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
FULL YEAR AND FOURTH QUARTER 2021 RESULTS
Fourth
Quarter and Full Year Performance Exceeded Most Recent Business Outlook
2021 Shipments Surpassed Pre-Pandemic Levels
Lowest Debt
Levels Since Mid-2015
PERRYSBURG,
Ohio (February 1, 2022) – O-I Glass, Inc. (“O-I”) (NYSE: OI) today reported financial results for the
full year and fourth quarter ended December 31, 2021.
Full Year 2021
Results
| | |
Earnings
from
Continuing Operations
Earnings Per Share (Diluted) | | |
Earnings
from Continuing
Operations Before Income Taxes
$M | | |
Cash Provided
by Continuing
Operating Activities
$M | |
| | |
FY21 | | |
FY20 | | |
FY21 | | |
FY20 | | |
FY21 | | |
FY20 | |
| Reported | |
$ | 0.88 | | |
$ | 1.57 | | |
$ | 332 | | |
$ | 353 | | |
$ | 680 | | |
$ | 457 | |
| | |
Adjusted Earnings
Earnings Per Share (Diluted) | | |
Segment Operating Profit
$M | | |
Free Cash Flow
$M | |
| | |
FY21 | | |
FY20 | | |
FY21 | | |
FY20 | | |
FY21 | | |
FY20 | |
| Non
- GAAP1 | |
| $1.83
(Guidance: $1.77-$1.82) | | |
$ | 1.22 | | |
$ | 827 | | |
$ | 678 | | |
| $282
(Guidance: ≥ $260) | | |
$ | 146 | |
“We are pleased
with O-I’s full year 2021 results, which rebounded strongly following the onset of the pandemic. Business performance exceeded
the company’s guidance provided at the beginning of the year as well as our most recent business outlook. Sales and production
volumes surpassed pre-COVID levels underscoring consumer preference for premium and sustainable glass packaging. Likewise, earnings benefited
from very good operating performance and the company’s margin expansion initiatives,” said Andres Lopez, CEO of O-I.
| · | Reported
Results: For the full year 2021, the company recorded earnings from continuing operations
of $0.88 per share (diluted), compared to $1.57 per share (diluted) in 2020. Current year
earnings from continuing operations before income taxes were $332 million, compared to $353
million in the prior year. Lower 2021 earnings primarily reflected the non-recurrence of
a $275 million gain related to the 2020 sale of O-I’s Australia and New Zealand business
unit, partially offset by higher operating results in 2021. Both periods included items management
considers not representative of ongoing operations and other adjustments. |
| · | Adjusted
Earnings: Excluding certain items management considers not representative of ongoing
operations and other adjustments, 2021 adjusted earnings1 were $1.83 per share,
compared with the prior year of $1.22 per share. Improved earnings reflected higher shipment
and production levels (adjusted for divestitures) and the benefit from the company’s
margin expansion initiatives. Adjusted earnings exceeded original guidance of $1.55 to $1.75
per share and the company’s most recent business outlook of $1.77 to $1.82 per share. |
| · | Segment
Operating Profit1: Full year 2021 segment operating profit was $827 million
compared to $678 million in 2020. Segment operating profit benefited from a 5.3 percent increase
in shipments and a 7.3 percent increase in production levels (each in tons and adjusted for
divestitures). On a comparable basis, shipments increased 1.1 percent from 2019 levels as
the company swiftly recovered from the onset of the pandemic that impacted 2020 results.
3.2 percent higher average selling prices (adjusted for divestitures) in 2021 mostly offset
elevated cost inflation. Segment operating profit also benefited from strong operating performance
and $70 million of net benefits from the company’s margin expansion initiatives. |
| · | Cash
Flows: Cash provided by continuing operating activities was $680 million in 2021, compared
with $457 million in 2020. Free cash flow1 was $282 million in 2021 versus $146
million in 2020 and compared favorably to the company’s original guidance of approximately
$240 million and most recent outlook of at least $260 million. |
| · | Capital
Structure: Total debt was $4.8 billion on December 31, 2021, compared to $5.1 billion
at prior year end. Net debt1 was $4.1 billion on December 31, 2021, down
from $4.6 billion at year-end 2020 reflecting favorable cash flow and use of proceeds from
divestitures. Committed liquidity exceeded $2.3 billion at year end 2021. |
“O-I made
significant progress as we accelerated our transformation in 2021. Despite the ongoing challenges from the pandemic, the company continued
to take bold structural actions to improve O-I’s business fundamentals. The benefits from O-I’s margin expansion initiatives
exceeded our original target. As we redefine the glass production process, the company achieved critical milestones that will enable
broader MAGMA deployment in the near future. This included validation of our Generation 1 MAGMA line in Holzminden, Germany, and advancing
the Generation 2 pilot. We expanded our Portfolio Optimization program to fund attractive expansion projects as well as improve the balance
sheet and increase Return on Invested Capital. The company has completed or announced $1.1 billion of asset sales to date and expects
to complete its $1.5 billion Portfolio Optimization program in 2022, well ahead of target and prior to major capital redeployment for
expansion. Finally, we made significant progress as we seek a fair and final resolution to Paddock’s legacy asbestos liabilities.
