $ 10.6  $  528.3  $   17.0  $   545.3 
  1998                312.9      128.3    10.7     451.9      12.0      463.9
  1997                250.3       73.4    11.7     335.4       8.1      343.5
=============================================================================

Total assets:
  1999             $6,016.8   $3,333.8  $175.0  $9,525.6  $1,230.7  $10,756.3
  1998              6,166.2    3,137.2   174.4   9,477.8   1,582.9   11,060.7
  1997              4,313.6    1,239.1   190.5   5,743.2   1,101.9    6,845.1
=============================================================================

Capital expenditures (2):
  1999             $  428.4   $  212.3  $  3.4  $  644.1  $   6.3   $  650.4
  1998                382.8      185.0     4.1     571.9      1.6      573.5
  1997                317.4      111.9     8.0     437.3     34.0      471.3
============================================================================

(1)  Detail presented in tables on page 76.

(2)  Excludes property, plant and equipment acquired through acquisitions.
























                                      74

<PAGE>
Financial information regarding the Company's geographic segments is as
follows:
-----------------------------------------------------------------------------
                                                                     Total
                       United                  Asia      Latin     Geographic
                       States      Europe    Pacific    America     Segments 
-----------------------------------------------------------------------------

Net sales:
  1999               $3,177.6    $  968.8     $814.9     $561.6      $5,522.9
  1998                3,042.2     1,052.0      522.6      689.5       5,306.3
  1997                2,870.3     1,037.5       60.0      690.7       4,658.5
=============================================================================

EBIT, excluding unusual items:
  1999               $  577.6    $  101.2     $135.1     $ 55.4      $  869.3
  1998                  533.0       139.5       87.3      108.8         868.6
  1997                  457.9       140.0       (1.0)     135.2         732.1
=============================================================================

Unusual items:
  1999:
   Gains related 
    to the sales of
    two manufactur-
    ing facilities   $   30.8                            $ 10.0      $   40.8
   Charges related
    principally to
    restructuring
    costs and write-
    offs of certain
    assets in 
    Europe and
    Latin America                $  (10.8)                (10.0)       (20.8)

  1998:
   Charges for re-
    structuring 
    costs at certain
    international
    affiliates                      (46.8)    $ (3.6)     (22.2)        (72.6)
   Gain on termination
    of license
    agreement            18.5                                            18.5
   Loss on sale of
    discontinued
    operation by
    equity investee                                        (5.7)         (5.7)
=============================================================================




                                      75

<PAGE>
The Company's net fixed assets by geographic segment are as follows:
-----------------------------------------------------------------------------
                                               United                        
                                               States     Foreign       Total
-----------------------------------------------------------------------------

  1999                                       $1,755.0    $1,689.1    $3,444.1
  1998                                        1,619.4     1,807.6     3,427.0
  1997                                        1,288.3     1,117.1     2,405.4
=============================================================================

Reconciliations to consolidated totals are as follows:
-----------------------------------------------------------------------------
                                                 1999        1998        1997
-----------------------------------------------------------------------------
Revenues:
  Net sales for reportable segments          $5,522.9    $5,306.3    $4,658.5
  Royalties and net technical assistance         30.3        26.6        21.6
  Equity earnings                                22.3        16.0        17.9
  Interest income                                28.5        29.2        23.6
  Other revenue                                 182.7       121.2       106.8
-----------------------------------------------------------------------------
    Total                                    $5,786.7    $5,499.3    $4,828.4
=============================================================================
Earnings before income taxes, minority
  share owners' interests in earnings of
  subsidiaries, and extraordinary items:
  EBIT, excluding unusual items for 
    reportable segments                      $  869.3    $  868.6    $  732.1
  Unusual items excluded from reportable
    segment information                          20.0       (59.8)
  Eliminations and other retained, 
    excluding unusual items                       5.9         1.9        (2.9)
  Unusual items excluded from eliminations
    and other retained:

    1998:
      Adjustment of reserve for estimated    
        future asbestos-related costs                      (250.0)
      Net charges for the settlement of
        certain environmental litigation
        and the reduction of previously
        established reserves                                 (0.9)

    1997:
      Gain on sale of Kimble Glass                                       16.3
      Charges principally for guarantees of 
        certain lease obligations                                       (14.1)
  Net interest expense                         (397.4)     (350.8)     (279.1)
-----------------------------------------------------------------------------
  Total                                      $  497.8    $  209.0    $  452.3
=============================================================================

                                      76

<PAGE>
Selected Quarterly Financial Data (unaudited).  The following tables present
selected financial data by quarter for the years ended December 31, 1999 and
1998:

-----------------------------------------------------------------------------
                                    1999                                     
-----------------------------------------------------------------------------
                      First    Second          Third      Fourth            
                     Quarter  Quarter (a)     Quarter     Quarter       Total
-----------------------------------------------------------------------------
Net sales           $1,307.0    $1,423.1     $1,426.2    $1,366.6    $5,522.9
=============================================================================
Gross profit        $  307.2    $  354.7     $  314.0    $  250.6    $1,226.5
=============================================================================
Earnings (loss):
  Before extra-
   ordinary
   items            $   69.3    $  110.9     $   77.5    $   41.4    $  299.1
  Extraordinary 
   charges from 
   early 
   extinguishment 
   of debt, net of 
   applicable
   income taxes                                               (.8)        (.8)
-----------------------------------------------------------------------------
  Net earnings      $   69.3    $  110.9     $   77.5    $   40.6    $  298.3
=============================================================================
Earnings (loss) per share
  of common stock: (b)
  Basic:
   Before extra-
    ordinary
    items           $   0.41    $   0.68     $   0.46    $   0.24    $   1.80
   Extraordinary 
    charges                                                  (.01)       (.01)
-----------------------------------------------------------------------------
  Net earnings      $   0.41    $   0.68     $   0.46    $   0.23    $   1.79

  Diluted:
   Before extra-
    ordinary
    items           $   0.41    $   0.67     $   0.46    $   0.24    $   1.79
   Extraordinary
    charges                                                  (.01)       (.01)
-----------------------------------------------------------------------------
  Net earnings      $   0.41    $   0.67     $   0.46    $   0.23    $   1.78
=============================================================================
(a)  In the second quarter of 1999, the Company recorded: (1) gains totaling
     $40.8 million ($23.6 million after tax and minority share owners'
     interests) related to the sales of a U.S. glass container plant and a
     mold manufacturing business in Colombia; and (2) charges totaling $20.8

                                      77

<PAGE>
     million ($14.0 million after tax and minority share owners' interests)
     related principally to restructuring costs and write-offs of certain
     assets in Europe and Latin America.  The net aftertax amounts of these
     items was a credit of $9.6 million, or $.06 per share on both a basic and
     diluted basis for the second quarter.

