YEAR ENDING 12.31.2020
O-I Glass, Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31, 2020
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Commission file number 1-9576
O-I GLASS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
One Michael Owens Way, Perrysburg, Ohio
(Address of principal executive offices)
22-2781933
(IRS Employer
Identification No.)
43551
(Zip Code)
Securities registered pursuant to Section 12(b) of the Act:
Registrant’s telephone number, including area code: (567) 336-5000
Title of each class
Common Stock, $.01 par value
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
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
Name of each exchange on which registered
Trading symbol
OI
New York Stock Exchange
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 ☒
Smaller reporting company ☐
Accelerated filer ☐
Emerging growth company ☐
Non-accelerated filer ☐
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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value (based on the consolidated tape closing price on June 30, 2020) of the voting and non-voting common
equity held by non-affiliates of the Company was approximately $897,396,000. For the sole purpose of making this calculation, the term
“non-affiliate” has been interpreted to exclude directors and executive officers of the Company. Such interpretation is not intended to be, and
should not be construed to be, an admission by the Company or such directors or executive officers of the Company that such directors and
executive officers of the Company are “affiliates,” as that term is defined under the Securities Act of 1934.
The number of shares of common stock, $.01 par value of O-I Glass, Inc. outstanding as of January 31, 2021 was 157,440,512.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the O-I Glass, Inc. Proxy Statement for the Annual Meeting of Share Owners to be held Tuesday, May 11, 2021 (“2021
Proxy Statement”) are incorporated by reference into Part III hereof.
TABLE OF CONTENTS
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 1.
ITEM 1A. RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 1B. UNRESOLVED STAFF COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 2.
LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 3.
ITEM 4. MINE SAFETY DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHARE OWNER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES . . . . . . . . . . . .
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . .
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . . . . . . . . . .
ITEM 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ITEM 9.
ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 9A. CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 9B. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE . . . . . . .
ITEM 11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED SHARE OWNER MATTERS . . . . . . . . . . . . . . .
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 16. FORM 10-K SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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SIGNATURES
ITEM 1. BUSINESS
General Development of Business
PART I
O-I Glass, Inc., a Delaware corporation (the “Company”), through its subsidiaries, is the successor to a
business established in 1903. The Company is one of the leading manufacturers of glass containers in the world
with 72 glass manufacturing plants in 20 countries. It competes in the glass container segment of the rigid
packaging market and is the leading glass container manufacturer in most of the countries where it has
manufacturing facilities.
The term “Company,” as used herein and unless otherwise stated or indicated by context, refers to Owens-
Illinois, Inc. and its affiliates (“O-I”) prior to the Corporate Modernization (as defined below) and to O-I Glass,
Inc. and its affiliates (“O-I Glass”) after the Corporate Modernization.
Corporate Modernization and Paddock’s Chapter 11 Filing
On December 26 and 27, 2019, the Company implemented the Corporate Modernization pursuant to the
Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 26, 2019, among O-I, O-I Glass
and Paddock Enterprises, LLC (“Paddock”).
The Corporate Modernization was conducted pursuant to Section 251(g) of the General Corporation Law of
the State of Delaware, which permits the creation of a holding company through a merger with a direct or indirect
wholly owned subsidiary of the constituent corporation without stockholder approval. The Corporate
Modernization involved a series of transactions (together with certain related transactions, the “Corporate
Modernization”) pursuant to which (1) O-I formed a new holding company, O-I Glass, as a direct wholly owned
subsidiary of O-I and a sister company to Owens-Illinois Group, Inc. (“O-I Group”), (2) O-I Glass formed a new
Delaware limited liability company, Paddock, as a direct wholly owned subsidiary of O-I Glass, (3) O-I merged
with and into Paddock, with Paddock continuing as the surviving entity and as a direct wholly owned subsidiary
of O-I Glass (the “Merger”) and (4) Paddock distributed 100% of the capital stock of O-I Group to O-I Glass, as a
result of which O-I Group is a direct wholly owned subsidiary of O-I Glass and sister company to Paddock.
Upon the effectiveness of the Merger, each share of O-I stock held immediately prior to the Merger
automatically converted into a right to receive an equivalent corresponding share of O-I Glass stock, having the
same designations, rights, powers and preferences and the qualifications, limitations, and restrictions as the
corresponding share of O-I stock being converted. Immediately after the Corporate Modernization, O-I Glass had,
on a consolidated basis, the same assets, businesses and operations as O-I had immediately prior to the Corporate
Modernization. After the Corporate Modernization, O-I’s share owners became share owners of O-I Glass. The
Merger is intended to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of
1986, as amended, and as a result, the stockholders of O-I do not recognize gain or loss for U.S. federal income
tax purposes upon the conversion of their O-I shares.
On January 6, 2020, Paddock voluntarily filed for relief under Chapter 11 of the United States Bankruptcy
Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the District of Delaware to equitably and finally
resolve all of its current and future asbestos-related claims. O-I Glass and O-I Group were not included in the
Chapter 11 filing. 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. Paddock now operates in the ordinary course under court protection
from Asbestos Claims (as defined herein) by operation of the automatic stay in Paddock’s Chapter 11 filing,
which stays ongoing litigation and submission of claims to Paddock, defers payment of outstanding obligations
on account of settled or otherwise determined lawsuits and claims, and will provide a centralized forum to resolve
presently pending and anticipated future lawsuits and claims associated with asbestos.
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For a discussion of the effects of the Corporate Modernization and Paddock’s Chapter 11 proceedings on the
Company’s financial statements, see Item 1A, Risk Factors – “Corporate Modernization,” “Subsidiary
Bankruptcy” and “Asbestos-Related Liability,” and Item 7, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and Note 15 to the Company’s Consolidated Financial Statements.
Company Strategy
The Company’s vision is to be the most innovative, sustainable, and chosen supplier of brand-building
packaging solutions. Its goal is to grow the business and create value for employees, customers, share owners
and the community. The Company will realize its vision and goal by achieving its five strategic ambitions
including:
• To profitably grow the top line through effective innovation, marketing, and commercialization
and excel at serving current customers by significantly improving the customer experience; aligning
its activity with customers’ needs and market dynamics; improving quality and flexibility; elevating
innovation and new product development; improving its environmental profile; advocating and
marketing glass; advancing end-to-end supply chain capabilities, processes, and talent; and enabling
profitable growth;
• To be cost competitive by elevating year-over-year productivity across the business by ensuring
asset stability and total systems cost management; elevating factory performance, efficiency, and
profitability; leveraging automation and improving quality; cultivating concepts that extend current or
create new competitive advantages; and focusing on continuous improvement across all aspects of the
business;
• To disrupt current industry dynamics by creating a new paradigm with MAGMA by leveraging
innovation and developing breakthrough technology; commercializing MAGMA; and enabling the full
value chain for glass;
• To become the most sustainable rigid packaging producer by repositioning its Environmental,
Social and Governance (ESG) profile, improving its environmental performance; increasing recycling;
and actively communicating and advocating for glass packaging;
• To be a simple, agile, diverse, inclusive, and performance-based organization energized by
engaged employees by elevating organizational focus; driving performance, culture, and engagement of
its people; developing talent; strengthening diversity and inclusion in the work place; and embedding
flexibility to follow market needs and changes.
Reportable Segments
Historically, the Company had three reportable segments based on its geographic locations: Americas,
Europe and Asia Pacific. These three 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. Thus, after 2020, the Company will no longer report results for the Asia Pacific reportable
segment. For the historical periods presented in this report, 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
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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.
Products and Services
The Company produces glass containers for alcoholic beverages, including beer, flavored malt beverages,
spirits and wine. The Company also produces glass packaging for a variety of food items, soft drinks, teas, juices
and pharmaceuticals. The Company manufactures glass containers in a wide range of sizes, shapes and colors and
is active in new product development and glass container innovation.
Customers
In most of the countries where the Company competes, it has the leading position in the glass container
segment of the rigid packaging market based on sales revenue. The Company’s largest customers consist mainly
of the leading global food and beverage manufacturers, including (in alphabetical order) Anheuser-Busch InBev,
Brown-Forman, Carlsberg, Coca-Cola, Constellation, Diageo, Heineken, Molson Coors, Nestle, and PepsiCo.
The Company sells most of its glass container products directly to customers under annual or multi-year
supply agreements. Multi-year contracts typically provide for price adjustments based on cost changes. The
Company also sells some of its products through distributors. Many customers provide the Company with regular
estimates of their product needs, which enables the Company to schedule glass container production to maintain
reasonable levels of inventory. Glass container manufacturing facilities are generally located in close proximity to
customers.
Sales and Markets
The Company’s principal markets for glass container products are in the Americas and Europe with select
operations remaining in the Asia Pacific region after the sale of its ANZ businesses.
Americas. The Company has 35 glass container manufacturing plants in the Americas region located in
Argentina, Brazil, Canada, Colombia, Ecuador, Mexico, Peru, the U.S. and interests in three joint ventures that
manufacture glass containers. Also, the Company has a distribution facility in the U.S. used to import glass
containers from its business in Mexico. The Company has the leading share of the glass container segment of the
U.S. rigid packaging market, based on sales revenue by domestic producers. In South America and Mexico, the
Company maintains a diversified portfolio serving several markets, including alcoholic beverages (beer, wine and
spirits), non-alcoholic beverages and food, as well as a large infrastructure for returnable/refillable glass
containers.
The principal glass container competitors in the U.S. are the Ardagh Group and Anchor Glass Container.
Imports from China, Mexico, Taiwan and other countries also compete in U.S. glass container segments.
Additionally, there are several major consumer packaged goods companies that self-manufacture glass containers.
The Company competes directly with Verallia in Brazil and Argentina, and does not believe that it competes with
any other large, multinational glass container manufacturers in the rest of the region.
Europe. The Company is one of the leaders in the glass container segment of the rigid packaging market in
the European countries in which it operates, with 34 glass container manufacturing plants located in the Czech
Republic, Estonia, France, Germany, Hungary, Italy, the Netherlands, Poland, Spain and the United Kingdom.
These plants primarily produce glass containers for the alcoholic beverages (beer, wine and spirits), non-alcoholic
beverages and food markets in these countries. The Company also has interests in two joint ventures that
manufacture glass containers in Italy. Throughout Europe, the Company competes directly with a variety of glass
container manufacturers including Verallia, Ardagh Group, Vetropack, Vidrala and BA Vidro.
Asia Pacific. After 2020, the Company will no longer report results for the Asia Pacific reportable segment
due to the sale of most of this segment. On July 31, 2020, the Company completed the sale of its 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. After the sale of the ANZ businesses, the remaining
3
businesses in the Asia Pacific region, which consist of three plants and a joint venture, do not meet the criteria of
an individually reportable segment.
In addition to competing with other large and well-established manufacturers in the glass container segment,
the Company competes in all regions with manufacturers of other forms of rigid packaging, principally aluminum
cans and plastic containers. Competition is based on quality, price, service, innovation and the marketing
attributes of the container. The principal competitors producing metal containers include Ardagh Group, Ball
Corporation, Crown Holdings, Inc., and Silgan Holdings Inc. The principal competitors producing plastic
containers include Amcor, Consolidated Container Holdings, LLC, Reynolds Group Holdings Limited, Plastipak
Packaging, Inc. and Silgan Holdings Inc. The Company also competes with manufacturers of non-rigid packaging
alternatives, including flexible pouches, aseptic cartons and bag-in-box containers.
The Company seeks to provide products and services to customers ranging from large multinationals to
small local breweries and wineries in a way that creates a competitive advantage for the Company. The Company
believes that it is often the glass container partner of choice because of its innovation and branding capabilities,
its global footprint and its expertise in manufacturing know-how and process technology.
Seasonality
Sales of many glass container products such as beer, beverages and food are seasonal. Shipments in North
America and Europe are typically greater in the second and third quarters of the year, while shipments in Latin
America are typically greater in the third and fourth quarters of the year.
Manufacturing
The Company has 72 glass manufacturing plants. It constantly seeks to improve the productivity of these
operations through the systematic upgrading of production capabilities, sharing of best practices among plants
and effective training of employees.
The Company also provides engineering support for its glass manufacturing operations through facilities
located in the U.S., Poland and Peru.
Suppliers and Raw Materials
The primary raw materials used in the Company’s glass container operations are sand, soda ash, limestone
and recycled glass. Each of these materials, as well as the other raw materials used to manufacture glass
containers, has historically been available in adequate supply from multiple sources.
Energy
The Company’s glass container operations require a continuous supply of significant amounts of energy,
principally natural gas, fuel oil and electrical power. Adequate supplies of energy are generally available at all of
the Company’s manufacturing locations. Energy costs typically account for 10% to 20% of the Company’s total
manufacturing costs, depending on the cost of energy, the type of energy available, the factory location and the
particular energy requirements. The percentage of total cost related to energy can vary significantly because of
volatility in market prices, particularly for natural gas and fuel oil in volatile markets such as North America and
Europe.
In the Americas’ businesses in the U.S. and Canada, more than 90% of the sales volume is represented by
customer contracts that contain provisions that pass the commodity price of natural gas to the customer,
effectively reducing the region’s exposure to changing natural gas market prices. In the Americas’ business in
South America and Mexico, there is a combination of fixed price contracts, as well as energy pricing linked to
variable commodities pricing. Also, in these countries, customer contracts generally allow for annual price
adjustments for inflation, variability in energy costs, and foreign currency variation.
In Europe, the Company enters into long-term contracts for a significant amount of its energy requirements.
These contracts have terms that range from one to five years.
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Research, Development and Engineering
Research, development and engineering constitute important parts of the Company’s technical activities.
The Company primarily focuses on advancements in the areas of product innovation, manufacturing process
control, melting technology, automatic inspection, light-weighting and further automation of manufacturing
activities. The Company has increased its focus on advancing melting technology with investments in modular
glass melting furnaces. The Company’s investments in this new technology, known as the MAGMA program,
seek to reduce the amount of capital required to install, rebuild and operate its furnaces. This new melting
technology is also focused on the ability of these assets to be more easily turned on and off or adjusted based on
seasonality and customer demands. The Company’s research and development activities are conducted
principally at its corporate facilities in Perrysburg, Ohio.
The Company holds a large number of patents related to a wide variety of products and processes and has a
substantial number of patent applications pending. While the aggregate of the Company’s patents are of material
importance to its businesses, the Company does not consider that any patent or group of patents relating to a
particular product or process is of material importance when judged from the standpoint of any individual
segment or its businesses as a whole.
Sustainability, the Environment and Workplace Safety
The Company is committed to sustainability, including reducing the impact its products and operations have
on the environment. As part of this commitment, the Company has set sustainability targets, including some for
increasing the use of recycled glass in its manufacturing process and reducing energy consumption and carbon
dioxide equivalent (“CO2”) emissions, and aligned its sustainability ambitions with the United Nations
Sustainable Development Goals. Some specific actions taken by the Company include expanding sustainability
corporate governance at the board level, appointing a Chief Sustainability Officer who reports to the CEO,
establishing a global sustainability network, working with governments and other organizations to establish and
financially support recycling initiatives, partnering with other entities throughout the supply chain to improve the
effectiveness of recycling efforts, reducing the weight of glass packaging and investing in research and
development to reduce energy consumption in its manufacturing process. The Company invests in technology
and training to improve safety, reduce energy use, decrease emissions and increase the amount of cullet, or
recycled glass, used in the production process.
In addition, the Company is committed to ensuring the health and safety of its employees, as well as
contractors and visitors in all of the Company’s facilities. Hazards in the workplace are actively identified and
management tracks incidents so remedial actions can be taken to improve workplace safety. The coronavirus
disease 2019 (“COVID-19”) pandemic has underscored the importance of keeping the Company’s employees
safe and healthy. In response to the pandemic, the Company has taken actions aligned with the World Health
Organization and the Centers for Disease Control and Prevention to protect its workforce so they can more safely
and effectively perform their work.
The Company’s worldwide operations, in addition to other companies within the industry, are subject to
extensive laws, ordinances, regulations and other legal requirements relating to environmental protection,
including legal requirements governing investigation and clean-up of contaminated properties as well as water
discharges, air emissions, waste management and workplace health and safety. The Company strives to abide by
and uphold such laws and regulations.
Glass Recycling, Deposit Return Systems, and Extended Producer Responsibility
The Company is an important contributor to recycling efforts worldwide and is among the largest users of
recycled glass. If sufficient high-quality recycled glass were available on a consistent basis, the Company has the
technology to make glass containers containing a high proportion of recycled glass. Using recycled glass in the
manufacturing process reduces energy costs and impacts the operating life and efficiency of the glass melting
furnaces.
In the U.S., Canada, Europe and elsewhere, government authorities have adopted or are considering legal
requirements, including Extended Producer Responsibility (“EPR”) frameworks. EPR and other packaging
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recycling regulations may impose fees, mandate certain recycling rates, require minimum use of recycled
materials, or result in limitations on or preferences for certain types of packaging. The Company believes that
governments worldwide will continue to develop and enact legal requirements guiding customer and
end-consumer packaging choices.
Sales of beverage containers are affected by governmental regulation of packaging, including deposit-return
system (“DRS”) laws and EPR regulations. As of December 31, 2020, there were a number of U.S. states,
Canadian provinces and territories and European countries with some form of legal regulation that imposes fees
on producers or consumers of various packaging, including glass containers. The structure and enforcement of
such laws and regulations can impact the sales of beverage containers in a given jurisdiction. Such laws and
regulations also impact the availability of post-consumer recycled glass for the Company to use in container
production.
Countries, states, and localities in all geographies in which the Company operates have recently considered
or are now considering new EPR regulations, various laws and regulations to change curbside recycling, modify
or create DRS laws, and create alternatives to traditional recycling systems. Although there is no clear trend in
the direction of these various activities, the Company believes these legal and regulatory activities will impact the
price and supply of recycled glass. As a large user of recycled glass for making new glass containers, the
Company has an interest in laws and regulations impacting the supply of such material in its markets.
Climate Change and Air Emissions
Governments globally are increasingly considering a variety of mandatory or voluntary (e.g. Paris Climate
Accord) climate-change or environmental regulatory and legal requirements. The Company is unable to predict
what climate-change or environmental legal requirements may be adopted in the future. However, the Company
continually monitors its operations in relation to climate-change risks and environmental impacts and invests in
environmentally friendly and emissions-reducing projects. As such, the Company has made significant
expenditures for environmental improvements at certain of its facilities over the last several years; however, these
expenditures did not have a material adverse effect on the Company’s results of operations or cash flows. The
Company is unable to predict the impact of future environmental legal requirements on its results of operations or
cash flows.
In Europe, the European Union Emissions Trading Scheme is in effect to facilitate emissions reduction. The
Company’s manufacturing facilities which operate in EU countries must restrict the volume of their CO2
emissions to the level of their individually allocated emissions allowances as set by country regulators. If the
actual level of emissions for any facility exceeds its allocated allowance, additional allowances can be bought to
cover deficits; conversely, if the actual level of emissions for any facility is less than its allocation, the excess
allowances can be sold. Should the regulators significantly restrict the number of emissions allowances available,
it could have a material effect on the Company’s results.
In the Americas, the U.S. and Canada have engaged in significant legislative and regulatory activities
relating to greenhouse gas (“GHG”) emissions for years at the federal, state and provincial levels of government.
In the U.S., the Environmental Protection Agency (the “EPA”) regulates emissions of GHG air pollutants under
the Clean Air Act, which grants the EPA authority to establish limits for certain air pollutants and to require
compliance, levy penalties and bring civil judicial action against violators. The EPA’s GHG regulations continue
to evolve, as the structure and scope of the regulations are often the subject of litigation and federal legislative
activity. New GHG regulations in any country or state in the U.S. where the Company operates could have a
significant long-term impact on the Company’s operations that are affected by such regulations. The state of
California in the U.S., the Canadian federal government and the province of Quebec have adopted cap-and-trade
legislation aimed at reducing GHG emissions. In Mexico and other South American countries, national and local
governments are also considering potential regulations to reduce GHG emissions.
Workplace Safety
In the U.S., the Company is subject to various state and federal regulatory agencies, such as the
Occupational Safety and Health Administration (OSHA), that assure safe and healthy working conditions by
6
setting and enforcing standards and by providing training, outreach, education and assistance. Similar regulatory
agencies focused on employee safety exist in other countries in which the Company operates around the world.
The Company is unable to predict what workplace safety legal requirements may be adopted in the future.
However, the Company continually monitors its operations in relation to workplace safety and invests in projects
to enhance employee safety. As such, the Company has made significant expenditures for workplace safety
improvements at certain of its facilities over the last several years; however, these expenditures did not have a
material adverse effect on the Company’s results of operations or cash flows. The Company expects to see
continued improvement in health and safety as a result of these projects. The Company is unable to predict the
impact of future health and safety legal requirements on its results of operations or cash flows.
Human Capital Resources
The Company’s success depends on its ability to attract, develop and retain key personnel. The skills,
experience and industry knowledge of key employees significantly benefit the Company’s operations and
performance. The Company has approximately 25,000 employees and 72 plants spread across 20 countries. Led
by its people’s knowledge and ambition, the Company is innovating to meet its customers’ ever-evolving needs
to help build their brands and become valued partners. To facilitate talent attraction and retention, the Company
provides a safe, inclusive, diverse, motivating and collaborative work environment with opportunities for its
employees to grow and develop in their careers, supported by strong compensation, benefits and health and
wellness programs, and by programs that build connections between its employees and their communities.
The Company is committed to a culture of respect and integrity and believes it is better when it reflects the
diversity of the world it serves, leading to a broader range of perspectives that yield superior decisions and
outcomes. The Company is expanding its employee development programs, with significant focus on leadership
development and a greater level of diversity. The Company is focused on increasing all aspects of diversity
across its management team, which includes taking steps to increase the representation of women in senior
leadership roles. To assess and improve employee retention and engagement, the Company surveys employees
with the assistance of third-party consultants, and takes actions to address areas of employee concern.
A significant portion of the Company’s employees in the Americas are hourly workers covered by collective
bargaining agreements. 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. The Company considers its employee relations to be good and does
not anticipate any material work stoppages in the near term.
The Company continues to emphasize collaboration, leveraging its knowledge and expertise, increasing
accountability, and aligning incentives with the right results, with a focus on one team, one enterprise and one
plan. The Company believes successful execution along these lines will lead to enhanced value for share owners,
customers, and employees.
Available Information
The Company’s website is www.o-i.com. The Company’s annual report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 can be obtained from this site at no cost. The
Securities and Exchange Commission (“SEC”) maintains a website at www.sec.gov that contains reports, proxy
and information statements, and other information regarding issuers that file electronically with the SEC.
The Company’s Corporate Governance Guidelines, Global Code of Business Conduct and Ethics and the
charters of the Audit, Compensation, Nominating/Corporate Governance and Risk Oversight Committees are also
available on the “Investors” section of the Company’s website. Copies of these documents are available in print
to share owners upon request, addressed to the Corporate Secretary at the address above. The information on the
Company’s website is not part of this or any other report that the Company files with, or furnishes to, the SEC.
7
Information About our Executive Officers
In the following table, the Company sets forth certain information regarding those persons currently serving
as executive officers of O-I Glass, Inc. as of February 16, 2021.
Name and Age
Andres A. Lopez (58) . . . . .
Darrow Abrahams (47) . . . .
Arnaud Aujouannet (51) . . .
Position
Chief Executive Officer since January 2016; President, Glass Containers and Chief
Operating Officer 2015; Vice President and President of O-I Americas 2014–2015; Vice
President and President of O-I South America 2009–2014; Vice President of Global
Manufacturing and Engineering 2006 – 2009.
Senior Vice President, General Counsel and Corporate Secretary since September 2020;
Deputy General Counsel April 2020 – August 2020; Associate General Counsel, Dispute
Resolution 2017 – 2020; Assistant General Counsel, Litigation 2015 – 2017; Senior
Litigator 2012 – 2015.
Senior Vice President and Chief Sales and Marketing Officer since October 2017; Vice
President of Sales and Marketing, Europe 2015 – 2017. Previously Commercial Associate
Director, Oral Care Europe for Procter & Gamble, a multi-national consumer goods
company 2012 – 2015; Global Sales & Marketing Chief Sales & Marketing Officer, Swiss
Precision Diagnostic/Clearblue (a Procter & Gamble Joint Venture) 2009 – 2012.
Giancarlo Currarino (44) . . .
Senior Vice President, Chief Technical Operation Officer since July 2020; Senior Vice
President and Chief Technology and Supply Chain Officer 2016 –2020; Vice President and
Chief Technology Officer 2012 – 2016; Vice President of Global Engineering 2011 – 2012.
John A. Haudrich (53) . . . . .
Senior Vice President and Chief Financial Officer since April 2019; Senior Vice President
and Chief Strategy and Integration Officer 2015 – 2019; Vice President and Acting Chief
Financial Officer 2015; Vice President Finance and Corporate Controller 2011 – 2015; Vice
President of Investor Relations 2009 – 2011.
Vitaliano Torno (62) . . . . . .
President, Business Operations and O-I Europe since July 2020; President, O-I Europe
2016–2020; Managing Director, O-I Europe 2015; Vice President, European countries
2013 – 2015; Vice President, Marketing and sales, Europe 2010 – 2013.
8
ITEM 1A. RISK FACTORS
Risks Related to the Company’s Business and Industry
The COVID-19 pandemic has resulted, and may likely continue to result in material adverse effects on the
Company's business, financial position, liquidity, results of operations and cash flows.
The COVID-19 pandemic, and the various governmental, industry and consumer actions related thereto,
have had, and may likely continue to have, negative impacts on the Company's business. These impacts include,
without limitation, significant volatility or decreases in the demand for the Company's products, changes in
customer and consumer behavior and preferences, disruptions in or closures of the Company's manufacturing
operations or those of its customers and suppliers, disruptions within the Company's supply chain, limitations on
the Company's employees' ability to work and travel, potential financial difficulties of customers and suppliers,
significant changes in economic or political conditions, and related financial and commodity volatility, including
volatility in raw material and other input costs.
In addition, future changes in the Company's cost of capital, expected cash flows, or other factors as a result
of the above may cause the Company's long-lived assets, including goodwill, to be impaired, resulting in a non-
cash charge against results of operations to write-down long-lived assets including goodwill for the amount of the
impairment.
The COVID-19 pandemic may also have the effect of heightening many of the other risks described in this
annual report on Form 10-K for the year ended December 31, 2020, such as those relating to the Company's
ability to service its indebtedness; the restrictions placed on the Company under its existing indebtedness;
fluctuations in foreign exchange rates; international operations; changes in consumer demand; the global
economic environment; operational disruptions; the availability and cost of raw materials; joint ventures;
cybersecurity and data privacy; and goodwill; among others.
The degree to which the COVID-19 pandemic and related actions will ultimately impact the Company's
business, financial position, liquidity, results of operations and cash flows will depend on factors that are beyond
its control, highly uncertain and cannot be predicted, 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 the
Company’s customers and suppliers; and how quickly and to what extent normal economic and operating
conditions can resume.
Competition—The Company faces intense competition from other glass container producers, as well as from
makers of alternative forms of packaging. Competitive pressures could adversely affect the Company’s
financial health.
The Company is subject to significant competition from other glass container producers, as well as from
makers of alternative forms of packaging, such as aluminum cans and plastic containers. The Company also
competes with manufacturers of non-rigid packaging alternatives, including flexible pouches and aseptic cartons,
in serving the packaging needs of certain end-use markets, including juice customers. The Company competes
with each rigid packaging competitor on the basis of price, quality, service and the marketing and functional
attributes of the container. Advantages or disadvantages in any of these competitive factors may be sufficient to
cause the customer to consider changing suppliers and/or using an alternative form of packaging. The adverse
effects of consumer purchasing decisions may be more significant in periods of economic downturn and may lead
to longer-term reductions in consumer spending on glass packaged products.
9
Pressures from competitors and producers of alternative forms of packaging have resulted in excess capacity
in certain countries in the past and have led to capacity adjustments and significant pricing pressures in the rigid
packaging market. These pressures could have a material adverse effect on the Company’s operations.
Lower Demand Levels—Changes in consumer preferences may have a material adverse effect on the
Company’s financial results.
Changes in consumer preferences for the food and beverages they consume can reduce demand for the
Company’s products. Because many of the Company’s products are used to package consumer goods, the
Company’s sales and profitability could be negatively impacted by changes in consumer preferences for those
products. Examples of changes in consumer preferences include, but are not limited to, lower sales of major
domestic beer brands and shifts from beer to wine or spirits that results in the use of fewer glass containers. In
periods of lower demand, the Company’s sales and production levels may decrease causing a material adverse
effect on the Company’s profitability.
Customer Consolidation—The continuing consolidation of the Company’s customer base may intensify
pricing pressures and have a material adverse effect on operations.
Many of the Company’s largest customers have acquired companies with similar or complementary product
lines. This consolidation has increased the concentration of the Company’s business with its largest customers. In
many cases, such consolidation has been accompanied by pressure from customers for lower prices, reflecting the
increase in the total volume of products purchased or the elimination of a price differential between the acquiring
customer and the company acquired. Increased pricing pressures from the Company’s customers may have a
material adverse effect on operations.
New Glass Melting Technologies—The Company’s inability to develop or apply new glass melting technology
may affect its competitiveness.
The Company’s success depends partially on its ability to improve its glass melting technology. This
technology, known as the MAGMA program, seeks to reduce the amount of capital required to install, rebuild
and operate the Company’s furnaces. This new technology is also focused on the ability of these assets to be
more easily turned on and off or adjusted based on seasonality and customer demand. 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 or results of operations could be adversely affected.
Energy Costs—Higher energy costs worldwide and interrupted power supplies may have a material adverse
effect on operations.
Electrical power, natural gas, and fuel oil are vital to the Company’s 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 could cause the
Company to experience a significant increase in operating costs, which may have a material adverse effect
on operations.
Operational Disruptions—Profitability could be affected by unanticipated operational disruptions.
The Company’s glass container manufacturing process is asset intensive and includes the use of large
furnaces and machines. The Company periodically experiences unanticipated disruptions to its assets, and these
events can have an adverse effect on its business operations and profitability. The impacts of these operational
disruptions include, but are not limited to, higher maintenance, production changeover and shipping costs, higher
capital spending, as well as lower absorption of fixed costs during periods of extended downtime. The Company
maintains insurance policies in amounts and with coverage and deductibles that are reasonable and in line with
10
industry standards; however, this insurance coverage may not be adequate to protect the Company from all
liabilities and expenses that may arise.
Raw Materials—Profitability could be affected by the availability and cost of raw materials.
The raw materials that the Company uses have historically been available in adequate supply from multiple
sources. For certain raw materials, however, there may be temporary shortages due to weather or other factors,
including disruptions in supply caused by transportation or production delays. These shortages, as well as
material volatility in the cost of any of the principal raw materials that the Company uses, may have a material
adverse effect on operations.
In addition, the Company purchases its soda ash raw materials in U.S. dollars in South America and Mexico.
Given fluctuations in foreign currency exchange rates, this may cause these regions to experience inflationary or
deflationary impacts to their raw material costs.
Seasonality—Profitability could be affected by varied seasonal demands.
Due principally to the seasonal nature of the consumption of beer and other beverages, for which demand is
stronger during the summer months, sales of the Company’s products have varied and are expected to vary by
quarter. Shipments in North America and Europe are typically greater in the second and third quarters of the year,
while shipments in South America are typically greater in the third and fourth quarters of the year. Unseasonably
cool weather during peak demand periods can reduce demand for certain beverages packaged in the Company’s
containers.
Joint Ventures—Failure by joint venture partners to observe their obligations could have a material adverse
effect on operations.
A portion of the Company’s operations is conducted through joint ventures, including joint ventures in the
Americas and Europe segments and one joint venture in the Asia Pacific region that is included in Retained
corporate costs and other. If the Company’s joint venture partners do not observe their obligations or are unable
to commit additional capital to the joint ventures, it is possible that the affected joint venture would not be able to
operate in accordance with its business plans, which could have a material adverse effect on the Company’s
financial condition and results of operations.
Labor Relations—Some of the Company’s employees are unionized or represented by workers’ councils.