Paddock reached an agreement-in-principle for a consensual plan of reorganization last April, submitted the plan of reorganization to
the courts in January 2022, and is targeting confirmation and effectiveness of the plan in the first half of 2022.”
“All of these
actions are consistent with our strategy to increase stockholder value and ensure sustainable prosperity for O-I,” continued Lopez.
1 Adjusted earnings
per share, free cash flow, segment operating profit, and net debt are each non-GAAP financial measures. See tables included in this release
for reconciliations to the most directly comparable GAAP measures.
Fourth Quarter 2021 Results
| | |
Earnings (Loss) from
Continuing
Operations
Earnings Per Share (Diluted) | | |
Earnings from Continuing Operations
Before
Income Taxes
$M | |
| | |
4Q21 | | |
4Q20 | | |
4Q21 | | |
4Q20 | |
| Reported | |
$ | 0.27 | | |
$ | (0.18 | ) | |
$ | 71 | | |
$ | 14 | |
| |
|
Adjusted
Earnings
Earnings Per Share (Diluted) |
|
|
Segment Operating
Profit
$M |
|
| |
|
4Q21 |
|
|
4Q20 |
|
|
4Q21 |
|
|
4Q20 |
|
| Non - GAAP1 |
|
|
$0.36
(Guidance: $0.30-$0.35) |
|
|
$ |
0.40 |
|
|
$ |
177 |
|
|
$ |
200 |
|
| · | Reported
Earnings: For the fourth quarter 2021, earnings from continuing operations were $0.27
per share (diluted) compared to a loss of $0.18 per share in the fourth quarter of 2020.
Current year earnings from continuing operations before income taxes were $71 million, compared
to $14 million in the prior year quarter. The year over year increase was primarily due to
gains recorded on the sale of miscellaneous assets and lower restructuring and other charges,
partially offset by higher pension settlement charges in 2021. Both periods included items
management considers not representative of ongoing operations and other adjustments. |
| · | Adjusted
Earnings: Excluding certain items management considers not representative of ongoing
operations and other adjustments, adjusted earnings were $0.36 per share in the fourth
quarter of 2021, compared with $0.40 per share in the fourth quarter of 2020. Adjusted earnings
exceeded the company’s most recent business outlook of $0.30 to $0.35 per share. |
| · | Segment
Operating Profit: Segment operating profit1 was $177 million compared to $200
million in the prior year quarter. Earnings benefited from 5.4 percent higher sales volumes
and 1.2 percent higher production levels (in tons and adjusted for divestitures) as well
as $20 million in savings from the company’s margin expansion initiatives, primarily
in Europe. These benefits were more than offset by unfavorable foreign currency translation,
elevated cost inflation, and costs associated with increased engineering project activity,
primarily in the Americas. |
Net sales were
$1.6 billion in the fourth quarter of 2021 compared to $1.5 billion in the prior year quarter. Divestitures reduced net sales by $8 million.
Adjusted for divestitures, average selling prices increased 4.5 percent and contributed $67 million to sales while shipments (in tons)
improved 5.4 percent boosting net sales by $55 million. Unfavorable foreign currency translation decreased net sales by $30 million while
net sales from technical services improved $7 million reflecting higher engineering project activity.
Segment operating
profit was $177 million in the fourth quarter of 2021 compared to $200 million in the prior year.
| · | Americas:
Segment operating profit in the Americas was $99 million compared to $127 million in the
fourth quarter of 2020. The benefit of higher selling prices more than offset cost inflation.
Shipments decreased 1.7 percent (in tons, adjusted for divestitures) reflecting elevated
engineering project activity that restricted production amid record low inventories. Higher
operating costs reflected elevated logistics costs and higher maintenance expenses due to
increased engineering project activity. Results included $1 million of unfavorable foreign
currency translation. |
| · | Europe:
Segment operating profit in Europe was $78 million compared to $73 million in the fourth
quarter 2020. Shipments in tons increased 13.2 percent primarily due to strong growth in
the wine category across southern Europe. The benefit of higher selling prices partially
mitigated elevated cost inflation while segment operating profit reflected the savings from
the company’s margin expansion initiatives. Results included $2 million of unfavorable
foreign currency translation. |
Retained corporate
and other costs were $45 million compared to $47 million in the prior year quarter.
2022 Outlook
“There is
great momentum at O-I as we enter the new year and we expect improved earnings and operating cash flow. While we will contend with a
few headwinds, all key operating levers are heading in the right direction. We expect selling price increases will more than offset elevated
cost inflation. Likewise, earnings should benefit from strong demand for healthy, sustainable glass containers as well as our ongoing
highly successful margin expansion initiatives,” concluded Lopez.
Currently, O-I
expects full year 2022 adjusted earnings will approximate $1.85 to $2.00 per share. This outlook assumes higher selling prices will more
than offset cost inflation, sales volume growth (in tons) of up to one percent and at least $50 million of benefits from the company’s
margin expansion initiatives. These incremental savings should more than offset the headwind from cost attributed to expansion project
activity. O-I’s earnings guidance also assumes foreign currency rates as of January 28, 2022, earnings dilution from the company’s
Portfolio Optimization program, incremental interest expense for the anticipated funding of the Paddock 524(g) trust and an effective
annual adjusted tax rate of approximately 28 to 32 percent.
For the first quarter
of 2022, the company anticipates adjusted earnings in the range of $0.38 to $0.43 per share.
