UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-9576 O-I GLASS, INC. (Exact name of registrant as specified in its charter) Delaware 22-2781933 (State or other jurisdiction of (I ...

O-I Glass, Inc. (NYSE:OI) Q1 2023 Earnings Conference Call April 26, 2023 8:00 AM ET Company Participants Chris Manuel - Vice President of Investor Relations Andres Lopez - Chief Executive Officer John Haudrich - Chief Financial Officer Conference Call Participants George Staphos - Bank of America Anthony Pettinari - Citi Ghansham Panjabi - Baird Gabe Hajde - Wells Fargo Arun Viswanathan - RBC Capital Markets Mike Roxland - Truist Securities Mike Leithead - Barclays Operator Hello, and welcome to the O-I Gl ...

| --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | 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 general political, economic and competitive conditions in markets and countries where the company has operations, including uncertainties related to economic and social condition ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 22-2781933 (IRS Employer Identification No.) One Michael Owens Way, Perrysburg, Ohio (Address of principal executive offices) 43551 (Zip Code) Registrant's telephone number, including area code: (567) 336-5000 Securities registered pursuant to Section 12(b) of the Act: ...

O-I Glass, Inc. (NYSE:OI) Q4 2022 Earnings Conference Call February 1, 2023 8:00 AM ET Company Participants Christopher Manuel - Vice President of Investor Relations Andres Lopez - Chief Executive Officer John Haudrich - Chief Financial Officer Conference Call Participants Ghansham Panjabi - Baird Bryan Burgmeier - Stanton Mike Roxland - Truist Securities Kyle White - Deutsche Bank Arun Viswanathan - RBC Capital Markets Gabe Hajde - Wells Fargo Mike Leithead - Barclays Operator Hello, everyone and welcome t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-9576 O-I GLASS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (IRS Employer inco ...

Financial Data and Key Metrics Changes - O-I Glass reported adjusted earnings of $0.63 per share for Q3 2022, an increase of nearly 10% from the prior year and exceeding guidance [6][18] - Segment operating profit rose to $266 million from $243 million last year, with margins improving by 60 basis points to around 16% [19] - Financial leverage decreased to approximately 3.6 times, aligning with the 2024 Investor Day target ahead of schedule [24] Business Line Data and Key Metrics Changes - The Americas reported segment operating profit of $130 million, flat compared to the prior year, with a slight decline in sales volume by 1.8% [20] - Europe saw segment operating profit increase to $136 million, up $44 million from the prior year, with margins reaching 20% due to favorable net pricing and a 3.6% increase in sales volume [21] Market Data and Key Metrics Changes - Global shipments increased nearly 2.5% year-to-date, with Europe up about 4% and the Americas up 1% [10] - Demand in Europe was strongest in the Southwest and North Central markets, while the Americas faced challenges due to elevated maintenance activities [10] Company Strategy and Development Direction - O-I Glass is focusing on transformation initiatives, including a $1.5 billion portfolio optimization program completed in August, aimed at reducing debt and funding expansion investments [8] - The company is advancing its MAGMA and ULTRA initiatives, with plans for new capacity in Kentucky expected to start production in mid-2024 [13][55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued progress in 2023 despite macroeconomic uncertainties, expecting earnings to be in line or likely up from 2022 levels [27][30] - The company highlighted strong fundamentals in glass demand, which are less sensitive to GDP fluctuations compared to previous downturns [98][100] Other Important Information - O-I Glass has made significant strides in sustainability, with renewable energy now representing over 27% of its energy sources, a 14 percentage point increase from 2020 [15] - The company has resolved legacy asbestos liabilities, allowing for a stronger focus on shareholder value [8] Q&A Session Summary Question: Insights on backlogs in Europe and Latin America - Management noted strong backlogs in Europe and Latin America, with significant imports providing a buffer against demand changes, totaling over 2.5 million tons [39][40] Question: Drivers of margin expansion initiatives - Management confirmed that the drivers for anticipated margin expansion in 2023 remain consistent with previous years, focusing on productivity and top-line improvements [42][43] Question: Unplanned downtime in the Americas - Unplanned downtime was attributed to unexpected repairs and supply chain challenges, with expectations for gradual improvement in 2023 [48][49] Question: Sustainability of margins in Europe - Management expressed confidence in the sustainability of 20% margins in Europe due to strong procurement positions and ongoing margin expansion initiatives [61][62] Question: Impact of recession on demand - Management indicated that glass demand fundamentals are solid and less sensitive to GDP, with expectations for continued demand even in a recessionary environment [98][100]

e THIRD QUARTER 2022 EARNINGS NOVEMBER 2, 2022 SAFE HARBOR COMMENTS FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking" statements related to O-I Glass, Inc. ("O-I" or the "company") 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 uncertai ...

[Part I — Financial Information](index=2&type=section&id=Part%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for O-I Glass, Inc [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements.) This section presents O-I Glass, Inc.'s unaudited condensed consolidated financial statements, including results of operations, comprehensive income, balance sheets, and cash flows, along with detailed explanatory notes for the periods ended June 30, 2022 [Condensed Consolidated Results of Operations](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20RESULTS%20OF%20OPERATIONS) This section details the Company's condensed consolidated results of operations for the three and six months ended June 30, 2022 and 2021 Condensed Consolidated Results of Operations (Three Months Ended June 30) | Metric | 2022 (Millions $) | 2021 (Millions $) | Change ($M) | Change (%) | | :----------------------------------- | :---------------- | :---------------- | :---------- | :--------- | | Net sales | 1,778 | 1,660 | 118 | 7.11% | | Cost of goods sold | (1,453) | (1,354) | (99) | 7.31% | | Gross profit | 325 | 306 | 19 | 6.21% | | Selling and administrative expense | (123) | (116) | (7) | 6.03% | | Research, development and engineering expense | (20) | (19) | (1) | 5.26% | | Interest expense, net | (46) | (52) | 6 | -11.54% | | Equity earnings | 24 | 22 | 2 | 9.09% | | Other income (expense), net | 168 | 57 | 111 | 194.74% | | Earnings before income taxes | 328 | 198 | 130 | 65.66% | | Provision for income taxes | (72) | (75) | 3 | -4.00% | | Net earnings | 256 | 123 | 133 | 108.13% | | Net earnings attributable to non-controlling interests | (4) | (5) | 1 | -20.00% | | Net earnings attributable to the Company | 252 | 118 | 134 | 113.56% | | Basic earnings per share | 1.62 | 0.75 | 0.87 | 116.00% | | Diluted earnings per share | 1.59 | 0.73 | 0.86 | 117.81% | Condensed Consolidated Results of Operations (Six Months Ended June 30) | Metric | 2022 (Millions $) | 2021 (Millions $) | Change ($M) | Change (%) | | :----------------------------------- | :---------------- | :---------------- | :---------- | :--------- | | Net