The Company is party to a number of collective bargaining agreements with labor unions, which at
December 31, 2020, covered approximately 74% of the Company’s employees in the U.S. and Canada. The
principal collective bargaining agreement, which at December 31, 2020 covered approximately 77% of the
Company’s union-affiliated employees in U.S. and Canada, will expire on March 31, 2022. Approximately 80%
of employees in South America and Mexico are covered by 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. In addition, if the Company’s employees were to engage in a strike or
other work stoppage, the Company could experience a significant disruption of operations and/or higher ongoing
labor costs, which may have a material adverse effect on operations.
11
Global Economic Environment—The global credit, financial and economic environment could have a
material adverse effect on operations and financial condition.
The global credit, financial and economic environment could have a material adverse effect on operations,
including the following:
• 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;
• Tightening of credit in financial markets 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; and
• 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.
Business Integration Risks—The Company may not be able to effectively integrate additional businesses it
acquires in the future.
The Company may consider strategic transactions, including acquisitions that will complement, strengthen
and enhance growth in its worldwide glass operations. The Company evaluates opportunities on a preliminary
basis from time-to-time, but these transactions may not advance beyond the preliminary stages or be completed.
Such acquisitions are subject to various risks and uncertainties, including:
• The inability to integrate effectively the operations, products, technologies and personnel of the acquired
companies (some of which may be located in diverse geographic regions) and achieve expected
synergies;
• The potential disruption of existing business and diversion of management’s attention from day-to-day
operations;
• The inability to maintain uniform standards, controls, procedures and policies;
• The need or obligation to divest portions of the acquired companies;
• The potential impairment of relationships with customers;
• The potential failure to identify material problems and liabilities during due diligence review of
acquisition targets;
• The potential failure to obtain sufficient indemnification rights to fully offset possible liabilities
associated with acquired businesses; and
• The challenges associated with operating in new geographic regions.
12
In addition, the Company cannot make assurances that the integration and consolidation of newly acquired
businesses will achieve any anticipated cost savings and operating synergies.
Goodwill—A significant write-down of goodwill would have a material adverse effect on the Company’s
reported results of operations and net worth.
Goodwill at December 31, 2020 totaled $1.95 billion, representing approximately 22% of total assets. The
Company evaluates goodwill annually (or more frequently if impairment indicators arise) for impairment using
the required business valuation methods. These methods include the use of a weighted average cost of capital to
calculate the present value of the expected future cash flows of the Company’s reporting units. Future changes in
the cost of capital, expected cash flows, or other factors may cause the Company’s goodwill to be impaired,
resulting in a non-cash charge against results of operations to write-down goodwill for the amount of the
impairment. If a significant write down is required, the charge would have a material adverse effect on the
Company’s reported results of operations and net worth. For example, the Company recorded a non-cash
impairment charge of $595 million in the third quarter of 2019, which was equal to the excess of the North
American reporting unit's carrying value over its fair value. The goodwill related to the North America reporting
unit remains the reporting unit that has the greatest risk of future impairment charges given the difference
(approximately 19%) between the business enterprise value and carrying value of this reporting unit as of
October 1, 2020.
Pension Funding—An increase in the underfunded status of the Company’s pension plans could adversely
impact the Company’s operations, financial condition and liquidity.
The Company contributed $103 million, $33 million and $34 million to its defined benefit pension plans in
2020, 2019 and 2018, respectively. The amount the Company is required to contribute to these plans is
determined by the laws and regulations governing each plan, and is generally related to the funded status of the
plans. A deterioration in the value of the plans’ investments or a decrease in the discount rate used to calculate
plan liabilities generally would increase the underfunded status of the plans. An increase in the underfunded
status of the plans could result in an increase in the Company’s obligation to make contributions to the plans,
thereby reducing the cash available for working capital and other corporate uses, and may have an adverse impact
on the Company’s operations, financial condition and liquidity.
Risks Related to the Corporate Modernization
Corporate Modernization—The Company may not obtain the anticipated benefits of the Corporate
Modernization.
The Company implemented the Corporate Modernization on December 26 and 27, 2019. On December 27,
2019, the Company announced the adoption of a new holding company structure whereby O-I Glass became the
new parent entity with O-I Group and Paddock as direct, wholly owned subsidiaries. The Company’s legacy
asbestos-related liabilities and certain other liabilities remained within Paddock, while the Company’s glass-
making operations remained under O-I Group. The Company believes that the Corporate Modernization
improves the Company’s operating efficiency and cost structure, while ensuring the Company remains well-
positioned to address its legacy liabilities. The anticipated benefits of the Corporate Modernization may not be
obtained if circumstances prevent the Company from taking advantage of the strategic and business opportunities
that the Company expects from the Corporate Modernization transactions. As a result, the Company may incur
the costs of a corporate reorganization without realizing the anticipated benefits, which could adversely affect the
Company’s reputation, financial condition, and operating results. The Company’s management has dedicated,
and will continue to dedicate, significant effort to implementing the Corporate Modernization. These efforts may
divert management’s focus and resources from the Company’s business, corporate initiatives, or strategic
opportunities, which could have an adverse effect on the Company’s businesses, results of operations, financial
condition, or prospects.
13
As a result of the Corporate Modernization, the name of the Company’s parent holding company changed
from Owens-Illinois, Inc. to O-I Glass, Inc. The reorganization efforts related to the Corporate Modernization
could confuse and distract the Company’s customers, suppliers and employees. In addition, these reorganization
efforts could adversely affect or delay the Company’s development and introduction of new products and
technologies, result in the loss of management, technical, or other key personnel, disrupt the Company’s supplier
or customer relationships, jeopardize its supplier or sales channels and the Company’s branding and marketing
efforts, and increase administrative expense, all of which could affect the Company’s profitability.
For a discussion of the effects of the Corporate Modernization on the Company’s financial statements, see
Item 1, “Corporate Modernization and Paddock’s Chapter 11 Filing” and Item 7, “Management’s Discussion and
Analysis of Financial Condition and Results of Operations.”
Subsidiary Bankruptcy—The Company’s subsidiary, Paddock, has filed a petition to resolve asbestos litigation
and asbestos-related claims under Chapter 11 of the Bankruptcy Code. Risks and uncertainties related to this
filing could have a material adverse effect on the Company’s business, financial condition, results of
operations and cash flows.
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 to equitably and finally resolve all of
its current and future asbestos-related liabilities. O-I Glass and O-I Group were not included in the Chapter 11
filing. 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. Paddock has been deconsolidated from the Company’s financial
statements since the Petition Date.
The amount that will be necessary to fully and finally resolve all of Paddock’s current and future asbestos-
related claims is uncertain. Several risks and uncertainties related to Paddock’s Chapter 11 case could have a
material adverse effect on the Company’s business, financial condition, results of operations and cash flows,
including the value of Paddock, as deconsolidated, reflected in the Company’s financial statements, the ultimate
amounts necessary to fund any trust established pursuant to Section 524(g) of the Bankruptcy Code, the potential
for the Company’s asbestos-related exposure to extend beyond Paddock arising from corporate veil piercing
efforts or other claims by asbestos plaintiffs, the costs of the Chapter 11 proceedings and the length of time
necessary to resolve the case, either through settlement or as a result of litigation arising in connection with the
Chapter 11 proceeding, and the possibility that Paddock will be unsuccessful in attaining relief under Chapter 11.
As part of the Corporate Modernization transactions, O-I Glass entered into a support agreement with
Paddock that requires O-I Glass to provide funding to Paddock for all permitted uses, subject to the terms of the
support agreement and that is designed to ensure that Paddock remains solvent. The key objective of the support
agreement is to ensure that Paddock has the same ability to fund the costs related to Asbestos Claims (as defined
herein) as O-I, which funded asbestos-related liabilities out of cash funded from its subsidiaries.
Paddock also has legacy environmental liabilities, related to, among other things, O-I’s prior operation of
certain facilities, including, but not limited to, in Ohio, Kentucky, Connecticut, New Jersey, and Georgia.
Paddock’s liabilities with respect to these facilities relate to penalties for site closures, remediation expenses,
exposure for cleanup of contamination, and alleged noncompliance with regulations. Paddock also has liabilities
associated with O-I’s involvement in a number of other administrative and legal proceedings regarding the
responsibility for the cleanup of hazardous waste or damages claimed to be associated with it and with O-I’s
involvement in some minor claims for environmental remediation of properties sold to third parties. Paddock also
has other contested prepetition liabilities arising from pending non-asbestos-related litigation.
For a further discussion of the Chapter 11 proceedings and Paddock’s legacy liabilities, see Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 15 to the
Consolidated Financial Statements, included in this report.
14
Asbestos-Related Liability—The Company has made substantial payments to resolve claims of persons
alleging exposure to asbestos-containing products and the Company has obligations to make further payments
to resolve such claims under the terms of the support agreement. These substantial payments and obligations
have affected and may continue to affect the Company’s cost of borrowing, its ability to pursue global or
domestic acquisitions, its ability to reinvest in its operations, and its ability to pay dividends.
From 1948 to 1958, one of the 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 exited the insulation business in April 1958. Historically, the Company
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 presented
to O-I under administrative claims-handling agreements, which O-I had in place with many plaintiffs’ counsel
throughout the country.
Beginning with the initial liability of $975 million established in 1993, O-I had accrued a total of
approximately $5.0 billion through 2019, before insurance recoveries, for its asbestos-related liability. O-I’s
ability to estimate its liability had been significantly affected by, among other factors, the volatility of asbestos-
related litigation in the United States, the significant number of co-defendants that have filed for bankruptcy, the
inherent uncertainty of future disease incidence, the claiming patterns against O-I, the significant expansion of the
defendants that are in the litigation, and the continuing changes in the way in which these defendants participate
in the resolution of the cases in which O-I was also a defendant.
For many years, O-I conducted an annual comprehensive legal review of its asbestos-related liabilities and
costs in connection with finalizing its annual results of operations. In May 2016, O-I revised its method for
estimating its asbestos-related liabilities in connection with finalizing and reporting its restated results of
operations for the three years ended December 31, 2015. The revised method estimated the total future costs for
O-I’s asbestos-related liability. Under this method, O-I 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 O-I in estimating the total number of future Asbestos Claims likely to be asserted
against O-I. O-I 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. The revised methodology led O-I to conclude that an
asbestos-related liability of $486 million was required as of December 31, 2019.
Following the Corporate Modernization transactions, asbestos-related liabilities that were previously paid by
O-I now reside at Paddock. The Company undertook the Corporate Modernization transactions, which resulted in
the legacy liabilities of O-I residing within Paddock, separate from the active operations of the Company’s
subsidiaries, while fully maintaining Paddock’s ability to access the value of those operations to support its
legacy liabilities through the support agreement. The Corporate Modernization transactions also helped ensure
that Paddock has the same ability to fund the costs of defending and resolving present and future Asbestos Claims
as O-I previously did, through Paddock’s retention of its own assets to satisfy these claims and through its access
to additional funds from the Company through the support agreement. The Company anticipates that, as a result
of Paddock’s Chapter 11 filing, Paddock’s asbestos-related liabilities will be assessed and ultimately paid out in
connection with a confirmed Chapter 11 plan of reorganization.
The Company continues to believe that Paddock’s ultimate asbestos-related liabilities cannot be estimated
with certainty at this time. Historically, as part of its annual comprehensive legal reviews, the Company has
reviewed its estimate of total asbestos-related liability, unless significant changes in trends or new developments
warranted an earlier review. Such reviews resulted in significant adjustments to the liability accrued at the time
of the review. For example, for the years ended December 31, 2019 and 2018, the Company’s comprehensive
legal review of asbestos-related liabilities resulted in charges of $35 million and $125 million, respectively.
15
The significant assumptions underlying the material components of the Company’s historical accruals have
been:
a) settlements will 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;
b) Asbestos Claims will continue to be resolved primarily under the Company’s administrative claims-
handling agreements, which are currently suspended as a result of Paddock’s Chapter 11 filing, or on
terms comparable to those set forth in those agreements;
c)
the incidence of serious asbestos-related disease cases and claiming patterns against the Company for
such cases do not change materially, including claiming pattern changes driven by changes in the law,
procedure, or expansion of judicial resources in jurisdictions where the Company settles Asbestos
Claims;
d)
the Company is substantially able to defend itself successfully at trial and on appeal;
e)
the number and timing of additional co-defendant bankruptcies do not change significantly the assets
available to participate in the resolution of cases in which the Company is a defendant; and
f) co-defendants with substantial resources and assets continue to participate significantly in the resolution
of future Asbestos Claims.
See “Critical Accounting Estimates” and Note 15 to the Consolidated Financial Statements for additional
information about the Company’s asbestos-related liability.
The Company’s funding of substantial payments to resolve asbestos-related claims and the obligation to
fund asbestos-related payments ultimately paid out in connection with the confirmation of a Chapter 11 plan of
reorganization has affected and may continue to affect the Company’s cost of borrowing, its ability to pursue
global or domestic acquisitions, its ability to reinvest in its operations, and its ability to pay dividends.
Risks Related to Information Technology, Cybersecurity and Data Privacy
Information Technology—Failure or disruption of the Company’s information technology, or those of third
parties, could have a material adverse effect on its business 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, including, but not limited to, natural
disasters, terrorist attacks, power outages, fire, sabotage, equipment failures, cybersecurity vulnerabilities, and
cyber-related attacks or computer crimes, any of which could have a material adverse effect on the Company’s
financial condition, results of operations and cash flows.
Cybersecurity and Data Privacy—Security breaches 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 phishing and malware incidents, and
although no such attack has had a material adverse effect on its business, this may not be the case with future
attacks. As the prevalence of cyberattacks continues to increase, the Company’s IT systems, or those of third
16
parties, may be subject to increased security threats, and the Company may incur additional 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 prevent certain security breaches, and any such breaches could result in transactional errors, business
disruptions, loss of or damage to intellectual property, loss 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), regulatory fines, penalties or intervention, reputational damage, reimbursement or other
compensatory costs, and additional compliance costs, any of which could have a material adverse effect on the
Company’s financial condition, results of operations and cash flows. Any resulting costs or losses may not be
covered by, or may exceed the coverage limits of, the Company’s cyber insurance.
The Company is increasingly reliant on third parties to provide software, support and management with
respect to its IT systems. The security and privacy measures the Company’s vendors implement may not be
sufficient to prevent and detect cyberattacks that could have a material adverse effect on the Company’s financial
condition, results of operations and cash flows. While the Company’s IT vendor agreements typically contain
provisions that seek to eliminate or limit the Company’s exposure to liability for damages from a cyberattack,
there can be no assurance that such provisions will withstand legal challenges or cover all or any such damages.
If the Company’s business continuity and/or disaster recovery plans do not effectively and timely resolve issues
resulting from a cyberattack, the Company may suffer material adverse effects on its financial condition, results
of operations and cash flows.
In addition, new global privacy rules are being enacted and existing ones are being updated and
strengthened. 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. 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, in the event of an incident. To comply with the new data
protection rules imposed by the GDPR 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.
Risks Related to the Company’s Indebtedness
Substantial Leverage—The Company’s indebtedness could adversely affect the Company’s financial health.
The Company has a significant amount of debt. As of December 31, 2020 and December 31, 2019, the
Company had approximately $5.1 billion and $5.6 billion of total debt outstanding, respectively.
The Company’s indebtedness could:
•
•
Increase vulnerability to general adverse economic and industry conditions;
Increase vulnerability to interest rate increases for the portion of the debt under the secured credit
agreement;
• Require the Company to dedicate a substantial portion of cash flow from operations to payments on
indebtedness, thereby reducing the availability of cash flow to fund working capital, capital
expenditures, acquisitions, share repurchases, development efforts and other general corporate
endeavors;
• Limit flexibility in planning for, or reacting to, changes in the Company’s business and the rigid
17
packaging market;
• Place the Company at a competitive disadvantage relative to its competitors that have less debt; and
• Limit the Company’s ability to borrow additional funds.
Ability to Service Debt—To service its indebtedness, the Company will require a significant amount of cash.
The Company’s ability to generate cash and refinance certain indebtedness depends on many factors beyond
its control.
The Company’s ability to make payments on, to refinance its indebtedness and to fund working capital,
capital expenditures, acquisitions, development efforts and other general corporate endeavors depends on its
ability to generate cash in the future. The Company makes no assurance that it will generate sufficient cash flow
from operations, or that future borrowings will be available under the secured credit agreement, in an amount
sufficient to enable the Company to pay its indebtedness, or to fund other liquidity needs. If short-term interest
rates increase, the Company’s debt service cost will increase because some of its debt is subject to short-term
variable interest rates. At December 31, 2020, the Company’s debt, including interest rate swaps, that is subject
to variable interest rates represented approximately 29% of total debt.
Further, in July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it
intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative
Reference Rates Committee ("ARRC") has proposed that the Secured Overnight Financing Rate ("SOFR") is the
rate that represents best practice as the alternative to USD-LIBOR for use in debt instruments, derivatives and
other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market
transition plan to SOFR from USD-LIBOR, and organizations are currently working on industry wide and
company specific transition plans as they relate to derivatives, debt and cash markets exposed to USD-LIBOR.
Approximately 10% of the Company’s long-term indebtedness is indexed to USD-LIBOR and it is monitoring
this activity and evaluating the related risks. Although an alternative to LIBOR has been contemplated in the
Company’s bank credit agreement, it is unclear as to the new method of calculating LIBOR that may evolve, and
this new method could adversely affect the Company’s interest rates on its indebtedness.
The Company may need to refinance all or a portion of its indebtedness on or before maturity. If the
Company is unable to generate sufficient cash flow and is unable to refinance or extend outstanding borrowings
on commercially reasonable terms or at all, it may have to take one or more of the following actions:
• Reduce or delay capital expenditures planned for replacements, improvements and expansions;
• Sell assets;
• Restructure debt; and/or
• Obtain additional debt or equity financing.
The Company can provide no assurance that it could effect or implement any of these alternatives on
satisfactory terms, if at all.
Debt Restrictions—The Company may not be able to finance future needs or adapt its business plans to
changes because of restrictions placed on it by the secured credit agreement and the indentures and
instruments governing other indebtedness.
The secured credit agreement, the indentures governing the senior notes, and certain of the agreements
governing other indebtedness contain affirmative and negative covenants that limit the ability of the Company to
18
take certain actions. For example, certain of the indentures restrict, among other things, the ability of the
Company and its restricted subsidiaries to borrow money, pay dividends on, or redeem or repurchase its stock,
make certain investments, create liens, enter into certain transactions with affiliates and sell certain assets or
merge with or into other companies. These restrictions could adversely affect the Company’s ability to operate its
businesses and may limit its ability to take advantage of potential business opportunities as they arise.
Failure to comply with these or other covenants and restrictions contained in the secured credit agreement,
the indentures or agreements governing other indebtedness could result in a default under those agreements, and
the debt under those agreements, together with accrued interest, could then be declared immediately due and
payable. If a default occurs under the secured credit agreement, the Company could no longer request borrowings
under the secured credit agreement, and the lenders could cause all of the outstanding debt obligations under such
secured credit agreement to become due and payable, which would result in a default under the indentures
governing the Company’s other outstanding debt securities and could lead to an acceleration of obligations
related to these debt securities. A default under the secured credit agreement, indentures or agreements governing
other indebtedness could also lead to an acceleration of debt under other debt instruments that contain cross-
acceleration or cross-default provisions.
Risks Related to the Company’s International Operations
International Operations—The Company is subject to risks associated with operating in foreign countries.
The Company operates manufacturing and other facilities throughout the world. Net sales from non-U.S.
operations totaled approximately $4.3 billion, representing approximately 71% of the Company’s net sales for the
year ended December 31, 2020. As a result of its non-U.S. operations, the Company is subject to risks associated
with operating in foreign countries, including:
• Political, social and economic instability;
• War, civil disturbance or acts of terrorism;
• Outbreaks of pandemic disease, such as COVID-19;
• Taking of property by nationalization or expropriation without fair compensation;
• Changes in governmental policies and regulations;
• Devaluations and fluctuations in currency exchange rates;
•
•
Imposition of limitations on conversions of foreign currencies into dollars or remittance of dividends and
other payments by foreign subsidiaries;
Imposition or increases of withholding and other taxes on remittances and other payments by foreign
subsidiaries;
• Hyperinflation in certain foreign countries;
•
Impositions or increase of investment and other restrictions or requirements by foreign governments;
• Loss or non-renewal of treaties or other agreements with foreign tax authorities;
• Changes in tax laws, or the interpretation thereof, including those affecting foreign tax credits or tax
deductions relating to the Company’s non-U.S. earnings or operations; and
19
• Complying with the U.S. Foreign Corrupt Practices Act that prohibits companies and their
intermediaries from engaging in bribery or other prohibited payments to foreign officials for the
purposes of obtaining or retaining business or gaining an unfair business advantage and requires
companies to maintain accurate books and records and effective internal controls.
The risks associated with operating in foreign countries may have a material adverse effect on operations.
Foreign Currency Exchange Rates—The Company is subject to the effects of fluctuations in foreign currency
exchange rates, which could adversely impact the Company’s financial results.
The Company’s reporting currency is the U.S. dollar. A significant portion of the Company’s net sales,
costs, assets and liabilities is denominated in currencies other than the U.S. dollar, primarily the Euro, Brazilian
real, Colombian peso and Mexican peso. In its consolidated financial statements, the Company remeasures
transactions denominated in a currency other than the functional currency of the reporting entity (e.g., soda ash
purchases) and translates local currency financial results into U.S. dollars based on the exchange rates prevailing
during the reporting period. During times of a strengthening U.S. dollar, the reported revenues and earnings of the
Company’s international operations will be reduced because the local currencies will translate into fewer U.S.
dollars. This could have a material adverse effect on the Company’s financial condition, results of operations and
cash flows.
Brexit—The Company’s business may be impacted by the United Kingdom’s withdrawal from the European
Union.
Following a national referendum and enactment of legislation by the government of the United Kingdom,
the United Kingdom formally withdrew from the European Union and ratified a trade and cooperation agreement
governing its future relationship with the European Union. The agreement, which is being applied provisionally
from January 1, 2021, until it is ratified by the European Parliament and the Council of the European Union,
addresses trade, economic arrangements, law enforcement, judicial cooperation and a governance framework
including procedures for dispute resolution, among other things. Because the agreement merely sets forth a
framework in many respects and will require complex additional bilateral negotiations between the United
Kingdom and the European Union as both parties continue to work on the rules for implementation, significant
political and economic uncertainty remains about how the precise terms of the relationship between the parties
will differ from the terms before withdrawal.
These developments, or the perception that any related developments could occur, have had and may
continue to have a material adverse effect on global economic conditions and financial markets, and could
significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain
financial markets. Asset valuations, currency exchange rates and credit ratings have been and may continue to be
subject to increased market volatility. Such volatility, and any adverse effect that Brexit has on the currency
regimes to which the Company is subject, could adversely affect the Company’s sales volumes and costs. The
Company has two manufacturing facilities in the United Kingdom. Further, the significant political and economic
uncertainty surrounding Brexit may cause the Company’s customers to closely monitor their costs, terminate or
reduce the scope of existing contracts, decrease or postpone currently planned contracts, or negotiate for more
favorable deal terms, each of which may have a negative impact on the Company’s financial condition, results of
operations and cash flows.
20
Risks Related to Legal and Regulatory Matters
Environmental Risks—The Company is subject to various environmental legal requirements and may be
subject to new legal requirements in the future. These requirements may have a material adverse effect on
operations.
The Company’s operations and properties are subject to extensive laws, ordinances, regulations and other
legal requirements relating to environmental protection, including legal requirements governing investigation and
clean up of contaminated properties as well as water discharges, air emissions, waste management and workplace
health and safety. Such legal requirements frequently change and vary among jurisdictions. The Company’s
operations and properties must comply with these legal requirements. These requirements may have a material
adverse effect on operations.
The Company has incurred, and expects to incur, costs for its operations to comply with environmental legal
requirements, and these costs could increase in the future. Many environmental legal requirements provide for
substantial fines, orders (including orders to cease operations), and criminal sanctions for violations. These legal
requirements may apply to conditions at properties that the Company presently or formerly owned or operated, as
well as at other properties for which the Company may be responsible, including those at which wastes
attributable to the Company were disposed. A significant order or judgment against the Company, the loss of a
significant permit or license or the imposition of a significant fine may have a material adverse effect
on operations.
A number of governmental authorities have enacted, or are considering enacting, legal requirements that
would mandate certain rates of recycling, the use of recycled materials and/or limitations on certain kinds of
packaging materials. In addition, some companies with packaging needs have responded to such developments
and/or perceived environmental concerns of consumers by using containers made in whole or in part of recycled
materials. Such developments may reduce the demand for some of the Company’s products and/or increase the
Company’s costs, which may have a material adverse effect on operations.
Governmental authorities have also enacted, or are considering enacting, legal requirements restricting the
volume of GHG emissions that manufacturing facilities can produce with penalties for companies that do not
comply. A reduction in the quantity of permitted GHG emissions under existing rules, or the introduction of new
GHG emissions rules, in jurisdictions where the Company operates, could have a material effect on the
Company’s results of operations. The Company is not able to predict what environmental legal requirements may
be adopted in the future nor the impact such future environmental legal requirements may have on its results of
operations or cash flows.
Taxes—Potential tax law and U.S. trade policy changes could adversely affect net income and cash flow.
The Company is subject to income tax in the numerous jurisdictions in which it operates. Increases in
income tax rates or other tax law changes, as well as ongoing audits by domestic and international authorities,
could reduce the Company’s net income and cash flow from affected jurisdictions. In particular, additional
guidance is likely to continue to be issued providing further clarification on the application of the U.S. Tax Cuts
and Jobs Act and related regulations. Further, it is reasonable to expect that global taxing authorities will be
reviewing current legislation for potential modifications in reaction to the implementation of the U.S. legislation.
This additional guidance, along with the potential for additional global tax legislation changes, such as
restrictions on interest deductibility and deductibility of cross-jurisdictional payments, could have a material
adverse impact on net income and cash flow by impacting significant deductions or income inclusions. In
addition, the Company’s products are subject to import and excise duties and/or sales or value-added taxes in
many jurisdictions in which it operates. Increases in these indirect taxes could affect the affordability of the
Company’s products and, therefore, reduce demand.
In addition, existing free trade laws and regulations provide certain beneficial duties and tariffs for
qualifying imports and exports, subject to compliance with the applicable classification and other
21
requirements. Changes in laws or policies governing the terms of foreign trade, and in particular increased trade
restrictions, tariffs or taxes on imports from countries where the Company manufactures products, such as
Mexico, could have a material adverse effect on its business and financial results. Also, a government’s adoption
of “buy national” policies or retaliation by another government against such policies may affect the prices of and
demand for the Company’s products and could have a negative impact on the Company’s results of operations.
Many international legislative and regulatory bodies have proposed legislation and begun investigations of
the tax practices of multinational companies and, in the European Union, the tax policies of certain EU member
states. One of these efforts has been led by the OECD, an international association of more than 35 countries
including the United States, which has finalized recommendations to revise corporate tax, transfer pricing, and
tax treaty provisions in member countries. One area of focus is base erosion and profit shifting, including
situations where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction
with lower tax rates. Since 2013, the European Commission (EC) has been investigating tax rulings granted by
tax authorities in a number of EU member states with respect to specific multinational corporations to determine
whether such rulings comply with EU rules on state aid, as well as more recent investigations of the tax regimes
of certain EU member states. If the EC determines that a tax ruling or tax regime violates the state aid
restrictions, the tax authorities of the affected EU member state may be required to collect back taxes for the
period of time covered by the ruling. Due to the large scale of the Company’s U.S. and international business
activities, many of these proposed changes to the taxation of the Company’s activities, if enacted, could increase
the Company’s worldwide effective tax rate and harm results of operations.
Corporate tax reform, anti-base-erosion rules and tax transparency continue to be high priorities in many
jurisdictions. As a result, policies regarding corporate income and other taxes in numerous jurisdictions are under
heightened scrutiny and tax reform legislation has been, and will likely continue to be, proposed or enacted in a
number of jurisdictions in which the Company operates. Further, many jurisdictions have passed legislation, and
may pass additional legislation, intended to address the economic burdens of COVID-19 and to fund economic
recovery and growth. This could include opportunities to increase tax revenues collected from local corporations.
The results of the U.S. presidential election could lead to changes in tax laws that could negatively impact
the Company’s effective tax rate. The proposed changes would raise the tax rate on both domestic and foreign
income of U.S. multi-national corporations, impose a new alternative minimum tax on book income, and require
a tax surcharge on imported goods. If these proposals are ultimately enacted into legislation, they could
materially impact the Company’s tax provision, cash tax liability and effective tax rate.
Any substantial changes in domestic or international corporate tax policies, regulations or guidance,
enforcement activities or legislative initiatives may materially adversely affect the Company.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
22
ITEM 2. PROPERTIES
The principal manufacturing facilities and other material important physical properties of the Company at
December 31, 2020 are listed below. All properties are glass container plants and are owned in fee, except where
otherwise noted.
Americas Operations
Argentina
Rosario
Brazil
Recife
Rio de Janeiro
Canada
Sao Paulo
Vitoria de Santo Antao
Brampton, Ontario
Montreal, Quebec
Colombia
Buga (tableware)
Soacha
Ecuador
Guayaquil
Mexico
Guadalajara
Monterrey
Queretaro
Peru
Callao
United States
Auburn, NY
Brockway, PA
Crenshaw, PA
Danville, VA
Kalama, WA(1)
Lapel, IN
Los Angeles, CA
Muskogee, OK
European Operations
Czech Republic
Dubi
Estonia
Jarvakandi
France
Beziers
Gironcourt
Labegude
Puy-Guillaume
Reims
Zipaquira
Tlanepantla Estado de Mexico
Toluca
Tultitlan Estado de Mexico
Lurin(1)
Portland, OR
Streator, IL
Toano, VA
Tracy, CA
Waco, TX
Windsor, CO
Winston-Salem, NC
Zanesville, OH
Nove Sedlo
Vayres
Veauche
Vergeze
Wingles
23
Germany
Bernsdorf
Holzminden
Hungary
Oroshaza
Italy
Aprilia
Asti
Bari
Marsala
Mezzocorona
The Netherlands
Leerdam
Poland
Jaroslaw
Spain
Barcelona(1)
United Kingdom
Alloa
Other Operations
Engineering Support Centers
Brockway, Pennsylvania
Lurin, Peru
Shared Service Centers
Medellin, Colombia
Perrysburg, Ohio
Distribution Center
Laredo, TX(1)
China
Tianjin
Indonesia
Jakarta
Corporate Facilities
Perrysburg, Ohio(1)
Rinteln
Origgio
Ottaviano
San Gemini
San Polo
Villotta
Maastricht
Poznan
Sevilla
Harlow
Jaroslaw, Poland
Perrysburg, Ohio
Poznan, Poland(1)
Zhaoqing
Vufflens-la-Ville, Switzerland(1)
(1) This facility is leased in whole or in part.
The Company believes that its facilities are well maintained and currently adequate for its planned
production requirements over the next three to five years.
24
ITEM 3. LEGAL PROCEEDINGS
For information on legal proceedings, see Note 15 to the Consolidated Financial Statements.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
25
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHARE OWNER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
On December 26 and 27, 2019, the Company implemented the Corporate Modernization. The Corporate
Modernization involved a series of transactions, including the Merger. Upon the effectiveness of the Merger,
each share of O-I stock held immediately prior to the Merger automatically converted into a right to receive an
equivalent corresponding share of O-I Glass stock, par value $.01 per share (“O-I Glass Common Stock”), having
the same designations, rights, powers and preferences, qualifications, limitations, and restrictions as the
corresponding share of O-I stock being converted.
Following the implementation of the Corporate Modernization, the Company’s common stock continues to
be listed on the New York Stock Exchange on an uninterrupted basis with the symbol OI. The number of share
owners of record on December 31, 2020 was 847. Approximately 99% of the outstanding shares were registered
in the name of Depository Trust Company, or CEDE & Co., which held such shares on behalf of a number of
brokerage firms, banks, and other financial institutions.
