O-I Glass(OI) - 2025 Q2 - Quarterly Report

Part I Item 1. Financial Statements. Presents O-I Glass, Inc.'s unaudited condensed consolidated financial statements and detailed notes for Q2 and H1 2025 and 2024 Condensed Consolidated Results of Operations This section provides the condensed consolidated results of operations, including net sales, gross profit, and net earnings, for the specified periods Condensed Consolidated Results of Operations (Dollars in millions, except per share) | Metric (Dollars in millions, except per share) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $1,706 | $1,729 | $3,273 | $3,322 | | Cost of goods sold | $(1,407) | $(1,426) | $(2,694) | $(2,701) | | Gross profit | $299 | $303 | $579 | $621 | | Earnings before income taxes | $7 | $104 | $26 | $221 | | Provision for income taxes | $(6) | $(42) | $(36) | $(83) | | Net earnings (loss) | $1 | $62 | $(10) | $138 | | Net earnings (loss) attributable to the Company | $(5) | $57 | $(20) | $129 | | Basic earnings per share | $(0.03) | $0.37 | $(0.13) | $0.83 | | Diluted earnings per share | $(0.03) | $0.36 | $(0.13) | $0.81 | Condensed Consolidated Comprehensive Income (Loss) This section details the condensed consolidated comprehensive income and loss, including foreign currency and derivative adjustments Condensed Consolidated Comprehensive Income (Loss) (Dollars in millions) | Metric (Dollars in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net earnings (loss) | $1 | $62 | $(10) | $138 | | Foreign currency translation adjustments | $213 | $(257) | $310 | $(252) | | Pension and other postretirement benefit adjustments, net of tax | $(7) | $6 | $(10) | $12 | | Change in fair value of derivative instruments, net of tax | $(77) | $10 | $(105) | $19 | | Other comprehensive income (loss) | $129 | $(241) | $195 | $(221) | | Total comprehensive income (loss) | $130 | $(179) | $185 | $(83) | | Comprehensive income (loss) attributable to the Company | $124 | $(177) | $170 | $(85) | Condensed Consolidated Balance Sheets This section presents the condensed consolidated balance sheets, detailing assets, liabilities, and equity at specific dates Condensed Consolidated Balance Sheets (Dollars in millions) | Metric (Dollars in millions) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--------------------------------------- | :------------ | :---------------- | :------------ | | Cash and cash equivalents | $487 | $734 | $671 | | Trade receivables, net | $848 | $572 | $725 | | Inventories | $990 | $963 | $1,153 | | Total current assets | $2,604 | $2,478 | $2,819 | | Property, plant and equipment, net | $3,458 | $3,296 | $3,465 | | Goodwill | $1,467 | $1,321 | $1,395 | | Total assets | $9,179 | $8,654 | $9,334 | | Accounts payable | $1,104 | $1,142 | $1,127 | | Short-term loans and long-term debt due within one year | $236 | $416 | $500 | | Total current liabilities | $2,102 | $2,160 | $2,234 | | Long-term debt | $4,898 | $4,553 | $4,648 | | Share owners' equity | $1,369 | $1,205 | $1,631 | | Total liabilities and share owners' equity | $9,179 | $8,654 | $9,334 | Condensed Consolidated Cash Flows This section outlines the condensed consolidated cash flows from operating, investing, and financing activities Condensed Consolidated Cash Flows (Dollars in millions) | Metric (Dollars in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------- | :----------------------------- | :----------------------------- | | Net earnings (loss) | $(10) | $138 | | Depreciation and amortization | $238 | $250 | | Restructuring, asset impairment and related charges | $195 | $0 | | Cash utilized in operating activities | $(16) | $(20) | | Cash payments for property, plant and equipment | $(239) | $(373) | | Cash utilized in investing activities | $(221) | $(380) | | Additions to long-term debt | $680 | $1,096 | | Repayments of long-term debt | $(698) | $(917) | | Cash provided by (utilized in) financing activities | $(47) | $180 | | Change in cash | $(247) | $(242) | | Cash at end of period | $487 | $671 | Notes to Condensed Consolidated Financial Statements Provides detailed disclosures and explanations for the condensed consolidated financial statements, covering key financial areas and subsequent events Note 1. Segment Information Details the company's reportable segments, Americas and Europe, and their respective net sales and operating profits - The company has two reportable segments: Americas and Europe, aligned with its internal management and performance evaluation approach. Certain assets and activities not directly related to segments are reported within 'Retained corporate costs and other'[17] - Segment operating profit, a non-GAAP measure, is used by management to evaluate segment performance and allocate resources. It consists of consolidated earnings before interest income, interest expense, and provision for income taxes, excluding certain items not representative of ongoing operations and retained corporate costs[18] Segment Net Sales (Millions) | Segment | Three months ended June 30, 2025 (Net Sales, Millions) | Three months ended June 30, 2024 (Net