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O-I GLASS, INC.

(OI)
  Report
Real-time Estimate Cboe BZX  -  12:52 2022-09-28 pm EDT
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O-I GLASS, INC. /DE/ Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

08/03/2022 | 04:34pm EDT

The Company's measure of profit for its reportable segments is segment operating profit, which consists of consolidated earnings before interest income, interest expense, and provision (benefit) for income taxes and excludes amounts related to certain items that management considers not representative of ongoing operations and other adjustments, as well as certain retained corporate costs. The segment data presented below is prepared in accordance with general accounting principles for segment reporting. The lines titled "reportable segment totals" in both net sales and segment operating profit represent non-GAAP measures. Management has included reportable segment totals below to facilitate the discussion and analysis of financial condition and results of operations and believes this information allows the Board of Directors, management, investors and analysts to better understand the Company's financial performance. The Company's management, including the chief operating decision maker (defined as its chief executive officer) uses segment operating profit, in combination with net sales and selected cash flow information, to evaluate performance and to allocate resources. Segment operating profit is not, however, intended as an alternative measure of operating results as determined in accordance with U.S. GAAP and is not necessarily comparable to similarly titled measures used by other companies.

In March 2020, the World Health Organization categorized COVID-19 as a pandemic, and it continues to impact the United States and other countries across the world. To limit the spread of COVID-19, governments have taken various actions, including the issuance of stay-at-home orders and social distancing guidelines. As a result, many businesses have adjusted, reduced or suspended operating activities, either due to requirements under government orders or as a result of a reduction in demand for many products from direct or ultimate customers. Fortunately, the manufacture of glass containers has been largely viewed as essential to the important food and beverage value chain in the countries in which the Company operates. However, the Company is still impacted by broader supply chain issues and, in some cases, certain end use categories that it serves are not deemed essential. While the Company's plants continued to operate as essential businesses, some plants suspended operations or cut back on shifts for a portion of 2020 due to government actions to address COVID-19. Additional suspensions and cutbacks may occur as the impacts from COVID-19 and related responses continue to develop.

The following discussion describes the Company's consolidated results of operations for the three and six months ended June 30, 2022. The COVID-19 pandemic impacted the Company's shipment and production levels in 2020 and, to a lesser extent, in 2021 and the first six months of 2022. The Company is actively monitoring the continued impact of the pandemic, which could negatively impact its business, results of operations, cash flows and financial position beyond the second quarter of 2022.

Financial information for the three and six months ended June 30, 2022 and 2021 regarding the Company's reportable segments is as follows (dollars in millions):

                               Three months ended        Six months ended
                                    June 30,                 June 30,
                                2022         2021        2022        2021
Net Sales:
Americas                     $      971     $   890    $   1,912    $ 1,727
Europe                              765         745        1,474      1,384
Reportable segment totals         1,736       1,635        3,386      3,111
Other                                42          25           83         50
Net Sales                    $    1,778     $ 1,660    $   3,469    $ 3,161


                                       29

                                                     Three months ended         Six months ended
                                                          June 30,                  June 30,
                                                      2022          2021         2022        2021
Net earnings attributable to the Company           $      252     $    118    $      340    $    21
Net earnings attributable to non-controlling
interests                                                   4            5            38         12
Net earnings                                              256          123           378         33
Provision for income taxes                                 72           75           120        100
Earnings before income taxes                              328          198           498        133
Items excluded from segment operating profit:
Retained corporate costs and other                         53           42           103         77
Gain on sale of divested business                                                   (55)
Gain on sale leaseback                                  (182)                      (182)
Restructuring, asset impairment and other
charges                                                    12            9            12          9
Brazil indirect tax credit                                            (69)                     (69)
Charge related to Paddock support agreement
liability                                                                                       154
Interest expense, net                                      46           52           112        103
Segment operating profit                           $      257     $    232    $      488    $   407

Americas                                                  130          124           258        224
Europe                                                    127          108           230        183
Reportable segment totals                          $      257     $    232    $      488    $   407

Note: All amounts excluded from reportable segment totals are discussed in the following applicable sections.

Executive Overview - Quarters ended June 30, 2022 and 2021

Net sales in the second quarter of 2022 were $118 million, or approximately 7%, higher than in the same quarter in 2021 primarily due to higher prices. Net sales were negatively impacted by the unfavorable effects of changes in foreign currency exchange rates and the sale of the Company's glass tableware business in Colombia on March 1, 2022.

Earnings before income taxes were $130 million higher in the second quarter of 2022 compared to the same period in the prior year. This increase was due to higher segment operating profit, a gain on a sale leaseback transaction entered into by the Company for its land and building related to its plant in Brampton, Ontario, Canada and lower net interest expense, partially offset by the non-recurrence of a gain recorded on a Brazilian indirect tax credit in the second quarter of 2021 and higher retained corporate and other costs in the second quarter of 2022 compared to the same period in the prior year.

Segment operating profit for reportable segments in the second quarter of 2022 was $25 million higher compared to the second quarter of 2021, primarily due to higher sales and production levels, strong operating performance, benefits from margin expansion initiatives and higher net prices, slightly offset by higher logistics costs and elevated engineering project activity.

On April 26, 2021, the Company announced that its subsidiary, Paddock Enterprises, LLC ("Paddock"), had reached an agreement in principle to accept the terms of a mediator's proposal regarding a consensual plan of reorganization in Paddock's Chapter 11 bankruptcy case. The agreement in principle provided for total consideration of $610 million to fund the Paddock Trust (as defined in Note 9 to the Condensed Consolidated Financial Statements). The Company recorded a charge of $154 million related to its potential liability under the Paddock support agreement during the first fiscal quarter of 2021 primarily related to an increase to Paddock's asbestos reserve estimate in consideration for the channeling injunction to be included in the Plan (as defined in Note 10 to the Condensed Consolidated Financial Statements) protecting the Company and its affiliates from Asbestos Claims (as defined in Note 10 to the Condensed Consolidated Financial Statements). Subsequent to quarter end, in July 2022, the Plan became effective, and the Paddock Trust was funded by the Company and Paddock with consideration totaling $610 million.


                                       30

Net interest expense for the second quarter of 2022 decreased $6 million compared to the second quarter of 2021, primarily due to lower debt levels, partially offset by higher interest rates than in the second quarter of 2021.