sales | 3,469 | 3,161 | 308 | 9.74% | | Cost of goods sold | (2,841) | (2,609) | (232) | 8.89% | | Gross profit | 628 | 552 | 76 | 13.77% | | Selling and administrative expense | (243) | (218) | (25) | 11.47% | | Research, development and engineering expense | (42) | (37) | (5) | 13.51% | | Interest expense, net | (112) | (103) | (9) | 8.74% | | Equity earnings | 47 | 40 | 7 | 17.50% | | Other income (expense), net | 220 | (101) | 321 | -317.82% | | Earnings before income taxes | 498 | 133 | 365 | 274.44% | | Provision for income taxes | (120) | (100) | (20) | 20.00% | | Net earnings | 378 | 33 | 345 | 1045.45% | | Net earnings attributable to non-controlling interests | (38) | (12) | (26) | 216.67% | | Net earnings attributable to the Company | 340 | 21 | 319 | 1519.05% | | Basic earnings per share | 2.18 | 0.13 | 2.05 | 1576.92% | | Diluted earnings per share | 2.14 | 0.13 | 2.01 | 1546.15% | [Condensed Consolidated Comprehensive Income](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20COMPREHENSIVE%20INCOME) This section presents the condensed consolidated comprehensive income for the three and six months ended June 30, 2022 and 2021 Condensed Consolidated Comprehensive Income (Three Months Ended June 30) | Metric | 2022 (Millions $) | 2021 (Millions $) | Change ($M) | Change (%) | | :------------------------------------------ | :---------------- | :---------------- | :---------- | :--------- | | Net earnings | 256 | 123 | 133 | 108.13% | | Other comprehensive income (loss): | | | | | | Foreign currency translation adjustments | (123) | 125 | (248) | -198.40% | | Pension and other postretirement benefit adjustments, net of tax | 26 | 17 | 9 | 52.94% | | Change in fair value of derivative instruments, net of tax | 20 | - | 20 | - | | Other comprehensive income (loss) | (77) | 142 | (219) | -154.23% | | Total comprehensive income | 179 | 265 | (86) | -32.45% | | Comprehensive (income) loss attributable to non-controlling interests | 4 | (7) | 11 | -157.14% | | Comprehensive income attributable to the Company | 183 | 258 | (75) | -29.07% | Condensed Consolidated Comprehensive Income (Six Months Ended June 30) | Metric | 2022 (Millions $) | 2021 (Millions $) | Change ($M) | Change (%) | | :------------------------------------------ | :---------------- | :---------------- | :---------- | :--------- | | Net earnings | 378 | 33 | 345 | 1045.45% | | Other comprehensive income (loss): | | | | | | Foreign currency translation adjustments | 12 | 38 | (26) | -68.42% | | Pension and other postretirement benefit adjustments, net of tax | 44 | 37 | 7 | 18.92% | | Change in fair value of derivative instruments, net of tax | 23 | 13 | 10 | 76.92% | | Other comprehensive income (loss) | 79 | 88 | (9) | -10.23% | | Total comprehensive income | 457 | 121 | 336 | 277.69% | | Comprehensive (income) loss attributable to non-controlling interests | (35) | (8) | (27) | 337.50% | | Comprehensive income attributable to the Company | 422 | 113 | 309 | 273.45% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section provides the condensed consolidated balance sheets as of June 30, 2022, December 31, 2021, and June 30, 2021 Condensed Consolidated Balance Sheets (June 30, 2022 vs. December 31, 2021 vs. June 30, 2021) | Metric | June 30, 2022 (Millions $) | December 31, 2021 (Millions $) | June 30, 2021 (Millions $) | | :------------------------------------------ | :------------------------- | :--------------------------- | :------------------------- | | **Assets** | | | | | Cash and cash equivalents | 661 | 725 | 531 | | Trade receivables, net | 957 | 692 | 855 | | Inventories | 775 | 816 | 796 | | Prepaid expenses and other current assets | 224 | 237 | 217 | | Assets held for sale | - | 49 | - | | Total current assets | 2,617 | 2,519 | 2,399 | | Property, plant and equipment, net | 2,758 | 2,817 | 2,842 | | Goodwill | 1,792 | 1,840 | 1,932 | | Intangibles, net | 272 | 286 | 309 | | Other assets | 1,434 | 1,370 | 1,392 | | **Total assets** | **8,873** | **8,832** | **8,874** | | **Liabilities and share owners' equity** | | | | | Accounts payable | 1,190 | 1,210 | 1,038 | | Short-term loans and long-term debt due within one year | 65 | 72 | 85 | | Other liabilities | 530 | 551 | 564 | | Liabilities held for sale | - | 13 | - | | Total current liabilities | 1,785 | 1,846 | 1,687 | | Long-term debt | 4,427 | 4,753 | 4,977 | | Paddock support agreement liability | 625 | 625 | 625 | | Other long-term liabilities | 777 | 781 | 1,083 | | Share owners' equity | 1,259 | 827 | 502 | | **Total liabilities and share owners' equity** | **8,873** | **8,832** | **8,874** | [Condensed Consolidated Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20CASH%20FLOWS) This section outlines the condensed consolidated cash flows for the six months ended June 30, 2022 and 2021 Condensed Consolidated Cash Flows (Six Months Ended June 30) | Metric | 2022 (Millions $) | 2021 (Millions $) | Change ($M) | Change (%) | | :------------------------------------------ | :---------------- | :---------------- | :---------- | :--------- | | Cash provided by operating activities | 120 | 143 | (23) | -16.08% | | Cash provided by (utilized in) investing activities | 66 | (109) | 175 | -160.55% | | Cash utilized in financing activities | (243) | (68) | (175) | 257.35% | | Effect of exchange rate fluctuations on cash | (7) | 2 | (9) | -450.00% | | Change in cash | (64) | (32) | (32) | 100.00% | | Cash at beginning of period | 725 | 563 | 162 | 28.77% | | Cash at end of period | 661 | 531 | 130 | 24.48% | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes supporting the condensed consolidated financial statements [1. Segment Information](index=7&type=section&id=1.%20Segment%20Information) The Company operates two reportable segments, Americas and Europe, with segment operating profit serving as the primary performance measure - The Company's reportable segments are Americas and Europe, with segment operating profit used to evaluate performance and allocate resources[18](index=18&type=chunk)[19](index=19&type=chunk) Net Sales by Reportable Segment (Millions $) | Segment | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | | :-------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Americas | 971 | 890 | 1,912 | 1,727 | | Europe | 765 | 745 | 1,474 | 1,384 | | Other | 42 | 25 | 83 | 50 | | **Total Net Sales** | **1,778** | **1,660** | **3,469** | **3,161** | Segment Operating Profit (Millions $) | Segment | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | | :-------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Americas | 130 | 124 | 258 | 224 | | Europe | 127 | 108 | 230 | 183 | | **Reportable segment totals** | **257** | **232** | **488** | **407** | [2. Revenue](index=8&type=section&id=2.%20Revenue) Revenue is recognized upon transfer of control of glass containers, with disaggregation provided by customer end use and geographic segment - Revenue is recognized when control of glass containers transfers to the customer, typically upon shipment from manufacturing or warehousing facilities[22](index=22&type=chunk) Disaggregated Revenue by Customer End Use (Three Months Ended June 30, 2022) | Customer End Use | Americas (Millions $) | Europe (Millions $) | Total (Millions $) | | :-------------------------------- | :-------------------- | :------------------ | :----------------- | | Alcoholic beverages (beer, wine, spirits) | 613 | 576 | 1,189 | | Food and other | 199 | 122 | 321 | | Non-alcoholic beverages | 159 | 67 | 226 | | **Reportable segment totals** | **971** | **765** | **1,736** | | Other | | | 42 | | **Net sales** | | | **1,778** | Disaggregated Revenue by Customer End Use (Six Months Ended June 30, 2022) | Customer End Use | Americas (Millions $) | Europe (Millions $) | Total (Millions $) | | :-------------------------------- | :-------------------- | :------------------ | :----------------- | | Alcoholic beverages (beer, wine, spirits) | 1,189 | 1,113 | 2,302 | | Food and other | 413 | 232 | 645 | | Non-alcoholic beverages | 310 | 129 | 439 | | **Reportable segment totals** | **1,912** | **1,474** | **3,386** | | Other | | | 83 | | **Net sales** | | | **3,469** | [3. Credit Losses](index=10&type=section&id=3.