(b)  Earnings per share are computed independently for each period presented. 
     Due primarily to the repurchase of 10 million shares of common stock
     during the fourth quarter, and the resultant effect of this change on
     average shares, per share amounts calculated on a year-to-date basis do
     not equal the sums of such amounts calculated separately for each
     quarter.









































                                      78

<PAGE>

-----------------------------------------------------------------------------
                                    1998                                     
-----------------------------------------------------------------------------
                      First      Second       Third       Fourth            
                   Quarter (a)   Quarter   Quarter (b)  Quarter (c)     Total
-----------------------------------------------------------------------------
Net sales            $1,098.5   $1,385.0     $1,453.6     $1,369.2   $5,306.3
=============================================================================
Gross profit         $  237.4   $  353.4     $  347.9     $  292.0   $1,230.7
=============================================================================
Earnings (loss):
  Before extra-
   ordinary
   items             $   80.4   $  115.0     $  113.6     $ (186.9)  $  122.1
  Extraordinary 
   charges from 
   early 
   extinguishment
   of debt, net 
   of applicable
   income taxes                    (14.1)                               (14.1)
-----------------------------------------------------------------------------
  Net earnings       $   80.4   $  100.9     $  113.6     $ (186.9)  $  108.0
=============================================================================
Earnings (loss) per share
  of common stock (d):
  Basic:
   Before extra-
    ordinary
    items            $   0.57   $   0.76     $   0.70     $  (1.24)  $   0.71
    Extraordinary 
      charges                      (0.10)                               (0.09)
-----------------------------------------------------------------------------
    Net earnings     $   0.57   $   0.66     $   0.70     $  (1.24)  $   0.62
=============================================================================
  Diluted:
   Before extra-
    ordinary
    items            $   0.56   $   0.75     $   0.69     $  (1.24)  $   0.71
    Extraordinary
      charges                      (0.09)                               (0.09)
-----------------------------------------------------------------------------
    Net earnings     $   0.56   $   0.66     $   0.69     $  (1.24)  $   0.62 
=============================================================================

(a)  In the first quarter of 1998, the Company recorded:  (1) a credit of
     $15.1 million to adjust net deferred income tax liabilities as a result
     of a reduction in Italy's statutory income tax rate; (2) a gain of $18.5
     million ($11.4 million aftertax) related to the termination of a license
     agreement, net of charges for related equipment write-offs and capacity
     adjustments, under which the Company had produced plastic multipack

                                      79

<PAGE>
     carriers for beverage cans; and (3) charges of $16.3 million ($10.1
     million aftertax) for the settlement of certain environmental litigation
     and severance costs at certain international affiliates.  The net
     aftertax amounts of these items was a credit of $16.4 million, or $0.12
     per share on both a basic and diluted basis for the first quarter.

(b)  In the third quarter of 1998, the Company recorded:  (1) a benefit of
     $7.6 million ($4.7 million aftertax) from the reduction of previously
     established reserves for guarantees of certain obligations of a
     previously divested business; and (2) a loss of $5.7 million ($3.5
     million aftertax) on the sale of a discontinued operation by an equity
     investee.  The net aftertax amounts of these items was a credit of $1.2
     million, or $0.01 per share on both a basic and diluted basis for the
     third quarter.

(c)  In the fourth quarter of 1998, the Company recorded:  (1) a charge of
     $250.0 million ($154.4 million aftertax) related to adjustment of the
     reserve for estimated future asbestos-related costs; (2) charges of $64.8
     million ($42.6 million after tax and minority share owners' interests)
     related principally to a plant closing in the United Kingdom and
     restructuring costs at certain international affiliates.  The net
     aftertax amount of these items was a charge of $197.0 million, or $1.27
     per share on both a basic and diluted basis for the fourth quarter.

     In the fourth quarter of 1998, the Company also recorded:  (1) charges of
     $42.0 million ($31.5 million after tax and minority share owners'
     interests) principally for write-offs of certain assets associated with
     business conditions in emerging markets; and (2) charges of $8.2 million
     ($6.2 million aftertax) associated with changes in estimated carrying
     costs of the Rockware glass container business.  The net aftertax amount
     of these items was a charge of $37.7 million, or $0.24 per share on both
     a basic and diluted basis for the fourth quarter.

(d)  Earnings per share are computed independently for each period presented. 
     Due primarily to the issuance of 14.5 million shares of common stock in
     the second quarter of 1998, the second quarter of 1998 issuance of
     convertible preferred stock, which is convertible into approximately 8.6
     million shares of common stock, and the resultant effect of all these
     changes on average shares, per share amounts calculated on a year-to-date
     basis do not equal the sums of such amounts calculated separately for
     each quarter.












                                      80

<PAGE>

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE

None.

















































                                      81

<PAGE>

                                  PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information with respect to non-officer directors is included in the Proxy
Statement in the section entitled "Election of Directors" and such information
is incorporated herein by reference.

Information with respect to executive officers is included herein on pages
17 - 20.



ITEMS 11.   EXECUTIVE COMPENSATION AND CERTAIN RELATIONSHIPS AND RELATED 
and 13.     TRANSACTIONS

The section entitled "Director and Executive Compensation and Other
Information," exclusive of the subsections entitled "Board Compensation
Committee Report on Executive Compensation" and "Performance Graph," which is
included in the Proxy Statement is incorporated herein by reference.



ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The section entitled "Security Ownership of Certain Beneficial Owners and
Management" which is included in the Proxy Statement is incorporated herein by
reference.




























                                      82

<PAGE>

                                   PART IV


ITEM 14.(a).     EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


Index of Financial Statements and Financial Statement Schedules Covered by
Report of Independent Auditors.

