Exhibit 99.1
FOR IMMEDIATE RELEASE
For more information, contact:
Chris Manuel
Vice President of Investor Relations
567-336-2600
Chris.Manuel@o-i.com
O-I GLASS REPORTS FIRST QUARTER 2020
RESULTS
PERRYSBURG, Ohio (April 28, 2020) –
O-I Glass, Inc. (NYSE: OI) today reported financial results for the first quarter ended March 31, 2020.
“As described in our preliminary
earnings release update, O-I’s first quarter performance was solid. Results benefited from favorable price and mix as well
as good cost performance. At the same time, shipment levels were slightly below prior year reflecting the initial impact of the
COVID-19 pandemic and the volume pressures have continued in April. Consistent with our focus on cash generation, cash flows compared
favorably to the same period in the prior year and liquidity was strong at the end of the first quarter,” said Andres Lopez,
CEO.
“We are pleased with the improvement
in our operating performance given progress on our turnaround initiatives that benefited both the top and bottom line. I am confident
these improvements will be sustained. To mitigate the impact of COVID-19, we are taking preemptive measures to reduce costs and
improve cash generation including suspension of the company’s dividend. At the same time, we remain focused on creating long-term
value by executing on our turnaround initiatives and advancing MAGMA,” concluded Lopez.
Comments
| · | Reported
Earnings: For the first quarter of 2020, the company recorded net earnings attributable to the company of $0.32 per share,
compared with earnings of $0.51 per share (diluted) in the prior year period. |
| · | Adjusted
Earnings Were Consistent with Guidance: Excluding certain items management considers not representative of ongoing operations,
first quarter 2020 adjusted earnings1 were $0.41 per share, compared with the prior year of $0.51 per share. Current
quarter results were consistent with the company’s guidance of $0.40 – $0.45 per share. |
| · | Solid
First Quarter Performance: First quarter 2020 earnings benefited from improved price and mix as well as good operating cost
improvement both driven by the company’s turnaround initiatives. Shipments in tons declined approximately 0.8 percent from
the prior year which compared to management’s guidance of flat to up two percent. Shipment trends reflect the benefit of
the recent Nueva Fanal acquisition which was more than offset by slightly lower organic sales and the initial impact of COVID-19.
The company estimates the pandemic negatively impacted first quarter sales volumes by 1.7 percent primarily in March. Compared
to expectations heading into the quarter, the combined impact of a stronger U.S. dollar and a higher effective tax rate represented
a $0.04 earnings headwind compared to guidance. |
________________
1
Adjusted earnings per share, free cash flow and segment operating profit are each non-GAAP financial measures. See tables included
in this release for reconciliations to the most directly comparable GAAP measures.
| · | Favorable Cash Flows Compared to Prior
Year: The first quarter is typically a seasonal use of cash for the business. Cash utilized in operating activities
was $315 million in the first quarter of 2020 compared to a $595 million in the prior year. Free cash flow1 was a $435
million use of cash compared to a $716 million use of cash in the first quarter of 2019. |
| · | Strong Liquidity: O-I maintained
$1.7 billion of total committed liquidity, including nearly $900 million cash-on-hand as well as undrawn availability on committed
lines of credit, at the end of the first quarter and has no debt maturities until March 2021. Liquidity has remained strong through
April 2020. |
| · | Business Conditions Remain Fluid:
Many governments have implemented new rules and guidelines to combat the virus that restrict business activity. Fortunately, the
manufacture of glass containers has been largely viewed as essential to the important food and beverage value chain in
the countries in which we operate. However, we are still impacted by the broader supply chain issues and in some cases certain
end use categories that we serve are not deemed essential. Reflecting the challenges with the COVID-19 pandemic, O-I’s shipment
