O-I Glass, Inc. /DE/ (OI)

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) before interest expense, net and provision for income taxes and excludes amounts related to certain items that management considers not representative of ongoing operations and other adjustments, as well as certain retained corporate costs. The 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 non-GAAP measures when presented outside of the financial statement footnotes. 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 the Chief Executive Officer), uses segment operating profit, supplemented by net sales and selected cash flow information, to evaluate segment performance and 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.

Financial information for the three and six months ended June 30, 2026 and 2025 regarding the Company’s reportable segments is as follows (dollars in millions):

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

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Executive Overview — Quarters ended June 30, 2026 and 2025

Net sales in the second quarter of 2026 decreased $38 million, or approximately 2%, compared to the same period in the prior year, primarily due to the impact from lower sales volumes, partially offset by slightly higher average selling prices and favorable foreign currency translation.

Loss before income taxes changed by $834 million in the second quarter of 2026 compared to earnings before income taxes in the same quarter in 2025. This change was primarily due to a goodwill impairment and lower segment operating profit in Europe.

Segment operating profit of reportable segments in the second quarter of 2026 was $54 million lower compared to the same period in the prior year, primarily due to lower net prices (net of cost inflation) and lower sales volumes, partially offset by lower operating costs and the favorable impact of foreign currency translation. Operating costs were favorably impacted by benefits from the Company’s Fit to Win initiative, partially offset by furnace events and operational disruptions following recent plant restructuring actions and other costs.

Net interest expense in the second quarter of 2026 increased $1 million compared to the second quarter of 2025.

In the second quarter of 2026, the Company recorded net loss attributable to the Company of $972 million, or $6.33 per share, compared to a net loss attributable to the Company of $5 million, or $0.03 per share, in the second quarter of 2025. As discussed below, net loss attributable to the Company in 2026 and 2025 included items that management considers not representative of ongoing operations and other adjustments. These items increased net loss attributable to the Company by $986 million, or $6.42 per share, in the second quarter of 2026 and increased net loss attributable to the Company by $86 million, or $0.56 per share, in the second quarter of 2025.

Results of Operations — Second Quarter of 2026 Compared with Second Quarter of 2025

Net Sales

The Company’s net sales in the second quarter of 2026 were $1,668 million compared with $1,706 million in the second quarter of 2025, a decrease of $38 million, or approximately 2%. Glass container shipments, in tons, were down approximately 5% in the second quarter of 2026 (down approximately 4.5% excluding the impact of a divestiture), which decreased net sales by approximately $84 million compared to the same period in the prior year. Average selling prices slightly increased, which increased net sales by $4 million in the second quarter of 2026. The Company believes that several factors contributed to lower volumes in the second quarter of 2026, including softer demand, challenging prior year comparisons, and constrained sales opportunities resulting from several furnace events and operational disruptions following recent plant restructuring actions. Demand trends improved sequentially through the second quarter with June 2026 sales volumes being flat with June 2025. Food and non-alcoholic beverage glass container sales continue to perform better than beer, wine and spirits sales. Favorable foreign currency exchange rates increased net sales by $49 million in the second quarter of 2026 compared to the same period in the prior year. Other sales were approximately $7 million lower in the second quarter of 2026 than in the same quarter in the prior year, driven by the divestiture of a plant in the fourth quarter of 2025 in the former Asia Pacific region.

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

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Americas: Net sales in the Americas in the second quarter of 2026 were $949 million compared to $943 million in the second quarter of 2025, an increase of $6 million, or less than 1%. Higher selling prices in the region increased net sales by $36 million in the second quarter of 2026. Glass container shipments were approximately 7% lower in the second quarter of 2026, which decreased net sales by approximately $74 million, due to challenging prior year comparisons, softer demand, exiting some unprofitable business and the impact of a furnace event, which constrained sales opportunities. The favorable effects of foreign currency exchange rate changes increased net sales by $44 million in the second quarter of 2026 compared to the same period in 2025, as the Brazilian Real, Colombian Peso and Mexican Peso strengthened compared to the U.S. dollar.

Europe: Net sales in Europe in the second quarter of 2026 were $704 million compared to $741 million in the second quarter of 2025, a decrease of $37 million, or approximately 5%. Lower average selling prices in Europe decreased net sales by $32 million in the second quarter of 2026. Glass container shipments decreased by approximately 2% in the second quarter of 2026, which decreased net sales by approximately $10 million. The Company believes that lower net sales in the second quarter of 2026 were due to operational disruptions following recent plant restructuring actions, which limited sales opportunities. Favorable effects of foreign currency exchange rate changes increased net sales by $5 million in the second quarter of 2026 compared to the same period in the prior year, as the Euro slightly strengthened compared to the U.S. dollar.

Earnings (Loss) before Income Taxes and Segment Operating Profit

Loss before income taxes was $827 million in the second quarter of 2026 compared to earnings before income taxes of $7 million in the second quarter of 2025, a change of $834 million.  This change was primarily due to a goodwill impairment and lower segment operating profit in Europe.

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 expens

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ITEM 7. 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) before interest expense, net, and provision for income taxes and excludes amounts related to certain items that management considers not representative of ongoing operations and other adjustments as well as certain retained corporate costs. The 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 non-GAAP measures when presented outside of the financial statement footnotes. 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 the Chief Executive Officer), uses segment operating profit, supplemented by net sales and selected cash flow information, to evaluate segment performance and 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.