                                                                     Page
                                                                     ----
Report of Independent Auditors                                         40

Consolidated Balance Sheets at December 31, 1999 and 1998           42-43

For the years ended December 31, 1999, 1998 and 1997

     Consolidated Results of Operations                                41
     Consolidated Share Owners' Equity                              44-45
     Consolidated Cash Flows                                        46-47

Statement of Significant Accounting Policies                        48-49

Financial Review                                                    50-76

Exhibit Index                                                       77-80

     Financial Statement Schedule                              Schedule Page
     ----------------------------                              -------------
For the years ended December 31, 1999, 1998, and 1997:

  II - Valuation and Qualifying Accounts (Consolidated)               S-1


All other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule.

















                                      83

<PAGE>
                               EXHIBIT INDEX

S-K Item 601
    No.                               Document
------------                          --------
3.1        -- Restated Certificate of Incorporation of Owens-Illinois, Inc.
              (filed as Exhibit 3.1 to the Registrant's Registration
              Statement, File No. 33-43224, and incorporated herein by
              reference).
3.2        -- Bylaws of Owens-Illinois, Inc., as amended (filed as Exhibit
              3.2 to the Registrant's Registration Statement, File No. 33-
              43224, and incorporated herein by reference).
4.1        -- Indenture dated as of May 15, 1997, between Owens-Illinois,
              Inc. and The Bank of New York, as Trustee (filed as Exhibit 4.1
              to the Registrant's Form 8-K dated May 16, 1997, File No. 1-
              9576, and incorporated herein by reference).
4.2        -- Indenture dated as of May 20, 1998, between Owens-Illinois,
              Inc. and The Bank of New York, as Trustee (filed as Exhibit 4.1
              to the Registrant's Form 8-K dated May 20, 1998, File No. 1-
              9576, and incorporated herein by reference).
4.3        -- Certificate of Designations, Preferences and Relative,
              Participating, Optional and Other Special Rights of Preferred
              Stock and Qualifications, Limitations and Restrictions Thereof
              of Series A Exchangeable Preferred Stock, Series B Exchangeable
              Preferred Stock and Series C Exchangeable Preferred Stock of
              Owens-Illinois, Inc., dated October 30, 1992 (filed as Exhibit
              3.5 to the Registrant's Annual Report on Form 10-K for the year
              ended December 31, 1992, File No. 1-9576, and incorporated
              herein by reference).
4.4        -- Certificate of Designation of Convertible Preferred Stock
              (filed as Exhibit 4.10 to the Registrant's Form 8-K dated May
              20, 1998, File No. 1-9576, and incorporated herein by
              reference).
4.5        -- Second Amended and Restated Credit Agreement, dated as of April
              30, 1998, among Owens-Illinois, Inc. and certain of its
              subsidiaries and the lenders listed therein, including those
              named as managing agents, co-agents, lead managers, arrangers,
              offshore administrative agents, The Bank of Nova Scotia,
              NationsBank, N.A., Bank of America National Trust and Savings
              Association, and Bankers Trust Company including exhibits and
              schedules thereto (filed as Exhibit 4.1 to the Registrant's
              Quarterly Report on Form 10-Q for the quarter ended March 31,
              1998, File No. 1-9576, and incorporated herein by reference).
10.1       -- Lease Agreement, dated as of May 21, 1980, between Owens-
              Illinois, Inc. and Leyden Associates Limited Partnership (filed
              as Exhibit 5 to the Registrant's Registration Statement, File
              No. 2-68022, and incorporated herein by reference). 
10.2*      -- Amended and Restated Owens-Illinois Supplemental Retirement
              Benefit Plan (filed as Exhibit 10.1 to the Registrant's
              Quarterly Report on Form 10-Q for the quarter ended June 30,
              1998, File No. 1-9576, and incorporated herein by reference).


                                      84

<PAGE>
S-K Item 601
    No.                                  Document
------------                             --------

10.3 *     -- Written description of the Owens-Illinois Senior Executive Life
              Insurance Plan (filed as Exhibit 3.5 to the Registrant's Annual
              Report on Form 10-K for the year ended December 31, 1992, File
              No. 1-9576, and incorporated herein by reference).
10.4 *     -- Form of Employment Agreement between Owens-Illinois, Inc. and
              various Employees (filed as Exhibit 10(m) to the Registrant's
              Annual Report on Form 10-K for the year ended December 31,
              1987, File No. 1-9576, and incorporated herein by reference).  
10.5 *     -- Form of Non-Qualified Stock Option Agreement between Owens-
              Illinois, Inc. and various Employees (filed as Exhibit 10(1) to
              the Registrant's Annual Report on Form 10-K for the year ended
              December 31, 1987, File No. 1-9576, and incorporated herein by
              reference).
10.6 *     -- Form of Subscription Agreement between Owens-Illinois, Inc. and
              various Purchasers (filed as Exhibit 10(k) to the Registrant's
              Annual Report on Form 10-K for the year ended December 31,
              1987, File No. 1-9576, and incorporated herein by reference).
10.7 *     -- Stock Option Plan for Directors of Owens-Illinois, Inc. (filed
              as Exhibit 4.3 to Registrant's Form S-8, File No. 33-57141, and
              incorporated herein by reference).
10.8 *     -- First Amendment to Stock Option Plan for Directors of Owens-
              Illinois, Inc. (filed as Exhibit 10.10 to the Registrant's
              Annual Report on Form 10-K for the year ended December 31,
              1995, File No. 1-9576, and incorporated herein by reference).
10.9 *     -- Form of Non-Qualified Stock Option Agreement for use under the
              Stock Option Plan for Directors of Owens-Illinois, Inc. (filed
              as Exhibit 4.4 to Registrant's Form S-8, File No. 33-57141, and
              incorporated herein by reference).
10.10 *    -- Second Amended and Restated Stock Option Plan for Key Employees
              of Owens-Illinois, Inc. (filed as Exhibit 10.20 to the
              Registrant's Annual Report on Form 10-K for the year ended
              December 31, 1994, File No. 1-9576, and incorporated herein by
              reference).
10.11 *    -- First Amendment to Second Amended and Restated Stock Option
              Plan for Key Employees of Owens-Illinois, Inc. (filed as
              Exhibit 10.13 to the Registrant's Annual Report on Form 10-K
              for the year ended December 31, 1995, File No. 1-9576, and
              incorporated herein by reference).
10.12 *    -- Second Amendment to Second Amended and Restated Stock Option
              Plan for Key Employees of Owens-Illinois, Inc. (filed as
              Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q
              for the quarter ended June 30, 1997, File No. 1-9576, and
              incorporated herein by reference).
10.13 *    -- Form of Non-Qualified Stock Option Agreement for use under the
              Amended and Restated Stock Option Plan for Key Employees of
              Owens-Illinois, Inc. (filed as Exhibit 10.21 to the
              Registrant's Annual Report on Form 10-K for the year ended 