For the second quarter of 2022, the Company recorded net earnings attributable to the Company of $252 million, or $1.59 per share (diluted), compared to net earnings attributable to the Company of $118 million, or $0.73 per share (diluted), in the second quarter of 2021. As discussed below, net earnings attributable to the Company in both periods included items that management considers not representative of ongoing operations and other adjustments. These items increased net earnings attributable to the Company by $137 million, or $0.86 per share, in the second quarter of 2022 and increased net earnings attributable to the Company by $32 million, or $0.19 per share, in the second quarter of 2021.

Results of Operations - Second Quarter of 2022 Compared with Second Quarter of 2021

Net Sales

The Company's net sales in the second quarter of 2022 were $1,778 million compared with $1,660 million for the second quarter of 2021, an increase of $118 million, or approximately 7%. Glass container shipments, in tons, were up nearly 1% in the second quarter of 2022, but a slightly less favorable mix resulted in a $1 million decrease to net sales compared to the same period in 2021. Higher selling prices increased net sales by $208 million in the second quarter of 2022, driven by the pass through of higher cost inflation. Unfavorable foreign currency exchange rates decreased net sales by $95 million in the second quarter of 2022 compared to the prior year quarter, primarily driven by the weakening of the Euro and the Colombian peso compared to the U.S. dollar. The non-recurrence of the shipments related to the divestiture of the Company's glass tableware business in Colombia on March 1, 2022 reduced net sales by approximately $11 million in the second quarter of 2022. Other sales were approximately $17 million higher in the second quarter of 2022 than the same period in the prior year driven by higher machine parts sales to third parties.

The change in net sales of reportable segments can be summarized as follows (dollars in millions):


Reportable segment net sales - 2021                       $ 1,635
Price                                           $  208
Sales volume and mix                               (1)

Effects of changing foreign currency rates (95) Divestitures

                                      (11)
Total effect on reportable segment net sales                  101
Reportable segment net sales - 2022                       $ 1,736


Americas: Net sales in the Americas in the second quarter of 2022 were $971 million compared to $890 million for the second quarter of 2021, an increase of $81 million, or approximately 9%. Higher selling prices in the region increased net sales by $92 million in the second quarter of 2022, driven by the pass through of higher cost inflation. Glass container shipments in the region were up nearly 1% in the second quarter of 2022 compared to the prior year second quarter. Lower shipments to beer customers, primarily in North America due to a combination of factors, were offset by higher shipments in most other end use categories across the remainder of the region. These higher shipment levels increased net sales by approximately $2 million in the second quarter of 2022 and more than offset choppy demand patterns and ongoing supply chain challenges, which are expected to continue in 2022. The divestiture of the glass tableware business in Colombia reduced net sales by approximately $11 million in the second quarter of 2022 compared to the same period in the prior year. The unfavorable effects of foreign currency exchange rate changes decreased net sales by $2 million in the second quarter of 2022 compared to the same period in 2021, as the Colombian peso weakened in relation to the U.S. dollar.

Europe: Net sales in Europe in the second quarter of 2022 were $765 million compared to $745 million for the second quarter of 2021, an increase of $20 million, or approximately 3%. Glass container shipments in the second quarter of 2022 were up nearly 1%, but a slightly less favorable mix resulted in a $3 million decrease to net sales compared to the second quarter of 2021. Lower shipments to wine customers were offset by higher shipments in most other end use categories. Higher selling prices in Europe increased net sales by $116 million in the second quarter of


                                       31

2022, driven by the pass through of cost inflation. Unfavorable foreign currency exchange rates decreased the region's net sales by approximately $93 million in the second quarter of 2022 as the Euro weakened in relation to the U.S. dollar.

Earnings before Income Taxes and Segment Operating Profit

Earnings before income taxes were $328 million in the second quarter of 2022 compared to earnings before income taxes of $198 million in the second quarter of 2021, an increase of $130 million, or 66%. This increase was due to higher segment operating profit, a gain on a sale leaseback transaction entered into by the Company for its land and building related to its plant in Brampton, Ontario, Canada and lower net interest expense, partially offset by the non-recurrence of a gain recorded on a Brazilian indirect tax credit in the second quarter of 2021 and higher retained corporate and other costs in the second quarter of 2022 compared to the same period in the prior year.

Segment operating profit of the reportable segments includes an allocation of some corporate expenses based on a percentage of sales and direct billings based on the costs of specific services provided. Unallocated corporate expenses and certain other expenses not directly related to the reportable segments' operations are included in Retained corporate costs and other. For further information, see Segment Information included in Note 1 to the Condensed Consolidated Financial Statements.

Segment operating profit of reportable segments in the second quarter of 2022 was $257 million, compared to $232 million in the second quarter of 2021, an increase of $25 million, or approximately 11%. This increase was primarily due to higher net prices, higher sales and production levels, strong operating performance, benefits from the Company's margin expansion initiatives, partially offset by higher logistics costs, elevated engineering project activity and the unfavorable effect of changes in foreign currency rates.

The change in segment operating profit of reportable segments can be summarized as follows (dollars in millions):


Reportable segment operating profit - 2021                           $ 232
Net price (net of cost inflation)                          $   42
Sales volume and mix                                            6
Operating costs                                               (1)
Effects of changing foreign currency rates                   (17)
Divestitures                                                  (5)
Total net effect on reportable segment operating profit                 25
Reportable segment operating profit - 2022                           $ 257


Americas: Segment operating profit in the Americas in the second quarter of 2022 was $130 million compared to $124 million in the second quarter of 2021, an increase of $6 million, or 5%. The impact of higher shipments and an improved mix discussed above increased segment operating profit by $7 million in the second quarter of 2022 compared to the same period in the prior year. Cost inflation exceeded higher selling prices resulting in a net $5 million decrease to segment operating profit in the second quarter of 2022. Operating costs in the second quarter of 2022 were $12 million lower than in the prior year quarter and included benefits from the region's margin expansion initiatives, partially offset by furnace events in North America that resulted in higher repair costs and unplanned production downtime. The effects of foreign currency exchange rates decreased segment operating profit by $4 million in the current year period.

In March 2022, the Company completed the sale of its Cristar TableTop S.A.S. ("Cristar") glass tableware business in Colombia, and in May 2022, the Company completed the sale of its land and building for its Brampton, Ontario, Canada plant in conjunction with a leaseback of this property. The sale of the tableware business and sale leaseback transaction are part of the Company's portfolio optimization program to divest non-core assets and decapitalize the business through sale-leaseback transactions and redeploy the proceeds to help fund attractive growth opportunities, which primarily include capital expenditures related to expansion projects and investments in the Company's MAGMA innovation, as well as to reduce debt. The divestiture of the Cristar glass tableware business and nearly two months of additional lease expense associated with the Brampton, Ontario sale leaseback transaction reduced segment operating profit by approximately $4 million in the second quarter of 2022 compared to the same period in the prior year.