Cash provided by
continuing operating activities is expected to be at least $725 million in 2022. The outlook assumes capital expenditures of approximately
$600 million, including $375 million for base activity and $225 million for strategic/expansion investment. The company anticipates 2022
free cash flow of at least $125 million and adjusted free cash flow of at least $350 million (excludes strategic/expansion investment
that will be funded by asset sale proceeds from the Portfolio Optimization program). This cash flow outlook excludes the one-time funding
of the $610 million 524(g) trust upon the effective date of a plan of reorganization, which the Company expects to occur in the
first half of 2022.
The earnings and
cash flow guidance ranges may not fully reflect uncertainty in macroeconomic conditions, currency rates, and further pandemic effects
such as supply chain and labor challenges, among other factors.
Conference Call Scheduled for February 2,
2022
O-I CEO Andres
Lopez and CFO John Haudrich will conduct a conference call to discuss the company’s latest results on Wednesday, February 2,
2022, at 8:00 a.m. EST. 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. EST, on February 2,
2022. 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 first
quarter 2022 earnings conference call is currently scheduled for Tuesday, April 26, 2022, at 8:00 a.m. EST.
About O-I Glass
At
O-I Glass, Inc. (NYSE: OI), we love glass and we’re proud to be one of the leading producers of glass bottles and jars around
the globe. Glass is not only beautiful, it’s also pure and completely recyclable, making it the most sustainable rigid packaging
material. Headquartered in Perrysburg, Ohio (USA), O-I is the preferred partner for many of the world’s leading food and beverage
brands. We innovate in line with customers’ needs to create iconic packaging that builds brands around the world. Led by our diverse
team of more than 24,000 people across 70 plants in 19 countries, O-I achieved net sales of $6.4 billion in 2021. Learn more
about us: o-i.com / Facebook / Twitter / Instagram / LinkedIn
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, free cash flow, segment operating profit and net
debt, provide relevant and useful supplemental financial information that 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.
Adjusted earnings
relates to net earnings from continuing operations attributable to the company, exclusive of items management considers not representative
of ongoing operations and other adjustments 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 from continuing operations 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 costs and other adjustments. Management uses adjusted earnings, adjusted earnings per share, and segment operating profit to
evaluate its period-over-period operating performance because it believes these provide useful supplemental measures 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 and segment operating profit 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.
Net debt is defined as total debt less cash. Management
uses net debt to analyze the liquidity of the company.
Further, free cash flow relates to cash provided
by continuing operating activities less cash payments for 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. 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,
as amended. Forward-looking statements reflect the company’s current expectations and projections about future events at the time,
and thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,”
“could,” “would,” “should,” “may,” “plan,” “estimate,” “intend,”
“predict,” “potential,” “continue,” and the negatives of these words and other similar expressions
generally identify forward-looking statements.
It is possible that the company’s future
financial performance may differ from expectations due to a variety of factors including, but not limited to the following: (1) the
risk that the proposed plan of reorganization of Paddock (the "Plan") may not be approved by the bankruptcy court or that other
conditions necessary to implement the agreement in principle may not be satisfied, (2) the actions and decisions of participants
in the bankruptcy proceeding, and the actions and decisions of third parties, including regulators, that may have an interest in the
bankruptcy proceedings, (3) the terms and conditions of any reorganization plan that may ultimately be approved by the bankruptcy
court, (4) delays in the confirmation or consummation of a plan of reorganization, including the Plan, due to factors beyond the
company's and Paddock's control, (5) risks with respect to the receipt of the consents necessary to effect the reorganization, (6) risks
inherent in, and potentially adverse developments related to, the bankruptcy proceeding, that could adversely affect the company and
the company's liquidity or results of operations, (7) the impact of the COVID-19 pandemic and the various governmental, industry
and consumer actions related thereto, (8) the company's ability to obtain the benefits it anticipates from the corporate modernization,
(9) 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 Paddock's legacy liabilities, (10) 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, (11) the company's
ability to achieve its strategic plan, (12) the company's ability to improve its glass melting technology, known as the MAGMA program,
(13) foreign currency fluctuations relative to the U.S. dollar, (14) changes in capital availability or cost, including interest rate
fluctuations and the ability of the company to refinance debt on favorable terms, (15) the general political, economic and competitive
conditions in markets and countries where the company has operations, including uncertainties related to economic and social conditions,
disruptions in the supply chain, competitive pricing pressures, inflation or deflation, changes in tax rates and laws, natural disasters,
and weather, (16) the company's ability to generate sufficient future cash flows to ensure the company's goodwill is not impaired, (17)