in tons during the last two weeks of March were down 7 percent overall, with the most significant reductions in Latin America where
government restrictions have been most stringent and Europe. The company has temporarily curtailed some capacity to adapt to revised
customer demand and comply with governmental public health decrees in certain countries. Shipments have been unfavorably impacted
in April primarily driven by government restrictions but should improve as markets reopen. |
| · | Navigating COVID-19 With Agility:
As previously noted, O-I continues to implement measures to protect the health and safety of all employees in alignment with the
recommendations put forth by the World Health Organization, U.S. Centers for Disease Control and Prevention, or other local authorities
based on location. Fortunately, the benefit of O-I’s turnaround initiatives has exceeded expectations and the company is
moving with agility to balance supply with evolving demand trends which remain fluid. |
| · | Actions to Mitigate Impact of Pandemic:
In response to the unprecedented nature of the pandemic, the company is taking a number of preemptive measures to reduce costs
and preserve O-I’s financial flexibility. Cash generation is the top financial priority and the company is taking actions
to quickly align supply with evolving demand trends as well as closely managing working capital levels. 2020 capital expenditures
should approximate $300 million or lower. In addition to an expanded SG&A reduction initiative, the company is implementing
a program to temporarily reduce salaries for certain executive officers, including the CEO, and Board fees by up to 25 percent
with future repayment subject to achieving certain goals. The company will also temporarily defer up to 15 percent of other
salaried employees’ base pay during 2020. Furthermore, the company is suspending its dividend and is pausing the share
repurchase program. The status of these efforts will be reviewed regularly, but the company anticipates these measures will continue
through 2020. |
| · | Focus on Long-Term Value Creation:
Despite headwinds from the pandemic, the company continues to focus on long-term value creation including its turnaround initiatives,
footprint optimization efforts, MAGMA deployment and resolution of legacy asbestos liabilities. In light of COVID-19, for the time
being the company has halted the strategic review of its Australia and New Zealand (“ANZ”) business and will continue
to run the operations which is performing well. As market conditions stabilize, the company will reevaluate alternatives for ANZ.
The company’s tactical divestiture program continues to advance, but at a slower than anticipated pace. |
| · | Earnings Guidance:
Due to the significant uncertainty related to the pandemic, the company withdrew its full year 2020 guidance and does not plan
to provide updated quarterly or yearly guidance until market trends become more clear. The company is operating with a set of financial
principles that prioritize liquidity, maximizing free cash flow and debt reduction during the pandemic. |
First Quarter 2020 Results
First quarter 2020 net sales were $1.56
billion compared with $1.64 billion in the prior year. Higher selling prices increased revenue $19 million. However, lower shipments
negatively impacted sales by $20 million as sales volume in tons declined 0.8 percent. Sales volumes reflected the net effect of
a 1.7 percent decline due to COVID-19, a 1.1 percent decline in organic sales volumes and a 2.0 percent benefit from Nueva Fanal.
Unfavorable foreign currency translation reduced net sales by $75 million compared to 2019.
Segment operating profit1 was
$169 million in the first quarter of 2020, compared with $200 million in the prior year period. Profits were unfavorably impacted
by $13 million attributable to unfavorable foreign currency translation and $15 million due to temporary items that benefited 2019
but did not repeat in 2020.
| · | Americas: Segment operating profit
in the Americas was $103 million in the first quarter of 2020 compared with $113 million in the prior year period. Results benefited
from improved operating performance due to turnaround initiatives while cost inflation more than offset higher selling prices.