                                       32

Europe: Segment operating profit in Europe in the second quarter of 2022 was $127 million compared to $108 million in the second quarter of 2021, an increase of $19 million, or 18%. The impact of shipments and mix discussed above decreased segment operating profit by $1 million. The benefit of higher selling prices exceeded cost inflation and increased segment operating profit by $47 million in the second quarter of 2022, compared to the second quarter of 2021. Elevated engineering project activity more than exceeded the benefits from margin expansion initiatives and cost control measures and increased the region's operating costs by approximately $13 million in the second quarter of 2022 compared to the second quarter of the prior year. The effects of foreign currency exchange rates decreased segment operating profit by $13 million in the current year period. The divestiture of the Le Parfait brand in December 2021 reduced segment operating profit by approximately $1 million in the second quarter of 2022 compared to the same period in the prior year.

In addition, the current conflict between Russia and Ukraine has caused a significant increase in the price of natural gas and increased price volatility. The Company's European operations typically purchase natural gas under long-term supply arrangements and frequently agree on price with the relevant supplier in advance of the period in which the natural gas will be delivered, which is shielding the Company from the full impact of increased natural gas prices. However, the current conflict between Russia and Ukraine and the resulting sanctions, potential sanctions or other adverse repercussions on Russian-sourced energy supplies could cause the Company's energy suppliers to be unable or unwilling to deliver natural gas at agreed prices and quantities. If this occurs, it will be necessary for the Company to procure natural gas at then-current market prices and subject to market availability and could cause the Company to experience a significant increase in operating costs or result in the temporary or permanent cessation of delivery of natural gas to several of the Company's manufacturing plants in Europe. In addition, depending on the duration and ultimate outcome of the conflict between Russia and Ukraine, future long-term supply arrangements for natural gas may not be available at reasonable prices or at all.

Interest Expense, Net

Net interest expense in the second quarter of 2022 was $46 million compared to $52 million for the second quarter of 2021. This decrease was primarily due to lower debt levels, partially offset by higher interest rates.

Provision for Income Taxes

The Company's effective tax rate from operations for the three months ended June 30, 2022 was 22.0% compared to 37.9% for the three months ended June 30, 2021. The effective tax rate for the second quarter of 2022 differed from the second quarter of 2021 due to the favorable capital gains tax rate on the sale of the land and building related to the Brampton, Canada plant, as well as a change in mix of geographic earnings.

Net Earnings Attributable to the Company

For the second quarter of 2022, the Company recorded net earnings attributable to the Company of $252 million, or $1.59 per share (diluted), compared to a net earnings attributable to the Company of $118 million, or $0.73 per share (diluted), in the second quarter of 2021. Earnings in the second quarter of 2022 and 2021 included items that management considered not representative of ongoing operations and other adjustments as set forth in the following table (dollars in millions):


                                                       Net Earnings
                                                         Increase
                                                        (Decrease)
Description                                           2022      2021
Gain on sale leaseback                                  182

Restructuring, asset impairment and other charges (12) (9) Brazil indirect tax credit

                                         69
Net provision for income tax on items above            (33)      (28)
Total                                                $  137    $   32


                                       33

Executive Overview - Six months ended June 30, 2022 and 2021

Net sales for the first six months of 2022 were $308 million, or approximately 10%, higher than in the same period in the prior year, primarily due to higher prices and stronger shipments than the prior year period, which was more significantly impacted by COVID-19 and the impact of severe weather in the Americas. Net sales were negatively impacted by the unfavorable effects of changes in foreign currency exchange rates and the sale of the Company's glass tableware business in Colombia on March 1, 2022.

Earnings before income taxes were $365 million higher in the first six months of 2022 compared to the same period in the prior year. This increase was due to higher segment operating profit, the gains on the sale of the land and building of the Company's plant in Brampton, Ontario, Canada, and the Company's glass tableware business in Colombia in the first six months of 2022, as well as the nonoccurrence of the Paddock-related charge in the first six months of 2021, partially offset by the non-recurrence of the gain recorded on a Brazilian indirect tax credit in 2021, higher retained corporate and other costs and higher net interest expense in the first six months of 2022 compared to the same period in the prior year.

Segment operating profit for reportable segments in the first six months of 2022 was $81 million higher compared to the first six months of 2021, primarily due to higher sales and production levels, strong operating performance, benefits from margin expansion initiatives, higher net prices and the non-recurrence of severe weather that impacted the Americas in the first quarter of 2021, slightly offset by higher logistics costs and elevated engineering project activity.

On April 26, 2021, the Company announced that its subsidiary, Paddock Enterprises, LLC ("Paddock"), had reached an agreement in principle to accept the terms of a mediator's proposal regarding a consensual plan of reorganization in Paddock's Chapter 11 bankruptcy case. The agreement in principle provided for total consideration of $610 million to fund the Paddock Trust (as defined in Note 9 to the Condensed Consolidated Financial Statements). The Company recorded a charge of $154 million related to its potential liability under the Paddock support agreement during the first fiscal quarter of 2021 primarily related to an increase to Paddock's asbestos reserve estimate in consideration for the channeling injunction to be included in the Plan (as defined in Note 10 to the Condensed Consolidated Financial Statements) protecting the Company and its affiliates from Asbestos Claims (as defined in Note 10 to the Condensed Consolidated Financial Statements). Subsequent to quarter end, in July 2022, the Plan became effective, and the Paddock Trust was funded by the Company and Paddock with consideration totaling $610 million.

Net interest expense for the first half of 2022 increased $9 million compared to the same period in 2021, primarily due to higher note repurchase premiums and refinancing fees and charges and higher interest rates, partially offset by lower debt levels.

For the first six months of 2022, the Company recorded net earnings attributable to the Company of $340 million, or $2.14 per share (diluted), compared to net earnings attributable to the Company of $21 million, or $0.13 per share (diluted), in the first six months of 2021. As discussed below, net earnings in both periods included items that management considers not representative of ongoing operations and other adjustments. These items increased net earnings attributable to the Company by $135 million, or $0.85 per share, in the first six months of 2022 and decreased net earnings attributable to the Company by $122 million, or $0.76 per share, in the first six months of 2021.

