Good morning, welcome to the O-I Glass second quarter 2023 earnings conference call. My name is Carla, and I will be the operator of today's call. If you would like to register a question for the Q&A portion of today's call, please press Star followed by One on your telephone keypad. When asking your question, please ensure your telephone is unmuted locally. To revoke a question, you can press Star followed by Two. I will now hand the call over to your host, Chris Manuel, Vice President of Investor Relations, to begin. Please go ahead when you're ready. Thank you, Carla, welcome everyone to the O-I Glass Second Quarter 2023 Earnings Conference Call. Our discussion today will be led by Andres Lopez, our CEO, and John Haudrich, our CFO. Today, we'll discuss key business developments and review our financial results. Following prepared remarks, we will host a Q&A session. Presentation materials for this call are available on the company's website. Please review the safe harbor comments and disclosure of our use of non-GAAP financial measures included in those materials. Now I'd like to turn the call over to Andres, who will start on slide three. Good morning, everyone, and thanks for your interest in O-I. We are pleased to announce strong second quarter results despite more challenging macro conditions. Last night, O-I reported adjusted earnings of $0.88 per share, which exceeded our guidance range and represented a 20% increase from prior year results. Adjusted earnings benefited from favorable net price, as well as solid operating performance and our ongoing margin expansion initiatives. As expected, sales volume was down, primarily due to a slower consumer consumption and customer inventory stocking. Likewise, we did incur some additional costs for temporary downtime to balance supply with demand, as well as planned asset project activity. In addition to a strong results, we continue to advance our strategy despite more challenging macros. Our margin improvement efforts are well ahead of plan, and all other initiatives remain on track, including our expansion plans, development of breakthrough technology, and deleveraging efforts. Reflecting very good year-to-date performance, we have tightened our full-year guidance and now expect adjusted earnings will range between $3.10 and $3.25 per share. We have also provided third quarter adjusted earnings guidance of $0.68-$0.73 per share, which represents a solid increase from third quarter last year. John will expand on our financial performance and outlook a bit later. Let's move to Slide four and discuss recent sales trends, starting with the chart on the left. O-I segment sales increased 7% from the prior year as the benefit of higher selling prices more than offset lower sales volume, which was consistent with our expectation heading into the quarter. Price was up 13% from last year, primarily reflecting structural increases like annual price adjustment formulas and contract negotiations, as well as the annualized benefit of prior year pricing actions. Additionally, current year open market increases are offsetting the incremental cost inflation we are incurring this year. On the other hand, sales volume was down 9% from the prior year period, which is on the high end of our most recent guidance. We attribute about half of this decline to lower consumer consumption, while customer inventory stocking and our internal constraints accounted for the balance of the shift. Shipments were down about the same across both the Americas and Europe, but our decline was concentrated in certain categories and geographies. Around 30% of our decline was in the wine category, which was most pronounced in Southern Europe and primarily reflects our record-low inventory levels. Beer accounted for a little over a quarter of our volume drop, most notably in Northern Europe, reflecting softer local consumption as well as lower global demand, as many of those brands are exported around the world. Additionally, inventory stocking led to lower shipments of beer bottles across Latin America, despite solid consumption trends. Finally, the spirits also represented about a quarter of our decline, with a noticeable drop in Mexican tequila as a strong consumption activity has moderated recently. As illustrated on the right, Nielsen data indicates mixed consumer consumption trends. Importantly, this data only reflects retail demand, and we believe on-premise consumption has been robust. On a year-to-date basis to May, consumer retail purchases declined the most in US wine and European beer, while beer in Mexico and the U.S. was down modestly. On the other hand, a number of markets continued to grow, including beer in both Brazil and Colombia, as well as spirits in the U.S. As noted, consumer consumption did show some initial signs of improvement in certain categories in June and July. Our July sales volume was down, but a bit better than we saw in the second quarter. At this point, we anticipate third quarter shipments will be around mid-to-high single digits, with further improvement in the fourth quarter. Overall, we expect volume trends will remain choppy for a while as we exit the stocking phase and our customers calibrate to mixed and evolving consumer patterns. Let's discuss long-term glass growth trends on slide five. For the past several years, we have seen some of the strongest glass fundamentals in decades, reflecting megatrends that benefit glass, including premiumization, health and wellness, and sustainability.... Additionally, at-home dining picked up