Sales, Millions) | Six months ended June 30, 2025 (Net Sales, Millions) | Six months ended June 30, 2024 (Net Sales, Millions) | | :------ | :------------------------------------------- | :------------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Americas | $943 | $899 | $1,816 | $1,753 | | Europe | $741 | $802 | $1,407 | $1,511 | | Total | $1,684 | $1,701 | $3,223 | $3,264 | | Other | $22 | $28 | $50 | $58 | | Net Sales | $1,706 | $1,729 | $3,273 | $3,322 | Segment Operating Profit (Millions) | Segment | Three months ended June 30, 2025 (Segment Operating Profit, Millions) | Three months ended June 30, 2024 (Segment Operating Profit, Millions) | Six months ended June 30, 2025 (Segment Operating Profit, Millions) | Six months ended June 30, 2024 (Segment Operating Profit, Millions) | | :------ | :-------------------------------------------------------- | :-------------------------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------ | | Americas | $135 | $106 | $276 | $208 |\ | Europe | $90 | $127 | $158 | $260 |\ | Total | $225 | $233 | $434 | $468 | - Operations outside the U.S. that accounted for 10% or more of consolidated net sales during Q2 2025 and H1 2025 were in France (12%), Italy (13%), and Mexico (13-14%)[23][24] Note 2. Revenue Explains revenue recognition policies and provides a breakdown of net sales by customer end-use for each segment - Revenue is recognized at the point in time when control of glass containers is transferred to the customer, primarily upon shipment from manufacturing or warehousing facilities[25] Net Sales by Customer End Use (Q2, Millions) | Customer End Use | Americas (Millions) | Europe (Millions) | Total (Millions) | | :--------------- | :------------------ | :---------------- | :--------------- | | Alcoholic beverages | $535 | $533 | $1,068 | | Food and other | $219 | $118 | $337 | | Non-alcoholic beverages | $189 | $90 | $279 | | Reportable segment totals | $943 | $741 | $1,684 | | Other | | | $22 | | Net sales | | | $1,706 | Net Sales by Customer End Use (H1, Millions) | Customer End Use | Americas (Millions) | Europe (Millions) | Total (Millions) | | :--------------- | :------------------ | :---------------- | :--------------- | | Alcoholic beverages | $1,038 | $1,014 | $2,052 | | Food and other | $436 | $229 | $665 | | Non-alcoholic beverages | $342 | $164 | $506 | | Reportable segment totals | $1,816 | $1,407 | $3,223 | | Other | | | $50 | | Net sales | | | $3,273 | Note 3. Credit Losses Describes the company's credit risk mitigation strategies and presents accounts receivable and allowance for credit losses - The company assesses customer creditworthiness and establishes credit limits to mitigate credit risk, monitoring ongoing exposure through active review of customer balances[28] Credit Losses (Millions) | Metric | June 30, 2025 (Millions) | June 30, 2024 (Millions) | | :--------------------- | :----------------------- | :----------------------- | | Accounts receivable, net | $848 | $725 | | Allowance | $31 | $30 | - Changes in the allowance for credit losses were not material for the three and six months ended June 30, 2025 and 2024[29] Note 4. Inventories Provides a breakdown of inventory by class, including finished goods, raw materials, and operating supplies Inventory Class (Millions) | Inventory Class | June 30, 2025 (Millions) | December 31, 2024 (Millions) | June 30, 2024 (Millions) | | :-------------- | :----------------------- | :--------------------------- | :----------------------- | | Finished goods | $742 | $745 | $957 | | Raw materials | $196 | $169 | $144 | | Operating supplies | $52 | $49 | $52 | | Total | $990 | $963 | $1,153 | Note 5. Derivative Instruments Details the company's use of derivative instruments to manage market risks, including commodity, foreign exchange, and interest rate derivatives - The company uses natural gas forwards and collars, foreign exchange option and forward contracts, interest rate swaps, and cross-currency swaps to manage market risks. These instruments are classified as Level 2 in the fair value hierarchy[31] Derivative Instruments (Millions) | Category | June 30, 2025 (Assets, Millions) | December 31, 2024 (Assets, Millions) | June 30, 2024 (Assets, Millions) | June 30, 2025 (Liabilities, Millions) | December 31, 2024 (Liabilities, Millions) | June 30, 2024 (Liabilities, Millions) | | :-------------------------------------- | :------------------------------- | :----------------------------------- | :------------------------------- | :------------------------------------ | :---------------------------------------- | :------------------------------------ | | Commodity forward contracts and collars | $0 | $0 | $0 | $1 | $6 | $10 | | Fair value hedges of foreign exchange risk | $1 | $8 | $6 | $163 | $69 | $82 | | Net investment hedges | $9 | $7 | $3 | $142 | $29 | $37 | | Foreign exchange derivative contracts (not designated as hedges) | $14 | $2 | $2 | $1 | $10 | $8 | | Total derivatives | $24 | $17 | $11 | $307 | $114 | $137 | Gain (Loss) Recognized in OCI (Effective Portion) (Millions) | Gain (Loss) Recognized in