Results of Operations - First six months of 2022 compared with first six months of 2021

Net Sales

The Company's net sales in the first six months of 2022 were $3,469 million compared with $3,161 million for the first six months of 2021, an increase of $308 million, or approximately 10%. Glass container shipments, in tons, were up approximately 3% in the first half of 2022, increasing net sales by approximately $72 million compared to the same period in 2021, which was more significantly impacted by COVID-19 and the impact of severe weather in the Americas. Higher selling prices increased net sales by $348 million in the first six months of 2022, driven by the pass through of higher cost inflation. Unfavorable foreign currency exchange rates decreased net sales by $130 million in the first half of 2022 compared to the prior year period, primarily driven by the weakening of the Euro compared to the U.S. dollar.


                                       34

The non-recurrence of the shipments related to the divestiture of the Company's glass tableware business in Colombia on March 1, 2022 reduced net sales by approximately $15 million in the first six months of 2022. Other sales were approximately $33 million higher in the first half of 2022 than the same period in the prior year driven by higher machine parts sales to third parties.

The change in net sales of reportable segments can be summarized as follows (dollars in millions):


Reportable segment net sales - 2021                        $ 3,111
Price                                           $   348
Sales volume and mix                                 72

Effects of changing foreign currency rates (130) Divestitures

                                       (15)
Total effect on reportable segment net sales                   275
Reportable segment net sales - 2022                        $ 3,386


Americas: Net sales in the Americas in the first six months of 2022 were $1,912 million compared to $1,727 million for the first six months of 2021, an increase of $185 million, or approximately 11%. Higher selling prices in the region increased net sales by $172 million in the first half of 2022, driven by the pass through of higher cost inflation. Glass container shipments in the region were up nearly 2% in the first six months of 2022 compared to the prior year period, which was more significantly impacted by COVID-19 and the impact of severe weather that affected the southern United States and Mexico. These higher shipment levels increased net sales by approximately $24 million in the first six months of 2022 and more than offset choppy demand patterns and ongoing supply chain challenges, which are expected to continue in 2022. This was partially offset by the divestiture of the Cristar glass tableware business in March 2022, which reduced net sales by approximately $15 million in the first half of 2022 compared to the same period in the prior year. The favorable effects of foreign currency exchange rate changes increased net sales by $4 million in the first six months of 2022 compared to the same period in 2021.

Europe: Net sales in Europe in the first six months of 2022 were $1,474 million compared to $1,384 million for the first six months of 2021, an increase of $90 million, or approximately 7%. Glass container shipments in the first half of 2022 were up nearly 5%, increasing net sales by approximately $48 million, compared to the same period in 2021, driven by stronger shipments to wine, spirits and non-alcoholic beverage customers. Higher selling prices in Europe increased net sales by $176 million in the first half of 2022, driven by the pass through of higher cost inflation. Unfavorable foreign currency exchange rates decreased the region's net sales by approximately $134 million in the first six months of 2022 as the Euro weakened in relation to the U.S. dollar.

Earnings before Income Taxes and Segment Operating Profit

Earnings before income taxes were $498 million in the first half of 2022 compared to $133 million in the first half of 2021, an increase of $365 million. This increase was due to higher segment operating profit, the gains on the sale of land and building of the Company's plant in Brampton, Ontario, Canada and the Company's glass tableware business in Colombia in the first six months of 2022 and the non-recurrence of the Paddock-related charge in the first six months of 2021, partially offset by the non-recurrence of the gain recorded on a Brazilian indirect tax credit, higher retained corporate and other costs and higher net interest expense in the first six months of 2022 compared to the same period in the prior year.

Segment operating profit of the reportable segments includes an allocation of some corporate expenses based on a percentage of sales and direct billings based on the costs of specific services provided. Unallocated corporate expenses and certain other expenses not directly related to the reportable segments' operations are included in Retained corporate costs and other. For further information, see Segment Information included in Note 1 to the Condensed Consolidated Financial Statements.

Segment operating profit of reportable segments in the first half of 2022 was $488 million, compared to $407 million for the first half of 2021, an increase of $81 million, or approximately 20%. This increase was primarily due to higher sales and production levels, strong operating performance, benefits from the Company's margin expansion


                                       35

initiatives, higher net prices and the non-recurrence of severe weather that impacted the Americas in the first quarter of 2021, slightly offset by higher logistics costs and elevated engineering project activity.

The change in segment operating profit of reportable segments can be summarized as follows (dollars in millions):


Reportable segment operating profit - 2021                           $ 407
Net price (net of cost inflation)                          $   57
Sales volume and mix                                           23
Operating costs                                                25
Effects of changing foreign currency rates                   (16)
Divestitures                                                  (8)
Total net effect on reportable segment operating profit                 81
Reportable segment operating profit - 2022                           $ 488


Americas: Segment operating profit in the Americas in the first six months of 2022 was $258 million compared to $224 million in the first six months of 2021, an increase of $34 million, or 15%. The impact of higher shipments discussed above increased segment operating profit by $10 million. The benefit of higher selling prices exceeded cost inflation resulting in a net $7 million increase to segment operating profit in the first half of 2022. Operating costs in the first six months of 2022 were $23 million lower than in the same period of the prior year and included benefits from the region's margin expansion initiatives, partially offset by furnace events in North America that resulted in higher repair costs and unplanned production downtime. The effects of foreign currency exchange rates decreased segment operating profit by $1 million in the current year period.

Included in the above discussion of the factors impacting results, the region's results for the first six months of 2022 benefited from the non-recurrence of severe weather that occurred in February of 2021, which negatively impacted first quarter 2021 results by approximately $40 million, primarily due to surcharges for usage or excess usage of electricity and natural gas, lost production downtime, lost sales and the cost of incremental repairs.

In March 2022, the Company completed the sale of its Cristar glass tableware business in Colombia, and in May 2022, the Company completed the sale of the land and building of the Company's plant in Brampton, Ontario, Canada in conjunction with a leaseback of this property. The divestiture and sale leaseback are part of the Company's portfolio optimization program to divest non-core assets and decapitalize the business through sale-leaseback transactions and redeploy the proceeds to help fund attractive growth opportunities, which primarily include capital expenditures related to expansion projects and investments in the Company's MAGMA innovation, as well as to reduce debt. The divestiture of the Cristar glass tableware business and nearly two months of additional lease expense associated with the Brampton, Ontario sale leaseback transaction reduced segment operating profit by approximately $5 million in the first six months of 2022 compared to the same period in the prior year.