%20Credit%20Losses) The Company manages credit risk through customer creditworthiness assessments and credit limits, with trade receivables at **$957 million** as of June 30, 2022 - The Company assesses customer creditworthiness and establishes credit limits to mitigate credit risk, monitoring ongoing exposure through active review of customer balances[26](index=26&type=chunk) Trade Receivables, Net of Allowance (Millions $) | Date | Trade Receivables, Net | Allowance | | :--------------- | :--------------------- | :-------- | | June 30, 2022 | 957 | 29 | | June 30, 2021 | 855 | 32 | [4. Inventories](index=10&type=section&id=4.%20Inventories) The Company's inventory, primarily finished goods and raw materials, totaled **$775 million** at June 30, 2022 Major Classes of Inventory (Millions $) | Category | June 30, 2022 | December 31, 2021 | June 30, 2021 | | :--------------- | :------------ | :---------------- | :------------ | | Finished goods | 618 | 659 | 636 | | Raw materials | 115 | 119 | 122 | | Operating supplies | 42 | 38 | 38 | | **Total** | **775** | **816** | **796** | [5. Derivative Instruments](index=10&type=section&id=5.%20Derivative%20Instruments) The Company uses derivative instruments to manage commodity price, foreign exchange, and interest rate exposures, classifying them as Level 2 in the fair value hierarchy - The Company utilizes derivative instruments such as natural gas forwards, foreign exchange contracts, and interest rate swaps to hedge against market risks, classifying them as Level 2 in the fair value hierarchy[29](index=29&type=chunk)[30](index=30&type=chunk)[32](index=32&type=chunk) Fair Value of Derivative Instruments (Millions $) | Category | June 30, 2022 (Assets) | Dec 31, 2021 (Assets) | June 30, 2021 (Assets) | June 30, 2022 (Liabilities) | Dec 31, 2021 (Liabilities) | June 30, 2021 (Liabilities) | | :------------------------------------------ | :--------------------- | :-------------------- | :--------------------- | :-------------------------- | :------------------------- | :-------------------------- | | Commodity forward contracts and collars | 2 | — | — | 6 | — | — | | Interest rate swaps - fair value hedges | — | 4 | 11 | 28 | 2 | 1 | | Cash flow hedges of foreign exchange risk | — | 2 | 6 | 1 | 23 | 75 | | Fair value hedges of foreign exchange risk | 17 | 9 | — | 2 | — | — | | Net investment hedges | 16 | 3 | 2 | — | 17 | 40 | | Foreign exchange derivative contracts (not hedges) | 2 | 1 | 1 | — | 2 | 2 | | **Total derivatives** | **37** | **19** | **20** | **37** | **44** | **118** | Gain (Loss) Recognized in OCI (Effective Portion) (Millions $) | Derivative Type | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Commodity forward contracts and collars | (3) | — | (3) | — | | Cash flow hedges of foreign exchange risk | — | (16) | 13 | 32 | | Net Investment Hedges | 27 | — | 32 | 15 | | **Total** | **24** | **(16)** | **42** | **47** | [6. Restructuring Accruals](index=14&type=section&id=6.%20Restructuring%20Accruals) Restructuring charges of **$11 million** were recorded for the three and six months ended June 30, 2022, primarily for employee and exit costs - Restructuring charges of **$11 million** were recorded for the three and six months ended June 30, 2022, mainly for employee and exit costs in the Americas and Europe, with most cash expenditures expected over several years[47](index=47&type=chunk)[48](index=48&type=chunk) Restructuring Accruals (Millions $) | Category | June 30, 2022 | June 30, 2021 | | :---------------- | :------------ | :------------ | | Employee Costs | 17 | 32 | | Asset Impairment | — | — | | Other Exit Costs | 15 | 12 | | **Total Restructuring** | **32** | **44** | [7. Pension Benefit Plans](index=15&type=section&id=7.%20Pension%20Benefit%20Plans) Net periodic pension costs for U.S. plans decreased in Q2 and H1 2022, while non-U.S. plans saw an increase Net Periodic Pension Cost (Three Months Ended June 30) (Millions $) | Component | U.S. 2022 | U.S. 2021 | Non-U.S. 2022 | Non-U.S. 2021 | | :-------------------- | :-------- | :-------- | :------------ | :------------ | | Service cost | 3 | 3 | 2 | 3 | | Interest cost | 8 | 10 | 6 | 5 | | Expected asset return | (15) | (21) | (8) | (11) | | Amortization of actuarial loss | 10 | 16 | 2 | 3 | | **Net periodic pension cost** | **6** | **8** | **2** | **—** | Net Periodic Pension Cost (Six Months Ended June 30) (Millions $) | Component | U.S. 2022 | U.S. 2021 | Non-U.S. 2022 | Non-U.S. 2021 | | :-------------------- | :-------- | :-------- | :------------ | :------------ | | Service cost | 6 | 6 | 5 | 6 | | Interest cost | 17 | 20 | 11 | 10 | | Expected asset return | (30) | (42) | (17) | (23) | | Amortization of actuarial loss | 20 | 32 | 4 | 7 | | **Net periodic pension cost** | **13** | **16** | **3** | **—** | [8. Income Taxes](index=16&type=section&id=8.%20Income%20Taxes) The effective tax rate for Q2 2022 was 22.0% and 24.1% for H1 2022, influenced by asset sales and geographic earnings mix - The effective tax rate for Q2 2022 was **22.0%**, down from **37.9%** in Q2 2021, driven by favorable capital gains tax rates from asset sales and shifts in geographic earnings[134](index=134&type=chunk) - For H1 2022, the effective tax rate was **24.1%**, significantly lower than **75.2%** in H1 2021, primarily due to gains from the tableware business and Brampton plant sales, and the absence of the Paddock support agreement liability charge[157](index=157&type=chunk) - The Company settled a tax audit in Mexico for **$38 million** in Q2 2022, equal to previously established reserves[53](index=53&type=chunk) [9. Debt](index=17&type=section&id=9.%20Debt) The Company refinanced its credit agreement in March 2022, with total long-term debt decreasing to **$4,427 million** at June 30, 2022 Long-Term Debt Summary (Millions $) | Debt Type | June 30, 2022 | December 31, 2021 | June 30, 2021 | | :-------------------------------- | :------------ | :---------------- | :------------ | | Secured Credit Agreement: Term Loan A | 946 | — | — | | Previous Secured Credit Agreement: Term Loan A | — | 923 | 1,068 | | Senior Notes: 5.875%, due 2023 | 547 | 695 | 693 | | Senior Notes: 3.125%, due 2024 (€725M) | 734 | 826 | 878 | | Senior Notes: 6.375%, due 2025 | 297 | 297 | 297 | | Senior Notes: 5.375%, due 2025 | 299 | 298 | 298 | | Senior Notes: 2.875%, due 2025 (€500M) | 519 | 561 | 589 | | Senior Notes: 6.625%, due 2027 | 606 | 693 | 692 | | Senior Notes: 4.750%, due 2030 | 395 | 395 | — | | Finance leases | 105 | 98 | 105 | | Other | 4 | 5 | 6 | | **Total long-term debt** | **4,452** | **4,791** | **5,017** | | Less amounts due within one year | 25 | 38 | 40 | | **Long-term debt (net of current portion)** | **4,427** | **4,753** | **4,977** | - A new Credit Agreement was entered into on March 25, 2022, refinancing the previous one and providing up to **$2.8 billion** in borrowings, including a **$600 million** delayed draw term loan for the Paddock Trust[57](index=57&type=chunk) - The Company repurchased **$150.0 million** of 5.875% Senior Notes due 2023 and **$88.2 million** of 6.625% Senior Notes due 2027 in Q1 2022, funded by cash on hand[64](index=64&type=chunk) [10. Contingencies](index=19&type=section&id=10.