during COVID and remains above pre-pandemic levels. While O-I's volumes were under pressure in the past, our shipments, including JVs, increased about 1.5% a year on average during the 2016 to 2022 period, reflecting these favorable trends. As illustrated on the right, there have been many ups and downs during this period, given significant ongoing market volatility. Shipments were disrupted by the pandemic and rebounded as COVID subsided, and customers prioritized security of supply. Yet again, the current economic downturn has disrupted demand. Certainly, we will contend with some short-term challenges. However, we expect shipments will be up in 2024, aided by our expansion projects, which are supported by long-term contracts. Currently, it is unclear if the improvement will be robust or more moderate, which will depend on the timing and shape of the broader market recovery. Over time, we expect demand will grow between 1% and 3% a year across the markets that we serve, which is consistent with third-party projections and the long-term trend we have seen since 2016. In summary, we remain encouraged by federal mega trends, our future expansion plans, and our customers continued a strong interest in growing their business in premium, brand building, and sustainable glass containers. Let's discuss the status of our 2023 strategic objectives on slide six. Overall, our key initiatives are progressing well. Second quarter segment operating profit margins approximated 17.5%, which was a strong improvement from the prior year. Net price is more than double our annual target, and our margin expansion initiatives are on pace to exceed our 2023 goal. Our plans for profitable growth remain on target. This includes current year expansion plans and new projects set for next year, including our first MAGMA Greenfield, which should be commissioned by mid-2024. Importantly, MAGMA development is progressing well, and we successfully completed market testing and initial qualification of our first ULTRA bottles, which opens the door to broader deployment of this new lightweighting technology. Finally, our ESG and glass advocacy efforts are progressing nicely, and net debt leverage should end the year comfortably below three times. I'm highly confident these efforts will advance our strategy as we continue to transform O-I. Now, I turn it over to John to review financial matters, starting on page seven. Thanks, Andres. Good morning, everyone. O-I reported second quarter adjusted earnings of $0.88 per share, which exceeded both prior year results and guidance. As noted on the left, we have posted year-over-year improvement across all key financial measures. Segment operating profit was up in Europe and about stable in the Americas, as global segment operating profit totaled $326 million, representing a 27% improvement from last year. As Andres noted, margins approximated 17.5%, up 270 basis points from the prior year. As you can see on the right, segment operating profit benefited from structural price improvements, as well as very good operating performance and our margin expansion initiatives. These benefits more than offset lower sales volume and higher operating costs due to unfavorable inventory revaluation and planned asset project activity. Likewise, we did curtail some production to balance supply with lower demand. The Americas reported segment operating profit of $126 million, which was in line with the prior year. Earnings benefited from good commercial contract execution and solid operating performance, while sales volume was down, as Andres noted. Higher costs reflected planned project activity, temporary production curtailment, and unfavorable inventory revaluation. In Europe, segment operating profit was $200 million, up significantly from the prior year. Higher earnings reflected favorable net price, which more than offset lower sales volume. Solid operating performance and margin expansion initiatives substantially offset the impact of some temporary production curtailment. The chart provides additional details on non-operating items, which were pretty stable except for higher interest expense. Yet again, the company delivered strong earnings and margin improvement despite a highly volatile macro environment. Let's move to page eight and discuss our business outlook. We have tightened our 2023 full year guidance range, reflecting very good year-to-date performance. We now expect sales will be up substantially this year, and adjusted earnings will approximate $3.10-$3.25 per share, which represents a significant increase from prior year results and the initial outlook we provided at the start of the year. We expect free cash flow will approximate $175 million, which is also an increase from our initial guidance. Keep in mind, this outlook does account for some potential variability in sales volume and working capital trends over the second half of 2023. Looking at the balance of the year, we expect third quarter adjusted earnings will approximate $0.68-$0.73 per share, which represents a solid increase from prior year results. We are setting initial fourth quarter guidance at $0.25-$0.35 per share, which is down compared to $0.38 in the prior year, primarily due to a higher tax rate, which we estimate could be an $0.08 year-over-year headwind. Likewise, our outlook remains conservative, given elevated macro uncertainty. The chart provides additional details on full year and quarterly guidance. Just as we have seen over the past three years, the company continues to manage well through