                                85

<PAGE>
S-K Item 601
    No.                                  Document
------------                             --------
              December 31, 1994, File No. 1-9576, and incorporated herein by
              reference).
10.14 *    -- Form of First Amendment to Subscription Agreement between
              Owens-Illinois, Inc. and Robert J. Lanigan (filed as Exhibit
              10.19 to the Registrant's Annual Report on Form 10-K for the
              year ended December 31, 1990, File No. 1-9576, and incorporated
              herein by reference).
10.15 *    -- Form of Non-Qualified Stock Option Agreement between Owens-
              Illinois, Inc., and Robert J. Lanigan (filed as Exhibit 10.21
              to the Registrant's Annual Report on Form 10-K for the      
              year ended December 31, 1990, File No. 1-9576, and incorporated
              herein by reference).
10.16 *    -- Form of First Amendment to Non-Qualified Stock Option Agreement
              between Owens-Illinois, Inc. and Robert J. Lanigan (filed as
              Exhibit 10.20 to the Registrant's Annual Report on Form 10-K
              for the year ended December 31, 1990, File No. 1-9576, and
              incorporated herein by reference).
10.17 *    -- Amended and Restated Owens-Illinois, Inc. Senior Management
              Incentive Plan (filed as Exhibit 10.15 to the Registrant's
              Annual Report on Form 10-K for the year ended December 31,
              1993, File No. 1-9576, and incorporated herein by reference).
10.18 *    -- First Amendment to Amended and Restated Owens-Illinois, Inc.
              Senior Management Incentive Plan (filed as Exhibit 10.19 to the
              Registrant's Annual Report on Form 10-K for the year ended
              December 31, 1995, File No. 1-9576, and incorporated herein by
              reference).
10.19 *    -- Second Amendment to Amended and Restated Owens-Illinois, Inc.
              Senior Management Incentive Plan (filed as Exhibit 10.2 to the
              Registrant's Quarterly Report on Form 10-Q for the quarter
              ended June 30, 1997, File No. 1-9576, and incorporated herein
              by reference).
10.20 *    -- Third Amendment to Amended and Restated Owens-Illinois, Inc.
              Senior Management Incentive Plan (filed as Exhibit 10.3 to the
              Registrant's Quarterly Report on Form 10-Q for the quarter
              ended June 30, 1997, File No. 1-9576, and incorporated herein
              by reference).
10.21 *    -- Amended and Restated Owens-Illinois, Inc. Performance Award
              Plan (filed as Exhibit 10.16 to the Registrant's Annual Report
              on Form 10-K for the year ended December 31, 1993, File No. 1-
              9576, and incorporated herein by reference).
10.22 *    -- First Amendment to Amended and Restated Owens-Illinois, Inc.
              Performance Award Plan (filed as Exhibit 10.4 to the
              Registrant's Quarterly Report on Form 10-Q for the quarter
              ended June 30, 1997, File No. 1-9576, and incorporated herein
              by reference).





                                      86

<PAGE>
S-K Item 601
    No.                                  Document
------------                             --------
10.23 *    -- Owens-Illinois, Inc. Corporate Officers Deferred Compensation
              Plan (filed as Exhibit 10.17 to the Registrant's Annual Report
              on Form 10-K for the year ended December 31, 1993, File No. 1-
              9576, and incorporated herein by reference).
10.24 *    -- First Amendment to Owens-Illinois, Inc. Corporate Officers
              Deferred Compensation Plan (filed as Exhibit 10.22 to the
              Registrant's Annual Report on Form 10-K for the year ended
              December 31, 1995, File No. 1-9576, and incorporated herein by
              reference).
10.25 *    -- Second Amendment to Owens-Illinois, Inc. Corporate Officers
              Deferred Compensation Plan (filed as Exhibit 10.2 to the
              Registrant's Quarterly Report on Form 10-Q for the quarter
              ended June 30, 1998, File No. 1-9576, and incorporated herein
              by reference).
10.26 *    -- Owens-Illinois, Inc. Executive Savings Plan (filed as Exhibit
              10.18 to the Registrant's Annual Report on Form 10-K for the
              year ended December 31, 1993, File No. 1-9576, and incorporated
              herein by reference).
10.27 *    -- First Amendment to Owens-Illinois, Inc. Executive Savings Plan
              (filed as Exhibit 10.24 to the Registrant's Annual Report on
              Form 10-K for the year ended December 31, 1995, File No. 1-
              9576, and incorporated herein by reference).
10.28 *    -- Second Amendment to Owens-Illinois, Inc. Executive Savings Plan
              (filed as Exhibit 10.25 to the Registrant's Annual Report on
              Form 10-K for the year ended December 31, 1995, File No. 1-
              9576, and incorporated herein by reference).
10.29 *    -- Third Amendment to Owens-Illinois, Inc. Executive Savings Plan
              (filed as Exhibit 10.1 to the Registrant's Quarterly Report on
              Form 10-Q for the quarter ended March 31, 1997, File No. 1-
              9576, and incorporated herein by reference).
10.30 *    -- Owens-Illinois, Inc. Directors Deferred Compensation Plan
              (filed as Exhibit 10.26 to the Registrant's Annual Report on
              Form 10-K for the year ended December 31, 1995, File No. 1-
              9576, and incorporated herein by reference).
10.31 *    -- First Amendment to Owens-Illinois, Inc. Directors Deferred
              Compensation Plan (filed as Exhibit 10.27 to the Registrant's
              Annual Report on Form 10-K for the year ended December 31,
              1995, File No. 1-9576, and incorporated herein by reference).
10.32 *    -- Second Amendment to Owens-Illinois, Inc. Directors Deferred
              Compensation Plan (filed as Exhibit 10.2 to the Registrant's
              Quarterly Report on Form 10-Q for the quarter ended March 31,
              1997, File No. 1-9576, and incorporated herein by reference).
10.33 *    -- Amended and Restated 1997 Equity Participation Plan of Owens-
              Illinois, Inc. (filed as Exhibit 10.1 to the Registrant's
              Quarterly Report on Form 10-Q for the quarter ended June 30,
              1999, File No. 1-9576, and incorporated herein by reference).




