UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

September 30, ~~2021~~2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-9576

O-I GLASS, INC.

(Exact name of registrant as specified in its charter)



Delaware		22-2781933
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)


One Michael Owens Way, Perrysburg, Ohio		43551
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (567) 336-5000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $.01 par value	OI	New York Stock Exchange

~~Securities registered pursuant to Section 12(g) of the Act:~~ ~~None.~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐
Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock, par value $.01, of O-I Glass, Inc. outstanding as of September 30, ~~2021~~2022 was ~~156,827,223.~~155,137,621.

Part I — FINANCIAL INFORMATION

Item 1. Financial Statements.

The Condensed Consolidated Financial Statements of O-I Glass, Inc. (the “Company”) presented herein are unaudited but, in the opinion of management, reflect all adjustments necessary to present fairly such information for the periods and at the dates indicated. All adjustments are of a normal recurring nature. Because the following unaudited condensed consolidated financial statements have been prepared in accordance with Article 10 of Regulation S-X, they do not contain all information and footnotes normally contained in annual consolidated financial statements; accordingly, they should be read in conjunction with the Consolidated Financial Statements and notes thereto appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

The term “Company,” as used herein and unless otherwise stated or indicated by context, refers to Owens-Illinois, Inc. (“O-I”) prior to the Corporate Modernization (as defined in Note 10) and to O-I Glass, Inc. (“O-I Glass”) after the Corporate Modernization.

O-I GLASS, INC.

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS

(Dollars in millions, except per share amounts)
(Unaudited)


	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Net sales	$	1,609	$	1,616	$	4,770	$	4,595	$	1,693	$	1,609	$	5,163	$	4,770
Cost of goods sold		(1,307)		(1,339)		(3,916)		(3,887)		(1,368)		(1,307)		(4,209)		(3,916)

Gross profit		302		277		854		708		325		302		954		854

Selling and administrative expense		(108)		(95)		(325)		(308)		(128)		(108)		(371)		(325)
Research, development and engineering expense		(19)		(16)		(57)		(45)		(14)		(19)		(56)		(57)
Interest expense, net		(50)		(61)		(153)		(212)		(63)		(50)		(175)		(153)
Equity earnings		23		21		64		49		24		23		71		64
Other income (expense), net		(21)		250		(123)		147		134		(21)		353		(123)

Earnings from continuing operations before income taxes		127		376		260		339		278		127		776		260
Provision for income taxes		(43)		(41)		(144)		(50)		(43)		(43)		(164)		(144)

Earnings from continuing operations		84		335		116		289		235		84		612		116
Gain from discontinued operations		7				7						7				7

Net earnings		91		335		123		289		235		91		612		123
Net earnings attributable to non-controlling interests		(6)		(7)		(17)		(11)		(4)		(6)		(41)		(17)
Net earnings attributable to the Company	$	85	$	328	$	106	$	278	$	231	$	85	$	571	$	106

Amounts attributable to the Company:
Earnings from continuing operations	$	78	$	328	$	99	$	278	$	231	$	78	$	571	$	99
Gain from discontinued operations		7				7						7				7
Net earnings	$	85	$	328	$	106	$	278	$	231	$	85	$	571	$	106

Basic earnings per share:
Earnings from continuing operations attributable to the Company	$	0.49	$	2.09	$	0.62	$	1.77
Earnings from continuing operations									$	1.49	$	0.49	$	3.67	$	0.62
Gain from discontinued operations		0.05				0.05						0.05				0.05
Net earnings	$	0.54	$	2.09	$	0.67	$	1.77	$	1.49	$	0.54	$	3.67	$	0.67

Weighted average shares outstanding (thousands)		156,825		157,073		157,430		156,650		155,115		156,825		155,546		157,430

Diluted earnings per share:
Earnings from continuing operations attributable to the Company	$	0.48	$	2.06	$	0.61	$	1.76
Earnings from continuing operations									$	1.45	$	0.48	$	3.59	$	0.61
Gain from discontinued operations		0.05				0.05						0.05				0.05
Net earnings	$	0.53	$	2.06	$	0.66	$	1.76	$	1.45	$	0.53	$	3.59	$	0.66

Weighted average diluted shares outstanding (thousands)		160,511		159,299		160,473		158,438		158,935		160,511		158,892		160,473

See accompanying notes.

O-I GLASS, INC.

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME ~~(LOSS)~~

(Dollars in millions)

(Unaudited)


	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Net earnings	$	91	$	335	$	123	$	289	$	235	$	91	$	612	$	123
Other comprehensive income (loss):
Foreign currency translation adjustments		(110)		(148)		(81)		(666)		(99)		(110)		(86)		(81)
Pension and other postretirement benefit adjustments, net of tax		78		42		115		92		31		78		75		115
Change in fair value of derivative instruments, net of tax		13		(11)		26		(18)		24		13		47		26
Other comprehensive income (loss)		(19)		(117)		60		(592)		(44)		(19)		36		60
Total comprehensive income (loss)		72		218		183		(303)
Comprehensive income attributable to non-controlling interests		(5)		(7)		(3)		(1)
Comprehensive income (loss) attributable to the Company	$	67	$	211	$	180	$	(304)
Total comprehensive income										191		72		648		183
Comprehensive (income) loss attributable to non-controlling interests										3		(5)		(32)		(3)
Comprehensive income attributable to the Company									$	194	$	67	$	616	$	180

See accompanying notes.

O-I GLASS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(Unaudited)

September 30,

December 31,

September 30,

2021

2020

2020
Assets

Current assets:

Cash and cash equivalents

$
628

$
563

$
606
Trade receivables, net of allowance of $31 million, $33 million, and $33 million at September 30, 2021, December 31, 2020 and September 30, 2020

793

623

724
Inventories

808

841

782
Prepaid expenses and other current assets

213

270

272
Total current assets

2,442

2,297

2,384

Property, plant and equipment, net

2,785

2,907

2,675
Goodwill

1,879

1,951

1,847
Intangibles, net

294

325

311
Other assets

1,366

1,402

1,407
Total assets

$
8,766

$
8,882

$
8,624

Liabilities and Share owners’ equity

Current liabilities:

Accounts payable

$
1,062

$
1,126

$
910
Short-term loans and long-term debt due within one year

79

197

212
Other liabilities

597

575

575
Total current liabilities

1,738

1,898

1,697

Long-term debt

4,853

4,945

5,163
Paddock support agreement liability

625

471

471
Other long-term liabilities

980

1,167

1,028
Share owners' equity

570

401

265
Total liabilities and share owners’ equity

$
8,766

$
8,882

$
8,624


	September 30,		December 31,		September 30,
	2022		2021		2021
Assets
Current assets:
Cash and cash equivalents	$	523	$	725	$	628
Trade receivables, net of allowance of $28 million, $28 million, and $31 million at September 30, 2022, December 31, 2021 and September 30, 2021		892		692		793
Inventories		792		816		808
Prepaid expenses and other current assets		223		237		213
Assets held for sale				49	��
Total current assets		2,430		2,519		2,442

Property, plant and equipment, net		2,698		2,817		2,785
Goodwill		1,730		1,840		1,879
Intangibles, net		264		286		294
Other assets		1,522		1,370		1,366
Total assets	$	8,644	$	8,832	$	8,766

Liabilities and share owners’ equity
Current liabilities:
Accounts payable	$	1,171	$	1,210	$	1,062
Short-term loans and long-term debt due within one year		331		72		79
Other liabilities		594		551		597
Liabilities held for sale				13
Total current liabilities		2,096		1,846		1,738

Long-term debt		4,280		4,753		4,853
Paddock support agreement liability				625		625
Other long-term liabilities		817		781		980
Share owners' equity		1,451		827		570
Total liabilities and share owners’ equity	$	8,644	$	8,832	$	8,766

See accompanying notes.

O-I GLASS, INC.

CONDENSED CONSOLIDATED CASH FLOWS

(Dollars in millions)

(Unaudited)

Nine months ended September 30,

2021

2020

Cash flows from operating activities:

Net earnings

$
123

$
289

Gain from discontinued operations

(7)

Non-cash charges

Depreciation and amortization

349

363

Pension expense

24

30

Charge related to Paddock support agreement liability

154

Brazil indirect tax credit

(69)

Restructuring, asset impairment and related charges

20

72

Pension settlement charges

5

8

Gain on sale of ANZ business

(280)

Cash payments

Pension contributions

(33)

(32)

Cash paid for restructuring activities

(14)

(32)

Change in components of working capital

(139)

(402)

Other, net (a)

36

112

Cash provided by continuing operating activities

449

128

Cash provided by discontinued operating activities

7

Cash provided by operating activities

456

128

Cash flows from investing activities:

Cash payments for property, plant and equipment

(268)

(246)

Cash proceeds on disposal of other businesses and misc. assets

8

2

Cash proceeds on sale of ANZ businesses, net of transaction costs

58

441

Deconsolidation of Paddock

(47)

Other

1

Cash provided by (utilized in) investing activities

(202)

151

Cash flows from financing activities:

Changes in borrowings, net

(119)

(300)

Payment of finance fees

(50)

Shares repurchased

(30)

Dividends paid

(8)

Net cash payments for hedging activity

(10)

(8)

Sale leaseback proceeds in conjunction with ANZ sale

155

Distributions to non-controlling interests

(10)

(5)

Other, net

(2)

(3)

Cash utilized in financing activities

(171)

(219)

Effect of exchange rate fluctuations on cash

(18)

(5)

Change in cash

65

55

Cash at beginning of period

563

551

Cash at end of period

$
628

$
606


	Nine months ended September 30,
	2022		2021
Cash flows from operating activities:
Net earnings	$	612	$	123
Gain from discontinued operations				(7)
Non-cash charges
Depreciation and amortization		347		349
Pension expense		25		24
Charge related to Paddock support agreement liability				154
Brazil indirect tax credit				(69)
Restructuring, asset impairment and related charges		21		20
Pension settlement charges		5		5
Gain on sale of divested business		(55)
Gain on sale leasebacks		(334)
Cash payments
Pension contributions		(22)		(33)
Cash paid for restructuring activities		(14)		(14)
Paddock Trust Settlement payment and related expenses		(618)
Change in components of working capital		(162)		(139)
Other, net (a)		(29)		36
Cash provided by (utilized in) continuing operating activities		(224)		449
Cash provided by discontinued operating activities				7
Cash provided by (utilized in) operating activities		(224)		456
Cash flows from investing activities:
Cash payments for property, plant and equipment		(346)		(268)
Contributions and advances to joint ventures		(11)
Cash proceeds on disposal of other businesses and misc. assets		96		8
Cash proceeds on sale leasebacks		368
Cash proceeds on sale of ANZ businesses, net of transaction costs				58
Reconsolidation of reorganized Paddock		12
Other		(11)
Cash provided by (utilized in) investing activities		108		(202)
Cash flows from financing activities:
Changes in borrowings, net		(4)		(119)
Payment of finance fees		(29)
Shares repurchased		(30)		(30)
Net cash receipts (payments) for hedging activity		38		(10)
Distributions to non-controlling interests		(27)		(10)
Issuance of common stock and other		(2)		(2)
Cash utilized in financing activities		(54)		(171)
Effect of exchange rate fluctuations on cash		(32)		(18)
Change in cash		(202)		65
Cash at beginning of period		725		563
Cash at end of period	$	523	$	628

(a)	Other, net includes other non-cash charges plus other changes in non-current assets and liabilities.

See accompanying notes.

O-I GLASS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Tabular data dollars in millions, except per share amounts

1. Segment Information

~~Historically, the~~The Company ~~had 3~~has two reportable segments and 3two operating segments based on its geographic locations: the Americas ~~Europe~~ and ~~Asia Pacific.~~Europe. These 3two segments are aligned with the Company’s internal approach to managing, reporting, and evaluating performance of its global glass operations. On July 31, 2020, the Company completed the sale of its Australia and New Zealand (“ANZ”) businesses, which comprised the majority of its businesses in the Asia Pacific region (approximately 85% of net sales in that region for the full year 2019), to Visy Industries Holdings Pty Ltd. (“Visy”). After the sale of the ANZ businesses, the remaining businesses in the Asia Pacific region do not meet the criteria of an individually reportable segment. For the three and nine months ended September 30, 2020, the results of the Asia Pacific segment reflect only the results of its ANZ businesses. For all historical periods discussed in this report, the sales and operating results of the other businesses that historically comprised the Asia Pacific segment, and that have been retained by the Company, have been reclassified to Other sales and Retained corporate costs and other, respectively. For asset reporting purposes, only the assets related to the ANZ businesses have been reported in the Asia Pacific segment, while the other businesses that historically comprised this segment and that have been retained by the Company have been reclassified to the Other assets line for all periods presented.

Certain assets and activities not directly related to one of the ~~regions~~segments or to glass manufacturing are reported with Retained corporate costs and other. These include licensing, equipment manufacturing, global engineering, certain equity investments and the remaining businesses in the Asia Pacific region that do not meet the criteria of an individually reportable segment after the sale of the ~~ANZ businesses.~~Company’s Australia and New Zealand businesses in 2020. Retained corporate costs and other also includes certain headquarters administrative and facilities costs and certain incentive compensation and other benefit plan costs that are global in nature and are not allocable to the reportable segments.

The Company’s measure of profit for its reportable segments is segment operating profit, which consists of consolidated earnings ~~(loss)~~from continuing operations before interest income, interest expense, and benefit (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’s management, including the chief operating decision maker (defined as our chief executive officer), uses segment operating profit, in combination with net sales and selected cash flow information, to evaluate performance and to allocate resources. Segment operating profit for reportable segments includes an allocation of some corporate expenses based on both a percentage of sales and direct billings based on the costs of specific services provided. Segment operating profit is not a recognized term under accounting principles generally accepted in the United States (“U.S. ~~GAAP~~GAAP”) and, therefore, does not purport to be an alternative to earnings ~~(loss)~~from continuing operations before income taxes. Further, the Company's measure of segment operating profit may not be comparable to similarly titled measures of other companies.

Financial information for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 regarding the Company’s reportable segments is as follows:

Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

Net sales:

Americas

$
925

$
887

$
2,652

$
2,442

Europe

655

644

2,039

1,775

Asia Pacific

52

281

Reportable segment totals

1,580

1,583

4,691

4,498

Other

29

33

79

97

Net sales

$
1,609

$
1,616

$
4,770

$
4,595


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Net sales:
Americas	$	987	$	925	$	2,898	$	2,652
Europe		680		655		2,153		2,039
Reportable segment totals		1,667		1,580		5,051		4,691
Other		26		29		112		79
Net sales	$	1,693	$	1,609	$	5,163	$	4,770

Three months ended September 30,

Nine months ended September 30,


2021

2020

2021

2020

Segment operating profit:

Americas

$
133

$
113

$
357

$
268

Europe

110

88

293

191

Asia Pacific

3

19

Reportable segment totals

243

204

650

478

Items excluded from segment operating profit:

Retained corporate costs and other

(49)

(35)

(126)

(98)

Gain on sale of ANZ businesses

280

280

Brazil indirect tax credit

69

Restructuring, asset impairment and other charges

(12)

(9)

(21)

(80)

Charge related to Paddock support agreement liability

(154)

Charge for deconsolidation of Paddock

(14)

Pension settlement charges

(5)

(5)

(8)

Strategic transaction costs

(3)

(7)

Interest expense, net

(50)

(61)

(153)

(212)

Earnings from continuing operations before income taxes

$
127

$
376

$
260

$
339


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Earnings from continuing operations before income taxes	$	278	$	127	$	776	$	260
Items excluded from segment operating profit:
Retained corporate costs and other		63		49		165		126
Gain on sale of divested business						(55)
Gain on sale leasebacks		(153)				(334)
Restructuring, asset impairment and other charges		10		12		21		21
Brazil indirect tax credit								(69)
Charge related to Paddock support agreement liability								154
Pension settlement charges		5		5		5		5
Interest expense, net		63		50		175		153
Segment operating profit	$	266	$	243	$	753	$	650

Americas	$	130	$	133	$	388	$	357
Europe		136		110		365		293
Reportable segment totals	$	266	$	243	$	753	$	650

Financial information regarding the Company’s total assets is as follows:


	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
	2021		2020		2020		2022		2021		2021
Total assets:
Americas	$	4,925	$	4,927	$	4,663	$	5,020	$	4,853	$	4,925
Europe		3,457		3,507		3,307		3,174		3,513		3,457

Reportable segment totals		8,382		8,434		7,970		8,194		8,366		8,382
Other		384		448		654		450		466		384
Consolidated totals	$	8,766	$	8,882	$	8,624	$	8,644	$	8,832	$	8,766

2. Revenue

Revenue is recognized at ~~the~~a point in time when obligations under the terms of the Company’s contracts and related purchase orders with its customers are satisfied. This occurs with the transfer of control of glass containers, which primarily takes place when products are shipped from the Company’s manufacturing or warehousing facilities to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimated provisions for rebates, discounts, returns and allowances. Sales, value-added, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s payment terms are based on customary business practices and can vary by customer type. The term between invoicing and when payment is due is not significant. Also, the Company elected to account for shipping and handling costs as a fulfillment cost at the time of shipment.

For the three- and nine-month periods ended September 30, ~~2021~~2022 and September 30, ~~2020,~~2021, the Company had no material bad debt expense, and there were no material contract assets, contract liabilities or deferred contract costs recorded on the Condensed Consolidated Balance Sheet.

Consistent with the disclosures in Note 1 related to the ANZ sale, Asia Pacific revenue for the three- and nine-month periods ended September 30, 2020, reflect only the revenue of the ANZ businesses. The other businesses that comprised the Asia Pacific segment and that have been retained by the Company have been reclassified to the Other sales line.

The following tables for the three months ended September 30, ~~2021~~2022 and ~~2020~~2021 disaggregate the Company’s revenue by customer end use:


	Three months ended September 30, 2022
	Americas		Europe		Total

Alcoholic beverages (beer, wine, spirits)	$	612	$	509	$	1,121
Food and other		205		113		318
Non-alcoholic beverages		170		58		228
Reportable segment totals	$	987	$	680	$	1,667
Other						26
Net sales					$	1,693


	Three months ended September 30, 2021
	Americas		Europe		Total

Alcoholic beverages (beer, wine, spirits)	$	561	$	467	$	1,028
Food and other		215		124		339
Non-alcoholic beverages		149		64		213
Reportable segment totals	$	925	$	655	$	1,580
Other						29
Net sales					$	1,609

Three months ended September 30, 2021

Americas

Europe

Asia Pacific

Total

Alcoholic beverages (beer, wine, spirits)

$
561

$
467

$
—

$
1,028
Food and other

215

124

339
Non-alcoholic beverages

149

64

213
Reportable segment totals

$
925

$
655

$
—

$
1,580
Other

29
Net sales

$
1,609

Three months ended September 30, 2020

Americas

Europe

Asia Pacific

Total

Alcoholic beverages (beer, wine, spirits)

$
537

$
452

$
40

$
1,029
Food and other

222

138

6

366
Non-alcoholic beverages

128

54

6

188
Reportable segment totals

$
887

$
644

$
52

$
1,583
Other

33
Net sales

$
1,616

The following tables for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 disaggregate the Company’s revenue by customer end use:

Nine months ended September 30, 2021

Americas

Europe

Asia Pacific

Total

Alcoholic beverages (beer, wine, spirits)

$
1,610

$
1,507

$
—

$
3,117
Food and other

627

366

993
Non-alcoholic beverages

415

166

581
Reportable segment totals

$
2,652

$
2,039

$
—

$
4,691
Other

79
Net sales

$
4,770

Nine months ended September 30, 2020

Americas

Europe

Asia Pacific

Total

Alcoholic beverages (beer, wine, spirits)

$
1,471

$
1,258

$
217

$
2,946
Food and other

609

360

38

1,007
Non-alcoholic beverages

362

157

26

545
Reportable segment totals

$
2,442

$
1,775

$
281

$
4,498
Other

97
Net sales

$
4,595


	Nine months ended September 30, 2022
	Americas		Europe		Total

Alcoholic beverages (beer, wine, spirits)	$	1,800	$	1,621	$	3,421
Food and other		617		345		962
Non-alcoholic beverages		481		187		668
Reportable segment totals	$	2,898	$	2,153	$	5,051
Other						112
Net sales					$	5,163


	Nine months ended September 30, 2021
	Americas		Europe		Total

Alcoholic beverages (beer, wine, spirits)	$	1,610	$	1,507	$	3,117
Food and other		627		366		993
Non-alcoholic beverages		415		166		581
Reportable segment totals	$	2,652	$	2,039	$	4,691
Other						79
Net sales					$	4,770

3. Credit Losses

The Company is exposed to credit losses primarily through its sales of glass containers to customers. The Company’s trade receivables from customers are due within one year or less. The Company assesses each customer’s ability to pay for the glass containers it sells to them by conducting a credit review. The credit review considers the expected billing exposure and timing for payment and the customer’s established credit rating or the Company’s assessment of the customer’s creditworthiness, based on an analysis of their financial statements when a credit rating is not available. The Company also considers contract terms and conditions, country and political risk, and business strategy in its evaluation. A credit limit is established for each customer based on the outcome of this review. The Company may require collateralized asset support or a prepayment to mitigate credit risk. The Company monitors its ongoing credit exposure through the active review of customer balances against contract terms and due dates, including timely account reconciliation, dispute resolution and payment confirmation. The Company may employ collection agencies and legal counsel to pursue the recovery of defaulted receivables.

At September 30, ~~2021~~2022 and September 30, ~~2020,~~2021, the Company reported ~~$793~~$892 million and ~~$724~~$793 million of accounts receivable, respectively, net of allowances of ~~$31~~$28 million and ~~$33~~$31 million, respectively. Changes in the allowance were not material for each of the three and nine months ended September 30, ~~2021~~2022 and September 30, ~~2020.~~2021.

4. Inventories

Major classes of inventory at September 30, ~~2021,~~2022, December 31, ~~2020~~2021 and September 30, ~~2020~~2021 are as follows:


	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
	2021		2020		2020		2022		2021		2021
Finished goods	$	651	$	675	$	625	$	623	$	659	$	651
Raw materials		120		129		121		131		119		120
Operating supplies		37		37		36		38		38		37
	$	808	$	841	$	782	$	792	$	816	$	808

5. Derivative Instruments

The Company has certain derivative assets and liabilities, which consist of natural gas forwards and collars, foreign exchange option and forward contracts, interest rate swaps and cross-currency swaps. The valuation of these instruments is determined primarily using the income approach, including discounted cash flow analysis on the expected cash flows of each derivative. ~~Foreign~~Natural gas prices, foreign exchange rates and interest rates are the significant inputs into the valuation models. The Company also evaluates counterparty risk in determining fair values. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. Estimates of the fair value of foreign currency and commodity derivative instruments are determined using exchange traded prices and rates. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. These inputs are observable in active markets over the terms of the instruments the Company holds, and, accordingly, the Company classifies its derivative assets and liabilities as Level 2 in the hierarchy.

Commodity Forward Contracts and Collars Designated as Cash Flow Hedges

The Company has entered into commodity forward contracts and collars related to forecasted natural gas requirements, the objective of which are to limit the effects of fluctuations in future market prices of natural gas and the related volatility in cash flows.

An unrecognized loss of $2 million at September 30, 2022 related to the commodity forward contracts and collars was included in Accumulated other comprehensive income (“Accumulated OCI”), and will be reclassified into earnings in the period when the commodity forward contracts expire.