Europe: Segment operating profit in Europe in the first six months of 2022 was $230 million compared to $183 million in the same period of 2021, an increase of $47 million, or 26%. The impact of higher shipments discussed above increased segment operating profit by $13 million. The benefit of higher selling prices exceeded cost inflation and increased segment operating profit by $50 million in the first six months of 2022 compared to the first six months of 2021. Operating costs in the first six months of 2022 were $2 million lower than in the same period of the prior year and included benefits from the region's margin expansion initiatives. The effects of foreign currency exchange rates decreased segment operating profit by $15 million in the current year period. The divestiture of the Le Parfait brand in December 2021 reduced segment operating profit by approximately $3 million in the first half of 2022 compared to the same period in the prior year.

In addition, the current conflict between Russia and Ukraine has caused a significant increase in the price of natural gas and increased price volatility. The Company's European operations typically purchase natural gas under long-term supply arrangements and frequently agree on price with the relevant supplier in advance of the period in which the natural gas will be delivered, which is shielding the Company from the full impact of increased natural gas prices. However, the current conflict between Russia and Ukraine and the resulting sanctions, potential sanctions or other adverse repercussions on Russian-sourced energy supplies could cause the Company's energy suppliers to be


                                       36

unable or unwilling to deliver natural gas at agreed prices and quantities. If this occurs, it will be necessary for the Company to procure natural gas at then-current market prices and subject to market availability and could cause the Company to experience a significant increase in operating costs or result in the temporary or permanent cessation of delivery of natural gas to several of the Company's manufacturing plants in Europe. In addition, depending on the duration and ultimate outcome of the conflict between Russia and Ukraine, future long-term supply arrangements for natural gas may not be available at reasonable prices or at all.

Interest Expense, Net

Net interest expense for the first six months of 2022 was $112 million compared to $103 million for the same period of 2021. This increase was primarily due to higher note repurchase premiums and refinancing fees and charges and higher interest rates, partially offset by lower debt levels. Net interest expense for the first six months of 2022 included $18 million for note repurchase premiums, third-party fees and the write-off of deferred finance fees that related to debt that was repaid prior to its maturity and the Company's new bank credit agreement.

Provision for Income Taxes

The Company's effective tax rate from operations for the six months ended June 30, 2022 was 24.1% compared to 75.2% for the six months ended June 30, 2021. The effective tax rate for the first six months of 2022 differed from the first six months of 2021 due to the favorable capital gains tax rate on the sales of the tableware business and the land and building of its Brampton, Canada plant in the first six months of 2022 and the charge related to the Paddock support agreement liability recorded without a tax benefit in the first six months of 2021, as well as a change in the mix of geographic earnings.

Net Earnings Attributable to Non-Controlling Interests

Net earnings attributable to non-controlling interests for the first six months of 2022 was $38 million compared to $12 million for the first six months of 2021. This increase was primarily due to approximately $29 million of non-controlling interest recorded in the first quarter of 2022 associated with the gain on the sale of the Company's glass tableware business in Colombia.

Net Earnings Attributable to the Company

For the first six months of 2022, the Company recorded net earnings attributable to the Company of $340 million, or $2.14 per share (diluted), compared to net earnings attributable to the Company of $21 million, or $0.13 per share (diluted), in the first half of 2021. Earnings in the first six months of 2022 and 2021 included items that management considered not representative of ongoing operations and other adjustments as set forth in the following table (dollars in millions):


                                                                        Net Earnings
                                                                          Increase
                                                                         (Decrease)
Description                                                            2022     2021
Gain on sale of divested business                                     $    55  $
Gain on sale leaseback                                                    182
Restructuring, asset impairment and other charges                        (12)      (9)

Charges for note repurchase premiums and write-off of finance fees (18) Brazil indirect tax credit

                                                          69
Charge related to Paddock support agreement liability                            (154)
Net provision for income tax on items above                              (43)     (28)
Net impact of noncontrolling interests on items above                    (29)
Total                                                                 $   135  $ (122)


                                       37

Forward Looking Operational and Financial Impacts

The Company expects full year 2022 sales shipment growth (in tons) to increase

around 1% compared to 2021. Likewise, the Company expects continued benefits

? from its initiatives to expand margins and higher selling prices that are

expected to more than offset cost inflation. Operating costs will also reflect

incremental cost for expansion project activity.

? The Company will continue to focus on long-term value creation, including

advancing the MAGMA deployment.

Including the $620 million funding of the Paddock trust and related expenses,

cash provided by operating activities is expected to be approximately $155

? million for 2022. Excluding the one-time funding of the Paddock trust and

related expenses, cash provided by operating activities is expected to be

approximately $775 million for 2022. Capital expenditures in 2022 are expected

to be approximately $600 million.

The European Union is preparing for potential Russian natural gas curtailments

through this next winter and has established a plan to reduce natural gas usage

by 15 percent to mitigate the brunt of these potential curtailments. Early in

2022, the Company started to install energy switching capabilities and

establish agile network optimization plans. Today, approximately 20% of the

? Company's production capacity in Europe is capable of running with oil and the

Company expects to have approximately 50% covered by year-end 2022. At this

time, it is unclear if meaningful issues will emerge. If natural gas

curtailments impact its operations, the Company believes it is well positioned

to manage the situation and believes it would represent only a slight potential

risk to its 2022 business outlook.

The Company will continue to actively monitor the impact of the COVID-19

pandemic. The extent to which the Company's operations will be impacted by the

? pandemic will depend largely on future developments, which are highly uncertain

and cannot be accurately predicted, including new information that may emerge

concerning the severity of the outbreak and actions by government authorities

to contain the outbreak or treat its impact, among other things.

The Company will continue to actively monitor the impact of the conflict

between Russia and Ukraine. The extent to which the Company's operations will

? be impacted by this conflict will depend largely on future developments,

including potential sanctions or other adverse repercussions on Russian-sourced

energy supplies, which are highly uncertain and cannot be accurately predicted.

Items Excluded from Reportable Segment Totals

Retained Corporate Costs and Other

Retained corporate costs and other for the second quarter of 2022 were $53 million compared to $42 million in the second quarter of 2021 and were $103 million for the first six months of 2022 compared to $77 million for the first six months of 2021. These costs were higher in the 2022 periods primarily due to inflation, additional research and development expenses related to MAGMA and higher management incentive expense.