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For discussion related to changes in financial condition and the results of operations for 2024 compared to 2023, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 12, 2025.

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Financial information regarding the Company’s reportable segments is as follows (dollars in millions):

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

Executive Overview—Comparison of 2025 with 2024

Net sales in 2025 decreased $105 million, or approximately 2%, compared to the prior year, primarily due to the impact from lower sales volumes and lower average selling prices, partially offset by favorable foreign currency translation.

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Loss before income taxes changed by $87 million in 2025 compared to earnings before income taxes in 2024. This change was primarily due to higher restructuring, asset impairment and other charges and slightly higher interest expense, partially offset by higher segment operating profit and lower retained corporate and other costs.

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Segment operating profit of reportable segments in 2025 was $98 million higher compared to the prior year, primarily due to lower operating costs, partially offset by lower net prices (net of cost inflation) and lower sales volumes. Operating costs were favorably impacted by benefits from the Company’s Fit to Win initiatives and several favorable discrete items, partially offset by temporary curtailments of production volumes, primarily in Europe, to balance supply and demand and reduce inventory levels and other items.

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Net interest expense in 2025 increased $6 million compared to 2024, primarily due to higher write-offs of deferred finance fees and related charges for refinancing activity.

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In 2025, the Company recorded net loss attributable to the Company of $129 million, or $0.84 per share, compared to a net loss attributable to the Company of $106 million, or $0.69 per share, in 2024. As discussed below, net loss attributable to the Company in 2025 and 2024 included items that management considers not representative of ongoing operations and other adjustments. These items increased net loss attributable to the Company by $378 million, or $2.44 per share, in 2025 and increased net loss attributable to the Company by $233 million, or $1.50 per share, in 2024.

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Results of Operations—Comparison of 2025 with 2024

Net Sales

The Company’s net sales in 2025 were $6,426 million compared with $6,531 million in 2024, a decrease of $105 million, or approximately 2%. Average selling prices declined, which decreased net sales by $14 million in 2025. Glass container shipments, in tons, were down approximately 3% in 2025 (down approximately 2.5% excluding the impact of divestitures), which decreased net sales by approximately $172 million compared to the prior year. The Company believes that several factors also contributed to lower volumes in 2025, including challenging market conditions, a major project startup in Europe, inventory corrections in the Mexico and North America beer category related to changes in U.S. trade and immigration policies and the Company’s deliberate decisions to exit unprofitable business and shift toward lighter-weight and smaller format bottles. Finally, the Company’s shipments to higher value categories, such as premium spirits, food, non-alcoholic beverages and ready-to-drink, outperformed shipments to mainstream beer and wine categories. Favorable foreign currency exchange rates increased net sales by $112 million in 2025 compared to the prior year. Other sales were approximately $31 million lower in 2025 than in the prior year, driven by lower machine part sales.

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

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Americas: Net sales in the Americas in 2025 were $3,641 million compared to $3,584 million in 2024, an increase of $57 million, or 2%. Higher selling prices in the region increased net sales by $136 million in 2025, driven by the pass through of higher cost inflation. Glass container shipments were 2% lower in 2025, which decreased net sales by approximately $57 million, due to subdued consumer demand, inventory corrections in the Mexico and North America beer category related to changes in U.S. trade and immigration policies and the Company’s deliberate decisions to exit unprofitable business as part of its network optimization efforts. The unfavorable effects of foreign currency exchange rate changes decreased net sales by $22 million in 2025 compared to 2024, as the Brazilian Real and Mexican Peso weakened compared to the U.S. dollar.

Europe: Net sales in 2025 were $2,689 million compared to $2,820 million in 2024, a decrease of $131 million, or 5%. Lower average selling prices in Europe decreased net sales by $150 million in 2025. Glass container shipments decreased by approximately 3% in 2025, and this decreased net sales by approximately $115 million. The Company believes that net sales in 2025 were adversely impacted by challenging market conditions and a major project startup. Favorable effects of foreign currency exchange rate changes increased net sales by $134 million in 2025 compared to the prior year, as the Euro strengthened compared to the U.S. dollar.

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Earnings (Loss) Before Income Taxes and Segment Operating Profit

Loss before income taxes was $49 million in 2025 compared to earnings before income taxes of $38 million in 2024, a change of $87 million.  This change was primarily due to higher restructuring, asset impairment and other charges and slightly higher interest expense, partially offset by higher segment operating profit and lower retained corporate and other costs.

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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 2 to the Consolidated Financial Statements.

Segment operating profit of reportable segments in 2025 was $846 million, compared to $748 million in 2024, an increase of $98 million, or 13%. This increase was primarily due to lower operating costs, partially offset by lower net prices (net of cost inflation) and lower sales volumes. Operating costs were favorably impacted by approximately $240 million of benefits from the Company’s Fit to Win initiative (exceeding management’s expectations) and several favorable discrete items that approximated $27 million, including several insurance settlements and an adjustment to its accrued liabilities for carbon emissions, partially offset by approximately $75 million related to temporary curtailments of production volumes, primarily in Europe, to balance supply and demand and reduce inventory levels and other items. Favorable foreign currency exchange rates increased segment operating profit by $14 millio

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