                                      87

<PAGE>
S-K Item 601
    No.                                  Document
------------                             --------
10.34 *    -- Form of Non-Qualified Stock Option Agreement for use under the
              Amended and Restated 1997 Equity Participation Plan of Owens-
              Illinois, Inc. (filed as Exhibit 4.3 to the Registrant's Form
              S-8, File No. 333-47691, and incorporated herein by reference).
10.35 *    -- Form of Restricted Stock Agreement for use under the Amended
              and Restated 1997 Equity Participation Plan of Owens-Illinois,
              Inc. (filed as Exhibit 4.4 to the Registrant's Form S-8, File
              No. 333-47691, and incorporated herein by reference).
10.36 *    -- Form of Restricted Stock Agreement for use under the Amended
              and Restated 1997 Equity Participation Plan of Owens-Illinois,
              Inc. (filed as Exhibit 10.2 to the Registrant's Quarterly
              Report on Form 10-Q for the quarter ended June 30, 1999, File
              No. 1-9576, and incorporated herein by reference).
10.37 *    -- Form of Phantom Stock Agreement for use under the Amended and
              Resated 1997 Equity Participation Plan of Owens-Illinois, Inc.
              (filed as Exhibit 10.3 to the Registrant's Quarterly Report on
              Form 10-Q for the quarter ended June 30, 1999, File No. 1-9576,
              and incorporated herein by reference).
12         -- Computation of Ratio of Earnings to Fixed Charges and Earnings
              to Combined Fixed Charges and Preferred Stock Dividends (filed
              herewith).
21         -- Subsidiaries of the Registrant (filed herewith).
23.1       -- Consent of Independent Auditors (filed herewith).
23.2       -- Consent of McCarter & English, LLP (filed herewith).
24         -- Owens-Illinois, Inc. Power of Attorney (filed herewith).
27         -- Financial Data Schedule (filed herewith).

*  Indicates a management contract or compensatory plan or arrangement
   required to be filed as an exhibit to this form pursuant to Item 14(c).
-------------             


ITEM 14.(b).     REPORTS ON FORM 8-K

No reports on Form 8-K were filed by the Registrant during the last quarter of
1999.














                                      88

<PAGE>

                                  SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.


                                          OWENS-ILLINOIS, INC.


                                                 (Registrant)



                                          By/s/ James W. Baehren           
                                            -------------------------
                                            James W. Baehren
                                            Corporate Secretary and
                                            Associate General Counsel
                                            



Date:  March 30, 2000  




























                                      89

<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Owens-
Illinois, Inc. and in the capacities and on the dates indicated.


     Signature                     Title
     ---------                     -----
Robert J. Dineen       Director

Edward A. Gilhuly      Director

James H. Greene, Jr.   Director

Henry R. Kravis        Director

Robert J. Lanigan      Director

Joseph H. Lemieux      Chairman of the Board of Directors and Chief Executive
                       Officer (Principal Executive Officer); Director

John J. McMackin, Jr.  Director

Michael W. Michelson   Director

George R. Roberts      Director

David G. Van Hooser    Senior Vice President and Chief Financial Officer
                       (Principal Financial Officer)

Edward C. White        Controller (Principal Accounting Officer)

Thomas L. Young        Executive Vice President, Administration and General
                       Counsel; Director




                                          By/s/ James W. Baehren      
                                            --------------------
                                            James W. Baehren
                                            Attorney-in-fact




Date:  March 30, 2000







                                      90

<PAGE>
                     INDEX TO FINANCIAL STATEMENT SCHEDULE

      Financial Statement Schedule of Owens-Illinois, Inc. and Subsidiaries:

      For the years ended December 31, 1999, 1998, and 1997:

                                                                         PAGE
                                                                         ----
II -- Valuation and Qualifying Accounts (Consolidated) . . . . . . .      S-1














































<PAGE>
                             OWENS-ILLINOIS, INC.

        SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED)

                 Years ended December 31, 1999, 1998, and 1997
                             (Millions of Dollars)


Reserves deducted from assets in the balance sheets:

Allowances for losses and discounts on receivables
--------------------------------------------------

                                      Additions                     
                                 ------------------
                    Balance at   Charged to                          Balance
                    beginning    costs and             Deductions   at end of
                    of period    expenses    Other      (Note 1)     period  
                    ---------------------------------------------------------

1999 . . . . . . .  $  56.9      $  53.3    $   0.0    $  53.3      $  56.9
                    =======      =======    =======    =======      =======
1998 . . . . . . .  $  52.9      $  61.2    $   0.0    $  57.2      $  56.9
                    =======      =======    =======    =======      =======
1997 . . . . . . .  $  40.6      $  51.3    $   0.0    $  39.0      $  52.9
                    =======      =======    =======    =======      =======




(1)  Deductions from allowances for losses and discounts on receivables
     represent uncollectible notes and accounts written off.





















                                      S-1





<PAGE>
                                                     Exhibit 12 -- Page 1 of 2
                             OWENS-ILLINOIS, INC.
               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
     AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
                     (Millions of dollars, except ratios)

                                                Years ended December 31,  
                                          -----------------------------------
                                                                 Pro Forma
                                                              As Adjusted For
                                                               BTR Packaging
                                                                Acquisition
                                            1999      1998         1998      
                                          ------    ------    ---------------
Earnings before income taxes, minority 
  share owners' interests, and 
  extraordinary items  . . . . . . . .    $497.8    $209.0        $256.2
Less:  Equity earnings . . . . . . . .     (22.3)    (16.0)        (16.0)
Add:  Total fixed charges deducted
        from earnings. . . . . . . . .     452.4     404.8         459.6 
      Proportional share of pre-tax 
        earnings of 50% owned 
        associates . . . . . . . . . .      10.6       7.2           7.2
      Dividends received from less
        than 50% owned associates. . .       9.8       6.6           6.6
                                          ------    ------        ------
          Earnings available for 
          payment of fixed charges . .    $948.3    $611.6        $713.6
                                          ======    ======        ======
Fixed charges (including the Company's 
  proportional share of 50% owned 
  associates):
    Interest expense . . . . . . . . .    $417.0    $372.6        $422.9
    Portion of operating lease rental 
      deemed to be interest. . . . . .      26.5      24.8          25.9
    Amortization of deferred financing 
      costs and debt discount expense.       8.9       7.4          10.8
                                          ------    ------        ------
          Total fixed charges
          deducted from earnings
          and total fixed charges. . .    $452.4    $404.8        $459.6