Gain on Sale of Divested Business and Sale Leaseback of Land and Building

In May 2022, the Company completed the sale of the land and building of the Company's Brampton, Ontario, Canada plant to an affiliate of Crestpoint Real Estate Investments Ltd. The Company recorded a pretax gain of approximately $182 million (approximately $158 million after tax) on the sale, which is reflected to Other income (expense), net on the Condensed Consolidated Results of Operations in the second quarter of 2022.


                                       38

In March 2022, the Company completed the sale of its Cristar glass tableware business in Colombia to Vidros Colombia S.A.S, an affiliate of Nadir Figueiredo S.A., a glass tableware producer based in Brazil. The related pretax gain was approximately $55 million (approximately $16 million after tax and non-controlling interest). The pretax gain was recorded to Other income (expense), net on the Condensed Consolidated Results of Operations in the first quarter of 2022.

See Note 17 to the Condensed Consolidated Financial Statements for further information.

Restructuring, Asset Impairment and Other Charges

For the three and six months ended June 30, 2022, the Company recorded charges totaling $12 million for restructuring, asset impairment and other charges consisting of employee costs, such as severance, benefit-related costs and other exit costs (including related consulting costs attributed to restructuring of managed services activities) at a number of the Company's locations in the Americas and Europe. The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

For the three and six months ended June 30, 2021, the Company recorded charges totaling $9 million for restructuring, asset impairment and other charges (including related consulting costs attributed to restructuring of managed services activities) consisting of employee costs, such as severance, benefit-related costs and other exit costs at a number of the Company's locations in the Americas and Europe. The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

Gain on Brazil Indirect Tax Credit

In the second quarter of 2021, the Company recorded a $69 million gain based on a favorable court ruling in Brazil that will allow the Company to recover indirect taxes paid in previous years. This gain was recorded to Other income (expense), net on the Condensed Consolidated Results of Operations.

Charge for Paddock Support Agreement Liability

On April 26, 2021, the Company announced that its subsidiary, Paddock, had reached an agreement in principle to accept the terms of a mediator's proposal regarding a consensual plan of reorganization in Paddock's Chapter 11 bankruptcy case. The agreement in principle provided for total consideration of $610 million to fund the Paddock Trust (as defined in Note 9 to the Condensed Consolidated Financial Statements). The Company recorded a charge of $154 million related to its potential liability under the Paddock support agreement during the first fiscal quarter of 2021, primarily related to an increase to Paddock's asbestos reserve estimate in consideration for the channeling injunction to be included in the Plan (as defined in Note 10 to the Condensed Consolidated Financial Statements) protecting the Company and its affiliates from Asbestos Claims (as defined in Note 10 to the Condensed Consolidated Financial Statements). This charge was recorded to Other income (expense), net on the Condensed Consolidated Results of Operations in the first quarter of 2021. Subsequent to quarter end, in July 2022, the Plan became effective, and the Paddock Trust was funded by the Company and Paddock with consideration totaling $610 million.

See Note 10 to the Condensed Consolidated Financial Statements for further information.

Capital Resources and Liquidity

On March 25, 2022, certain of the Company's subsidiaries entered into a Credit Agreement and Syndicated Facility Agreement (the "Agreement"), which refinances in full the previous credit agreement (the "Previous Agreement"). The Agreement provides for up to $2.8 billion of borrowings pursuant to term loans, revolving credit facilities and a delayed draw term loan facility. The delayed draw term loan facility allows for a one-time borrowing of up to $600 million, the proceeds of which were to be used, in addition to other consideration paid by the Company and/or its subsidiaries, to directly or indirectly fund the Paddock Trust (see Note 10 for more information). Subsequent to quarter end, on July 18, 2022, the Company drew down the $600 million maximum delayed draw term loan to fund, together with other


                                       39

consideration, the Paddock Trust. The term loans mature, and the revolving credit facilities terminate, in March 2027. The delayed draw term loan matures in December 2023. The Company recorded approximately $2 million of additional interest charges for third-party fees and the write-off of unamortized fees related to the Agreement in the first quarter of 2022.

At June 30, 2022, the Agreement includes a $300 million revolving credit facility, a $950 million multicurrency revolving credit facility and $950 million in term loan A facilities ($946 million outstanding balance at June 30, 2022, net of debt issuance costs). At June 30, 2022, the Company had unused credit of $1.240 billion available under the Agreement. The weighted average interest rate on borrowings outstanding under the Agreement at June 30, 2022 was 3.13%.

The Agreement contains various covenants that restrict, among other things and subject to certain exceptions, the ability of the Company to incur certain indebtedness and liens, make certain investments, become liable under contingent obligations in certain defined instances only, make restricted payments, make certain asset sales within guidelines and limits, engage in certain affiliate transactions, participate in sale and leaseback financing arrangements, alter its fundamental business, and amend certain subordinated debt obligations.

The Agreement also contains one financial maintenance covenant, a Secured Leverage Ratio (as defined in the Agreement), that requires the Company not to exceed a ratio of 2.50x calculated by dividing consolidated Net Indebtedness that is then secured by Liens on property or assets of the Company and certain of its subsidiaries by Consolidated EBITDA, as each term is defined and as described in the Credit Agreement. The Secured Leverage Ratio could restrict the ability of the Company to undertake additional financing or acquisitions to the extent that such financing or acquisitions would cause the Secured Leverage Ratio to exceed the specified maximum.

Failure to comply with these covenants and restrictions could result in an event of default under the Agreement. In such an event, the Company could not request additional borrowings under the revolving facilities, and all amounts outstanding under the Agreement, together with accrued interest, could then be declared immediately due and payable. Upon the occurrence and for the duration of a payment event of default, an additional default interest rate equal to 2.0% per annum will apply to all overdue obligations under the Agreement. If an event of default occurs under the Agreement and the lenders cause all of the outstanding debt obligations under the Agreement to become due and payable, this would result in a default under the indentures governing the Company's outstanding debt securities and could lead to an acceleration of obligations related to these debt securities. As of June 30, 2022, the Company was in compliance with all covenants and restrictions in the Agreement. In addition, the Company believes that it will remain in compliance and that its ability to borrow additional funds under the Agreement will not be adversely affected by the covenants and restrictions.