Cash Flow Hedges of Foreign Exchange Risk

The Company has variable-interest rate borrowings denominated in currencies other than the functional currency of the borrowing subsidiaries. As a result, the Company is exposed to fluctuations in the currency of the borrowing against the subsidiaries’ functional currency. In addition, one of the Company’s non-U.S. dollar-functional-currency subsidiaries purchases a raw material in the normal course of business for use in glass container production that is priced in U.S. dollars. Such purchases expose the Company to exchange rate fluctuations. The Company uses derivatives to manage these exposures and designates these derivatives as cash flow hedges of foreign exchange risk.

An unrecognized gain of $0 at September 30, 2022, an unrecognized gain of $6 million at December 31, 2021 and an unrecognized gain of $9 million at September 30, 2021, related to these cross-currency swaps, were included in Accumulated OCI, and will be reclassified into earnings within the next 12 months.

Fair Value Hedges of Foreign Exchange Risk

The Company has fixed interest rate borrowings denominated in currencies other than the functional currency of the borrowing subsidiaries. As a result, the Company is exposed to fluctuations in the currency of the borrowing against the subsidiaries’ functional currency. The Company uses derivatives to manage these exposures and designates these derivatives as ~~cash flow~~fair value hedges of foreign exchange risk.

~~An unrecognized gain~~ Approximately $7 million and $4 million of ~~$9 million at September 30, 2021, an unrecognized gain~~the components were excluded from the assessment of ~~$9 million at December 31, 2020~~effectiveness and ~~an unrecognized gain of $9 million at September 30, 2020, related to these cross-currency swaps, were~~are included in Accumulated OCI at September 30, 2022 and ~~will be reclassified into earnings within the next 12 months.~~December 31, 2021, respectively.

Interest Rate Swaps Designated as Fair Value Hedges

The Company enters into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. The Company’s fixed-to-variable interest rate swaps are accounted for as fair value hedges. The relevant terms of the swap agreements match the corresponding terms of the notes, and therefore, there is no hedge ineffectiveness. The Company recorded the net of the fair market values of the swaps as a long-term liability and short-term asset, along with a corresponding net decrease in the carrying value of the hedged debt.

~~Cash Flow Hedges of Interest Rate Risk~~

The Company enters into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments. These interest rate swap agreements were used to hedge the variable cash flows associated with variable-rate debt.

An unrecognized loss of $0 at September 30, 2021, an unrecognized loss of less than $1 million at December 31, 2020 and an unrecognized loss of less than $1 million at September 30, 2020 related to these interest rate swaps were included in Accumulated OCI and will be reclassified into earnings within the next 12 months.

Net Investment Hedges

The Company is exposed to fluctuations in foreign exchange rates on investments it holds in non-U.S. subsidiaries and uses cross-currency swaps to partially hedge this exposure.

Foreign Exchange Derivative Contracts Not Designated as Hedging Instruments

The Company uses short-term forward exchange or option agreements to purchase foreign currencies at set rates in the future. These agreements are used to limit exposure to fluctuations in foreign currency exchange rates for significant planned purchases of fixed assets or commodities that are denominated in currencies other than the subsidiaries’ functional currency. The Company also uses foreign exchange agreements to offset the foreign currency exchange rate risk for receivables and payables, including intercompany receivables, payables, and loans, not denominated in, or indexed to, their functional currencies.

Balance Sheet Classification

The following table shows the amount and classification (as noted above) of the Company’s derivatives at September 30, ~~2021,~~2022, December 31, ~~2020~~2021 and September 30, ~~2020:~~2021:


	Fair Value of						Fair Value of						Fair Value of						Fair Value of
	Hedge Assets						Hedge Liabilities						Hedge Assets						Hedge Liabilities
	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,		September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
	2021		2020		2020		2021		2020		2020		2022		2021		2021		2022		2021		2021
Derivatives designated as hedging instruments:
Interest rate swaps - fair value hedges (a)	$	9	$	17	$	16	$	1	$	—	$	—
Cash flow hedges of foreign exchange risk (b)		9		6		9		54		115		67
Net investment hedges (c)		2		1		2		28		52		27
Commodity forward contracts and collars (a)													$	3	$	—	$	—	$	2	$	—	$	—
Interest rate swaps - fair value hedges (b)																4		9		39		2		1
Cash flow hedges of foreign exchange risk (c)																2		9		1		23		54
Fair value hedges of foreign exchange risk (d)														68		9
Net investment hedges (e)														36		3		2				17		28
Total derivatives accounted for as hedges	$	20	$	24	$	27	$	83	$	167	$	94	$	107	$	18	$	20	$	42	$	42	$	83
Derivatives not designated as hedges:
Foreign exchange derivative contracts (d)		1		1		3		4		3		6
Foreign exchange derivative contracts (f)														2		1		1		17		2		4
Total derivatives	$	21	$	25	$	30	$	87	$	170	$	100	$	109	$	19	$	21	$	59	$	44	$	87


Current	$	15	$	13	$	16	$	4	$	15	$	13	$	25	$	14	$	15	$	31	$	2	$	4
Noncurrent		6		12		14		83		155		87		84		5		6		28		42		83
Total derivatives	$	21	$	25	$	30	$	87	$	170	$	100	$	109	$	19	$	21	$	59	$	44	$	87

(a) The notional amount of the commodity forward contracts and collars was approximately 44 million British Thermal Units (“BTUs”) at September 30, 2022. The maximum maturity dates are in 2027 at September 30, 2022.

(b) The notional amounts of the interest rate swaps designated as fair value hedges were €725 million at September 30, ~~2021,~~2022, December 31, ~~2020~~2021 and September 30, ~~2020.~~2021. The maximum maturity dates ~~were~~are in 2024 ~~for all three periods.~~at September 30, 2022, December 31, 2021 and September 30, 2021.

~~(b)~~(c) The notional amounts of the cash flow hedges of foreign exchange risk were 259 million Mexican pesos at September 30, 2022, $422 million at December 31, 2021 and $878 million at September 30, 2021. The maximum maturity dates are in 2022 at September 30, 2022 and are in 2023 at December 31, 2021 ~~$978~~and September 30, 2021.

(d) The notional amounts of the fair value hedges of foreign exchange risk were $850 million at September 30, 2022 and $400 million at December 31, ~~2020 and $1.1 billion at September 30, 2020.~~2021. The maximum maturity dates ~~were~~are in ~~2023 for all three periods.~~2030 at September 30, 2022 and December 31, 2021.

~~(c)~~(e) The notional amounts of the net investment hedges were ~~€311~~€324 million at September 30, ~~2021,~~2022 and €311 million at December 31, ~~2020~~2021 and ~~€311 million at~~ September 30, ~~2020.~~2021. The maximum maturity dates ~~were~~are in 2026 for September 30, 2022, 2027 for December 31, 2021 and 2027 for September 30, ~~2021 and December 31, 2020 and in 2020 for September 30, 2020.~~2021.

~~(d)~~(f) The notional amounts of the foreign exchange derivative contracts were ~~$291~~$448 million, ~~$247~~$202 million and ~~$247~~$291 million at September 30, ~~2021,~~2022, December 31, ~~2020~~2021 and September 30, ~~2020,~~2021, respectively. The maximum maturity dates ~~were~~are in 2023 for September 30, 2022 and in 2022 for December 31, 2021 ~~for all three periods.~~and September 30, 2021.

Gain (Loss) Recognized in OCI (Effective Portion)

Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1)

Three months ended September 30,

Three months ended September 30,

Derivatives designated as hedging instruments:

2021

2020

2021

2020

Cash Flow Hedges










Cash flow hedges of foreign exchange risk (a)

$
24

$
(61)

$
24

$
(80)

Cash flow hedges of interest rate risk (b)

Net Investment Hedges

Net Investment Hedges (b)

13

(26)

1

1

$
37

$
(87)

$
25

$
(79)

Gain (Loss) Recognized in OCI (Effective Portion)

Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1)

Nine months ended September 30,

Nine months ended September 30,

Derivatives designated as hedging instruments:

2021

2020

2021

2020

Cash Flow Hedges










Cash flow hedges of foreign exchange risk (a)

$
56

$
(51)

$
57

$
(71)

Cash flow hedges of interest rate risk (b)

(1)

Net Investment Hedges

Net Investment Hedges (b)

27

(29)

2

4

$
83

$
(80)

$
59

$
(68)

Amount of Gain (Loss) Recognized in Other income (expense), net

Amount of Gain (Loss) Recognized in Other income (expense), net

Three months ended September 30,

Nine months ended September 30,

Derivatives not designated as hedges:

2021

2020

2021

2020

Foreign exchange derivative contracts

$
2

$
3


$
9

$
13

(1) Gains and losses reclassified from accumulated OCI and recognized in income are recorded to (a) other income (expense), net or (b) interest expense, net.


	Gain (Loss) Recognized in OCI (Effective Portion)				Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1)
	Three months ended September 30,				Three months ended September 30,
Derivatives designated as hedging instruments:	2022		2021		2022		2021
Cash Flow Hedges
Commodity forward contracts and collars(a)	$	7	$	—	$	4	$	—
Cash flow hedges of foreign exchange risk (b)				24				24
Net Investment Hedges
Net Investment Hedges (c)		23		14		2		1
	$	30	$	38	$	6	$	25


	Gain (Loss) Recognized in OCI (Effective Portion)				Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1)
	Nine months ended September 30,				Nine months ended September 30,
Derivatives designated as hedging instruments:	2022		2021		2022		2021
Cash Flow Hedges
Commodity forward contracts and collars (a)	$	4	$	—	$	6	$	—
Cash flow hedges of foreign exchange risk (b)		13		56		14		57
Net Investment Hedges
Net Investment Hedges (c)		55		29		5		2
	$	72	$	85	$	25	$	59


	Amount of Gain (Loss) Recognized in Other income (expense), net					Amount of Gain (Loss) Recognized in Other income (expense), net
	Three months ended September 30,					Nine months ended September 30,
Derivatives not designated as hedges:	2022		2021			2022		2021
Foreign exchange derivative contracts	$	(16)	$	2	$	(32)	$	9

(1) Gains and losses reclassified from Accumulated OCI and recognized in income are recorded to (a) cost of goods sold, (b) other income (expense), net or (c) interest expense, net.

6. Restructuring Accruals

Selected information related to the restructuring accruals for the three months ended September 30, ~~2021~~2022 and ~~2020~~2021 is as follows:


	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at July 1, 2022	$	17	$		$	15	$	32
Charges		3		6		1		10
Write-down of assets to net realizable value				(6)				(6)
Net cash paid, principally severance and related benefits		(2)				(4)		(6)
Other, including foreign exchange translation		(1)						(1)
Balance at September 30, 2022	$	17	$	—	$	12	$	29

Employee

Asset

Other

Total

Costs

Impairment

Exit Costs

Restructuring
Balance at July 1, 2021

$
32

$
—

$
12

$
44
Charges

1

11

12
Write-down of assets to net realizable value

(1)

(1)
Net cash paid, principally severance and related benefits

(4)

(1)

(5)
Other, including foreign exchange translation

—
Balance at September 30, 2021

$
28

$
—

$
22

$
50

Employee

Asset

Other

Total

Costs

Impairment

Exit Costs

Restructuring
Balance at July 1, 2020

$
30

$
—

$
17

$
47
Charges

2

3

5
Write-down of assets to net realizable value

(3)

(3)
Net cash paid, principally severance and related benefits

(10)

(10)
Other, including foreign exchange translation

(4)

(4)
Balance at September 30, 2020

$
22

$
—

$
13

$
35


	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at July 1, 2021	$	32	$	—	$	12	$	44
Charges				1		11		12
Write-down of assets to net realizable value				(1)				(1)
Net cash paid, principally severance and related benefits		(4)				(1)		(5)
Balance at September 30, 2021	$	28	$	—	$	22	$	50

Selected information related to the restructuring accruals for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 is as follows:


	Employee		Asset		Other		Total		Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring		Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2021	$	38	$	—	$	7	$	45
Balance at January 1, 2022									$	20	$	—	$	11	$	31
Charges		2		1		17		20		6		7		8		21
Write-down of assets to net realizable value				(1)				(1)				(7)				(7)
Net cash paid, principally severance and related benefits		(11)				(3)		(14)		(7)				(7)		(14)
Other, including foreign exchange translation		(1)				1		—		(2)						(2)
Balance at September 30, 2021	$	28	$	—	$	22	$	50
Balance at September 30, 2022									$	17	$	—	$	12	$	29


	Employee		Asset		Other		Total		Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring		Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2020	$	32	$		$	13	$	45
Balance at January 1, 2021									$	38	$	—	$	7	$	45
Charges		23		43		6		72		2		1		17		20
Write-down of assets to net realizable value				(43)				(43)				(1)				(1)
Net cash paid, principally severance and related benefits		(31)				(1)		(32)		(11)				(3)		(14)
Other, including foreign exchange translation		(2)				(5)		(7)		(1)				1		—
Balance at September 30, 2020	$	22	$	—	$	13	$	35
Balance at September 30, 2021									$	28	$	—	$	22	$	50

When a decision is made to take restructuring actions, the Company manages and accounts for them programmatically apart from the ~~on-going~~ongoing operations of the business. Information related to major programs is presented separately, while minor initiatives are presented on a combined basis. As of September 30, ~~2021~~2022 and ~~2020,~~2021, no major restructuring programs were in effect.

For the three and nine months ended September 30, ~~2021,~~2022, the Company implemented several discrete restructuring initiatives and recorded restructuring and other charges of ~~$12~~$10 million and ~~$20~~$21 million, respectively. These charges

consisted of employee costs, such as severance and benefit-related costs, asset impairments, and other exit costs (including related consulting costs attributed to restructuring of managed services activities) at a number of the Company’s ~~businesses~~locations in the Americas and Europe. These restructuring charges, which were recorded to Other income (expense), net on the Condensed Consolidated Results of Operations, were discrete actions and are expected to approximate the total cumulative costs for those actions as no ~~material~~significant additional costs are expected to be incurred. ~~For the three and nine months ended September 30, 2021, these charges were recorded to Other income (expense), net on the Condensed Consolidated Results of Operations.~~ The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

For the three and nine months ended September 30, ~~2020,~~2021, the Company implemented several discrete restructuring initiatives and recorded restructuring ~~asset impairment~~ and other charges of $5$12 million and ~~$72~~$20 million, respectively. These charges consisted of employee costs, such as severance and benefit-related costs ~~write-down of assets~~ and other exit costs ~~primarily~~(including related consulting costs attributed to restructuring of managed services activities) at a ~~plant closure~~number of the Company’s locations in the Americas and ~~to a reduction-in-force program as part of its selling, general and administrative expense reduction initiative to help simplify the organization and improve decision making and execution.~~Europe. These restructuring charges, which were recorded to Other income (expense), net on the Condensed Consolidated Results of Operations, were discrete actions and are expected to approximate the total cumulative costs for those actions as no ~~material~~significant additional costs are expected to be incurred. ~~For the three and nine months ended September 30, 2020, these charges were recorded to Other income (expense), net on the Condensed Consolidated Results of Operations.~~ The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

The Company’s decisions to curtail selected production capacity have resulted in write-downs of certain long-lived assets to the extent their carrying value exceeded fair value or fair value less cost to sell. The Company classified the assumptions used to determine the fair value of the impaired assets in the period that the measurement was taken as Level 3 (third-party appraisal) in the fair value hierarchy as set forth in the general accounting principles for fair value measurements. For the asset impairments recorded through September 30, ~~2021,~~2022, the remaining carrying value of the impaired assets was approximately $1$5 million.

7. Pension Benefit Plans

The components of the net periodic pension cost for the three months ended September 30, ~~2021~~2022 and ~~2020~~2021 are as follows:


									U.S.				Non-U.S.
	U.S.				Non-U.S.				Three months ended September 30,				Three months ended September 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Service cost	$	3	$	3	$	3	$	3	$	3	$	3	$	2	$	3
Interest cost		10		12		5		6		9		10		6		5
Expected asset return		(21)		(19)		(11)		(12)		(15)		(21)		(8)		(11)
Amortization of actuarial loss		16		14		3		3		10		16		2		3
Net periodic pension cost	$	8	$	10	$	—	$	—	$	7	$	8	$	2	$	—

The components of the net periodic pension cost for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 are as follows:


	U.S.				Non-U.S.
	Nine months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Service cost	$	9	$	9	$	7	$	9
Interest cost		26		30		16		15
Expected asset return		(45)		(63)		(25)		(34)
Amortization of actuarial loss		30		48		7		10
Net periodic pension cost	$	20	$	24	$	5	$	—

U.S.

Non-U.S.


2021

2020

2021

2020

Service cost

$
9

$
9

$
9

$
10

Interest cost

30

37

15

19

Expected asset return

(63)

(60)

(34)

(36)

Amortization of actuarial loss

48

42

10

9

Net periodic pension cost

$
24

$
28

$
—

$
2

The components of pension expense, other than the service cost component, are included in Other income (expense), net on the Condensed Consolidated Results of Operations.

The Company settled a portion of its pension obligations, which resulted in pension settlement charges of $5 million in both the three and nine months ended September 2022. The Company settled a portion of its pension obligations, which resulted in a reduction of its pension liability of approximately $46 million and pension settlement charges of $5 million in both the three and nine months ended September 30, 2021. ~~For the three and nine months ended September 30, 2020, the Company recorded pension settlement charges totaling~~ ~~$0 and $8 million, respectively.~~

During the third quarter of 2020, the Company remeasured a portion of its post-retirement benefit obligations in the U.S. due to plan changes, which resulted in a reduction in post-retirement benefit obligations of approximately $32 million.

8. Income Taxes

The Company calculates its interim tax provision using the estimated annual effective tax rate (“EAETR”) methodology in accordance with ASC 740-270. The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pretax ordinary income or loss in each tax jurisdiction in which the Company operates. The tax effects of discrete items are recognized in the tax provision in the quarter they occur, in accordance with U.S. GAAP. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter can materially impact the reported effective tax rate. The Company’s annual effective tax rate may be affected by the mix of earnings in the U.S. and foreign jurisdictions, and factors such as changes in tax laws, tax rates or regulations, changes in business, changing interpretation of existing tax laws or regulations, the finalization of tax audits and reviews, as well as other factors. As such, there can be significant volatility in interim tax provisions. The annual effective tax rate differs from the statutory U.S. Federal tax rate of 21% primarily because of varying non-U.S. tax rates and the impact of the U.S. valuation allowance.

The Company is currently under income tax examination in various tax jurisdictions in which it operates, including Brazil, Canada, Colombia, France, Indonesia, Italy, Mexico and Peru. The years under examination range from 2004 through ~~2018.~~2021. The Company has received tax assessments in excess of established reserves. The Company is contesting these tax assessments, and will continue to do so, including pursuing all available remedies, such as appeals and litigation, if necessary. The Company believes that adequate provisions for all income tax uncertainties have been made. However, if tax assessments are settled against the Company at amounts in excess of established reserves, it could have a material impact on the Company’s consolidated results of operations, financial position or cash ~~flows.~~flows.In the second quarter of 2022, the Company settled a tax audit in Mexico equal to reserves previously established of $38 million.

9. Debt

The following table summarizes the long-term debt of the ~~Company:~~Company at September 30, 2022, December 31, 2021, and September 30, 2021:


	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
	2021		2020		2020		2022		2021		2021
Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans							$	—	$	—	$	—
Term Loans:
Term Loan A								1,444
Previous Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans	$	—	$	—	$	195
Term Loans:
Term Loan A		1,068		1,067		1,157				923		1,068
Other secured debt				99		109
Senior Notes:
4.00%, due 2023		308		307		307						308
5.875%, due 2023		694		692		691		249		695		694
3.125%, due 2024 (€725 million)		854		914		873		674		826		854
6.375%, due 2025		297		296		296		298		297		297
5.375%, due 2025		298		298		298		299		298		298
2.875%, due 2025 (€500 million)		574		607		579		487		561		574
6.625%, due 2027		693		692		691		606		693		693
4.750%, due 2030								396		395
Finance leases		99		108		94		103		98		99
Other		5		7		6		4		5		5
Total long-term debt		4,890		5,087		5,296		4,560		4,791		4,890
Less amounts due within one year		37		142		133		280		38		37
Long-term debt	$	4,853	$	4,945	$	5,163	$	4,280	$	4,753	$	4,853

The Company presents debt issuance costs in the ~~condensed consolidated balance sheet~~Condensed Consolidated Balance Sheet as a deduction of the carrying amount of the related debt liability.

On ~~June~~March 25, ~~2019,~~2022, certain of the Company’s subsidiaries entered into a ~~Senior Secured Credit Facility Agreement (as amended by that certain Amendment No. 1 to the Third Amended and Restated~~ Credit Agreement and Syndicated Facility Agreement dated as of December 13, 2019, and as further amended by that certain Amendment No. 2 to the Third Amended and Restated Credit Agreement and Syndicated Facility Agreement dated as of December 19, 2019, ~~the “Agreement”~~(the “Original Agreement”), which ~~amended and restated~~refinanced in full the previous credit ~~agreement (the “Previous Agreement”).~~agreement. The ~~proceeds from the~~Original Agreement ~~were used to repay all outstanding amounts under the Previous Agreement.~~

~~The Agreement provides~~provided for up to ~~$3.0~~$2.8 billion of borrowings pursuant to term loans, ~~and~~ revolving credit ~~facilities.~~ facilities and a delayed draw term loan facility. The delayed draw term loan facility allowed for a one-time borrowing of up to $600 million, the proceeds of which were used, in addition to other consideration paid by the Company and/or its subsidiaries, to fund an asbestos settlement trust (the “Paddock Trust”) established in connection with the confirmed plan of reorganization of Paddock Enterprises, LLC (“Paddock”) proposed by Paddock, O-I Glass and certain other parties in Paddock’s Chapter 11 case (see Note 10 for more information). On July 18, 2022, the Company drew down the $600 million delayed draw term loan to fund, together with other consideration, the Paddock Trust.

On August 30, 2022, certain of the Company’s subsidiaries entered into an Amendment No. 1 to its Credit Agreement and Syndicated Facility Agreement (the “Credit Agreement Amendment”), which amends the Original Agreement (as amended by the Credit Agreement Amendment, the “Credit Agreement”). The Credit Agreement Amendment provides for up to $500 million of additional borrowings in the form of term loans. The proceeds of such term loans were used, together with cash, to retire the $600 million delayed draw term loan. The term loans mature, and the revolving credit facilities terminate, in ~~June 2024.~~ March 2027. The term loans borrowed under the Credit Agreement Amendment are secured by certain collateral of the Company and certain of its subsidiaries. In addition, the Credit Agreement Amendment makes modifications to certain loan documents, in order to give the Company increased flexibility to incur secured debt in the future.

The Company recorded approximately $1 million of additional interest charges for third-party fees and the write-off of unamortized fees related to the Credit Agreement Amendment in the third quarter of 2022. The Company recorded approximately $2 million of additional interest charges for third-party fees incurred in connection with the execution of the Original Agreement and the write-off of unamortized fees related to the previous credit agreement in the first quarter of 2022.

At September 30, ~~2021,~~2022, the Credit Agreement includes a ~~$300~~$300 million revolving credit facility, a ~~$1.2 billion~~$950 million multicurrency revolving credit facility and ~~a $1.5 billion~~$1,450 million in term loan A ~~facility~~facilities ($~~1,068~~1,444 million outstanding balance at September 30, ~~2021,~~2022, net of debt issuance costs). At September 30, ~~2021,~~2022, the Company had unused credit of $~~1,489 million~~1.24 billion available under the Credit Agreement. The weighted average interest rate on borrowings outstanding under the Credit Agreement at September 30, ~~2021~~2022 was ~~1.58%~~4.81%.