consumer preferences for alternative forms of packaging, (18) cost and availability of raw materials, labor, energy and transportation,
(19) consolidation among competitors and customers, (20) unanticipated expenditures with respect to data privacy, environmental, safety
and health laws, (21) unanticipated operational disruptions, including higher capital spending, (22) the company's ability to further
develop its sales, marketing and product development capabilities, (23) the failure of the company's joint venture partners to meet their
obligations or commit additional capital to the joint venture, (24) 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, (25) changes
in U.S. trade policies, (26) risks related to recycling and recycled content laws and regulations, (27) risks related to climate-change
and air emissions, including related laws or regulations and the other risk factors discussed in the company's 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
December 31 | | |
Year ended
December 31 | |
| Unaudited | |
2021 | | |
2020 | | |
2021 | | |
2020 | |
| Net sales | |
$ | 1,588 | | |
$ | 1,497 | | |
$ | 6,357 | | |
$ | 6,091 | |
| Cost of goods sold | |
| (1,350 | ) | |
| (1,232 | ) | |
| (5,266 | ) | |
| (5,119 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Gross profit | |
| 238 | | |
| 265 | | |
| 1,091 | | |
| 972 | |
| | |
| | | |
| | | |
| | | |
| | |
| Selling and administrative expense | |
| (108 | ) | |
| (95 | ) | |
| (433 | ) | |
| (403 | ) |
| Research, development and engineering expense | |
| (25 | ) | |
| (30 | ) | |
| (82 | ) | |
| (75 | ) |
| Interest expense, net | |
| (64 | ) | |
| (53 | ) | |
| (216 | ) | |
| (265 | ) |
| Equity earnings (losses) | |
| 26 | | |
| (11 | ) | |
| 90 | | |
| 37 | |
| Other income (expense), net (a) | |
| 4 | | |
| (62 | ) | |
| (118 | ) | |
| 87 | |
| | |
| | | |
| | | |
| | | |
| | |
| Earnings from continuing operations before income taxes | |
| 71 | | |
| 14 | | |
| 332 | | |
| 353 | |
| | |
| | | |
| | | |
| | | |
| | |
| Provision for income taxes | |
| (23 | ) | |
| (39 | ) | |
| (167 | ) | |
| (89 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Earnings (loss) from continuing operations | |
| 48 | | |
| (25 | ) | |
| 165 | | |
| 264 | |
| | |
| | | |
| | | |
| | | |
| | |
| Gain from discontinued operations | |
| | | |
| | | |
| 7 | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Net earnings (loss) | |
| 48 | | |
| (25 | ) | |
| 172 | | |
| 264 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net earnings attributable to noncontrolling interests | |
| (5 | ) | |
| (4 | ) | |
| (23 | ) | |
| (15 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net earnings (loss) attributable to the Company | |
$ | 43 | | |
$ | (29 | ) | |
$ | 149 | | |
$ | 249 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Amounts attributable to the Company: | |
| | | |
| | | |
| | | |
| | |
| Earnings (loss) from continuing operations | |
$ | 43 | | |
$ | (29 | ) | |
$ | 142 | | |
$ | 249 | |
| Gain from discontinued operations | |
| | | |
| | | |
| 7 | | |
| | |
| Net earnings (loss) | |
$ | 43 | | |
$ | (29 | ) | |
$ | 149 | | |
$ | 249 | |
| | |
| | | |
| | | |
| | | |
| | |
| Basic earnings per share: | |
| | | |
| | | |
| | | |
| | |
| Net earnings (loss) attributable to the Company | |
$ | 0.28 | | |
$ | (0.18 | ) | |
$ | 0.90 | | |
$ | 1.59 | |
| Gain from discontinued operations | |
| | | |
| | | |
| 0.05 | | |
| | |
| Net earnings (loss) | |
$ | 0.28 | | |
$ | (0.18 | ) | |
$ | 0.95 | | |
$ | 1.59 | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average shares outstanding (thousands) | |
| 156,318 | | |
| 157,274 | | |
| 157,150 | | |
| 156,806 | |
| | |
| | | |
| | | |
| | | |
| | |
| Diluted earnings per share: | |
| | | |
| | | |
| | | |
| | |
| Net earnings (loss) attributable to the Company | |
$ | 0.27 | | |
$ | (0.18 | ) | |
$ | 0.88 | | |
$ | 1.57 | |
| Gain from discontinued operations | |
| | | |
| | | |
| 0.05 | | |
| | |
| Net earnings (loss) | |
$ | 0.27 | | |
$ | (0.18 | ) | |
$ | 0.93 | | |
$ | 1.57 | |
| | |
| | | |
| | | |
| | | |
| | |
| Diluted average shares (thousands) | |
| 159,823 | | |
| 157,274 | | |
| 160,309 | | |
| 158,785 | |
| (a) On
July 31, 2020, the Company completed the sale of its Australia and New Zealand ("ANZ") businesses to Visy Industries
Holdings Pty Ltd. The Company recorded a net gain of
approximately $275 million in 2020 related to this sale. |
| |
| O-I GLASS, INC. |
| Condensed Consolidated Balance Sheet |
| (Dollars in millions) |
| |
December 31, | | |
December 31, | |
| Unaudited | |
2021 | | |
2020 | |
| Assets | |
| | | |
| | |
| Current assets: | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 725 | | |
$ | 563 | |
| Trade receivables, net | |
| 692 | | |
| 623 | |
| Inventories | |
| 816 | | |
| 841 | |
| Prepaid expenses and other current assets | |
| 237 | | |
| 270 | |
| Assets held for sale | |
| 49 | | |
| | |
| Total current assets | |
| 2,519 | | |
| 2,297 | |
| | |
| | | |
| | |
| Property, plant and equipment, net | |
| 2,817 | | |
| 2,907 | |
| Goodwill | |
| 1,840 | | |
| 1,951 | |
| Intangibles, net | |
| 286 | | |
| 325 | |
| Other assets | |
| 1,370 | | |
| 1,402 | |
| | |
| | | |
| | |
| Total assets | |
$ | 8,832 | | |
$ | 8,882 | |
| | |
| | | |
| | |
| Liabilities and Share Owners' Equity | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable | |
$ | 1,210 | | |
$ | 1,126 | |
| Short-term loans and long-term debt due within one year | |
| 72 | | |
| 197 | |
| Other liabilities | |
| 551 | | |
| 575 | |
| Liabilities held for sale | |
| 13 | | |
| | |
| Total current liabilities | |
| 1,846 | | |
| 1,898 | |
| | |
| | | |
| | |
| Long-term debt | |
| 4,753 | | |
| 4,945 | |
| Paddock support agreement liability | |
| 625 | | |
| 471 | |
| Other long-term liabilities | |
| 781 | | |
| 1,167 | |
| Share owners' equity | |
| 827 | | |
| 401 | |
| | |
| | | |
| | |
| Total liabilities and share owners' equity | |
$ | 8,832 | | |
$ | 8,882 | |
O-I GLASS, INC.