In response to the COVID-19 pandemic, the Company has suspended its dividend. However, the payment
and amount of future dividends remain within the discretion of the Company's Board of Directors and will
depend upon the Company's future earnings, financial condition, capital requirements, and other factors.
Information with respect to securities authorized for issuance under equity compensation plans is included
herein under Item 12.
The Company did not purchase any shares of its common stock during the year ended December 31, 2020.
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 and employees. This authorization supersedes and replaces any
prior repurchase authorizations.
26
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG O-I GLASS, INC., S&P 500, PEER GROUP
250
200
150
100
50
0
2015
2016
2017
2018
2019
2020
O-I Glass, Inc.
S&P 500 Index - Total Return
Peer Group
2015
2016
2017
2018
2019
2020
Years Ending December 31,
O-I Glass, Inc. . . . . . . . . . . . . . . . . . . . . . $ 100.00 $ 99.94 $ 127.27 $ 98.97 $ 69.57 $ 69.70
203.04
S&P 500 . . . . . . . . . . . . . . . . . . . . . . . . . .
180.44
Packaging Group . . . . . . . . . . . . . . . . . . .
100.00
100.00
130.42
109.04
171.49
143.56
136.40
115.77
111.96
105.27
The graph above compares the performance of the Company’s Common Stock with that of a broad market
index (the S&P 500 Composite Index) and a packaging group consisting of companies with lines of business or
product end uses comparable to those of the Company for which market quotations are available.
The packaging group consists of: AptarGroup, Inc., Ardagh Group S.A., Ball Corp., Crown Holdings, Inc.,
O-I Glass, Inc., Sealed Air Corp., Silgan Holdings Inc., and Sonoco Products Co. The comparison of total return
on investment for each period is based on the investment of $100 on December 31, 2015 and the change in
market value of the stock, including additional shares assumed purchased through reinvestment of dividends, if
any.
27
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 from continuing operations before interest income, interest expense, and provision for
income taxes and excludes amounts related to certain items that management considers not representative of
ongoing operations as well as certain retained corporate costs. The 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 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
spread throughout 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 year ended
December 31, 2020. The COVID-19 pandemic impacted the Company’s shipment and production levels in 2020,
and 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 2020.
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. 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 seven months of the results of the ANZ businesses. For 2019, the results
of the Asia Pacific segment have been recast to 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.
For discussion related to changes in financial condition and the results of operations for 2019 compared to
2018, 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, 2019, which was
filed with the SEC on February 21, 2020.
28
Financial information regarding the Company’s reportable segments is as follows (dollars in millions):
Net sales:
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reportable segment totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,322 $
2,364
281
5,967
124
6,091 $
3,622
2,387
534
6,543
148
6,691
2020
2019
Segment operating profit:
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reportable segment totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Items excluded from segment operating profit:
Retained corporate costs and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of ANZ businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge for goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge for asbestos-related costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, asset impairment and other charges . . . . . . . . . . . . . . . . . . . . . . . . . .
Strategic transaction and corp. modernization costs . . . . . . . . . . . . . . . . . . . . . . . . .
Charge for deconsolidation of Paddock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of equity investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings (loss) from continuing operations before income taxes . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net earnings attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net earnings (loss) attributable to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net earnings (loss) from continuing operations attributable to the Company . . . . . . . . $
2020
2019
395 $
264
19
678
(145)
275
(26)
(142)
(8)
(14)
(265)
353
(89)
264
264
(15)
249 $
249 $
495
317
44
856
(112)
(595)
(35)
(26)
(114)
(31)
107
(311)
(261)
(118)
(379)
(3)
(382)
(18)
(400)
(397)
Note: all amounts excluded from reportable segment totals are discussed in the following applicable
sections.
Executive Overview—Comparison of 2020 with 2019
• Net sales in 2020 were down approximately 9% compared to 2019, primarily due to lower volumes due
to COVID-19, the sale of the Company’s ANZ businesses on July 31, 2020 and the unfavorable effects
of changes in foreign currency exchange rates, partially offset by incremental sales from the Nueva
Fanal acquisition in mid-2019 and higher prices.
• Segment operating profit for reportable segments was down approximately 21% in 2020 compared to
2019, primarily due to lower sales volumes and higher operating costs driven by lower production levels
to comply with government decrees to manage the pandemic, as well as the Company’s effort to align
supply with lower demand and manage inventory. Segment operating profit was also impacted by the
sale of the Company’s ANZ businesses and the unfavorable effects of changes in foreign currency
exchange rates.
29
• On January 6, 2020 (the “Petition Date”), Paddock voluntarily filed for relief under Chapter 11 of the
Bankruptcy Code to equitably and finally resolve all of its current and future asbestos-related claims.
O-I Glass and O-I Group were not included in the Chapter 11 filing. Following the Chapter 11 filing,
Paddock became 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 liabilities were derecognized from the Company’s
consolidated financial statements as of the Petition Date. Simultaneously, the Company recognized a
$471 million liability related to its support agreement with Paddock. Taken together, these transactions
resulted in a loss of approximately $14 million, which was recorded as a charge in the first quarter of
2020.
•
In May 2020, the Company issued $700 million of senior notes at an interest rate of 6.625% to repay
upcoming debt maturities.
• On July 31, 2020, the Company completed the sale of its ANZ businesses to Visy. Gross proceeds are
approximately USD $677 million, and amounts received were used to reduce debt. The Company
recorded a gain of approximately $275 million in 2020 related to this sale.
Net sales in 2020 were $600 million lower than the same period in the prior year primarily due to lower
sales volumes driven by COVID-19, the sale of the Company’s ANZ businesses on July 31, 2020, and the
unfavorable effects of changes in foreign currency exchange rates, partially offset by incremental sales from the
Nueva Fanal acquisition in mid-2019 and higher prices.
Earnings from continuing operations before income taxes were $614 million higher in 2020 than in the prior
year, primarily due to a gain on the sale of the ANZ businesses in 2020 and the nonoccurrence of a goodwill
impairment charge that was recorded in 2019, partially offset by lower segment operating profit in 2020.
Segment operating profit for reportable segments in 2020 was $178 million lower than in the prior year. The
decrease was largely due to lower sales volumes and higher operating costs driven by unabsorbed fixed costs
from lower production levels to comply with government decrees to manage the pandemic, as well as the
Company’s effort to align supply with lower demand and manage inventory. Segment operating profit was also
impacted by the sale of the Company’s ANZ businesses and the unfavorable effects of changes in foreign
currency exchange rates.
Net interest expense in 2020 decreased $46 million compared to 2019. Net interest expense included $44
million and $65 million for note repurchase premiums, the write-off of deferred finance fees and third-party fees
in 2020 and 2019, respectively, that related to debt that was repaid prior to its maturity. Net interest expense
decreased in 2020 compared to the prior year due to debt reduction and refinancing activities, as well as lower
note repurchase premiums, third-party fees and the write-off of deferred finance fees.
For 2020, the Company recorded net earnings from continuing operations attributable to the Company of
$249 million, or $1.57 per share (diluted), compared to a net loss from continuing operations attributable to the
Company of $397 million, or $2.56 per share, in 2019. Net earnings (loss) from continuing operations attributable
to the Company in 2020 and 2019 included items that management considered not representative of ongoing
operations. These items increased net earnings attributable to the Company by $55 million, or $0.35 per share, in
2020 and decreased net earnings attributable to the Company by $748 million, or $4.80 per share, in 2019.
30
Results of Operations—Comparison of 2020 with 2019
Net Sales
The Company’s net sales in 2020 were $6,091 million compared to $6,691 million in 2019, a decrease of
$600 million, or approximately 9%. Unfavorable foreign currency exchange rates decreased sales by $180
million in 2020 compared to the prior year, as the U.S. dollar strengthened against the Australian dollar, Brazilian
real, Mexican peso and the Colombian peso, partially offset by the U.S. dollar weakening against the Euro. Total
glass container shipments, in tons, were approximately 7% lower in 2020 compared to the prior year, due in part
to the sale of the Company’s ANZ businesses on July 31, 2020 and due to COVID-19. Excluding the ANZ
businesses, glass container shipments were down approximately 4% in 2020 compared to 2019, or approximately
$248 million, primarily due to COVID-19. The divestiture of the Company’s ANZ businesses decreased net
sales by approximately $229 million in 2020. Higher selling prices increased net sales by $81 million in 2020.
Other sales, consisting primarily of machine parts, were approximately $24 million lower in 2020 than the prior
year.
The change in net sales of reportable segments can be summarized as follows (dollars in millions):
Net sales— 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Sales volume and mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effects of changing foreign currency rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divestiture (ANZ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total effect on net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net sales— 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
6,543
81
(248)
(180)
(229)
(576)
5,967
$
Americas: Net sales in the Americas in 2020 were $3,322 million compared to $3,622 million in 2019, a
decrease of $300 million, or 8%. Total glass container shipments in the region were down approximately 4% in
2020 compared to the prior year, driven primarily by lower shipments to alcoholic beverage customers in the U.S.
largely due to ongoing trends in beer shipments, and due to a decline in organic sales volumes linked to
COVID-19. The net impact of lower organic sales more than offset the additional sales from the Nueva Fanal
acquisition and resulted in a $126 million reduction to net sales in 2020 compared to 2019. The unfavorable
effects of foreign currency exchange rate changes decreased net sales $204 million in 2020 compared to 2019.
Higher selling prices increased net sales by $30 million in 2020.
Europe: Net sales in Europe in 2020 were $2,364 million compared to $2,387 million in 2019, a decrease of
$23 million, or 1%. Glass container shipments in 2020 were down approximately 5% compared to 2019,
primarily driven by COVID-19, resulting in $115 million of lower net sales. Selling prices in Europe increased
net sales by $51 million in 2020 compared to the prior year. Favorable changes in foreign currency exchange
rates improved the region’s sales by approximately $41 million in 2020 as the Euro strengthened in relation to the
U.S. dollar.
Asia Pacific: Net sales in Asia Pacific in 2020 were $281 million compared to $534 million in 2019, a
decrease of $253 million, or 47%. The decline in sales in 2020 was due to approximately $17 million of
unfavorable changes in foreign currency exchange rates and approximately $236 million of lower sales volumes,
primarily due to the sale of the ANZ businesses in the third quarter of 2020. On July 31, 2020, the Company
completed the sale of its ANZ businesses, which comprised the majority of the Asia Pacific region, to Visy. For
2020, the results for the Asia Pacific reportable segment reflect only seven months of the results of the ANZ
businesses.
31
Earnings from Continuing Operations before Income Taxes and Segment Operating Profit
Earnings from continuing operations before income taxes were $353 million in 2020 compared to a loss of
$261 million from continuing operations before income taxes in 2019, an increase of $614 million. This increase
was primarily due to the gain on the sale of the ANZ businesses in 2020 and the nonoccurrence of a goodwill
impairment charge that was recorded in 2019, partially offset by lower segment operating profit in 2020
compared to the prior year.
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 2020 was $678 million compared to $856 million in
2019, a decrease of $178 million, or 21%. The decrease was largely due to lower sales volumes and higher
operating costs as a result of the COVID-19 pandemic, the sale of the Company’s ANZ businesses in the third
quarter of 2020 and the unfavorable effects of changes in foreign currency exchange rates. The Company’s
operating costs were impacted by an approximate 7.5% decrease in production levels in 2020, which reflected
required curtailments to comply with government decrees to manage the pandemic, as well as the Company’s
effort to align supply with lower demand and manage inventory. The Company’s turnaround initiatives, strong
operating performance and cost control measures partially offset the impact of lower production levels.
The change in segment operating profit of reportable segments can be summarized as follows (dollars in
millions):
Segment operating profit - 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net price (net of cost inflation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Sales volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effects of changing foreign currency exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divestiture (ANZ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total net effect on segment operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment operating profit - 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
856
3
(83)
(55)
(19)
(24)
(178)
678
$
Americas: Segment operating profit in the Americas in 2020 was $395 million compared to $495 million in
2019, a decrease of $100 million, or 20%. The decrease in sales volume discussed above decreased segment
operating profit in 2020 by $54 million. The effects of changes in foreign currency exchange rates decreased
segment operating profit by $19 million in 2020. Despite temporary production downtime due to the impacts of
COVID-19, improved operating performance and lower costs drove operating costs lower and increased segment
operating profit by $11 million in 2020. The region’s closure of a plant in 2020 did not have a material impact on
its profitability this year, and significant savings are not expected in future years, but the closure is expected to
avoid anticipated losses from this plant in the future. Cost inflation more than offset higher selling prices
resulting in a net $38 million decrease to segment operating profit in the current year.
Europe: Segment operating profit in Europe in 2020 was $264 million compared to $317 million in 2019, a
decrease of $53 million, or 17%. The decrease in sales volume discussed above decreased segment operating
profit in 2020 by $27 million. The region’s operating costs in 2020 were approximately $78 million higher driven
by temporary production downtime associated with COVID-19, which decreased segment operating profit
compared to the same period in the prior year. Higher net selling prices (net of cost inflation) increased segment
operating profit by $51 million in 2020 compared to the prior year. The effects of changes in foreign currency
exchange rates increased segment operating profit by $1 million in 2020.
Asia Pacific: Segment operating profit in 2020 was $19 million compared to $44 million in 2019, a decrease
of $25 million, or 57%. For 2020, the results for the Asia Pacific reportable segment reflect only seven months of
32
the results of the ANZ businesses since those businesses were sold on July 31, 2020. This divestiture resulted in
a decrease of approximately $24 million in 2020 compared to the prior year. Prior to this sale, lower sales
volumes reduced segment operating profit in 2020 by $2 million. Lower net selling prices (net of cost inflation)
decreased segment operating profit by $10 million in 2020 compared to the prior year. The effects of changes in
foreign currency exchange rates decreased segment operating profit by $1 million in 2020. Partially offsetting
this, the region’s operating costs in 2020 were approximately $12 million lower due to improved factory
performance, which increased segment operating profit compared to the same period in the prior year.
Interest Expense, Net
Net interest expense in 2020 was $265 million compared to $311 million in 2019. Net interest expense
included $44 million and $65 million in 2020 and 2019, respectively, for the write-off of deferred finance fees
and third-party fees that were related to debt that was repaid prior to its maturity. Net interest expense decreased
in 2020 compared to the prior year due to debt reduction and refinancing activities, as well as lower note
repurchase premiums, third-party fees and the write-off of deferred finance fees.
Provision for Income Taxes
The Company’s effective tax rate from continuing operations for 2020 was 25.2% compared to (45.2%) for
2019. The effective tax rate for 2020 differed from 2019 primarily due to minimal tax on the gain on the sale of
the ANZ businesses due to utilization of tax attributes in 2020 and the goodwill impairment charge recorded in
2019, which was not deductible for income tax purposes.
Net Earnings (Loss) from Continuing Operations Attributable to the Company
For 2020, the Company recorded earnings from continuing operations attributable to the Company of $249
million, or $1.57 per share (diluted), compared to a loss from continuing operations attributable to the Company
of $397 million, or $2.56 per share, in 2019. Earnings in 2020 and 2019 included items that are not representative
of ongoing operations as set forth in the following table (dollars in millions):
Description
Gain on sale of ANZ business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Charge for goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge for asbestos-related costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, asset impairment and other charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge for deconsolidation of Paddock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Strategic transaction costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note repurchase premiums, the write-off of unamortized finance fees and third party
fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of equity investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net benefit for income tax on items above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other tax charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net impact of noncontrolling interests on items above . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Foreign Currency Exchange Rates
Net Earnings
Increase
(Decrease)
2020
2019
275 $
(142)
(14)
(26)
(8)
(44)
13
1
55 $
—
(595)
(35)
(114)
(26)
(31)
(65)
107
13
(3)
1
(748)
Given the global nature of its operations, the Company is subject to fluctuations in foreign currency
exchange rates. As described above, the Company’s reported revenues and segment operating profit in 2020 were
decreased due to foreign currency effects compared to 2019.
33
This trend may continue into 2021. During times of a strengthening U.S. dollar, the reported revenues and
segment operating profit of the Company’s international operations will be reduced because the local currencies
will translate into fewer U.S. dollars. The Company uses certain derivative instruments to mitigate a portion of
the risk associated with changing foreign currency exchange rates.
Forward Looking Operational and Financial Impacts from the COVID-19 Pandemic
• The Company expects that full year 2021 sales shipment growth to be 2 to 4 percent (in tons) compared
to 2020, representing a partial volume recovery to 2019 levels. Likewise, the Company expects
continued benefits from its initiatives to expand margins. These incremental savings should more than
offset the headwind from temporary cost reduction efforts in 2020 to mitigate the impact of the
COVID-19 pandemic that will not repeat in 2021.
• The Company will continue to focus on long-term value creation, including advancing the MAGMA
deployment. Also, the Company has substantially completed its strategic and tactical divestiture
program with proceeds used to reduce debt and improve financial flexibility. Finally, the Company will
continue to advance the Paddock Chapter 11 process to establish a final, certain and equitable resolution
of its legacy asbestos-related claims liabilities.
• Cash provided by continuing operating activities is expected to approximate $615 million or higher in
2021. This outlook assumes capital expenditures of approximately $375 million and the continued
suspension of all asbestos-related claims payments, pending final resolution of the Paddock Chapter 11.
• 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.
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 years ending December 31, 2020 and 2019.
Retained corporate costs and other for 2020 were $145 million compared to $112 million in 2019. These
costs were higher in the 2020 periods primarily due to the nonoccurrence of equity earnings from a soda ash joint
venture that was sold by the Company in the fourth quarter of 2019, higher research and development costs and
higher incentive compensation, partially offset by efforts to reduce costs.
Restructuring, Asset Impairment and Other Charges
During 2020, the Company recorded charges totaling $142 million for restructuring, asset impairment and
other charges. These charges reflect $96 million of employee costs, such as severance, benefit-related costs, asset
impairments 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. These charges
also reflect approximately $46 million of other charges, which included approximately $36 million of non-cash
impairment charges related to an equity investment (Retained corporate costs and other).
34
During 2019, the Company recorded charges totaling $114 million for restructuring, asset impairment and
other charges. These charges reflect $69 million of employee costs, such as severance, benefit-related costs and
other exit costs primarily related to a severance program for certain salaried employees at the Company’s
corporate and Americas headquarters and a furnace closure in the Americas. These charges also reflect
approximately $45 million of other charges, including approximately $22 million of non-cash asset impairment
charges related to the Company’s operations in Argentina and China, primarily due to macroeconomic conditions
in those countries.
See Notes 6 and 10 to the Consolidated Financial Statements for additional information.
Strategic Transaction and Corporate Modernization Costs
For the year ended December 31, 2020, the Company recorded charges totaling $8 million 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 and improving the Company’s operating
efficiency, cost structure and working capital management. These activities are ongoing and may result in tactical
divestitures, corporate transactions or similar actions, and could cause the Company to incur restructuring,
impairment, disposal or other related charges in future periods.
For the year ended December 31, 2019, the Company incurred costs of $31 million related to the Corporate
Modernization and a strategic portfolio review. See Note 15 to the Consolidated Financial Statements for further
information.
Pension Settlement Charges
In the past several years, the Company has settled a portion of its pension obligations, which resulted in
settlement charges as noted below.
During 2020, the Company recorded charges totaling $26 million for pension settlements, primarily in
Canada, Mexico and the United States.
During 2019, the Company recorded charges totaling $26 million for pension settlements, primarily in the
United States and the United Kingdom.
Charge for Paddock Deconsolidation
Following its Chapter 11 filing, 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 15 to the Consolidated Financial Statements for further information.
Gain on Sale of the ANZ Businesses
On July 31, 2020, the Company completed the sale of its 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. As a result, the Company recorded a net gain (including costs directly attributable to the sale of ANZ) of
approximately $275 million.
35
Charge for Goodwill Impairment
As part of its on going assessment of goodwill, the Company determined that indicators of impairment had
occurred during the third quarter of 2019. The triggering events were management’s update to its long-range
plan, which indicated lower projected future cash flows for its North American reporting unit (in the Americas
segment) as compared to the projections used in the most recent goodwill impairment test performed as of
October 1, 2018, and a significant reduction in the Company’s share price. The Company’s business in North
America has experienced declining shipments to its alcoholic beverage customers, primarily in the beer category,
and this trend is likely to continue into the foreseeable future. These factors, combined with the narrow difference
between the estimated fair value and carrying value of the North American reporting unit as of December 31,
2018, resulted in the Company performing an interim impairment analysis during the third quarter of 2019. As a
result, the Company recorded a non-cash impairment charge of $595 million in the third quarter of 2019, which
was equal to the excess of the North American reporting unit's carrying value over its fair value. Goodwill related
to the Company’s other reporting units was determined to not be impaired as a result of the interim impairment
analysis.
See Note 7 to the Consolidated Financial Statements for further information.
Charge for Asbestos-Related Costs
For the year ended December 31, 2019, the Company’s comprehensive legal review of its asbestos-related
liabilities resulted in a $35 million charge. This charge was primarily due to a 9% increase in the estimated
average disposition cost per claim (including related legal costs), driven primarily by plaintiffs leveraging a
changing litigation environment, and an immaterial decrease in the estimated number of claims likely to be
asserted against the Company in the future.
Following the Corporate Modernization transactions, asbestos-related liabilities that were previously paid by
O-I now reside at Paddock. On January 6, 2020, Paddock voluntarily filed for relief under Chapter 11 of the
Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware, to equitably and finally resolve all of
its current and future asbestos-related claims. O-I Glass and O-I Group were not included in the Chapter 11
filing. 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. The Company undertook the Corporate Modernization transactions to
improve the Company’s operating efficiency and cost structure, which resulted in the legacy liabilities of O-I
residing within Paddock, separate from the active operations of the Company’s subsidiaries, while fully
maintaining Paddock’s ability to access the value of those operations to support its legacy liabilities through the
support agreement. The Corporate Modernization transactions also helped ensure that Paddock has the same
ability to fund the costs of defending and resolving present and future Asbestos Claims as O-I previously did,
through Paddock’s retention of its own assets to satisfy these claims and through its access to additional funds
from the Company through the support agreement. The ultimate amount that the Company may be required to
fund on account of asbestos-related liabilities paid out in connection with a confirmed Chapter 11 plan of
reorganization cannot be estimated with certainty at this time.
The Company anticipates that cash flows in 2021 will continue to benefit from the operation of the
automatic stay in Paddock’s Chapter 11 filing, which stays ongoing litigation and submission of claims and
defers payment in connection with asbestos-related liabilities.
Following the Chapter 11 filing, the activities of Paddock became 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 Chapter 11 filing date of January 6,
2020, and its assets and liabilities were derecognized from the Company’s consolidated financial statements on a
prospective basis.
36
See “Critical Accounting Estimates” and Note 15 to the Consolidated Financial Statements for additional
information.
Gain on Sale of Equity Investment
During 2019, the Company recorded a gain of approximately $107 million related to the sale of the
Company’s 25% interest in Tata Chemicals (Soda Ash) Partners, which was an equity investment of the
Company.
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.
The Company incurred $0 and $3 million in 2020 and 2019, respectively, for losses from discontinued
operations for matters related to the Venezuelan expropriation.
Capital Resources and Liquidity
On June 25, 2019, 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”), which amended and restated the previous credit agreement
(the “Previous Agreement”). The proceeds from the Agreement were used to repay all outstanding amounts
37
under the Previous Agreement. The Company recorded $4 million of additional interest charges for third-party
fees and the write-off of unamortized fees related to the Agreement during 2019.
The Agreement provides for up to $3.0 billion of borrowings pursuant to term loans and revolving credit
facilities. The term loans mature, and the revolving credit facilities terminate, in June 2024. At December 31,
2020, the Agreement includes a $300 million revolving credit facility, a $1.2 billion multicurrency revolving
credit facility, and a $1.5 billion term loan A facility ($1,067 million outstanding balance at December 31, 2020,
net of debt issuance costs). At December 31, 2020, the Company had unused credit of $1.5 billion available
under the Agreement. The weighted average interest rate on borrowings outstanding under the Agreement at
December 31, 2020 was 1.68%.
The 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 Agreement also contains one financial maintenance covenant, a Total Leverage Ratio (the “Leverage
Ratio”), that requires the Company not to exceed a ratio of 5.0x calculated by dividing consolidated total debt,
less cash and cash equivalents, by Consolidated EBITDA, with such Leverage Ratio decreasing to (a) 4.75x for
the quarter ending June 30, 2021 and (b) 4.50x for the quarter ending December 31, 2021 and thereafter, as
defined and described in the 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 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 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 Agreement. In such an event, the Company could not request borrowings under the revolving facilities,
and all amounts outstanding under the 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
Agreement. If an event of default occurs under the Agreement and the lenders cause all of the outstanding debt
obligations under the 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 December 31, 2020, the Company was in compliance with all covenants and
restrictions in the Agreement. In addition, the Company believes that it will remain in compliance and that its
ability to borrow funds under the Agreement will not be adversely affected by the covenants and restrictions.
The Leverage Ratio also determines pricing under the Agreement. The interest rate on borrowings under the
Agreement is, at the Company’s option, the Base Rate or the Eurocurrency Rate, as defined in the Agreement,
plus an applicable margin. The applicable margin is linked to the Leverage Ratio. The margins range from 1.00%
to 1.50% for Eurocurrency Loans and from 0.00% to 0.50% for Base Rate Loans. In addition, a commitment fee
is payable on the unused revolving credit facility commitments ranging from 0.20% to 0.30% per annum linked
to the Leverage Ratio.
Obligations under the 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 Agreement are guaranteed by certain domestic subsidiaries of the Company, and certain
foreign obligations under the Agreement are guaranteed by certain foreign subsidiaries of the Company.
38
In July 2019, the Company redeemed €250 million aggregate principal amount of its outstanding 6.75%
senior notes due 2020. The redemption was funded with cash on hand and revolver borrowings.
In November 2019, the Company issued €500 million aggregate principal amount of senior notes. The
senior notes bear interest at a rate of 2.875% per annum and mature on February 15, 2025. 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 €492 million and were used to redeem the
remaining €250 million aggregate principal amount of the Company’s outstanding 6.75% senior notes due 2020
and €212 million aggregate principal amount of the Company’s outstanding 4.875% senior notes due 2021.
In December 2019, subsidiaries of the Company completed consent solicitations to amend and waive certain
provisions of the indentures governing certain of their senior notes. On December 11, 2019, those subsidiaries
entered into supplemental indentures reflecting the amendments and waivers, which were obtained to facilitate
the implementation of the Corporate Modernization. The Company recorded approximately $5 million of
additional interest charges for third-party fees in 2019 related to these activities.
The Company recorded approximately $56 million of additional interest charges for note repurchase
premiums and the write-off of unamortized finance fees related to the senior note redemptions conducted during
2019.
In May 2020, the Company issued $700 million aggregate principal amount of senior notes. The senior notes
bear interest at a rate of 6.625% per annum and mature on May 13, 2027. 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 million and were used to redeem the remaining $130
million aggregate principal amount of the Company’s outstanding 4.875% senior notes due 2021, approximately
$419 million aggregate principal amount of the Company’s outstanding 5.00% senior notes due 2022 and
approximately $105 million of other secured borrowings. The Company recorded approximately $38 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 9 to the Consolidated Financial
Statements 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.
Cash Flows
Operating activities: Cash provided by continuing operating activities was $457 million for 2020, compared
to $408 million for 2019. The increase in cash provided by continuing operating activities in 2020 was largely
due to the staying of all asbestos-related payments as a result of Paddock’s Chapter 11 filing in early
January 2020. The Company made $0 and $151 million of asbestos-related payments in 2020 and 2019,
respectively. The Company anticipates that cash flows in 2021 will continue to benefit from the operation of the
automatic stay in Paddock’s Chapter 11 filing, which stays ongoing litigation and submission of claims and
defers payment in
39
connection with asbestos-related liabilities. See Note 15 to the Consolidated Financial Statements for additional
information on Paddock.
Working capital was a use of cash of $181 million in 2020, compared to a use of cash of $176 million in
2019. The higher use of cash from working capital in 2020 compared to the prior year was primarily due to
accounts receivable. The Company reduced the amount of its trade receivables that were factored by
approximately $103 million at year-end 2020 compared to 2019, which resulted in a larger use of working capital
in 2020. Excluding the impact of accounts receivable factoring, the Company’s days sales outstanding were
slightly lower as of December 31, 2020 compared to December 31, 2019. Partially offsetting the impact of lower
factored receivables was a decline in inventory levels. As a result of COVID-19, the Company reduced
production levels to align with lower sales demand, and this resulted in approximately $75 million of a lower use
of cash from working capital in 2020 compared to 2019.
During 2020, the Company contributed $103 million to its defined benefit pension plans, compared with
$33 million in 2019. As part of these contributions, the Company elected to make $50 million and $0 in 2020 and
2019, respectively, in discretionary contributions. Cash payments for restructuring activities were $37 million in
2020 compared to $54 million in 2019. In addition, the Company experienced a $103 million increase in cash
provided by other operating items for 2020 compared to the prior year, which included the impact of higher
dividends received from equity affiliates, lower equity earnings due to the sale of a soda ash joint venture in
December 2019 and less cash spent on pallets and repair parts.
Investing activities: Cash provided by investing activities was $93 million for 2020, compared to $437
million utilized in investing activities for 2019. In response to the COVID-19 pandemic in 2020, the Company
took a number of measures, including limiting its capital expenditures, to reduce costs and preserve its financial
flexibility. Capital spending for property, plant and equipment was $311 million during 2020, compared to $426
million in 2019. The Company estimates that its full year 2021 capital expenditures will be approximately $375
million. Cash paid for acquisitions was $0 and $190 million for 2020 and 2019, respectively. On June 28, 2019,
the Company completed its acquisition of Nueva Fábrica Nacional de Vidrio, S. de R.L. de C.V., a four-furnace
glass plant located near Mexico City, Mexico, from Grupo Modelo, a wholly owned affiliate of Anheuser-Busch
InBev SA/NV. Contributions and advances to joint ventures were $0 and $22 million in 2020 and 2019,
respectively. No significant contributions are planned to the Company’s joint ventures in 2021.
On July 31, 2020, the Company completed the sale of its ANZ businesses to Visy. Cash proceeds, net of
costs directly attributable to the sale of ANZ, of approximately $441 million were received in the third quarter of
2020. Approximately 95% of proceeds were received at the time of closing and the remaining balance will be
paid within 12 months of closing without conditions precedent. In addition and as discussed below, the Company
received proceeds for a sale leaseback transaction executed in conjunction with the ANZ sale.
The Company received approximately $10 million and $197 million in 2020 and 2019, respectively, of net
proceeds from the disposal of assets. In 2019, these net proceeds primarily related to the sale of the Company’s
25% equity interest in Tata Chemicals (Soda Ash) Partners.
Following the 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 liabilities
were derecognized from the Company’s financial statements, which resulted in an investing outflow of $47
million in the Company’s 2020 consolidated cash flows. See Note 15 to the Consolidated Financial Statements
for more information.
Financing activities: Cash utilized in financing activities was $557 million for 2020, compared to $68
million of cash provided by financing activities for 2019. Financing activities in 2020 included additions to long-
term debt of $1,845 million, which included the issuance of $700 million of senior notes. Financing activities in
2020 also included the repayment of long-term debt of $2,460 million, which included the paydown of
approximately $410 million of the Term Loan A facility, the repurchase of the remaining €118 million aggregate
principal amount of the Company’s outstanding 4.875% senior notes due 2021, approximately $500 million
aggregate principal amount of the Company’s outstanding 5.00% senior notes due 2022 and approximately $230
million of other secured
40
borrowings. Financing activities in 2019 included additions to long-term debt of $4,265 million, which included
the issuance of €500 million of senior notes and the refinancing of the Company’s Senior Secured Credit Facility.
Financing activities in 2019 also included the repayment of long-term debt of $4,099 million, which included the
repayment of the previous credit facility and the repurchase of the outstanding €500 million aggregate principal
amount of outstanding 6.75% senior notes due 2020 and the partial redemption of €212 million outstanding
4.875% senior notes due 2021.
Borrowings under short-term loans decreased by $15 million in 2020. As a result of financing activities, the
Company paid finance fees of $51 million and $85 million for 2020 and 2019, respectively. Also, the Company
paid approximately $8 million and received $28 million in proceeds related to hedging activity in 2020 and 2019,
respectively.
