Slide 1: Safe harbor comments
Safe harbor comments 2 Regulation G Management believes that its presentation and use of certain non-GAAP financial measures, including adjusted EPS and free cash flow, provide relevant and useful information, which is widely used by analysts, investors and competitors in the industry, as well as by
Slide 2: Leading positions in key global markets
3 Leading positions in key global markets #1 position in North America MATURE MARKETS #1 position in Australia and N. Zealand #1 position in Europe #1 position in Latin America EMERGING MARKETS Foothold in China Leading position within Southeast Asia
Slide 3: Trusted by the world's leading and emerging brands
4 Trusted by the world’s leading and emerging brands Strong partnerships Consolidation across the food and beverage industry requires increased efficiencies across the value chain Proliferation of new (potential) customers and brands entering the market provides great opportunity for glass Increasin
Slide 4: Why O-I? Investment thesis
Why O-I? 5 Investment thesis Global leader in glass packaging Well positioned to modestly grow volume Secular trends support glass growth Select opportunities for smarter growth Comprehensive strategic plan Positioned to increase adjusted EPS1 and free cash flow to deleverage balance sheet and drive
Slide 5: End market demand trends
6 End market demand trends NORTH AMERICA EUROPE Growth in premium products and high-end beer offset decline in megabeer Well balanced supply and demand Stable industry demand Solid export trends, given FX rate Continuing, but less intense, price dynamics LATIN AMERICA Attractive growth trends in Mex
Slide 6: Solid progress on strategic initiatives
On track to deliver incremental segment operating profit of ~$50M to ~$70M Improved year-on-year manufacturing efficiencies at two-thirds of plants Reduced unscheduled downtime Created new global supply chain lead and global network Launched Key Account Management Trained >250 cross-functional, glob
Slide 7: Acquisition update: Continued strong operations
Strong business performance continues New Monterrey furnace is at full output and performing well Supplying the fastest growing beer segment in the U.S. Synergy realization is on target: productivity and cost savings 8 Acquisition update: Continued strong operations
Slide 8: Commitments on track
9 Commitments on track Key targets are on track: Annual organic volume growth of ~1% Annual margin expansion +100 bps1 Adjusted EPS2 $2.25 - $2.35 in 2016 Free cash flow3 ~$300M in 2016 Deleveraging Track towards ~3x leverage4 by YE18 1 Defined as segment operating profit divided by segment sales 2
Slide 9: 2Q16 adjusted EPS outlook
2Q16 adjusted EPS outlook 10 2Q15 Adjusted EPS1 $0.60 Currency Impact ($0.04) Assumptions:2 EUR = 1.11; BRL = 3.57; COP = 3,068; AUD = 0.72; MXN = 18.4 2Q15 Adjusted EPS in Constant Currency2 $0.56 Europe Higher sales and production volume; lower costs North America Acquisition benefits; solid legac
Slide 10: Asbestos: limited, declining liability
Asbestos liability on balance sheet represents current estimate of total asbestos-related liability1 Year end 2015 asbestos liability was 30% lower than year end 2012 Average age of claimant is >80 years old Total Asbestos-Related Liability1 Asbestos: limited, declining liability 11 1 year 1 Asbesto
Slide 11: O-I: Disciplined allocation of strong cash flows
12 O-I: Disciplined allocation of strong cash flows Strong cash flow generation, invested Capex JV w/ CBI NCI1 Share buybacks Net debt reduction Asbestos payments $130 $20 $80 1 NCI represents distributions paid to noncontrolling interests. Internally Capex JV with CBI in Mexico Externally (liabilit
Slide 12: 2016 management priorities
2016 management priorities 13 Establish and maintain revenue and operational stability Improve commercial and end-to-end supply chain performance Maximize the value of the Vitro F&B acquisition Leverage an enterprise approach and ensure accountability Strategic Improve margins and earnings Generate
Slide 13: 2016 management priorities
MMMM 2016 management priorities * Establish and maintain revenue and operational stability = Improve commercial and end-to-end supply chain performance = Maximize the value of the Vitro F&B acquisition = Leverage an enterprise approach and ensure accountability * Exercise a balanced approach to volu
Slide 14: Q&A
mmm Q&A Gil Serving the World’s Leading Food & Beverage Brands
Slide 15: Reconciliation to expected adjusted earnings - FY16 Fcst
16 Reconciliation to expected adjusted earnings - FY16 Fcst The reconciliation below describes the items that management considers not representative of ongoing operations. Unaudited Low End of Guidance Range High End of Guidance Range 355 $ to 372 $ Items management considers not representative of
Slide 16: Reconciliation to adjusted earnings and constant currency
17 Reconciliation to adjusted earnings and constant currency The reconciliation below describes the items that management considers not representative of ongoing operations. Unaudited Three months ended June 30 2015 42 $ 5 Restructuring, asset impairment and related charges 22 Strategic transaction
Slide 17: Reconciliation to free cash flow
Reconciliation to free cash flow 18 Note: Management defines free cash flow as cash provided by continuing operating activities less capital spending (both as determined in accordance with GAAP). Reconciliation to Free Cash Flow $ Millions Year ended December 31 2016 Fcst 2015 2014 2013 2012 2011 20
Slide 18: Pension accounting impacts annual EPS
1 Related to the “amortization of actuarial loss” component of pension expense, which is included in GAAP EPS and adjusted EPS 19 Pension accounting impacts annual EPS Sustained non cash pension expense reduces EPS by ~ $0.401 Actively managing pension liabilities $0.40 impact $0.00 $0.50 $1.00 $1.5
Slide 19: Impact from currency rates
Impact from currency rates 20 Estimated translation impact on annual EPS from 10% FX change Euro $0.10 Mexican peso $0.07 Brazilian real $0.05 Colombian peso $0.03 Australian dollar $0.05
Slide 20: Impact from currency rates
MMMM =|mpact from currency rates Euro Mexican peso Brazilian real Colombian peso Australian dollar Ci ated translation pact on annual EPS from 10% FX change $0.10 $0.07 $0.05 $0.03 $0.05 20