The Total Leverage Ratio (as defined in the Agreement) determines pricing under the Agreement. The interest rate on borrowings under the Agreement is, at the Company's option, the Base Rate, Term SOFR or, for non-U.S. dollar borrowings only, the Eurocurrency Rate (each as defined in the Agreement), plus an applicable margin. The applicable margin is linked to the Total Leverage Ratio. The margins range from 1.00% to 1.75% for Term SOFR loans and Eurocurrency Rate loans and from 0.00% to 0.75% for Base Rate loans. In addition, a commitment fee is payable on the unused revolving credit facility commitments ranging from 0.20% to 0.35% per annum linked to the Total Leverage Ratio.

Obligations under the Agreement are secured by substantially all of the assets, excluding real estate and certain other excluded assets, of certain of the Company's domestic subsidiaries and certain foreign subsidiaries. Such obligations are also secured by a pledge of intercompany debt and equity investments in certain of the Company's domestic subsidiaries and, in the case of foreign obligations, of stock of certain foreign subsidiaries. All obligations under the Agreement are guaranteed by certain domestic subsidiaries of the Company, and certain foreign obligations under the Agreement are guaranteed by certain foreign subsidiaries of the Company.

On February 10, 2022, the Company announced the commencement, by an indirect wholly owned subsidiary of the Company, of a tender offer to purchase for cash up to $250.0 million aggregate purchase price of its outstanding (i) 5.875% Senior Notes due 2023, (ii) 5.375% Senior Notes due 2025, (iii) 6.375% Senior Notes due 2025 and (iv) 6.625%


                                       40

Senior Notes due 2027. On February 28, 2022, the Company repurchased $150.0 million aggregate principal amount of the outstanding 5.875% Senior Notes due 2023 and $88.2 million aggregate principal amount of the outstanding 6.625% Senior Notes due 2027. Following the repurchase, $550.0 million and $611.8 million aggregate principal amounts of the 5.875% Senior Notes due 2023 and 6.625% Senior Notes due 2027, respectively, remained outstanding. The repurchases were funded with cash on hand. The Company recorded approximately $16 million of additional interest charges for note repurchase premiums and the write-off of unamortized finance fees related to the senior note repurchases conducted in the first quarter of 2022.

In November 2021, the Company issued $400 million aggregate principal amount of senior notes. The senior notes bear interest at a rate of 4.75% per annum and mature on February 15, 2030. The senior notes were issued via a private placement and are guaranteed by certain of the Company's domestic subsidiaries. The net proceeds, after deducting debt issuance costs, totaled approximately $395 million and, together with cash on hand, were used to redeem the $310 million aggregate principal amount of the Company's outstanding 4.00% Senior Notes due 2023 and approximately $128 million of term loan A borrowings under the Previous Agreement. The Company recorded approximately $13 million of additional interest charges for note repurchase premiums and write-off of unamortized finance fees related to these redemptions.

In order to maintain a capital structure containing appropriate amounts of fixed and floating-rate debt, the Company has entered into a series of interest rate swap agreements. These interest rate swap agreements were accounted for as fair value hedges (see Note 5 for more information).

The Company assesses its capital raising and refinancing needs on an ongoing basis and may enter into additional credit facilities and seek to issue equity and/or debt securities in the domestic and international capital markets if market conditions are favorable. Also, depending on market conditions, the Company may elect to repurchase portions of its debt securities in the open market.

Material Cash Requirements

There have been no material changes to the Company's material cash requirements at June 30, 2022 from those described in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity - Material Cash Requirements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Cash Flows

Operating activities: Cash provided by operating activities was $120 million for the six months ended June 30, 2022, compared to $143 million cash provided by operating activities for the six months ended June 30, 2021. The decrease in cash provided by operating activities in the first six months of 2022 was primarily due to a higher use of cash from working capital, lower non-cash charges and a higher use of cash from other operating items, partially offset by higher net earnings than in the same period in 2021. For the six months ended June 30, 2022, the Company has contributed approximately $12 million toward its defined benefit pension plans compared to $24 million in the same period in the prior year. In the first six months of both 2022 and 2021, all asbestos-related payments were stayed as a result of Paddock's Chapter 11 filing in early January 2020. See Note 10 to the Condensed Consolidated Financial Statements for additional information on Paddock.

Working capital was a use of cash of $250 million in the first six months of 2022, compared to a use of cash of $229 million in the same period in 2021. The use of cash from working capital was higher in the first six months of 2022 primarily due to higher accounts receivable resulting from higher sales and less factoring. For the six months ended June 30, 2022 and 2021, the Company's use of its accounts receivable factoring programs resulted in a decrease of $28 million and an increase of $4 million, respectively, to cash provided by operating activities. Excluding the impact of accounts receivable factoring, the Company's days sales outstanding as of June 30, 2022 were comparable to June 30, 2021. For the six months ended June 30, 2022, other cash flows from operating activities were a higher use of cash of approximately $42 million compared to the same period in the prior year, primarily due to the Company paying a $38 million tax audit settlement in Mexico.


                                       41

Investing activities: Cash provided by investing activities was $66 million for the six months ended June 30, 2022, compared to $109 million of cash utilized in investing activities for the six months ended June 30, 2021. Capital spending for property, plant and equipment was $199 million during the first six months of 2022, compared to $175 million in the same period in 2021. The Company's 2022-2024 capital expenditure plan to enable profitable growth has evolved amid ongoing supply chain challenges. The Company now anticipates that it will undertake a broader range of smaller scope capital projects to de-risk project execution. The Company also plans to accelerate the development of its Generation 3 MAGMA solution. Additionally, the company recently announced the first U.S. MAGMA greenfield facility to be constructed at Bowling Green, KY, which is expected to commence production in mid-2024. The Company estimates that its full year 2022 capital expenditures should be approximately $600 million.

In addition, as previously disclosed, the Company entered into an Order with the Oregon Department of Environmental Quality to submit a permit application to install pollution control equipment at its Portland, Oregon manufacturing facility or to cease its operations at that facility by June 30, 2022. In the second quarter of 2022, the Company submitted the permit application to install pollution control equipment, allowing it to continue operations at the Portland facility. The current plan for this pollution control equipment is included in the Company's estimated full year 2022 capital expenditure noted above.

Cash proceeds of approximately $286 million were received in the first six months of 2022, primarily related to the sale of the land and building of the Company's plant in Brampton, Ontario, Canada and its Cristar glass tableware business in Colombia. In the first quarter of 2021, the Company received approximately $58 million related to the sale of its ANZ businesses. Contributions to joint ventures were $11 million and $0 in the first six months of 2022 and 2021, respectively.