Condensed Consolidated Cash Flow
(Dollars
in millions)
| |
Three months ended
December 31 | | |
Year ended
December 31 | |
| Unaudited | |
2021 | | |
2020 | | |
2021 | | |
2020 | |
| Cash flows from operating activities: | |
| | | |
| | | |
| | | |
| | |
| Net earnings (loss) | |
| 48 | | |
$ | (25 | ) | |
$ | 172 | | |
$ | 264 | |
| Gain from discontinued operations | |
| | | |
| | | |
| (7 | ) | |
| | |
| Non-cash charges | |
| | | |
| | | |
| | | |
| | |
| Depreciation and amortization | |
| 114 | | |
| 119 | | |
| 463 | | |
| 482 | |
| Pension expense | |
| 8 | | |
| 8 | | |
| 32 | | |
| 38 | |
| Charge related to Paddock support agreement liability | |
| | | |
| | | |
| 154 | | |
| | |
| Brazil indirect tax credit | |
| (2 | ) | |
| | | |
| (71 | ) | |
| | |
| Restructuring, asset impairment and related charges | |
| 8 | | |
| 24 | | |
| 28 | | |
| 96 | |
| Gain on sale of ANZ businesses | |
| | | |
| 5 | | |
| | | |
| (275 | ) |
| Gain on sale of miscellaneous assets | |
| (84 | ) | |
| | | |
| (84 | ) | |
| | |
| Pension settlement charges | |
| 69 | | |
| 18 | | |
| 74 | | |
| 26 | |
| Other asset impairments | |
| | | |
| 36 | | |
| | | |
| 36 | |
| Cash payments | |
| | | |
| | | |
| | | |
| | |
| Pension contributions | |
| (51 | ) | |
| (71 | ) | |
| (84 | ) | |
| (103 | ) |
| Cash paid for restructuring activities | |
| (16 | ) | |
| (5 | ) | |
| (30 | ) | |
| (37 | ) |
| Change in components of working capital (a) | |
| 126 | | |
| 221 | | |
| (13 | ) | |
| (181 | ) |
| Other, net (b) | |
| 11 | | |
| (1 | ) | |
| 46 | | |
| 111 | |
| Cash provided by continuing operating activities | |
| 231 | | |
| 329 | | |
| 680 | | |
| 457 | |
| Cash provided by discontinued operating activities | |
| | | |
| | | |
| 7 | | |
| | |
| Total cash provided by operating activities | |
| 231 | | |
| 329 | | |
| 687 | | |
| 457 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | | |
| | | |
| | |
| Cash payments for property, plant and equipment | |
| (130 | ) | |
| (65 | ) | |
| (398 | ) | |
| (311 | ) |
| Net cash proceeds on disposal of misc. assets | |
| 114 | | |
| 8 | | |
| 122 | | |
| 10 | |
| Net cash proceeds on sale of ANZ business | |
| | | |
| | | |
| 58 | | |
| 441 | |
| Deconsolidation of Paddock | |
| | | |
| | | |
| | | |
| (47 | ) |
| Other, net | |
| (2 | ) | |
| (1 | ) | |
| (2 | ) | |
| | |
| Cash provided by (utilized) in investing activities | |
| (18 | ) | |
| (58 | ) | |
| (220 | ) | |
| 93 | |
| |
| | | |
| | | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | | |
| | | |
| | |
| Changes in borrowings, net | |
| (65 | ) | |
| (330 | ) | |
| (184 | ) | |
| (630 | ) |
| Shares repurchased | |
| (10 | ) | |
| | | |
| (40 | ) | |
| | |
| Payment of finance fees | |
| (16 | ) | |
| (1 | ) | |
| (16 | ) | |
| (51 | ) |
| Dividend paid | |
| | | |
| | | |
| | | |
| (8 | ) |
| Net cash payments for hedging activity | |
| (5 | ) | |
| | | |
| (15 | ) | |
| (8 | ) |
| Distributions to noncontrolling interests | |
| (6 | ) | |
| (7 | ) | |
| (16 | ) | |
| (12 | ) |
| Sale leaseback proceeds in conjunction with ANZ sale | |
| | | |
| | | |
| | | |
| 155 | |
| Other, net | |
| | | |
| | | |
| (2 | ) | |
| (3 | ) |
| Cash utilized in financing activities | |
| (102 | ) | |
| (338 | ) | |
| (273 | ) | |
| (557 | ) |
| Effect of exchange rate fluctuations on cash | |
| (11 | ) | |
| 24 | | |
| (29 | ) | |
| 19 | |
| Increase (decrease) in cash incl cash classified within current assets held for sale | |
| 100 | | |
| (43 | ) | |
| 165 | | |
| 12 | |
| Less: decrease in cash classified within current assets held for sale | |
| (3 | ) | |
| | | |
| (3 | ) | |
| | |
| Cash at beginning of period | |
| 628 | | |
| 606 | | |
| 563 | | |
| 551 | |
| Cash at end of period | |
$ | 725 | | |
$ | 563 | | |
$ | 725 | | |
$ | 563 | |
| (a) | The
Company uses various factoring programs to sell certain receivables to financial institutions as part of managing its cash flows. At
December 31, 2021, December 31, 2020 and December 31, 2019, the amount of receivables sold by the Company was $481 million,
$436 million and $539 million, respectively. For the years ended December 31, 2021 and 2020, the Company's use of its factoring
programs resulted in an increase of $45 million to cash from operating activities and a $103 million decrease to cash from operating
activities, respectively. |
| (b) | Other,
net includes other non-cash charges plus other changes in non-current assets and liabilities. |
O-I GLASS, INC.