Preferred stock dividends (increased 
  to assumed pre-tax amount) . . . . .      35.5      21.3          33.6
                                          ------    ------        ------
Combined fixed charges and preferred 
  stock dividends. . . . . . . . . . .    $487.9    $426.1        $493.2
                                          ======    ======        ======
Ratio of earnings to fixed charges
 . .       2.1       1.5           1.6
Ratio of earnings to combined fixed 
  charges and preferred stock 
  dividends. . . . . . . . . . . . . .       1.9       1.4           1.4 

                                      E-1

<PAGE>
                                                     Exhibit 12 -- Page 2 of 2

                             OWENS-ILLINOIS, INC.
               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
     AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
                     (Millions of dollars, except ratios)

                                                    Years ended December 31, 
                                                   --------------------------
                                                     1997      1996      1995
                                                   ------    ------    ------
Earnings before income taxes, minority share 
  owners' interests, and extraordinary items . .   $452.3    $324.1    $310.0
Pretax earnings of majority-owned subsidiary not
  consolidated . . . . . . . . . . . . . . . . .                             
Less:  Equity earnings . . . . . . . . . . . . .    (17.9)    (15.2)    (14.4)
Add:  Total fixed charges deducted from 
        earnings . . . . . . . . . . . . . . . .    324.1     324.3     321.1
      Proportional share of pre-tax earnings of 
        50% owned associates . . . . . . . . . .      2.8
      Dividends received from less than 50% 
        owned associates . . . . . . . . . . . .      4.8       2.7       3.7 
                                                   ------    ------    ------
          Earnings available for payment of 
          fixed charges. . . . . . . . . . . . .   $766.1    $635.9    $620.4
                                                   ======    ======    ======
Fixed charges (including the Company's 
  proportional share of 50% owned associates):
    Interest expense . . . . . . . . . . . . . .   $298.7    $297.6    $294.6
    Portion of operating lease rental deemed 
      to be interest . . . . . . . . . . . . . .     21.3      21.7      21.5
    Amortization of deferred financing costs and 
      debt discount expense. . . . . . . . . . .      4.1       5.0       5.0  
                                                   ------    ------    ------
          Total fixed charges deducted from 
          earnings and total fixed charges . . .   $324.1    $324.3    $321.1

Preferred stock dividends (increased to assumed 
  pre-tax amount). . . . . . . . . . . . . . . .      2.2       2.2       2.6
                                                   ------    ------    ------
Combined fixed charges and preferred stock 
  dividends. . . . . . . . . . . . . . . . . . .   $326.3    $326.5    $323.7
                                                   ======    ======    ======
Ratio of earnings to fixed charges . . . . . .        2.4       2.0       1.9
Ratio of earnings to combined fixed charges and 
  preferred stock dividends. . . . . . . . .          2.3       1.9       1.9







                                      E-2



<PAGE>
                                  EXHIBIT 21

                             OWENS-ILLINOIS, INC.

                        SUBSIDIARIES OF THE REGISTRANT

The Registrant had the following subsidiaries at December 31, 1999 (subsid-
iaries are indented following their respective parent companies):

                                               State/Country of Incorporation
Name                                                  or Organization        
----                                           ------------------------------
Owens-Illinois Group, Inc.                                 Delaware
   OI Health Care Holding Corp.                            Delaware
   OI General Finance Inc.                                 Delaware
   OI Closure FTS Inc.                                     Delaware
      Specialty Packaging Licensing Company Limited        Delaware
      Owens-Illinois Closure Inc.                          Delaware
         Product Design & Engineering, Inc.                Minnesota
         O-I Brazil Closure Inc.                           Delaware
            OI Tampas do Brasil Ltda.                      Brazil
   Closure & Packaging Services, Ltd.                      Guernsey
      Closure & Packaging Services (U.K.) Ltd.             United Kingdom
      Closure & Packaging Services (Antilles) N.V.         Netherlands
                                                               Antilles
         Closure & Packaging Services (Netherlands) B.V.   Netherlands
   OI Plastic Products FTS Inc.                            Delaware
      Owens-Illinois Prescription Products Inc.            Delaware
         OI Medical Inc.                                   Delaware
            MARC Industries, Inc.                          Delaware
               EntraCare Corporation                       Kansas     
               MARC Medical Inc.                           Kansas  
               Precision Medical Molding, Inc.             Missouri
               K&M Plastics, Inc.                          Kansas
               Specialty Packaging Products de Mexico,
                     S.A. de C.V.                          Mexico
            OI Medical Holdings Inc.                       Delaware
               Anamed International, Inc.                  Nevada
               Martell Medical Products, Inc.              California
               Owens-BriGam Medical Company                Delaware
               Owens-BriGam de Mexico                      Mexico
               BriGam, Inc.                                North Carolina
                  BriGam Medical Inc.                      North Carolina
                  BriGam Ventures, Inc.                    North Carolina
      Owens-Brockway Plastic Products Inc.                 Delaware
         Owens-Illinois Specialty Products 
               Puerto Rico, Inc.                           Delaware
         OI Regioplast STS Inc.                            Delaware
            Regioplast S.A. de C.V.                        Mexico




                                      E-3

<PAGE>
Subsidiaries of the Registrant (continued)