OCI (Effective Portion) (Millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Commodity forward contracts and collars | $(1) | $0 | $5 | $(4) | | Net Investment Hedges | $(74) | $6 | $21 | $(111) | | Total | $(75) | $6 | $17 | $(106) | Note 6. Restructuring Accruals Outlines the company's restructuring programs, including the "Fit to Win" initiative, and associated charges and accruals - The company's major restructuring program, 'Fit to Win,' began in the second half of 2024 and is expected to last at least through 2026, aiming to reduce redundant production capacity and streamline costs[45] Restructuring Accruals (Millions) | Category | Balance at April 1, 2025 (Millions) | Charges (Millions) | Write-down of assets to net realizable value (Millions) | Net cash paid (Millions) | Other (Millions) | Balance at June 30, 2025 (Millions) | | :----------------------- | :---------------------------------- | :----------------- | :------------------------------------------------------ | :----------------------- | :--------------- | :---------------------------------- | | Fit to Win program: Employee Costs | $78 | $8 | - | $(46) | $7 | $47 | | Fit to Win program: Asset Impairment | - | $104 | $(104) | - | - | - | | Fit to Win program: Other Exit Costs | $32 | $1 | - | $(2) | - | $31 | | Other Restructuring: Employee Costs | $6 | - | - | $(1) | - | $5 | | Other Restructuring: Other Exit Costs | $4 | - | - | $(1) | - | $3 | | Total | $120 | $113 | $(104) | $(50) | $7 | $86 | - For the three and six months ended June 30, 2025, the company recorded restructuring, asset impairment, and other charges of approximately $113 million and $195 million, respectively, primarily related to the Fit to Win program, including $104 million for halting the MAGMA program[46] - As of June 30, 2025, cumulative charges related to the Fit to Win program totaled approximately $396 million, with additional charges expected in future quarters[46] Note 7. Pension Benefit Plans Presents the net periodic pension costs for both U.S. and non-U.S. pension benefit plans Net Periodic Pension Cost (Q2, Millions) | Component | Three months ended June 30, 2025 (U.S., Millions) | Three months ended June 30, 2024 (U.S., Millions) | Three months ended June 30, 2025 (Non-U.S., Millions) | Three months ended June 30, 2024 (Non-U.S., Millions) | | :-------------------- | :---------------------------------------------- | :---------------------------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | | Service cost | $1 | $1 | $2 | $2 | | Interest cost | $11 | $11 | $9 | $9 | | Expected asset return | $(12) | $(13) | $(8) | $(8) | | Amortization of actuarial loss | $3 | $3 | $2 | $3 | | Net periodic pension cost | $3 | $2 | $5 | $6 | Net Periodic Pension Cost (H1, Millions) | Component | Six months ended June 30, 2025 (U.S., Millions) | Six months ended June 30, 2024 (U.S., Millions) | Six months ended June 30, 2025 (Non-U.S., Millions) | Six months ended June 30, 2024 (Non-U.S., Millions) | | :-------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------------- | :-------------------------------------------------- | | Service cost | $2 | $2 | $4 | $4 | | Interest cost | $22 | $22 | $17 | $18 |\ | Expected asset return | $(25) | $(26) | $(15) | $(16) |\ | Amortization of actuarial loss | $6 | $6 | $4 | $6 |\ | Net periodic pension cost | $5 | $4 | $10 | $12 | Note 8. Income Taxes Discusses the company's interim tax provision, ongoing income tax examinations, and the impact of new tax legislation - The company calculates its interim tax provision using the estimated annual effective tax rate (EAETR) methodology, which differs from the statutory U.S. Federal tax rate of 21% primarily due to varying non-U.S. tax rates and the impact of the U.S. valuation allowance[50] - The company is currently under income tax examination in various jurisdictions (Brazil, Canada, Colombia, Germany, Indonesia, Italy, Peru, and the U.S.) for years ranging from 2004 through 2023 and is contesting tax assessments in excess of established reserves[51] - The 'One Big Beautiful Bill Act' (OBBBA) was enacted on July 4, 2025, with certain provisions effective in 2025, and the company is currently assessing its impact on its consolidated financial statements[52] Note 9. Debt Provides a detailed breakdown of the company's debt structure, including revolving loans, term loans, and senior notes Debt Type (Millions) | Debt Type | June 30, 2025 (Millions) | December 31, 2024 (Millions) | June 30, 2024 (Millions) | | :-------------------------------------- | :----------------------- | :--------------------------- | :----------------------- | | Revolving Loans | $205 | $0 | $0 | | Term Loan A | $1,339 | $1,338 | $1,392 | | Senior Notes (various maturities/rates) | $3,565 | $3,516 | $3,549 | | Finance leases | $186 | $195 | $189 | | Other | $8 | $8 | $1 | | Total long-term debt | $5,003 | $4,859 | $4,995 | | Less amounts due within one year | $(105) | $(306) | $(347) | | Long-term debt (net) | $4,898 | $4,553 | $4,648 | - As of June 30, 2025, the Credit Agreement includes a $300 million revolving