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

The Credit Agreement also contains 1one financial maintenance covenant, a ~~Total~~Secured Leverage Ratio ~~(the “Leverage Ratio”)~~(as defined in the Credit Agreement), that requires the Company not to exceed a ratio of ~~5.0x~~2.50x calculated by dividing consolidated ~~total debt, less cash~~Net Indebtedness that is then secured by Liens on property or assets of the Company and ~~cash equivalents,~~certain of its subsidiaries by Consolidated EBITDA, ~~with such Leverage Ratio decreasing to (a) 4.75x for the quarter ending September 30, 2021~~as each term is defined and ~~(b) 4.50x for the quarter ending December 31, 2021 and thereafter,~~ as ~~defined and~~ described in the Credit Agreement. The ~~maximum Leverage Ratio is subject to an increase of~~ ~~0.5x for (i) any fiscal quarter during which certain qualifying acquisitions (as specified in the Agreement) are consummated and (ii) the following three fiscal~~

~~quarters, provided that the Leverage Ratio shall not exceed 5.0x. The~~Secured Leverage Ratio could restrict the ability of the Company to undertake additional financing or acquisitions to the extent that such financing or acquisitions would cause the Secured Leverage Ratio to exceed the specified maximum.

Failure to comply with these covenants and ~~other customary~~ restrictions could result in an event of default under the Credit Agreement. In such an event, the Company could not request additional borrowings under the revolving facilities, and all amounts outstanding under the Credit Agreement, together with accrued interest, could then be declared immediately due and payable. Upon the occurrence and for the duration of a payment event of default, an additional default interest rate equal to 2.0% per annum will apply to all overdue obligations under the Credit Agreement. If an event of default occurs under the Credit Agreement and the lenders cause all of the outstanding debt obligations under the Credit Agreement to become due and payable, this would result in a default under the indentures governing the Company’s outstanding debt securities and could lead to an acceleration of obligations related to these debt securities. As of September 30, ~~2021,~~2022, the Company was in compliance with all covenants and restrictions in the Credit Agreement. In addition, the Company believes that it will remain in compliance and that its ability to borrow additional funds under the Credit Agreement will not be adversely affected by the covenants and restrictions.

The Total Leverage Ratio ~~also~~(as defined in the Credit Agreement) determines pricing under the Credit Agreement. The interest rate on borrowings under theCredit Agreement is, at the Company’s option, the Base Rate, Term SOFR or, for non-U.S. dollar borrowings only, the Eurocurrency Rate (each as defined in the ~~Agreement,~~Credit Agreement), plus an applicable margin. The applicable margin is linked to the Total Leverage Ratio. The margins range from 1.00% to ~~1.50%~~2.25% for Term SOFR loans and Eurocurrency ~~Loans~~Rate loans and from 0.00% to ~~0.50%~~1.25% for Base Rate ~~Loans.~~loans. In addition, a commitment fee is payable on the unused revolving credit facility commitments ranging from 0.20% to ~~0.30%~~0.35% per annum linked to the Total Leverage Ratio.

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

remained outstanding. The redemption was funded with cash on hand. The Company recorded approximately $7 million of additional interest charges for note repurchase premiums and the write-off of unamortized finance fees related to this redemption.

On February 10, 2022, the Company announced the commencement, by an indirect wholly owned subsidiary of the Company, of a tender offer to purchase for cash up to $250.0 million aggregate purchase price of its outstanding (i) 5.875% Senior Notes due 2023, (ii) 5.375% Senior Notes due 2025, (iii) 6.375% Senior Notes due 2025 and (iv) 6.625% Senior Notes due 2027. On February 28, 2022, the Company repurchased $150.0 million aggregate principal amount of the outstanding 5.875% Senior Notes due 2023 and $88.2 million aggregate principal amount of the outstanding 6.625% Senior Notes due 2027. Following the repurchase, $550.0 million and $611.8 million aggregate principal amounts of the 5.875% Senior Notes due 2023 and 6.625% Senior Notes due 2027, respectively, remained outstanding. The repurchases were funded with cash on hand. The Company recorded approximately $16 million of additional interest charges for note repurchase premiums and the write-off of unamortized finance fees related to the senior note repurchases conducted in the first quarter of 2022.

In November 2021, the Company issued ~~$700~~$400 million aggregate principal amount of senior notes. The senior notes bear interest at a rate of ~~6.625~~%4.75% per annum and mature on ~~May 13, 2027.~~February 15, 2030. The senior notes were issued via a private placement and are guaranteed by certain of the Company’s domestic subsidiaries. The net proceeds, after deducting debt issuance costs, totaled approximately ~~$690~~$395 million and, together with cash on hand, were used to redeem the ~~remaining $130~~$310 million aggregate principal amount of the Company’s outstanding ~~4.875% senior notes~~4.00% Senior Notes due ~~2021, approximately $419 million aggregate principal amount of the Company’s outstanding 5.00% senior notes due 2022~~2023 and approximately ~~$105~~$128 million of ~~other secured borrowings.~~term loan A borrowings under the Previous Agreement. The Company recorded approximately ~~$38~~$13 million of additional interest charges for note repurchase premiums and write-off of unamortized finance fees related to these redemptions.

In August 2020, the Company redeemed the remaining $81 million aggregate principal amount of the Company’s outstanding 5.00% senior notes due 2022. The Company recorded approximately $6 million of additional interest charges for note repurchase premiums and write-off of unamortized finance fees related to this redemption.

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

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

The carrying amounts reported for certain long-term debt obligations subject to frequently redetermined interest rates approximate fair value. Fair values for the Company’s significant fixed rate debt obligations are based on

published market quotations, and are classified as Level 1 in the fair value hierarchy. Fair values at September 30, ~~2021~~2022 of the Company’s significant fixed rate debt obligations are as follows:


	Principal		Indicated Market				Principal		Indicated Market
	Amount		Price Per $		Fair Value		Amount		Price		Fair Value
Senior Notes:
5.875%, due 2023	$	700	$	106.00	$	742	$	250	$	99.61	$	249
4.00%, due 2023		310		102.57		318
3.125%, due 2024 (€725 million)		841		103.53		871		711		93.17		662
6.375%, due 2025		300		110.86		333		300		94.40		283
5.375%, due 2025		300		107.11		321		300		92.89		279
2.875%, due 2025 (€500 million)		580		101.56		589		490		90.16		442
6.625%, due 2027		700		107.40		752		612		90.45		554
4.750% due 2030								400		79.94		320

10.10. Contingencies

Asbestos

From 1948 to 1958, one of the ~~Company's~~Company’s former business units commercially produced and sold approximately $40 million of a high-temperature, calcium-silicate based pipe and block insulation material containing asbestos. The Company sold its insulation business unit in April 1958. The Company historically received claims from individuals alleging bodily injury and death as a result of exposure to asbestos from this product (“Asbestos Claims”). Some Asbestos Claims were brought as personal injury lawsuits that typically allege various theories of liability, including negligence, gross negligence and strict liability and seek compensatory and, in some cases, punitive damages.

Predominantly, however, Asbestos Claims were historically presented to the Company under administrative claims-handling agreements, which the Company had in place with many plaintiffs’ counsel throughout the country (“Administrative Claims”). Administrative Claims required evaluation and negotiation regarding whether particular claimants qualify under the criteria established by the related claims-handling agreements. The criteria for Administrative Claims included verification of a compensable illness and a reasonable probability of exposure to a product manufactured by the Company's former business unit during its manufacturing period ending in 1958. Plaintiffs’ counsel presented, and the Company negotiated, Administrative Claims under these various agreements in differing quantities, at different times, and under a variety of conditions.

On December 26 and 27, 2019, the Company implemented the Corporate Modernization, whereby O-I Glass became the new parent entity with Owens-Illinois Group, Inc. (“O-I Group”) and Paddock ~~Enterprises LLC (“Paddock”)~~ as direct, wholly owned subsidiaries, with Paddock as the successor-by-merger to ~~O-I.~~O-I (the “Corporate Modernization”). The Company’s legacy asbestos-related liabilities remained within Paddock, with the Company’s glass-making operations remaining under O-I Group. As part of the Corporate Modernization transactions, O-I Glass entered into a support agreement with Paddock that ~~requires~~required O-I Glass to provide funding to Paddock for all permitted uses, subject to the terms of the support agreement. The key objectives of the Paddock support agreement ~~are~~were to ensure that Paddock ~~has~~retained the ability to fund the costs and expenses of managing the Chapter 11 process, and ultimately settle Asbestos Claims through the establishment of a trust as described below and fund certain other liabilities.

On January 6, 2020 (the “Petition Date”), Paddock voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to equitably and finally resolve all of its current and future ~~asbestos-related claims.~~Asbestos Claims. O-I Glass and O-I Group were not included in the Chapter 11 filing. As a result of the initiation of the Chapter 11 proceeding, Paddock continues to operate in the ordinary course and with court protection from Asbestos Claims by operation of the automatic stay in Paddock’s Chapter 11 filing, which stays ongoing litigation and submission of claims against Paddock outside the Bankruptcy Court as of the Petition Date and defers the payment of Paddock’s outstanding obligations on account of settled or otherwise determined lawsuits and claims. The bankruptcy process is expected to provide a centralized forum to resolve presently pending and anticipated future lawsuits and claims associated with asbestos. Paddock’s ultimate goal in its Chapter 11 case is to confirm a plan of reorganization under section 524(g) of the Bankruptcy Code and utilize this specialized provision to

~~establish a trust that will address all current and future asbestos-related claims~~ and that, in exchange for funding of the trust by the Company and/or its subsidiaries, will provide permanent injunctive relief, protecting the Company, each of its current and former affiliates and certain other related parties (the “Company Protected Parties”) from any Asbestos Claims based on products manufactured, sold, used, and/or distributed by Owens-Illinois, Inc.

Following the Petition Date, the activities of Paddock became subject to review and oversight by the ~~bankruptcy court.~~Bankruptcy Court. As a result, the Company no longer ~~has~~had exclusive control over Paddock’s ~~activities during the Chapter 11 proceedings.~~activities. Therefore, Paddock was deconsolidated as of the Petition Date, and its assets and liabilities, which primarily included ~~$47~~$47 million of cash, the legacy asbestos-related liabilities, as well as certain other assets and liabilities as of the Petition Date, were derecognized from the Company’s consolidated financial statements on a prospective basis. Simultaneously, the Company recognized a liability related to the Paddock support agreement ~~as described above,~~ of $471 million as required under applicable accounting standards. ~~The deconsolidation and~~

On April 26, 2021, the Company announced that (i) Paddock, support agreement resulted in a loss of approximately $14 million, which was reflected as a charge in the Company’s first quarter 2020 operating results. Additionally, the deconsolidation resulted in an investing outflow of $47 million in the Company’s first quarter 2020 consolidated cash flows.

On February 23, 2021, Paddock and O-I Glass commenced a court-approved mediation process regarding the terms of a potential consensual plan of reorganization pursuant to section 524(g) of the Bankruptcy Code with(ii) the Official Committee of Asbestos Personal Injury Claimants (the “ACC” ~~or “Asbestos Claimants’ Committee”~~), appointed in the Paddock Chapter 11 case as the representative of current Paddock asbestos claimants, and (iii) the Legal Representative of Future Asbestos Claimants (the “FCR” ~~or “Future Claimants’ Representative”~~), appointed in the Paddock Chapter 11 case as the representative of future Paddock asbestos ~~claimants. On April 26, 2021, the Company announced that Paddock, the ACC and the FCR~~claimants, had reached an agreement in principle, supported by O-I Glass, by accepting a proposal from ~~the~~Paddock’s court-appointed mediators setting forth total consideration to fund a trust created under section 524(g) of the Bankruptcy Code upon the effective date of a ~~consensual plan of reorganization for Paddock.~~

This agreement in principle, which is subject to definitive documentation and satisfaction of certain conditions, will resolve the potential liability of Paddock and the Company Protected Parties for pending and future personal injury claims related to exposure to asbestos-containing products that were allegedly manufactured, distributed, used and/or sold by Owens-Illinois, Inc. Under the Chapter 11 plan that will implement the agreement in principle, an asbestos settlement trust (the “Paddock Trust”) created pursuant to the provisions of section 524(g) of the U.S. Bankruptcy Code will be established and, on the effective date of the Chapter 11 plan, will be funded with $610 million in total consideration (“Settlement Consideration”). In exchange for the Settlement Consideration, each of the Company Protected Parties is expected to receive the benefit of a release from Paddock, and Paddock and the Company Protected Parties will receive the benefit of an injunction under Section 524(g) of the Bankruptcy Code channeling Asbestos Claims to the Paddock Trust and permanently enjoining the assertion of Asbestos Claims against Paddock and the Company Protected Parties.

~~The agreement in principle is subject to, among other things, the negotiation and filing of a Chapter 11~~ plan of reorganization for Paddock ~~incorporating the terms of such agreement~~ (the “Plan”), acceptance of the Plan by at least 75% of Paddock’s current asbestos claimants voting on such Plan, and confirmation of the Plan by the Bankruptcy Court and approval of the injunction in favor of Paddock and the Company Protected Parties by the United States District Court for the District of Delaware (“District Court”“Effective Date”). ~~On the effective date of the Plan, the Settlement Consideration will be provided and Asbestos Claims against Paddock and the Company Protected Parties will be permanently enjoined.~~

In connection with the agreement in principle, the Company ~~has~~ recorded a charge of $154 million related to its potential liability under the Paddock support agreement as a recognizable subsequent event in the Company’s ~~condensed~~ consolidated results of operations for the quarter ended March 31, 2021, primarily related to an increase to Paddock’s asbestos reserve estimate in consideration for the channeling injunction to be included in the Plan (as defined below) protecting the Company, each of its current and former affiliates and certain other related parties (the “Company Protected ~~Parties~~Parties”) from Asbestos Claims, as well as certain other adjustments to Paddock’s assets and liabilities, including estimated professional fees and expenses to be incurred in confirming and implementing the Plan. This charge was recorded to Other income (expense), net on the ~~Condensed~~ Consolidated Results of Operations.

On January 12, 2022, Paddock, O-I Glass, the FCR and the ACC jointly filed the Plan of Reorganization for Paddock Enterprises, LLC Under Chapter 11 of the Bankruptcy Code, dated January 12, 2022 (including any supplements and exhibits thereto, as amended, modified or supplemented from time to time in accordance with the terms thereof, the “Plan”). Amended versions of the Plan were subsequently filed on February 14, 2022, April 1, 2022, and May 24, 2022. The Plan incorporates and implements the agreement in principle described herein. On May 26, 2022, the Bankruptcy Court entered an order confirming the Plan and recommending that the District Court affirm such

~~Several risks and uncertainties remain related to Paddock’s Chapter 11 case that could have a material adverse effect on~~confirmation. On June 22, 2022, the ~~Company’s business, consolidated financial condition, results of operations and cash flows, including~~District Court entered an order affirming the ~~total costs~~confirmation order previously issued by the Bankruptcy Court. On July 8, 2022, the Effective Date of the ~~Chapter 11 proceeding,~~Plan occurred.

Under the confirmed and effective Plan, the Paddock Trust was created pursuant to the provisions of section 524(g) of the Bankruptcy Code and was funded with $610 million in total consideration (“Settlement Consideration”). In exchange for the Settlement Consideration, each of the Company Protected Parties received the benefit of a release from Paddock, and Paddock and the ~~length~~Company Protected Parties received the benefit of ~~time necessary to confirm a Plan, and~~an injunction under section 524(g) of the possibility that Paddock will be unsuccessful in confirming such Plan or that such Plan does not ultimately become effective. The Paddock support agreement liability of $625 million recorded on the Company’s September 30, 2021 Condensed Consolidated Balance Sheet as required under applicable accounting standards is the Company’s best estimate based on the facts and circumstances that exist at the Form 10-Q filing date. These risk factors are discussed further in Part II, Item 1A–“Risk Factors.”

~~Prior~~Bankruptcy Code channeling Asbestos Claims to the ~~Petition Date,~~Paddock Trust and permanently enjoining the ~~Company knew of approximately 850~~ asbestos lawsuits pending. This figure does not include an estimate of potential Administrative Claims that could have been presented under a claims-handling agreement due to the uncertainties around presentation timing, quantities, or qualification rates. The Company historically considered Administrative Claims to be filed and disposed of when they were accepted for payment.

The lack of uniform rules in lawsuit pleading practice, technical pleading requirements in some jurisdictions, local rules, and other factors caused considerable variation in the specific amounts of monetary damages asserted in lawsuits brought prior to the Petition Date. In the Company’s experience, the monetary relief alleged in a lawsuit bore little relationship to an Asbestos Claim’s merits or its disposition value. Rather, several variables, including, but not limited to, the type and severity of the asbestos disease, medical history, and exposure to other disease-causing agents; the product identification evidence against the Company and other co-defendants; the defenses available to the Company and other co-defendants; the specific jurisdiction in which the claim was made; the applicable law; and the law firm representing the claimant, affected the value.

The Company was also a defendant in other Asbestos Claims involving maritime workers, medical monitoring, co-defendants’ third-party actions, and property damage allegations. Based upon its experience, the Company assessed that these categoriesassertion of Asbestos Claims ~~would not involve any material liability. Therefore, they were not included in the description of pending or disposed matters.~~

~~From receipt of its first Asbestos Claim to the Petition Date,~~against Paddock and the Company inProtected Parties. In addition, the ~~aggregate disposed~~Paddock Trust, Paddock and O-I Glass (on behalf of ~~approximately 401,200~~itself and the Company Protected Parties) entered into an agreement through which the Paddock Trust agreed to indemnify the Company Protected Parties against any attempts to evade the channeling injunction or to otherwise bring Asbestos Claims ~~at an average indemnity payment of approximately $10,200 per claim. The Company’s asbestos indemnity payments varied on~~against any Company Protected Party after the Effective Date. As a ~~per-claim basis. Asbestos-related cash payments~~result, the Plan provides for ~~2019 were $151 million~~a full and ~~the Company’s cash payments per claim disposed (inclusive of legal costs) were approximately $129,000 for the year ended December 31, 2019.~~

~~Prior to the Petition Date, the Company’s objective was historically to achieve, where possible,~~final resolution of Asbestos Claims, ~~pursuant to claims-handling agreements. Failure~~a full and final resolution of ~~claimants to meet certain medical and product exposure criteria~~(and a release in ~~claims-handling agreements generally reduced the number~~favor of ~~claims that would otherwise have been received by~~ the Company and its affiliates for) all claims arising out of the Corporate Modernization and provides that upon the Effective Date (which occurred on July 8, 2022), all obligations owed under the support agreement would terminate. Consistent with the Plan, the support agreement was deemed rejected as of the Effective Date, and all obligations between the parties to the support agreement were terminated.

Pursuant to the Plan, Paddock issued a promissory note (the “Trust Note”) in the ~~tort system. In addition, changes~~principal amount of $8.5 million to the Paddock Trust on the Effective Date and the Company issued a pledge of the equity interests in ~~jurisdictional dynamics, legislative acts, asbestos docket management~~reorganized Paddock to the Paddock Trust to secure the Trust Note. On July 18, 2022, the Company funded the Paddock Trust with $601.5 million, comprising $600 million borrowed under the Credit Agreement and ~~procedures,~~$1.5 million from cash. On July 20, 2022, Paddock redeemed the ~~substantive law,~~Trust Note by paying $8.5 million in cash to the ~~co-defendant pool,~~Paddock Trust, and ~~other external factors affected lawsuit volume, claim volume, qualification rates, claim values,~~the pledge of equity interests in reorganized Paddock was cancelled.

As a result of the funding of the Paddock Trust and ~~related matters. Collectively, these variables generally had~~ the ~~effect~~cancellation of ~~increasing~~the pledge of equity interests in reorganizedPaddock, on July 20, 2022, the Company regained exclusive control over reorganized Paddock’s activities. Therefore, at that date in the third quarter of 2022, reorganized Paddock was reconsolidated, and its remaining assets totaling $18 million (including $12 million of cash and cash equivalents) and liabilities totaling $30 million were recognized in the Company’s ~~per-claim average indemnity payment over time.~~

~~Beginning with~~condensed consolidated financial statements. The funding of the ~~initial liability~~Paddock Trust and certain related expenses resulted in an operating cash outflow of ~~$975~~$618 million established in 1993, the Company has accrued a total of approximately $5.0 billion through just prior to the Petition Date, before insurance recoveries, for its asbestos-related liability. The Company’s estimates of its liability were significantly affected by, among other factors, the volatility of asbestos-related litigation in the ~~United States,~~Company’s condensed consolidated cash flows during the significant number of co-defendants that filed for bankruptcy, changes in mortality rates, the inherent uncertainty of future disease incidence and claiming patterns against the Company, the significant expansion of the types of defendants sued in this litigation, and changes in the extent to which such defendants participated in the resolution of cases in which the Company was also a defendant.

Prior to the Petition Date, the Company continually monitored trends that could affect its ultimate liability and analyzed the developments and variables likely to affect the resolution of Asbestos Claims. The material components of the Company’s total accrued liability were determined by the Company in connection with its annual comprehensive legal review and consisted of the following estimates, to the extent it was probable that such liabilities had been incurred

and could be reasonably estimated: (i) the liability for Asbestos Claims already asserted against the Company; (ii) the liability for Asbestos Claims not yet asserted against the Company; and (iii) the legal defense costs estimated to be incurred in connection with the Asbestos Claims already asserted and those Asbestos Claims the Company believed would be asserted.

Through December 31, 2019, the Company historically conducted an annual comprehensive legal review of its asbestos-related liabilities and costs in connection with finalizing and reporting its annual consolidated results of operations, unless significant changes in trends or new developments warranted an earlier review. As part of its annual comprehensive legal review, the Company provided historical Asbestos Claims data to a third party with expertise in determining the impact of disease incidence and mortality on future filing trends to develop information to assist the Company in estimating the total number of future Asbestos Claims likely to be asserted against the Company. The Company used this estimate, along with an estimation of disposition costs and related legal costs, as inputs to develop its best estimate of its total probable liability. If the results of the annual comprehensive legal review indicated that the existing amount of the accrued liability was lower (higher) than its reasonably estimable asbestos-related costs, then the Company recorded an appropriate charge (credit) to the Company’s results of operations to increase (decrease) the accrued liability.

~~The significant assumptions underlying the material components of the Company’s accrual historically were:~~

~~settlements would continue to be limited almost exclusively to claimants who were exposed to the Company’s asbestos containing insulation prior to its exit from that business in 1958;~~

~~Asbestos Claims would continue to be resolved primarily under the Company’s administrative claims-handling agreements or on terms comparable to those set forth in those agreements;~~

the incidence of serious asbestos-related disease cases and claiming patterns against the Company for such cases would not change materially, including claiming pattern changes driven by changes in the law, procedure, or expansion of judicial resources in jurisdictions where the Company settled Asbestos Claims;

~~the Company would be substantially able to defend itself successfully at trial and on appeal;~~

~~the number and timing of additional co-defendant bankruptcies would not change significantly the assets available to participate in the resolution of cases in which the Company is a defendant; and~~

~~co-defendants with substantial resources and assets would continue to participate significantly in the resolution of future Asbestos Claims.~~

~~For the year ended December 31, 2019, the Company concluded that an accrual in the amount of $486~~ ~~million was required under applicable accounting standards. This amount was not discounted for the time value of money. The Company’s comprehensive legal review resulted in a charge of $~~35 million for the year ended December 31, 2019. As previously disclosed, the Company anticipated that adjustments to its asbestos-related accruals were possible given the inherent uncertainties involved in asbestos litigation. In the fourth quarter of 2019, this charge was primarily due to an increase in the estimated average disposition cost per claim (including related legal costs), driven primarily by a changing litigation environment more favorable to plaintiffs, and a decrease in the estimated number of claims likely to be asserted against the Company in the future that was less than the decrease expected by the Company.2022.