%20Contingencies) The Company's asbestos liabilities were transferred to Paddock Enterprises, LLC, with a **$610 million** Paddock Trust funded in July 2022 to resolve claims - Paddock Enterprises, LLC, a subsidiary, filed for Chapter 11 in January 2020 to resolve asbestos claims, with O-I Glass and O-I Group not included in the filing[74](index=74&type=chunk) - An agreement in principle was reached in April 2021 to fund a Paddock Trust with **$610 million** to resolve all current and future asbestos claims, providing permanent injunctive relief to the Company and its affiliates[77](index=77&type=chunk)[78](index=78&type=chunk) - The Plan became effective on July 8, 2022, and the Paddock Trust was funded with **$601.5 million** from the Company and **$8.5 million** from Paddock on July 18, 2022, leading to the reconsolidation of Paddock in Q3 2022[80](index=80&type=chunk)[85](index=85&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - In Q2 2021, the Company recorded a **$69 million** gain from a favorable court ruling in Brazil regarding indirect tax recovery[86](index=86&type=chunk) [11. Share Owners' Equity](index=22&type=section&id=11.%20Share%20Owners'%20Equity) Total share owners' equity increased to **$1,259 million** at June 30, 2022, driven by net earnings and other comprehensive income Share Owners' Equity Activity (Three Months Ended June 30, 2022) (Millions $) | Item | Common Stock | Capital in Excess of Par Value | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests | Total Share Owners' Equity | | :-------------------------------- | :----------- | :----------------------------- | :------------- | :---------------- | :----------------------------------- | :------------------------ | :------------------------- | | Balance on April 1, 2022 | 2 | 3,085 | (699) | 389 | (1,821) | 146 | 1,102 | | Reissuance of common stock | — | (1) | 4 | — | — | — | 3 | | Shares repurchased | — | (10) | — | — | — | — | (10) | | Stock compensation | — | 11 | — | — | — | — | 11 | | Net earnings | — | — | — | 252 | — | 4 | 256 | | Other comprehensive loss | — | — | — | — | (69) | (8) | (77) | | Distribution to noncontrolling interests | — | — | — | — | — | (26) | (26) | | **Balance on June 30, 2022** | **2** | **3,085** | **(695)** | **641** | **(1,890)** | **116** | **1,259** | Share Owners' Equity Activity (Six Months Ended June 30, 2022) (Millions $) | Item | Common Stock | Capital in Excess of Par Value | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests | Total Share Owners' Equity | | :-------------------------------- | :----------- | :----------------------------- | :------------- | :---------------- | :----------------------------------- | :------------------------ | :------------------------- | | Balance on January 1, 2022 | 2 | 3,090 | (701) | 301 | (1,972) | 107 | 827 | | Reissuance of common stock | — | (3) | 9 | — | — | — | 6 | | Shares repurchased | — | (20) | — | — | — | — | (20) | | Stock compensation | — | 18 | — | — | — | — | 18 | | Net earnings | — | — | — | 340 | — | 38 | 378 | | Other comprehensive income (loss) | — | — | — | — | 82 | (3) | 79 | | Distributions to noncontrolling interests | — | — | — | — | — | (26) | (26) | | Other | — | — | (3) | — | — | — | (3) | | **Balance on June 30, 2022** | **2** | **3,085** | **(695)** | **641** | **(1,890)** | **116** | **1,259** | - The Company repurchased **770,710 shares** of common stock for approximately **$10 million** during Q2 2022, as part of a **$150 million** anti-dilutive share repurchase program, with **$90 million** remaining available[90](index=90&type=chunk) [12. Accumulated Other Comprehensive Loss](index=24&type=section&id=12.%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated other comprehensive loss increased to **$(1,890) million** at June 30, 2022, primarily due to exchange rate fluctuations Accumulated Other Comprehensive Loss Activity (Three Months Ended June 30) (Millions $) | Item | Net Effect of Exchange Rate Fluctuations | Change in Certain Derivative Instruments | Employee Benefit Plans | Total Accumulated Other Comprehensive Loss | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | :--------------------- | :--------------------------------------- | | Balance on April 1, 2022 | (1,160) | (18) | (643) | (1,821) | | Change before reclassifications | (115) | 25 | (1) | (91) | | Amounts reclassified from accumulated other comprehensive loss | — | (4) | 12 | 8 | | Translation effect | — | (1) | 15 | 14 | | Other comprehensive income (loss) attributable to the Company | (115) | 20 | 26 | (69) | | **Balance on June 30, 2022** | **(1,275)** | **2** | **(617)** | **(1,890)** | Accumulated Other Comprehensive Loss Activity (Six Months Ended June 30) (Millions $) | Item | Net Effect of Exchange Rate Fluctuations | Change in Certain Derivative Instruments | Employee Benefit Plans | Total Accumulated Other Comprehensive Loss | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | :--------------------- | :--------------------------------------- | | Balance on January 1, 2022 | (1,290) | (21) | (661) | (1,972) | | Change before reclassifications | 15 | 43 | (1) | 57 | | Amounts reclassified from accumulated other comprehensive income (loss) | — | (19) | 24 | 5 | | Translation effect | — | (1) | 21 | 20 | | Tax effect | — | — | — | — | | Other comprehensive income attributable to the Company | 15 | 23 | 44 | 82 | | **Balance on June 30, 2022** | **(1,275)** | **2** | **(617)** | **(1,890)** | [13. Other Income (Expense), Net](index=26&type=section&id=13.%20Other%20Income%20(Expense),%20Net) Other income (expense), net significantly increased in Q2 and H1 2022, driven by gains from asset sales and sale-leaseback transactions Other Income (Expense), Net (Millions $) | Item | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | 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) | | Intangible amortization expense | (8) | (9) | (16) | (17) | | Foreign currency exchange loss | (2) | — | (2) | (2) | | Royalty income | 5 | 6 | 11 | 11 | | Other | 3 | — | 2 | 1 | | **Other income (expense), net** | **168** | **57** | **220** | **(101)** | [14. Earnings Per Share](index=27&type=section&id=14.%20Earnings%20Per%20Share) Diluted EPS attributable to the Company significantly increased to **$1.59** in Q2 2022 and **$2.14** in H1 2022, reflecting higher net earnings Earnings Per Share (Three Months Ended June 30) | Metric | 2022 | 2021 | | :------------------------------------------ | :----- | :----- | | Net earnings attributable to the Company | $252M | $118M | | Basic earnings per share | $1.62 | $0.75 | | Diluted earnings per share | $1.59 | $0.73 | | Weighted average shares outstanding (thousands) | 155,683 | 157,902 | | Weighted average diluted shares outstanding (thousands) | 158,951 | 160,791 | Earnings Per Share (Six Months Ended June 30) | Metric | 2022 | 2021 | | :------------------------------------------ | :----- | :----- | | Net earnings attributable to the Company | $340M | $21M | | Basic earnings per share | $2.18 | $0.13 | | Diluted earnings per share | $2.14 | $0.13 | | Weighted average shares outstanding (thousands) | 155,765 | 157,737 | | Weighted average diluted shares outstanding (thousands) | 158,874 | 160,459 | [15. Supplemental Cash Flow Information](index=28&type=section&id=15.