elevated volatility.... While volume trends remain uncertain, we intend to manage the leverage under our control and deliver on our business outlook. Overall, we remain optimistic and expect strong performance in 2023, and believe performance will continue to improve in 2024. Moving to page nine. Certainly, our year-to-date performance is very strong, which builds on consistent progress over the last several years. This trend reflects a comprehensive approach to enable sustainable earnings and cash flow performance improvement across a number of key operating levers. The top line is up, segment operating profits and margins are strong, we have improved our business portfolio, and our balance sheet is in the best place in over a decade. As a result, we have either met or exceeded street expectations for 12 consecutive quarters. Importantly, we are confident our efforts will enable sustained earnings, margins, and cash flow improvement in 2024 and into the future. Let me wrap up by covering our capital allocation priorities. I'm on page 10. Improving our capital structure remains our top priority. As noted, the balance sheet should end the year below 3x leverage, and we expect to attain our target of 2.5x leverage sometime next year. Our second priority is to fund profitable growth, including our current $630 million expansion program. Returning value to our shareholders is our final priority. In addition to our ongoing anti-dilutive share repurchase program, we may consider reinstating a dividend and/or additional share re-repurchases as we get closer to our leverage target next year. Back to Andres for concluding remarks on page 11. Thanks, John. In conclusion, we are pleased with our second quarter adjusted earnings, which were up 20% from last year and exceeded guidance despite a more challenging macro environment. We are delivering on our commitments, which demonstrates improved agility, resilience, and strong execution. In addition to very good performance, we continue to advance our strategy. With a strong first half, many of our key initiatives are tracking favorably to plan. Likewise, we have tightened our full year guidance and expect adjusted earnings will be up a robust 35%-40% this year. In fact, we are well on our way to delivering our best performance in the past 15 years. Importantly, we anticipate future earnings will continue to improve as we leverage the strong foundation established over the past several years. Finally, I believe O-I represents an attractive investment opportunity as we further strengthen our financial profile, successfully execute and leverage our transformation program, enable long-term profitable growth, advance breakthrough innovations like MAGMA and ULTRA, and further leverage our sustainability position to win in the new green economy. We are confident this strategy will create value for all stakeholders and support future shareholder-friendly capital allocation. Thank you. We're ready to address your questions. Thank you. If you would like to ask a question, you may do so by pressing star followed by one on your telephone keypad. To revoke your question, please press star followed by two. When preparing for your question, please ensure your phone is unmuted locally. Please limit yourself to one question and one follow-up question. If you have any additional questions, you may rejoin the question queue. Our first question comes from Ghansham Panjabi from Baird. Your line is now open. Please go ahead. Yes. Hey, good, good morning, everybody. Good morning. I guess, you know, first off, from inventory, apart from inventory destocking, a lot of your major customers are calling out point-of-sale weakness, on the volume side in a variety of categories, including Diageo earlier this week on the spirit side. You know, clearly, 2023 is a big reset year for you from, from a volume perspective as inventories adjust along the supply chain. At this point, you know, are you anticipating volume improvement in 2024? And if so, in which categories? Yes, Ghansham. We shared some details during the opening remarks about demand, but I would like to emphasize a couple of things. The first one is there is a general pattern across markets with softer consumer consumption as well as supply chain destocking. That applies everywhere. Now, I would like to highlight two markets. Southwest Europe is the one with the largest drop in volume year-on-year, but it's driven primarily by low inventories in O-I, which last year we had available to serve incremental demand, and this year we don't. That creates unfavorable year-on-year comparison. However, this market is quite healthy, and wine, which is a very important segment over there, is quite strong. The other market is the Andean market as well as Brazil, where overall consumer consumption is good. The challenge there is that because of the supply chain constraints over the last two years, customers imported a large amount of empty glass, and now they're using that glass, reducing the demand for the local supply, which is a very temporary situation. The market is good. In fact, just as an example, in Brazil, glass is growing year to date, 4.4%, and is, is ahead of every one of the substrates. Pretty healthy markets. They're going just through a temporary adjustment. Now, the overall sales volume obviously is choppy, it's difficult to predict, however, we saw some improvement in July. Now, if we look at the best information available today, we're seeing improvement in the second half in 80% of the markets we serve. Some markets