Other Matters

In February 2021, severe weather conditions swept across the southern United States, curtailing access to natural gas and electricity for several of the Company’s facilities. While the situation was most acute in Texas, access to natural gas in Mexico was also significantly impacted as Texas supplies natural gas to the country. The Company was notified by energy providers in both the United States and Mexico that it may be assessed surcharges for usage or excess usage of electricity and natural gas during that period. Although most of these surcharges had not yet been formally assessed as of the first quarter of 2021, the Company believed that these costs were probable and reasonably estimable and therefore

~~had accrued approximately $20 million as of March 31, 2021, which was based on the best information available at that time.~~

Subsequent to March 31, 2021, the Company has paid or agreed to pay approximately $3 million of the energy surcharges to certain providers. The Company was notified by certain providers that approximately $6 million of the potential surcharges would not be assessed and therefore the related accruals were reversed to earnings. At September 30, 2021, the Company had approximately $11 million accrued for this matter.

In the second quarter of 2021, the Company recorded a $69 million gain based on a favorable court ruling in Brazil, which will allow the Company to recover indirect taxes paid in previous years. This gain was recorded to Other income (expense), net on the Condensed Consolidated Results of Operations, as well as $28 million of income tax expense that was recognized as a discrete item in the second quarter of 2021.

Other litigation is pending against the Company, in some cases involving ordinary and routine claims incidental to the business of the Company and in others presenting allegations that are non-routine and involve compensatory, punitive or treble damage claims as well as other types of relief. The Company records a liability for such matters when it is both probable that the liability has been incurred and the amount of the liability can be reasonably estimated. Recorded amounts are reviewed and adjusted to reflect changes in the factors upon which the estimates are based, including additional information, negotiations, settlements and other events.

~~11. Share Owners’ Equity~~

~~The activity in share owners’ equity for the three months ended September 30, 2021 and 2020 is as follows:~~

2220

Share Owners’ Equity of the Company










Accumulated




Capital in

Retained

Other

Non-

Total Share

Common

Excess of

Treasury

Earnings

Comprehensive

controlling

Owners'


Stock

Par Value

Stock

(Loss)

Loss

Interests

Equity

Balance on July 1, 2020

$
2

$
3,128

$
(724)

$
(147)

$
(2,308)

$
91

$
42

Reissuance of common stock (0.2 million shares)

(3)

5

2

Stock compensation (0.1 million shares)

3

3

Net earnings

328

7

335

Other comprehensive income (loss)

(117)

(117)

Balance on September 30, 2020

$
2

$
3,128

$
(719)

$
181

$
(2,425)

$
98

$
265

11. Share Owners’ Equity

The activity in share owners’ equity for the three months ended September 30, 2022 and 2021 is as follows:


	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury			Retained	Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on July 1, 2022	$	2	$	3,085		(695)	$	641	$	(1,890)	$	116	$	1,259
Reissuance of common stock (0.2 million shares)				(2)		4								2
Shares repurchased (0.8 million shares)				(10)										(10)
Stock compensation (0.0 million shares)				10										10
Net earnings								231				4		235
Other comprehensive loss										(37)		(7)		(44)
Distribution to noncontrolling interests												(1)		(1)
Balance on September 30, 2022	$	2	$	3,083	$	(691)	$	872	$	(1,927)	$	112	$	1,451


	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on July 1, 2021	$	2	$	3,113	$	(709)	$	173	$	(2,180)	$	103	$	502
Reissuance of common stock (0.2 million shares)				(1)		4								3
Shares repurchased (0.6 million shares)				(10)										(10)
Stock compensation (0.0 million shares)				3										3
Net earnings								85				6		91
Other comprehensive loss										(18)		(1)		(19)
Balance on September 30, 2021	$	2	$	3,105	$	(705)	$	258	$	(2,198)	$	108	$	570

The activity in share owners’ equity for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 is as follows:

Share Owners’ Equity of the Company










Accumulated




Capital in

Retained

Other

Non-

Total Share

Common

Excess of

Treasury

Earnings

Comprehensive

controlling

Owners'

Stock

Par Value

Stock

(Loss)

Loss

Interests

Equity

Balance on January 1, 2020

$
2

$
3,130

$
(733)

$
(89)

$
(1,843)

$
97

$
564

Reissuance of common stock (0.7 million shares)

(10)

17

7

Stock compensation (0.9 million shares)

8

8

Net earnings

278

11

289

Other comprehensive income (loss)

(582)

(10)

(592)

Dividends declared

(8)

(8)

Other

(3)

(3)

Balance on September 30, 2020

$
2

$
3,128

$
(719)

$
181

$
(2,425)

$
98

$
265

~~During the three months ended September 30, 2021, the Company purchased 619,666 shares of its common stock for approximately $10~~ ~~million. The stock purchases were~~ ~~pursuant to a $150 million anti-dilutive share repurchase program authorized by the Company’s Board of Directors that is intended to offset stock-based compensation provided~~


	Share Owners’ Equity of the Company
									Accumulated
			Capital in						Other		Non-		Total Share
	Common		Excess of		Treasury		Retained		Comprehensive		controlling		Owners'
	Stock		Par Value		Stock		Earnings		Loss		Interests		Equity
Balance on January 1, 2022	$	2	$	3,090	$	(701)	$	301	$	(1,972)	$	107	$	827
Reissuance of common stock (0.6 million shares)				(5)		13								8
Shares repurchased (2.3 million shares)				(30)										(30)
Stock compensation (0.5 million shares)				28										28
Net earnings								571				41		612
Other comprehensive income (loss)										45		(9)		36
Distributions to noncontrolling interests												(27)		(27)
Other						(3)								(3)
Balance on September 30, 2022	$	2	$	3,083	$	(691)	$	872	$	(1,927)	$	112	$	1,451

2321

~~to the Company’s directors, officers, and employees. Approximately $120 million remained available for purchases under this program as of September 30, 2021.~~

~~The Company has 250,000,000 shares of common stock authorized with a par value of $.01 per share. Shares outstanding are as follows:~~

Shares Outstanding (in thousands)

September 30,

December 31,

September 30,


2021

2020

2020

Shares of common stock issued (including treasury shares)

188,426

189,305

189,302

Treasury shares

31,599

31,911

32,136

Share Owners’ Equity of the Company










Accumulated




Capital in

Other

Non-

Total Share

Common

Excess of

Treasury

Retained

Comprehensive

controlling

Owners'

Stock

Par Value

Stock

Earnings

Loss

Interests

Equity

Balance on January 1, 2021

$
2

$
3,129

$
(714)

$
152

$
(2,272)

$
104

$
401

Issuance of common stock (0.05 million shares)

1

1

Reissuance of common stock (0.3 million shares)

(4)

11

7

Shares repurchased (1.7 million shares)

(30)

(30)

Stock compensation (0.6 million shares)

11

11

Net earnings

106

17

123

Other comprehensive income (loss)

74

(14)

60

Other

(2)

(2)

1

(3)

Balance on September 30, 2021

$
2

$
3,105

$
(705)

$
258

$
(2,198)

$
108

$
570

During the three months ended September 30, 2022, the Company purchased 768,984 shares of its common stock for approximately $10 million. The share purchases were pursuant to a $150 million anti-dilutive share repurchase program authorized by the Company’s Board of Directors that is intended to offset stock-based compensation provided to the Company’s directors, officers, and employees. Approximately $80 million remained available for purchases under this program as of September 30, 2022.

The Company has 250,000,000 shares of common stock authorized with a par value of $.01 per share. Shares outstanding are as follows:

Shares Outstanding (in thousands)

September 30,

December 31,

September 30,


2022

2021

2021

Shares of common stock issued (including treasury shares)

186,180

187,752

188,426

Treasury shares

31,042

31,397

31,599

12. Accumulated Other Comprehensive Loss

The activity in accumulated other comprehensive loss for the three months ended September 30, ~~2021~~2022 and ~~2020~~2021 is as follows:


									Total										Total
									Accumulated										Accumulated
	Net Effect of		Change in Certain						Other		Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive		Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss		Fluctuations		Instruments			Benefit Plans			Loss
Balance on July 1, 2021	$	(1,187)	$	(47)		$	(946)		$	(2,180)
Balance on July 1, 2022											$	(1,275)	$	2		$	(617)		$	(1,890)
Change before reclassifications		(109)		37			47			(25)		(92)		30						(62)
Amounts reclassified from accumulated other comprehensive loss				(25)	(a)		24	(b)		(1)				(6)	(a)		17	(b)		11
Translation effect							7			7							14			14
Tax effect				1						1
Other comprehensive income (loss) attributable to the Company		(109)		13			78			(18)		(92)		24			31			(37)
Balance on September 30, 2021	$	(1,296)	$	(34)		$	(868)		$	(2,198)
Balance on September 30, 2022											$	(1,367)	$	26		$	(586)		$	(1,927)

Total

Accumulated

Net Effect of

Change in Certain

Other

Exchange Rate

Derivative

Employee

Comprehensive


Fluctuations

Instruments

Benefit Plans

Loss

Balance on July 1, 2020

$
(1,321)

$
(21)

$
(966)

$
(2,308)

Change before reclassifications

1

(88)

30

(57)

Amounts reclassified from accumulated other comprehensive income (loss)

78
(a)

17
(b)

95

Amounts reclassified from accumulated other comprehensive income (loss) related to ANZ sale

(149)

1

4

(144)

Translation effect

(1)

(9)

(10)

Tax effect

(1)

(1)

Other comprehensive income (loss) attributable to the Company

(148)

(11)

42

(117)

Balance on September 30, 2020

$
(1,469)

$
(32)

$
(924)

$
(2,425)

~~(a)~~

~~Amount is recorded to Other income (expense), net and interest expense, net on the Condensed Consolidated Results of Operations (see Note 5 for additional information).~~

~~(b)~~

~~Amount is included in the computation of net periodic pension cost (see Note 7 for additional information) and net post-retirement benefit cost.~~

2422

~~The activity in accumulated other comprehensive loss for the nine months ended September 30, 2021 and 2020 is as follows:~~

Total

Accumulated

Net Effect of

Change in Certain

Other

Exchange Rate

Derivative

Employee

Comprehensive


Fluctuations

Instruments

Benefit Plans

Loss

Balance on January 1, 2021

$
(1,229)

$
(60)

$
(983)

$
(2,272)

Change before reclassifications

(67)

83

45

61

Amounts reclassified from accumulated other comprehensive income (loss)

(59)
(a)

63
(b)

4

Translation effect

1

7

8

Tax effect

1

1

Other comprehensive income (loss) attributable to the Company

(67)

26

115

74

Balance on September 30, 2021

$
(1,296)

$
(34)

$
(868)

$
(2,198)

Total

Accumulated

Net Effect of

Change in Certain

Other

Exchange Rate

Derivative

Employee

Comprehensive


Fluctuations

Instruments

Benefit Plans

Loss

Balance on January 1, 2020

$
(813)

$
(14)

$
(1,016)

$
(1,843)

Change before reclassifications

(507)

(81)

27

(561)

Amounts reclassified from accumulated other comprehensive income (loss)

67
(a)

59
(b)

126

Amounts reclassified from accumulated other comprehensive income (loss) related to ANZ sale

(149)

1

4

(144)

Translation effect

(3)

4

1

Tax effect

(2)

(2)

(4)

Other comprehensive income (loss) attributable to the Company

(656)

(18)

92

(582)

Balance on September 30, 2020

$
(1,469)

$
(32)

$
(924)

$
(2,425)


									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on July 1, 2021	$	(1,187)	$	(47)		$	(946)		$	(2,180)
Change before reclassifications		(109)		37			47			(25)
Amounts reclassified from accumulated other comprehensive income (loss)				(25)	(a)		24	(b)		(1)
Translation effect							7			7
Tax effect				1						1
Other comprehensive income (loss) attributable to the Company		(109)		13			78			(18)
Balance on September 30, 2021	$	(1,296)	$	(34)		$	(868)		$	(2,198)

(a)	Amount is recorded to Other income (expense), net and interest expense, net on the Condensed Consolidated Results of Operations (see Note 5 for additional information).

(b)	Amount is included in the computation of net periodic pension cost (see Note 7 for additional information) and net post-retirement benefit cost.

The activity in accumulated other comprehensive loss for the nine months ended September 30, 2022 and 2021 is as follows:


									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on January 1, 2022	$	(1,290)	$	(21)		$	(661)		$	(1,972)
Change before reclassifications		(77)		73			(1)			(5)
Amounts reclassified from accumulated other comprehensive income (loss)				(25)	(a)		41	(b)		16
Translation effect				(1)			35			34
Other comprehensive income attributable to the Company		(77)		47			75			45
Balance on September 30, 2022	$	(1,367)	$	26		$	(586)		$	(1,927)


									Total
									Accumulated
	Net Effect of		Change in Certain						Other
	Exchange Rate		Derivative			Employee			Comprehensive
	Fluctuations		Instruments			Benefit Plans			Loss
Balance on January 1, 2021	$	(1,229)	$	(60)		$	(983)		$	(2,272)
Change before reclassifications		(67)		83			45			61
Amounts reclassified from accumulated other comprehensive income (loss)				(59)	(a)		63	(b)		4
Translation effect				1			7			8
Tax effect				1						1
Other comprehensive income (loss) attributable to the Company		(67)		26			115			74
Balance on September 30, 2021	$	(1,296)	$	(34)		$	(868)		$	(2,198)

2523

(a)	Amount is recorded to Other income (expense), net and interest expense, net on the Condensed Consolidated Results of Operations (see Note 5 for additional information).

(b)	Amount is included in the computation of net periodic pension cost (see Note 7 for additional information) and net post-retirement benefit cost.

13. Other Income (Expense), Net

Other income (expense), net for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 included the following:


	Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Gain on sale of ANZ businesses	$	—	$	280	$	—	$	280
Gain on sale of divested business (see Note 17)									$		$		$	55	$
Gain on sale leasebacks (see Note 17)										153				334
Restructuring, asset impairment and other charges		(12)		(9)		(21)		(80)		(10)		(12)		(21)		(21)
Brazil indirect tax credit						69
Brazil indirect tax credit (see Note 10)																69
Pension settlement charges		(5)				(5)		(8)		(5)		(5)		(5)		(5)
Charge related to Paddock support agreement liability (see Note 10)						(154)										(154)
Intangible amortization expense		(9)		(8)		(26)		(23)		(8)		(9)		(24)		(26)
Strategic transaction costs				(3)				(7)
Foreign currency exchange loss		(1)		(1)		(3)		(3)		(3)		(1)		(4)		(3)
Royalty income		6		2		17		8		7		6		18		17
Charge for deconsolidation of Paddock (see Note 10)								(14)
Other				(11)				(6)
Other income (expense), net	$	(21)	$	250	$	(123)	$	147	$	134	$	(21)	$	353	$	(123)

14. Earnings Per Share

The following ~~tables set~~table sets forth the computation of basic and diluted earnings per ~~share:~~share for the three months ended September 30, 2022 and 2021:


	Three months ended September 30,				Three months ended September 30,
	2021		2020		2022		2021
Numerator:
Net earnings attributable to the Company	$	85	$	328	$	231	$	85
Denominator (in thousands):
Denominator for basic earnings per share-weighted average shares outstanding		156,825		157,073		155,115		156,825
Effect of dilutive securities:
Stock options and other		3,686		2,226		3,820		3,686
Denominator for diluted earnings per share-adjusted weighted average shares outstanding		160,511		159,299		158,935		160,511
Basic earnings per share:
Earnings from continuing operations attributable to the Company	$	0.49	$	2.09	$	1.49	$	0.49
Gain from discontinued operations		0.05						0.05
Net earnings	$	0.54	$	2.09
Net earnings attributable to the Company					$	1.49	$	0.54
Diluted earnings per share:
Earnings from continuing operations attributable to the Company	$	0.48	$	2.06	$	1.45	$	0.48
Gain from discontinued operations		0.05						0.05
Net earnings	$	0.53	$	2.06
Net earnings attributable to the Company					$	1.45	$	0.53

The diluted earnings per share computation for the three months ended September 30, 2022 and 2021 excludes 724,186 and ~~2020~~958,014 weighted average shares of common stock, respectively, due to their antidilutive effect, which includes options to purchase, unvested restricted stock units and performance vested restricted share units. Options to

purchase shares were excluded because the exercise prices of the options were greater than the average market price of the shares of common stock.

The following table sets forth the computation of basic and diluted earnings per share for the nine months ended September 30, 2022 and 2021:


	Nine months ended September 30,
	2022		2021
Numerator:
Net earnings attributable to the Company	$	571	$	106
Denominator (in thousands):
Denominator for basic earnings per share-weighted average shares outstanding		155,546		157,430
Effect of dilutive securities:
Stock options and other		3,346		3,043
Denominator for diluted earnings per share-adjusted weighted average shares outstanding		158,892		160,473
Basic earnings per share:
Earnings from continuing operations attributable to the Company	$	3.67	$	0.62
Gain from discontinued operations				0.05
Net earnings attributable to the Company	$	3.67	$	0.67
Diluted earnings per share:
Earnings from continuing operations attributable to the Company	$	3.59	$	0.61
Gain from discontinued operations				0.05
Net earnings attributable to the Company	$	3.59	$	0.66

The diluted earnings per share computation for the nine months ended September 30, 2022 and 2021 excludes ~~958,014~~1,035,227 and ~~1,564,207~~1,206,870 weighted average shares of common stock, respectively, due to their antidilutive effect, which includes options to purchase, unvested restricted stock units and performance vested restricted share units. Options to purchase shares were excluded because the exercise prices of the options were greater than the average market price of the ~~common shares.~~

Nine months ended September 30,


2021

2020
Numerator:


Net earnings attributable to the Company

$
106

$
278
Denominator (in thousands):

Denominator for basic earnings per share-weighted average shares outstanding

157,430

156,650
Effect of dilutive securities:

Stock options and other

3,043

1,788
Denominator for diluted earnings per share-adjusted weighted average shares outstanding

160,473

158,438
Basic earnings per share:

Earnings from continuing operations attributable to the Company

$
0.62

$
1.77
Gain from discontinued operations

0.05

Net earnings

$
0.67

$
1.77
Diluted earnings per share:

Earnings from continuing operations attributable to the Company

$
0.61

$
1.76
Gain from discontinued operations

0.05

Net earnings

$
0.66

$
1.76

~~The diluted earnings per share computation for the nine months ended September 30, 2021 and 2020 excludes 1,206,870 and 2,616,538 weighted average~~ shares of common stock, respectively, due to their antidilutive effect, which includes options to purchase, unvested restricted stock units and performance vested restricted share units. Options to purchase shares were excluded because the exercise prices of the options were greater than the average market price of the common shares.

stock.

15. Supplemental Cash Flow Information

Income taxes paid in cash were as follows:


	Nine months ended September 30,				Nine months ended September 30,
	2021		2020		2022		2021
U.S.	$	6	$	1	$	9	$	6
Non-U.S.		58		53		128		58
Total income taxes paid in cash	$	64	$	54	$	137	$	64

Interest paid, including note repurchase premiums, in cash for the nine months ended September 30, 2022 and 2021 ~~and 2020~~ was ~~$144~~$172 million and ~~$196~~$144 million, respectively. Cash interest for the nine months ended September 30, ~~2020~~2022 included ~~$41~~$17 million ~~for~~of note repurchase premiums.

The Company uses various factoring programs to sell certain receivables to financial institutions as part of managing its cash flows. At September 30, ~~2021,~~2022, December 31, ~~2020~~2021 and September 30, ~~2020,~~2021, the amount of receivables sold by the Company was $447 million, $481 million and $416 million, ~~$436 million and $426 million,~~ respectively. These amounts included ~~$189~~$174 million, ~~$176~~$180 million and ~~$188~~$189 million at September 30, ~~2021,~~2022, December 31, ~~2020,~~2021, and September 30, ~~2020,~~2021, respectively, for trade receivable amounts factored under supply chain financing programs linked to commercial arrangements with key customers. For the nine months ended September 30, ~~2021 and 2020,~~2022, the Company’s use of its factoring programs resulted in ~~decreases to~~a decrease in cash ~~from~~provided by operating activities of $34 million compared to a decrease in cash provided by operating activities of $20 million for the same period in 2021. For the nine months ended September 30, 2022 and 2021, the Company recorded expenses related to these factoring programs of approximately $6 million and ~~$113~~$4 million, respectively.

~~16. New Accounting Pronouncement~~

~~Effects of Reference Rate Reform on Financial Reporting~~ - In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which allows for elective contract modification guidance for contracts or other transactions that reference LIBOR or a

2725

reference rate that is expected to be discontinued as a result of reference rate reform. To date, no significant contracts that reference LIBOR have been modified by the Company. The Company adopted ASU No. 2020-04 effective July 1, 2020. The adoption of this ASU had no impact on ~~the Company’s condensed consolidated balance sheets, results of operations or cash flows.~~

~~17.~~16. COVID-19 Impacts

On March 11, 2020, the World Health Organization characterized COVID-19 as a global pandemic and recommended containment and mitigation measures. The Company is actively monitoring the impact of the COVID-19 pandemic, which negatively impacted its business in 2020 and, to a lesser extent, in 2021 and the first nine months of ~~2021~~2022 and may negatively impact its business and results of operations in the future.

The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates particularly as it relates to estimates reliant on forecasts and other assumptions reasonably available to the Company and the uncertain future impacts of the COVID-19 pandemic and related economic disruptions. The extent to which the COVID-19 pandemic and related economic disruptions impact the Company’s business and financial results will depend on future developments including, but not limited to, the continued spread, duration and severity of the COVID-19 pandemic; the occurrence, spread, duration and severity of any subsequent wave or waves of outbreaks after the initial outbreak has subsided; the actions taken by the U.S. and foreign governments to contain the COVID-19 pandemic, address its impact or respond to the reduction in global and local economic activity; the occurrence, duration and severity of a global, regional or national recession, depression or other sustained adverse market event; the impact of the developments described above on its customers and suppliers; and how quickly and to what extent normal economic and operating conditions can resume. The accounting matters assessed included, but were not limited to:

~~• allowance for doubtful accounts and credit losses;~~

●

allowance for doubtful accounts and credit losses;

~~• carrying value of inventory; and~~

●

carrying value of inventory; and

~~• the carrying value of goodwill and other long-lived assets.~~

●

the carrying value of goodwill and other long-lived assets.

There was not a material impact to the above estimates in the Company’s Condensed Consolidated Financial Statements for the ~~three- and~~ nine-month ~~periods~~period ended September 30, ~~2021~~2022 or September 30, ~~2020.~~2021. The Company’s future assessment of the magnitude and duration of the COVID-19 pandemic, as well as other factors, could result in material changes to the estimates and material impacts to the Company’s Condensed Consolidated Financial Statements in future reporting periods.

17. Divestitures and Sale Leasebacks of Land and Building

~~18. Divestitures~~In August 2022, the Company completed the sale of the land and building related to its Vernon, California (Los Angeles) plant to 2900 Fruitland Avenue Investors LLC and 2901 Fruitland Avenue Investors LLC (“Fruitland”). Proceeds from the sale were approximately $181 million and the Company recorded a pretax gain of approximately $153 million (approximately $153 million after tax) on the sale, which is reflected in Other income (expense), net on the Condensed Consolidated Results of Operations.

~~On July 31, 2020,~~In connection with this transaction, the Company entered into a lease for the land and building with Fruitland for the Vernon, California plant for an initial term of 10 years. The lease requires the Company to make rent payments of approximately $7.2 million in the first year, gradually increasing to approximately $10.3 million in the tenth year. The lease is classified as operating and was recorded as a right-of-use asset (included in Other assets on the Condensed Consolidated Balance Sheet) with a balance of approximately $62 million, a current operating lease liability (included in Other liabilities on the Condensed Consolidated Balance Sheet) with a balance of approximately $3 million and a noncurrent operating lease liability (included in Other long-term liabilities on the Condensed Consolidated Balance Sheet) with a balance of approximately $59 million as of September 30, 2022.