%20Supplemental%20Cash%20Flow%20Information) Income taxes paid in cash increased to **$99 million** in H1 2022, while interest paid also rose to **$112 million** Income Taxes Paid in Cash (Six Months Ended June 30) (Millions $) | Region | 2022 | 2021 | | :------- | :--- | :--- | | U.S. | 6 | 4 | | Non-U.S. | 93 | 38 | | **Total** | **99** | **42** | - Interest paid in cash, including note repurchase premiums, increased to **$112 million** in H1 2022 from **$97 million** in H1 2021[100](index=100&type=chunk) - Receivables sold through factoring programs decreased to **$453 million** at June 30, 2022, from **$481 million** at December 31, 2021, resulting in a **$28 million** decrease in cash from operating activities in H1 2022[101](index=101&type=chunk) [16. COVID-19 Impacts](index=28&type=section&id=16.%20COVID-19%20Impacts) The COVID-19 pandemic continued to impact the Company in H1 2022, though with no material effect on critical accounting estimates - The COVID-19 pandemic negatively impacted the Company's business in H1 2022, though to a lesser extent than in 2020 and 2021[102](index=102&type=chunk) - No material impact was observed on critical accounting estimates (allowance for doubtful accounts, inventory carrying value, goodwill, and long-lived assets) for the six-month period ended June 30, 2022, due to COVID-19[103](index=103&type=chunk)[104](index=104&type=chunk) [17. Divestitures and Sale Leaseback of Land and Building](index=29&type=section&id=17.%20Divestitures%20and%20Sale%20Leaseback%20of%20Land%20and%20Building) The Company completed a **$190 million** sale-leaseback of its Brampton plant and sold its Cristar business for **$96 million**, generating significant pretax gains - Completed the sale-leaseback of the Brampton, Ontario plant in May 2022 for **$190 million**, recognizing a **$182 million** pretax gain[105](index=105&type=chunk) - Sold the Cristar TableTop S.A.S. business in Colombia in March 2022 for **$96 million**, resulting in a **$55 million** pretax gain[107](index=107&type=chunk) - These divestitures and sale-leaseback transactions are part of the Company's portfolio optimization program to fund growth opportunities and reduce debt[130](index=130&type=chunk)[152](index=152&type=chunk) [18. Subsequent Events](index=29&type=section&id=18.%20Subsequent%20Events) The Paddock Plan became effective on July 8, 2022, with the Paddock Trust funded on July 18, 2022, leading to reconsolidation - On July 8, 2022, the Paddock Plan became effective, terminating the Paddock support agreement and implementing the channeling injunction for asbestos claims[109](index=109&type=chunk) - The Paddock Trust was funded with **$601.5 million** from the Company (including a **$600 million** delayed draw term loan) and **$8.5 million** from Paddock on July 18-20, 2022[109](index=109&type=chunk) - Reorganized Paddock was reconsolidated into the Company's financial statements on July 20, 2022, with an estimated **$620 million** operating cash outflow in Q3 2022 related to the funding and expenses[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's analysis of the Company's financial condition and results of operations, highlighting key performance drivers and macroeconomic impacts [Executive Overview — Quarters ended June 30, 2022 and 2021](index=31&type=section&id=Executive%20Overview%20%E2%80%94%20Quarters%20ended%20June%2030,%202022%20and%202021) This overview summarizes the Company's financial performance for the second quarters of 2022 and 2021, highlighting key changes in sales and earnings - Net sales in Q2 2022 increased by **$118 million (7%)** year-over-year, primarily due to higher prices, despite negative impacts from foreign currency exchange rates and the sale of the Colombian glass tableware business[116](index=116&type=chunk) - Earnings before income taxes rose by **$130 million** in Q2 2022, driven by higher segment operating profit, a gain on a sale-leaseback transaction, and lower net interest expense, partially offset by the non-recurrence of a Brazilian tax credit gain and higher corporate costs[117](index=117&type=chunk) - Segment operating profit increased by **$25 million (11%)** in Q2 2022, attributed to higher sales and production, strong operating performance, margin expansion initiatives, and higher net prices[118](index=118&type=chunk) - Net earnings attributable to the Company for Q2 2022 were **$252 million ($1.59 diluted EPS)**, up from **$118 million ($0.73 diluted EPS)** in Q2 2021, with non-recurring items increasing earnings by **$137 million** in 2022[121](index=121&type=chunk) [Results of Operations — Second Quarter of 2022 Compared with Second Quarter of 2021](index=32&type=section&id=Results%20of%20Operations%20%E2%80%94%20Second%20Quarter%20of%202022%20Compared%20with%20Second%20Quarter%20of%202021) This section analyzes the Company's financial results for the second quarter of 2022 compared to the same period in 2021 [Net Sales (Q2)](index=32&type=section&id=Net%20Sales%20(Q2)) Net sales increased by **$118 million (7%)** to **$1,778 million** in Q2 2022, driven by higher selling prices despite currency headwinds - Net sales increased by **$118 million (7%)** to **$1,778 million** in Q2 2022, driven by **$208 million** from higher selling prices[122](index=122&type=chunk) - Unfavorable foreign currency exchange rates (Euro, Colombian peso) decreased net sales by **$95 million**, and divestiture of the Colombian glass tableware business reduced sales by **$11 million**[122](index=122&type=chunk) Change in Reportable Segment Net Sales (Q2 2022 vs. Q2 2021) (Millions $) | Factor | Effect on Net Sales | | :-------------------------------- | :------------------ | | Price | 208 | | Sales volume and mix | (1) | | Effects of changing foreign currency rates | (95) | | Divestitures | (11) | | **Total effect on reportable segment net sales** | **101** | [Earnings before Income Taxes and Segment Operating Profit (Q2)](index=33&type=section&id=Earnings%20before%20Income%20Taxes%20and%20Segment%20Operating%20Profit%20(Q2)) Earnings before income taxes increased by **$130 million (66%)** in Q2 2022, with segment operating profit rising by **$25 million (11%)** - Earnings before income taxes increased by **$130 million (66%)** to **$328 million** in Q2 2022, primarily due to higher segment operating profit and a sale-leaseback gain[126](index=126&type=chunk) - Segment operating profit for reportable segments increased by **$25 million (11%)** to **$257 million**, driven by higher net prices, sales/production levels, and margin expansion initiatives[128](index=128&type=chunk) Change in Reportable Segment Operating Profit (Q2 2022 vs. Q2 2021) (Millions $) | Factor | Effect on Operating Profit | | :-------------------------------- | :----------------------- | | 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** | - Europe's segment operating profit increased by **$19 million (18%)**, benefiting from higher selling prices exceeding cost inflation, despite increased engineering project activity and unfavorable foreign currency effects[131](index=131&type=chunk) [Interest Expense, Net (Q2)](index=34&type=section&id=Interest%20Expense,%20Net%20(Q2)) Net interest expense decreased by **$6 million** to **$46 million** in Q2 2022, driven by lower debt levels despite higher interest rates - Net interest expense decreased by **$6 million** to **$46 million** in Q2 2022, driven by lower debt levels, despite higher interest rates[133](index=133&type=chunk) [Provision for Income Taxes (Q2)](index=34&type=section&id=Provision%20for%20Income%20Taxes%20(Q2)) The effective tax rate for Q2 2022 was **22.0%**, a decrease from **37.9%** in Q2 2021, due to favorable capital gains tax rates and geographic earnings mix - The effective tax rate for Q2 2022 was **22.0%**, down from **37.9%** in Q2 2021, due to favorable capital gains tax rates and changes in geographic earnings mix[134](index=134&type=chunk) [Net Earnings Attributable to the Company (Q2)](index=34&type=section&id=Net%20Earnings%20Attributable%20to%20the%20Company%20(Q2)) Net earnings attributable to the Company significantly increased to **$252 million ($1.59 diluted EPS)** in Q2 2022, including **$137 million** in non-recurring items - Net earnings attributable to the Company increased to **$252 million ($1.59 diluted EPS)** in Q2 2022 from **$118 million ($0.73 diluted EPS)** in Q2 2021[135](index=135&type=chunk) Net Earnings Impact from Non-Recurring Items (Q2) (Millions $) | 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** | [Executive Overview — Six months ended June 30, 2022 and 2021](index=35&type=section&id=Executive%20Overview%20%E2%80%94%20Six%20months%20ended%20June%2030,%202022%20and%202021) This overview summarizes the Company's financial performance for the first six months of 2022 and 2021, highlighting key changes in sales and earnings - Net sales for H1 2022 increased by **$308 million (10%)** year-over-year, driven by higher prices and stronger shipments, despite negative impacts from foreign currency and divestitures[136](index=136&type=chunk) - Earnings before income taxes rose by **$365 million** in H1 2022, due to higher segment operating profit, gains from asset sales, and the non-recurrence of the Paddock-related charge from 2021[137](index=137&type=chunk) - Segment operating profit increased by **$81 million (20%)** in H1 2022, reflecting higher sales, strong operating performance, margin expansion, and the non-recurrence of severe weather impacts in the Americas[138](index=138&type=chunk) - Net earnings attributable to the Company for H1 2022 were **$340 million ($2.14 diluted EPS)**, a significant increase from **$21 million ($0.13 diluted EPS)** in H1 2021, with non-recurring items increasing earnings by **$135 million** in 2022 and decreasing by **$122 million** in 2021[141](index=141&type=chunk) [Results of Operations — First six months of 2022 compared with first six months of 2021](index=35&type=section&id=Results%20of%20Operations%20%E2%80%94%20First%20six%20months%20of%202022%20compared%20with%20first%20six%20months%20of%202021) This section analyzes the Company's financial results for the first six months of 2022 compared to the same period in 2021 [Net Sales (H1)](index=35&type=section&id=Net%20Sales%20(H1)) Net sales increased by **$308 million (10%)** to **$3,469 million** in H1 2022, driven by higher selling prices and increased shipments - Net sales increased by **$308 million (10%)** to **$3,469 million** in H1 2022, primarily due to **$348 million** from higher selling prices and **$72 million** from increased glass container shipments[142](index=142&type=chunk) - Unfavorable foreign currency exchange rates (Euro) decreased net sales by **$130 million**, and divestitures reduced sales by **$15 million**[142](index=142&type=chunk)[143](index=143&type=chunk) Change in Reportable Segment Net Sales (H1 2022 vs. H1 2021) (Millions $) | Factor | Effect on Net Sales | | :-------------------------------- | :------------------ | | Price | 348 | | Sales volume and mix | 72 | | Effects of changing foreign currency rates | (130) | | Divestitures | (15) | | **Total effect on reportable segment net sales** | **275** | [Earnings before Income Taxes and Segment Operating Profit (H1)](index=37&type=section&id=Earnings%20before%20Income%20Taxes%20and%20Segment%20Operating%20Profit%20(H1)) Earnings before income taxes increased by **$365 million** to **$498 million** in H1 2022, with segment operating profit rising by **$81 million (20%)** - Earnings before income taxes increased by **$365 million** to **$498 million** in H1 2022, driven by higher segment operating profit, asset sale gains, and the non-recurrence of the Paddock charge[146](index=146&type=chunk) - Segment operating profit for reportable segments increased by **$81 million (20%)** to **$488 million**, due to higher sales, strong operating performance, margin expansion, and the absence of severe weather impacts[148](index=148&type=chunk)[149](index=149&type=chunk) Change in Reportable Segment Operating Profit (H1 2022 vs. H1 2021) (Millions $) | Factor | Effect on Operating Profit | | :-------------------------------- | :----------------------- | | 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** | - Europe's segment operating profit increased by **$47 million (26%)**, benefiting from higher selling prices exceeding cost inflation and increased shipments[153](index=153&type=chunk) [Interest Expense, Net (H1)](index=39&type=section&id=Interest%20Expense,%20Net%20(H1)) Net interest expense increased by **$9 million** to **$112 million** in H1 2022, primarily due to note repurchase premiums and higher interest rates - Net interest expense increased by **$9 million** to **$112 million** in H1 2022, primarily due to **$18 million** in note repurchase premiums and refinancing fees, and higher interest rates[156](index=156&type=chunk) [Provision for Income Taxes (H1)](index=39&type=section&id=Provision%20for%20Income%20Taxes%20(H1)) The effective tax rate for H1 2022 was **24.1%**, significantly lower than **75.2%** in H1 2021, due to asset sale gains and the non-recurrence of the Paddock charge - The effective tax rate for H1 2022 was **24.1%**, down from **75.2%** in H1 2021, due to favorable capital gains tax rates on asset sales and the non-recurrence of the Paddock support agreement liability charge without tax benefit[157](index=157&type=chunk) [Net Earnings Attributable to Non-Controlling Interests (H1)](index=39&type=section&id=Net%20Earnings%20Attributable%20to%20Non-Controlling%20Interests%20(H1)) Net earnings attributable to non-controlling interests increased to **$38 million** in H1 2022, primarily due to a **$29 million** gain from the Cristar business sale - Net earnings attributable to non-controlling interests increased to **$38 million** in H1 2022, primarily due to a **$29 million** gain from the sale of the Cristar glass tableware business[158](index=158&type=chunk) [Net Earnings Attributable to the Company (H1)](index=39&type=section&id=Net%20Earnings%20Attributable%20to%20the%20Company%20(H1)) Net earnings attributable to the Company substantially increased to **$340 million ($2.14 diluted EPS)** in H1 2022, including **$135 million** in non-recurring items - Net earnings attributable to the Company increased to **$340 million ($2.14 diluted EPS)** in H1 2022 from **$21 million ($0.13 diluted EPS)** in H1 2021[159](index=159&type=chunk) Net Earnings Impact from Non-Recurring Items (H1) (Millions $) | 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)** | [Forward Looking Operational and Financial Impacts](index=40&type=section&id=Forward%20Looking%20Operational%20and%20Financial%20Impacts) The Company forecasts approximately **1%** sales shipment growth for full-year 2022, with **$155 million** in operating cash activities and **$600 million** in capital expenditures - Full year 2022 sales shipment growth (in tons) is expected to increase around **1%**, with margin expansion initiatives and higher selling prices offsetting cost inflation[162](index=162&type=chunk) - Cash provided by operating activities