credit facility, a $950 million multicurrency revolving credit facility, and $1.45 billion in term loan A facilities ($1.34 billion outstanding). The company had $1.04 billion in unused credit available[57] - The weighted average interest rate on borrowings outstanding under the Credit Agreement at June 30, 2025, was 6.08%. The company was in compliance with all covenants and restrictions[57][60] - In May 2024, the company issued €500 million and $300 million in senior notes to repurchase and redeem existing debt, including the full repayment of 2.875% Senior Notes due 2025 in Q1 2025[63][65] Note 10. Contingencies Addresses environmental accruals, legal settlements, and ongoing investigations by competition authorities Contingencies (Millions) | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | June 30, 2024 (Millions) | | :----------------------------------- | :----------------------- | :--------------------------- | :----------------------- | | Aggregate environmental accruals (undiscounted) | $38 | $35 | $33 | - In Q1 2025, the company reached a tentative settlement for $16.5 million regarding the Cuyahoga River site litigation, expecting to pay in Q3 2025, and recorded a $4 million charge[71] - The company is under investigation by competition authorities in Italy, France, and Ecuador for alleged anti-competitive conduct, which could result in material fines if violations are found[72][73] Note 11. Share Owners' Equity Provides an overview of changes in total share owners' equity, including net earnings and share repurchases Share Owners' Equity (Millions) | Metric | June 30, 2025 (Millions) | April 1, 2025 (Millions) | June 30, 2024 (Millions) | April 1, 2024 (Millions) | | :----------------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Total Share Owners' Equity | $1,369 | $1,249 | $1,631 | $1,826 | | Net earnings (loss) attributable to the Company | $(5) | - | $57 | - | | Other comprehensive income (loss) | $129 | - | $(234) | - | | Shares repurchased (millions) | 0.9 | - | 0.6 | - | - During Q2 2025, the company repurchased 938,029 shares of common stock for approximately $10 million under a $100 million anti-dilutive share repurchase program. Approximately $60 million remained available as of June 30, 2025[79] Note 12. Accumulated Other Comprehensive Loss Details the components of accumulated other comprehensive loss, including exchange rate fluctuations and derivative instrument changes Accumulated Other Comprehensive Loss (Millions) | Component | Balance Jan 1, 2025 (Millions) | Change before reclassifications (Millions) | Reclassified from Accumulated OCI into Income (Millions) | Translation effect (Millions) | Tax effect (Millions) | Balance June 30, 2025 (Millions) | | :-------------------------------------- | :----------------------------- | :----------------------------------------- | :------------------------------------------------------- | :---------------------------- | :-------------------- | :----------------------------- | | Net Effect of Exchange Rate Fluctuations | $(1,435) | $305 | - | - | - | $(1,130) | | Change in Certain Derivative Instruments | $(14) | $(111) | $6 | - | - | $(119) | | Employee Benefit Plans | $(526) | $(1) | $10 | $(18) | $(1) | $(536) | | Total Accumulated Other Comprehensive Loss | $(1,975) | $193 | $16 | $(18) | $(1) | $(1,785) | Note 13. Other Expense, Net Itemizes other expenses, net, including restructuring charges, environmental charges, and foreign currency exchange losses Other Expense, Net (Millions) | Component | Three months ended June 30, 2025 (Millions) | Three months ended June 30, 2024 (Millions) | Six months ended June 30, 2025 (Millions) | Six months ended June 30, 2024 (Millions) | | :-------------------------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Restructuring, asset impairment and other charges | $(108) | $0 | $(191) | $0 | | Legacy environmental charge | $0 | $(10) | $(4) | $(10) | | Gain on sale of miscellaneous assets | $0 | $0 | $6 | $0 | | Intangible amortization expense | $(7) | $(7) | $(13) | $(15) | | Foreign currency exchange loss | $(3) | $0 | $(3) | $(3) | | Royalty income | $5 | $6 | $10 | $12 | | Other income (expense) | $(5) | $(1) | $(5) | $1 | | Other expense, net | $(118) | $(12) | $(200) | $(15) | Note 14. Earnings Per Share Presents basic and diluted earnings per share, highlighting the impact of net earnings or loss attributable to the company Earnings Per Share (Millions) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net earnings (loss) attributable to the Company | $(5) | $57 | $(20) | $129 | | Basic earnings per share | $(0.03) | $0.37 | $(0.13) | $0.83 | | Diluted earnings per share | $(0.03) | $0.36 | $(0.13) | $0.81 | - For Q2 2025 and H1 2025, diluted loss per share was equal to basic loss per share due to the net loss attributable to the company[89][90] Note 15. Supplemental Cash Flow Information Provides additional details on cash payments for income taxes and interest, and the impact of accounts receivable factoring programs Income Taxes Paid in Cash (Millions) | Income Taxes Paid in Cash (Millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | U.S. | $7 | $5 | | Non-U.S. | $43 | $94 | | Total | $50 | $99 | - Interest paid in cash for the six months ended June 30, 2025, was $178 million, down from $188 million in the prior year[91] - The company's use of accounts receivable factoring programs increased cash provided by operating activities by approximately $9 million for H1 2025, a decrease from $90 million in H1 2024[93] Outstanding Payment Obligations under SCF Program (Millions) | Outstanding Payment Obligations under SCF Program (Millions) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--------------------------------------------------------- | :------------ | :---------------- | :------------ | | Confirmed obligations outstanding at the end of the period | $121 | $82 | $91 | Note 16. Subsequent Events Discloses significant events occurring after the reporting period, including plant closures and expected charges - In late July 2025, the company finalized plans for the indefinite suspension of operations of one furnace and the closure of one plant in its Americas segment as part of the Fit to Win initiative[97] - These actions are expected to result in approximately $45 million in charges in Q3 2025, including $35 million for impairment of plant-related assets and $10 million for employee separation benefits[98] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Management's discussion and analysis of financial condition and results of operations for Q2 and H1 2025, highlighting key performance drivers and outlook Executive Overview — Quarters ended June 30, 2025 and 2024 Provides an executive summary of the company's financial performance for Q2 and H1 2025, highlighting key changes in sales and earnings - Net sales in Q2 2025 decreased by $23 million (1%) compared to Q2 2024, primarily due to lower average selling prices and sales volumes, partially offset by favorable foreign currency translation[101] - Earnings before income taxes in Q2 2025 were $97 million lower than Q2 2024, mainly due to higher restructuring, asset impairment, and other charges, and lower segment operating profit[102] - The company recorded a net loss attributable to the Company of $5 million ($0.03 per share) in Q2 2025, compared to net earnings of $57 million ($0.36 per share) in Q2 2024, significantly impacted by $86 million in non-representative items[105] - Net sales for H1 2025 decreased by $49 million (2%) compared to H1 2024, primarily due to unfavorable foreign currency translation and lower average selling prices[122] - Earnings before income taxes in H1 2025 were $195 million lower than H1 2024, mainly due to higher restructuring, asset impairment, and other charges, and lower segment operating profit[123] - The company recorded a net loss attributable to the Company of $20 million ($0.13 per share) in H1 2025, compared to net earnings of $129 million ($0.81 per share) in H1 2024, significantly impacted by $165 million in non-representative items[126] Results of Operations - Second Quarter 2025 Compared with Second Quarter 2024 Details Q2 2025 financial performance versus Q2 2024, analyzing net sales, earnings, and segment operating profit drivers, including one-time charges Net Sales (Q2) Analyzes net sales performance for Q2 2025, detailing changes driven by price, volume, and foreign currency effects across segments Reportable Segment Net Sales - 2024 (Millions) | Reportable segment net sales - 2024 (Millions) | $1,701 |\ | :--------------------------------------------- | :----- |\ | Price (Millions) | $(19) |\ | Sales volume and mix (Millions) | $(26) |\ | Effects of changing foreign currency rates (Millions) | $28 |\ | Total effect on reportable segment net sales (Millions) | $(17)|\ | Reportable segment net sales - 2025 (Millions) | $1,684 | - Americas net sales increased by $44 million (5%) to $943 million, driven by higher selling prices ($22 million) and a 4% increase in glass container shipments ($50 million), partially offset by unfavorable foreign currency ($28 million)[107][108] - Europe net sales decreased by $61 million (8%) to $741 million, due to lower average selling prices ($41 million) and a 9% decrease in glass container shipments ($76 million), partially offset by favorable foreign currency ($56 million)[109] Earnings before Income Taxes and Segment Operating Profit (Q2) Examines the drivers of earnings before income taxes and segment operating profit for Q2 2025, including restructuring and Fit to Win impacts - Earnings before income taxes decreased by $97 million to $7 million in Q2 2025, primarily due to higher restructuring, asset impairment, and other charges, and lower segment operating profit[110] Reportable Segment Operating Profit - 2024 (Millions) | Reportable segment operating profit - 2024 (Millions) | $233 |\ | :---------------------------------------------------- | :--- |\ | Net price (net of cost inflation) (Millions) | $(31)|\ | Sales volume and mix (Millions) | $(8) |\ | Operating costs (Millions) | $31 |\ | Effects of changing foreign currency rates (Millions) | $0 |\ | Total