Total sales volume in tons declined 1 percent as additional shipments attributed to the Nueva Fanal acquisition in mid-2019 were
more than offset by a decline in volumes linked to COVID-19 and the continued decline in the North America beer category. Results
were also unfavorably impacted $6 million by foreign currency translation. |
| · | Europe: Segment operating profit
in Europe was $61 million in the first quarter of 2020 compared with $79 million in the prior year period. Results benefited from
higher selling prices (net of cost inflation) and improved operating performance while shipments in tons declined 2 percent primarily
due to COVID-19. Results were also unfavorably impacted $4 million by foreign currency translation and $15 million due to temporary
items that benefited 2019, but did not repeat in 2020, including energy credits and incentives. |
| · | Asia Pacific: Segment operating
profit in Asia Pacific was $5 million in the first quarter of 2020 compared with $8 million in the prior year period. Shipments
in tons increased 7 percent while earnings were impacted by lower selling prices (net of cost inflation). Results also reflected
$3 million of unfavorable foreign currency translation. |
Retained corporate and
other costs were $21 million in the first quarter of 2020 compared with $24 million in the prior year period. Net interest expense
was $53 million in 2020, down from $65 million in 2019 due to recent refinancing activities. The company’s effective tax
rate was 32.1 percent compared to 24.3 percent in the prior year. Excluding certain items that management does not consider representative
of ongoing operations, the effective tax rate was 27.6 percent, which was higher than 24.5 percent in the prior year primarily
reflecting shifts in regional earnings mix as well as recent regulatory changes in certain markets.
During the first quarter
of 2020, the company de-consolidated its direct, wholly owned subsidiary Paddock Enterprises LLC (“Paddock”) as of
January 6, 2020, the day Paddock filed for Chapter 11 relief. As a result of the de-consolidation, O-I recorded a $14 million pre-tax
charge which is excluded from adjusted earnings.
Cash utilized in operating activities
was $315 million in the first quarter of 2020 and $595 million in the prior year period. Free cash flow was a $435 million use
of cash in 2020 and $716 million in 2019. Favorable cash utilized in operating activities and free cash flow compared
to the prior year included the benefit of lower working capital levels primarily due to increased utilization of accounts receivable
factoring programs and the staying of all asbestos related payments as a result of Paddock filing for bankruptcy in early January.
Total debt was $6.4 billion at March
31, 2020 compared to $5.9 billion at March 31, 2019. Net debt2 was $5.5 billion compared to $5.6 billion in the
prior year. At the end of the first quarter, O-I maintained approximately $1.7 billion in total committed liquidity including
nearly $900 million cash-on-hand as well as undrawn availability on committed lines of credit. In March, the company borrowed
approximately $600 million on its $1.5 billion revolving credit facility to bolster cash-on-hand as a proactive measure to
ensure financial flexibility.
The company is actively monitoring the
impact of the COVID-19 outbreak, which will negatively impact its business and results of operations for the second quarter of
2020 and likely beyond. The extent to which the company’s operations will be impacted by the outbreak will depend largely
on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge
concerning the severity of the outbreak and actions by government authorities to contain the outbreak or treat its impact, among
other things.
Conference Call Scheduled for April 29, 2020
O-I Glass CEO Andres Lopez and CFO John
Haudrich will conduct a conference call to discuss the company’s latest results on Wednesday, April 29, 2020, at 8:00 a.m.
EDT. A live webcast of the conference call, including presentation materials, will be available on the O-I website,
www.o-i.com/investors, in the Webcasts and Presentations section.
The conference call also may be accessed by dialing 888-733-1701
(U.S. and Canada) or 706-634-4943 (international) by 7:50 a.m. EDT, on April 29, 2020. Ask for the O-I conference call. A replay
of the call will be available on the O-I website, www.o-i.com/investors, for a year following the call.
Contact: Sasha Sekpeh, 567-336-5128 –
O-I Investor Relations
O-I news releases are available on the
O-I website at www.o-i.com.
O-I’s second quarter 2020 earnings
conference call is currently scheduled for Wednesday, August 5, 2020, at 8:00 a.m. EDT.
About O-I Glass
At O-I Glass, Inc. (NYSE: OI), we love
glass and we’re proud to make more of it than any other glass bottle or jar producer in the world. We love that it’s
beautiful, pure and completely recyclable. With global headquarters in Perrysburg, Ohio, we are the preferred partner for many
of the world's leading food and beverage brands. Working hand and hand with our customers, we give our passion and expertise to
make their bottles iconic and help build their brands around the world. With more than 27,500 people at 78 plants in 23 countries,
O-I has a global impact, achieving revenues of $6.7 billion in 2019. For more information, visit o-i.com.