In May 2022, the Company completed the sale of the land and building related to its Brampton, Ontario, Canada plant to an affiliate of Crestpoint Real Estate Investments Ltd. (“Crestpoint”). Net proceeds were approximately $190 million, and the Company recorded a pretax gain of approximately $182 million (approximately $158 million after

tax) on the sale, which is reflected in Other income (expense), net on the Condensed Consolidated Results of Operations.

In connection with this transaction, the Company entered into a lease for the land and building with Crestpoint for the Brampton, Ontario plant for an initial term of 10 years. The lease requires the Company to make rent payments of approximately $7.3 million in the first year, gradually increasing to approximately $9.1 million in the tenth year. The lease is classified as operating and was recorded as a right-of-use asset (included in Other assets on the Condensed Consolidated Balance Sheet) with a balance of approximately $54 million, a current operating lease liability (included in Other liabilities on the Condensed Consolidated Balance Sheet) with a balance of approximately $4 million and a noncurrent operating lease liability (included in Other long-term liabilities on the Condensed Consolidated Balance Sheet) with a balance of approximately $51 million as of September 30, 2022.

In March 2022, the Company completed the sale of its ~~ANZ businesses~~Cristar TableTop S.A.S. business to ~~Visy,~~Vidros Colombia S.A.S, an ~~unaffiliated~~

~~company.~~affiliate of Nadir Figueiredo S.A., a glass tableware producer based in Brazil. Gross proceeds ~~approximated AUD $947~~received were approximately $96 million ~~(including a related sale-leaseback agreement which~~

~~approximated AUD $214 million), or approximately USD $677 million. Approximately 95% of those proceeds~~

~~were received at the time of closing,~~ and the ~~remaining balance of~~related pretax gain recorded was approximately ~~$58~~$55 million ~~was received~~(approximately $16 million after tax and non-controlling interest) in the first quarter of ~~2021. In 2020, the Company recognized a net~~2022. The pretax gain ~~(including costs directly attributable~~was recorded to ~~the sale of ANZ and subject to post-closing adjustments) on the divestiture of approximately $275 million, which was reported on the~~ Other income (expense), net ~~line in~~on the Condensed Consolidated Results of Operations. In addition, at closing, certain subsidiaries of the Company entered into certain ancillary agreements with Visy and the ANZ businesses in respect of the provision of certain transitional and technical services to the ANZ businesses.

In January 2021, the Company completed the sale of its plant in Argentina. Gross proceeds ~~are~~were approximately $10 million, and the gain on the sale was not material.

~~19. Subsequent Event~~

On October 25, 2021, the Company announced that it had entered into a binding commitment to sell its Le Parfait brand and business to a subsidiary of Berlin Packaging L.L.C., a global packaging supplier. Le Parfait is a French jar brand sold in more than 20 countries. The proposed sale is expected to generate gross proceeds of approximately €72 million, which will be redeployed to help fund expansion initiatives, such as the Company’s MAGMA innovation. O-I expects to close around year end 2021, subject to the works council consultation and other customary closing conditions. The proposed transaction between O-I and Berlin Packaging L.L.C. also includes a long-term supply arrangement to manufacture Le Parfait jars from O-I plants in France and Spain.

2927

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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

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

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

On July 31, 2020, the Company completed the sale of its Australia and New Zealand (“ANZ”) businesses, which comprised the majority of the Asia Pacific region (approximately 85% of net sales for the full year 2019), to Visy Industries Holdings Pty Ltd. After the sale of the ANZ businesses, the remaining businesses in the Asia Pacific region do not meet the criteria of an individually reportable segment. For the 2020 results presented below, the results for the Asia Pacific reportable segment reflect only the results of the ANZ businesses. The sales and operating results of the other businesses that historically comprised the Asia Pacific segment, and that have been retained by the Company, have been reclassified to Other sales and Retained corporate costs and other, respectively.2022.

Financial information for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 regarding the Company’s reportable segments is as follows (dollars in millions):


	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Net Sales:
Americas	$	925	$	887	$	2,652	$	2,442	$	987	$	925	$	2,898	$	2,652
Europe		655		644		2,039		1,775		680		655		2,153		2,039
Asia Pacific				52				281
Reportable segment totals		1,580		1,583		4,691		4,498		1,667		1,580		5,051		4,691
Other		29		33		79		97		26		29		112		79
Net Sales	$	1,609	$	1,616	$	4,770	$	4,595	$	1,693	$	1,609	$	5,163	$	4,770

3028

Three months ended

Nine months ended

September 30,

September 30,


2021

2020

2021

2020
Segment operating profit:

Americas

$
133

$
113

$
357

$
268
Europe

110

88

293

191
Asia Pacific

3

19
Reportable segment totals

243

204

650

478
Items excluded from segment operating profit:

Retained corporate costs and other

(49)

(35)

(126)

(98)
Gain on Sale of ANZ businesses

280

280
Brazil indirect tax credit

69

Restructuring, asset impairment and other charges

(12)

(9)

(21)

(80)
Charge related to Paddock support agreement liability

(154)

Charge for deconsolidation of Paddock

(14)
Pension settlement charges

(5)

(5)

(8)
Strategic transaction costs

(3)

(7)
Interest expense, net

(50)

(61)

(153)

(212)
Earnings from continuing operations before income taxes

127

376

260

339
Provision for income taxes

(43)

(41)

(144)

(50)
Earnings from continuing operations

84

335

116

289
Gain from discontinued operations

7

7

Net earnings

91

335

123

289
Net earnings attributable to non-controlling interests

(6)

(7)

(17)

(11)
Net earnings attributable to the Company

$
85

$
328

$
106

$
278
Net earnings from continuing operations attributable to the Company

$
78

$
328

$
99

$
278


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
Net earnings attributable to the Company	$	231	$	85	$	571	$	106
Net earnings attributable to non-controlling interests		4		6		41		17
Net earnings		235		91		612		123
Gain from discontinued operations				(7)				(7)
Earnings from continuing operations		235		84		612		116
Provision for income taxes		43		43		164		144
Earnings from continuing operations before income taxes		278		127		776		260
Items excluded from segment operating profit:
Retained corporate costs and other		63		49		165		126
Gain on sale of divested business						(55)
Gain on sale leasebacks		(153)				(334)
Restructuring, asset impairment and other charges		10		12		21		21
Brazil indirect tax credit								(69)
Charge related to Paddock support agreement liability								154
Pension settlement charges		5		5		5		5
Interest expense, net		63		50		175		153
Segment operating profit	$	266	$	243	$	753	$	650

Americas		130		133		388		357
Europe		136		110		365		293
Reportable segment totals	$	266	$	243	$	753	$	650

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

Executive Overview — Quarters ended September 30, ~~2021~~2022 and ~~2020~~2021

Net sales for the third quarter of 2021 were $7 million lower, or less than 1%, than the third quarter of the prior year, primarily due to the sale of the Company’s ANZ businesses on July 31, 2020 and the sale of the Company’s plant in Argentina in January 2021. Excluding these divestitures, shipments were slightly lower than the prior year quarter. Net sales in the third quarter of 2022 were $84 million higher, or approximately 5%, than in the same quarter in 2021 primarily due to higher prices. Net sales were ~~positively~~negatively impacted by the ~~favorable~~unfavorable effects of changes in foreign currency exchange rates and ~~higher prices.~~the sale of the Company’s glass tableware business in Colombia on March 1, 2022.

Earnings from continuing operations before income taxes were ~~$249~~$151 million ~~lower~~higher in the third quarter of ~~2021~~2022 compared to the same period in the prior ~~year quarter.~~year. This ~~decrease~~increase was ~~primarily~~ due to ~~a $280 million gain on the sale of the ANZ businesses in the third quarter of 2020 that did not reoccur in the third quarter of 2021, partially offset by~~ higher segment operating profit and ~~lower~~a gain on a sale leaseback transaction entered into by the Company for its land and building related to its plant in Vernon, California, partially offset by higher retained corporate and other costs and higher net interest expense in the third quarter of ~~2021 than~~2022 compared to the same period in the prior ~~year quarter.~~ year.

Segment operating profit for reportable segments ~~for~~in the third quarter of 2022 was $23 million higher compared to the third quarter of 2021, ~~was $39 million higher than the third quarter of the prior year. The increase was largely~~primarily due to higher ~~production levels, as well as~~net prices, strong operating performance and ~~the benefit of~~benefits from margin expansion ~~initiatives.~~initiatives, partially offset by elevated asset project activity and unplanned production downtime, the unfavorable effects of changes in foreign currency exchange rates and the unfavorable impact from divestitures in earlier periods.

On April 26, 2021, the Company announced that its subsidiary, Paddock Enterprises, LLC (“Paddock”), had reached an agreement in principle to accept the terms of a mediator’s proposal regarding a consensual plan of reorganization in Paddock’s Chapter 11 bankruptcy case. The agreement in principle provided for total consideration of $610 million to fund the Paddock Trust (as defined in Note 9 to the Condensed Consolidated Financial Statements). The Company recorded a charge of $154 million related to its potential liability under the Paddock support agreement during the first fiscal quarter of 2021 primarily related to an increase to Paddock’s asbestos reserve estimate in consideration for the channeling injunction to be included in the Plan (as defined in Note 10 to the Condensed Consolidated Financial

Statements) protecting the Company and its affiliates from Asbestos Claims (as defined in Note 10 to the Condensed Consolidated Financial Statements). In July 2022, the Plan became effective, and the Paddock Trust was funded by the Company and Paddock with consideration totaling $610 million.

Net interest expense for the third quarter of ~~2021 decreased by $11~~2022 increased $13 million compared to the third quarter of ~~2020,~~2021, primarily due to ~~lower refinancing fees and charges and~~ ~~lower debt levels in 2021.~~ ~~Net interest expense in the third quarter of 2020 included $6 million for~~higher note repurchase premiums, third-party fees and the write-off of deferred finance fees that related to debt that was repaid prior to its ~~maturity.~~maturity, as well as higher interest rates, partially offset by lower debt levels than in the third quarter of 2021.

For the third quarter of ~~2021,~~2022, the Company recorded net earnings from continuing operations attributable to the Company of $231 million, or $1.45 per share (diluted), compared to $78 million, or $0.48 per share (diluted), ~~compared to $328 million, or $2.06 per share (diluted)~~ in the third quarter of ~~2020.~~2021. As discussed below, net earnings from continuing operations attributable to the Company in both periods included items that management considers not representative of ongoing ~~operations.~~operations and other adjustments. These items increased net earnings from continuing operations attributable to the Company by $130 million, or $0.82 per share, in the third quarter of 2022 and decreased net earnings from continuing operations attributable to the Company by $16 million, or $0.10 per share, ~~(diluted),~~ in the third quarter of ~~2021 and increased earnings from~~

~~continuing operations attributable to the Company by $263 million, or $1.65 per share (diluted), in the third quarter of 2020.~~2021.

Results of Operations — Third Quarter of ~~2021~~2022 Compared with Third Quarter of ~~2020~~2021

Net Sales

The Company’s net sales in the third quarter of ~~2021~~2022 were ~~$1,609~~$1,693 million compared with ~~$1,616~~$1,609 million for the third quarter of ~~2020, a decrease~~2021, an increase of $7$84 million, or ~~less than 1%~~approximately 5%. ~~Total glass~~Glass container shipments, in tons, were ~~down~~up approximately 4%1% in the third quarter of ~~2021~~2022, but a slightly less favorable mix resulted in a $4 million decrease to net sales compared to the same period in 2021. Higher selling prices increased net sales by $221 million in the third quarter of 2022, driven by the pass through of higher cost inflation. Unfavorable foreign currency exchange rates decreased net sales by $110 million in the third quarter of 2022 compared to the prior year quarter, primarily ~~due~~driven by the weakening of the Euro compared to the ~~July 2020 sale~~U.S. dollar. The non-recurrence of the shipments related to the divestiture of the Company’s ~~ANZ businesses and the January 2021 sale of the Company’s plant~~glass tableware business in ~~Argentina, which together~~Colombia on March 1, 2022 reduced net sales by approximately ~~$59 million compared to the prior year quarter. Excluding the divested businesses, glass container shipments decreased approximately 1%, and this impacted net sales by approximately $16~~$20 million in the third quarter of 2021 compared to the same period in 2020. Favorable foreign currency exchange rates increased net sales by $15 million in the third quarter of 2021 compared to the prior year quarter, driven by the Mexican peso and the Brazilian real strengthening against the U.S. dollar. Higher selling prices increased net sales by $57 million in the quarter.2022. Other ~~net~~ sales were approximately $4$3 million lower in the third quarter of ~~2021~~2022 than the same period in the prior year driven by lower machine parts sales to third parties.

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


Reportable segment net sales - 2020			$	1,583
Reportable segment net sales - 2021							$	1,580
Price	$	57			$	221
Sales volume and mix		(16)				(4)
Effects of changing foreign currency rates		15				(110)
Divestitures		(59)				(20)
Total effect on reportable segment net sales				(3)				87
Reportable segment net sales - 2021			$	1,580
Reportable segment net sales - 2022							$	1,667

Americas: Net sales in the Americas in the third quarter of ~~2021~~2022 were ~~$925~~$987 million compared to ~~$887~~$925 million for the third quarter of ~~2020,~~2021, an increase of ~~$38~~$62 million, or approximately 4%7%. Total glass container shipments in the region were down approximately 4% in the third quarter of 2021 compared to the prior year quarter, driven by choppy demand patterns and mix management from lower margin categories given tight inventory conditions and ongoing supply chain challenges, as well as due to the divestiture of a plant in Argentina in January 2021. The divestiture in Argentina reduced net sales by approximately $7 million in the third quarter of 2021 compared to the same period in 2020. Excluding the divestiture, glass container shipments were down approximately 3% in the third quarter of 2021 compared to the same period in 2020, which decreased net sales by approximately $24 million. The favorable effects of foreign currency exchange rate changes increased net sales by $16 million in the third quarter of 2021 compared to the same period in 2020 as the Mexican peso and the Brazilian real strengthened compared to the U.S. dollar. Higher selling prices in the region increased net sales by ~~$53~~$108 million in the third quarter of ~~2021~~2022, driven by the pass through of higher cost inflation. Glass container shipments in the region were down nearly 2% in the third quarter of 2022 compared to the prior year third quarter. Lower shipments to beer customers, primarily in North America, drove overall shipments in the Americas lower in the third quarter of 2022, but were partially offset by higher shipments in the spirits and non-alcoholic end use categories across the remainder of the region. These lower shipment levels decreased net sales by approximately $15 million in the third quarter of 2022. The divestiture of the glass tableware business in Colombia reduced net sales by approximately $20 million in the third quarter of 2022 compared to the same period in ~~2020.~~the prior year. The unfavorable effects of foreign currency exchange rate changes decreased net sales by $11 million in the third quarter of 2022 compared to the same period in 2021.

Europe: Net sales in Europe in the third quarter of ~~2021~~2022 were ~~$655~~$680 million compared to ~~$644~~$655 million for the third quarter of ~~2020,~~2021, an increase of ~~$11~~$25 million, or approximately 2%4%. Glass container shipments in the third quarter of ~~2021~~2022 were up ~~approximately 2%~~nearly 4%, which resulted in a $11 million increase to net sales compared to the third quarter of ~~2020, resulting~~2021. Higher shipments to beer and wine customers were the main contributors to overall higher shipments in ~~$8 million of higher~~the region. Higher selling prices in Europe increased net sales ~~primarily~~by $113 million in the third quarter of 2022, driven by ~~higher shipments to alcoholic beverage (primarily wine) and non-alcoholic beverage customers as~~ the ~~impacts from COVID-19 have significantly improved.~~pass through of cost inflation. Unfavorable foreign currency exchange rates decreased the region’s net sales by approximately $1$99 million in the third quarter of ~~2021~~2022 as the Euro ~~slightly~~ weakened in relation to the U.S. dollar. ~~Higher selling prices in Europe increased net sales by $4 million in the third quarter of 2021.~~

Asia Pacific: Net sales in Asia Pacific in the third quarter of 2021 were $0 compared to $52 million for the third quarter of 2020, a decrease of $52 million, due to the sale of the ANZ businesses in the third quarter of 2020.

Earnings from Continuing Operations before Income Taxes and Segment Operating Profit

Earnings from continuing operations before income taxes were $278 million in the third quarter of 2022 compared to $127 million in the third quarter of 2021, ~~compared~~an increase of $151 million, or 119%. This increase was due to ~~$376 million~~higher segment operating profit and a gain on a sale leaseback transaction entered into by the Company for its land and building related to its plant in Vernon, California, partially offset by higher retained corporate and other costs and higher net interest expense in the third quarter of ~~2020, a decrease of $249 million or 66%. This decrease was largely due~~2022 compared to the ~~$280 million gain on the sale of the ANZ businesses~~same period in the ~~third quarter of 2020 that did not reoccur in the third quarter of 2021, partially offset by higher segment operating profit and lower net interest expense than the~~ prior ~~year quarter~~year.

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

Segment operating profit of reportable segments in the third quarter of ~~2021~~2022 was ~~$243~~$266 million, compared to ~~$204~~$243 million ~~for~~in the third quarter of ~~2020,~~2021, an increase of ~~$39~~$23 million, or approximately ~~19%~~10%. This increase was ~~largely~~primarily due to ~~lower operating costs driven by~~ higher ~~production levels,~~net prices, strong operating performance and ~~the benefit of~~benefits from margin expansion ~~initiatives.~~initiatives, partially offset by elevated asset project activity and unplanned production downtime, the unfavorable effects of changes in foreign currency exchange rates and the unfavorable impact from divestitures in earlier periods.

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


Reportable segment operating profit - 2020			$	204
Reportable segment operating profit - 2021							$	243
Net price (net of cost inflation)	$	—			$	48
Sales volume and mix		(3)				1
Operating costs		45				(5)
Effects of changing foreign currency rates		(1)				(11)
Divestitures		(2)				(10)
Total net effect on reportable segment operating profit				39				23
Reportable segment operating profit - 2021			$	243
Reportable segment operating profit - 2022							$	266

Americas: Segment operating profit in the Americas in the third quarter of ~~2021~~2022 was ~~$133~~$130 million compared to ~~$113~~$133 million in the third quarter of ~~2020, an increase~~2021, a decrease of ~~$20~~$3 million, or ~~18%~~2%. The impact of lower shipments ~~discussed above, excluding the~~was offset by an improved mix resulting in no net impact ~~of the divestiture of the plant in Argentina, decreased~~to segment operating profit ~~by $6 million.~~in the third quarter of 2022 compared to the same period in the prior year. Higher ~~net~~ selling prices ~~(net of~~exceeded cost ~~inflation) resulted~~inflation resulting in a net ~~$15~~$10 million increase to segment operating profit in the ~~current year quarter.~~

third quarter of 2022. Operating costs ~~in the Americas~~ in the third quarter of ~~2021~~2022 were $10 million ~~lower~~higher than in the prior year quarter due to elevated asset project activity, unplanned production downtime and higher maintenance costs. The effects of foreign currency exchange rates increased segment operating profit by $5 million in the current year period.

tableware business and the additional lease expense associated with the above sale leaseback transactions reduced segment operating profit by approximately $8 million in the third quarter of 2022 compared to the same period in the prior year, which improved segment operating profit. Operating costs benefited from higher production levels than the prior year quarter as the impacts from COVID-19 have significantly improved, as well as benefits from the Company’s margin expansion cost initiatives. The divestiture of the plant in Argentina improved segment operating profit by approximately $1 million in the third quarter.year.

Europe: Segment operating profit in Europe in the third quarter of ~~2021~~2022 was ~~$110~~$136 million compared to ~~$88~~$110 million in the third quarter of ~~2020,~~2021, an increase of ~~$22~~$26 million, or ~~25%~~24%. The impact of ~~higher~~ shipments discussed above ~~increased~~and an unfavorable mix resulted in a $1 million increase to segment operating profit ~~by $3 million. Operating costs~~ in the third quarter of ~~2021 were approximately $35 million favorable~~2022 compared to the same period in the prior ~~year reflecting~~year. The benefit of higher ~~production levels as the impacts from COVID-19 have significantly improved, as well as benefits from the Company’s margin expansion cost initiatives. Lower net~~ selling prices ~~(net of~~exceeded cost ~~inflation) decreased~~inflation and increased segment operating profit by ~~$15 million in the current quarter compared to the prior year quarter. The unfavorable effects of foreign currency exchange rate changes decreased segment operating profit by $1~~$38 million in the third quarter of ~~2021~~2022, compared to the ~~prior year quarter.~~

~~Asia Pacific: Segment~~third quarter of 2021. The region benefitted from approximately $5 million of lower operating ~~profit in Asia Pacific~~costs in the third quarter of 2022, which reflected the net benefit of a $13 million subsidy received by the Italian government to help mitigate the impact of elevated energy costs and an insurance recovery in the third quarter of the prior year that did not repeat this quarter. The effects of foreign currency exchange rates decreased segment operating profit by $16 million in the current year period. The divestiture of the Le Parfait brand in December 2021 ~~was $0 compared to $3~~reduced segment operating profit by approximately $2 million in the third quarter of ~~2020, a decrease of $3 million, due~~2022 compared to the ~~sale~~same period in the prior year.

In addition, the current conflict between Russia and Ukraine has caused a significant increase in the price of natural gas and increased price volatility. The Company’s European operations typically purchase natural gas under long-term supply arrangements and frequently agree on price with the relevant supplier in advance of the ~~ANZ businesses~~period in which the natural gas will be delivered, which is shielding the Company from the full impact of increased natural gas prices. However, the current conflict between Russia and Ukraine and the resulting sanctions, potential sanctions or other adverse repercussions on Russian-sourced energy supplies could cause the Company’s energy suppliers to be unable or unwilling to deliver natural gas at agreed prices and quantities. If this occurs, it will be necessary for the Company to procure natural gas at then-current market prices and subject to market availability and could cause the Company to experience a significant increase in operating costs or result in the ~~third quarter~~temporary or permanent cessation of ~~2020.~~delivery of natural gas to several of the Company’s manufacturing plants in Europe. In addition, depending on the duration and ultimate outcome of the conflict between Russia and Ukraine, future long-term supply arrangements for natural gas may not be available at reasonable prices or at all.

Interest Expense, Net

~~Net interest expense for the third quarter of 2021 was $50 million compared to $61 million for the third quarter of 2020. This decrease was primarily due to~~ ~~lower refinancing fees and charges and~~ ~~lower debt levels in 2021.~~ Net interest expense in the third quarter of ~~2020~~2022 was $63 million compared to $50 million for the third quarter of 2021. This increase was primarily due to higher note repurchase premiums, third-party fees and the write-off of deferred finance fees that related to debt that was repaid prior to its maturity, as well as higher interest rates, partially offset by lower debt levels than in the third quarter of 2021. Net interest expense for the third quarter of 2022 included $6$8 million for note repurchase premiums, third-party fees and the write-off of deferred finance fees that related to debt that was repaid prior to its ~~maturity.~~maturity and the Company’s new bank credit agreement.

Provision for Income Taxes

The Company’s effective tax rate from operations for the three months ended September 30, ~~2021~~2022 was ~~33.9%~~15.5% compared to ~~10.9%~~33.9% for the three months ended September 30, ~~2020.~~2021. The effective tax rate for the third quarter of ~~2021 was higher than~~2022 differed from the third quarter of ~~2020 primarily~~2021 due to the ~~nonoccurrence~~tax on sale of the ~~gain~~land and building related to the Vernon, California plant substantially offset by the reversal of a valuation allowance on ~~the sale of ANZ, which was recorded as non-taxable in the third quarter of 2020,~~deferred tax assets, as well as to a change in ~~geographic~~ mix of geographic earnings.