net effect on reportable segment operating profit (Millions) | $(8)|\ | Reportable segment operating profit - 2025 (Millions) | $225 | - Americas segment operating profit increased by $29 million (27%) to $135 million, driven by higher shipments and $29 million in benefits from the Fit to Win initiative[113][114] - Europe segment operating profit decreased by $37 million (29%) to $90 million, impacted by lower net selling prices, lower shipments, and $38 million from temporary production curtailments, partially offset by $34 million in Fit to Win benefits[115] - The company's European natural gas coverage for 2026 is currently below 40% as of June 30, 2025, with an intent to reach this level by the end of 2025[116] Interest Expense, Net (Q2) Reports on net interest expense for Q2 2025, highlighting the impact of note repurchase premiums and deferred finance fees Net Interest Expense (Millions) | Metric | Three months ended June 30, 2025 (Millions) | Three months ended June 30, 2024 (Millions) | | :------------------ | :------------------------------------------ | :------------------------------------------ | | Net interest expense | $85 | $87 | - Net interest expense decreased by $2 million in Q2 2025, primarily due to lower note repurchase premiums and write-offs of deferred finance fees[117] Provision for Income Taxes (Q2) Discusses the effective tax rate for Q2 2025, noting the impact of restructuring charges and geographic earnings mix Effective Tax Rate | Period | Effective Tax Rate | | :----- | :----------------- | | Q2 2025 | 85.7% | | Q2 2024 | 40.4% | - The effective tax rate for Q2 2025 increased significantly due to a net unfavorable tax rate on restructuring and asset impairment charges, a European investment tax incentive, and a change in the mix of geographic earnings[118] Net Earnings (Loss) Attributable to the Company (Q2) Summarizes net earnings (loss) attributable to the company for Q2 2025, detailing the impact of non-representative items Net Earnings (Loss) Attributable to the Company (Millions) | Metric | Three months ended June 30, 2025 (Millions) | Three months ended June 30, 2024 (Millions) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net earnings (loss) attributable to the Company | $(5) | $57 | | Diluted earnings per share | $(0.03) | $0.36 | Impact on Net Earnings (Loss) Attributable to the Company (Millions) | Description | 2025 (Millions) | 2024 (Millions) | | :------------------------------------------------------------------------ | :-------------- | :-------------- | | Restructuring, asset impairment and other charges | $(108) | $0 | | Legacy environmental charge | $0 | $(10) | | Charges for note repurchase premiums and write-off of deferred finance fees and related charges | $(2) | $0 | | European investment tax incentive | $22 | $0 | | Total impact on Net Earnings (Loss) Attributable to the Company | $(86) | $(12) | Results of Operations - First Six Months 2025 Compared with First Six Months 2024 Compares H1 2025 financial results to H1 2024, analyzing net sales, earnings, and segment operating profit drivers, including significant charges Net Sales (H1) Analyzes net sales performance for H1 2025, detailing changes driven by price, volume, and foreign currency effects across segments Reportable Segment Net Sales - 2024 (Millions) | Reportable segment net sales - 2024 (Millions) | $3,264 |\ | :--------------------------------------------- | :----- |\ | Price (Millions) | $(35) |\ | Sales volume and mix (Millions) | $40 |\ | Effects of changing foreign currency rates (Millions) | $(46) |\ | Total effect on reportable segment net sales (Millions) | $(41)|\ | Reportable segment net sales - 2025 (Millions) | $3,223 | - Americas net sales increased by $63 million (4%) to $1,816 million, driven by higher selling prices ($52 million) and a more than 4% increase in glass container shipments ($98 million), partially offset by unfavorable foreign currency ($87 million)[129] - Europe net sales decreased by $104 million (7%) to $1,407 million, due to lower average selling prices ($87 million) and a 3% decrease in glass container shipments ($58 million), partially offset by favorable foreign currency ($41 million)[130] Earnings before Income Taxes and Segment Operating Profit (H1) Examines the drivers of earnings before income taxes and segment operating profit for H1 2025, including restructuring and Fit to Win impacts - Earnings before income taxes decreased by $195 million to $26 million in H1 2025, primarily due to higher restructuring, asset impairment, and other charges, and lower segment operating profit[131] Reportable Segment Operating Profit - 2024 (Millions) | Reportable segment operating profit - 2024 (Millions) | $468 |\ | :---------------------------------------------------- | :--- |\ | Net price (net of cost inflation) (Millions) | $(70)|\ | Sales volume and mix (Millions) | $9 |\ | Operating costs (Millions) | $31 |\ | Effects of changing foreign currency rates (Millions) | $(4) |\ | Total net effect on reportable segment operating profit (Millions) | $(34)|\ | Reportable segment