Non-GAAP Financial Measures
The company uses certain non-GAAP financial
measures, which are measures of its historical or future financial performance that are not calculated and presented in accordance
with GAAP, within the meaning of applicable SEC rules. Management believes that its presentation and use of certain non-GAAP financial
measures, including adjusted earnings, adjusted earnings per share, segment operating profit, net debt, and free cash flow, provide
relevant and useful supplemental financial information, which is widely used by analysts and investors, as well as by management
in assessing both consolidated and business unit performance. These non-GAAP measures are reconciled to the most directly comparable
GAAP measures and should be considered supplemental in nature and should not be considered in isolation or be construed as being
more important than comparable GAAP measures.
________________
2 Net Debt is defined as Total Debt less Cash.
See tables included in this release for reconciliations to the most directly comparable GAAP measures.
Adjusted earnings relates to net earnings attributable to the company, exclusive of items management considers not representative of ongoing
operations because such items are not reflective of the company’s principal business activity, which is glass container production.
Adjusted earnings are divided by weighted average shares outstanding (diluted) to derive adjusted earnings per share. Segment operating
profit relates to earnings before interest expense (net), and before income taxes and is also exclusive
of items management considers not representative of ongoing operations as well as certain retained corporate cost. Net Debt is
defined as gross debt less cash. Management uses adjusted earnings, adjusted earnings per share, segment operating profit, segment
operating profit margin and net debt to evaluate its period-over-period operating performance because it believes this provides
a useful supplemental measure of the results of operations of its principal business activity by excluding items that are not reflective
of such operations. Adjusted earnings, adjusted earnings per share, segment operating profit, and net debt may be useful to investors
in evaluating the underlying operating performance of the company’s business as these measures eliminate items that are not
reflective of its principal business activity.
Further, free cash flow relates to cash
provided by operating activities less additions to property, plant and equipment. Management has historically used free
cash flow to evaluate its period-over-period cash generation performance because it believes this has provided a useful supplemental
measure related to its principal business activity. Free cash flow may be useful to investors to assist in understanding the comparability
of cash flows generated by the company’s principal business activity. It should not be inferred that the entire free cash
flow amount is available for discretionary expenditures, since the company has mandatory debt service requirements and other non-discretionary
expenditures that are not deducted from the measure. Management uses non-GAAP information principally for internal reporting, forecasting,
budgeting and calculating compensation payments.
The company routinely posts important
information on its website – www.o-i.com/investors.
Forward-Looking Statements
This press release contains “forward-looking”
statements related to O-I Glass, Inc. (“O-I Glass” 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.
Forward-looking statements reflect the company’s current expectations and projections about future events at the time, and
thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,”
“could,” “would,” “should,” “may,” “plan,” “estimate,”
“intend,” “predict,” “potential,” “continue,” and the negatives of these words
and other similar expressions generally identify forward-looking statements.