The Company paid $8 million and $31 million in dividends in 2020 and 2019, respectively. In 2020 and
2019, the Company repurchased $0 and $38 million, respectively, of the Company’s stock. In response to the
COVID-19 pandemic, the Company suspended its quarterly dividend after the first quarter of 2020 and paused
share repurchases for 2020. 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 and employees. This authorization
supersedes and replaces any prior repurchase authorizations. The Company expects to repurchase approximately
$35 million of the Company’s common stock in 2021.
In addition, the Company received approximately $155 million in proceeds for a sale leaseback transaction
in 2020 that was executed in conjunction with the ANZ sale.
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 and its impact on its customers and suppliers, the negative
financial impact to the Company’s results cannot be reasonably estimated, but could be material. The Company
is actively managing the 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 that cash
flows in 2021 will continue to benefit from the operation of the automatic stay in Paddock’s Chapter 11 filing,
which stays ongoing litigation and submission of claims and defers payment in connection with asbestos-related
liabilities.
Contractual Obligations and Off-Balance Sheet Arrangements
The following information summarizes the Company’s significant contractual cash obligations at
December 31, 2020 (dollars in millions).
Payments due by period
Total
Less than
one year
1 - 3 years 3 - 5 years
More than
5 years
Contractual cash obligations:
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,979 $
Finance lease obligations . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations(2) . . . . . . . . . . . . . . . . . . . . . . . . .
Pension benefit plan contributions(3) . . . . . . . . . . . . . .
Postretirement benefit plan benefit payments(1) . . . . .
108
138
829
1,773
60
51
Total contractual cash obligations . . . . . . . . . . . . . . . $ 7,938 $
41
125 $ 1,068 $ 3,093 $
29
39
365
876
25
14
208
279
16
3
185
551
60
5
10
945 $ 2,387 $ 3,629 $
10
693
38
82
71
67
26
977
Other commercial commitments:
Total
Amount of commitment expiration per period
Less than
one year
1 - 3 years 3 - 5 years
More than
5 years
Standby letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . $
Total commercial commitments . . . . . . . . . . . . . . . . . . $
41 $
41 $
41 $
41 $
$
— $
$
— $
—
(1) Amounts based on rates and assumptions at December 31, 2020.
(2) The Company’s purchase obligations consist principally of contracted amounts for energy and molds. In
cases where variable prices are involved, current market prices have been used. The amount above does not
include ordinary course of business purchase orders because the majority of such purchase orders may be
canceled. The Company does not believe such purchase orders will adversely affect its liquidity position.
(3) In order to maintain minimum funding requirements, the Company is required to make contributions to its
defined benefit pension plans of approximately $60 million in 2021. Future funding requirements for the
Company’s pension plans will depend largely on actual asset returns and future actuarial assumptions, such
as discount rates, and can vary significantly.
The Company is unable to make a reasonably reliable estimate as to when cash settlement with taxing
authorities may occur for its unrecognized tax benefits. Therefore, the liability for unrecognized tax benefits is
not included in the table above. See Note 13 to the Consolidated Financial Statements for additional 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 Consolidated Financial Statements, if applicable, where estimates and assumptions affect the Company’s
reported and expected financial results.
The Company believes that accounting for the impairment of long-lived assets, pension benefit plans,
contingencies and litigation related to its asbestos-related liability, and income taxes involves the more significant
judgments and estimates used in the preparation of its consolidated financial statements.
Impairment of Long-Lived Assets
Property, Plant and Equipment (PP&E) - The Company tests for impairment of PP&E whenever events or
changes in circumstances indicate that the carrying amount of the assets may not be recoverable. PP&E held for
use in the Company’s business is grouped for impairment testing at the lowest level for which cash flows can
reasonably be identified, typically a segment or a component of a segment. The Company evaluates the
recoverability of PP&E based on undiscounted projected cash flows, excluding interest and taxes. If an asset
group is considered impaired, the impairment loss to be recognized is measured as the amount by which the asset
42
group’s carrying amount exceeds its fair value. PP&E held for sale is reported at the lower of carrying amount or
fair value less cost to sell.
Impairment testing requires estimation of projected future cash flows generated by the asset group. The
assumptions underlying cash flow projections represent management’s best estimates at the time of the
impairment review. Factors that management must estimate include, among other things: industry and market
conditions, sales volume and prices, production costs and inflation. Changes in key assumptions or actual
conditions which differ from estimates could result in an impairment charge. The Company uses reasonable and
supportable assumptions when performing impairment reviews and cannot predict the occurrence of future events
and circumstances that could result in impairment charges.
Goodwill – Goodwill is tested for impairment annually as of October 1 (or more frequently if impairment
indicators arise). When performing a quantitative test for goodwill impairment, the Company compares the
business enterprise value (“BEV”) of each reporting unit with its carrying value. The BEV is computed based on
estimated future cash flows, discounted at the weighted average cost of capital of a hypothetical third-party
buyer. If the BEV is less than the carrying value for any reporting unit, then any excess of the carrying value over
the BEV is recorded as an impairment loss. The calculations of the BEV are based on internal and external
inputs, such as projected future cash flows of the reporting units, discount rates, terminal business value, among
other assumptions. The valuation approach utilized by management represents a Level 3 fair value measurement
measured on a non-recurring basis in the fair value hierarchy due to the Company’s use of unobservable inputs.
The Company’s projected future cash flows incorporate management’s best estimates of the expected future
results including, but not limited to, price trends, customer demand, material costs, asset replacement costs and
any other known factors.
Goodwill is tested for impairment at the reporting unit level, which is the operating segment or one level
below the operating segment, also known as a component. Two or more components of an operating segment
shall be aggregated into a single reporting unit based on an assessment of various factors. The aggregation of the
components of the Company’s reporting units was based on their economic similarity as determined by the
Company using a number of quantitative and qualitative factors, including gross margins, the manner in which
the Company operates the business, the consistent nature of products, services, production processes, customers
and methods of distribution, as well as the level of shared resources and assets between the components. Despite
the consolidation of the Americas segment effective January 1, 2018, the Company has not changed the reporting
units within this reportable segment or the goodwill allocated to its reporting units. The Americas reportable
segment is comprised of two reporting units – North America and Latin America. The Company has determined
that the Europe segment is also a reporting unit. Prior to 2020, the Company aggregated the components of the
Asia Pacific segment, which had no goodwill, into a single reporting unit equal to the reportable segment. On
July 31, 2020, the Company completed the sale of its 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). 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.
The COVID-19 pandemic had an adverse impact on the Company’s business during the second quarter of
2020, resulting in a significant decline in revenue and earnings, along with a decline in the Company’s stock
price and associated market capitalization. The Company determined that the impact of COVID-19 was a
triggering event that required the Company to perform a quantitative interim goodwill impairment test in the
second quarter of 2020. This interim test indicated that the BEV of each of the Company’s reporting units
exceeded its respective carrying amount in the second quarter of 2020; therefore, no goodwill impairment existed.
As part of its on going assessment of goodwill in 2019, the Company determined that indicators of impairment
had occurred during the third quarter of 2019. The triggering events were management’s update to its long-range
plan, which indicated lower projected future cash flows for its North American reporting unit (in the Americas
segment) as compared to the projections used in the most recent goodwill impairment test performed as of
October 1, 2018, and a significant reduction in the Company’s share price. As a result, the Company recorded a
non-cash impairment charge of $595 million in the third quarter of 2019, which was equal to the excess of the
43
North American reporting unit's carrying value over its fair value. Goodwill related to the Company’s other
reporting units was determined to not be impaired as a result of the 2019 interim impairment analysis.
During the fourth quarter of 2020, the Company completed its annual impairment testing and determined
that no impairment of goodwill existed. Goodwill at December 31, 2020 totaled approximately $1.95 billion,
representing 22% of total assets. As of December 31, 2020, the Company has three reporting units and includes
approximately $933 million of recorded goodwill to the Company’s Europe reporting unit, approximately $446
million of recorded goodwill to the Company’s North America reporting unit and approximately $572 million of
recorded goodwill to the Company’s Latin America reporting unit. There can be no assurance that anticipated
financial results will be achieved, and the goodwill balances remain susceptible to future impairment charges.
The goodwill related to the North America reporting unit remains the reporting unit that has the greatest risk of
future impairment charges given the difference (approximately 19%) between the BEV and carrying value of this
reporting unit as of October 1, 2020. Future changes in the Company’s cost of capital or expected cash flows
may cause the Company’s goodwill to become impaired, resulting in a non-cash charge against the Company’s
results of operations. For example, if the Company’s assumed perpetuity growth rate, which would impact
projected future cash flows, were one percentage point lower and the Company’s assumed weighted average cost
of capital were one percentage point higher, the testing performed as of October 1, 2020, would have indicated a
goodwill impairment of approximately $25 million related to the Company’s North American reporting unit. The
BEVs of the Company’s Europe and Latin America reporting units more substantially exceeded their carrying
values. Any impairment charges that the Company may take in the future could be material to its consolidated
results of operations and financial condition.
During the time subsequent to the annual evaluation, and at December 31, 2020, the Company considered
whether any events and/or changes in circumstances had resulted in the likelihood that the goodwill of any of its
reporting units may have been impaired and has determined that no such events have occurred. The Company
will monitor conditions throughout 2021 that might significantly affect the projections and variables used in the
impairment test to determine if a review prior to October 1 may be appropriate. If the results of impairment
testing confirm that a write-down of goodwill is necessary, then the Company will record a charge at that time.
In the event the Company would be required to record a significant write-down of goodwill, the charge would
have a material adverse effect on reported results of operations and net worth.
Other Long-Lived Assets - Intangibles – Other long-lived assets consist primarily of purchased customer
relationships intangibles and are amortized using the accelerated amortization method over their estimated useful
lives. The Company reviews these assets for impairment whenever events or changes in circumstances indicate
that the carrying amount of the asset may not be recoverable. In the event that a decline in fair value of an asset
occurs, and the decline in value is considered to be other than temporary, an impairment loss is recognized. The
test for impairment would require the Company to make estimates about fair value, which may be determined
based on discounted cash flows, third-party appraisals or other methods that provide appropriate estimates of
value. The Company continually monitors the carrying value of its assets.
Pension Benefit Plans
Estimates - The determination of pension obligations and the related pension expense or credits to operations
involves certain estimations. The most critical estimates are the discount rate used to calculate the actuarial
present value of benefit obligations and the expected long-term rate of return on plan assets. The Company uses
discount rates based on yields of high quality fixed rate debt securities at the end of the year. At December 31,
2020, the weighted average discount rate was 2.61% and 1.92% for U.S. and non-U.S. plans, respectively. The
Company uses an expected long-term rate of return on assets that is based on both past performance of the
various plans’ assets and estimated future performance of the assets. Due to the nature of the plans’ assets and the
volatility of debt and equity markets, actual returns may vary significantly from year to year. The Company refers
to average historical returns over longer periods (up to 10 years) in determining its expected rates of return
because short-term fluctuations in market values do not reflect the rates of return the Company expects to achieve
based upon its long-term investing strategy. For purposes of determining pension charges and credits in 2020, the
44
Company’s estimated weighted average expected long-term rate of return on plan assets is 7.15% for U.S. plans
and 5.23% for non-U.S. plans compared to 7.25% for U.S. plans and 5.50% for non-U.S. plans in 2019. The
Company recorded pension expense from continuing operations (exclusive of settlement charges) of $32 million,
$25 million, and $26 million for the U.S. plans in 2020, 2019, and 2018, respectively, and $6 million, $7 million,
and $6 million for the non-U.S. plans in 2020, 2019, and 2018, respectively. Depending on currency translation
rates, the Company expects to record approximately $35 million of total pension expense for the full year of
2021. The 2021 pension expense will reflect a 6.85% and 5.20% expected long-term rate of return for the U.S.
assets and non-U.S. assets, respectively.
Future effects on reported results of operations depend on economic conditions and investment performance.
For example, a one-half percentage point change in the actuarial assumption regarding discount rates used to
calculate plan liabilities or in the expected rate of return on plan assets would result in a change of approximately
$6 million and $11 million, respectively, in the pretax pension expense for the full year of 2021.
Recognition of Funded Status - The Company recognizes the funded status of each pension benefit plan on
the balance sheet. The funded status of each plan is measured as the difference between the fair value of plan
assets and actuarially calculated benefit obligations as of the balance sheet date. Actuarial gains and losses are
accumulated in Other Comprehensive Income, and the portion of each plan that exceeds 10% of the greater of
that plan’s assets or projected benefit obligation is amortized to income on a straight-line basis over the average
remaining service period of employees still accruing benefits or the expected life of participants not accruing
benefits if all, or almost all, of the plan’s participants are no longer accruing benefits.
Contingencies and Litigation Related to Asbestos Liability
For many years, the Company has conducted an annual comprehensive legal review of its asbestos-related
liabilities and costs in connection with finalizing and reporting its annual results of operations, unless significant
changes in trends or new developments warrant an earlier review. As part of its annual comprehensive legal
review for the year ended December 31, 2019, the Company provided historical claims filing data to a third-party
consultant with expertise in predicting future claims filings based on actuarial inputs such as disease incidence
and mortality. The Company used those estimates of total future claims, along with its legal judgment regarding
an estimation of future disposition costs and related legal costs, as inputs to develop a reasonable estimate of
probable liability.
Following the Corporate Modernization transactions, asbestos-related liabilities that were previously paid by
O-I now reside at Paddock. On January 6, 2020, Paddock voluntarily filed for relief under Chapter 11 of the
Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware, to equitably and finally resolve all of
its current and future asbestos-related claims. O-I Glass and O-I Group were not included in the Chapter 11
filing. 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. Although the Chapter 11 proceedings are progressing, it is not possible
to predict the form of any ultimate resolution or when an ultimate resolution might occur at this time. The
Company undertook the Corporate Modernization transactions to improve the Company’s operating efficiency
and cost structure, which resulted in the legacy liabilities of O-I residing within Paddock, separate from the active
operations of the Company’s subsidiaries, while fully maintaining Paddock’s ability to access the value of those
operations to support its legacy liabilities through the support agreement. The Corporate Modernization
transactions also helped ensure that Paddock has the same ability to fund the costs of defending and resolving
present and future Asbestos Claims as O-I previously did, through Paddock’s retention of its own assets to satisfy
these claims and through its access to additional funds from the Company through the support agreement. The
ultimate amount that the Company may be required to fund on account of such asbestos-related liabilities paid out
in connection with a confirmed Chapter 11 plan of reorganization cannot be estimated with certainty at this time.
45
Income Taxes
The Company accounts for income taxes as required by general accounting principles under which
management judgment is required in determining income tax expense/(benefit) and the related balance sheet
amounts. This judgment includes estimating and analyzing historical and projected future operating results, the
reversal of taxable and tax deductible temporary differences, tax planning strategies, and the ultimate outcome of
uncertain income tax positions. Actual income taxes paid may vary from estimates, depending upon changes in
income tax laws, actual results of operations, and the effective settlement of uncertain tax positions. The
Company has received tax assessments in excess of established reserves for uncertain tax positions. 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 to the Company’s results of operations, financial position or cash flows. Changes in the estimates
and assumptions used for calculating income tax expense and potential differences in actual results from
estimates could have a material impact on the Company’s results of operations and financial condition.
Deferred tax assets and liabilities are recognized for the tax effects of temporary differences between the
financial reporting and tax bases of assets and liabilities measured using enacted tax rates and for tax attributes
such as operating losses and tax credit carryforwards. Deferred tax assets and liabilities are determined separately
for each tax jurisdiction on a separate or on a consolidated tax filing basis, as applicable, in which the Company
conducts its operations or otherwise incurs taxable income or losses. A valuation allowance is recorded when it is
more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of
deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character within
the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The
Company considers the following possible sources of taxable income when assessing the realization of deferred
tax assets:
•
•
•
•
taxable income in prior carryback years;
future reversals of existing taxable temporary differences;
future taxable income exclusive of reversing temporary differences and carryforwards; and
prudent and feasible tax planning strategies that the Company would be willing to undertake to prevent
a deferred tax asset from otherwise expiring.
The assessment regarding whether a valuation allowance is required or whether a change in judgment
regarding the valuation allowance has occurred also considers all available positive and negative evidence,
including, but not limited to:
•
•
•
•
•
nature, frequency, and severity of cumulative losses in recent years;
duration of statutory carryforward and carryback periods;
statutory limitations against utilization of tax attribute carryforwards against taxable income;
historical experience with tax attributes expiring unused; and
near- and medium-term financial outlook.
The weight given to the positive and negative evidence is commensurate with the extent to which the
evidence may be objectively verified. Accordingly, it is generally difficult to conclude a valuation allowance is
not required when there is significant objective and verifiable negative evidence, such as cumulative losses in
recent years. The Company uses the actual results for the last two years and current year results as the primary
measure of cumulative losses in recent years.
The evaluation of deferred tax assets requires judgment in assessing the likely future tax consequences of
events recognized in the financial statements or tax returns and future profitability. The recognition of deferred
46
tax assets represents the Company’s best estimate of those future events. Changes in the current estimates, due to
unanticipated events or otherwise, could have a material effect on the Company’s results of operations and
financial condition.
In certain tax jurisdictions, the Company’s analysis indicates that it has cumulative losses in recent years.
This is considered significant negative evidence which is objective and verifiable and, therefore, difficult to
overcome. However, the cumulative loss position is not solely determinative, and, accordingly, the Company
considers all other available positive and negative evidence in its analysis. Based on its analysis, the Company
has recorded a valuation allowance for the portion of deferred tax assets where based on the weight of available
evidence it is unlikely to realize those deferred tax assets.
Based on the evidence available, including a lack of sustainable earnings, the Company in its judgment
previously recorded a valuation allowance against substantially all of its net deferred tax assets in the United
States. If a change in judgment regarding this valuation allowance were to occur in the future, the Company will
record a potentially material deferred tax benefit, which could result in a favorable impact on the effective tax
rate in that period. The utilization of tax attributes to offset taxable income reduces the amount of deferred tax
assets subject to a valuation allowance.
In 2017, the Company elected to treat Global Intangible Low Taxed Income (“GILTI”), which was effective
in 2018 for the Company, as a period cost.
The U.S. Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. Additional guidance
related to the Act continues to be issued providing further clarification on the application of the Act, including
regulations related to the GILTI high-tax exception, interest deductibility, base erosion and anti-abuse tax, and
foreign tax credits. In addition, global taxing authorities will be reviewing current legislation for potential
modifications in reaction to the implementation of the Act. This additional guidance, along with the potential for
additional global tax legislation changes, such as restrictions on interest deductibility and deductibility of cross-
jurisdictional payments, could have a material adverse impact on net income and cash flow by impacting
significant deductions or income inclusions.
47
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risks relating to the Company’s operations result primarily from fluctuations in foreign currency
exchange rates, and changes in interest rates. To mitigate some of the near term volatility in the Company’s
earnings and cash flows, the Company manages certain of its exposures through the use of derivative instruments.
These instruments carry varying degrees of counterparty credit risk. To mitigate this risk, the Company has
defined a financial counterparty policy that established criteria to select qualified counterparties based on credit
ratings and credit default spreads. The policy also limits the exposure with individual counterparties. The
Company monitors these exposures quarterly. The Company does not enter into derivative financial instruments
for trading purposes. A discussion of the Company’s accounting policies for derivative financial instruments, as
well as the Company’s exposure to market risk, is included in Notes 1 and 9 to the Consolidated Financial
Statements.
For purposes of disclosing the market risk inherent in its derivative financial instruments, the Company
utilizes sensitivity analyses which assume no changes to factors other than foreign currency exchange rates and
interest rates. The analyses do not reflect the complex market reactions that normally would arise from the
market shifts modeled.
Foreign Currency Exchange Rate Risk
A substantial portion of the Company’s operations are conducted by subsidiaries outside the U.S. The
primary international markets served by the Company’s subsidiaries are in Canada, China, Latin America
(principally Brazil, Colombia, and Mexico), and Europe (principally France, Germany, Italy, the Netherlands,
Poland, Spain, and the United Kingdom). In general, revenues earned and costs incurred by the Company’s major
international operations are denominated in their respective local currencies. Consequently, the Company’s
reported financial results could be affected by factors such as changes in foreign currency exchange rates or
highly inflationary economic conditions in the international markets in which the Company’s subsidiaries
operate. When the U.S. dollar strengthens against foreign currencies, the reported U.S. dollar value of local
currency earnings generally decreases; when the U.S. dollar weakens against foreign currencies, the reported U.S.
dollar value of local currency earnings generally increases. The Company has hedged a portion of the net
investment in international subsidiaries against fluctuations in the European Euro through derivative financial
instruments. The net fair value of these instruments was a net liability of approximately $51 million at
December 31, 2020 and net asset of approximately $2 million at December 31, 2019.
In addition, because the Company’s subsidiaries operate within their local economic environment, the
Company believes it is appropriate to finance those operations with borrowings denominated in the local currency
to the extent practicable where debt financing is desirable or necessary. This strategy mitigates the risk of
reported losses or gains in the event the foreign currency strengthens or weakens against the U.S. dollar.
Considerations which influence the amount of such borrowings include long- and short-term business plans, tax
implications, and the availability of borrowings with acceptable interest rates and terms. However, the Company
has certain 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. The Company uses derivatives to manage these exposures and
designates these derivatives as cash flow hedges of foreign exchange risk. At December 31, 2020 and 2019, the
net fair value of such swap contracts was a net liability of approximately $109 million and a net asset of
approximately $4 million, respectively.
As of December 31, 2020, the potential change in fair value for such financial instruments from a change of
10% in the quoted foreign exchange rates would be approximately $168 million.
Interest Rate Risk
The Company’s interest expense is most sensitive to changes in the general level of interest rates applicable
to the term loans under its Agreement (see Note 14 to the Consolidated Financial Statements for further
48
information). The Company’s interest rate risk management objective is to limit the impact of interest rate
changes on net income and cash flow, while minimizing interest payments and expense. To achieve this
objective, the Company regularly evaluates its mix of fixed and floating-rate debt and, from time-to-time, may
enter into interest rate swap agreements. Interest rate swaps designated as cash flow hedges involve the receipt
of variable amounts from (or payment of variable amounts to) a counterparty in exchange for the Company
making (or receiving) fixed-rate payments. In 2019 and 2020, the Company has used interest rate swap
agreements to effectively convert fixed-rate debt to variable-rate debt. At December 31, 2020 and 2019, the net
fair value of such swap contracts was a net asset of approximately $17 million and approximately $5 million,
respectively. As of December 31, 2020, based on the outstanding balances on the Company’s variable-rate debt
(including the effect of the swap contracts), a one percentage point change in interest rates would change the
Company’s annual net interest expense by $15 million.
The following table provides information about the Company’s interest rate sensitivity related to its
significant debt obligations, including interest rate swap agreements, at December 31, 2020. The table presents
principal cash flows and related weighted-average interest rates by expected maturity date.
(Dollars in millions)
Long-term debt at variable rate:
2021
2022
2023
2024
2025
Thereafter Total 12/31/2020
Fair Value at
Principal by expected maturity . . $
11
Avg. principal outstanding . . . . . $ 1,485
Avg. interest rate . . . . . . . . . . . .
$
9
$ 1,475
$
16
$ 1,462
2.40 %
2.40 %
2.41 %
$ 1,415
$ 746
$
$
2.41 %
$
10
34
$
1.55 %
$ 1,490 $
1,500
29
29
1.60 %
Long-term debt at fixed rate:
Principal by expected maturity . . $ 131
Avg. principal outstanding . . . . . $ 3,531
Avg. interest rate . . . . . . . . . . . .
36
$
$ 3,447
$ 1,035
$ 2,912
$ 490
$ 2,150
4.22 %
4.32 %
5.01 %
4.62 %
$ 1,204
$ 1,303
$
$
5.94 %
$ 3,597 $
701
701
6.63 %
3,823
The Company believes the near-term exposure to interest rate risk of its debt obligations has not changed
materially since December 31, 2020.
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.
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 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 impact of the COVID-19 pandemic and the various governmental, industry
and consumer actions related thereto, (2) the Company’s ability to obtain the benefits it anticipates from the
Corporate Modernization, (3) risks inherent in, and potentially adverse developments related to, the Chapter 11
bankruptcy proceeding involving Paddock, that could adversely affect the Company and the Company’s liquidity
or results of operations, including the impact of deconsolidating Paddock from the Company’s financials, risks
from asbestos-related claimant representatives asserting claims against the Company and potential for litigation
and payment demands against the Company by such representatives and other third parties, (4) the amount that
will be necessary to fully and finally resolve all of Paddock’s asbestos-related claims and the Company’s
obligations to make payments to resolve such claims under the terms of its support agreement with Paddock, (5)
49
the Company’s ability to manage its cost structure, including its success in implementing restructuring or other
plans aimed at improving the Company’s operating efficiency and working capital management, achieving cost
savings, and remaining well-positioned to address Paddock’s legacy liabilities, (6) 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, (7) the Company’s ability to achieve its strategic
plan, (8) the Company’s ability to improve its glass melting technology, known as the MAGMA program,
(9) foreign currency fluctuations relative to the U.S. dollar, (10) changes in capital availability or cost, including
interest rate fluctuations and the ability of the Company to refinance debt on favorable terms, (11) the general
political, economic and competitive conditions in markets and countries where the Company has operations,
including uncertainties related to Brexit, economic and social conditions, disruptions in the supply chain,
competitive pricing pressures, inflation or deflation, changes in tax rates and laws, natural disasters and weather,
(12) the Company’s ability to generate sufficient future cash flows to ensure the Company’s goodwill is not
impaired, (13) consumer preferences for alternative forms of packaging, (14) cost and availability of raw
materials, labor, energy and transportation, (15) consolidation among competitors and customers,
(16) unanticipated expenditures with respect to data privacy, environmental, safety and health laws,
(17) unanticipated operational disruptions, including higher capital spending, (18) the Company’s ability to
further develop its sales, marketing and product development capabilities, (19) the failure of the Company’s joint
venture partners to meet their obligations or commit additional capital to the joint venture, (20) 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, (21) changes in U.S. trade policies, and the other risk
factors discussed in this annual report on Form 10-K and any subsequently filed Quarterly Report on Form 10-Q.
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.
50
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets at December 31, 2020 and 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the years ended December 31, 2020, 2019, and 2018:
Consolidated Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Comprehensive Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Share Owners’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
52
56 - 57
54
55
58
59
60
51
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Share Owners and the Board of Directors of O-I Glass, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of O-I Glass, Inc. (the Company) as of
December 31, 2020 and 2019, the related consolidated statements of results of operations, comprehensive income
(loss), share owners’ equity and cash flows for each of the three years in the period ended December 31, 2020,
and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the
“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity
with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020,
based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework), and our report dated February 16, 2021
expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express
an opinion on the Company’s financial statements based on our audits. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of the critical audit matter does not alter in any way our
opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to
which it relates.
52
Valuation of Goodwill – North America Reporting Unit
Description of
the Matter
As of December 31, 2020, the Company’s goodwill balance associated with the North
America reporting unit was $446 million. As discussed in Note 7 to the consolidated
financial statements, goodwill is tested for impairment at least annually, or more frequently
if impairment indicators arise. The outcome of the Company’s annual goodwill impairment
test indicated that no impairment existed. However, the goodwill related to the North
America reporting unit was determined to be at risk for future impairment charges given the
difference (approximately 19%) between the business enterprise value (“BEV”) and the
carrying value of this reporting unit.
Auditing management’s goodwill impairment test was complex and judgmental due to the
significant estimation required to determine the BEV of the North America reporting unit.
In particular, the BEV was sensitive to assumptions, such as estimated future cash flows of
the reporting unit and changes in the weighted average cost of capital, which are affected by
expectations about future market or economic conditions and the impact of planned business
and operating strategies.
How We
Addressed the
Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness
of controls over the Company’s goodwill impairment review process, including controls
over management’s review of the assumptions and methodologies used in the calculation of
the BEV of the North America reporting unit, as well as the Company’s review of the
completeness and accuracy of the data used in the Company’s analysis.
To test the estimated BEV of the Company’s North America reporting unit, we performed
audit procedures that included, among others, testing the underlying assumptions used in the
Company’s analysis, testing the completeness and accuracy of the underlying estimated
future cash flows used by management and testing of the calculation of the BEV of the
reporting unit. We compared the assumptions used by management to historical results. We
assessed the historical accuracy of management’s estimates and performed sensitivity
analyses over certain assumptions used by management to evaluate the changes in the BEV
of the North America reporting unit that would result from changes in those assumptions. In
addition, we involved our valuation specialists to assist with our evaluation of the
methodologies applied and assumptions used by management.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1987.
Toledo, Ohio
February 16, 2021
53
O-I Glass, Inc.
CONSOLIDATED RESULTS OF OPERATIONS
Dollars in millions, except per share amounts
Years ended December 31,
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling and administrative expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research, development and engineering expense . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net (incl. goodwill impairment) . . . . . . . . . . . . .
Earnings (loss) from continuing operations before income taxes . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . .
Gain (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . .
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net earnings attributable to noncontrolling interests . . . . . . . . . . . . . . . . .
Net earnings (loss) attributable to the Company . . . . . . . . . . . . . . . . . . . . . $
Amounts attributable to the Company:
Earnings (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . $
Gain (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . .
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2020
6,091 $
(5,119)
972
(403)
(75)
(265)
37
87
353
(89)
264
264
(15)
249 $
249 $
—
249 $
2019
6,691 $
(5,483)
1,208
(439)
(68)
(311)
78
(729)
(261)
(118)
(379)
(3)
(382)
(18)
(400) $
(397) $
(3)
(400) $
Basic earnings per share:
Earnings (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . $
Gain (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . .
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.59 $
—
1.59 $
(2.56) $
(0.02)
(2.58) $
Diluted earnings per share:
Earnings (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . $
Gain (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . .
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Dividends declared per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.57 $
—
1.57 $
0.05 $
(2.56) $
(0.02)
(2.58) $
0.15 $
2018
6,877
(5,594)
1,283
(483)
(70)
(261)
77
(269)
277
(108)
169
113
282
(25)
257
144
113
257
0.90
0.71
1.61
0.89
0.70
1.59
0.05
See accompanying Notes to the Consolidated Financial Statements.
54
O-I Glass, Inc.
CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
Dollars in millions
Years ended December 31,
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other comprehensive income (loss):
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other postretirement benefit adjustments, net of tax . . . . .
Change in fair value of derivative instruments, net of tax . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comprehensive income attributable to noncontrolling interests . . . . . . . .
Comprehensive income (loss) attributable to the Company . . . . . . . . . . . . $
2020
2019
2018
264 $
(382) $
282
(416)
33
(46)
(429)
(165)
(15)
(180) $
58
45
4
107
(275)
(275) $
(174)
30
(6)
(150)
132
(17)
115
See accompanying Notes to the Consolidated Financial Statements.
55
O-I Glass, Inc.
CONSOLIDATED BALANCE SHEETS
Dollars in millions
December 31,
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Trade receivables, net of allowances of $33 million and $32 million at
December 31, 2020 and 2019, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets:
Equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangibles, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment:
Land, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and equipment, at cost:
Buildings and building equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Factory machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation, office and miscellaneous equipment . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2020
2019
563 $
551
623
841
270
2,297
673
67
662
325
1,951
3,678
621
1,045
271
2,488
694
42
808
371
1,934
3,849
248
275
1,197
5,285
79
211
7,020
4,113
2,907
8,882 $
1,267
5,623
104
359
7,628
4,355
3,273
9,610
See accompanying Notes to the Consolidated Financial Statements.
56
O-I Glass, Inc.
CONSOLIDATED BALANCE SHEETS (Continued)
Dollars in millions, except per share amounts
December 31,
Liabilities and Share Owners’ Equity
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Salaries and wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. and foreign income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonpension postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asbestos-related liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Paddock Support Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share owners’ equity:
Share owners’ equity of the Company:
Common stock, par value $.01 per share, 250,000,000 shares authorized,
189,305,018 and 188,447,335 shares issued (including treasury shares),
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital in excess of par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost, 31,911,047 and 32,573,359 shares, respectively . . . . . . . .