                                               State/Country of Incorporation
Name                                                  or Organization        
----                                           ------------------------------
         OI Australia Inc.                                 Delaware
            Continental PET Holdings Pty. Ltd.             Australia
               ACI America Holdings Inc.                   Delaware
                  Continental PET Technologies Inc.        Delaware
                     Continental PET Technologies de 
                           Mexico, S.A. de C.V.            Mexico             
                     Continental PET Technologies 
                           Magyaoroszag Kft.               Hungary
                     Continental PET do Brasil Ltda.       Brazil
      Owens-Illinois Labels Inc.                           Delaware
      OI Venezuela Plastic Products Inc.                   Delaware
         OI Plasticos de Venezuela C.A.                    Venezuela
   OI General FTS Inc.                                     Delaware
      OI Castalia STS Inc.                                 Delaware
      OI Levis Park STS Inc.                               Delaware
      OI AID STS Inc.                                      Delaware
      Owens-Illinois Leasing, Inc.                         Delaware
      Owens-Illinois General Inc.                          Delaware
         Owens Insurance, Ltd.                             Bermuda
         OI Holding Company, Inc.                          Ohio
         Owens-Illinois Foreign Sales Corp.                Virgin Islands
         Harbor Capital Advisors, Inc.                     Delaware
            HCA Securities, Inc.                           Delaware
            Harbor Transfer, Inc.                          Delaware
         Universal Materials, Inc.                         Ohio
   Owens-Brockway Packaging, Inc.                          Delaware
      OI Ione STS Inc.                                     Delaware
      Owens-Brockway Glass Container Inc.                  Delaware
         Brockway Realty Inc.                              Pennsylvania
         Brockway Research Inc.                            Delaware
         OI Auburn Inc.                                    Delaware
         Seagate, Inc.                                     Ohio
         OIB Produvisa Inc.                                Delaware
         OI Consol STS Inc.                                Delaware
         OI California Containers Inc.                     California
         OI Puerto Rico STS Inc.                           Delaware
            Owens-Illinois de Puerto Rico                  Ohio
         OI Venezuela STS Inc.                             Delaware
            Owensglass & Cia                               Venezuela
               Centro Vidriero de Venezuela, C.A.          Venezuela   
               Manufacturera de Vidrios Planos, C.A.       Venezuela
               OIV Holding, C.A.                           Venezuela
                  Owens-Illinois de Venezuela, C.A.        Venezuela
                     Fabrica de Vidrio Los Andes, C.A.     Venezuela
               Owens-Illinois Ventas, S.A.                 Venezuela



                                      E-4

<PAGE>
Subsidiaries of the Registrant (continued)

                                               State/Country of Incorporation
Name                                                  or Organization        
----                                           ------------------------------
         OI Peldar STS Inc.                                Delaware
            OI Latin America Inc.                          Delaware
               OI Ecuador STS Inc.                         Delaware
                  Cristaleria del Ecuador, S.A.            Ecuador
               OI Peru STS Inc.                            Delaware
                  Vidrios Industriales S.A.                Peru
         OI Brazil Inc.                                    Delaware
            Owens-Illinois International B.V.              Netherlands
               Cristaleria Peldar, S.A.                    Colombia
               Sao Raimundo Administracao, Participacoes
                     e Representacoes, Limitada            Brazil
                  Companhia Industrial Sao Paulo e Rio     Brazil
               OI Finnish Holdings Oy                      Finland
                  Ryttylan Muovi Oy                        Finland
                  Karhulan Lasi Oy                         Finland
                  A/S Jarvakandi Klaas                     Estonia
               PET Technologies B.V.                       Netherlands
               Owens-Illinois China Holdings B.V.          Netherlands
                  ACI Qingdao Plastic Packaging Co. Ltd.   China
         OI Machineworks Inc.                              Delaware
            O-I Europe (Machinery and Distribution) 
                  Limited                                  United Kingdom
         OI Overseas Management Company Limited            Delaware
            United Glass Group Ltd.                        United Kingdom
               United Glass, Limited                       United Kingdom
                  PET Technologies Limited                 United Kingdom
         OI Poland Inc.                                    Delaware
            Huta Szkla Jaroslaw S.A.                       Poland
            Huta Szkla Antoninek Sp.zo.o                   Poland
         OI Hungary Inc.                                   Delaware
            United Hungarian Glass Containers Kft.         Hungary
         OI International Holdings Inc.                    Delaware
            OI Glass Holdings B.V.                         Netherlands        
               Owens-Illinois International Management
                     & Trading Kft.                        Hungary
                  OI Finance Ltd.                          Ireland
               OI Italia S.r.l.                            Italy
                  AVIR S.p.A.                              Italy
                     Avirunion, a.s.                       Czech Republic
                     Sonator Investments B.V.              Netherlands
                        Vidrieria Rovira, S.A.             Spain
         OI China Inc.                                     Delaware
            Wuhan Owens Glass Container Company Ltd.       China
         OI Thailand Inc.                                  Delaware
            OI Pacific (Machinery and Distribution) 
                  Limited                                  Thailand


                                      E-5

<PAGE>
Subsidiaries of the Registrant (continued)

                                               State/Country of Incorporation
Name                                                  or Organization        
----                                           ------------------------------
         Owens-Illinois (Australia) Pty. Ltd.              Australia
            ACI Packaging Services Pty. Ltd.               Australia
               ACI Operations Pty. Ltd.                    Australia
                  ACI Plastics Packaging (Thailand) Ltd.   Thailand
               ACI International Ltd.                      Australia
                  OI Andover Group Inc.                    Delaware
                     The Andover Group Inc.                Delaware
                  Breadalbane Shipping PTE Ltd.            Singapore
                  PT Kangar Consolidated Industries        Indonesia
                  ACI India LLC                            Delaware
                     Owens-Brockway (India) Limited        India
                  Owens-Illinois (NZ) Ltd.                 New Zealand
                     ACI Operations New Zealand Ltd.       New Zealand
                  Owens-Illinois (HK) Ltd.                 Hong Kong
                     ACI Guangdong Ltd.                    Hong Kong
                        ACI Guangdong Glass Company Ltd.   China
                     ACI Shanghai Ltd.                     Hong Kong
                        ACI Shanghai Glass Company Ltd.    China
                     ACI Tianjin Ld.                       Hong Kong
                        ACI Tianjin Mould Company Ltd.     China


      

























                                      E-6





<PAGE>
                                 EXHIBIT 23.1
                             OWENS-ILLINOIS, INC.
                        CONSENT OF INDEPENDENT AUDITORS


We consent to the reference to our firm under the caption "Selected Financial
Data."  