It is possible that the company’s
future financial performance may differ from expectations due to a variety of factors including, but not limited to the following:
(1) the company’s ability to obtain the benefits it anticipates from the Corporate Modernization, (2) risks inherent in,
and potentially adverse developments related to, the Chapter 11 bankruptcy proceeding involving Paddock, that could adversely affect
the company and the company’s liquidity or results of operations, including the impact of deconsolidating Paddock from the
company’s financials, risks from asbestos-related claimant representatives asserting claims against the company and potential
for litigation and payment demands against us by such representatives and other third parties, (3) the amount that will be necessary
to fully and finally resolve all of Paddock’s asbestos-related claims and the company’s obligations to make payments
to resolve such claims under the terms of its support agreement with Paddock, (4) the company’s ability to manage its cost
structure, including its success in implementing restructuring or other plans aimed at improving the company’s operating
efficiency and working capital management, achieving cost savings, and remaining well-positioned to address the company’s
legacy liabilities, (5) the company’s ability to acquire or divest businesses, acquire and expand plants, integrate operations
of acquired businesses and achieve expected benefits from acquisitions, divestitures or expansions, (6) the company’s ability
to achieve its strategic plan, (7) foreign currency fluctuations relative to the U.S. dollar, (8) changes in capital availability
or cost, including interest rate fluctuations and the ability of the company to refinance debt at favorable terms, (9) the general
political, economic and competitive conditions in markets and countries where the company has operations, including uncertainties
related to Brexit, economic and social conditions, disruptions in the supply chain, competitive pricing pressures, inflation or
deflation, changes in tax rates and laws, natural disasters and weather, (10) the impact of COVID-19 and the various governmental,
industry and consumer actions related thereto, (11) the company’s ability to generate sufficient future cash flows to ensure
the company’s goodwill is not impaired, (12) consumer preferences for alternative forms of packaging, (13) cost and availability
of raw materials, labor, energy and transportation, (14) consolidation among competitors and customers, (15) unanticipated expenditures
with respect to data privacy, environmental, safety and health laws, (16) unanticipated operational disruptions, including higher
capital spending, (17) the company’s ability to further develop its sales, marketing and product development capabilities,
(18) the failure of the company’s joint venture partners to meet their obligations or commit additional capital to the joint
venture, (19) the ability of the company and the third parties on which it relies for information technology system support to
prevent and detect security breaches related to cybersecurity and data privacy, (20) changes in U.S. trade policies, and the other
risk factors discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2019 and any subsequently
filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or the company’s other filings with the Securities and Exchange
Commission.
It is not possible to foresee or identify
all such factors. Any forward-looking statements in this document are based on certain assumptions and analyses made by the company
in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors
it believes are appropriate in the circumstances. Forward-looking statements are not a guarantee of future performance and actual
results or developments may differ materially from expectations. While the company continually reviews trends and uncertainties
affecting the company’s results or operations and financial condition, the company does not assume any obligation to update
or supplement any particular forward-looking statements contained in this document.
O-I GLASS, INC.
Condensed Consolidated Results of Operations
(Dollars in millions, except per share amounts)
| | |
Three months ended
March 31 | |
| Unaudited | |
2020 | | |
2019 | |
| | |
| | |
| |
| Net sales | |
$ | 1,561 | | |
$ | 1,638 | |
| Cost of goods sold | |
| (1,293 | ) | |
| (1,340 | ) |
| | |
| | | |
| | |
| Gross profit | |
| 268 | | |
| 298 | |
| | |
| | | |
| | |
| Selling and administrative expense | |
| (116 | ) | |
| (115 | ) |
| Research, development and engineering expense | |
| (16 | ) | |
| (16 | ) |
| Interest expense, net | |
| (53 | ) | |
| (65 | ) |
| Equity earnings | |
| 15 | | |
| 19 | |
| Other expense, net | |
| (17 | ) | |
| (10 | ) |
| | |
| | | |
| | |
| Earnings before income taxes | |
| 81 | | |
| 111 | |
| | |
| | | |
| | |
| Provision for income taxes | |
| (26 | ) | |
| (27 | ) |
| | |
| | | |
| | |
| Net earnings | |
| 55 | | |
| 84 | |
| | |
| | | |
| | |
| Net earnings attributable to noncontrolling interests | |
| (5 | ) | |
| (5 | ) |
| | |
| | | |
| | |
| Net earnings attributable to the Company | |
$ | 50 | | |
$ | 79 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| Basic earnings per share: | |
| | | |
| | |
| Net earnings attributable to the Company | |
$ | 0.32 | | |
$ | 0.51 | |
| Weighted average shares outstanding (thousands) | |
| 156,081 | | |
| 154,361 | |
| | |
| | | |
| | |
| Diluted earnings per share: | |
| | | |
| | |
| Net earnings attributable to the Company | |
$ | 0.32 | | |
$ | 0.51 | |
| Diluted average shares (thousands) | |
| 157,684 | | |
| 156,635 | |
O-I GLASS, INC.