Retained earnings (accumulated deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total share owners’ equity of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total share owners’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and share owners’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2020
2019
1,126 $
145
22
408
55
142
1,898
4,945
109
521
113
424
471
1,276
132
32
431
75
49
1,995
5,435
110
528
135
357
486
2
3,129
(714)
152
(2,272)
297
104
401
8,882 $
2
3,130
(733)
(89)
(1,843)
467
97
564
9,610
See accompanying Notes to the Consolidated Financial Statements.
57
O-I Glass, Inc.
CONSOLIDATED SHARE OWNERS’ EQUITY
Dollars in millions
Balance on January 1, 2018 . . . . . . . . . . . . . . . . . . . $
Issuance of common stock (0.03 million shares) . . .
Reissuance of common stock (0.4 million shares) . .
Treasury shares purchased (8.6 million shares) . . .
Stock compensation (0.8 million shares) . . . . . . . .
Dividends declared (a) . . . . . . . . . . . . . . . . . . . . . . .
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive loss . . . . . . . . . . . . . . . . . . .
Distributions to noncontrolling interests . . . . . . . . .
Balance on December 31, 2018 . . . . . . . . . . . . . . . .
Issuance of common stock (0.1 million shares) . . . .
Reissuance of common stock (0.4 million shares) .
Treasury shares purchased (2.1 million shares) . . .
Stock compensation (1.7 million shares) . . . . . . . .
Dividends declared (b) . . . . . . . . . . . . . . . . . . . . . . .
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . .
Distributions to noncontrolling interests . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance on December 31, 2019 . . . . . . . . . . . . . . . .
Reissuance of common stock (0.9 million shares) . .
Stock compensation (0.9 million shares) . . . . . . . .
Dividends declared (c) . . . . . . . . . . . . . . . . . . . . . . .
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive loss . . . . . . . . . . . . . . . . . . . .
Distributions to noncontrolling interests . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance on December 31, 2020 . . . . . . . . . . . . . . . . $
Common
Stock
Non-
Controlling
Interests
Share Owners’ Equity of the Company
Capital in
Excess of
Par Value
3,099
Treasury
Stock
(551)
Retained
Earnings
(accumulated
deficit)
84
Accumulated
Other
Comprehensive
Loss
(1,826)
(2)
27
9
(163)
(8)
257
(142)
(705)
333
(1,968)
15
(38)
3,124
2
(6)
10
2
2
(5)
(733)
21
2
3,130
(12)
11
(22)
(400)
125
(89)
(1,843)
(8)
249
(429)
2 $ 3,129 $ (714) $
152 $
(2,272) $
(2)
119
25
(8)
(22)
114
Total
Share
Owners'
Equity
927
—
7
(163)
27
(8)
282
(150)
(22)
900
2
9
(38)
10
(22)
(382)
107
(17)
(5)
564
9
11
(8)
264
(429)
(8)
(2)
104 $ 401
18
(18)
(17)
15
97
(8)
(a) The Company's Board of Directors declared a quarterly cash dividend of five cents per share of common stock in the fourth
quarter of 2018.
(b) The Company's Board of Directors declared a quarterly cash dividend of five cents per share of common stock in the second, third
and fourth quarters of 2019.
(c) The Company's Board of Directors declared a quarterly cash dividend of five cents per share of common stock in the first quarter
of 2020.
See accompanying Notes to the Consolidated Financial Statements.
58
O-I Glass, Inc.
CONSOLIDATED CASH FLOWS
Dollars in millions
Years ended December 31,
Operating activities:
2020
2019
2018
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Loss (gain) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash charges (credits):
264 $
(382) $
3
282
(113)
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangibles and other deferred items . . . . . . . . . . . . . . . . . . . .
Amortization of finance fees and debt discount . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax provision (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, asset impairment and related charges . . . . . . . . . . . . . . . . . . . . .
Charges for asbestos-related cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill impairment charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of equity investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of ANZ businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asbestos-related payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid for restructuring activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in components of working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash provided by continuing operating activities . . . . . . . . . . . . . . . . . . . . . . .
Cash utilized in discontinued operating activities . . . . . . . . . . . . . . . . . . . . . . .
Total cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities:
Cash payments for property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contributions and advances to joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash proceeds on disposal of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash proceeds on sale of ANZ businesses, net of transaction costs . . . . . . . .
Deconsolidation of Paddock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash provided by (utilized in) investing activities . . . . . . . . . . . . . . . . . . . . . .
Financing activities:
Additions to long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in short-term loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of finance fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash proceeds for hedging activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sale leaseback proceeds in conjunction with ANZ sale . . . . . . . . . . . . . . . . . . . .
Issuance of common stock and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash provided by (utilized in) financing activities . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate fluctuations on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
369
99
14
(5)
38
96
26
(275)
36
(103)
(37)
(181)
116
457
457
(311)
10
441
(47)
93
1,845
(2,460)
(15)
(51)
(8)
(8)
(12)
390
109
10
7
32
69
35
26
595
(107)
22
(33)
(151)
(54)
(176)
13
408
(3)
405
(426)
(190)
(22)
197
4
(437)
4,265
(4,099)
49
(85)
(31)
28
(17)
(38)
155
(3)
(557)
19
12
551
563 $
(4)
68
3
39
512
551 $
388
106
13
(9)
32
92
125
74
(34)
(105)
(32)
15
(41)
793
(2)
791
(536)
(123)
(52)
11
2
(698)
2,511
(2,353)
(18)
(13)
(22)
(163)
5
(53)
(20)
20
492
512
See accompanying Notes to the Consolidated Financial Statements.
59
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Tabular data dollars in millions
1. Significant Accounting Policies
Basis of Consolidated Statements The consolidated financial statements of the Company (as defined
below) include the accounts of its subsidiaries. Newly acquired subsidiaries have been included in the
consolidated financial statements from dates of acquisition.
The Company uses the equity method of accounting for investments in which it has a significant influence
and generally an ownership interest of 20% to 50%. The Company monitors other than temporary declines in fair
value and records reductions in carrying values when appropriate.
Nature of Operations The Company is a leading manufacturer of glass container products. The
Company’s principal product lines are glass containers for the food and beverage industries. The Company has
glass container operations located in 20 countries. The principal markets and operations for the Company’s
products are in the Americas and Europe.
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 below) and to O-I Glass, Inc. (“O-I Glass”)
after the Corporate Modernization.
On December 26 and 27, 2019, the Company implemented the Corporate Modernization pursuant to the
Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 26, 2019, among O-I, O-I Glass
and Paddock Enterprises, LLC (“Paddock”).
The Corporate Modernization was conducted pursuant to Section 251(g) of the General Corporation Law of
the State of Delaware, which permits the creation of a holding company through a merger with a direct or indirect
wholly owned subsidiary of the constituent corporation without stockholder approval. The Corporate
Modernization involved a series of transactions (together with certain related transactions, the “Corporate
Modernization”) pursuant to which (1) O-I formed a new holding company, O-I Glass, as a direct wholly owned
subsidiary of O-I and a sister company to Owens-Illinois Group, Inc. (“O-I Group”), (2) O-I Glass formed a new
Delaware limited liability company, Paddock, as a direct wholly owned subsidiary of O-I Glass, (3) O-I merged
with and into Paddock, with Paddock continuing as the surviving entity and as a direct wholly owned subsidiary
of O-I Glass (the “Merger”) and (4) Paddock distributed 100% of the capital stock of O-I Group to O-I Glass, as
a result of which O-I Group is a direct, wholly owned subsidiary of O-I Glass and sister company to Paddock.
Upon the effectiveness of the Merger, each share of O-I stock held immediately prior to the Merger
automatically converted into a right to receive an equivalent corresponding share of O-I Glass stock, having the
same designations, rights, powers and preferences, qualifications, limitations, and restrictions as the
corresponding share of O-I stock being converted. Immediately after the Corporate Modernization, O-I Glass had,
on a consolidated basis, the same assets, businesses and operations as O-I had immediately prior to the Corporate
Modernization. After the Corporate Modernization, O-I’s stockholders became stockholders of O-I Glass. The
implementation of the Corporate Modernization was accounted for as a merger under common control.
Use of Estimates The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management of the Company to make estimates and assumptions
that affect certain amounts reported in the financial statements and accompanying notes. Actual results may
differ from those estimates, at which time the Company would revise its estimates accordingly.
Foreign Currency Translation The assets and liabilities of non-U.S. subsidiaries are translated into U.S.
dollars at year-end exchange rates and their results of operations are converted on an ongoing basis at the
monthly average rate. Any related translation adjustments are recorded in accumulated other comprehensive
income in share owners’ equity.
60
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Revenue Recognition Revenue is recognized at the point in time when obligations under the terms of the
Company’s contracts and related purchase orders with its customers are satisfied, 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.
Shipping and Handling Costs Shipping and handling costs are included with cost of goods sold in the
Consolidated Results of Operations.
Stock-Based Compensation The Company has various stock-based compensation plans consisting of
stock option grants and restricted share awards. Costs resulting from all share-based compensation plans are
required to be recognized in the financial statements. A public entity is required to measure the cost of employee
services received in exchange for an award of equity instruments based on the grant-date fair value of the award.
That cost is recognized over the required service period (usually the vesting period). No compensation cost is
recognized for equity instruments for which employees do not render the required service.
Cash The Company defines “cash” as cash and time deposits with maturities of three months or less when
purchased. Outstanding checks in excess of funds on deposit are included in accounts payable.
Accounts Receivable Receivables are stated at amounts estimated by management to be the net realizable
value. The Company charges off accounts receivable when it becomes apparent based upon age or customer
circumstances that amounts will not be collected.
Allowance for Doubtful Accounts The allowance for doubtful accounts is established through charges to
the provision for bad debts. The Company evaluates the adequacy of the allowance for doubtful accounts on a
periodic basis. The evaluation includes historical trends in collections and write-offs, information on current
economic conditions and future forecasts and management’s evaluation of business risk.
Inventory Valuation Inventories are valued at the lower of average costs or market.
Goodwill Goodwill represents the excess of cost over fair value of net assets of businesses acquired.
Goodwill is evaluated annually, as of October 1, for impairment or more frequently if an impairment indicator
exists, by comparing the estimated fair value of each reporting unit to its carrying value. If the carrying value
exceeds the fair value, an impairment charge is recorded in the period of the evaluation based on that difference.
Intangible Assets and Other Long-Lived Assets Intangible assets are amortized over the expected useful
life of the asset. Amortization expense directly attributed to the manufacturing of the Company’s products is
included in cost of goods sold. Amortization expense related to non-manufacturing activities is included in
Selling and administrative expense and Other expense, net. The Company evaluates the recoverability of
intangible assets and other long-lived assets based on undiscounted projected cash flows, excluding interest and
taxes, when factors indicate that impairment may exist. If impairment exists, the asset is written down to fair
value.
Property, Plant and Equipment Property, plant and equipment (“PP&E”) is carried at cost and includes
expenditures for new facilities and equipment and those costs which substantially increase the useful lives or
capacity of existing PP&E. In general, depreciation is computed using the straight-line method and recorded over
the estimated useful life of the asset. Factory machinery and equipment is depreciated over periods ranging from
5 to 25 years with the majority of such assets (principally glass-melting furnaces and forming machines)
depreciated over 7 to 15 years. Buildings and building equipment are depreciated over periods ranging from 10
to 50 years. Depreciation expense directly attributed to the manufacturing of the Company’s products is included
in cost of goods sold. Depreciation expense related to non-manufacturing activities is included in Selling and
61
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
administrative. Depreciation expense includes the amortization of assets recorded under financing leases.
Maintenance and repairs are expensed as incurred. Costs assigned to PP&E of acquired businesses are based on
estimated fair values at the date of acquisition. The Company evaluates the recoverability of PP&E based on
undiscounted projected cash flows, excluding interest and taxes, when factors indicate that impairment may exist.
If impairment exists, the asset is written down to fair value.
Derivative Instruments The Company uses derivative instruments to manage risks generally associated
with foreign exchange rate and interest rate volatility. Derivative financial instruments are included on the
balance sheet at fair value. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are
recognized depending upon the type of hedging relationship and whether a hedge has been designated. For those
derivative instruments that qualify for hedge accounting, the Company designates the hedging instrument, based
upon the exposure being hedged, as a cash flow hedge, fair value hedge, or a hedge of a net investment in a
foreign operation. For a derivative instrument designated as a fair value hedge, the gain or loss on the derivative
is recognized in earnings immediately with the offsetting gain or loss on the hedged item. For a derivative
instrument designated as a cash flow hedge, the effective portion of the derivative's gain or loss is initially
reported as a component of Accumulated other comprehensive loss and is subsequently recognized in earnings
when the hedged exposure affects earnings. If there is an ineffective portion of the change in fair value of the
derivative it is recognized directly in earnings. For a derivative instrument designated as a hedge of a net
investment in a foreign operation, the effective portion of the derivative's gain or loss is reported in Accumulated
other comprehensive loss as part of the cumulative translation adjustment, and amounts are reclassified out of
accumulated other comprehensive loss into earnings when the hedged net investment is either sold or
substantially liquidated. Changes in fair value of derivative instruments that do not qualify for hedge accounting
are recognized immediately in current net earnings. The Company does not enter into derivative financial
instruments for trading purposes and is not a party to leveraged derivatives. In the consolidated statement of cash
flows, the settlement of derivative instruments designated as hedges is typically recorded in the category that is
consistent with the nature of the underlying item being hedged. See Note 9 to the Consolidated Financial
Statements for additional information about hedges and derivative financial instruments.
Fair Value Measurements Fair value is defined as the amount that would be received to sell an asset or
paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly
transaction between market participants. Generally accepted accounting principles defines a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or
indirectly; and
Level 3: Unobservable inputs for which there is little or no market data, which requires the Company to
develop assumptions.
The carrying amounts reported for cash and short-term loans approximate fair value. In addition, carrying
amounts approximate fair value for certain long-term debt obligations subject to frequently redetermined interest
rates. Fair values for the Company’s significant fixed rate debt obligations are generally based on published
market quotations.
New Accounting Standards
Credit Losses – Effective January 1, 2020, the Company adopted ASU No. 2016-13, “Financial
Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” using the
modified retrospective transition method. This ASU amends the impairment model to utilize an expected loss
methodology in place of the incurred loss methodology for financial instruments, including trade receivables. The
62
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
amendment requires entities to consider a broader range of information to estimate expected credit losses, which
may result in earlier recognition of losses. The adoption of ASU No. 2016-13 had no cumulative effect
adjustment as of January 1, 2020 and no material impact on the Company’s consolidated balance sheet,
consolidated results of operations or consolidated cash flows. See Note 4 for additional information.
Disclosure Requirements for Fair Value Measurement - In August 2018, the FASB issued ASU
No. 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement,”
which modifies the fair value disclosure requirements. Application of the standard is required for annual periods
beginning after December 15, 2019. The Company adopted this standard in the first quarter of 2020. The
adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
Disclosure Requirements for Defined Benefit Plans - In August 2018, the FASB issued ASU No. 2018-14,
“Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans,” which modifies
the defined benefit plan disclosure requirements. Application of the standard is required for annual periods
ending after December 15, 2020. The Company adopted this standard in the fourth quarter of 2020. The adoption
of this standard did not have a material impact on the Company’s consolidated financial statements.
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 reference rate that is expected to be discontinued as a result of reference rate reform.
The Company adopted ASU No. 2020-04 effective July 1, 2020. The adoption of this ASU had no impact on the
Company’s consolidated balance sheet, consolidated results of operations or consolidated cash flows.
2. Segment Information
Historically, the Company had three reportable segments and three operating segments based on its
geographic locations: the Americas, Europe and Asia Pacific. These three 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 year ended December 31, 2020, the results for the Asia Pacific reportable segment reflect only seven months
of the results of the ANZ businesses. For the years ended December 31, 2019 and December 31, 2018, the results
of the Asia Pacific segment have been recast to 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 Retained corporate costs
and other assets line for all periods presented.
Certain assets and activities not directly related to one of the regions 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. 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.
63
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
The Company’s measure of profit for its reportable segments is segment operating profit, which is a non-
GAAP financial measure that consists of consolidated earnings from continuing operations before interest
income, interest expense, and provision for income taxes and excludes amounts related to certain items that
management considers not representative of ongoing operations, as well as certain retained corporate costs. The
Company’s management 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.
Financial information regarding the Company’s reportable segments is as follows:
Net sales:
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reportable segment totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,322 $
2,364
281
5,967
124
6,091 $
3,622 $
2,387
534
6,543
148
6,691 $
3,638
2,489
582
6,709
168
6,877
2020
2019
2018
Segment operating profit:
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reportable segment totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Items excluded from segment operating profit:
Retained corporate costs and other charges . . . . . . . . . . . . . . . . . . .
Gain on sale of ANZ businesses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge for goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge for asbestos-related costs . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, asset impairment and other . . . . . . . . . . . . . . . . . . . .
Charge for deconsolidation of Paddock . . . . . . . . . . . . . . . . . . . . . .
Strategic transaction and corp. modernization costs . . . . . . . . . . . .
Gain on sale of equity investment . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings (loss) from continuing operations before income taxes . . . . $
2020
2019
2018
395 $
264
19
678
495 $
317
44
856
585
316
54
955
(145)
275
(26)
(142)
(14)
(8)
(265)
353 $
(112)
(116)
(595)
(35)
(26)
(114)
(31)
107
(311)
(261) $
(125)
(74)
(102)
(261)
277
64
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Americas
Europe
Asia
Pacific
Reportable Retained
Corp Costs
and Other
Segment
Totals
Consoli-
dated
Totals
Total assets:
2020 . . . . . . . . . . . . . . . . . . . . $
2019 . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . .
4,927 $
5,264
5,497
3,507 $
3,127
3,036
— $
694
620
8,434 $
9,085
9,153
448 $
525
546
8,882
9,610
9,699
Equity investments:
2020 . . . . . . . . . . . . . . . . . . . . $
2019 . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . .
492 $
491
429
120 $
101
98
Equity earnings (losses):
2020 . . . . . . . . . . . . . . . . . . . . $
2019 . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . .
51 $
38
39
23 $
18
21
— $
— $
612 $
592
527
74 $
56
60
Capital expenditures:
2020 . . . . . . . . . . . . . . . . . . . . $
2019 . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . .
146 $
178
255
138 $
177
187
20 $
39
52
304 $
394
494
61 $
102
171
(37) $
22
17
7 $
32
42
Depreciation and amortization
expense:
2020 . . . . . . . . . . . . . . . . . . . . $
2019 . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . .
270 $
292
293
146 $
136
136
28 $
45
43
444 $
473
472
24 $
26
22
673
694
698
37
78
77
311
426
536
468
499
494
The Company’s tangible long-lived assets, including property, plant and equipment and operating lease
right-of-use assets, by geographic region are as follows:
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Company’s net sales by geographic region are as follows:
U.S.
Non-U.S. Total
2,294 $
2,698
2,404
3,045
3,476
3,085
751 $
778
681
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,791 $
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,914
2,020
U.S.
Non-U.S. Total
4,300 $
4,777
4,857
6,091
6,691
6,877
Operations outside the U.S. that accounted for 10% or more of consolidated net sales from continuing
operations were in France (2020- 11%), Italy (2020-11%, 2019- 10%), and Mexico (2020-11%, 2019- 11%).
65
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
3. Revenue
On January 1, 2018, the Company adopted accounting standard ASC 606, “Revenue from Contracts with
Customers” and selected the modified retrospective transition method. The adoption of this standard did not
impact the Company’s consolidated results of operations or balance sheet and there was no cumulative effect of
initially applying this new revenue standard to the opening balance of retained earnings.
Revenue is recognized at 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 years ended December 31, 2020 and 2019, the Company had no material bad debt expense and there
were no material contract assets, contract liabilities or deferred contract costs recorded on the Consolidated
Balance Sheet. For the years ended December 31, 2020, 2019 and 2018, revenue recognized from prior periods
(for example, due to changes in transaction price) was not material.
Consistent with the disclosures in Note 2 related to the ANZ sale, Asia Pacific revenue for the year ended
December 31, 2020 reflects only seven months of revenue from the ANZ businesses. For the years ended
December 31, 2019 and December 31, 2018, revenue of the Asia Pacific segment has been recast to 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 table for the year ended December 31, 2020 disaggregates the Company’s revenue by
customer end use:
Americas
Europe
Asia Pacific
Alcoholic beverages (beer, wine, spirits) . . . . . . . . . . . . . . $
Food and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-alcoholic beverages . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reportable segment totals . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,008 $
823
491
3,322 $
1,681 $
481
202
2,364 $
217 $
38
26
281 $
$
The following table for the year ended December 31, 2019 disaggregates the Company’s revenue by
customer end use:
Americas
Europe
Asia Pacific
Alcoholic beverages (beer, wine, spirits) . . . . . . . . . . . . . . $
Food and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-alcoholic beverages . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reportable segment totals . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,301 $
760
561
3,622 $
1,715 $
433
239
2,387 $
412 $
71
51
534 $
$
Total
3,906
1,342
719
5,967
124
6,091
Total
4,428
1,264
851
6,543
148
6,691
66
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
The following table for the year ended December 31, 2018 disaggregates the Company’s revenue by
customer end use:
Americas
Europe
Asia Pacific
Total
Alcoholic beverages (beer, wine, spirits) . . . . . . . . . . . . . . $
Food and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-alcoholic beverages . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reportable segment totals . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,281 $
780
577
3,638 $
1,780 $
461
248
2,489 $
468 $
60
54
582 $
$
4,529
1,301
879
6,709
168
6,877
4. 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 December 31, 2020 and 2019, the Company reported $623 million and $621 million of accounts
receivable, respectively, net of allowances of $33 million and $32 million, respectively. Changes in the allowance
were not material for the years ended December 31, 2020 or 2019.
5. Inventories
Major classes of inventory are as follows:
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2020
2019
675 $
129
37
841 $
872
128
45
1,045
67
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
6. Equity Investments
At December 31, 2020, the Company’s ownership percentage in affiliates include:
Affiliates
Empresas Comegua S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BJC O-I Glass Pte. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CO Vidrieria SARL ("COV") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rocky Mountain Bottle Company . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vetrerie Meridionali SpA ("VeMe") . . . . . . . . . . . . . . . . . . . . . . . . . .
Vetri Speciali SpA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
O-I Ownership
Percentage
Business Type
49.7 % Glass container manufacturer
50 % Glass container manufacturer
50 % Glass container manufacturer
50 % Glass container manufacturer
50 % Glass container manufacturer
50 % Specialty glass manufacturer
Summarized information pertaining to the Company’s equity affiliates follows:
Equity in earnings:
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
29 $
8
37 $
58 $
58 $
20
78 $
42 $
52
25
77
72
2020
2019
2018
In 2020, the Company evaluated the future estimated earnings and cash flow of one of its Non-U.S. equity
investments (a glass container manufacturer reported in the Retained corporate costs and other category) and
determined that it was other-than-temporarily impaired. As such, the Company recorded an impairment charge of
approximately $36 million to the equity earnings line in its Consolidated Results of Operations to reduce its
carrying value down to its estimated fair value. Subsequent to the impairment charge, the remaining carrying
value of this equity investment was $0. The Company classified the significant assumptions that were utilized in
a discounted cash flow model to determine the fair value of the impaired assets as Level 3 in the fair value
hierarchy as set forth in the general accounting principles for fair value measurements.
Summarized combined financial information for equity affiliates is as follows (unaudited):
At end of year:
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities and deferred items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and deferred items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
476 $
1,317
1,793
330
183
513
1,280 $
460
1,356
1,816
303
158
461
1,355
2020
2019
For the year:
2020
2019
2018
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
927 $
256 $
141 $
908 $
232 $
114 $
972
234
184
In December 2019, the Company sold its 25% equity interest in Tata Chemicals (Soda Ash) Partners.
68
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Based on an evaluation of each of the Company’s equity investments for the three years
ending December 31, 2020, no investments exceeded the significant subsidiary thresholds per Rule 3-09 of
Regulation S-X. As such, separate financial statements for the Company’s equity investments are not required to
be filed with the Securities and Exchange Commission.
The Company made purchases of approximately $111 million and $205 million from equity affiliates in
2020 and 2019, respectively, and owed approximately $82 million and $103 million to equity affiliates as of
December 31, 2020 and 2019, respectively.
7. Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill for the years ended December 31, 2020, 2019, and 2018 are
as follows:
Europe
Americas
Other
Total
Balance as of January 1, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Translation effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition (divestiture) related adjustments . . . . . . . . . . . . . . . . . . .
Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Translation effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Translation effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
913 $ 1,672 $
(39)
874
(38)
1,634
21
(595)
15
1,075
(57)
(15)
859
74
933 $ 1,018 $
5 $ 2,590
(77)
2,513
16
(595)
5
(5)
1,934
17
— $ 1,951
Goodwill is tested for impairment annually as of October 1 (or more frequently if impairment indicators
arise) by comparing the business enterprise value (“BEV”) of each reporting unit with its carrying value. The
BEV is computed based on estimated future cash flows, discounted at the weighted average cost of capital of a
hypothetical third-party buyer. If the BEV is less than the carrying value for any reporting unit, then any excess
of the carrying value over the BEV will be recorded as an impairment loss. The calculations of the BEV of the
Company’s reporting units were determined based on valuation techniques using the best available information of
significant unobservable inputs, primarily future cash flows of the reporting units, discount rates, terminal
business values, and are classified as Level 3 in the fair value hierarchy.
The COVID-19 pandemic had an adverse impact on the Company’s business during the second quarter of
2020, resulting in a significant decline in revenue and earnings, along with a decline in the Company’s stock
price and associated market capitalization. The Company determined that the impact of COVID-19 was a
triggering event that required the Company to perform a quantitative interim goodwill impairment test in the
second quarter of 2020. This interim test indicated that the BEV of each of the Company’s reporting units
exceeded its carrying amount in the second quarter of 2020; therefore, no goodwill impairment existed. During
the fourth quarter of 2020, the Company completed its annual impairment testing and determined that no
impairment existed.
There can be no assurance that anticipated financial results will be achieved and the goodwill balances
remain susceptible to future impairment charges. The goodwill related to the North America reporting unit, which
was approximately $446 million and is included in the Americas segment above, was determined to have the
greatest risk of future impairment charges given the difference (approximately 19%) between the BEV and
69
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
carrying value of this reporting unit as of October 1, 2020. The BEVs of the Company’s Europe and Latin
America reporting units more substantially exceeded their carrying values as of October 1, 2020. If the
Company’s projected future cash flows were lower, or if the assumed weighted average cost of capital were
higher, the testing performed in the fourth quarter of 2020 may have indicated an impairment of the goodwill
related to one or more of the Company’s reporting units. Any impairment charges that the Company may take in
the future could be material to its consolidated results of operations and financial condition.
During the time subsequent to the annual evaluation, and at December 31, 2020, the Company considered
whether any events and/or changes in circumstances had resulted in the likelihood that the goodwill of any of its
reporting units may have been impaired and has determined that no such events have occurred.
During the third quarter of 2019, the Company determined that indicators of impairment had occurred which
required the Company to perform a quantitative interim goodwill impairment test. The triggering events were
management’s update to its long-range plan, which indicated lower projected future cash flows for its North
American reporting unit (in the Americas segment) and a significant reduction in the Company’s share price.
During 2019, the Company’s business in North America experienced declining shipments to its alcoholic
beverage customers, primarily in the beer category. As a result of the goodwill impairment test, the Company
recorded a non-cash impairment charge of $595 million in the third quarter of 2019, which was equal to the
excess of the North American reporting unit's carrying value over its fair value (BEV). Goodwill related to the
Company’s other reporting units was determined to not be impaired as a result of the interim impairment analysis
in the third quarter of 2019. During the fourth quarter of 2019, the Company completed its annual impairment
testing and determined that no impairment existed.
The acquisition-related adjustment in the Americas segment (Latin America reporting unit) in 2019 relates
to the Nueva Fanal acquisition that the Company completed on June 28, 2019. See Note 21 for additional details.
Goodwill for the Americas segment is net of accumulated impairment losses of $595 million as of
December 31, 2020 and 2019.
Intangible Assets
Customer list intangible assets are amortized using the accelerated amortization method over their 20 year
lives. Net intangible asset values were $325 million and $371 million, which included accumulated amortization
of $216 million and $183 million, for the years ended December 31, 2020 and 2019, respectively. Amortization
expense for intangible assets was $33 million, $41 million and $40 million for the years ended December 31,
2020, 2019, and 2018, respectively. Estimated amortization related to intangible assets through 2025 is as
follows: 2021, $32 million; 2022, $30 million; 2023, $27 million; 2024, $25 million; and 2025, $24 million. No
impairment existed on these assets at December 31, 2020.
The Company has determined that the fair value measurements related to the customer list intangible assets
are based on significant unobservable inputs and are classified as Level 3 in the fair value hierarchy.
70
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
8. Other Assets
Other assets (noncurrent) consist of the following at December 31, 2020 and 2019:
Right of use lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred returnable packaging costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repair part inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Value added taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
138 $
178
82
112
59
19
74
662 $
203
178
110
115
74
26
102
808
2020
2019
Capitalized software includes costs related to the acquisition and development of internal-use software.
These costs are amortized over the estimated useful life of the software. Amortization expense for capitalized
software was $12 million, $13 million and $12 million for 2020, 2019, and 2018, respectively. Estimated
amortization related to capitalized software through 2025 is as follows: 2021, $10 million; 2022, $9 million;
2023, $8 million; 2024, $8 million; and 2025, $7 million.
9. Derivative Instruments
The Company has certain derivative assets and liabilities which consist of 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 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. 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.
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. The Company uses derivatives to manage these
exposures and designates these derivatives as cash flow hedges of foreign exchange risk.
During the second and third quarters of 2020, the Company terminated a portion of its cross-currency swaps,
which resulted in a net $3 million cash outflow recognized in the Cash flows from financing activities section of
the Consolidated Cash Flows. During the second quarter of 2019, the Company terminated a portion of its cross-
currency swaps, which resulted in a $15 million cash inflow recognized in the Cash flows from financing
activities section of the Consolidated Cash Flows.
An unrecognized gain of $9 million at December 31, 2020, related to these cross-currency swaps, was
included in Accumulated OCI, and will be reclassified into earnings within the next twelve months.
71
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
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.
During the second quarter of 2019, the Company terminated a portion of its interest rate swaps, which
resulted in a $13 million cash inflow recognized in the Cash flows from financing activities section of the
Consolidated Cash Flows.
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 less than $1 million at year ended December 31, 2020 related to these interest rate
swaps was included in Accumulated OCI, and will be reclassified into earnings within the next twelve 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.
During the third quarter of 2020, the Company terminated a portion of its cross-currency swaps designated
as net investment hedges, which resulted in a $5 million outflow recognized in the Cash flows from financing
section of the Consolidated Cash Flows.
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.
72
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Balance Sheet Classification
The following table shows the amount and classification (as noted above) of the Company’s derivatives at
December 31, 2020 and 2019:
Derivatives designated as hedging instruments:
Interest rate swaps - fair value hedges (a) . . . . . . . . . . . . . $
Cash flow hedges of foreign exchange risk (b) . . . . . . . . .
Interest rate swaps - cash flow hedges (c) . . . . . . . . . . . . .
Net investment hedges (d) . . . . . . . . . . . . . . . . . . . . . . . . . .
Total derivatives accounted for as hedges . . . . . . . . . . . . . . . . . $
Derivatives not designated as hedges:
Foreign exchange derivative contracts (e) . . . . . . . . . . . . .
Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fair Value of
Hedge Assets
Hedge Liabilities
2020
2019
2020
2019
17 $
6
8 $
25
— $
115
2
21
1
1
24 $
2
35 $
52
167 $
24
1
25 $
3
38 $
3
170 $
24
—
24
24
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
13 $
12
25 $
8 $
30
38 $
15 $
155
170 $
(a) The notional amounts of the interest rate swaps designated as fair value hedges were €725 million at
December 31, 2020 and December 31, 2019. The maximum maturity dates were in 2024 at December 31,
2020 and December 31, 2019.