operating profit - 2025 (Millions) | $434 | - Americas segment operating profit increased by $68 million (33%) to $276 million, driven by higher shipments, $56 million in Fit to Win savings, and $7 million from an insurance claim settlement[134][135] - Europe segment operating profit decreased by $102 million (39%) to $158 million, impacted by lower net selling prices, $89 million from temporary production curtailments, and lower shipments, partially offset by $54 million in Fit to Win benefits[137] - The company's European natural gas coverage for 2026 is currently below 40% as of June 30, 2025, with an intent to reach this level by the end of 2025[139][140] Interest Expense, Net (H1) Reports on net interest expense for H1 2025, highlighting the impact of foreign currency exchange rates and note repurchase premiums Net Interest Expense (Millions) | Metric | Six months ended June 30, 2025 (Millions) | Six months ended June 30, 2024 (Millions) | | :------------------ | :---------------------------------------- | :---------------------------------------- | | Net interest expense | $166 | $165 | - Net interest expense increased by $1 million in H1 2025, primarily due to the unfavorable effect of foreign currency exchange rates, partially offset by lower note repurchase premiums[141] Provision for Income Taxes (H1) Discusses the effective tax rate for H1 2025, noting the impact of restructuring charges and geographic earnings mix Effective Tax Rate | Period | Effective Tax Rate | | :----- | :----------------- | | H1 2025 | 138.5% | | H1 2024 | 37.6% | - The effective tax rate for H1 2025 increased significantly due to a net unfavorable tax rate on restructuring charges, a European investment tax incentive, and a change in the mix of geographic earnings[142] Net Earnings (Loss) Attributable to the Company (H1) Summarizes net earnings (loss) attributable to the company for H1 2025, detailing the impact of non-representative items Net Earnings (Loss) Attributable to the Company (Millions) | Metric | Six months ended June 30, 2025 (Millions) | Six months ended June 30, 2024 (Millions) | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net earnings (loss) attributable to the Company | $(20) | $129 | | Diluted earnings per share | $(0.13) | $0.81 | Impact on Net Earnings (Loss) Attributable to the Company (Millions) | Description | 2025 (Millions) | 2024 (Millions) | | :------------------------------------------------------------------------ | :-------------- | :-------------- | | Restructuring, asset impairment and other charges | $(191) | $0 | | Legacy environmental charge | $(4) | $(10) | | Gain on sale of miscellaneous assets | $6 | $0 | | Charges for note repurchase premiums and write-off of deferred finance fees and related charges | $(2) | $0 | | European investment tax incentive | $22 | $0 | | Net benefit for income tax on items above | $2 | $0 | | Total impact on Net Earnings (Loss) Attributable to the Company | $(165) | $(12) | Research, Development and Engineering Discusses the decision to halt the MAGMA program and the future focus of research, development, and engineering activities - The company halted further MAGMA development and operations in Q2 2025, recording approximately $104 million in restructuring, asset impairment, and other charges, as the program did not meet operational and financial thresholds[145] - Future spending on research, development, and engineering activities is expected to significantly decline, with a focus on rolling out ULTRA technology and collaborating with third-party vendors[146] Forward-Looking Operational and Financial Information Provides the company's commercial outlook for 2025, including expected Fit to Win benefits and capital expenditure projections - The company maintains a cautious commercial outlook for 2025, expecting stable sales volumes but a net price headwind due to competitive pressures in Europe[150] - Management anticipates generating at least $250 million of Fit To Win benefits in 2025, with cumulative benefits of at least $650 million through 2027 (2024 baseline)[150] 2025 Outlook (Millions) | Metric | 2025 Outlook (Millions) | | :----------------------------------- | :---------------------- | | Cash provided by operating activities | ~$600 | | Capital expenditures | $400 - $450 | Items Excluded from Reportable Segment Totals Details financial items excluded from reportable segment operating profit, such as corporate costs, restructuring charges, and asset sale gains Retained Corporate Costs and Other Discusses changes in retained corporate costs, including Fit to Win benefits and a strategic review of former Asia Pacific businesses Retained Corporate Costs and Other (Millions) | Period | 2025 (Millions) | 2024 (Millions) | | :----- | :-------------- | :-------------- | | Q2 | $25 | $32 | | H1 | $53 | $72 | - Retained corporate costs and other decreased in Q2 and H1 2025, driven by approximately $21 million and $35 million, respectively, of benefits from the Fit to Win initiative, partially offset by higher management incentives[148] - The company has initiated