will improve along the, the second half, some will start to improve in Q4, but this improvement is gonna carry into 2024. ... I think we're going through a temporary adjustment, but we're seeing some signs of starting some recovery and move up as we go later in the year and into 2024. You know, building on that, Ghansham, is we, we do have our expansion programs coming online substantially next year. We know we have our first two projects this year, one in Colombia and one in Canada, you know, they're coming on, and that'll be in full swing next year. Then we have additional expansion underway in Peru and Brazil, Scotland, as well as in Kentucky with our first MAGMA facility mid-2024. All of those, you know, if you take a look at that, that's embedded probably about 3% ± type of growth on a year-on-year basis of just additional volumes coming through them. As we've said many times in the past, that brings in, once they're fully in scope on an annualized basis, about $115 million-$120 million of, of profit for the business. That'll be a good shot in the arm on top of the recovery that Andres was talking about next year. Okay, terrific. Then in terms of the curtailment, curtailment impact on operating profit, you know, what was that number in 2Q? I'm sorry if I missed that, if you gave that out. What are you also embedding for the back half of the year? I'm just trying to get a sense as to why 4Q EPS, you know, just based on what you've guided to, would be the lowest since the mid-2000s. Just so, so one thing just on that last part, on the fourth quarter, keep in mind, I put it in, in the prepared comments, is we will have a, a fairly high tax rate in the fourth quarter, probably in the mid-30s. It's just a matter of, you know, the timing of, of, of various elements, withholding taxes and, and regional earnings mix. That's about a $0.08 impact on the fourth quarter. If you normalize for that, operating profit is gonna be pretty consistent with last year's. Just to give you a sense in that regard. Keep in mind, it's a little bit of an aberration there. If we take a look at the curtailment costs, we had about $25 million plus of curtailment costs in the second quarter. It was skewed to the Americas, and that's why you would see, you know, some of the higher operating costs, you know, hit there in the second quarter. Just as a sense of, you know, sensitivity on curtailment, every 1% that we adjust our production levels to correspond with sales volume adjustments is anywhere from a $3 million-$7 million impact on EBIT on a quarterly basis. It really depends whether you're taking lines down or cold furnaces and things like that. As we take a look in the back half, you probably to rebalance the inventories, from, you know, that started to build up for the first half of the year, and also to address some of the, you know, that sales volume, you know, pressure that we see in the back half of the year. You're looking at anywhere from, you know, call it $30 million, in the third quarter that will be absorbed, and that is absorbed in our outlook. Then we might have a similar level in the fourth quarter that's also absorbed in our outlook. I'd say again, there could be some swing factors as we get, and get a better understanding of the sales volume in the back half of the year. So despite, you know, obviously absorbing, you know, the, now the sales volume as well as the, the, the curtailment costs, you know, we're actually posting pretty good numbers, in the back half of the year. Thanks, Ghansham. Our next question comes from George Staphos from Bank of America. Your line is now open. Please go ahead. Hi, thanks for the details, hope you're all having a good morning. I guess if we go to slide 4, Andres, you talked about some of the curtailments, excuse me, some of the constraints that you had. Is there a way by, you know, within wine in Europe, and you mentioned also in South America, you know, what the effect of constraints were in some of your most important markets? You had it in total, you know, for example, the, you know, 2% you said overall, but how did that break down in terms of some of your more important categories? Again, to Gansham's question, should we expect that that reverses next year? Yeah. So the, you know that the Andean market, as well as Brazil, are very important for us, and what we're seeing in both markets, it's, it's a pretty healthy demand. Now, you would imagine the imports of empty glass were quite substantial because of how tight the supply chain was over the last two years. That got to be consumed, and it's, it's being consumed at this point. Now we're seeing with some recovery, for example, in the Andean countries, coming back to supply the key products that are growing in that market, in the premium segment. Again, and we expect this to normalize over the next two to three months. That market should contribute well, Brazil to Southwest Europe. Once we get into more favorable comps, we won't see this drop that we're seeing at this point in time. The North America market, it's been doing fairly well, I think in part because we've been diversifying away from beer into growth categories. Even the mega year, it's been flat. It's been lower in on, off-premise and higher in on-premise, fully offsetting each other. We see a strength in the markets. I think we are in a transition point right now, as we go into the second half, we should start seeing these important markets starting to rebound and then continue all that into the fourth quarter and 2024. Yeah, to build off