Reportable Segment Information
(Dollars in millions)
| |
Three
months ended
December 31 | | |
Year
ended
December 31 | |
| Unaudited | |
2021 | | |
2020 | | |
2021 | | |
2020 | |
| Net sales: | |
| | | |
| | | |
| | | |
| | |
| Americas | |
$ | 906 | | |
$ | 880 | | |
$ | 3,557 | | |
$ | 3,322 | |
| Europe | |
| 647 | | |
| 589 | | |
| 2,687 | | |
| 2,364 | |
| Asia
Pacific | |
| | | |
| | | |
| | | |
| 281 | |
| Reportable segment totals | |
| 1,553 | | |
| 1,469 | | |
| 6,244 | | |
| 5,967 | |
| Other | |
| 35 | | |
| 28 | | |
| 113 | | |
| 124 | |
| Net sales | |
$ | 1,588 | | |
$ | 1,497 | | |
$ | 6,357 | | |
$ | 6,091 | |
| | |
| | | |
| | | |
| | | |
| | |
| Segment
operating profit (a): | |
| | | |
| | | |
| | | |
| | |
| Americas | |
$ | 99 | | |
$ | 127 | | |
$ | 456 | | |
$ | 395 | |
| Europe | |
| 78 | | |
| 73 | | |
| 371 | | |
| 264 | |
| Asia
Pacific | |
| | | |
| | | |
| | | |
| 19 | |
| Reportable segment totals | |
| 177 | | |
| 200 | | |
| 827 | | |
| 678 | |
| | |
| | | |
| | | |
| | | |
| | |
| Items excluded from segment
operating profit: | |
| | | |
| | | |
| | | |
| | |
| Retained
corporate costs and other | |
| (45 | ) | |
| (47 | ) | |
| (171 | ) | |
| (145 | ) |
| Items
not considered representative of ongoing operations and other adjustments (b) | |
| 3 | | |
| (86 | ) | |
| (108 | ) | |
| 85 | |
| | |
| | | |
| | | |
| | | |
| | |
| Interest
expense, net | |
| (64 | ) | |
| (53 | ) | |
| (216 | ) | |
| (265 | ) |
| Earnings
from continuing operations before income taxes | |
$ | 71 | | |
$ | 14 | | |
$ | 332 | | |
$ | 353 | |
| | |
| | | |
| | | |
| | | |
| | |
| Ratio of earnings (loss) before
income taxes to net sales | |
| 4.5 | % | |
| 0.9 | % | |
| 5.2 | % | |
| 5.8 | % |
| | |
| | | |
| | | |
| | | |
| | |
| Segment
operating profit margin (c): | |
| | | |
| | | |
| | | |
| | |
| Americas | |
| 10.9 | % | |
| 14.4 | % | |
| 12.8 | % | |
| 11.9 | % |
| Europe | |
| 12.1 | % | |
| 12.4 | % | |
| 13.8 | % | |
| 11.2 | % |
| Asia
Pacific | |
| | | |
| | | |
| | | |
| 6.8 | % |
| Reportable segment margin totals | |
| 11.4 | % | |
| 13.6 | % | |
| 13.2 | % | |
| 11.4 | % |
| (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 and other adjustments 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 from continuing operations 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) | Reference
Reconciliation to Adjusted Earnings. |
| (c) | Segment
operating profit margin is segment operating profit divided by segment net sales. |
O-I GLASS, INC.