is expected to be approximately **$155 million** for 2022, or **$775 million** excluding the **$620 million** funding of the Paddock trust and related expenses[162](index=162&type=chunk) - Capital expenditures in 2022 are expected to be approximately **$600 million**, including investments in MAGMA innovation and expansion projects[162](index=162&type=chunk) - The Company is installing energy switching capabilities (oil) in Europe, aiming for approximately **50%** production capacity coverage by year-end 2022, to mitigate risks from potential Russian natural gas curtailments[162](index=162&type=chunk) [Items Excluded from Reportable Segment Totals](index=40&type=section&id=Items%20Excluded%20from%20Reportable%20Segment%20Totals) This section details items excluded from reportable segment totals, including corporate costs, asset sale gains, and restructuring charges [Retained Corporate Costs and Other](index=40&type=section&id=Retained%20Corporate%20Costs%20and%20Other) Retained corporate costs and other increased to **$53 million** in Q2 2022 and **$103 million** in H1 2022, driven by inflation and MAGMA R&D expenses - Retained corporate costs and other increased to **$53 million** in Q2 2022 and **$103 million** in H1 2022, primarily due to inflation, MAGMA R&D expenses, and higher management incentive expense[161](index=161&type=chunk) [Gain on Sale of Divested Business and Sale Leaseback of Land and Building](index=40&type=section&id=Gain%20on%20Sale%20of%20Divested%20Business%20and%20Sale%20Leaseback%20of%20Land%20and%20Building) A **$182 million** pretax gain was recorded from the Brampton plant sale-leaseback, and a **$55 million** pretax gain from the Cristar business sale - A pretax gain of approximately **$182 million** was recorded in Q2 2022 from the sale-leaseback of the Brampton, Ontario plant[162](index=162&type=chunk) - A pretax gain of approximately **$55 million** was recorded in Q1 2022 from the sale of the Cristar glass tableware business in Colombia[163](index=163&type=chunk) [Restructuring, Asset Impairment and Other Charges](index=41&type=section&id=Restructuring,%20Asset%20Impairment%20and%20Other%20Charges) Charges totaling **$12 million** were recorded for restructuring, asset impairment, and other costs in H1 2022, primarily for employee and exit expenses - Charges totaling **$12 million** were recorded for restructuring, asset impairment, and other charges in H1 2022, mainly for employee and exit costs in the Americas and Europe[165](index=165&type=chunk) [Gain on Brazil Indirect Tax Credit](index=41&type=section&id=Gain%20on%20Brazil%20Indirect%20Tax%20Credit) A **$69 million** gain was recognized in Q2 2021 from a favorable court ruling in Brazil for indirect tax recovery - A **$69 million** gain was recorded in Q2 2021 from a favorable court ruling in Brazil for the recovery of indirect taxes[167](index=167&type=chunk) [Charge for Paddock Support Agreement Liability](index=41&type=section&id=Charge%20for%20Paddock%20Support%20Agreement%20Liability) A **$154 million** charge was recorded in Q1 2021 for the Paddock support agreement liability, reflecting an increased asbestos reserve estimate - A **$154 million** charge was recorded in Q1 2021 related to the Paddock support agreement liability, reflecting an increased asbestos reserve estimate for the channeling injunction[168](index=168&type=chunk) - The Paddock Trust was funded in July 2022, following the Plan becoming effective, to resolve asbestos claims[168](index=168&type=chunk) [Capital Resources and Liquidity](index=41&type=section&id=Capital%20Resources%20and%20Liquidity) The Company refinanced its credit agreement in March 2022, securing **$2.8 billion** in borrowings, with **$1.24 billion** in unused credit available as of June 30, 2022 - A new Credit Agreement was entered into on March 25, 2022, providing up to **$2.8 billion** in borrowings, including a **$600 million** delayed draw term loan for the Paddock Trust[170](index=170&type=chunk) - As of June 30, 2022, the Company had **$1.24 billion** in unused credit available under the new Agreement and was in compliance with all debt covenants[172](index=172&type=chunk)[175](index=175&type=chunk) - The Company repurchased **$238.2 million** of senior notes in Q1 2022 and issued **$400 million** in new senior notes in November 2021 to manage its capital structure[179](index=179&type=chunk)[180](index=180&type=chunk) [Material Cash Requirements](index=43&type=section&id=Material%20Cash%20Requirements) No material changes to the Company's cash requirements were reported at June 30, 2022, compared to the 2021 Annual Report on Form 10-K - No material changes to the Company's material cash requirements at June 30, 2022, from those described in the 2021 Annual Report on Form 10-K[183](index=183&type=chunk) [Cash Flows](index=43&type=section&id=Cash%20Flows) Cash from operating activities decreased to **$120 million** in H1 2022, while investing activities provided **$66 million**, and financing activities utilized **$243 million** - Cash provided by operating activities decreased to **$120 million** in H1 2022 from **$143 million** in H1 2021, primarily due to higher working capital use and lower non-cash charges[184](index=184&type=chunk) - Cash provided by investing activities was **$66 million** in H1 2022, a significant improvement from **$109 million** utilized in H1 2021, driven by **$286 million** in proceeds from asset sales[186](index=186&type=chunk)[188](index=188&type=chunk) - Cash utilized in financing activities increased to **$243 million** in H1 2022 from **$68 million** in H1 2021, mainly due to a **$187 million** increase in net debt repayments[189](index=189&type=chunk) - The Company anticipates sufficient cash flows from operations and available credit to fund its operating needs, debt service, and other obligations short-term and long-term[191](index=191&type=chunk) [Critical Accounting Estimates](index=44&type=section&id=Critical%20Accounting%20Estimates) Management's financial statements rely on continuous evaluation of estimates and assumptions, with no material changes reported at June 30, 2022 - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts, which are evaluated on an ongoing basis[192](index=192&type=chunk)[193](index=193&type=chunk) - No material changes in critical accounting estimates were reported at June 30, 2022, compared to the 2021 Annual Report on Form 10-K[195](index=195&type=chunk) [Forward-Looking Statements](index=45&type=section&id=Forward-Looking%20Statements) Forward-looking statements reflect current expectations and projections, involving inherent uncertainties and risks from factors like COVID-19, MAGMA delays, and global economic conditions - Forward-looking statements reflect current expectations and projections, involving uncertainty and risk, and are not guarantees of future performance[196](index=196&type=chunk)[198](index=198&type=chunk) - Key risk factors include the impact of COVID-19, the Company's ability to achieve benefits from Corporate Modernization, cost structure management, MAGMA program implementation delays, foreign currency fluctuations, and global economic and political conditions, including the Russia-Ukraine conflict[197](index=197&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) No material changes in the Company's market risk disclosures were reported at June 30, 2022, compared to the 2021 Annual Report on Form 10-K - No material changes in market risk at June 30, 2022, from those described in the 2021 Annual Report on Form 