(b) The notional amounts of the cash flow hedges of foreign exchange risk were $978 million and $1.424 billion
at December 31, 2020 and December 31, 2019, respectively. The maximum maturity dates were in 2023 at
December 31, 2020 and December 31, 2019.
(c) The notional amounts of the interest rate swaps designated as cash flow hedges were $0 million and $105
million at December 31, 2020 and December 31, 2019, respectively. The maximum maturity date was 2020
at December 31, 2019.
(d) The notional amounts of the net investment hedges were €311 million at December 31, 2020 and
December 31, 2019, and maximum maturity dates were 2027 at December 31, 2020 and 2020 at
December 31, 2019.
(e) The notional amounts of the foreign exchange derivative contracts were $247 million and $283 million and
maximum maturity dates were 2021 and 2020 at December 31, 2020 and December 31, 2019, respectively.
73
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
The effects of derivative instruments on the Company’s Consolidated Statements of Results of Operations
and Comprehensive Income (Loss) for OCI for the years ended December 31, 2020, 2019 and 2018 are as
follows:
Derivatives designated as hedging instruments:
Cash Flow Hedges
Gain (Loss) Recognized in OCI
(Effective Portion)
2019
2018
2020
Gain (Loss) Reclassified from
Accumulated OCI into Income
(Effective Portion) (1)
2019
2018
2020
Cash flow hedges of foreign exchange risk (a) . . $ (99) $
Cash flow hedges of interest rate risk (b) . . . . . .
Net Investment Hedges
Net Investment Hedges. . . . . . . . . . . . . . . . . . . . .
(54)
$ (153) $
28 $ 12 $ (115) $
(1)
(1)
(1)
10
37 $ 16 $ (112) $
5
4
(30) $
9
(7)
1
(37) $ 10
Derivatives not designated as hedges:
Amount of Gain (Loss)
Recognized in Other income
(expense), net
2019
2020
2018
Foreign exchange derivative contracts . . . . . . $
9 $
10 $
1
(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.
10. Restructuring
The Company continually reviews its manufacturing footprint and operating cost structure and may decide
to close operations or reduce headcount to gain efficiencies, integrate acquired operations, reduce future expenses
and address other market factors. The Company incurs costs associated with these actions including employee
severance and benefits, other exit costs such as those related to contract terminations, and asset impairment
charges. The Company also may incur other costs related to closed facilities including environmental
remediation, clean-up, dismantling and preparation for sale or other disposition.
The Company accounts for restructuring and other costs under applicable provisions of generally accepted
accounting principles. Charges for employee severance and related benefits are generally accrued based on
contractual arrangements with employees or their representatives. Other exit costs are accrued based on the
estimated cost to settle related contractual arrangements. Estimated environmental remediation costs are accrued
when specific claims have been received or are probable of being received.
The Company’s decisions to curtail selected production capacity have resulted in write-downs of certain
long-lived assets to the extent their carrying amounts exceeded fair value or fair value less cost to sell. The
Company classified the significant 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
December 31, 2020 and December 31, 2019, the remaining carrying value of the impaired assets was
approximately $1 million and $0, respectively.
When a decision is made to take restructuring actions, the Company manages and accounts for them
programmatically apart from the ongoing operations of the business. Information related to major programs is
74
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
presented separately while minor initiatives are presented on a combined basis. As of December 31, 2020 and
2019, no major restructuring programs were in effect.
In 2020, the Company implemented several discrete restructuring initiatives and recorded restructuring and
other charges of $96 million. These charges consisted of employee costs such as severance and benefit-related
costs, write-down of assets and other exit costs primarily related to plant and furnace closures in the Americas
and in Retained corporate costs and other, as well as 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. These restructuring charges were discrete actions and are expected to approximate the total
cumulative costs for those actions as no significant additional costs are expected to be incurred. These charges
were recorded to Other income (expense), net on the Consolidated Results of Operations. The Company expects
that the majority of the remaining cash expenditures related to the accrued employee costs will be paid out by the
end of 2021.
In 2019, the Company implemented several discrete restructuring initiatives and recorded restructuring and
other charges of $69 million. These charges consisted of employee costs such as severance and benefit-related
costs, write-down of assets and other exit costs primarily related to a severance program for certain salaried
employees at the Company’s corporate and America’s headquarters and a furnace closure in the Americas. These
restructuring charges were discrete actions and are expected to approximate the total cumulative costs for those
actions as no significant additional costs are expected to be incurred. These charges were recorded to Selling and
administrative expense ($2 million) and Other income (expense), net ($67 million) on the Consolidated Results of
Operations.
Also, as part of previous restructuring charges, the Company has reserved for estimated increases in workers
compensation claims that arise from plant and furnace closures. Since many of these reserves are long-term in
nature, the Company transferred approximately $14 million of these reserves to a long-term liability account in
the fourth quarter of 2019.
The following table presents information related to restructuring, asset impairment and other costs related to
closed facilities from January 1, 2019 through December 31, 2020:
Employee
Costs
47 $
39
(37)
(14)
(3)
32 $
40
Total
Asset
(17)
22 $
13
— $
17
(17)
Other
Impairment Exit Costs Restructuring
69
69
(17)
(54)
(14)
(8)
45
96
(46)
(37)
(13)
45
— $
46
(46)
(3)
(13)
7 $
(5)
13 $
10
— $
38 $
(34)
Balance at January 1, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-down of assets to net realizable value . . . . . . . . . . . . .
Net cash paid, principally severance and related benefits . .
Transfers to other accounts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, including foreign exchange translation . . . . . . . . . . .
Balance at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . $
Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-down of assets to net realizable value . . . . . . . . . . . . .
Net cash paid, principally severance and related benefits . .
Other, including foreign exchange translation . . . . . . . . . . .
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . $
75
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
11. Pension Benefit Plans and Other Postretirement Benefits
Pension Benefit Plans
The Company has defined benefit pension plans covering a substantial number of employees located in the
United States and several other non-U.S. jurisdictions. Benefits generally are based on compensation for salaried
employees and on length of service for hourly employees. The Company’s policy is to fund pension plans such
that sufficient assets will be available to meet future benefit requirements. The Company’s defined benefit
pension plans use a December 31 measurement date.
The changes in the pension benefit obligations for the year are as follows:
Obligations at beginning of year . . . . . . . . . . . . . . . . . $
Change in benefit obligations:
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions (Divestiture) . . . . . . . . . . . . . . . . . . . .
Participant contributions . . . . . . . . . . . . . . . . . . . . .
Benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . .
Net change in benefit obligations . . . . . . . . . . . . .
Obligations at end of year . . . . . . . . . . . . . . . . . . . . . . . $
U.S.
Non-U.S.
2020
2019
2020
2019
1,505 $
1,413 $
1,150 $
1,022
11
50
134
(24)
12
58
144
(35)
(86)
(87)
85
1,590 $
92
1,505 $
13
26
67
(63)
(56)
1
(51)
6
34
(23)
1,127 $
12
33
116
(44)
30
1
(37)
(6)
23
128
1,150
The actuarial (gain) loss for the Company’s pension benefit obligations in 2020 and 2019 was primarily
related to changes in discount rates.
The changes in the fair value of the pension plans’ assets for the year are as follows:
Fair value at beginning of year . . . . . . . . . . . . . . . . . . . $
Change in fair value:
Actual gain (loss) on plan assets . . . . . . . . . . . . . . .
Benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . . . .
Participant contributions . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions (Divestitures) . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in fair value of assets . . . . . . . . . . . . .
Fair value at end of year . . . . . . . . . . . . . . . . . . . . . . . . $
U.S.
Non-U.S.
2020
2019
2020
2019
1,215 $
1,094 $
947 $
843
161
(86)
58
(24)
235
(87)
8
(35)
109
1,324 $
121
1,215 $
99
(51)
45
1
(63)
(71)
23
(1)
(18)
929 $
110
(37)
25
1
(44)
30
26
(7)
104
947
76
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
The Company recognizes the funded status of each pension benefit plan on the Consolidated Balance Sheet.
The funded status of each plan is measured as the difference between the fair value of plan assets and actuarially
calculated benefit obligations as of the balance sheet date. Actuarial gains and losses are accumulated in
Accumulated Other Comprehensive Loss and the portion of each plan that exceeds 10% of the greater of that
plan’s assets or projected benefit obligation is amortized to income on a straight-line basis over the average
remaining service period of employees still accruing benefits or the expected life of participants not accruing
benefits if all, or almost all, of the plan’s participants are no longer accruing benefits.
The funded status of the pension plans at year end is as follows:
U.S.
Non-U.S.
2020
2019
2020
2019
Plan assets at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,324 $ 1,215 $
Projected benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan assets less than projected benefit obligations . . . . . . . . . . . . .
1,505
(290)
1,590
(266)
1,127
(198)
929 $
947
1,150
(203)
Items not yet recognized in pension expense:
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
708
722
708
442 $
722
432 $
323
11
334
136 $
327
5
332
129
The net amount recognized is included in the Consolidated Balance Sheets at December 31, 2020 and 2019
as follows:
Pension assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Current pension liability, included with other accrued liabilities . . .
Pension benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss. . . . . . . . . . . . . . . . . . . . . . . .
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
— $
(2)
(264)
708
442 $
— $
(1)
(289)
722
432 $
67 $
(8)
(257)
334
136 $
42
(6)
(239)
332
129
U.S.
Non-U.S.
2020
2019
2020
2019
The following changes in plan assets and benefit obligations were recognized in Accumulated Other
Comprehensive Loss at December 31, 2020 and 2019 as follows (amounts are pretax):
Current year actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Amortization of actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in accumulated other comprehensive loss . . . . . . . . . . . . . . . $
U.S.
Non-U.S.
2020
2019
2020
2019
57 $
(56)
(14)
(13)
(6) $
(41)
(22)
5
(64)
(13) $
(64) $
12 $
(12)
(12)
2
(10)
12
2 $
54
(10)
(9)
1
36
8
44
The accumulated benefit obligation for all defined benefit pension plans was $2,692 million and $2,622
million at December 31, 2020 and 2019, respectively.
77
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
The components of the net pension expense for the year are as follows:
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected asset return . . . . . . . . . . . . . . . . . . . . . . . .
Amortization:
2020
U.S.
2019
2018
2020
Non-U.S.
2019
2018
11 $
50
(85)
12 $
58
(86)
14 $
59
(98)
13 $
26
(45)
12 $
33
(48)
15
32
(52)
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
56
32 $
41
25 $
51
26 $
12
6 $
10
7 $
11
6
In 2020, the Company settled a portion of its pension obligations in the U.S., Canada and Mexico, resulting
in settlement charges of $14 million, $8 million and $4 million, respectively. A retiree annuity contract purchase
transaction with an insurer in Canada amounted to approximately $31 million and gave rise to the majority of the
settlement transaction, with lump-sum payments directly to plan participants comprising the remainder. In 2019,
the Company settled a portion of its pension obligations in the U.S., the United Kingdom and Mexico, resulting
in settlement charges of $17 million, $7 million and $2 million, respectively. In 2018, the Company settled a
portion of its pension obligations in the U.S. and the United Kingdom, resulting in settlement charges of $61
million and $13 million, respectively. A retiree annuity contract purchase transaction in the U.S. amounting to
approximately $94 million in 2018 gave rise to the majority of the settlement charges, with lump-sum payments
directly to plan participants comprising the remainder.
The components of pension expense, other than the service cost component, as well as pension settlement
charges are included in Other income (expense), net on the Consolidated Results of Operations.
The following information is for plans with projected and accumulated benefit obligations in excess of the
fair value of plan assets at year end:
Projected Benefit Obligation Exceeds
the Fair Value of Plan Assets
Accumulated Benefit Obligation Exceeds
the Fair Value of Plan Assets
U.S.
Non-U.S.
U.S.
Non-U.S.
2020
2019
2020 2019
2020
2019
2020
2019
Projected benefit obligations . . . . . $ 1,590 $ 1,505 $ 331 $ 952 $ 1,590 $ 1,505 $ 331 $ 952
927
Accumulated benefit obligation . . .
706
Fair value of plan assets . . . . . . . . .
1,590
1,324
1,505
1,215
1,505
1,215
1,590
1,324
927
706
309
67
309
67
The weighted average assumptions used to determine benefit obligations are as follows:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.61 %
N/A
2020
2019
3.39 %
N/A
2020
1.92 %
2.80 %
2019
2.53 %
2.89 %
U.S.
Non-U.S.
The weighted average assumptions used to determine net periodic pension costs are as follows:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.39 % 4.36 % 3.69 % 2.53 % 3.01 % 2.76 %
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . N/A
N/A % 2.86 % 2.76 % 2.78 %
7.15 % 7.25 % 7.25 % 5.23 % 5.50 % 5.52 %
Expected long-term rate of return on assets . . . . . . . . .
N/A
2020
U.S.
2019
2018
2020
Non-U.S.
2019
2018
78
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Future benefits are assumed to increase in a manner consistent with past experience of the plans, which, to
the extent benefits are based on compensation, includes assumed salary increases as presented above.
For 2020, the Company’s weighted average expected long-term rate of return on assets was 7.15% for the
U.S. plans and 5.23% for the non-U.S. plans. In developing this assumption, the Company considered its
historical 10-year average return (through December 31, 2020) and evaluated input from its third-party pension
plan asset consultants, including their review of asset class return expectations.
It is the Company’s policy to invest pension plan assets in a diversified portfolio consisting of an array of
asset classes within established target asset allocation ranges. The investment risk of the assets is limited by
appropriate diversification both within and between asset classes. Plan assets are primarily invested in a broad
mix of domestic and international equities, domestic and international bonds, and real estate, subject to target
asset allocation ranges, which may differ by individual plan. The assets are managed with a view to ensuring that
sufficient liquidity will be available to meet expected cash flow requirements.
The investment valuation policy of the Company is to value investments at fair value. Equity securities for
which market quotations are readily available are valued at the last reported sales price on their principal
exchange on valuation date or official close for certain markets. Fixed income investments are valued by an
independent pricing service. Investments in registered investment companies or collective pooled funds are
valued at their respective net asset values. Short-term investments are stated at amortized cost, which
approximates fair value. The fair value of real estate is determined by periodic appraisals.
The assets of the U.S. plans are maintained in a group trust. The U.S. plans hold no individual assets other
than the investment in the group trust. The Company’s U.S. pension plan assets held in the group trust are
measured at net asset value in the fair value hierarchy. The total U.S. plan assets amounted to $1,324 million and
$1,215 million as of December 31, 2020 and 2019, respectively. In 2020, the group trust assets consisted of
approximately 66% equity securities, 29% debt securities, and 5% real estate and other.
In 2020, the non-U.S. plan assets consisted of approximately 20% equity securities, 57% debt securities, and
23% real estate and other. The following table sets forth by level, within the fair value hierarchy, the Company’s
non-U.S. pension plan assets at fair value as of December 31, 2020 and 2019:
2020
2019
Cash and cash equivalents . . . . . . . . . . . . . $ 31 $ — $ — $ 31 $
Equity securities . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 67 $ 28 $ —
Investments measured at net asset value . .
Total non-U.S. assets at fair value . . . . . . .
$ 834
$ 929
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
8
—
58
23
8 $ — $ — $
$ 63 $ 26 $ —
$ 858
$ 947
—
38
26
3
23
2
26
55
36
79
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
In order to maintain minimum funding requirements, the Company is required to make contributions to its
defined benefit pension plans of approximately $60 million in 2021.
The following estimated future benefit payments, which reflect expected future service, as appropriate, are
expected to be paid in the years indicated:
Year(s)
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S.
Non-U.S.
99 $
100
95
96
93
445
41
45
46
47
48
266
The Company also sponsors several defined contribution plans for all salaried and hourly U.S. employees,
and employees in Canada, the United Kingdom, and the Netherlands. Participants’ contributions are based on
their compensation. The Company matches contributions of participants, up to various limits, in substantially all
plans. Company contributions to these plans amounted to $34 million in 2020, $33 million in 2019, and $36
million in 2018.
Postretirement Benefits Other Than Pensions
The Company provides retiree health care and life insurance benefits covering certain U.S. salaried and
hourly employees, and substantially all employees in Canada. Benefits provided by the Company for hourly
retirees are determined by collective bargaining. Employees are generally eligible for benefits upon retirement
and completion of a specified number of years of creditable service. The Company uses a December 31
measurement date to measure its postretirement benefit obligations.
The changes in the postretirement benefit obligations for the year are as follows:
Obligations at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Change in benefit obligations:
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
U.S.
Non-U.S.
2020
2019
2020
2019
72 $
74 $
71 $
80
2
14
(11)
(39)
(34)
38 $
4
3
(9)
2
2
5
(2)
2
1
3
(15)
(2)
4
(2)
72 $
9
80 $
(9)
71
The actuarial (gain) loss for the Company’s postretirement benefit obligations in 2020 and 2019 was
primarily related to changes in discount rates.
80
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
During the third quarter of 2020, the Company remeasured a portion of its post-retirement benefit obligation
in the U.S. due to plan changes, which resulted in a reduction in the post-retirement benefit obligation of
approximately $39 million.
The funded status of the postretirement benefit plans at year end is as follows:
Postretirement benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Items not yet recognized in net postretirement benefit cost:
Actuarial gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
U.S.
Non-U.S.
2020
2019
2020
2019
(38) $
(72) $
(80) $
(71)
20
(35)
(15)
(53) $
1
8
9
(63) $
(7)
(1)
(7)
(87) $
(1)
(72)
The net amount recognized is included in the Consolidated Balance Sheets at December 31, 2020 and 2019
as follows:
Current nonpension postretirement benefit, included with Other
accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Nonpension postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . .
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(2) $
(36)
(15)
(53) $
(5) $
(67)
9
(63) $
(3) $
(77)
(7)
(87) $
(3)
(68)
(1)
(72)
U.S.
Non-U.S.
2020
2019
2020
2019
The following changes in benefit obligations were recognized in Accumulated Other Comprehensive Loss at
December 31, 2020 and 2019 as follows (amounts are pretax):
Current year actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Amortization of actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service credit . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
U.S.
Non-U.S.
2020
2019
2020
2019
14 $
(5)
12
(39)
(18) $
5 $
(15)
3 $
(1)
8
10 $
5 $
(15)
The components of the net postretirement benefit cost for the year are as follows:
2020
U.S.
2019
2018
2020
2019
Non-U.S.
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization:
— $
2
— $
4
— $
3
2 $
2
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service credit . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net postretirement benefit (income) cost . . . . . . . . . . . . . $
(11)
5
(6)
(4) $
1
(8)
(7)
(3) $
2
(7)
(5)
(2) $
(1)
(1)
3 $
—
4 $
—
4
81
2018
1
3
1 $
3
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Amortization included in net postretirement benefit cost is based on the average remaining service of
employees. The weighted average discount rates used to determine the accumulated postretirement benefit
obligation and net postretirement benefit cost are as follows:
Accumulated postretirement benefit obligation . . . .
Net postretirement benefit cost . . . . . . . . . . . . . . . . . .
U.S.
2019
2020
2018
2020
2.48 % 3.31 % 4.30 % 2.55 % 3.00 % 3.60 %
3.31 % 4.30 % 3.61 % 3.00 % 3.60 % 3.35 %
2018
2019
Non-U.S.
The weighted average assumed health care cost trend rates at December 31 are as follows:
Health care cost trend rate assumed for next year . . . . . . . . . . . .
Rate to which the cost trend rate is assumed to decline
6.60 %
2020
2019
5.80 %
2020
5.00 %
2019
5.00 %
(ultimate trend rate) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year that the rate reaches the ultimate trend rate . . . . . . . . . . . .
5.00 %
2029
5.00 %
2028
5.00 %
N/A
5.00 %
N/A
U.S.
Non-U.S.
Amortization included in net postretirement benefit cost is based on the average remaining service of
employees.
The following estimated future benefit payments, which reflect expected future service, as appropriate, are
expected to be paid in the years indicated:
Year(s)
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 - 2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S.
Non-U.S.
2 $
2
2
2
2
10
3
3
3
3
3
16
Other U.S. hourly retirees receive health and life insurance benefits from a multi-employer trust established
by collective bargaining. Payments to the trust as required by the bargaining agreements are based upon
specified amounts per hour worked and were $5 million in 2020, $5 million in 2019 and $6 million in 2018.
Postretirement health and life benefits for retirees of foreign subsidiaries are generally provided through the
national health care programs of the countries in which the subsidiaries are located.
12. Leases
In the first quarter of 2019, the Company adopted ASC 842, Leases, and selected the modified retrospective
transition as of the effective date of January 1, 2019 (the effective date method). Under the effective date method,
financial results reported in periods prior to 2019 are unchanged.
The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if it
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent
the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are
82
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
recognized at the lease commencement date based on the estimated present value of lease payments over the lease
term.
The Company uses an estimated incremental borrowing rate at the lease commencement date to determine
the present value of lease payments when the implicit rate is not readily determinable in the lease. The
Company’s incremental borrowing rate reflects a fully secured rate based on recent debt issuances, the credit
rating of the Company, changes in currency and repayment timing of the lease, as well as publicly available data
for instruments with similar characteristics when calculating incremental borrowing rates.
Certain lease agreements include terms with options to extend the lease, however none of these have been
recognized in the Company’s right-of-use assets or lease liabilities since those options were not reasonably
certain to be exercised. Leases with a term of 12 months or less are not recorded on the balance sheet and lease
expense for these leases is recognized on a straight-line basis over the lease term. The Company’s lease
agreements include lease payments that are largely fixed and do not contain material residual value guarantees or
variable lease payments and no lease transactions with related parties. For the year ended December 31, 2020, the
Company’s lease costs associated with leases with terms less than 12 months or variable lease costs were
immaterial. Certain leases include options to purchase the leased property. The depreciable life of assets and
leasehold improvements are limited by the lease term, unless there is a transfer of title or purchase option
reasonably certain of exercise. The Company’s leases do not contain restrictions or covenants that restrict the
Company from incurring other financial obligations.
Rent expense attributable to all warehouse, office buildings and equipment operating leases was $91 million
in 2018. Minimum future rentals under operating leases as of December 31, 2018 were as follows: 2019, $69
million; 2020, $53 million; 2021, $41 million; 2022, $36 million; 2023, $29 million; and 2024 and thereafter, $40
million.
The Company leases warehouses, office buildings and equipment under both operating and finance lease
arrangements. Information related to these leases is as follows:
Lease cost
Finance lease cost:
Amortization of right-of-use assets (included in Cost of goods sold and
Selling and administrative expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest on lease liabilities (included in Interest expense, net) . . . . . . . . . . . . . . . .
Operating lease cost (included in Cost of goods sold and Selling and
administrative expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
7 $
2
75
84 $
6
2
83
91
Year ended December 31,
2020
2019
83
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Operating cash flows from finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing cash flows from finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right-of-use assets obtained in exchange for new operating lease liabilities . . . . . . . . .
75 $
2
7
42
83
2
6
61
Year ended December 31,
2020
2019
December 31,
2020
2019
Supplemental balance sheet information
Operating leases:
Operating lease right-of-use assets (included in Other assets) . . . . . . . . . . . . . . . . . . $
138 $
203
Current operating lease liabilities (included in Other current liabilities) . . . . . . . . . .
Noncurrent operating lease liabilities (included in Other long-term liabilities) . . . .
Total operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
45
93
138 $
65
138
203
Finance leases:
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current finance lease liabilities (included in Long-term debt due within one year) . .
Noncurrent finance lease liabilities (included in Long-term debt) . . . . . . . . . . . . . . .
Total finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
154 $
(42)
112
16
92
108 $
Weighted-average remaining lease term (in years):
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.8
6.9
Weighted-average discount rate:
107
(33)
74
7
63
70
3.6
7.4
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.69%
2.73%
4.17%
3.57%
84
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Operating leases
Finance leases
Maturity of lease liabilities
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
49 $
38
24
17
7
15
150
(12)
138 $
19
17
16
14
14
40
120
(12)
108
Minimum payments related to leases not yet
commenced as of December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
—
$
—
13. Income Taxes
The provision for income taxes was calculated based on the following components of earnings (loss) before
income taxes:
Continuing operations
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Discontinued operations
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020
(85) $
438
353 $
2019
(535) $
274
(261) $
2018
(100)
377
277
2020
2019
2018
— $
$
— $
— $
(3)
(3) $
—
113
113
The provision (benefit) for income taxes consists of the following:
Current:
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred:
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total:
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total for continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total for discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2020
2019
2018
8 $
86
94
12 $
99
111
8
109
117
1
(6)
(5)
9
80
89
—
89 $
7
7
12
106
118
—
118 $
(9)
(9)
8
100
108
—
108
85
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
A reconciliation of the provision for income taxes based on the statutory U.S. Federal tax rate of 21% to the
provision for income taxes is as follows:
2020
2019
2018
Tax provision on pretax earnings from continuing operations at
statutory U.S. Federal tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
74 $
(55) $
Increase (decrease) in provision for income taxes due to:
Non-U.S. tax rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global intangible low taxed income and Foreign-derived intangible
income, net of applicable GILTI credits . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Tax Cuts and Jobs Act: transition tax, net of foreign tax credits . .
Goodwill and equity investment impairments . . . . . . . . . . . . . . . . . . . . .
Tax impact of sale of ANZ business . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax law changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance: U.S. tax law change . . . . . . . . . . . . . . .
Change in valuation allowance: other . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax attribute expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Withholding tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible expenses and taxable gains . . . . . . . . . . . . . . . . . . . . . . .
Tax credits and incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in tax reserves and audit settlements . . . . . . . . . . . . . . . . . . . . .
Mexico inflationary adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other taxes based on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
34
7
6
(87)
(10)
59
6
12
14
(11)
2
(14)
12
2
(17)
89 $
14
28
125
(31)
11
16
8
(18)
20
4
(14)
(4)
3
11
118 $
58
25
32
(2)
4
(2)
(18)
6
11
4
(23)
13
8
(13)
7
(2)
108
Deferred income taxes reflect: (1) the net tax effects of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and their relevant tax basis; and (2) carryovers and credits
for income tax purposes.
86
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Significant components of the Company’s deferred tax assets and liabilities at December 31, 2020 and 2019
are as follows:
Deferred tax assets:
2020
2019
Accrued postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Asbestos-related liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Paddock-related liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit carryovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating, capital loss and interest carryovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other credit carryovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities:
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangibles and deferred software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35 $
107
130
276
19
55
85
33
46
786
112
79
33
224
(493)
Net deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
69 $
34
102
117
272
18
67
91
50
27
778
112
86
50
248
(462)
68
Deferred taxes are included in the Consolidated Balance Sheets at December 31, 2020 and 2019 as follows:
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
178 $
(109)
69 $
178
(110)
68
2020
2019
The deferred tax expense associated with the increase in the valuation allowance of $31 million was
primarily allocated $28 million to income from continuing operations due to the primacy of continuing
operations, changes in tax law and movements in non-U.S. currencies, and $3 million to other comprehensive
income.
Deferred tax assets and liabilities are determined separately for each tax jurisdiction on a separate or on a
consolidated tax filing basis, as applicable, in which the Company conducts its operations or otherwise incurs
taxable income or losses. A valuation allowance is recorded when it is more likely than not that some portion or
all of the gross deferred tax assets will not be realized. The realization of deferred tax assets depends on the
ability to generate sufficient taxable income of the appropriate character within the carryback or carryforward
periods provided for in the tax law for each applicable tax jurisdiction. The Company considers the following
possible sources of taxable income when assessing the realization of deferred tax assets:
•
•
taxable income in prior carryback years;
future reversals of existing taxable temporary differences;
87
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
•
future taxable income exclusive of reversing temporary differences and carryforwards; and
• prudent and feasible tax planning strategies that the Company would be willing to undertake to prevent a
deferred tax asset from otherwise expiring.
The assessment regarding whether a valuation allowance is required or whether a change in judgment
regarding the valuation allowance has occurred also considers all available positive and negative evidence,
including but not limited to:
• nature, frequency, and severity of cumulative losses in recent years;
• duration of statutory carryforward and carryback periods;
•
statutory limitations against utilization of tax attribute carryforwards against taxable income;
• historical experience with tax attributes expiring unused; and
• near- and medium-term financial outlook.
The weight given to the positive and negative evidence is commensurate with the extent to which the
evidence may be objectively verified. Accordingly, it is generally difficult to conclude a valuation allowance is
not required when there is significant objective and verifiable negative evidence, such as cumulative losses in
recent years. The Company uses the actual results for the last two years and current year results as the primary
measure of cumulative losses in recent years.
The evaluation of deferred tax assets requires judgment in assessing the likely future tax consequences of
events recognized in the financial statements or tax returns and future profitability. The recognition of deferred
tax assets represents the Company’s best estimate of those future events. Changes in the current estimates, due to
unanticipated events or otherwise, could have a material effect on the Company’s results of operations and
financial condition.
In certain tax jurisdictions, the Company’s analysis indicates that it has cumulative losses in recent years.
This is considered significant negative evidence which is objective and verifiable and, therefore, difficult to
overcome. However, the cumulative loss position is not solely determinative and, accordingly, the Company
considers all other available positive and negative evidence in its analysis. Based on its analysis, the Company
has recorded a valuation allowance for the portion of deferred tax assets where based on the weight of available
evidence it is unlikely to realize those deferred tax assets.
Based on the evidence available including a lack of sustainable earnings, the Company in its judgment
previously recorded a valuation allowance against substantially all of its net deferred tax assets in the United
States. If a change in judgment regarding this valuation allowance were to occur in the future, the Company will
record a potentially material deferred tax benefit, which could result in a favorable impact on the effective tax
rate in that period. In addition, based on available evidence and the weighting of factors discussed above, the
Company has valuation allowances on certain deferred tax assets in certain international tax jurisdictions.
The U.S. Tax Cuts and Jobs Act (“Act”) was enacted on December 22, 2017. The Act reduced the U.S.
federal corporate tax rate to 21% from 35%, required companies to pay a one-time transition tax on earnings of
certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign sourced
88
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
earnings. In 2017 and the first nine months of 2018, the Company recorded provisional amounts for certain
enactment-date effects of the Act by applying the guidance in SAB 118 because the Company had not yet
completed its enactment-date accounting for these effects. At December 31, 2018, the Company had completed
its accounting for all of the enactment-date income tax effects of the Act. At December 31, 2017, the Company
originally recorded a provisional amount for its one-time transition tax of $331 million, which was expected to be
substantially offset by available foreign tax credits resulting in a provisional net tax expense of $2 million,
primarily attributable to state taxes. Upon further analyses of certain aspects of the Act and refinement of its
calculations during 2018, the Company decreased its provisional amount of transition tax by $17 million, to $314
million. This resulted in no change to U.S. federal income tax expense due to the impact of foreign tax credits. In
addition, the provisional net tax expense, which was estimated at approximately $2 million, primarily attributable
to state taxes, was substantially eliminated. The Company recognized this favorable adjustment of $2 million as a
component of income tax expense from continuing operations.
As of December 31, 2017, the Company remeasured certain deferred tax assets and liabilities based on the
rates at which they were expected to reverse in the future (which was generally 21%) and based on the expected
future benefit to be realized as a result of changes to the tax base provided in the Act. The Company recorded a
provisional net tax charge of $162 million related to the remeasurement of net deferred tax assets, which was
fully offset by an adjustment to valuation allowance. Upon further analysis of certain aspects of the Act and
refinement of its calculations during 2018, the Company adjusted its provisional amount by $2 million, which is
fully offset by an adjustment to valuation allowance. Additionally, as of December 31, 2017, the Company
recorded a provisional deferred tax benefit of $11 million for the reduction of a deferred tax liability related to an
indefinite lived intangible asset. No adjustment was made to this provisional amount.
At December 31, 2020, before valuation allowance, the Company had unused foreign tax credits of $130
million including $85 million expiring in 2021 through 2030 and $45 million that can be carried over indefinitely.
Approximately $158 million of the deferred tax assets related to operating, capital loss and interest carryforwards
can be carried over indefinitely. The remaining operating, capital loss and interest carryforwards of $118 million
expire between 2021 and 2040. Other credit carryforwards include approximately $18 million of research tax
credits expiring from 2021 to 2039.