Net Earnings from Continuing Operations Attributable to the Company

For the third quarter of ~~2021,~~2022, the Company recorded net earnings from continuing operations attributable to the Company of ~~$78~~$231 million, or ~~$0.48~~$1.45 per share (diluted), compared to ~~$328~~$78 million, or ~~$2.06~~$0.48 per share (diluted), in the third quarter of ~~2020.~~2021. Earnings in ~~2021~~the third quarter of 2022 and ~~2020~~2021 included items that management considered not representative of ongoing operations and other adjustments as set forth in the following table (dollars in millions):

Net Earnings

Increase

(Decrease)
Description

2021

2020
Gain on Sale of ANZ businesses

$

$
280
Restructuring, asset impairment and other charges

(12)

(9)
Pension settlement charges

(5)

Strategic transaction costs

(3)
Charges for note repurchase premiums and write-off of finance fees

(6)
Net benefit for income tax on items above

1

1
Total

$
(16)

$
263


	Net Earnings
	Increase
	(Decrease)
Description	2022		2021
Gain on sale leaseback		153
Restructuring, asset impairment and other charges		(10)		(12)
Pension settlement charges		(5)		(5)
Charges for note repurchase premiums and write-off of finance fees		(8)
Net provision for income tax on items above				1
Total	$	130	$	(16)

Executive Overview — Nine months ended September 30, ~~2021~~2022 and ~~2020~~2021

Net sales for the first nine months of ~~2021~~2022 were ~~$175~~$393 million higher, or approximately 4%8%, ~~higher~~ than in the same period in the prior year, primarily due to higher prices and stronger shipments than the prior year period, which was more significantly impacted by COVID-19 ~~partially offset by the sale of the Company’s ANZ businesses in 2020, the sale of the Company’s plant in Argentina in January 2021~~ and the impact of severe weather in the ~~southern United States in February 2021.~~Americas. Net sales were ~~also positively~~negatively impacted by the ~~favorable~~unfavorable effects of changes in foreign currency exchange rates and ~~higher prices.~~the sale of the Company’s glass tableware business in Colombia on March 1, 2022.

Earnings from continuing operations before income taxes were ~~$79~~$516 million ~~lower~~higher in the first nine months of ~~2021~~2022 compared to the same period in the prior year. This ~~decrease~~increase was ~~primarily~~ due to ~~the $280 million gain~~higher segment operating profit and gains on the sale of the ~~ANZ businesses~~land and buildings of two of the Company’s plants in ~~2020 that did not reoccur~~the Americas and the Company’s glass tableware business in ~~2021 and a higher~~Colombia in the first nine months of 2022, as well as the non-recurrence of the Paddock-related charge in the ~~current year period,~~first nine months of 2021, partially offset by ~~higher segment operating profit, a~~the non-recurrence of the gain recorded on a Brazilian indirect tax credit in ~~the second quarter of~~ 2021, ~~lower restructuring charges~~higher retained corporate and ~~lower~~other costs and higher net interest expense ~~than~~in the first nine months of 2022 compared to the same period in the prior ~~year period.~~ year.

Segment operating profit for reportable segments ~~for~~in the first nine months of ~~2021~~2022 was ~~$172~~$103 million higher ~~than~~compared to the ~~same period in the prior year,~~first nine months of 2021, primarily due to higher sales and production levels, ~~as well as~~ strong operating performance, benefits from margin expansion initiatives, higher net prices and the ~~benefit~~non-recurrence of ~~margin expansion initiatives.~~severe weather that impacted the Americas in the first quarter of 2021, partially offset by elevated asset project activity and unplanned production downtime, the unfavorable effects of changes in foreign currency exchange rates and the unfavorable impact from divestitures in earlier periods.

bankruptcy case. The agreement in principle ~~provides~~provided for total consideration of $610 million to fund ~~a trust established under section 524(g) of~~ the ~~Bankruptcy Code on~~Paddock Trust (as defined in Note 9 to the ~~effective date of a plan of reorganization, which is subject to definitive documentation and satisfaction of certain conditions.~~Condensed Consolidated Financial Statements). The Company recorded a charge of $154 million related to its potential liability under the Paddock support agreement during the first fiscal quarter of 2021, primarily related to an increase to Paddock’s asbestos reserve estimate in consideration for the channeling injunction to be included in the Plan (as defined in Note 10 to the Condensed Consolidated Financial Statements) protecting ~~O-I Glass~~the Company and its affiliates from Asbestos ~~Claims.~~Claims (as defined in Note 10 to the Condensed Consolidated Financial Statements). In July 2022, the Plan became effective, and the Paddock Trust was funded by the Company and Paddock with consideration totaling $610 million.

Net interest expense for the first nine months of ~~2021 decreased $59~~2022 increased $22 million compared to the same period in ~~2020,~~2021, primarily due to ~~lower~~higher note repurchase premiums and refinancing fees and charges and higher interest rates, partially offset by lower debt ~~levels in 2021.~~levels.

For the first nine months of ~~2021,~~2022, the Company recorded net earnings from continuing operations attributable to the Company of ~~$99~~$571 million, or ~~$0.61~~$3.59 per share (diluted), compared to ~~$278~~$99 million, or ~~$1.76~~$0.61 per share (diluted), in the first nine months of ~~2020.~~2021. As discussed below, net earnings in both periods included items that management considers not representative of ongoing ~~operations.~~operations and other adjustments. These items increased net earnings from continuing

operations attributable to the Company by $265 million, or $1.67 per share, in the first nine months of 2022 and decreased net earnings attributable to the Company by $138 million, or $0.86 per share, ~~(diluted),~~ in the first nine months of ~~2021 and increased earnings attributable to the Company by $147 million, or $0.94 per share (diluted), in the first nine months of 2020.~~2021.

Results of Operations — First nine months of ~~2021~~2022 compared with first nine months of ~~2020~~2021

Net Sales

The Company’s net sales in the first nine months of ~~2021~~2022 were ~~$4,770~~$5,163 million compared with ~~$4,595~~$4,770 million for the first nine months of ~~2020,~~2021, an increase of ~~$175~~$393 million, or approximately 4%8%. ~~Total glass~~Glass container shipments, in tons, were ~~down approximately 1%~~up nearly 2.5% in the first nine months of ~~2021~~2022, increasing net sales by approximately $68 million compared to the same period in ~~the prior year, primarily due to the sale of the Company’s ANZ businesses on July 31, 2020~~2021, which was more significantly impacted by COVID-19 and the ~~sale~~impact of severe weather in the ~~Company’s plant in Argentina in January 2021, which together decreased~~Americas. Higher selling prices increased net sales by ~~approximately $297 million in the current period. Excluding the divested businesses, glass container shipments increased approximately 5%, or approximately $249~~$567 million in the first nine months of ~~2021 compared to~~2022, driven by the ~~same period in 2020 which were more significantly impacted by COVID-19. Favorable~~pass through of higher cost inflation. Unfavorable foreign currency exchange rates ~~increased~~decreased net sales by ~~$129~~$240 million in the first nine months of ~~2021~~2022 compared to the prior year period, primarily driven by the ~~strengthening~~weakening of the Euro ~~Mexican peso and the Colombian peso~~ compared to the U.S. dollar. ~~Higher selling prices increased~~The non-recurrence of the shipments related to the divestiture of the Company’s glass tableware business in Colombia on March 1, 2022 reduced net sales by ~~$112~~approximately $35 million in the first nine months of ~~2021.~~2022. Other sales were approximately ~~$18~~$33 million ~~lower~~higher in the first nine months of ~~2021~~2022 than the same period in the prior year driven by ~~lower~~higher machine parts sales to third parties.

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

Reportable segment net sales - 2020

$
4,498
Price

$
112

Sales volume and mix

249

Effects of changing foreign currency rates

129

Divestitures

(297)

Total effect on reportable segment net sales

193
Reportable segment net sales - 2021

$
4,691


Reportable segment net sales - 2021			$	4,691
Price	$	567
Sales volume and mix		68
Effects of changing foreign currency rates		(240)
Divestitures		(35)
Total effect on reportable segment net sales				360
Reportable segment net sales - 2022			$	5,051

Americas: Net sales in the Americas in the first nine months of ~~2021~~2022 were ~~$2,652~~$2,898 million compared to ~~$2,442~~$2,652 million for the first nine months of ~~2020,~~2021, an increase of ~~$210~~$246 million, or approximately 9%. ~~Total glass~~Higher selling prices in the region increased net sales by $279 million in the first nine months of 2022, driven by the pass through of higher cost inflation. Glass container shipments in the region were up approximately ~~2.5%~~1% in the first nine months of ~~2021~~2022 compared to the prior year period, ~~primarily due to stronger shipments compared to the same period in the prior year,~~ which was more significantly impacted ~~from COVID-19. The~~by COVID-19 and the impact of severe weather that affected the southern United States ~~in February 2021~~ and the divestiture of a plant in Argentina in January 2021 negatively impacted sales in the first nine months of 2021. Excluding the divestiture, glass container shipments were up approximately 3.5% in the first nine months of 2021. Higher shipments excluding the divestitureMexico. These higher shipment levels increased net sales by approximately ~~$93~~$9 million in the first nine months of ~~2021,~~2022 and more than offsetchoppy demand patterns and ongoing supply chain challenges, which are expected to continue in 2022. This was partially offset by the divestiture of the Cristar glass tableware business in ~~Argentina~~March 2022, which reduced net sales by approximately ~~$16 million.~~$35 million in the first nine months of 2022 compared to the same period in the prior year. The ~~favorable~~unfavorable effects of foreign currency exchange rate changes ~~increased~~decreased net sales by ~~$31~~$7 million in the first nine months of ~~2021~~2022 compared to ~~2020 as~~ the ~~Mexican peso and the Colombian peso strengthened~~same period in ~~relation to the U.S. dollar. Higher selling prices in the region increased net sales by $102 million in the first nine months of~~ 2021.

Europe: Net sales in Europe in the first nine months of ~~2021~~2022 were ~~$2,039~~$2,153 million compared to ~~$1,775~~$2,039 million for the first nine months of ~~2020,~~2021, an increase of ~~$264~~$114 million, or approximately ~~15%~~6%. Glass container shipments in the first nine months of ~~2021~~2022 were up approximately 8% compared to the first nine months of 2020, which was more significantly impacted from COVID-19, and this resulted in approximately $156 million of higher net sales. Favorable foreign currency exchange rates increased the region’s4%, increasing net sales by approximately ~~$98~~$59 million, ~~in the first nine months of 2021 as the Euro strengthened in relation~~compared to the ~~U.S. dollar.~~same period in 2021, driven by stronger shipments to beer, wine and non-alcoholic beverage customers. Higher selling prices in Europe increased net sales by ~~$10~~$288 million in the first nine months of ~~2021.~~

~~Asia Pacific: Net~~2022, driven by the pass through of higher cost inflation. Unfavorable foreign currency exchange rates decreased the region’s net sales ~~in Asia Pacific~~by approximately $233 million in the first nine months of ~~2021 were $0 compared to $281 million for~~2022 as the ~~first nine months of 2020, a decrease of $281 million, due~~Euro weakened in relation to the ~~sale of the ANZ businesses in the third quarter of 2020.~~

U.S. dollar.

Earnings from Continuing Operations before Income Taxes and Segment Operating Profit

Earnings from continuing operations before income taxes were $776 million in the first nine months of 2022 compared to $260 million in the first nine months of 2021, ~~compared~~an increase of $516 million. This increase was due to ~~$339 million~~higher segment operating profit, gains on the sale of land and buildings of two of the Company’s plants in the Americas and the Company’s glass tableware business in Colombia in the first nine months of ~~2020, a decrease~~2022 and the non-recurrence of ~~$79 million, or approximately 23%. This decrease was primarily due to~~ the ~~$280 million gain on the sale of the ANZ businesses in 2020 that did not reoccur in 2021 and a higher~~ Paddock-related charge in the ~~current year period,~~first nine months of 2021, partially offset by ~~higher segment operating profit, a~~the non-recurrence of the gain recorded on a

Brazilian indirect tax credit, higher retained corporate and other costs and higher net interest expense in the ~~second quarter~~first nine months of ~~2021, lower restructuring charges and lower interest expense than~~2022 compared to the same period in the prior ~~year period.~~year.

Segment operating profit of reportable segments in the first nine months of ~~2021~~2022 was ~~$650~~$753 million, compared to ~~$478~~$650 million for the first nine months of ~~2020,~~2021, an increase of ~~$172~~$103 million, or approximately ~~36%~~16%. This increase was primarily due to higher sales and ~~lower operating costs driven by higher~~ production levels, strong operating performance, benefits from the Company’s margin expansion initiatives, higher net prices and the ~~benefit~~non-recurrence of ~~margin expansion initiatives.~~severe weather that impacted the Americas in the first quarter of 2021, partially offset by elevated asset project activity and unplanned production downtime, the unfavorable effects of changes in foreign currency exchange rates and the unfavorable impact from divestitures in earlier periods.

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


Reportable segment operating profit - 2020			$	478
Reportable segment operating profit - 2021							$	650
Net price (net of cost inflation)	$	(26)			$	105
Sales volume and mix		61				24
Operating costs		142				20
Effects of changing foreign currency rates		11				(28)
Divestitures		(16)				(18)
Total net effect on reportable segment operating profit				172				103
Reportable segment operating profit - 2021			$	650
Reportable segment operating profit - 2022							$	753

Americas: Segment operating profit in the Americas in the first nine months of ~~2021~~2022 was ~~$357~~$388 million compared to ~~$268~~$357 million in the ~~same period~~first nine months of ~~2020,~~2021, an increase of ~~$89~~$31 million, or ~~33%~~9%. The impact of higher ~~sales excluding the divestiture, as~~shipments discussed above increased segment operating profit by ~~$24~~$10 million. ~~Cost inflation exceeded~~The benefit of higher selling prices exceeded cost inflation resulting in a net $4$17 million ~~decrease~~increase to segment operating profit in the ~~current year period.~~

first nine months of 2022. Operating costs in the first nine months of ~~2021~~2022 were ~~$64~~$13 million lower than in the same period inof the prior year ~~which improved segment operating profit. Included within these operating costs were~~and included benefits from the region’s margin expansion initiatives, ~~and higher production volumes, which more than~~partially offset ~~the significant impact of severe weather~~by furnace events in North America that ~~swept across the southern United States in February of 2021 and~~ resulted in higher repair costs and production downtime ~~unplanned repairs~~ and ~~higher outbound freight costs.~~elevated asset activity related to projects to increase capacity. The effects of foreign currency exchange rates increased segment operating profit by $2$4 million in the current year period.

Included in the above discussion of the factors impacting results, the region’s results ~~the Company estimates that segment operating profit in~~for the first nine months inof 2022 benefited from the ~~Americas was negatively impacted by approximately $46 million from the~~non-recurrence of severe weather that occurred in February of 2021, which ~~includes~~negatively impacted results by approximately $46 million, primarily due to surcharges for usage or excess usage of electricity and natural gas, ~~during the period of severe weather (see Note 10 to the Condensed Consolidated Financial Statements), as well as the estimated impacts of higher energy costs,~~ lost production downtime, lost sales and the cost of incremental repairs.

In August 2022, the Company completed the sale of its land and building for its Vernon, California plant in conjunction with a leaseback of this property. The Vernon, California leaseback transaction, the May 2022 sale leaseback transaction at the Brampton, Ontario, Canada plant and the sale of the Company’s Cristar tableware business in Colombia earlier in 2022 are part of the Company’s portfolio optimization program to divest non-core assets and decapitalize the business through sale-leaseback transactions and redeploy the proceeds to help fund attractive growth opportunities, which primarily include capital expenditures related to expansion projects and investments in the Company’s MAGMA innovation, as well as to reduce debt. The divestiture of the ~~plant in Argentina improved~~Cristar glass tableware business and the additional lease expense associated with the above sale leaseback transactions reduced segment operating profit by approximately $3$13 million in the first nine months of ~~2021. Also,~~2022 compared to the ~~region’s closure of a plant~~same period in the second quarter of 2020 did not have a material impact on its profitability in 2021, and significant savings are not expected in future quarters, but the closure is expected to avoid anticipated losses from this plant in the future. The outcome of this plant closure is in-line with management’s expectations.prior year.

Europe: Segment operating profit in Europe in the first nine months of ~~2021~~2022 was ~~$293~~$365 million compared to ~~$191~~$293 million in the same period of ~~2020,~~2021, an increase of ~~$102~~$72 million, or ~~53%~~25%. The impact of higher shipments discussed above increased segment operating profit by ~~$37~~approximately $14 million. The benefit of higher selling prices exceeded cost inflation and increased segment operating profit by $88 million in the first nine months of 2022 compared to the first

nine months of 2021. Operating costs in the first nine months of 2022 were $7 million lower than in the same period of the prior year, which reflected the net benefit of a $13 million subsidy received by the Italian government to help mitigate the impact of elevated energy costs and an insurance recovery in the prior year that did not repeat this year. The effects of foreign currency exchange rates ~~increased~~decreased segment operating profit by $9$32 million in the current year period. ~~Higher production volumes, benefits from margin expansion initiatives and cost control measures~~The divestiture of the Le Parfait brand in December 2021 reduced ~~the region’s operating costs and increased~~ segment operating profit by approximately ~~$78~~$5 million in the first nine months of ~~2021~~2022 compared to the same period in the prior year. ~~Lower net selling prices (net of cost inflation) decreased segment operating profit by $22 million~~

~~Asia Pacific: Segment~~Company to procure natural gas at then-current market prices and subject to market availability and could cause the Company to experience a significant increase in operating ~~profit in Asia Pacific~~costs or result in the ~~first nine month~~temporary or permanent cessation of ~~2021 was $0 compared~~delivery of natural gas to ~~$19 million in the first nine months of 2020, a decrease of $19 million, due to the sale~~several of the ~~ANZ businesses~~Company’s manufacturing plants in Europe. In addition, depending on the ~~third quarter~~duration and ultimate outcome of ~~2020.~~

the conflict between Russia and Ukraine, future long-term supply arrangements for natural gas may not be available at reasonable prices or at all.

Interest Expense, Net

Net interest expense for the first nine months of ~~2021~~2022 was ~~$153~~$175 million compared to ~~$212~~$153 million for the same period of ~~2020.~~2021. This ~~decrease~~increase was primarily due to ~~lower~~higher note repurchase premiums and refinancing fees and charges and higher interest rates, partially offset by lower debt ~~levels in 2021.~~levels. Net interest expense infor the first nine months of ~~2020~~2022 included ~~$44~~$26 million for note repurchase premiums, third-party fees and the write-off of deferred finance fees that related to debt that was repaid prior to its ~~maturity.~~maturity and the Company’s new bank credit agreement.

Provision for Income Taxes

The Company’s effective tax rate from operations for the nine months ended September 30, ~~2021~~2022 was ~~55.4%~~21.1% compared to ~~14.7%~~55.4% for the nine months ended September 30, ~~2020.~~2021. The effective tax rate for the first nine months of ~~2021~~2022 differed from the first nine months of ~~2020~~2021 due to the favorable tax provisions on the sales of the tableware business and the land and buildings of its Brampton, Canada and Vernon, California plants in the first nine months of 2022 and the charge related to the Paddock support agreement liability recorded without a tax benefit in the first nine months of 2021, as well as a change in the mix of geographic earnings.

Net Earnings Attributable to Non-Controlling Interests

Net earnings attributable to non-controlling interests for the first nine months of 2022 was $41 million compared to $17 million for the first nine months of 2021. This increase was primarily due to approximately $29 million of non-controlling interest recorded in the first quarter of ~~2021, the nonoccurrence of~~2022 associated with the gain on the sale of ~~ANZ, which was recorded as non-taxable~~the Company’s glass tableware business in ~~the third quarter of 2020, as well as to a change in geographic mix of earnings.~~Colombia.

Net Earnings from Continuing Operations Attributable to the Company

For the first nine months of ~~2021,~~2022, the Company recorded net earnings from continuing operations attributable to the Company of ~~$99~~$571 million, or ~~$0.61~~$3.59 per share (diluted), compared to ~~$278~~$99 million, or ~~$1.76~~$0.61 per share (diluted), in the first nine months of ~~2020.~~2021. Earnings in the first nine months of ~~2021~~2022 and ~~2020~~2021 included items that management considered not representative of ongoing operations and other adjustments as set forth in the following table (dollars in millions):

3736

Net Earnings

Increase

(Decrease)
Description

2021

2020
Gain on Sale of ANZ businesses

$

$
280
Restructuring, asset impairment and other charges

(21)

(80)
Charge related to Paddock support agreement liability

(154)

Charge for deconsolidation of Paddock

(14)
Pension settlement charges

(5)

(8)
Brazil indirect tax credit

69

Strategic transaction costs

(7)
Charges for note repurchase premiums and write-off of finance fees

(44)
Net (provision) benefit for income tax on items above

(27)

20
Total

$
(138)

$
147


	Net Earnings
	Increase
	(Decrease)
Description	2022		2021
Gain on sale of divested business	$	55	$
Gain on sale leasebacks		334
Restructuring, asset impairment and other charges		(21)		(21)
Charges for note repurchase premiums and write-off of finance fees		(26)
Brazil indirect tax credit				69
Pension settlement charges		(5)		(5)
Charge related to Paddock support agreement liability				(154)
Net provision for income tax on items above		(43)		(27)
Net impact of noncontrolling interests on items above		(29)
Total	$	265	$	(138)

Forward Looking Operational and Financial Impacts ~~from the COVID-19 Pandemic~~

●

Despite record low inventories levels and production constrained in several key markets until new capacity is commissioned, the Company expects full year 2022 sales shipment growth (in tons) to increase approximately 1% compared to 2021. However, the Company continues to monitor macro trends, including potential recession signals or a U.S. rail strike, which may affect its business outlook.

●

The Company expects full year 2021 sales shipment growth to be at least 4% (in tons) compared to 2020 (excluding the impact of divestitures), representing a partial volume recovery to 2019 levels. Likewise, the Company expects continued benefits from its initiatives to expand ~~margins.~~margins and higher selling prices that are expected to more than offset cost inflation. Operating costs will be negatively impacted from incremental costs for expansion project activity.

●

The Company will continue to focus on long-term value creation, including advancing the MAGMA deployment. ~~Also, the~~The Company ~~will continue to advance the Paddock Chapter 11 process to document and finalize the terms of a plan of reorganization pursuant to section 524(g) of the Bankruptcy Code, consistent~~remains on track with ~~the agreement~~its first MAGMA greenfield plant in ~~principle announced on April 26, 2021, which is expected to achieve a final, certain and equitable resolution of its legacy asbestos-related claims liabilities.~~ Kentucky starting 2024.

●

~~Cash~~Including the funding of the Paddock trust and related expenses, cash provided by ~~continuing~~ operating activities is expected to ~~approximate $660~~be approximately $155 million ~~in 2021. This outlook assumes~~for 2022. Excluding the ~~continued suspension~~one-time funding of ~~all asbestos-related claims payments, pending confirmation~~the Paddock trust and ~~effectiveness of a plan of reorganization~~related expenses, cash provided by operating activities is expected to be approximately $775 million for ~~Paddock. In addition, capital~~2022. Capital expenditures in ~~2021~~2022 are expected to ~~approximate $400~~be approximately $575 million.