10-K[200](index=200&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures.) The Company's disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal control over financial reporting - The Company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2022[202](index=202&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2022, despite modifications to workplace practices due to the COVID-19 pandemic[203](index=203&type=chunk) [Part II — Other Information](index=48&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, equity security sales, and exhibits [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings.) No environmental proceedings with monetary sanctions exceeding **$1 million** were pending as of June 30, 2022, with asbestos claims referenced in Note 10 - No environmental proceedings with monetary sanctions exceeding **$1 million** were pending or contemplated as of June 30, 2022[206](index=206&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors.) Asbestos-related risk factors are modified by the Paddock Trust funding, with new risks including higher energy costs, labor shortages, and MAGMA development delays - The funding of the Paddock Trust in July 2022 modifies asbestos-related risk factors previously disclosed[208](index=208&type=chunk) - Higher energy costs and interrupted supplies, particularly natural gas in Europe due to the Russia-Ukraine conflict, pose a material adverse effect on operations, potentially leading to significant cost increases or cessation of delivery[209](index=209&type=chunk)[211](index=211&type=chunk) - Labor shortages, increased compensation costs, and potential disruptions from collective bargaining agreements or competitive labor markets could materially affect consolidated operations[212](index=212&type=chunk)[214](index=214&type=chunk) - Delays in developing and implementing new glass melting technologies, such as the MAGMA program, due to supply chain challenges, could impact competitiveness and the transition to lower-carbon processes[215](index=215&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The Company repurchased **770,710 shares** for approximately **$10 million** in Q2 2022 under its **$150 million** anti-dilutive share repurchase program Issuer Purchases of Equity Securities (Three Months Ended June 30, 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) | | :----------------------- | :----------------------------- | :--------------------------- | :----------------------------------------------------------------- | :------------------------------------------------------------------------------------------------- | | April 1 - April 30, 2022 | 770,710 | $12.96 | 770,710 | 90 | | May 1 - May 31, 2022 | — | — | — | 90 | | June 1 - June 30, 2022 | — | — | — | 90 | | **Total** | **770,710** | **$12.96** | **770,710** | | [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits.) This section lists exhibits filed with the Form 10-Q, including the Incentive Award Plan, officer certifications, and financial statements in iXBRL format - Exhibits include the O-I Glass, Inc. Third Amended and Restated 2017 Incentive Award Plan, certifications of Principal Executive and Financial Officers, and financial statements in iXBRL format[220](index=220&type=chunk) [Signatures](index=52&type=section&id=SIGNATURES) The report was duly signed on behalf of O-I Glass, Inc. by John A. Haudrich, Senior Vice President and Chief Financial Officer, on August 3, 2022 - The report was signed by John A. Haudrich, Senior Vice President and Chief Financial Officer of O-I Glass, Inc. on August 3, 2022[224](index=224&type=chunk)

Financial Data and Key Metrics Changes - O-I Glass reported adjusted earnings of $0.73 per share for Q2 2022, a 35% increase from the prior year [6][31] - Segment operating profit rose to $257 million from $232 million year-over-year, with margins improving by 60 basis points despite foreign exchange headwinds [32][34] - Total financial leverage approximated four times at the end of Q2, the lowest level since prior substantial investments in the Americas network [35] Business Line Data and Key Metrics Changes - Glass shipments increased nearly 1% in Q2 2022, building on an 18% improvement in the prior year quarter [12] - The Americas segment posted a profit of $130 million, up $14 million from the prior year, while Europe saw a profit of $127 million, up $33 million [33][34] - The company expects full-year sales volume to increase by around 1% in 2022, supported by strong demand despite record low inventories [17] Market Data and Key Metrics Changes - Strong demand for glass is noted across various markets, with glass holding a 50% market share in Brazil's beer category [14] - In Europe, the conflict in Ukraine has reduced the availability of imported glass, driving demand for locally produced glass [16] - The company anticipates that its volumes each quarter in 2022 will exceed pre-pandemic levels [17] Company Strategy and Development Direction - O-I Glass is advancing its capital expansion and MAGMA development plans to adapt to current macro challenges while achieving financial targets [20][29] - The revised expansion plan aims for 5% to 6% organic volume growth and a 20% return on investment with lower total capital expenditures [25] - The company is focusing on smaller-scale projects to reduce construction costs and complexity, while also reactivating idle furnaces [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about navigating potential recession signals due to solid glass demand fundamentals [46] - The company is well-prepared for potential disruptions from Russian natural gas curtailments in Europe, with 20% of its capacity already capable of running on oil [49][50] - The outlook for the second half of 2022 has improved, with adjusted earnings expected to range between $2.05 and $2.20 per share for the full year [44] Other Important Information - O-I Glass has achieved a resolution on legacy asbestos liabilities and is making progress on key strategic objectives [22] - The company has increased its full-year earnings and cash flow guidance, reflecting solid progress year-to-date [54] - The company is actively working on improving contract structures in North America to better pass through inflation [67] Q&A Session Summary Question: European exposure and flex capacity - Management indicated that 20% of capacity can switch to oil, with plans to increase this to 50% by year-end, providing flexibility against potential disruptions [62] Question: Price-cost segment variance in Europe - Management expects a long-term net price favorable variance, with consistent levels anticipated in the second half of the year [66] Question: MAGMA technology rollout and constraints - The revised plan focuses on smaller projects to mitigate risks associated with supply chain constraints, allowing for faster implementation [72][121] Question: Market share gains in Europe - Management noted improvements in customer perception and service efficiency, contributing to market share stability despite tight inventories [87] Question: Divestiture opportunities - The company has completed $1.3 billion of its $1.5 billion divestiture program, with one final sales leaseback expected soon [91] Question: Consumer behavior changes due to inflation - Management has not observed significant changes in consumer behavior affecting demand, citing strong underlying demand fundamentals [99] Question: Energy needs and hedging - Management expressed confidence in their long-term energy contracts and hedging strategies, ensuring stability in energy costs [105]