As a result of the Act, in 2018, the Company had a change in judgement regarding the gross book-tax basis
differences in its non-U.S. consolidated subsidiaries. Since a majority of the pre-2018 non-U.S. earnings (net of
losses) were substantially taxed under the Act, distributions of those net earnings no longer attract significant
U.S. income taxes except for any associated currency gains. Therefore, the Company does not assert that these
net earnings (to the extent of foreign distributable reserves) and any associated gross book-tax basis differences,
if any, are indefinitely reinvested. For all remaining gross book-tax basis differences in its non-U.S. consolidated
subsidiaries, the Company maintains its assertion that it intends these to be indefinitely reinvested. The Company
also records deferred foreign taxes on gross book-tax basis differences to the extent of foreign distributable
reserves for certain foreign subsidiaries. Determining the amount of unrecognized deferred tax liability related to
any remaining undistributed foreign earnings is not practicable.
The Company records a liability for unrecognized tax benefits related to uncertain tax positions. The
Company accrues interest and penalties associated with unrecognized tax benefits as a component of its income
tax expense.
89
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
The following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended
December 31, 2020, 2019, and 2018:
Balance at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Additions and reductions for tax positions of prior years . . . . . . . . . . . . .
Additions based on tax positions related to the current year . . . . . . . . . . .
Reductions due to settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Unrecognized tax benefits, which if recognized, would impact the
Company’s effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accrued interest and penalties at December 31 . . . . . . . . . . . . . . . . . . . . . . . $
Interest and penalties included in tax expense for the years ended
2020
2019
2018
99 $
(20)
11
3
93 $
87 $
16
12
(16)
99 $
80 $
14 $
86 $
11 $
79
(4)
15
(3)
87
78
10
December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3 $
1 $
2
Based upon the outcome of tax examinations, judicial proceedings, or expiration of statute of limitations, it
is reasonably possible that the ultimate resolution of these unrecognized tax benefits may result in a payment that
is materially different from the current estimate of the tax liabilities. The Company believes that it is reasonably
possible that the estimated liability could decrease up to approximately $19 million within the next 12 months.
This is primarily the result of anticipated audit settlements or statute expirations in several taxing jurisdictions.
The Company is currently under income tax examination in various tax jurisdictions in which it operates,
including Bolivia, Brazil, Canada, Colombia, France, Germany, Indonesia, Mexico and Peru. The years under
examination range from 2004 through 2018. 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 to the Company’s consolidated results of operations, financial position or cash flows. During
2020, the Company concluded income tax audits in several jurisdictions, including China, Hungary and
Indonesia.
90
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
14. Debt
The following table summarizes the long-term debt of the Company at December 31, 2020 and 2019:
2020
2019
Secured Credit Agreement:
Revolving Credit Facility:
Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
— $
—
Term Loans:
Term Loan A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other secured debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior Notes:
4.875%, due 2021 (€118 million at December 31, 2019) . . . . . . . . . . . . . . . . . . . . .
5.00%, due 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.00%, due 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.875%, due 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.125%, due 2024 (€725 million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.375%, due 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.375%, due 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.875%, due 2025 (€500 million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.625%, due 2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less amounts due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,067
99
1,477
333
132
497
307
689
824
295
297
552
70
11
5,484
49
5,435
307
692
914
296
298
607
692
108
7
5,087
142
4,945 $
The Company presents debt issuance costs in the Consolidated Balance Sheet as a deduction of the carrying
amount of the related debt liability.
On June 25, 2019, 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”), which amended and restated the previous credit agreement
(the “Previous Agreement”). The proceeds from the Agreement were used to repay all outstanding amounts
under the Previous Agreement. The Company recorded $4 million of additional interest charges for third-party
fees and the write-off of unamortized fees related to the Agreement during 2019.
The Agreement provides for up to $3.0 billion of borrowings pursuant to term loans and revolving credit
facilities. The term loans mature, and the revolving credit facilities terminate, in June 2024. At December 31,
2020, the Agreement includes a $300 million revolving credit facility, a $1.2 billion multicurrency revolving
credit facility, and a $1.5 billion term loan A facility ($1,067 million outstanding balance at December 31, 2020,
net of debt issuance costs). At December 31, 2020, the Company had unused credit of $1.5 billion available
under the Agreement. The weighted average interest rate on borrowings outstanding under the Agreement at
December 31, 2020 was 1.68%.
91
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
The 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 Agreement also contains one financial maintenance covenant, a Total Leverage Ratio (the “Leverage
Ratio”), that requires the Company not to exceed a ratio of 5.0x calculated by dividing consolidated total debt,
less cash and cash equivalents, by Consolidated EBITDA, with such Leverage Ratio decreasing to (a) 4.75x for
the quarter ending June 30, 2021 and (b) 4.50x for the quarter ending December 31, 2021 and thereafter, as
defined and described in the 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 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 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 Agreement. In such an event, the Company could not request borrowings under the revolving facilities,
and all amounts outstanding under the 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
Agreement. If an event of default occurs under the Agreement and the lenders cause all of the outstanding debt
obligations under the 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 December 31, 2020, the Company was in compliance with all covenants and
restrictions in the Agreement. In addition, the Company believes that it will remain in compliance and that its
ability to borrow funds under the Agreement will not be adversely affected by the covenants and restrictions.
The Leverage Ratio also determines pricing under the Agreement. The interest rate on borrowings under the
Agreement is, at the Company’s option, the Base Rate or the Eurocurrency Rate, as defined in the Agreement,
plus an applicable margin. The applicable margin is linked to the Leverage Ratio. The margins range from 1.00%
to 1.50% for Eurocurrency Loans and from 0.00% to 0.50% for Base Rate Loans. In addition, a commitment fee
is payable on the unused revolving credit facility commitments ranging from 0.20% to 0.30% per annum linked
to the Leverage Ratio.
Obligations under the 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 Agreement are guaranteed by certain domestic subsidiaries of the Company, and certain
foreign obligations under the Agreement are guaranteed by certain foreign subsidiaries of the Company.
In July 2019, the Company redeemed €250 million aggregate principal amount of its outstanding 6.75%
senior notes due 2020. The redemption was funded with cash on hand and revolver borrowings.
In November 2019, the Company issued €500 million aggregate principal amount of senior notes. The
senior notes bear interest at a rate of 2.875% per annum and mature on February 15, 2025. 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 €492 million and were used to redeem the
92
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
remaining €250 million aggregate principal amount of the Company’s outstanding 6.75% senior notes due 2020
and €212 million aggregate principal amount of the Company’s outstanding 4.875% senior notes due 2021.
In December 2019, subsidiaries of the Company completed consent solicitations to amend and waive certain
provisions of the indentures governing certain of their senior notes. On December 11, 2019, those subsidiaries
entered into supplemental indentures reflecting the amendments and waivers, which were obtained to facilitate
the implementation of the Corporate Modernization. The Company recorded approximately $5 million of
additional interest charges for third-party fees in 2019 related to these activities.
The Company recorded approximately $56 million of additional interest charges for note repurchase
premiums and the write-off of unamortized finance fees related to the senior note redemptions conducted during
2019.
In May 2020, the Company issued $700 million aggregate principal amount of new senior notes. The new
senior notes bear interest at a rate of 6.625% per annum and mature on May 13, 2027. The new 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 million and were used to redeem the
remaining $130 million aggregate principal amount of the Company’s outstanding 4.875% senior notes due 2021,
approximately $419 million aggregate principal amount of the Company’s outstanding 5.00% senior notes due
2022 and approximately $105 million of other secured borrowings. The Company recorded approximately $38
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 9 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.
Annual maturities for all of the Company’s long-term debt through 2025 and thereafter are as follows: 2021,
$142 million; 2022, $45 million; 2023, $1,051 million; 2024, $1,905 million; 2025, $1,214 million; and 2026 and
thereafter, $730 million.
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
93
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
based on published market quotations and are classified as Level 1 in the fair value hierarchy. Fair values at
December 31, 2020, of the Company’s significant fixed rate debt obligations are as follows:
Principal
Amount
Indicated
Market Price
Fair Value
Senior Notes:
4.00%, due 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5.875%, due 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.125%, due 2024 (€725 million) . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.375%, due 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.375%, due 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.875%, due 2025 (€500 million) . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.625%, due 2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
310 $
700
891
300
300
614
700
102.51 $
107.57
103.42
111.61
107.80
102.01
108.78
318
753
921
335
323
626
761
15. Contingencies
Asbestos
From 1948 to 1958, one of the 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 O-I Group and Paddock as direct, wholly owned subsidiaries, with Paddock as
the successor-by-merger to O-I. The Company’s legacy asbestos-related liabilities remained within Paddock, with
the Company’s glass-making operations remaining under O-I Group.
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 to equitably and finally resolve all of
its current and future asbestos-related 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 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
94
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
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. Because the Chapter
11 proceedings are in the early stages, it is not possible to predict the form of the ultimate resolution or when an
ultimate resolution might occur.
As part of the Corporate Modernization transactions, O-I Glass entered into a support agreement with
Paddock that requires 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 support agreement are to ensure that Paddock has the ability to fund
the costs and expenses of managing the Chapter 11 process, ultimately settle Asbestos Claims through the
establishment of a trust as described above and fund certain other liabilities. The ultimate amount that may be
required to fund the trust in connection with a confirmed Chapter 11 plan of reorganization cannot be estimated
with certainty.
Following the Chapter 11 filing, 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
Chapter 11 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 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 support
agreement, as described above, of $471 million as required under applicable accounting standards, which may be
subject to change based on the facts and circumstances of the Chapter 11 proceedings. Taken together, these
transactions 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. As of December 31, 2020, the Company has
no better information with regard to the Chapter 11 proceedings that would indicate a change is required to the
$471 million accrued for the Paddock Support Agreement liability on the Company’s Consolidated Balance
Sheet.
Several risks and uncertainties related to Paddock’s Chapter 11 case could have a material adverse effect on
the Company’s business, consolidated financial condition, results of operations and cash flows, including the
ultimate amounts necessary to fund any trust established pursuant to Section 524(g) of the Bankruptcy Code, the
potential for the Company’s asbestos-related exposure to extend beyond Paddock based on corporate veil
piercing efforts or other claims by asbestos plaintiffs, the costs of the Chapter 11 proceedings and the length of
time necessary to resolve the case, either through settlement or various court proceedings, and the possibility that
Paddock will be unsuccessful in attaining the desired relief under Chapter 11.
The following table shows the approximate number of plaintiffs who had asbestos lawsuits pending against
the Company at the beginning of each listed year, the number of Asbestos Claims administratively presented or
filed in the tort system, the number of Asbestos Claims disposed of during that year, and the number of lawsuits
pending at the end of each listed year (eliminating duplicate filings):
Pending at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disposed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Filed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pending at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019
1,070
1,170
950
850
2018
1,330
1,220
960
1,070
95
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Prior to the Petition Date, the Company knew of approximately 850 asbestos lawsuits pending. The pending
lawsuit figures do 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”
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 categories 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 the Company in the aggregate disposed of
approximately 401,200 Asbestos Claims at an average indemnity payment of approximately $10,200 per claim.
The Company’s asbestos indemnity payments varied on a per-claim basis. Asbestos-related cash payments for
2019 and 2018 were $151 million and $105 million, respectively, and cash payments per claim disposed
(inclusive of legal costs) were approximately $129,000 and $86,000 for the years ended December 31, 2019 and
2018, respectively.
Prior to the Petition Date, the Company’s objective was historically to achieve, where possible, resolution of
Asbestos Claims pursuant to claims-handling agreements. Failure of claimants to meet certain medical and
product exposure criteria in claims-handling agreements generally reduced the number of claims that would
otherwise have been received by the Company in the tort system. In addition, changes in jurisdictional dynamics,
legislative acts, asbestos docket management and procedures, the substantive law, the co-defendant pool, and
other external factors affected lawsuit volume, claim volume, qualification rates, claim values, and related
matters. Collectively, these variables generally had the effect of increasing the Company’s per-claim average
indemnity payment over time.
Beginning with the initial liability of $975 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, 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
96
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
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:
a) 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;
b) 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;
c)
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;
d)
the Company would be substantially able to defend itself successfully at trial and on appeal;
e)
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
f) 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 charges of $35 million and $125 million for
the years ended December 31, 2019 and 2018, respectively. 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. In the fourth quarter
of 2018, the Company determined that it was advantageous to accelerate the disposition of certain claims in light
97
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
of additional information the Company obtained about higher estimated future claim volumes and values in
certain of the affected discrete streams of potential liability. Factors impacting the increased likelihood of these
additional losses included changes in the law, procedure, the expansion of judicial resources in certain
jurisdictions, and renewed attention to dockets of non-mesothelioma cases. The Company also obtained new
information about other Asbestos Claims, which had the effect of reducing its asbestos-related liability. The
combined effect of these items resulted in a change in estimate of the Company’s asbestos-related liability.
For a discussion of the effects of the Corporate Modernization and Paddock’s Chapter 11 proceedings on the
Company’s financial statements, see Item 1A, Risk Factors – “Corporate Modernization,” “Subsidiary
Bankruptcy” and “Asbestos-Related Liability,” and Item 7, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations.”
Other Matters
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.
16. Accumulated Other Comprehensive Income (Loss)
The components of comprehensive income are: (a) net earnings; (b) change in fair value of certain derivative
instruments; (c) pension and other postretirement benefit adjustments; and (d) foreign currency translation
adjustments. The net effect of exchange rate fluctuations generally reflects changes in the relative strength of the
U.S. dollar against major foreign currencies between the beginning and end of the year.
98
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
The following table lists the beginning balance, annual activity and ending balance of each component of
accumulated other comprehensive income (loss):
Net Effect of
Exchange Rate
Fluctuations
Change in Certain
Derivative
Instruments
Employee
Benefit Plans
Other
Comprehensive
Income (Loss)
Total Accumulated
Balance on January 1, 2019 . . . . . . . . . . . . . . $
Change before reclassifications . . . . . . . . . . .
Amounts reclassified from accumulated
other comprehensive income . . . . . . . . . . . .
Translation effect . . . . . . . . . . . . . . . . . . . . . . .
Tax effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss)
attributable to the Company . . . . . . . . . . . .
Balance on December 31, 2019 . . . . . . . . . . .
Change before reclassifications . . . . . . . . . . .
Amounts reclassified from accumulated
other comprehensive income . . . . . . . . . . . .
Amounts reclassified from accumulated
other comprehensive income (loss)
related to the ANZ sale . . . . . . . . . . . . . . . .
Translation effect . . . . . . . . . . . . . . . . . . . . . . .
Tax effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss)
(889) $
76
(18)
(74)
$
(1,061)
(21)
$
(1,968)
(19)
76
(813)
(267)
(149)
75 (a)
1
2
70 (b)
(7)
3
4
(14)
(156)
45
(1,016)
(32)
145
(6)
5
125
(1,843)
(455)
112 (a)
68 (b)
180
1
(2)
(1)
4
(9)
2
(144)
(11)
1
attributable to the Company . . . . . . . . . . . .
Balance on December 31, 2020 . . . . . . . . . . . $
(416)
(1,229) $
(46)
(60)
33
(983)
$
$
(429)
(2,272)
(a) Amount is recorded to other income (expense), net and interest expense, net on the Consolidated Results of
Operations (see Note 9 for additional information).
(b) Amount is included in the computation of net periodic pension cost and net postretirement benefit cost (see
Note 11 for additional information).
17. Stock Based Compensation
The Company has various nonqualified plans approved by share owners under which it has granted stock
options, restricted shares and performance vested restricted share units. Starting with the 2017 equity awards, the
Company has allocated these awards solely in the form of restricted shares and performance vested restricted
share units. As such, the Company’s annual compensation expense related to stock option awards is immaterial.
At December 31, 2020, there were 7,025,809 shares available for grants under these plans. Total compensation
cost for all grants of shares and units under these plans was $11 million, $10 million and $27 million for the years
ended December 31, 2020, 2019, and 2018, respectively.
Restricted Shares and Restricted Share Units
Restricted share units granted to employees vest 25% per year beginning on the first anniversary. Granted
but unvested restricted share units are forfeited upon termination, unless certain retirement criteria are met.
99
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Holders of vested restricted share units receive one share of the Company’s common stock for each unit as units
vest. Restricted share units granted to directors vest after one year.
The fair value of the restricted shares and restricted share units is equal to the market price of the Company’s
common stock on the date of the grant. The fair value of restricted shares and restricted share units, is amortized
over the vesting periods which range from one to four years.
The activity of restricted shares and restricted share units is as follows:
Nonvested at January 1, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonvested at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Awards granted during 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Awards granted during 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of
Restricted
Shares
(thousands)
Weighted
Average
Grant-Date
Fair Value
(per share)
19.69
8.79
19.06
13.84
12.54
19.69
22.05
$
$
1,112 $
1,270
(457)
(200)
1,725
Total fair value of shares vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
9 $
8 $
10
2020
2019
2018
Performance Vested Restricted Share Units
Performance vested restricted share units vest on January 1 of the third year following the year in which they
are granted. Holders of vested units may receive up to two shares of the Company’s common stock for each unit,
depending upon the attainment of consolidated performance goals established by the Compensation Committee of
the Company’s Board of Directors. If minimum goals are not met, no shares will be issued. Granted but
unvested restricted share units are forfeited upon termination of employment, unless certain retirement criteria
are met.
The fair value of each performance vested restricted share unit is equal to the product of the fair value of the
Company’s common stock on the date of grant and the estimated number of shares into which the performance
vested restricted share unit will be converted. The fair value of performance vested restricted share units is
amortized ratably over the vesting period. Should the estimated number of shares into which the performance
vested restricted share unit will be converted change, an adjustment will be recorded to recognize the
accumulated difference in amortization between the revised and previous estimates.
100
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
Performance vested restricted share unit activity is as follows:
Number of Performance Weighted Average
Vested Restricted Shares Grant-Date Fair Value
Units (thousands)
(per unit)
Nonvested at January 1, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited/Cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonvested at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Awards granted during 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Awards granted during 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,559 $
1,422
(401)
(289)
2,291
$
$
20.20
9.92
19.53
14.68
14.63
20.20
19.73
Approximately 400,846 shares were issued in 2020 with a fair value at issuance date of $8 million related to
performance vested restricted share units.
As of December 31, 2020, there was $15 million of total unrecognized compensation cost related to all
unvested stock options, restricted shares, restricted share units and performance vested restricted share units.
That cost is expected to be recognized over a weighted average period of approximately two years.
18. Other Income (Expense), net
Other income (expense), net for the years ended December 31, 2020, 2019, and 2018 included the following:
Impairment of goodwill (see Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Gain on sale of ANZ businesses (see Note 23) . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, asset impairment and other charges . . . . . . . . . . . . . . . . . . . . . .
Charge for asbestos-related costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge for other asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible amortization expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Strategic transaction and corporate modernization costs . . . . . . . . . . . . . . . . .
Gain on sale of equity investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge for deconsolidation of Paddock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royalty income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency exchange loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-income tax gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense),net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2019
(595) $
2018
—
2020
— $
275
(106)
(26)
(33)
(8)
(14)
12
(4)
(89)
(35)
(26)
(22)
(41)
(31)
107
12
(5)
(9)
87 $
(4)
(729) $
(97)
(125)
(74)
(40)
13
(6)
19
41
(269)
In 2019, the Company recorded charges of approximately $22 million for asset impairments related to the
Company’s operations in Argentina and China, due primarily to macroeconomic conditions in those countries.
The Company wrote down the value of these assets to the extent their carrying amounts exceeded fair value. The
fair value of the assets was computed based on estimated future cash flows. The Company classified the
significant assumptions used to determine the fair value of the impaired assets, which was not material, as Level
3 (third-party appraisal) in the fair value hierarchy. The remaining carrying value of the impaired assets was
approximately $5 million.
101
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
In 2018, other income (expense), net includes a gain realized on a sale of an asset in Europe (approximately
$11 million) and gains recorded on insurance proceeds in the Americas (approximately $11 million).
19. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share:
2020
2019
2018
Numerator:
Net earnings (loss) attributable to the Company . . . . . . . . . . . . . . . . . . . . $
249 $
(400) $
257
Denominator (in thousands):
Denominator for basic earnings per share-weighted average shares
outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
156,806
155,250
160,125
Effect of dilutive securities:
Stock options and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,979
1,963
Denominator for diluted earnings per share-adjusted weighted
average shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158,785
155,250
162,088
Basic earnings per share:
Earnings (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . $
Gain (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . .
1.59 $
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.59 $
Diluted earnings per share:
Earnings (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . $
Gain (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . .
1.57 $
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.57 $
(2.56) $
(0.02)
(2.58) $
(2.56) $
(0.02)
(2.58) $
0.90
0.71
1.61
0.89
0.70
1.59
Options to purchase 2,333,339, 2,086,004 and 1,726,275 weighted average shares of common stock which
were outstanding during 2020, 2019, and 2018, respectively, were not included in the computation of diluted
earnings per share because the options’ exercise price was greater than the average market price of the
common shares. For the year ended December 31, 2019, diluted earnings per share of common stock was equal
to basic earnings per share of common stock due to the loss from continuing operations.
On December 26 and 27, 2019, the Company implemented the Corporate Modernization, which involved a
series of transactions, including the Merger. Upon the effectiveness of the Merger, each share of O-I stock held
immediately prior to the Merger automatically converted into a right to receive an equivalent corresponding share
of O-I Glass Common Stock, having the same designations, rights, powers and preferences and the qualifications,
limitations, and restrictions as the corresponding share of O-I stock being converted.
In connection with the Merger and pursuant to the Merger Agreement, each option to purchase a share of
O-I common stock, each award of restricted shares of O-I common stock, each award of time-based restricted
stock units covering shares of O-I common stock, each award of performance-based restricted stock units
covering shares of O-I common stock and each dividend equivalent covering one share of O-I common stock, in
each case, that was outstanding immediately prior to the effective time of the Merger (collectively, the “Company
Equity Awards”) was converted into an O-I Glass Equity Award. Each O-I Glass Equity Award continues to be
subject to the same terms and conditions (including vesting schedule and performance, forfeiture and termination
conditions) that applied to the corresponding Company Equity Award immediately prior to the effective time of
the Merger.
102
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
20. Supplemental Cash Flow Information
Changes in the components of working capital related to operations (net of the effects related to acquisitions
and divestitures) were as follows:
Decrease (increase) in current assets:
Receivables - change in factoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Receivables - all other changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Salaries and wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. and foreign income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2020
2019
2018
(103) $
(29)
75
(30)
(67)
(43)
24
(8)
(181) $
(61) $
13
(26)
13
146
(103)
(29)
(58)
(62)
(30)
(25)
2
(176) $
67
(16)
(1)
9
15
The Company uses various factoring programs to sell certain trade receivables to financial institutions as
part of managing its cash flows. At December 31, 2020, December 31, 2019 and December 31, 2018, the total
amount of trade receivables sold by the Company was $436 million, $539 million and $600 million, respectively.
These amounts included $176 million, $133 million and $147 million at December 31, 2020, December 31, 2019
and December 31, 2018, respectively, for trade receivable amounts factored under supply-chain financing
programs linked to commercial arrangements with key customers.
Income taxes paid in cash were as follows:
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total income taxes paid in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1 $
90
91 $
2 $
101
103 $
11
97
108
2020
2019
2018
Interest paid in cash, including note repurchase premiums, for the years ended December 31, 2020, 2019 and
2018 was $252 million, $303 million and $236 million, respectively. Cash interest for the years ended
December 31, 2020, 2019 and 2018 included $41 million, $54 million and $0 million of note repurchase
premiums, respectively.
21. Business Combinations
On June 28, 2019, the Company completed the acquisition of Nueva Fábrica Nacional de Vidrio, S. de R.L.
de C.V. (“Nueva Fanal”) from Grupo Modelo, an affiliate of Anheuser-Busch InBev SA/NV for a total purchase
price of approximately $188 million. The Company financed this acquisition with debt. The Nueva Fanal facility
is located near Mexico City, Mexico. Currently, this plant has three furnaces to produce and supply
approximately 240,000 tons of glass containers annually for Grupo Modelo brands, such as Corona, for local and
103
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
global export markets. This acquisition increases the Company’s presence in the Mexican glass packaging
market.
Nueva Fanal’s operating results are included in the Company’s Consolidated Financial Statements from the
acquisition date as part of the Americas segment. The acquisition qualifies as a business combination and was
accounted for using the acquisition method of accounting.
The total purchase price was allocated to the tangible and identifiable intangible assets and liabilities based
upon their respective fair values and was completed during the second quarter of 2020. This resulted in the
recognition of approximately $21 million of goodwill that is not deductible for tax purposes and approximately
$3 million of other intangible assets. The following table summarizes the final estimates of fair value of the
assets acquired and liabilities assumed on June 28, 2019 and subsequent adjustments identified through the
purchase price allocation process and recorded through the measurement period:
June 28,
2019
Measurement
Period|
Adjustments
June 30,
2020
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . $
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net property, plant and equipment . . . . . . . . . . . . . . .
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . .
Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . $
42 $
17
0
35
129
223
25
3
0
195 $
(1) $
0
21
(32)
32
20
3
(1)
25
(7) $
41
17
21
3
161
243
28
2
25
188
This acquisition did not meet the thresholds for a significant acquisition and therefore no pro forma financial
information is presented.
22. 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 may negatively impact its business and
results of operations in the future.
The preparation of Consolidated Financial Statements in conformity with 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,
104
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
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;
carrying value of inventory; and
the carrying value of goodwill and other long-lived assets.
There was no material impact to the above estimates in the Company’s Consolidated Financial Statements
for the year ended December 31, 2020. 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 Consolidated Financial Statements in future reporting periods.
23. Divestiture
On July 31, 2020, the Company completed the sale of its ANZ businesses to Visy, an unaffiliated
company. Gross proceeds approximated AUD $947 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 will be paid within 12 months of closing without
conditions precedent. In 2020, the Company recognized a net gain (including costs directly attributable 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 the Consolidated Results of Operations. Certain post-
closing adjustments, such as a working capital adjustment, will be recorded in future periods once finalized. 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.
For the year ended December 31, 2020, the results for the Asia Pacific reportable segment reflect only seven
months of the results of the ANZ businesses through the date of its sale. The pretax profits from the ANZ
businesses were approximately $6 million for the seven months ended July 31, 2020.
24. 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.
105
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Tabular data dollars in millions
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.
As a result of the favorable ruling by an ICSID ad hoc committee rejecting Venezuela’s request to annul the
OIEG Award, and thereby concluding those annulment proceedings, the Company recognized a $115 million
gain from discontinued operations in 2018. The loss from discontinued operations of $0 and $3 million for the
years ended December 31, 2020 and 2019, respectively, and the gain from discontinued operations of $113
million for the year ended December 31, 2018, reflect the gain in 2018 and the ongoing costs for matters related
to the Venezuelan expropriation in all three years.
106
O-I Glass, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Tabular data dollars in millions
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure 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 Securities and Exchange Commission’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 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 December 31, 2020.
Management’s Report on Internal Control over Financial Reporting
The management of O-I Glass, Inc. is responsible for establishing and maintaining adequate internal control
over financial reporting. The Company’s internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles in the United States. However, all
internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to financial statement preparation
and reporting.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2020. In making this assessment management used the criteria for effective internal control over
financial reporting as described in “Internal Control—Integrated Framework” issued by the Committee of
Sponsoring Organizations of the Treadway Commission (the COSO framework) in 2013.
Based on this assessment, using the criteria above, management concluded that the Company’s system of
internal control over financial reporting was effective as of December 31, 2020.
The Company’s independent registered public accounting firm, Ernst & Young LLP, that audited the
Company’s consolidated financial statements included in this annual report on Form 10-K, has issued an
attestation report on the Company’s internal control over financial reporting which is included below.
107
Changes in Internal Control over Financial Reporting
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 were no changes in the Company’s internal control over financial reporting during the quarter ended
December 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.
108
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Share Owners and the Board of Directors of O-I Glass, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited O-I Glass, Inc.’s internal control over financial reporting as of December 31, 2020, based on
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, O-I Glass,
Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2020, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets of O-I Glass, Inc. as of December 31, 2020 and 2019,
the related consolidated statements of results of operations, comprehensive income (loss), share owners’ equity
and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and
financial statement schedule listed in the Index at Item 15 and our report dated February 16, 2021 expressed an
unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion
on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that
a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the
109
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Toledo, Ohio
February 16, 2021
110
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information with respect to non-officer directors and corporate governance is included in the 2021 Proxy
Statement in the sections entitled “Election of Directors” and, if applicable, “Delinquent Section 16(a) Reports”
and such information is incorporated herein by reference.
Information with respect to executive officers is included herein in Item 1.
Code of Business Conduct and Ethics
The Company’s Global Code of Business Conduct and Ethics, which is applicable to all directors, officers
and employees of the Company, including the principal executive officer, the principal financial officer and the
principal accounting officer, is available on the Investor Relations section of the Company’s website
(www.o-i.com). A copy of the Code is also available in print to share owners upon request, addressed to the
Corporate Secretary at O-I Glass, Inc., One Michael Owens Way, Perrysburg, Ohio 43551. The Company intends
to post amendments to or waivers from its Code of Business Conduct and Ethics (to the extent applicable to the
Company’s directors, executive officers or principal financial officers) at this location on its website.
ITEM 11. EXECUTIVE COMPENSATION
The sections entitled “Executive Compensation” and “Compensation and Talent Development Committee
Interlocks and Insider Participation,” which are included in the 2021 Proxy Statement, are incorporated herein by
reference.
111
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
The section entitled “Security Ownership of Certain Beneficial Owners and Management” which is included
in the 2021 Proxy Statement is incorporated herein by reference.
The following table summarizes securities authorized for issuance under equity compensation plans as of
December 31, 2020.
Equity Compensation Plan Information
(b)
(c)
(a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights(1)
(thousands)
Weighted-average
exercise price of
outstanding options,
warrants and rights (1)
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
(thousands)
5,497 $
14.41
7,026
Plan Category
Equity compensation plans approved by
security holders . . . . . . . . . . . . . . . . . . . . . . . . .
Equity compensation plans not approved by
security holders
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,497 $
14.41
7,026
(1) Represents 1,481,000 options to purchase shares of the Company’s common stock and 4,016,000 restricted
share units, which do not provide for an exercise price and have been excluded from the weighted average
exercise price in column (b). There are no outstanding warrants.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The sections entitled “Related Person Transactions” and “Board Independence,” which are included in the
2021 Proxy Statement, are incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information with respect to principal accountant fees and services is included in the 2021 Proxy Statement in
the section entitled “Independent Registered Public Accounting Firm” and such information is incorporated
herein by reference.
112
PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
Index of Financial Statements and Financial Statement Schedules Covered by Report of Independent
Auditors.
(a) DOCUMENTS FILED AS PART OF THIS REPORT
1. See Index to Consolidated Financial Statements on page 51 hereof.
2. Financial Statement Schedule:
For the years ended December 31, 2020, 2019, and 2018:
II—Valuation and Qualifying Accounts (Consolidated) . . . . . . . . . . . . . . . . .
All other schedules have been omitted since the required information is not present or not
present in amounts sufficient to require submission of the schedule.
3. See Exhibit Index beginning on page 114 hereof.
10-K Page
S-1
113
Exhibit No.
2.1
3.1
3.2
4.1
—
4.2
—
4.3
—
EXHIBIT INDEX
Document
— Agreement and Plan of Merger (filed as Exhibit 2.1 to O-I Glass, Inc.’s, Paddock
Enterprises, LLC’s and Owens-Illinois Group, Inc.’s Form 8-K12B dated December 25,
2019, File Nos. 1-9576 and 1-10956, and incorporated herein by reference).
— Amended and Restated Certificate of Incorporation of O-I Glass, Inc. (filed as Exhibit 3.2
to O-I Glass, Inc.’s, Paddock Enterprises, LLC’s and Owens-Illinois Group, Inc.’s
Form 8-K12B dated December 25, 2019, File Nos. 1-9576 and 1-10956, and incorporated
herein by reference).