●

The European Union is preparing for potential Russian natural gas curtailments through this next winter and has established a plan to reduce natural gas usage by 15 percent to mitigate the brunt of these potential curtailments. Early in 2022, the Company started to install energy switching capabilities and establish agile network optimization plans and it expects to have approximately 50% covered by year-end 2022. At this time, it is unclear if meaningful issues will emerge. If natural gas curtailments impact its operations, the Company believes it is well positioned to manage the situation and believes the downside risk to its 2022 business outlook would be small.

●

The Company will continue to actively monitor the impact of the COVID-19 pandemic. The extent to which the Company’s operations will be impacted by the pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning the severity of the outbreak and actions by government authorities to contain the outbreak or treat its impact, among other things.

●

The Company will continue to actively monitor the impact of the conflict between Russia and Ukraine. The extent to which the Company’s operations will be impacted by this conflict will depend largely on future developments, including potential sanctions or other adverse repercussions on Russian-sourced energy supplies, which are highly uncertain and cannot be accurately predicted.

Items Excluded from Reportable Segment Totals

Retained Corporate Costs and Other

After the sale of the ANZ businesses, the remaining businesses in the Asia Pacific region do not meet the criteria of an individually reportable segment. Starting on August 1, 2020 and for the historical periods, the operating results of the other businesses that were historically included in the Asia Pacific segment and that have been retained by the Company have been reclassified to Retained corporate costs and other. The results of these entities were not significant for the nine-month periods ended September 30, 2021 or September 30, 2020.

Retained corporate costs and other for the third quarter of ~~2021~~2022 were ~~$49~~$63 million compared to ~~$35~~$49 million in the third quarter of ~~2020~~2021 and were $165 million for the first nine months of 2022 compared to $126 million for the first nine months of ~~2021 compared to $98 million for the first nine months of 2020.~~2021. These costs were higher in the ~~2021~~2022 periods primarily due to ~~additional research and development~~

~~expenses related to MAGMA, higher marketing expenses for the Company’s glass advocacy campaign and~~ higher management incentive ~~expenses.~~expense and elevated cost inflation.

~~Gain~~Gains on Sale of ~~the ANZ Businesses~~Divested Business and Sale Leasebacks of Land and Building

~~On July 31, 2020,~~

For the nine months ended September 30, 2022, the Company recorded a pretax gain of $55 million related to the sale of the Company’s glass tableware business in Colombia. For the three and nine months ended September 30, 2022, the Company recorded pretax gains of approximately $153 million and $334 million, respectively, on the sale of land and buildings at two of its plants in the Americas. Additional details of these transactions are described below.

In August 2022, the Company completed the sale of the land and building of the Company’s Vernon, California (Los Angeles) plant to 2900 Fruitland Investors LLC and 2901 Fruitland Avenue Investors LLC. The Company recorded a pretax gain of approximately $153 million (approximately $153 million after tax) on the sale, which was recorded to Other income (expense), net on the Condensed Consolidated Results of Operations in the third quarter of 2022.

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

In March 2022, the Company completed the sale of its ~~ANZ businesses, which comprised the majority~~Cristar glass tableware business in Colombia to Vidros Colombia S.A.S, an affiliate of ~~its businesses~~Nadir Figueiredo S.A., a glass tableware producer based in ~~the Asia Pacific region~~Brazil. The related pretax gain was approximately $55 million (approximately ~~85% of net sales in that region for the full year 2019), to Visy. As a result, the Company recorded a net gain (including costs directly attributable to the sale of ANZ) of approximately $280~~$16 million ~~in the third quarter of 2020. This~~after tax and non-controlling interest). The pretax gain was recorded to Other income (expense), net on the Condensed Consolidated Results of ~~Operations.~~Operations in the first quarter of 2022.

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

Restructuring, Asset Impairment and Other Charges

For the three and nine months ended September 30, 2022, the Company recorded charges totaling $10 million and $21 million, respectively, for restructuring, asset impairment and other charges consisting of employee costs, such as severance, benefit-related costs and other exit costs (including related consulting costs attributed to restructuring of managed services activities) at a number of the Company’s locations in the Americas and Europe. The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

For the three and nine months ended September 30, 2021, the Company recorded charges totaling $12 million and $21 million, respectively, for restructuring, asset impairment and other charges (including related consulting costs attributed to restructuring of managed services activities) consisting of employee costs, such as severance, benefit-related costs and other exit costs at a number of the Company’s locations in the Americas and Europe. The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

Gain on Brazil Indirect Tax Credit

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

~~Restructuring, Asset Impairment and Other Charges~~

For the three and nine months ended September 30, 2021, the Company implemented several discrete restructuring initiatives and recorded restructuring and other charges of $12 million and $21 million, respectively. These charges consisted of employee costs, such as severance and benefit-related costs and other exit costs (including related consulting costs attributed to restructuring of managed services activities) at a number of the Company’s businesses in the Americas and Europe. The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

For the three and nine months ended September 30, 2020, the Company recorded charges totaling $9 million and $80 million, respectively, for restructuring, asset impairment and other charges. These charges reflect employee costs, such as severance, benefit-related costs, asset impairment and other exit costs primarily related to a reduction-in-force program for certain salaried employees and a plant closure in the Americas. The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

Charge for Paddock Support Agreement Liability

On April 26, 2021, the Company announced that its subsidiary, Paddock, had reached an agreement in principle to accept the terms of a mediator’s proposal regarding a consensual plan of reorganization in Paddock’s Chapter 11 bankruptcy case. The agreement in principle ~~provides~~provided for total consideration of $610 million to fund ~~a trust under section 524(g) of~~ the ~~Bankruptcy Code on~~Paddock Trust (as defined in Note 9 to the ~~effective date of a plan of reorganization, which is subject to definitive documentation and satisfaction of certain conditions.~~Condensed Consolidated Financial Statements). The Company ~~has~~ recorded a charge of $154 million related to its potential liability under the Paddock support agreement during the first fiscal quarter of 2021, primarily related to an increase to Paddock’s asbestos reserve estimate in consideration for the channeling injunction to be included in the Plan (as defined in Note 10 to the Condensed Consolidated Financial Statements) protecting ~~O-I Glass~~the Company and its affiliates from Asbestos ~~Claims.~~Claims (as defined in Note 10 to the Condensed Consolidated Financial Statements). This charge was recorded to Other income (expense), net on the Condensed Consolidated Results of Operations in the first quarter of 2021. In July 2022, the Plan became effective, and the Paddock Trust was funded by the Company and Paddock with consideration totaling $610 million.

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

~~Charge for Deconsolidation of Paddock~~

Following its Chapter 11 filing in January 2020, the activities of Paddock are now subject to review and oversight by the bankruptcy court. As a result, the Company no longer has exclusive control over Paddock’s activities during the bankruptcy proceedings. Therefore, Paddock was deconsolidated as of the Petition Date, and its assets and liabilities, which primarily included $47 million of cash, the legacy asbestos-related liabilities, as well as certain other assets and liabilities, were derecognized from the Company’s consolidated financial statements. Simultaneously, the Company recognized a liability related to the support agreement of $471 million, based on the accrual required under applicable accounting standards. Taken together, these transactions resulted in a loss of approximately $14 million, which was recorded as a charge in the first quarter of 2020.

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

Pension Settlement Charges

For ~~both~~each of the three and nine months ended September 30, 2022 and September 30, 2021, the Company settled a portion of its pension obligations and recorded approximately $5 million of pension settlement charges. ~~For the three and nine months ended September 30, 2020, the Company recorded charges totaling $0 and $8 million, respectively, of pension settlement charges.~~

~~Strategic Transaction Costs~~

For the three and nine months ended September 30, 2020, the Company recorded charges totaling $3 million and $7 million, respectively, for strategic transaction costs, which relate to activities that are aimed at exploring options to maximize investor value, focused on aligning the Company’s business with demand trends, improving the Company’s operating efficiency, cost structure and working capital management.

~~Discontinued Operations~~

On December 6, 2018, an ad hoc committee for the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) rejected the request by the Bolivarian Republic of Venezuela (“Venezuela”) to annul the award issued by an ICSID tribunal in favor of OI European Group B.V. (“OIEG”) related to the 2010 expropriation of OIEG’s majority interest in two plants in Venezuela (the “Award”). The annulment proceeding with respect to the Award is now concluded.

On July 31, 2017, OIEG sold its right, title and interest in amounts due under the Award to an Ireland-domiciled investment fund. Under the terms of the sale, OIEG received a payment, in cash, at closing equal to $115 million (the “Cash Payment”). OIEG may also receive additional payments in the future (“Deferred Amounts”) calculated based on the total compensation that is received from Venezuela as a result of collection efforts or as settlement of the Award with Venezuela. OIEG’s right to receive any Deferred Amounts is subject to the limitations described below.

OIEG’s interest in any amounts received in the future from Venezuela in respect of the Award is limited to a percentage of such recovery after taking into account reimbursement of the Cash Payment to the purchaser and reimbursement of legal fees and expenses incurred by the Company and the purchaser. OIEG’s percentage of such recovery will also be reduced over time. Because the Award has yet to be satisfied and the ability to successfully enforce the Award in countries that are party to the ICSID Convention is subject to significant challenges, the Company is unable to reasonably predict the amount of recoveries from the Award, if any, to which the Company may be entitled in the future. Any future amounts that the Company may receive from the Award are highly speculative and the timing of any such future payments, if any, is highly uncertain. As such, there can be no assurance that the Company will receive any future payments under the Award beyond the Cash Payment.

A separate arbitration involving two other subsidiaries of the Company -- Fabrica de Vidrios Los Andes, C.A. (“Favianca”), and Owens-Illinois de Venezuela, C.A. (“OIDV”) -- was initiated in 2012 to obtain compensation primarily for third-party minority shareholders’ lost interests in the two expropriated plants. However, on November 13, 2017, ICSID issued an award that dismissed this arbitration on jurisdiction grounds. In March 2018, OIDV and Favianca submitted to ICSID an application to annul the November 13, 2017 award; on November 22, 2019, OIDV and Favianca’s request to annul the award was rejected by an ICSID ad hoc committee. The two subsidiaries are evaluating potential next steps.

Capital Resources and Liquidity

“(the “Original Agreement”), which ~~amended and restated~~refinanced in full the previous credit ~~agreement (the “Previous Agreement”).~~agreement. The ~~proceeds from the~~Original Agreement ~~were used to repay all outstanding amounts under the Previous Agreement.~~

At September 30, ~~2021,~~2022, the Credit Agreement includes a $300 million revolving credit facility, a ~~$1.2 billion~~$950 million multicurrency revolving credit facility and ~~a $1.5~~ ~~billion~~$1,450 million in term loan A ~~facility~~facilities ($~~1,068~~1,444 million outstanding balance at September 30, ~~2021,~~2022, net of debt issuance costs). At September 30, ~~2021,~~2022, the Company had unused credit of ~~$1,489~~$1.24 ~~million~~

billion available under the Credit Agreement. The weighted average interest rate on borrowings outstanding under the Credit Agreement at September 30, ~~2021~~2022 was ~~1.58%~~4.81%.

The Credit Agreement also contains one financial maintenance covenant, a ~~Total~~Secured Leverage Ratio ~~(the “Leverage Ratio”)~~(as defined in the Credit Agreement), that requires the Company not to exceed a ratio of ~~5.0x~~2.50x calculated by dividing consolidated ~~total debt, less cash~~Net Indebtedness that is then secured by Liens on property or assets of the Company and ~~cash equivalents,~~certain of its subsidiaries by Consolidated EBITDA, ~~with such Leverage Ratio decreasing to (a) 4.75x for the quarter ending September 30, 2021~~as each term is defined and ~~(b) 4.50x for the quarter ending December 31, 2021 and thereafter,~~ as ~~defined and~~ described in the Credit Agreement. The maximum Leverage Ratio is subject to an increase of 0.5x for (i) any fiscal quarter during which certain qualifying acquisitions (as specified in the Agreement) are consummated and (ii) the following three fiscal quarters, provided that the Leverage Ratio shall not exceed 5.0x. ~~The~~Secured Leverage Ratio could restrict the ability of the Company to undertake additional financing or acquisitions to the extent that such financing or acquisitions would cause the Secured Leverage Ratio to exceed the specified maximum.

In ~~May 2020,~~August 2022, the Company redeemed $300 million aggregate principal amount of its 5.875% Senior Notes due 2023. Following the redemption, $250.0 million aggregate principal amount of the 5.875% Senior Notes due 2023 remained outstanding. The redemption was funded with cash on hand. The Company recorded approximately $7 million of additional interest charges for note repurchase premiums and the write-off of unamortized finance fees related to this redemption.

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

In November 2021, the Company issued ~~$700~~$400 million aggregate principal amount of senior notes. The senior notes bear interest at a rate of ~~6.625%~~4.75% per annum and mature on ~~May 13, 2027.~~February 15, 2030. The senior notes were issued via a private placement and are guaranteed by certain of the Company’s domestic subsidiaries. The net proceeds, after deducting debt

issuance costs, totaled approximately ~~$690~~$395 million and, together with cash on hand, were used to redeem the ~~remaining $130~~$310 million aggregate principal amount of the Company’s outstanding ~~4.875% senior notes~~4.00% Senior Notes due ~~2021, approximately $419 million aggregate principal amount of the Company’s outstanding 5.00% senior notes due 2022~~2023 and approximately ~~$105~~$128 million of ~~other secured borrowings.~~term loan A borrowings under the Previous Agreement. The Company recorded approximately ~~$38~~$13 million of additional interest charges for note repurchase premiums and write-off of unamortized finance fees related to these redemptions.

Material Cash Requirements

Other than the funding of the Paddock Trust that occurred in July of 2022, there have been no material changes to the Company’s material cash requirements at September 30, 2022 from those described in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations -Capital Resources and Liquidity - Material Cash Requirements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Cash Flows

Operating activities: Cash ~~provided by~~utilized in continuing operating activities was ~~$449~~$224 million for the nine months ended September 30, ~~2021,~~2022, compared to ~~$128~~$449 million cash provided by continuing operating activities for the nine months ended September 30, ~~2020.~~2021. The ~~increase~~decrease in cash provided by continuing operating activities in the first nine months of ~~2021~~2022 was primarily due to the $618 million that the Company paid in the third quarter of 2022 to fund the Paddock Trust and related expenses, as well as due to a ~~lower~~higher use of cash from working capital and ~~higher~~other operating items and lower non-cash charges, ~~which more than~~partially offset ~~lower~~by higher net earnings than in the same period in 2020. For the nine months ended September 30, 2021, the Company has paid approximately $14 million toward restructuring activities compared to $32 million in the same period in the prior year. In the first nine months of both 2021 and 2020, all asbestos-related payments were stayed as a result of Paddock’s Chapter 11 filing in early January 2020.2021. See Note 10 to the Condensed Consolidated Financial Statements for additional information on Paddock.

For the nine months ended September 30, ~~2021,~~2022, the Company has contributed approximately ~~$33~~$22 million totoward its defined benefit pension plans compared ~~with $32~~to $33 million in the same period in the prior year. ~~The Company expects to contribute between $100 million and $175 million to its pension plans from the fourth quarter of 2021 through 2024.~~

Working capital was a use of cash of ~~$139~~$162 million in the first nine months of ~~2021,~~2022, compared to a use of cash of ~~$402~~$139 million in the same period in ~~2020.~~2021. The use of cash from working capital was ~~lower~~higher in the first nine months of ~~2021, primarily~~2022 due, in part, to ~~lower~~higher accounts receivable resulting from higher sales and ~~higher accounts payable.~~less factoring compared to the previous year end. For the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, the Company’s use of its accounts receivable factoring programs resulted in ~~a decrease~~decreases of ~~$20~~$34 million and ~~$113~~$20 million, respectively, to cash ~~from~~provided by (utilized in) operating activities. Excluding the impact of accounts receivable factoring, the Company’s days sales outstanding as of September 30, ~~2021~~2022 were comparable to September 30, ~~2020.~~2021. For the nine months ended September 30, 2022, other cash flows from operating activities were a higher use of cash of approximately $65 million compared to the same period in the prior year, primarily due to the Company paying a $38 million tax audit settlement in Mexico.

Investing activities: Cash ~~utilized in~~provided by investing activities was ~~$202~~$108 million for the nine months ended September 30, ~~2021,~~2022, compared to ~~$151~~$202 million of cash ~~provided from~~utilized in investing activities for the nine months ended September 30, ~~2020.~~2021. Capital spending for property, plant and equipment was ~~$268~~$346 million during the first nine months of ~~2021,~~2022, compared to ~~$246~~$268 million in the same period in ~~2020.~~2021. The Company’s 2022-2024 capital expenditure plan to enable profitable growth has evolved amid ongoing supply chain challenges. The Company now anticipates that it will undertake a broader range of smaller scope capital projects to de-risk project execution. The Company also plans to accelerate the development of its Generation 3 MAGMA solution. Additionally, the Company announced that it will spend up to $240 million to build its first U.S. MAGMA greenfield facility in Bowling Green, KY, which is expected to commence production in mid-2024. The Company estimates that its full year ~~2021~~2022 capital expenditures should be approximately ~~$400~~$575 million. ~~To accommodate expected future sales growth,~~

In addition, as previously disclosed, the Company ~~intends~~entered into an Order with the Oregon Department of Environmental Quality to ~~increase~~submit a permit application to install pollution control equipment at its Portland, Oregon manufacturing facility or to cease its operations at that facility by June 30, 2022. In the second quarter of 2022, the Company submitted the permit application to install pollution control equipment, allowing it to continue operations at the Portland facility. The current plan for this pollution control equipment will be implemented in 2022 and 2023, and the 2022 capital spending is included in the Company’s estimated full year 2022 capital expenditures ~~for property, plant and equipment to a total~~noted above.

The Company received cash proceeds of approximately ~~$1.95 billion during the three-year period beginning January 1, 2022 and ending December 31, 2024. This spending includes maintenance-related capital expenditures as well as approximately $680~~$368 million in ~~capital expenditures~~the first nine months of 2022 related to ~~increase capacity in supply-constrained geographies~~the sale of the land and ~~categories, including using~~buildings of the Company’s ~~MAGMA technology. Based on~~plants in Brampton, Ontario, Canada and Vernon, California. The Company also received approximately $96 million of cash proceeds for the ~~Company’s current investment plan, capital expenditures are expected~~sale of miscellaneous businesses and other assets, primarily related to ~~ramp up~~its Cristar glass tableware business in ~~2022 to approximately $650 to $700 million, peak in 2023 and start to moderate in 2024.~~

~~On July 31, 2020,~~Colombia. In the first nine months of 2021, the Company ~~completed~~received approximately $58 million related to the sale of its ANZ ~~businesses~~businesses. Contributions to ~~Visy. Cash proceeds, net~~joint ventures were $11 million and $0 in the first nine months of ~~costs directly attributable to~~2022 and 2021, respectively.

As a result of the ~~sale~~funding of ~~ANZ,~~the Paddock Trust and the cancellation of ~~approximately $441 million were received~~the pledge of equity interests in reorganized Paddock, on July 20, 2022, the Company regained exclusive control over reorganized Paddock’s activities. Therefore, at that date in the third quarter of ~~2020,~~ 2022, reorganized Paddock was reconsolidated, and

~~the~~ its remaining ~~balance of $58 million was received by the Company in the first quarter of 2021. In addition and as discussed below, the Company received proceeds for a sale leaseback transaction executed in conjunction with the ANZ sale. Also, for the nine months ended September 30, 2021, the Company has received approximately $8 million from the sale of miscellaneous~~ assets, ~~and other businesses, which included the sale of its plant in Argentina in the first quarter of 2021. The Company intends to complete approximately $575~~including $12 million of ~~additional divestitures of non-core assets~~cash and ~~several sale leaseback transactions during the remainder of 2021 through 2024. The Company plans to use these proceeds to fund its increased capital expenditures and to reduce debt.~~

Following Paddock’s Chapter 11 filing in January 2020, the activities of Paddock are now subject to review and oversight by the bankruptcy court. As a result, the Company no longer has exclusive control over Paddock’s activities during the bankruptcy proceedings. Therefore, Paddock was deconsolidated, and its assets and liabilitiescash equivalents were ~~derecognized from the Company’s financial statements, which resulted in an investing outflow of $47 million~~recognized in the Company’s ~~first quarter~~condensed consolidated statement of ~~2020 Condensed Consolidated Cash Flows. See Note 10 to the Condensed Consolidated Financial Statements for more information.~~cash flows.

Financing activities: Cash utilized in financing activities was $54 million for the nine months ended September 30, 2022, compared to cash utilized in financing activities of $171 million for the nine months ended September 30, ~~2021, compared to $219 million of cash utilized in financing activities for the nine months ended September 30, 2020.~~2021. The decrease in cash utilized in financing activities was primarily due to ~~lower~~a $115 million decrease in net ~~borrowings~~repayments of debt in the first nine months of 2021. The Company normally increases borrowings in the first nine months of the year to service working capital needs. In 2021, borrowings for working capital were not as significant as in 2020, which resulted in a net reduction of borrowings2022 compared to the same period in the prior year. The Company paid ~~$50~~$29 million for finance fees and premiums related to financing activities in the first nine months of ~~2020,~~2022, whereas no fees or premiums were paid in the same period in 2021. ~~Also, the Company paid approximately $10 million and $8 million related to hedging activity in the first nine months of 2021 and 2020, respectively.~~

~~In addition,~~During each of the ~~Company received approximately $155 million in proceeds for a sale leaseback transaction in the third quarter of 2020 that was executed in conjunction with the ANZ sale.~~

In February 2021, the Company’s Board of Directors authorized a $150 million anti-dilutive share repurchase program for the Company’s common stock that the Company intends to use to offset stock-based compensation provided to the Company’s directors, officers,nine-month periods ended September 30, 2022 and ~~employees. This authorization supersedes and replaces any prior repurchase authorizations.~~ ~~Through the nine months ended~~ September 30, 2021, the Company repurchased $30 million of shares of the Company’s common ~~stock under this program. No share repurchases were made during~~stock. The Company received approximately $38 million and paid approximately $10 million related to hedge activity for the first nine months ended September 30, 2022 and September 30, 2021, respectively. Distributions to non-controlling interests increased from $10 million in the nine months ended September 30, ~~2020. The Company paid $8~~2021 to $27 million for the same period in ~~dividends~~2022 due to a higher distribution on the gain on the sale of the Cristar glass tableware business in the first nine months of 2020 and did not pay any dividends in the first nine months of 2021. In response to the COVID-19 pandemic, the Company suspended its dividend after the first quarter of 2020 and has no plans to reinstate it at this time.Colombia.

The Company anticipates that cash flows from its operations and from utilization of credit available under the Agreement will be sufficient to fund its operating and seasonal working capital needs, debt service and other obligations on a short-term (12 months) and long-term basis. However, as the Company cannot predict the duration or scope of the COVID-19 pandemic or the conflict between Russia and ~~its~~Ukraine and their impact on ~~its~~the Company’s customers and ~~suppliers. The~~suppliers, the negative financial impact to the Company’s results cannot be reasonably estimated, but could be material. The Company is actively managing its business to maintain cash flow, and it has significant liquidity. The Company believes that these factors will allow it to meet its anticipated funding requirements. ~~The Company anticipates~~On April 26, 2021, O-I announced that ~~cash flows~~its subsidiary Paddock had reached an agreement in ~~2021 will continue~~principle to ~~benefit from~~accept the ~~operation~~terms of the automatic stay in Paddock’s Chapter 11 filing, which stays ongoing litigation and submission of claims outside the Bankruptcy Court and defers payment in connection with asbestos-related liabilities ~~until~~ a mediator’s proposal regarding a consensual plan of reorganization ~~is confirmed~~under the Bankruptcy Code. The agreement provided for total consideration of $610 million to fund the Paddock Trust (as defined in Note 9 to the Condensed Consolidated Financial Statements). In July 2022, the Plan became effective, and ~~becomes effective.~~the Paddock Trust was funded by the Company and Paddock with consideration

totaling $610 million plus related expenses. See Note 10 to the Condensed Consolidated Financial Statements for further information.