a strategic review of its remaining businesses in the former Asia Pacific region to maximize shareholder value, which may result in divestitures or other actions[149] Restructuring, Asset Impairment and Other Charges Reports on restructuring, asset impairment, and other charges, primarily related to the Fit to Win program and the halt of MAGMA Restructuring, Asset Impairment and Other Charges (Millions) | Period | 2025 (Millions) | 2024 (Millions) | | :----- | :-------------- | :-------------- | | Q2 | $108 | $0 | | H1 | $191 | $0 | - For Q2 2025, charges included $104 million related to the decision to halt the MAGMA program. For H1 2025, these charges were primarily related to the Fit to Win program[151] - As of June 30, 2025, cumulative charges related to the Fit to Win program totaled approximately $396 million, with additional charges expected in future quarters[151] Legacy Environmental Charge Details the legacy environmental charge recorded in Q1 2025 for a Cuyahoga River site settlement Legacy Environmental Charge (Millions) | Period | 2025 (Millions) | 2024 (Millions) | | :----- | :-------------- | :-------------- | | Q2 | $0 | $10 | | H1 | $4 | $10 | - In Q1 2025, the company recorded a $4 million charge to augment its accrual for a Cuyahoga River site settlement, with an expected payment of $16.5 million in Q3 2025[153] Gain on Sale of Miscellaneous Assets Reports on the pre-tax gain recognized in Q1 2025 from the sale of land and buildings in the Americas segment Gain on Sale of Miscellaneous Assets (Millions) | Period | 2025 (Millions) | 2024 (Millions) | | :----- | :-------------- | :-------------- | | H1 | $6 | $0 | - In Q1 2025, the company recorded a pre-tax gain of approximately $6 million on the sale of land and buildings of a previously closed plant in the Americas[154] Capital Resources and Liquidity Discusses the company's credit facilities, available liquidity, compliance with debt covenants, and recent debt issuance activities - As of June 30, 2025, the Credit Agreement includes a $300 million revolving credit facility, a $950 million multicurrency revolving credit facility, and $1.45 billion in term loan A facilities ($1.34 billion outstanding)[158] - The company had $1.04 billion in unused credit available under its revolving credit facilities as of June 30, 2025, with a weighted average interest rate of 6.08% on outstanding borrowings[158] - The company was in compliance with all covenants and restrictions in the Credit Agreement as of June 30, 2025, and expects to remain in compliance[161] - In May 2024, the company issued €500 million and $300 million in senior notes to repurchase and redeem existing debt, including the full repayment of 2.875% Senior Notes due 2025 in Q1 2025[164][165][166] Material Cash Requirements Confirms no material changes to the company's cash requirements since the 2024 Annual Report on Form 10-K - There have been no material changes to the company's material cash requirements at June 30, 2025, from those described in its Annual Report on Form 10-K for the year ended December 31, 2024[168] Cash Flows Analyzes cash flows from operating, investing, and financing activities for H1 2025, and discusses future liquidity Cash Flow Activity (Millions) | Activity | Six months ended June 30, 2025 (Millions) | Six months ended June 30, 2024 (Millions) | | :------------------------ | :---------------------------------------- | :---------------------------------------- | | Operating activities | $(16) | $(20) | | Investing activities | $(221) | $(380) | | Financing activities | $(47) | $180 | - Cash utilized in operating activities decreased slightly in H1 2025 due to a lower use of working capital, partially offset by lower net income and higher cash paid for restructuring activities[169] - Cash utilized in investing activities decreased significantly in H1 2025, primarily due to lower capital spending for property, plant, and equipment ($239 million vs. $373 million in H1 2024)[171] - The company anticipates that cash flows from operations and available credit will be sufficient to fund its operating and seasonal working capital needs, debt service, and other obligations[173] Critical Accounting Estimates States that no material changes in critical accounting estimates were reported as of June 30, 2025 - The company's financial statements are based on management's estimates and assumptions, which are continuously evaluated. No material changes in critical accounting estimates were reported at June 30, 2025, compared to the 2024 Form 10-K[174][176] Forward-Looking Statements Highlights various risks associated with forward-looking statements, including program benefits, economic conditions, and operational challenges - The document contains forward-looking statements subject to various risks, including the ability to achieve expected benefits from the Fit to Win program, global economic and political conditions, cost and availability of raw materials/energy, competitive pressures, changes in consumer preferences, impacts from halting the MAGMA program, and risks related to indeb