We also consent to the incorporation by reference in the Registration
Statement (Form S-3 No. 333-47519) of Owens-Illinois, Inc. and in the related
Prospectus, in the Registration Statement (Form S-8 No. 333-67377) pertaining
to the Amended and Restated Owens-Illinois, Inc. Stock Purchase and Savings
Program, the Amended and Restated Owens-Illinois, Inc. Long-Term Savings Plan,
and the Owens-Illinois de Puerto Rico Long-Term Savings Plan, in the
Registration Statement (Form S-8 No. 33-44252) pertaining to the Amended and
Restated Stock Option Plan for Key Employees of Owens-Illinois, Inc., in the
Registration Statement (Form S-8 No. 33-57141) pertaining to the Stock Option
Plan for Directors of Owens-Illinois, Inc., and in the Registration Statement
(Form S-8 No. 333-47691) pertaining to the Amended and Restated 1997 Equity
Participation Plan of Owens-Illinois, Inc. of our report dated February 3,
2000 with respect to the consolidated financial statements and schedule of
Owens-Illinois, Inc., included in this Annual Report (Form 10-K) for the year
ended December 31, 1999.




                                               /s/ Ernst & Young
 LLP      
                                               ---------------------
                                               Ernst & Young LLP



Toledo, Ohio
March 29, 2000


















                                      E-7



<PAGE>
                                   EXHIBIT 23.2
                       CONSENT OF MCCARTER & ENGLISH, LLP
 
 
 
 
 
                                                          March 30, 2000
 
 
 
Ladies and Gentlemen: 
 
      We consent to the incorporation by reference in this Annual Report on
Form 10-K of Owens-Illinois, Inc. for the year ended December 31, 1999, of 
the reference to our firm under the caption "Legal Proceedings." 
 
 
 
                                          Very truly yours, 
 
 
 
 
                                          /s/ McCarter & English, LLP 
                                          ---------------------------
                                          McCarter & English, LLP


























                                      E-8





<PAGE>
                                      EXHIBIT 24
                                  OWENS-ILLINOIS, INC.
                                   POWER OF ATTORNEY

          KNOW ALL MEN BY THESE PRESENTS:  That each individual whose 
signature appears below hereby consents to and appoints David G. Van Hooser, 
James W. Baehren, or either of them, individually, as his true and lawful
attorney-in-fact and agent with all power of substitution, for him and in his
name, place and stead, in any and all capacities, to sign the 1999 Annual
Report on Form 10-K of Owens-Illinois, Inc., a corporation organized and 
existing under the laws of the State of Delaware, and any and all amendments 
thereto, and to file the same, with all exhibits thereto, and all documents in 
connection therewith, with the Securities and Exchange Commission pursuant to
the requirements of the Securities and Exchange Act of 1934, granting unto 
said attorney-in-fact and agent full power and authority to do and perform 
each and every act and thing requisite and necessary to be done in and about 
the same as fully to all intents and purposes as he might or could do in 
person, hereby ratifying and confirming all that said attorney-in-fact and 
agent or his substitute or substitutes, may lawfully do or cause to be done 
by virtue thereof.

          IN WITNESS WHEREOF, each of the undersigned has hereunto
 set his
hand on the date set opposite his name.

Signature                     Title                                 Date
---------                     -----                               --------
Joseph H. Lemieux             Chairman of the Board of             3/30/00
-------------------------     Directors and Chief Executive       --------
Joseph H. Lemieux             Officer (Principal Executive
                              Officer); Director

Thomas L. Young               Executive Vice President,            3/30/00
-------------------------     Administration and General          --------
Thomas L. Young               Counsel; Director


Robert J. Lanigan             Chairman Emeritus of                 3/30/00
-------------------------     the Board of Directors;             --------
Robert J. Lanigan             Director

Robert J. Dineen              Director                             3/30/00
-------------------------                                         --------
Robert J. Dineen

Edward A. Gilhuly             Director                             3/30/00
-------------------------                                         --------
Edward A. Gilhuly

James H. Greene, Jr.          Director                             3/30/00
-------------------------                                         --------
James H. Greene, Jr.


                                      E-9

<PAGE>
Signature                     Title                                Date
---------                     -----                              --------
Henry R. Kravis               Director                            3/30/00
-------------------------                                        --------
Henry R. Kravis

John J. McMackin, Jr.         Director                            3/30/00
-------------------------                                        --------
John J. McMackin, Jr.

Michael W. Michelson          Director                            3/30/00
-------------------------                                        --------
Michael W. Michelson

George R. Roberts             Director                            3/30/00
-------------------------                                        --------
George R. Roberts

David G. Van Hooser           Senior Vice President and           3/30/00
-------------------------     Chief Financial Officer            --------
David G. Van Hooser           (Principal Financial Officer)

Edward C. White               Controller (Principal               3/30/00
-------------------------     Accounting Officer)                --------
Edward C. White




























                                      E-10



<TABLE> <S> <C>


<PAGE>
<ARTICLE>         5
<LEGEND>
This schedule contains summary financial information extracted from the
December 31, 1999 consolidated balance sheet, and the consolidated results
of operations for the year then ended and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          DEC-31-1999
<PERIOD-END>                               DEC-31-1999
<CASH>                                     289,200,000
<SECURITIES>                                         0
<RECEIVABLES>                              856,400,000
<ALLOWANCES>                                56,900,000
<INVENTORY>                                826,600,000
<CURRENT-ASSETS>                         2,109,800,000
<PP&E>                                   5,590,800,000
<DEPRECIATION>                           2,146,700,000
<TOTAL-ASSETS>                          10,756,300,000
<CURRENT-LIABILITIES>                    1,273,100,000
<BONDS>                                  5,809,900,000
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                456,500,000
<COMMON>                                     1,600,000
<OTHER-SE>                               1,891,800,000
<TOTAL-LIABILITY-AND-EQUITY>            10,756,300,000
<SALES>                                  5,522,900,000
<TOTAL-REVENUES>                         5,786,700,000
<CGS>                                    4,296,400,000
<TOTAL-COSTS>                            4,296,400,000
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                            53,300,000
<INTEREST-EXPENSE>                         425,900,000
<INCOME-PRETAX>                            497,800,000
<INCOME-TAX>                               185,500,000
<INCOME-CONTINUING>                        299,100,000
<DISCONTINUED>                                       0
<EXTRAORDINARY>                              (800,000)
<CHANGES>                                            0
<NET-INCOME>                               298,300,000
<EPS-BASIC>                                       1.79
<EPS-DILUTED>                                     1.78
        

</TABLE>