Critical Accounting Estimates

The Company’s analysis and discussion of its financial condition and results of operations are based upon its consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. The Company evaluates these estimates and assumptions on an ongoing basis. Estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances at the time the financial statements are issued. The results of these estimates may

form the basis of the carrying value of certain assets and liabilities and may not be readily apparent from other sources. Actual results, under conditions and circumstances different from those assumed, may differ from estimates.

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

There have been no other material changes in critical accounting estimates at September 30, ~~2021~~2022 from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Forward-Looking Statements

This document contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 27A of the Securities Act of ~~1933.~~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 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 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)~~(2) the Company’s ability to obtain the benefits it anticipates from the Corporate Modernization, ~~(9)~~(3) the Company’s ability to manage its cost structure, including its success in implementing restructuring or other plans aimed at improving the Company’s operating efficiency and working capital management, and achieving cost savings, ~~and remaining well-positioned to address Paddock’s legacy liabilities, (10)~~(4) the Company’s ability to acquire or divest businesses, acquire and expand plants, integrate operations of acquired businesses and achieve expected benefits from acquisitions, divestitures or expansions, ~~(11)~~(5) the Company’s ability to achieve its strategic plan, ~~(12)~~(6) the Company’s ability to improve its glass melting technology, known as the MAGMA program, ~~(13)~~and implement it within the timeframe expected, (7) foreign currency fluctuations relative to the U.S. dollar, ~~(14)~~(8) changes in capital availability or cost, including interest rate fluctuations and the ability of the Company to refinance debt on favorable terms, ~~(15)~~(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, war, civil disturbance or acts of terrorism, natural disasters, and weather, ~~(16)~~(10) the Company’s ability to generate sufficient future cash flows to ensure the Company’s goodwill is not impaired, ~~(17)~~(11) consumer preferences for alternative forms of packaging, ~~(18)~~(12) cost and availability of raw materials, labor, energy and transportation ~~(19)~~(including impacts related to the current conflict between Russia and Ukraine and disruptions in supply of raw materials caused by transportation delays), (13) consolidation among ~~competitors~~competitors and customers, ~~(20)~~(14) unanticipated expenditures with respect to data privacy, environmental, safety and health laws, ~~(21)~~(15) unanticipated operational disruptions, including higher capital spending, ~~(22)~~(16) the Company’s ability to further develop its sales, marketing and product development capabilities, ~~(23)~~(17) the failure of the Company’s joint venture partners to meet their obligations or commit additional capital to the joint venture, ~~(24)~~(18) the ability of the Company and the third parties on which it relies for information technology system support to prevent and detect

security breaches related to cybersecurity and data privacy, ~~(25)~~(19) changes in U.S. trade policies, (20) risks related to recycling and recycled content laws and regulations, (21) risks related to climate-change and air emissions, including related laws or regulations and the other risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 and any subsequently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or the Company’s other filings with the Securities and Exchange Commission.

It is not possible to foresee or identify all such factors. Any forward-looking statements in this document are based

on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes are appropriate in the circumstances. Forward-looking statements are not a guarantee of future performance and actual results or developments may differ materially from expectations. While the Company continually reviews trends and uncertainties affecting the Company's results of operations and financial condition, the Company does not assume any obligation to update or supplement any particular forward-looking statements contained in this document.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in market risk at September 30, ~~2021~~2022 from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Item 4. Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, the Company has investments in certain unconsolidated entities. As the Company does not control or manage these entities, its disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those maintained with respect to its consolidated subsidiaries.

As required by Rule 13a-15(b) of the Exchange Act, the Company carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of September 30, ~~2021.~~2022.

As required by Rule 13a-15(d) of the Exchange Act, the Company carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of any change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. There have been no changes in the Company’s internal control over financial reporting during the fiscal quarter ended September 30, ~~2021~~2022 that have materially affected, or are reasonably likely to ~~material~~materially affect, the Company’s internal control over financial reporting. Although the Company has modified its workplace practices globally due to the COVID-19 pandemic, resulting in most of its administrative employees working remotely, this has not materially affected its internal control over financial reporting. The Company is continually monitoring and assessing the COVID-19 situation on its internal controls to minimize the impact on their design and operating effectiveness.

4544

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

SEC regulations require the Company to disclose certain information about environmental proceedings if the Company reasonably believes that such proceedings may result in monetary sanctions above a stated threshold. The Company uses a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required. On June 3, 2021, Owens-Brockway Glass Container Inc. (“OBGC”), a wholly owned subsidiary of the Company, received a Notice of Civil Penalty Assessment and Order (the “Notice”) from the Oregon Department of Environmental Quality (“ODEQ”) alleging that, with respect to operations at OBGC’s Portland, Oregon facility, OBGC has exceeded certain permitted air emission limits since April 22, 2020, exceeded permitted air opacity limits between April 23, 2020 and March 16, 2021, and failed to timely notify ODEQ of air emission exceedances that occurred on March 16, 2020 and April 23, 2020. The Notice assessed a penalty to OBGC of approximately $1.0 million and required that OBGC undertake corrective actions to address the alleged violations. OBGC appealed the Notice. On October 22, 2021, OBGC and ODEQ resolved the alleged violations and OBGC’s appeal. Under the terms of a mutual agreement and final order, OBGC agreed to pay an immaterial penalty, which was less than the assessed penalty of $1.0 million, and take certain corrective actions at the plant.

~~Except as discussed above, no~~No such environmental proceedings were pending or contemplated as of September 30, ~~2021.~~ 2022.

For further information on legal proceedings, see Note 10 to the Condensed Consolidated Financial Statements, ~~"Contingencies,"~~“Contingencies,” that is included in Part I of this Quarterly Report and incorporated herein by reference.

Item 1A. Risk Factors.

As discussed in Note 10 to the Condensed Consolidated Financial Statements, “Contingencies,” that is included in Part ~~Other than~~I of this Quarterly Report, in July 2022, Paddock emerged from Chapter 11 protection and the Paddock Trust (as defined in Note 9) was funded, the occurrence of which modifies the risks factors on this topic included in “Risks Related to the Corporate Modernization” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Otherwise, except as set forth below, there have been no material changes in risk factors at September 30, ~~2021~~2022 from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~

The resolution of asbestos claims pursuant to Paddock’s previously announced agreement-in-principle is subject to a number of risks and uncertainties that may prevent or delay implementation of the resolution of these claims on the terms set forth in such agreement-in-principle.

On April 26, 2021, the Company announced that its subsidiary, Paddock Enterprises LLC (“Paddock”) reached an agreement in principle to accept the terms of a mediator’s proposal regarding a consensual plan of reorganization under the Bankruptcy Code. The agreement in principle provides for total consideration of $610 million to fund a trust on the effective date of a plan of reorganization, subject to definitive documentation and satisfaction of certain conditions. The agreement in principle was reached with both the Future Claimants’ Representative and the Asbestos Claimants’ Committee, who agreed to support a plan of reorganization for Paddock that incorporates the settlement (the “Plan”). The Plan will require the approval by at least 75% of asbestos claimants voting on the Plan and be subject to approval by the Bankruptcy Court and the District Court. If approved and consummated, the Plan would permanently resolve all current and future asbestos claims against Paddock, and would protect all of O-I Glass and its subsidiaries from those claims, under Section 524(g) of the U.S. Bankruptcy Code.

The confirmation and consummation of the Plan, and accordingly the final resolution of asbestos claims against Paddock in accordance with the Plan, are subject to a number of risks and uncertainties, which could have the effect of delaying or preventing the confirmation and consummation of the Plan, increasing the Company’s costs in connection with effecting the settlement and the consummation of the Plan or reducing the benefit related to the consummation of the Plan. In light of these risks and uncertainties, the Company cannot provide assurance that the Plan, as contemplated by the agreement in principle, will be consummated on the time schedule that the Company anticipates or at all, or if consummated that the Company will recognize all benefits from the consummation of the Plan that the Company anticipates. These risks and uncertainties include:

2021.

●

~~the risk that the parties to the settlement are unable to agree upon the final plan documents, including the Plan,~~

~~to effectuate the settlement;~~

●

~~the risk that the Plan is not approved by a favorable vote of 75% of the holders of asbestos claims voting on the Plan;~~

●

~~the risk that the Plan is not approved by the Bankruptcy Court or the District Court and that orders so approving the Plan and issuing the protective injunctions do not become final; and~~

●

risks and uncertainties if any interested parties object to the Plan or appeal any order issued by the Bankruptcy Court or District Court approving the Plan, which objections and appeals, even if favorably resolved, may delay the consummation of the Plan and increase the Company’s costs in connection with the agreement-in-principle and related proceedings.

~~Information Technology-Failure~~Energy Costs or ~~disruption of the Company’s information technology, or those of third parties, could have a material adverse effect on its business~~Availability—Higher energy costs worldwide and ~~the results of operations.~~

The Company employs information technology (“IT”) systems and networks to support the business and relies on them to operate its plants, to communicate with its employees, customers and suppliers, to store sensitive business information and intellectual property, and to report financial and operating results. As with any IT system, the Company’s IT system, or any third-party system on which the Company relies, could fail on its own accord or may be vulnerable to a variety of interruptions due to events,interrupted power supplies, including but not limited to, natural disasters, terrorist attacks, power outages, fire, sabotage, equipment failures, cybersecurity vulnerabilities, and cyber-related attacks or computer crimes (e.g., ransomware or distributed denial-of-service attacks). In addition, the Company’s business continuity or disaster recovery plans may not effectively and timely resolve issues resulting from a cyberattack or other disruption. Asas a result of ~~any of~~ the ~~foregoing types of events, the Company may suffer material adverse effects on its reputation, financial condition, results of operations~~ current conflict between Russia and ~~cash flows.~~

Cybersecurity and Data Privacy-Security breaches affecting the Company or its third-party service providers could disrupt the Company’s business operations, result in the loss of critical and confidential information, and have a material adverse effect on its business, reputation and results of operations.

The Company has been subject to cyberattacks in the past, including, but not limited to, phishing and malware incidents, and the Company expects cyberattacks to increase in number, frequency and sophistication going forward. Although prior cyberattacks have not been material, future ~~attacks~~Ukraine, may have a material adverse effect on the Company’s ~~business operations, reputation~~consolidated assets or operations.

Electrical power, natural gas, and ~~financial results. As the prevalence of cyberattacks continues~~fuel oil are vital to ~~increase,~~ the Company’s ~~systems,~~operations as it relies on a continuous energy supply to conduct its business. Depending on the location and mix of energy sources, energy accounts for 10% to 20% of total manufacturing costs. Substantial increases and volatility in energy costs, including those resulting from extreme weather events that affect the Company’s facilities directly or its energy suppliers or the current conflict between Russia and Ukraine, could cause the Company to experience a significant increase in operating costs, which may have a material adverse effect on its assets or results of ~~third parties, including service providers, may~~operations.

For example, the current conflict between Russia and Ukraine has caused a significant increase in the price of natural gas and increased price volatility. Natural gas forms the primary energy source for the Company’s European operations, and a significant amount of natural gas in Europe is ultimately sourced from Russia. The Company’s European operations typically purchase natural gas under long-term supply arrangements and frequently agree on price with the relevant supplier in advance of the period in which the natural gas will be ~~subject~~delivered, which is shielding the Company from the full impact of increased natural gas prices.

However, the current conflict between Russia and Ukraine and the resulting sanctions, potential sanctions, government-mandated curtailments or government-imposed allocations, or other adverse repercussions on Russian-sourced energy supplies could cause the Company’s energy suppliers to ~~increased security threats,~~be unable or unwilling to deliver natural gas at agreed prices and quantities. If this occurs, the Company may ~~incur additional~~need to procure natural gas at then-current market prices, subject to market availability, which could cause the Company to experience a significant increase in operating costs ~~to upgrade and maintain its security measures in place to prevent and detect such threats. The Company’s security measures may be unable to anticipate, identify, detect~~ or prevent certain cyberattacks or security breaches, including due to the increasing use by attackers of tools and techniques that obfuscate or remove forensic evidence and that evade counter-measures, and any such incidents could result in ~~transactional errors, business disruptions, loss~~the temporary or permanent cessation of delivery of natural gas to several of the Company’s manufacturing plants in Europe. Alternatively, for certain plants that have energy switching capabilities, the Company may decide to switch to a different energy source, which could also result in a significant increase in operating costs. In addition, depending on the duration and ultimate outcome of the conflict between Russia and Ukraine, future long-term supply arrangements for natural gas may not be available at reasonable prices or ~~damage to intellectual property, loss~~at all. The occurrence of customers and business opportunities, unauthorized access to or disclosure of confidential or personal information (which could cause a breach of applicable data protection legislation), litigation or regulatory investigations and fines, penalties or intervention, reputational damage, reimbursement or other compensatory costs, and additional compliance costs, any of ~~which~~the foregoing could have a material adverse effect on the Company’s ~~financial condition,~~consolidated assets or results of ~~operations and cash flows. Any resulting costs or losses may not be covered by, or may exceed the coverage limits~~operations.

Labor—Some of the Company’s ~~cyber insurance.~~employees are unionized or represented by workers’ councils, and its business could be affected by labor shortages and labor cost increases.

The Company is party to a number of collective bargaining agreements with labor unions, which at September 30, 2022, covered approximately 74% of the Company’s employees directly associated with its operations in the U.S. and Canada. In June 2022, the Company entered into a new collective bargaining agreement for its principal collective bargaining agreement for the U.S., which approximates 73% of all union-affiliated employees in U.S. and Canada. This new collective bargaining agreement will expire in March 2025.

In addition, approximately 81% of employees in South America and Mexico are covered by other collective bargaining agreements. The collective bargaining agreements in South America and Mexico have varying terms and expiration dates. Upon the expiration of any collective bargaining agreement, if the Company is unable to negotiate acceptable contracts with labor unions, it could result in strikes by the affected workers and increased operating costs as a result of higher wages or benefits paid to union members. In Europe, a large number of the Company’s employees are employed in countries in which employment laws provide greater bargaining or other rights to employees than the laws of the U.S. Such employment rights require the Company to work collaboratively with the legal representatives of the employees to effect any changes to labor arrangements. For example, most of the Company’s employees in Europe are represented by workers’ councils that must approve any changes in conditions of employment, including salaries and benefits and staff changes, and may impede efforts to restructure the Company’s workforce.

The COVID-19 pandemic has also caused an overall tightened and increasingly ~~reliant on third parties~~competitive labor market. A number of factors may adversely affect the labor force available to ~~provide software, support~~the Company, including unemployment subsidies, the need for enhanced health and ~~management~~safety protocols and government regulations in the jurisdictions in which it operates. Increased competition for qualified labor could result in higher compensation costs for the Company, and a ~~host~~continuation of ~~related and other services across an array~~labor shortages, a lack of ~~business and operational functions, such as human resources, sales, electronic communications, data storage, finance, risk management and compliance, among others. The security and privacy measures~~qualified labor or increased turnover could result in a significant disruption of its operations and/or higher ongoing labor costs. Any of these ~~third parties implement may not be sufficient to anticipate, identify, detect or prevent cyberattacks or security breaches that~~occurrences could have a material adverse effect on the Company’s consolidated operations.

New Glass Melting Technologies—The Company’s inability to develop or apply new glass melting technology may affect its ability to transition to lower-carbon processes and competitiveness.Supply chain challenges have delayed the development of new melting technologies, which may have a material adverse effect on the Company’s consolidated operations.

The Company’s success depends partially on its ability to improve its glass melting technology and introduce processes that emit less carbon. One of these new technologies, known as the MAGMA program, seeks to reduce the amount of capital required to install, rebuild and operate the Company’s furnaces. It also is focused on the ability of these assets to be more easily turned on and off or adjusted based on seasonality and customer demand, utilize more recycled glass, produce lighter containers and use lower-carbon fuels. The Company is implementing its MAGMA program using a multi-generation development roadmap, which will include various deployment risks and will require the discovery of additional inventions through 2025. Current supply chain challenges have resulted in a delay in development of the Company’s MAGMA program. If the Company is unable to continue to improve this glass melting technology through research and development or licensing of new technology, the Company may not be able to remain competitive with other packaging manufacturers. As a result, its business, financial condition, results of operations or ability to transition to lower carbon operations could be adversely affected.

Global Economic Environment—The global credit, financial and ~~cash flows. While~~economic environment could have a material adverse effect on the Company’s ~~agreements with third-party service providers typically contain provisions that seek to eliminate~~operations and financial condition.

The global credit, financial and economic environment, and changes in economic conditions or ~~limit~~financial markets, could have a material adverse effect on the Company’s exposure to liability for damages from a cyberattack, there can be no assurance of compliance with such provisions or that such provisions will withstand legal challenges or cover all or any such damages.operations, including the following:

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In addition, new global privacy rules are being enacted and existing ones are being updated and strengthened. These laws impose obligations on companies regarding the handling of personal data and provide certain individual privacy rights to persons whose data is stored or processed. Any failure to comply with these laws and regulatory standards could subject us to legal and reputational risk. For example, in May 2018, the European Union (EU) implemented the General Data Protection Regulation (GDPR) that stipulates data protection and privacy regulations for all individuals within the EU and the European Economic Area (EEA). The Company has significant operations in the EEA and is subject to the GDPR. The GDPR imposes several stringent requirements for controllers and processors of personal data and could make it more difficult and/or more costly for the Company to use and share personal data, including placing obstacles on the transfer of personal data from Europe to the United States. In addition, the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020, is similar in many respects to the GDPR but also includes a private right of action and potential statutory damages exposure for certain types of data breaches. Other states in the U.S. have also been proposing and enacting laws similar to the CCPA. Although the Company takes reasonable efforts to comply with all applicable laws and regulations, there can be no assurance that the Company will not be subject to regulatory action, including fines, litigation, in the event of a statutory violation or security incident. To comply with the rules imposed by the GDPR, CCPA and other applicable data protection legislation, the Company may be required to put in place additional mechanisms which could adversely affect its financial condition, results of operations and cash flows.

●

Downturns in the business or financial condition of any of the Company’s customers or suppliers could result in a loss of revenues or a disruption in the supply of raw materials;

●

Unfavorable macroeconomic conditions, such as a recession or continued slowed economic growth, could negatively affect consumer demand for the Company’s products;

●

Cost inflation could negatively impact the Company’s costs for energy, labor, materials and services, and impact the Company’s profitability if increased costs are not fully passed on to customers through increased prices of the Company’s products;

●

Tightening of credit in financial markets or increasing interest rates could reduce the Company’s ability, as well as the ability of the Company’s customers and suppliers, to obtain future financing;

●

Volatile market performance could affect the fair value of the Company’s pension assets and liabilities, potentially requiring the Company to make significant additional contributions to its pension plans to maintain prescribed funding levels;

●

The deterioration of any of the lending parties under the Company’s revolving credit facility or the creditworthiness of the counterparties to the Company’s derivative transactions could result in such parties’ failure to satisfy their obligations under their arrangements with the Company;

●

A significant weakening of the Company’s financial position or results of operations could result in noncompliance with the covenants under the Company’s indebtedness; and

●

The current conflict between Russia and Ukraine, as well as any further actions by Russia or other countries relating to this conflict, and related economic sanctions imposed on Russia by other countries may further impact the global credit, financial and economic environment.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended September 30, ~~2021,~~2022, the Company purchased ~~619,666~~768,984 shares of its common stock for approximately $10 million pursuant to a $150 million anti-dilutive share repurchase program authorized by the Board of Directors that is intended to offset stock-based compensation provided to the Company’s directors, officers, and employees. Approximately ~~$120~~$80 million remained available for purchases under this program as of September 30, ~~2021.~~2022. The following table provides information about the Company’s purchases of its common stock during the three months ended September 30, ~~2021:~~2022:


Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
July 1 - July 31, 2022		768,984	$	12.98		768,984		80
August 1 - August 31, 2022								80
September 1 - September 30, 2022								80

Issuer Purchases of Equity Securities

Period

Total Number of Shares Purchased (in thousands)

Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Plan (in thousands)

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (in millions)

July 1 - July 31, 2021

620

$
16.12

620

120

August 1 - August 31, 2021

120

September 1 - September 30, 2021

120

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Item 6. Exhibits.


Exhibit 4.1*		Amendment No. 1 to Credit Agreement and Syndicated Facility Agreement, dated August 30, 2022, by and among the Borrowers named therein, Owens-Illinois General Inc., as Borrowers’ Agent, Wells Fargo Bank, National Association, as Administrative Agent, and the other Agents, Arrangers and Lenders named therein (filed as Exhibit 4.1 to O-I Glass, Inc.’s Form 8-K dated August 30, 2022, File No. 1-9576, and incorporated herein by reference).

Exhibit ~~10.1~~4.2*		Intercreditor Agreement, dated as of March 25, 2022, by and among Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent for the lenders party to the Amended Credit Agreement, and any other parties thereto, as amended by Amendment No. 1 to Credit Agreement and Syndicated Facility Agreement (filed as Annex B to Exhibit 4.1 to O-I Glass, Inc.’s Form 8-K dated August 30, 2022, File No. 1-9576, and incorporated herein by reference).

Exhibit 4.3*	Pledge Agreement, dated as of ~~Amended~~March 25, 2022, between Owens-Illinois Group, Inc., Owens-Brockway Packaging, Inc., and ~~Restated Performance Stock Unit~~Wells Fargo Bank, National Association, as Collateral Agent and any other parties thereto, as amended by Amendment No. 1 to Credit Agreement ~~for use under~~and Syndicated Facility Agreement (filed as Annex D to Exhibit 4.1 to O-I Glass, Inc.’s Form 8-K dated August 30, 2022, File No. 1-9576, and incorporated herein by reference).

Exhibit 4.4*		Security Agreement, dated as of March 25, 2022, between Owens-Illinois Group, Inc., each of the direct and indirect subsidiaries of Owens-Illinois Group, Inc. ~~Amended~~signatory thereto, and ~~Restated 2017 Incentive Award Plan~~Wells Fargo Bank, National Association, as Collateral Agent, as amended by Amendment No. 1 to Credit Agreement and Syndicated Facility Agreement (filed as Annex C to Exhibit 4.1 to O-I Glass, Inc.’s Form 8-K dated August 30, 2022, File No. 1-9576, and incorporated herein by reference).

Exhibit 31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1**		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.

Exhibit 32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.

Exhibit 101		Financial statements from the Quarterly Report on Form 10-Q of O-I Glass, Inc. for the quarter ended September 30, ~~2021,~~2022, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Results of Operations, (ii) the Condensed Consolidated Comprehensive Income, ~~(Loss),~~ (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements.

Exhibit 104		Cover Page Interactive Data file (formatted as iXBRL and contained in Exhibit 101).

*	Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

**	This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		O-I GLASS, INC.


Date	~~October 26, 2021~~November 2, 2022	By	/s/ John A. Haudrich
			John A. Haudrich
			Senior Vice President and Chief Financial Officer

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	Shares Outstanding (in thousands)
	September 30,	December 31,	September 30,
	2021	2020	2020

Shares of common stock issued (including treasury shares)	188,426	189,305	189,302

Treasury shares	31,599	31,911	32,136


Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased (in thousands)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan (in thousands)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (in millions)
July 1 - July 31, 2021		620	$	16.12		620		120
August 1 - August 31, 2021								120
September 1 - September 30, 2021								120