Condensed Consolidated Balance Sheets
(Dollars in millions)
| Unaudited | |
March 31, | | |
December 31, | | |
March 31, | |
| | |
2020 | | |
2019 | | |
2019 | |
| Assets | |
| | | |
| | | |
| | |
| Current assets: | |
| | | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 891 | | |
$ | 551 | | |
$ | 326 | |
| Trade receivables, net | |
| 767 | | |
| 621 | | |
| 939 | |
| Inventories | |
| 1,047 | | |
| 1,045 | | |
| 1,038 | |
| Prepaid expenses and other current assets | |
| 257 | | |
| 271 | | |
| 276 | |
| Total current assets | |
| 2,962 | | |
| 2,488 | | |
| 2,579 | |
| | |
| | | |
| | | |
| | |
| Property, plant and equipment, net | |
| 2,987 | | |
| 3,273 | | |
| 3,074 | |
| Goodwill | |
| 1,773 | | |
| 1,934 | | |
| 2,507 | |
| Intangibles, net | |
| 312 | | |
| 371 | | |
| 394 | |
| Other assets | |
| 1,470 | | |
| 1,544 | | |
| 1,598 | |
| | |
| | | |
| | | |
| | |
| Total assets | |
$ | 9,504 | | |
$ | 9,610 | | |
$ | 10,152 | |
| | |
| | | |
| | | |
| | |
| Liabilities and Share Owners' Equity | |
| | | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | | |
| | |
| Accounts payable | |
$ | 1,025 | | |
$ | 1,276 | | |
$ | 1,065 | |
| Short-term loans and long-term debt due within one year | |
| 283 | | |
| 124 | | |
| 91 | |
| Current portion of asbestos-related liabilities | |
| | | |
| | | |
| 160 | |
| Other liabilities | |
| 516 | | |
| 595 | | |
| 544 | |
| Total current liabilities | |
| 1,824 | | |
| 1,995 | | |
| 1,860 | |
| | |
| | | |
| | | |
| | |
| Long-term debt | |
| 6,115 | | |
| 5,435 | | |
| 5,820 | |
| Asbestos-related liabilities | |
| | | |
| 486 | | |
| 372 | |
| Paddock support agreement liability | |
| 471 | | |
| | | |
| | |
| Other long-term liabilities | |
| 1,018 | | |
| 1,130 | | |
| 1,090 | |
| Share owners' equity | |
| 76 | | |
| 564 | | |
| 1,010 | |
| | |
| | | |
| | | |
| | |
| Total liabilities and share owners' equity | |
$ | 9,504 | | |
$ | 9,610 | | |
$ | 10,152 | |
O-I GLASS, INC.