that. I just... I guess, John, I would say that the 2%- Yeah -from capacity and inventory constraints, for total, can you give us a number for some of the bigger end markets or regions? That's kind of what I was getting at there. Yeah, yeah, it was almost all wine in Southwest and Southeast Europe. Okay, basically Southern Europe. That's where we had our constraints. It was a record low inventory specifically in those markets. If you go back to the first quarter, we had issues in the West Coast of the US because of the weather and strikes down and civil unrest down in Peru and things like that. That did not translate over into the second quarter. Our issue from a constraint standpoint, was specifically in wine in Europe. Okay. What I would say with some of the, with some of the softness that we're seeing right now, we are able to catch up on some of the, the lower inventories, and as a result, I think that we're being in a, a much better position in the second half of the year to serve wine. Then to your other question, in the next year, I think we, again, should be in much better position. Thanks, George. Our next question comes from Anthony Pettinari from Citigroup. Your line is now open. Please go ahead. Good morning. Good morning, Anthony. Hey, just, just following up on Ghansham's question, and I guess, George, just a little bit. You know, on the previous earnings call, you talked about, you know, continued improvement in 2024 in earnings and free cash flow. You know, I guess three months later, you know, some things have changed, and there's some, some puts and takes. I'm just wondering if you could talk about, you know, level of confidence about year-over-year earnings growth in 2024, and maybe what could get you to sort of a, a higher end of, of earnings growth, or what could cause earnings to maybe not grow next year? Yeah. Yeah, sure, Anthony. I, I think there's three primary levers as we look into next year, two of which I, I think that we, we believe are more or less in our control, and we have, you know, good confidence around. The other one is a little bit more macro. The first one is on sales volume. You know, you know, back to our expectation next year, we, we feel pretty confident about the growth of the new expansion capital, which, you know, let's, let's say ±3%. You know, that's something in our control. It's contracted business with our customers and, and things like that. Not to mention, what is the shape of the recovery, right? I mean, at this point in time, we don't know whether it will be, as we said in the comments, a, a V-shaped recovery, which would have a robust recovery in the overall volumes next year because of the expansion plus the recovery, or whether it would be more moderate with the expansion of-- driven by the expansion of our business and in a slower macro recovery. That's a little bit of a swing factor, I think, between whether it is a moderate or a robust benefit to the performance next year. The next area, again, within our control, is our margin expansion initiatives. We've done really good on those. You know, as you, as you know, in the past, we were targeting about $50 million a year. We're targeting $100 million this year and should exceed that, with a lot of focus on North America. We believe that program has legs, including more progress in North America that we're doing this year and next year, which gives us some good annualized benefits. I think that's a good shot in the arm, too. Then when it the third variable is kind of what happens with net price. At this point in time, we are just anticipating neutral net price. If you look at how that works in our business, 55% of our business is under long-term agreements with price adjustment formulas, and we are still incurring 6%-7% inflation this year, which will be substantially recovered in that book of business next year. That's a pretty substantial amount of net price. Against probably what is a declining, you know, inflationary environment over time, which ultimately would suggest maybe higher net price, but let's just call it even because there might be some softness in, in the, the open market business with the softer volumes. It's too early to tell with that. That comes together more later in the year. Those are the three the three variables we look at, two in our control, and we're pretty confident about being able to deliver those in the next year, and the other one, a little bit more macro-driven. Okay, that, that's very helpful. Then maybe just one quick follow-up. You know, the 2%-3% headwind from customer destocking, is it possible to just give a sense of how much inventories you think customers may be carrying? You know, is this sort of like a one-quarter impact or two-quarter impact? I'm just trying to get a sense of, you know, customer inventory levels. You know, I, I... Anthony, what I'd say is that we serve many different end-use categories, all of which have different approaches on inventory. You, you go to beer, and there's only a few weeks, generally speaking, of finished goods in, in the chain, and, and that tends to correct pretty quickly. You're talking into, you know, foods may be a little bit more moderate, spirits and other categories, a little bit longer, right? And some of the ones that, that ship internationally end up having much longer, you know, you know, value chains and, and different levels of inventory. I don't know if there's a simple answer to that, but we believe that, you know, at this point in time, we're starting to see a transition, you know, kind