Financing activities: Cash utilized in financing activities was $243 million for the six months ended June 30, 2022, compared to cash utilized in financing activities of $68 million for the six months ended June 30, 2021. The increase in cash utilized in financing activities was primarily due to a $187 million increase in net repayments of debt in the first six months of 2022 compared to the same period in the prior year. The Company paid $20 million for finance fees and premiums related to financing activities in the first six months of 2022, whereas no fees or premiums were paid in the same period in 2021.

During each of the six-month periods ended June 30, 2022 and June 30, 2021, the Company repurchased $20 million of shares of the Company's common stock. The Company received approximately $38 million and paid approximately $10 million related to hedge activity for the first six months ended June 30, 2022 and June 30, 2021, respectively. Distributions to non-controlling interests increased from $10 million in the six months ended June 30, 2021 to $26 million for the same period in 2022 due to the gain on the sale of the Cristar glass tableware business in Colombia.

The Company anticipates that cash flows from its opera­tions and from utiliza­tion of credit available under the Agreement will be sufficient to fund its operating and seasonal working capital needs, debt service and other obligations on a short-term (12 months) and long-term basis. However, as the Company cannot predict the duration or scope of the COVID-19 pandemic or the conflict between Russia and Ukraine and their impact on the Company's customers and suppliers, the negative financial impact to the Company's results cannot be reasonably estimated, but could be material. The Company is actively managing its business to maintain cash flow, and it has significant liquidity. The Company believes that these factors will allow it to meet its anticipated funding requirements. On April 26, 2021, O-I announced that its subsidiary Paddock had reached an agreement in principle to accept the terms of a mediator's proposal regarding a consensual plan of reorganization under the Bankruptcy Code. The agreement provided for total consideration of $610 million to fund the Paddock Trust (as defined in Note 9 to the Condensed Consolidated Financial Statements). Subsequent to quarter end, in July 2022, the Plan became effective, and the Paddock Trust was funded by the Company and Paddock with consideration totaling $610 million. See Note 10 to the Condensed Consolidated Financial Statements for further information.

Critical Accounting Estimates

The Company's analysis and discussion of its financial condition and results of operations are based upon its consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. The Company evaluates these estimates and


                                       42

assumptions on an ongoing basis. Estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances at the time the financial statements are issued. The results of these estimates may form the basis of the carrying value of certain assets and liabilities and may not be readily apparent from other sources. Actual results, under conditions and circumstances different from those assumed, may differ from estimates.

The impact of, and any associated risks related to, estimates and assumptions are discussed within Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as in the Notes to the Condensed Consolidated Financial Statements, if applicable, where estimates and assumptions affect the Company's reported and expected financial results.

There have been no other material changes in critical accounting estimates at June 30, 2022 from those described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Forward-Looking Statements

This document contains "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Section 27A of the Securities Act of 1933, as amended. Forward-looking statements reflect the Company's current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words "believe," "expect," "anticipate," "will," "could," "would," "should," "may," "plan," "estimate," "intend," "predict," "potential," "continue," and the negatives of these words and other similar expressions generally identify forward-looking statements.

It is possible that the Company's future financial performance may differ from expectations due to a variety of factors including, but not limited to the following: (1) the impact of the COVID-19 pandemic and the various governmental, industry and consumer actions related thereto, (2) the Company's ability to obtain the benefits it anticipates from the Corporate Modernization, (3) the Company's ability to manage its cost structure, including its success in implementing restructuring or other plans aimed at improving the Company's operating efficiency and working capital management, and achieving cost savings, (4) the Company's ability to acquire or divest businesses, acquire and expand plants, integrate operations of acquired businesses and achieve expected benefits from acquisitions, divestitures or expansions, (5) the Company's ability to achieve its strategic plan, (6) the Company's ability to improve its glass melting technology, known as the MAGMA program, and implement it within the timeframe expected, (7) foreign currency fluctuations relative to the U.S. dollar, (8) changes in capital availability or cost, including interest rate fluctuations and the ability of the Company to refinance debt on favorable terms, (9) the general political, economic and competitive conditions in markets and countries where the Company has operations, including uncertainties related to economic and social conditions, disruptions in the supply chain, competitive pricing pressures, inflation or deflation, changes in tax rates and laws, war, civil disturbance or acts of terrorism, natural disasters, and weather, (10) the Company's ability to generate sufficient future cash flows to ensure the Company's goodwill is not impaired, (11) consumer preferences for alternative forms of packaging, (12) cost and availability of raw materials, labor, energy and transportation (including impacts related to the current conflict between Russia and Ukraine), (13) consolidation among competitors and customers, (14) unanticipated expenditures with respect to data privacy, environmental, safety and health laws, (15) unanticipated operational disruptions, including higher capital spending, (16) the Company's ability to further develop its sales, marketing and product development capabilities, (17) the failure of the Company's joint venture partners to meet their obligations or commit additional capital to the joint venture, (18) the ability of the Company and the third parties on which it relies for information technology system support to prevent and detect security breaches related to cybersecurity and data privacy, (19) changes in U.S. trade policies, (20) risks related to recycling and recycled content laws and regulations, (21) risks related to climate-change and air emissions, including related laws or regulations and the other risk factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and any subsequently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or the Company's other filings with the Securities and Exchange Commission.

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 circumstances. Forward-looking statements are not a guarantee of future performance and actual results or developments may differ


                                       43

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 assume any obligation to update or supplement any particular forward-looking statements contained in this document.

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Analyst Recommendations on O-I GLASS, INC.
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Financials (USD)
Sales 2022 6 714 M - -
Net income 2022 477 M - -
Net Debt 2022 4 040 M - -
P/E ratio 2022 4,15x
Yield 2022 -
Capitalization 1 937 M 1 937 M -
EV / Sales 2022 0,89x
EV / Sales 2023 0,86x
Nbr of Employees 24 000
Free-Float 82,3%
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Mean consensus HOLD
Number of Analysts 12
Last Close Price 12,44 $
Average target price 15,83 $
Spread / Average Target 27,3%
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Managers and Directors
Andres Alberto Lopez President-O I Americas
John A. Haudrich Chief Financial Officer & Senior Vice President
John H. Walker Independent Chairman
Giancarlo Currarino Chief Technical Operations Officer & Senior VP
Ludovic Valette Vice President-Technology & Engineering
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