Condensed Consolidated Cash Flow
(Dollars in millions)
| Unaudited | |
Three months ended
March 31 | |
| | |
2020 | | |
2019 | |
| Cash flows from operating activities: | |
| | | |
| | |
| Net earnings | |
$ | 55 | | |
$ | 84 | |
| Non-cash charges | |
| | | |
| | |
| Depreciation and amortization | |
| 126 | | |
| 126 | |
| Pension expense | |
| 9 | | |
| 8 | |
| Cash payments | |
| | | |
| | |
| Pension contributions | |
| (13 | ) | |
| (11 | ) |
| Asbestos-related payments | |
| | | |
| (71 | ) |
| Cash paid for restructuring activities | |
| (8 | ) | |
| (15 | ) |
| Change in components of working capital (a) | |
| (461 | ) | |
| (697 | ) |
| Other, net (b) | |
| (23 | ) | |
| (19 | ) |
| Cash utilized in operating activities | |
| (315 | ) | |
| (595 | ) |
| | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | |
| Cash payments for property, plant and equipment | |
| (120 | ) | |
| (121 | ) |
| Contributions and advances to joint ventures | |
| | | |
| (15 | ) |
| Net cash proceeds on disposal of assets | |
| | | |
| 1 | |
| Deconsolidation of Paddock | |
| (47 | ) | |
| | |
| Other | |
| 2 | | |
| | |
| Cash utilized in investing activities | |
| (165 | ) | |
| (135 | ) |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Changes in borrowings, net | |
| 859 | | |
| 589 | |
| Dividends Paid | |
| (8 | ) | |
| (8 | ) |
| Treasury shares repurchased | |
| | | |
| (38 | ) |
| Issuance of common stock and other | |
| (2 | ) | |
| (3 | ) |
| Cash provided by financing activities | |
| 849 | | |
| 540 | |
| Effect of exchange rate fluctuations on cash | |
| (29 | ) | |
| 4 | |
| Change in cash | |
| 340 | | |
| (186 | ) |
| Cash at beginning of period | |
| 551 | | |
| 512 | |
| Cash at end of period | |
$ | 891 | | |
$ | 326 | |
| (a) | The Company uses various factoring programs to sell certain
receivables to financial institutions as part of managing its cash flows. At March 31, 2020, December 31, 2019 and March 31, 2019,
the amount of receivables sold by the Company was $429 million, $539 million and $303 million, respectively. For the three months
ended March 31, 2020 and 2019, the Company reduced the use of its factoring programs compared to the most recent respective year-end
periods and this resulted in a higher use of working capital, and corresponding decrease to cash from operating activities, of
approximately $110 million and $297 million, respectively. |
| (b) | Other, net includes other non-cash charges plus other
changes in non-current assets and liabilities. |
O-I GLASS, INC.
Changes in Net Sales and Segment Operating Profit for Reportable Segments
(Dollars in millions)
Unaudited
| | |
Three months ended March 31 | |
| | |
Americas | | |
Europe | | |
Asia Pacific | | |
Total | |
| | |
| | |
| | |
| | |
| |
| Net sales for reportable segments- 1Q19 | |
$ | 881 | | |
$ | 596 | | |
$ | 151 | | |
$ | 1,628 | |
| Effects of changing foreign currency rates (a) | |
| (41 | ) | |
| (20 | ) | |
| (14 | ) | |
| (75 | ) |
| Price | |
| 6 | | |
| 12 | | |
| 1 | | |
| 19 | |
| Sales volume & mix | |
| (15 | ) | |
| (12 | ) | |
| 7 | | |
| (20 | ) |
| Total reconciling items | |
| (50 | ) | |
| (20 | ) | |
| (6 | ) | |
| (76 | ) |
| Net sales for reportable segments- 1Q20 | |
$ | 831 | | |
$ | 576 | | |
$ | 145 | | |
$ | 1,552 | |
| | |
Three months ended March 31 | |
| | |
Americas | | |
Europe | | |
Asia Pacific | | |
Total | |
| Segment operating profit - 1Q19 | |
$ | 113 | | |
$ | 79 | | |
$ | 8 | | |
$ | 200 | |
| Effects of changing foreign currency rates (a) | |
| (6 | ) | |
| (4 | ) | |
| (3 | ) | |
| (13 | ) |
| Net price (net of cost inflation) | |
| (6 | ) | |
| 13 | | |
| (4 | ) | |
| 3 | |
| Sales volume & mix | |
| (10 | ) | |
| (3 | ) | |
| 1 | | |
| (12 | ) |
| Operating costs | |
| 12 | | |
| (24 | ) | |
| 3 | | |
| (9 | ) |
| Total reconciling items | |
| (10 | ) | |
| (18 | ) | |
| (3 | ) | |
| (31 | ) |
| Segment operating profit - 1Q20 | |
$ | 103 | | |
$ | 61 | | |
$ | 5 | | |
$ | 169 | |
| (a) | Currency effect on net sales and segment operating profit
determined by using 2020 foreign currency exchange rates to translate 2019 local currency results. |
O-I GLASS, INC.