— Amended and Restated By-Laws of O-I Glass, Inc., (filed as Exhibit 3.3 to O-I Glass,
Inc.’s, Paddock Enterprises, LLC’s and Owens-Illinois Group, Inc.’s Form 8-K12B dated
December 25, 2019, File Nos. 1-9576 and 1-10956, and incorporated herein by reference).
Indenture dated as of December 3, 2014, by and among Owens-Brockway Glass
Container Inc., the guarantors party thereto and U.S. Bank National Association, as
trustee, including the form of 2022 Senior Notes and the form of 2025 Senior Notes (filed
as Exhibit 4.1 to Owens-Illinois Group, Inc.’s Form 8-K dated December 3, 2014, File
No. 33-13061, and incorporated herein by reference).
Indenture dated as of August 24, 2015, by and among Owens-Brockway Glass Container
Inc., the guarantors party thereto and U.S. Bank National Association, as trustee,
including the form of 2023 Senior Notes and the form of 2025 Senior Notes (filed as
Exhibit 4.1 to Owens-Illinois Group, Inc.’s Form 8-K dated August 24, 2015, File
No. 33-13061, and incorporated herein by reference).
Indenture, dated as of November 3, 2016, by and among OI European Group B.V., the
guarantors party thereto, Deutsche Trustee Company Limited, as trustee, Deutsche Bank
AG, London Branch, as principal paying agent and transfer agent, and Deutsche Bank
Luxembourg S. A., as Luxembourg transfer agent and registrar, including the form of
Notes (filed as Exhibit 4.1 to Owens-Illinois, Inc.’s and Owens-Illinois Group, Inc.’s
combined Form 8-K dated November 3, 2016, File Nos. 1-9576 and 33-13061, and
incorporated herein by reference).
4.4
— Third Amended and Restated Credit Agreement and Syndicated Facility Agreement, dated
June 25, 2019, by and among the Borrowers named therein, Owen-Illinois General Inc., as
Borrowers’ Agent, Deutsche Bank AG New York Branch, as Administrative Agent, and
the other Agents, Arrangers and Lenders named therein (filed as Exhibit 4.1 to Owen-
Illinois, Inc.’s and Owens-Illinois Group, Inc.’s combined Form 8-K dated June 25, 2019,
File Nos. 1-9576 and 33-13061, and incorporated herein by reference).
4.5
— Fourth Amended and Restated Intercreditor Agreement, dated as of June 27, 2018, by and
among Deutsche Bank AG New York Branch, as Administrative Agent and Collateral
Agent for the lenders party to the Credit Agreement (as defined therein) and any other
parties thereto (filed as Exhibit 4.2 to Owen-Illinois, Inc.’s and Owens-Illinois Group,
Inc.’s combined Form 8-K dated June 27, 2018, File Nos. 1-9576 and 33-13061, and
incorporated herein by reference).
4.6
— Fourth Amended and Restated Pledge Agreement, dated as of April 22, 2015, between
Owens-Illinois Group, Inc., Owens-Brockway Packaging, Inc., and Deutsche Bank AG,
New York Branch, as Collateral Agent (as defined therein) and any other parties thereto
(filed as Exhibit 4.2 to Owens-Illinois Group, Inc.’s Form 8-K dated April 22, 2015, File
No. 33-13061, and incorporated herein by reference).
114
Exhibit No.
4.7
4.8
Document
__ Amended and Restated Security Agreement, dated as of April 22, 2015, between Owens-
Illinois Group, Inc., each of the direct and indirect subsidiaries of Owens-Illinois Group,
Inc. signatory thereto, and Deutsche Bank AG, New York Branch, as Collateral Agent (as
defined therein) (filed as Exhibit 4.3 to Owens-Illinois Group, Inc.’s Form 8-K dated
April 22, 2015, File No. 33-13061, and incorporated herein by reference).
Indenture, dated as of December 12, 2017, by and among OI European Group B.V., the
guarantors party thereto, and Deutsche Bank Trust Company Americas, as Trustee (filed
as Exhibit 4.1 to Owens-Illinois, Inc.’s and Owens-Illinois Group, Inc.’s combined
Form 8-K dated December 12, 2017, File Nos. 1-9576 and 33-13061, and incorporated
herein by reference).
__
4.9
__ Domestic Guarantor Consent and Reaffirmation, dated as of June 25, 2019, by and among
4.10
Owens-Illinois Group, Inc., the Subsidiary Grantors (as defined therein) and Deutsche
Bank AG New York Branch, as the Collateral Agent (filed as Exhibit 4.3 to Owen-
Illinois, Inc.’s and Owens-Illinois Group, Inc.’s combined Form 8-K dated June 26, 2019,
File Nos. 1-9576 and 33-13061, and incorporated herein by reference).
— First Amendment to the Fourth Amended and Restated Intercreditor Agreement, dated as
of June 25, 2019, by and among Deutsche Bank AG New York Branch, as Administrative
Agent and Collateral Agent for the lenders party to the Credit Agreement (as defined
therein) and any other parties thereto (filed as Exhibit 4.2 to Owen-Illinois, Inc.’s and
Owens-Illinois Group, Inc.’s combined Form 8-K dated June 25, 2019, File Nos. 1-9576
and 33-13061, and incorporated herein by reference).
4.11
— Second supplemental indenture, dated as of December 11, 2019, by and among Owens-
Brockway Glass Container Inc., as issuer, and U.S. Bank National Association, as trustee,
to the indenture, dated as of December 3, 2014, by and among Owens-Brockway Glass
Container Inc., as issuer, the guarantors party thereto and U.S. Bank National Association,
as trustee (filed as Exhibit 4.1 to Owen-Illinois, Inc.’s and Owens-Illinois Group, Inc.’s
combined Form 8-K dated December 11, 2019, File Nos. 1-9576 and 33-13061, and
incorporated herein by reference).
4.12
— Second supplemental indenture, dated as of December 11, 2019, by and among Owens-
4.13
Brockway Glass Container Inc., as issuer, and U.S. Bank National Association, as trustee,
to the indenture, dated as of August 24, 2015, by and among Owens-Brockway Glass
Container Inc., as issuer, the guarantors party thereto and U.S. Bank National Association,
as trustee (filed as Exhibit 4.2 to Owen-Illinois, Inc.’s and Owens-Illinois Group, Inc.’s
combined Form 8-K dated December 11, 2019, File Nos. 1-9576 and 33-13061, and
incorporated herein by reference).
— First supplemental indenture, dated as of December 11, 2019, by and among OI European
Group B.V., as issuer, and Deutsche Trustee Company Limited, as trustee, to the
indenture, dated as of November 3, 2016, by and among the OI European Group B.V., as
issuer, the guarantors party thereto, Deutsche Trustee Company Limited, as trustee,
Deutsche Bank AG, London Branch, as principal paying agent and transfer agent, and
Deutsche Bank Luxembourg S.A., as Luxembourg transfer agent and registrar (filed as
Exhibit 4.4 to Owen-Illinois, Inc.’s and Owens-Illinois Group, Inc.’s combined Form 8-K
dated December 11, 2019, File Nos. 1-9576 and 33-13061, and incorporated herein by
reference).
115
Exhibit No.
4.14
— First supplemental indenture, dated as of December 11, 2019, by and among OI European
Document
Group B.V., as issuer, and Deutsche Bank Trust Company Americas, as trustee, to the
indenture, dated as of December 12, 2017, by and among the OI European Group B.V., as
issuer, the guarantors party thereto, Deutsche Bank Trust Company Americas, as trustee
(filed as Exhibit 4.5 to Owen-Illinois, Inc.’s and Owens-Illinois Group, Inc.’s combined
Form 8-K dated December 11, 2019, File Nos. 1-9576 and 33-13061, and incorporated
herein by reference).
Indenture, dated as of May 13, 2020, by and among Owens-Brockway Glass Container
Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (filed as
Exhibit 4.1 to O-I Glass, Inc.'s Form 8-K dated May 13, 2020, File No. 1-9576, and
incorporated herein by reference).
4.15
—
4.16
— Amendment No. 1, dated December 13, 2019, to the Third Amended and Restated Credit
Agreement and Syndicated Facility Agreement, dated June 25, 2019, by and among the
Borrowers named therein, Owens-Illinois General Inc., as Borrowers’ Agent, Deutsche
Bank AG New York Branch, as Administrative Agent, and the other Agents, Arrangers
and Lenders named therein (filed as Exhibit 10.1 to Owen-Illinois, Inc.’s and Owens-
Illinois Group, Inc.’s combined Form 8-K dated December 13, 2019, File Nos. 1-9576 and
33-13061, and incorporated herein by reference).
4.17
— Amendment No. 2, dated December 13, 2019, to the Third Amended and Restated Credit
Agreement and Syndicated Facility Agreement, dated June 25, 2019, by and among the
Borrowers named therein, Owens-Illinois General Inc., as Borrowers’ Agent, Deutsche
Bank AG New York Branch, as Administrative Agent, and the other Agents, Arrangers
and Lenders named therein (filed as Exhibit 10.2 to Owen-Illinois, Inc.’s and Owens-
Illinois Group, Inc.’s combined Form 8-K dated December 13, 2019, File Nos. 1-9576 and
33-13061, and incorporated herein by reference).
4.18
— Description of the Registrant’s Securities Registered Pursuant to Section 12 of the
Securities Exchange Act of 1934 (filed as Exhibit 4.19 to O-I Glass, Inc.’s Form 10-K for
the year ended December 31, 2019, File No. 1-9576, and incorporated herein by
reference).
10.1*
— Amended and Restated Owens-Illinois Supplemental Retirement Benefit Plan (filed as
Exhibit 10.1 to Owens-Illinois, Inc.’s Form 10-Q for the quarter ended June 30, 1998, File
No. 1-9576, and incorporated herein by reference).
10.2*
— First Amendment to Amended and Restated Owens-Illinois Supplemental Retirement
Benefit Plan (filed as Exhibit 10.3 to Owens-Illinois, Inc.’s Form 10-K for the year ended
December 31, 2000, File No. 1-9576, and incorporated herein by reference).
10.3*
— Second Amendment to Amended and Restated Owens-Illinois Supplemental Retirement
10.4*
10.5*
10.6*
Benefit Plan (filed as Exhibit 10.1 to Owens-Illinois, Inc.’s Form 10-Q for the quarter
ended March 31, 2002, File No. 1-9576, and incorporated herein by reference).
— Third Amendment to Amended and Restated Owens-Illinois Supplemental Retirement
Benefit Plan (filed as Exhibit 10.1 to Owens-Illinois, Inc.’s Form 10-Q for the quarter
ended March 31, 2003, File No. 1-9576, and incorporated herein by reference).
— Owens-Illinois, Inc. Directors Deferred Compensation Plan (filed as Exhibit 10.26 to
Owens-Illinois, Inc.’s Form 10-K for the year ended December 31, 1995, File No. 1-9576,
and incorporated herein by reference).
— First Amendment to Owens-Illinois, Inc. Directors Deferred Compensation Plan (filed as
Exhibit 10.27 to Owens-Illinois, Inc.’s Form 10-K for the year ended December 31, 1995,
File No. 1-9576, and incorporated herein by reference).
116
Exhibit No.
10.7*
— Second Amendment to Owens-Illinois, Inc. Directors Deferred Compensation Plan (filed
as Exhibit 10.2 to Owens-Illinois, Inc.’s Form 10-Q for the quarter ended March 31, 1997,
File No. 1-9576, and incorporated herein by reference).
Document
10.8*
— Amended and Restated 1997 Equity Participation Plan of Owens-Illinois, Inc. (filed as
10.9*
10.10*
Exhibit 10.1 to Owens-Illinois, Inc.’s Form 10-Q for the quarter ended June 30, 1999, File
No. 1-9576, and incorporated herein by reference).
— First Amendment to Amended and Restated 1997 Equity Participation Plan of Owens-
Illinois, Inc. (filed as Exhibit 10.1 to Owens-Illinois, Inc.’s Form 10-Q for the quarter
ended June 30, 2002, File No. 1-9576, and incorporated herein by reference).
— Owens-Illinois, Inc. Executive Deferred Savings Plan (filed as Exhibit 10.10 to Owens-
Illinois, Inc.’s Form 10-K for the year ended December 31, 2016, File No. 1-9576, and
incorporated herein by reference).
10.11*
— Owens-Illinois 2004 Executive Life Insurance Plan (filed as Exhibit 10.32 to Owens-
Illinois, Inc.’s Form 10-K for the year ended December 31, 2004, File No. 1-9576, and
incorporated herein by reference).
10.12*
— Owens-Illinois 2004 Executive Life Insurance Plan for Non-U.S. Employees (filed as
Exhibit 10.33 to Owens-Illinois, Inc.’s Form 10-K for the year ended December 31, 2004,
File No. 1-9576, and incorporated herein by reference).
10.13*
— Amended and Restated Owens-Illinois, Inc. 2005 Incentive Award Plan dated as of
April 24, 2009 (filed as Exhibit 10.1 to Owens-Illinois, Inc.’s Form 10-Q for the quarter
ended March 31, 2009, File No. 1-9576, and incorporated herein by reference).
— Form of Non-Qualified Stock Option Agreement for use under the Owens-Illinois, Inc.
10.14*
2005 Incentive Award Plan (filed as Exhibit 10.25 to Owens-Illinois, Inc.’s Form 10-K for
the year ended December 31, 2011, File No. 1-9576, and incorporated herein by
reference).
10.15*
— Form of Restricted Stock Unit Agreement for use under the Owens-Illinois, Inc. 2005
10.16*
10.17*
Incentive Award Plan (filed as Exhibit 10.28 to Owens-Illinois, Inc.’s Form 10-K for the
year ended December 31, 2011, File No. 1-9576, and incorporated herein by reference).
— Form of Performance Share Unit Agreement for use under the Owens-Illinois, Inc. 2005
Incentive Award Plan (filed as Exhibit 10.29 to Owens-Illinois, Inc.’s Form 10-K for the
year ended December 31, 2011, File No. 1-9576, and incorporated herein by reference).
— Second Amended and Restated Owens-Illinois, Inc. 2005 Incentive Award Plan (filed as
Appendix B to Owens-Illinois, Inc.’s Definitive Proxy Statement on Schedule 14A filed
March 31, 2014, File No. 1-9576, and incorporated herein by reference).
10.18*
— Form of Non-Qualified Stock Option Agreement for use under Owens-Illinois, Inc.’s
Second Amended and Restated 2005 Incentive Award Plan (filed as Exhibit 10.1 to
Owens-Illinois, Inc.’s Form 8-K dated March 7, 2015, File No. 1-9576, and incorporated
herein by reference).
10.19*
— Form of Restricted Stock Unit Agreement for use under Owens-Illinois, Inc.’s Second
Amended and Restated 2005 Incentive Award Plan (filed as Exhibit 10.2 to Owens-
Illinois, Inc.’s Form 10-Q for the quarter ended March 31, 2017, File No. 1-9576, and
incorporated herein by reference).
10.20*
— Form of Performance Stock Unit Agreement for use under Owens-Illinois, Inc.’s Second
Amended and Restated 2005 Incentive Award Plan (filed as Exhibit 10.1 to Owens-
Illinois, Inc.’s Form 10-Q for the quarter ended March 31, 2017, File No. 1-9576, and
incorporated herein by reference).
10.21*
— Owens-Illinois, Inc. 2017 Incentive Award Plan (filed as Appendix B to Owens-Illinois,
Inc.’s Definitive Proxy Statement on Schedule 14A filed March 30, 2017, File
No. 1-9576, and incorporated herein by reference).
117
Exhibit No.
10.22*
— Owens-Illinois, Inc. Executive Severance Policy (filed as Exhibit 10.4 to Owens-Illinois,
Inc.’s Form 8-K dated March 7, 2015, File No. 1-9576, and incorporated herein by
reference).
Document
10.23*
— Letter Agreement signed November 20, 2015, between Owens-Illinois, Inc. and Jan
Bertsch (filed as Exhibit 10.1 to Owens-Illinois, Inc.’s Form 8-K dated November 23,
2015, File No. 1-9576, and incorporated herein by reference).
10.24*
— Form of Director Restricted Stock Unit Agreement for use under the Owens-Illinois, Inc.
Amended and Restated 2017 Incentive Award Plan (filed as Exhibit 10.3 to Owens-
Illinois, Inc.’s Form 10-Q for the quarter ended June 30, 2019, File No. 1-9576, and
incorporated herein by reference).
10.25*
— Form of Employee Restricted Stock Unit Agreement for use under the Owens-Illinois,
Inc. 2017 Incentive Award Plan (filed as Exhibit 10.1 to Owens-Illinois, Inc.’s Form 10-Q
for the quarter ended March 31, 2019, File No. 1-9576, and incorporated herein by
reference).
10.26*
— Form of Employee Performance Stock Unit Agreement for use under the Owens-Illinois,
Inc. 2017 Incentive Award Plan (filed as Exhibit 10.2 to Owens-Illinois, Inc.’s Form 10-Q
for the quarter ended March 31, 2019, File No. 1-9576, and incorporated herein by
reference.
10.27*
— Owens-Illinois, Inc. Amended and Restated 2017 Incentive Award Plan (filed as
Appendix B to Owens-Illinois, Inc.’s Definitive Proxy Statement on Schedule 14A filed
April 2, 2019, File No. 1-9576, and incorporated herein by reference).
10.28*
— Form of Employee Restricted Stock Unit Agreement for use under the Owens-Illinois,
Inc. Amended and Restated 2017 Incentive Award Plan (filed as Exhibit 10.1 to Owens-
Illinois, Inc.’s Form 10-Q for the quarter ended June 30, 2019, File No. 1-9576, and
incorporated herein by reference).
— Form of Employee Performance Stock Unit Agreement for use under the Owens-Illinois,
Inc. Amended and Restated 2017 Incentive Award Plan (filed as Exhibit 10.2 to Owens-
Illinois, Inc.’s Form 10-Q for the quarter ended June 30, 2019, File No. 1-9576, and
incorporated herein by reference).
— Assignment and Assumption Agreement (filed as Exhibit 10.1 to O-I Glass, Inc.’s,
Paddock Enterprises, LLC’s and Owens-Illinois Group, Inc.’s Form 8-K12B dated
December 25, 2019, File Nos. 1-9576 and 1-10956, and incorporated herein by reference)
— Share Sale Deed, dated July 16, 2020, by and among, Owens-Illinois Holding (Australia)
Pty Ltd., O-I Glass, Inc., Visy Glass (Australasia) Pty Ltd. and Visy Industries Holdings
Pty Ltd. (filed as Exhibit 10.1 to O-I Glass, Inc.'s Form 8-K dated July 15, 2020, File
No. 1-9576, and incorporated herein by reference).
— Subsidiaries of O-I Glass, Inc. (filed herewith).
— Consent of Independent Registered Public Accounting Firm (filed herewith).
— O-I Glass, Inc. Power of Attorney (filed herewith).
— Certification of Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
— Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (filed herewith).
10.29*
10.30
10.31
21
23
24
31.1
31.2
32.1**
— Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 (furnished
herewith).
32.2**
— Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 (furnished
herewith).
118
Exhibit No.
101
Document
— Financial statements from the Annual Report on Form 10-K of O-I Glass, Inc. for the year
ended December 31, 2020, formatted in Inline XBRL: (i) the Consolidated Results of
Operations, (ii) the Consolidated Comprehensive Income (Loss), (iii) the Consolidated
Balance Sheets, (iv) the Consolidated Share Owners’ Equity, (v) the Consolidated Cash
Flows and (vi) the Notes to Consolidated Financial Statements.
104
— Cover Page Interactive data File (embedded within the Inline XBRL document)
*
Indicates a management contract or compensatory plan or arrangement required to be filed as an exhibit to
this report.
** 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.
ITEM 16. FORM 10-K SUMMARY
None.
119
Pursuant to the requirements of Section 13 or 15(d) 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.
SIGNATURES
O-I GLASS, INC.
(Registrant)
By:
/s/ DARROW ABRAHAMS
Darrow Abrahams
Attorney-in-fact
Date: February 16, 2021
120
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of O-I Glass, Inc. and in the capacities and on the dates indicated.
Signatures
Signatures
Title
Andres A. Lopez
President and Chief Executive Officer (Principal
Executive Officer) and Director
John A. Haudrich
Senior Vice President and Chief Financial Officer
(Principal Financial Officer; Principal Accounting
Officer)
Carol A. Williams
Chairman of the Board
Samuel R. Chapin
Gordon J. Hardie
Peter S. Hellman
John Humphrey
Anastasia D. Kelly
Alan J. Murray
Hari N. Nair
Joseph D. Rupp
Catherine I. Slater
John H. Walker
Date: February 16, 2021
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
By:
121
/s/ DARROW ABRAHAMS
Darrow Abrahams
Attorney-in-fact
INDEX TO FINANCIAL STATEMENT SCHEDULE
Financial Statement Schedule of O-I Glass, Inc. and Subsidiaries:
For the years ended December 31, 2020, 2019, and 2018:
II—Valuation and Qualifying Accounts (Consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PAGE
S-1
122
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED)
O-I GLASS, INC.
Years ended December 31, 2020, 2019, and 2018
(Millions of Dollars)
Reserves deducted from assets in the balance sheets:
Allowances for losses and discounts on receivables
Additions
Balance at Charged to
beginning costs and
expenses
of period
Other
Balance
Deductions at end of
period
(Note 1)
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
32 $
6 $ (2) $
(3) $
33
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
35 $
15 $ (2) $
(16) $
32
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
34 $
13 $ (4) $
(8) $
35
(1) Deductions from allowances for losses and discounts on receivables represent uncollectible notes and
accounts written off.
Valuation allowance on net deferred tax assets
Balance at
beginning of Charged to comprehensive
Charged to other
period
income
income
Foreign currency
translation
Other
end of
period
Balance at
2020 . . . . . . . . . . . . . . . . . . . . . . . . $
462 $
59 $
3 $
7 $ (38) $
493
2019 . . . . . . . . . . . . . . . . . . . . . . . . $
495 $
(31) $
(14) $
(1) $ 13 $
462
2018 . . . . . . . . . . . . . . . . . . . . . . . . $
543 $
(20) $
(7) $
(9) $ (12) $
495
S-1
SUBSIDIARIES OF O-I GLASS, INC.
EXHIBIT 21
O-I Glass, Inc. had the following subsidiaries at December 31, 2020 (subsidiaries are indented following
their respective parent companies):
Name
Paddock Enterprises, LLC
Meigs Investments LLC
Owens-Illinois Group, Inc.
OI General Finance Inc.
OI General FTS Inc.
OI Castalia STS Inc.
OI Levis Park STS Inc.
Owens-Illinois General Inc.
Owens Insurance, Ltd.
Universal Materials, Inc.
OI Advisors, Inc.
OI Securities, Inc.
OI Transfer, Inc.
Sovereign Air, LLC
Maumee Air Associates Inc.
OI Australia Inc.
Continental PET Holdings Pty. Ltd.
ACI America Holdings Inc.
ACI Ventures, Inc.
Owens-Brockway Packaging, Inc.
Owens-Brockway Glass Container Inc.
O-I Packaging Solutions LLC
O-I Bolivia Holdings Limited
Vidrio Lux S.A.
OI Andover Group Inc.
The Andover Group, Inc.
Brockway Realty Corporation
NHW Auburn, LLC
OI Auburn Inc.
SeaGate, Inc.
SeaGate II, Inc.
SeaGate III, Inc.
OIB Produvisa Inc.
OI California Containers, Inc.
O-I Latam Services S.A.S.
O-I GMEC Lurin srl
O-I Business Service Center Sp. Z.o.o.
OI Puerto Rico STS Inc.
Glass to Glass, LLC
1
State/Country
of Incorporation
or Organization
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Bermuda
Ohio
Delaware
Delaware
Delaware
Texas
Delaware
Delaware
Australia
Delaware
Delaware
Delaware
Delaware
Delaware
United Kingdom
Bolivia
Delaware
Delaware
Pennsylvania
Delaware
Delaware
Ohio
Ohio
Ohio
Delaware
Delaware
Colombia
Peru
Poland
Delaware
Delaware
Name
State/Country
of Incorporation
or Organization
O-I Caribbean Sales & Distibution Inc.
O-I Latam HQ, Inc.
Bolivian Investments, Inc.
Fabrica Boliviana de Vidrios S.A.
OI International Holdings Inc.
O-I Global Holdings LLC
O-I Global Holdings C.V.
O-I Americas LLC
O-I New Mexico Holdings B.V.
Glass International OISPV, S.A.P.I. de C.V.
O-I Mexico Holdings I B.V.
O-I Mexico Holdings II B.V.
Owens America, S. de R.L. de C.V.
Delaware
Delaware
Delaware
Bolivia
Delaware
Delaware
Netherlands
Delaware
Netherlands
Netherlands
Netherlands
Envases de Vidrio de las Americas, S. de R.L. de C.V.
Mexico
Especialidades Operativas de America, S. de R.L. de C.V. Mexico
Mexico
Mexico
Nueva Fabrica Nacional de Vidrio, S. de R.L. de C.V. Mexico
Mexico
Owens Vimosa, S. de R.L. de C.V.
Mexico
Owens Vigusa, S. de R.L. de C.V.
Mexico
Owens Virreyes, S. de R.L. de C.V.
Mexico
Owens Viquesa, S. de R.L. de C.V.
Mexico
Owens Vitolsa, S. de R.L. de C.V.
Netherlands
Delaware
Hungary
Ohio
Ecuador
Singapore
Delaware
Hong Kong
China
Hong Kong
Hong Kong
China
Hong Kong
China
Hong Kong
China
China
China
Australia
New Zealand
Indonesia
Switzerland
United Kingdom
Poland
ACI Guangdong Glass Company Limited
O-I (Shanghai) Glass Container Co., Ltd.
O-I (Tianjin) Glass Container Co., Ltd.
O-I (Shanghai) Management Co Ltd.
Owens-Illinois Services H.K. Limited
ACI Guangdong Limited
ACI Shanghai Limited
Owens-Illinois (HK) Limited
O-I (Zhaoqing) Glass Container Co., Ltd.
O-I Sihui Glass Recycling Co. Ltd.
Owens-Illinois Holding (Australia) Pty Ltd
Owens-Illinois Holding (Australia) Pty Ltd
PT Kangar Consolidated Industries
O-I Europe Sarl
O-I Sales and Distribution UK Limited.
O-I Poland S.A.
Cristaleria del Ecuador, S.A.
Owens-Illinois Singapore Pte. Ltd.
OI China LLC
ACI Beijing Limited
OI European Group B.V.
OI Hungary LLC
O-I Hungary Kft.
O-I Ecuador LLC
2
Name
O-I Glass Limited
Vidrieria Rovira, S. L.
OI Spanish Holdings B.V.
Owens-Illinois Peru S. A.
O-I Italy spa
O-I Czech Republic A.S.
San Domenico Vetraria S.r.l.
O-I Netherlands B.V.
Veglarec B.V.
O-I Europe SAS
O-I France SAS
Verdome Exploitation SNC
Prover SAS
SCI Le Mourtis
Atlantique Emballage
O-I Glasspack Beteiligungs & Verwaltungsgesellschaft GmbH
O-I Germany GmbH & Co. KG
O-I Glasspack Verwaltungs GmbH
OI Canada Holdings B.V.
O-I Canada Corp.
Owens-Illinois de Venezuela, C. A.
Fabrica de Vidrio Los Andes, C. A.
CMC S.A.
Cristaleria Peldar, S.A.
Industria de Materias Primas S.A.S.
Cristar S.A.S.
Vidrieria Fenicia S.A.S.
Owens-Illinois do Brasil Industria e Comercio Ltda.
Mineracao Silminas Ltda.
Mineracao Descalvado Ltda.
OI Finnish Holdings Oy
O-I Sales and Distribution Finland OY
O-I Estonia AS
O-I Jaroslaw Machine Service Center
Owens-Illinois Argentina S.A.
O-I LATAM B.V.
State/Country
of Incorporation
or Organization
United Kingdom
Spain
Netherlands
Peru
Italy
Czech Republic
Italy
Netherlands
Netherlands
France
France
France
France
France
France
Germany
Germany
Germany
Netherlands
Canada
Venezuela
Venezuela
Colombia
Colombia
Colombia
Colombia
Colombia
Brazil
Brazil
Brazil
Finland
Finland
Estonia
Poland
Argentina
Netherlands
3
DIRECTORS AND OFFICERS
Directors
Officers
Carol A. Williams
Special Advisor to the Chief Executive Officer (retired), President and Chief Executive Officer
Dow Chemical Company
Andres A. Lopez
Samuel R. Chapin
Executive Vice Chairman (retired), Bank of America
Merrill Lynch
Gordon J. Hardie
President (retired), Bunge Food & Ingredients
Darrow A. Abrahams
Senior Vice President, General Counsel and Corporate
Secretary
Arnaud Aujouannet
Senior Vice President and Chief Sales and Marketing
Officer
Peter S. Hellman
President and Chief Financial and Administrative
Officer (retired), Nordson Corporation
Giancarlo Currarino
Senior Vice President and Chief Technical Operations
Officer
John Humphrey
Executive Vice President and Chief Financial Officer
(retired), Roper Technologies, Inc.
John A. Haudrich
Senior Vice President and Chief Financial Officer
Anastasia D. Kelly
Managing Partner (Americas), DLA Piper
Vitaliano Torno
President, Business Operations and O-I Europe
Andres A. Lopez
President and Chief Executive Officer, O-I Glass, Inc.
Alan J. Murray
Managing Board Member for North America (retired),
Heidelberg Cement AG
Hari N. Nair
Chief Executive Officer, Anitar Investments LLC
Joseph D. Rupp
Chairman of the Board (retired), Olin Corporation
Catherine I. Slater
Senior Vice President, Global Cellulose Fibers and IP
Asia (retired), International Paper Company
John H. Walker
Non-Executive Chairman, Nucor Corporation
COMPANY INFORMATION
Exchange Listing
O-I Glass, Inc. common stock (symbol OI) is listed on
the New York Stock Exchange.
Annual Meeting
The annual meeting of share owners will be held
virtually on Tuesday, May 11, 2021 at 9:00 a.m. EDT.
See the 2021 Proxy Statement for further information.
Transfer Agent for Common Stock
Correspondence should be mailed to:
Computershare
P.O. Box 505000
Louisville, KY 40233
Overnight correspondence should be sent to:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
Computershare website:
http://www.computershare.com/investor
Phone: (781) 575-2724 or 1-877-373-6374
Hearing-impaired: TDD 1-800-952-9245
Forms 10-K and 10-Q
The Company’s Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q, filed with the
Securities and Exchange Commission, may be obtained
without charge by contacting:
O-I Glass, Inc.
Investor Relations
One Michael Owens Way
Perrysburg, OH 43551
Phone: (567) 336-2400
These reports are also available without charge on the
Company’s website at www.o-i.com
Any inquiries regarding your account or certificates
should be referred to Computershare Trust Company,
N.A.
Website
For further information about O-I, visit the Company’s
website at www.o-i.com
Annual Certifications
The most recent certifications by the Chief Executive
Officer and the Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 are
filed as exhibits to the Company’s Form 10-K. The
Company has also filed with the New York Stock
Exchange the most recent Annual CEO Certification as
required by Section 303.12(a) of the New York Stock
Exchange Listed Company Manual.
Corporate Headquarters
O-I Glass, Inc.
One Michael Owens Way
Perrysburg, OH 43551
Trustees
U.S. Bank, N.A.
Global Corporate Trust Services
60 Livingston Avenue
EP-MN-WN3L
St. Paul, MN 55107-1419
5.375% Senior Notes, due 2025
5.875% Senior Notes, due 2023
6.375% Senior Notes, due 2025
6.625% Senior Notes, due 2027
Deutsche Trustee Company Limited
Winchester House
1 Great Winchester Street
London, England EC2N 2DB
3.125% Senior Notes, due 2024
2.875% Senior Notes, due 2025
Deutsche Bank Trust Company Americas
Global Securities Services
Global Transaction Banking
60 Wall Street, 16th Floor
New York, New York 10005
4% Senior Notes, due 2023
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