Reconciliation to Adjusted Earnings
(Dollars
in millions, except per share amounts)
The reconciliation below describes the items that management considers
not representative of ongoing operations and other adjustments.
| |
Three months ended
December 31 | | |
Year ended
December 31 | |
| Unaudited | |
2021 | | |
2020 | | |
2021 | | |
2020 | |
| Net earnings (loss) attributable to the Company | |
$ | 43 | | |
$ | (29 | ) | |
$ | 142 | | |
$ | 249 | |
| | |
| | | |
| | | |
| | | |
| | |
| Items impacting equity earnings (losses): | |
| | | |
| | | |
| | | |
| | |
| Restructuring, asset impairment and other charges | |
| | | |
| 36 | | |
| | | |
| 36 | |
| Items impacting other income (expense), net: | |
| | | |
| | | |
| | | |
| | |
| Gain on sale of miscellaneous assets | |
| (84 | ) | |
| | | |
| (84 | ) | |
| | |
| Gain on sale of ANZ businesses | |
| | | |
| 5 | | |
| | | |
| (275 | ) |
| Restructuring, asset impairment and other charges | |
| 14 | | |
| 26 | | |
| 35 | | |
| 106 | |
| Charge related to Paddock support agreement liability | |
| | | |
| | | |
| 154 | | |
| | |
| Charge for deconsolidation of Paddock | |
| | | |
| | | |
| | | |
| 14 | |
| Strategic transaction and corporate modernization costs | |
| | | |
| 1 | | |
| | | |
| 8 | |
| Pension settlement charges | |
| 69 | | |
| 18 | | |
| 74 | | |
| 26 | |
| Brazil indirect tax credit | |
| (2 | ) | |
| | | |
| (71 | ) | |
| | |
| Items impacting interest expense: | |
| | | |
| | | |
| | | |
| | |
| Charges for note repurchase premiums and write-off of finance fees | |
| 13 | | |
| | | |
| 13 | | |
| 44 | |
| Items impacting income tax: | |
| | | |
| | | |
| | | |
| | |
| Tax charge recorded for certain tax adjustments | |
| 5 | | |
| | | |
| 5 | | |
| | |
| Net provision (benefit) for income tax on items above | |
| | | |
| 7 | | |
| 27 | | |
| (13 | ) |
| Items impacting net earnings attributable to noncontrolling interests: | |
| | | |
| | | |
| | | |
| | |
| Net impact of noncontrolling interests on items above | |
| (1 | ) | |
| (1 | ) | |
| (1 | ) | |
| (1 | ) |
| Total adjusting items (non-GAAP) | |
$ | 14 | | |
$ | 92 | | |
$ | 152 | | |
$ | (55 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Adjusted earnings (non-GAAP) | |
$ | 57 | | |
$ | 63 | | |
$ | 294 | | |
$ | 194 | |
| | |
| | | |
| | | |
| | | |
| | |
| Diluted average shares (thousands) | |
| 159,823 | | |
| 157,274 | | |
| 160,309 | | |
| 158,785 | |
| | |
| | | |
| | | |
| | | |
| | |
| Earnings (loss) per share from continuing operations (diluted) | |
$ | 0.27 | | |
$ | (0.18 | ) | |
$ | 0.88 | | |
$ | 1.57 | |
| Adjusted earnings per share (non-GAAP) (a) | |
$ | 0.36 | | |
$ | 0.40 | | |
$ | 1.83 | | |
$ | 1.22 | |
| (a) | For
purposes of computing adjusted earnings per share, the diluted average shares (in thousands) are 159,824 for the three months ended December 31,
2020. |
The
Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, adjusted earnings and adjusted
earnings per share, for the quarter ending March 31, 2022 or year ending December 31, 2022, to its most directly
comparable GAAP financial measure, earnings from continuing operations attributable to the Company, because management cannot
reliably predict all of the necessary components of this GAAP financial measure without unreasonable efforts. Earnings
from continuing operations attributable to the Company includes several significant items, such as restructuring charges, asset
impairment charges, charges for the write-off of finance fees, and the income tax effect on such items. The decisions and
events that typically lead to the recognition of these and other similar items are complex and inherently unpredictable, and the
amount recognized for each item can vary significantly. Accordingly, the Company is unable to provide a reconciliation of
adjusted earnings and adjusted earnings per share to earnings from continuing operations attributable to the Company or address the
probable significance of the unavailable information, which could be material to the Company's future financial results.
O-I GLASS, INC.