Reportable Segment Information and Reconciliation to Earnings Before Income Taxes
(Dollars in millions)
| Unaudited | |
Three months ended
March 31 | |
| | |
2020 | | |
2019 | |
| Net sales: | |
| | | |
| | |
| Americas | |
$ | 831 | | |
$ | 881 | |
| Europe | |
| 576 | | |
| 596 | |
| Asia Pacific | |
| 145 | | |
| 151 | |
| Reportable segment totals | |
| 1,552 | | |
| 1,628 | |
| Other | |
| 9 | | |
| 10 | |
| Net sales | |
$ | 1,561 | | |
$ | 1,638 | |
| | |
| | | |
| | |
| Segment operating profit (a): | |
| | | |
| | |
| Americas | |
$ | 103 | | |
$ | 113 | |
| Europe | |
| 61 | | |
| 79 | |
| Asia Pacific | |
| 5 | | |
| 8 | |
| Reportable segment totals | |
| 169 | | |
| 200 | |
| | |
| | | |
| | |
| Items excluded from segment operating profit: | |
| | | |
| | |
| Retained corporate costs and other | |
| (21 | ) | |
| (24 | ) |
| Charge for deconsolidation of Paddock | |
| (14 | ) | |
| | |
| Interest expense, net | |
| (53 | ) | |
| (65 | ) |
| Earnings before income taxes | |
$ | 81 | | |
$ | 111 | |
| | |
| | | |
| | |
| Ratio of earnings before income taxes to net sales | |
| 5.2 | % | |
| 6.8 | % |
| | |
| | | |
| | |
| Segment operating profit margin (b): | |
| | | |
| | |
| Americas | |
| 12.4 | % | |
| 12.8 | % |
| Europe | |
| 10.6 | % | |
| 13.3 | % |
| Asia Pacific | |
| 3.4 | % | |
| 5.3 | % |
| Reportable segment margin totals | |
| 10.9 | % | |
| 12.3 | % |
| (a) | Segment operating profit consists of consolidated earnings
before interest income, interest expense, and provision for income taxes and excludes amounts related to certain items that management
considers not representative of ongoing operations as well as certain retained corporate costs. |
| | |
| | The Company presents information on segment operating profit because management believes that it provides investors with a
measure of operating performance separate from the level of indebtedness or other related costs of capital. The most directly
comparable GAAP financial measure to segment operating profit is earnings before income taxes. The Company presents segment
operating profit because management uses the measure, in combination with net sales and selected cash flow information, to
evaluate performance and to allocate resources. |
| (b) | Segment operating profit margin is segment operating
profit divided by segment net sales. |
O-I GLASS, INC.
Reconciliation for Adjusted Earnings
(Dollars in millions,
except per share amounts)
The reconciliation below describes the items that management considers not representative of ongoing operations.
Unaudited
| | |
Three months ended | |
| | |
March 31, 2020 | |
| | |
| |
| Net earnings attributable to the Company | |
$ | 50 | |
| Items impacting other expense, net: | |
| | |
| Charge for deconsolidation of Paddock | |
| 14 | |
| Total adjusting items (non-GAAP) | |
$ | 14 | |
| | |
| | |
| Adjusted earnings (non-GAAP) | |
$ | 64 | |
| | |
| | |
| Diluted average shares (thousands) | |
| 157,684 | |
| | |
| | |
| Net earnings attributable to the Company (diluted) | |
$ | 0.32 | |
| Adjusted earnings per share (non-GAAP) | |
$ | 0.41 | |