Changes in Net Sales and Segment Operating Profit
for Reportable Segments
(Dollars in millions)
| | |
Three months ended December 31, | |
| Unaudited | |
Americas | | |
Europe | | |
Asia Pacific | | |
Total | |
| Net sales for reportable segments- 2020 | |
$ | 880 | | |
$ | 589 | | |
$ | - | | |
$ | 1,469 | |
| Effects of changing foreign currency rates (a) | |
| (8 | ) | |
| (22 | ) | |
| | | |
| (30 | ) |
| Price | |
| 58 | | |
| 9 | | |
| | | |
| 67 | |
| Sales volume & mix | |
| (16 | ) | |
| 71 | | |
| | | |
| 55 | |
| Divestitures | |
| (8 | ) | |
| | | |
| | | |
| (8 | ) |
| Total reconciling items | |
| 26 | | |
| 58 | | |
| - | | |
| 84 | |
| Net sales for reportable segments- 2021 | |
$ | 906 | | |
$ | 647 | | |
$ | - | | |
$ | 1,553 | |
| | |
Three months ended December 31, | |
| | |
Americas | | |
Europe | | |
Asia Pacific | | |
Total | |
| Segment operating profit - 2020 | |
$ | 127 | | |
$ | 73 | | |
$ | - | | |
$ | 200 | |
| Effects of changing foreign currency rates (a) | |
| (1 | ) | |
| (2 | ) | |
| | | |
| (3 | ) |
| Net Price (net of cost inflation) | |
| 8 | | |
| (31 | ) | |
| | | |
| (23 | ) |
| Sales volume & mix | |
| (3 | ) | |
| 14 | | |
| | | |
| 11 | |
| Operating costs | |
| (32 | ) | |
| 24 | | |
| | | |
| (8 | ) |
| Divestitures | |
| | | |
| | | |
| | | |
| | |
| Total reconciling items | |
| (28 | ) | |
| 5 | | |
| - | | |
| (23 | ) |
| Segment operating profit - 2021 | |
$ | 99 | | |
$ | 78 | | |
$ | - | | |
$ | 177 | |
| | |
Year ended December 31, | |
| | |
Americas | | |
Europe | | |
Asia Pacific | | |
Total | |
| Net sales for reportable segments- 2020 | |
$ | 3,322 | | |
$ | 2,364 | | |
$ | 281 | | |
$ | 5,967 | |
| Effects of changing foreign currency rates (a) | |
| 22 | | |
| 77 | | |
| | | |
| 99 | |
| Price | |
| 160 | | |
| 19 | | |
| | | |
| 179 | |
| Sales volume & mix | |
| 77 | | |
| 227 | | |
| | | |
| 304 | |
| Divestitures | |
| (24 | ) | |
| | | |
| (281 | ) | |
| (305 | ) |
| Total reconciling items | |
| 235 | | |
| 323 | | |
| (281 | ) | |
| 277 | |
| Net sales for reportable segments- 2021 | |
$ | 3,557 | | |
$ | 2,687 | | |
$ | - | | |
$ | 6,244 | |
| | |
Year ended December 31, | |
| | |
Americas | | |
Europe | | |
Asia Pacific | | |
Total | |
| Segment operating profit - 2020 | |
$ | 395 | | |
$ | 264 | | |
$ | 19 | | |
$ | 678 | |
| Effects of changing foreign currency rates (a) | |
| 1 | | |
| 7 | | |
| | | |
| 8 | |
| Net Price (net of cost inflation) | |
| 4 | | |
| (53 | ) | |
| | | |
| (49 | ) |
| Sales volume & mix | |
| 21 | | |
| 51 | | |
| | | |
| 72 | |
| Operating costs | |
| 32 | | |
| 102 | | |
| | | |
| 134 | |
| Divestitures | |
| 3 | | |
| | | |
| (19 | ) | |
| (16 | ) |
| Total reconciling items | |
| 61 | | |
| 107 | | |
| (19 | ) | |
| 149 | |
| Segment operating profit - 2021 | |
$ | 456 | | |
$ | 371 | | |
$ | - | | |
$ | 827 | |
| (a) | Currency
effect on net sales and segment operating profit determined by using 2021 foreign currency exchange rates to translate 2020 local currency
results. |
O-I GLASS, INC.
Reconciliation to Free Cash Flow
| | |
Year Ended | | |
Year Ended | | |
Forecasted Year Ended | |
| Unaudited | |
December 31, 2021 | | |
December 31, 2020 | | |
December 31, 2022 | |
| Cash provided by continuing operating activities (a) | |
$ | 680 | | |
$ | 457 | | |
$ | 725 | |
| Cash payments for property, plant and equipment | |
| (398 | ) | |
| (311 | ) | |
| (600 | ) |
| Free cash flow (non-GAAP) | |
$ | 282 | | |
$ | 146 | | |
$ | 125 | |
| Addback: Cash payments for property, plant and equipment - strategic/expansion only (non-GAAP) | |
| | | |
| | | |
| 225 | |
| Adjusted Free Cash Flow (non-GAAP) | |
| | | |
| | | |
$ | 350 | |
| (a) 2022 forecast excludes the one-time funding of the $610 million 524(g) trust at the conclusion of the Paddock Chapter 11 process. |
O-I GLASS, INC.
Reconciliation to Net Debt
| Unaudited | |
December 31, 2021 | | |
December 31, 2020 | |
| Total debt | |
$ | 4,825 | | |
$ | 5,142 | |
| Cash and cash equivalents | |
| 725 | | |
| 563 | |
| Net Debt | |
$ | 4,100 | | |
$ | 4,579 | |
O-I GLASS, INC.
Reconciliation to Adjusted Effective Tax Rate
The Company is unable to present a quantitative reconciliation of
its forward-looking non-GAAP measure, adjusted effective tax rate, for the year ending December 31, 2022, to its most directly comparable
GAAP financial measure, provision for income taxes divided by earnings (loss) from continuing operations before income taxes, because
management cannot reliably predict all of the necessary components of these GAAP financial measures without unreasonable efforts. Earnings
(loss) from continuing operations before income taxes includes several significant items, such as restructuring charges, asset impairment
charges, charges for the write-off of finance fees, and the provision for income taxes would include the income tax effect on such items.
The decisions and events that typically lead to the recognition of these and other similar items are complex and inherently unpredictable,
and the amount recognized for each item can vary significantly. Accordingly, the Company is unable to provide a of adjusted effective
tax rate to earnings (loss) from continuing operations before income taxes divided by provision for income taxes or address the probable
significance of the unavailable information, which could be material to the Company's future financial results.