of shifting out of the destocking phase and translating into what probably is much more associated with fundamental consumer consumption patterns, which we think, as you see with the Nielsen data and whatever, is down a few percent fundamentally. Yeah. Looking at the Andean countries, that inventory has been pretty much consumed. When we look at Brazil, it, we should have finalized consuming that in the third quarter, seeing a positive impact in the fourth. Mm-hmm. Yeah. Thanks, Anthony. Our next question comes from Michael Roxland from Truist Securities. Your line is now open. Please go ahead. Thank you, Andres, John, Chris. Congrats on a good quarter despite the backdrop. Thanks. Thank you. Thanks, Mike. Just want to get, you know, to follow up on some of these questions about the destocking. Can you talk about the cadence of destocking in Q2? Sounds like it started in January, volume was declined sequentially through April. I think you saw some improvement in May, if I recall correctly from your last call, and then it started to soften again in June. Can you talk about what happened during Q2 itself? You mentioned July has improved. Can you quantify that improvement in terms of destocking on a sequential basis as well? One, one thing I would say, it's, it's difficult for us to quantify on a month-to-month the destocking cadence per se. I mean, what we saw in our overall volumes is, is, is that April was a tough month, probably down, you know, low double digits. We, we, we saw, you know, May kind of bounce back to kind of -6%, -7%. Then you saw, you know, June down that high single digits and things like that. It's, it's been really choppy, and, and that's, that's what makes it a little bit difficult to, to read through everything. I'll tell you what, destocking tends to be a pretty, you know, choppy environment, especially when it's at the tail end and people are starting to calibrate from destocking over to fundamental demand patterns. That kind of gives us some sense that we're probably in the later stages of the destocking phase. Yeah, as we mentioned before, we're seeing about 80% of the markets we serve showing some form of improvement at this point. Some of them starting in Q3, some of them in Q4, for sure going into 2024. Got it. Thank you for that. Just one quick follow-up on the 2024 outlook. John, appreciate the color you gave in terms of things in your, in your control, not in your control. If I try to quantify it, price cost, possibly, you know, look assume neutral, maybe put some, some tailwinds there. You get incremental EBITDA growth through your expansion projects, call it $115 million-$120 million, and then you get the MEI benefits of $100 million. Is that the right way to be thinking about your sequential or year-over-year improvements in EBITDA from a- on a quant basis? Yeah. Mike, I don't want to get into specific numbers. We haven't really provided 2024 guidance per se. What I would say is if you take a look at, you know, on the expansion projects, it's a total of about $120 million over the life of it on a run rate basis. I don't know if we're going to get all of that next year because we had some this year. We'll have some next year, and then we'll have a follow into 2025. I think you're probably right about the margin expansion initiatives. I think we're looking at a robust number there. Then again, it's a little early to call the net price, and, like I said, at this point in time, we're just assuming it's neutral. Thanks, Mike. Our next question comes from Arun Viswanathan from RBC Capital. Your line is now open. Please go ahead. Great, thanks for taking my question. I just wanted to ask about the demand environment. You know, I think during the quarter, you guys did note some, some softening in certain markets, maybe some of the higher velocity, or sorry, the lower velocity, you know, spirits markets, and some other areas where you'd seen some strength before. Could you just give us an update, maybe on what you're seeing across some of your major categories and what you expect over the rest of the year? Thanks. Yeah. The... When we look at categories, the, the largest impact that we've seen so far is in wine, and, as we mentioned before, is closely related to low or high inventories. It's not as much the market itself, it's, it's those inventories which makes it very temporary. We've seen a decrease in beer in North Central Europe, and that's been primarily driven by lower consumption. We've seen some impact in spirits, in particular in Mexico, coming from a slower growth of the tequila category. Still growing, but not as fast as it was growing before. Thanks, Arun. Our next question comes from Gabe Hajde, from Wells Fargo Securities. Your line is now open. Please go ahead. Andres, John, Chris, good morning. Hey, Gabe. I wanted to- John, you, you left the door open a little bit, so I, I want to try to ask the question. In terms of sort of the, the more open market business that you referenced, obviously outside of the 55%, that's sort of on, on long-term contract, can you maybe break that out by geography, sort of what your exposure there is? Just sort of thinking about the supply-demand dynamics in, in the different regions. You know, we had some capacity come out of the market here in North America, so I, I feel like that market should be relatively snug. A similar comment in Brazil, but different, it's, it's growing, so, you know, should be pretty tight there. Europe is the one area where I think a lot of people are focused. It sounds like you do have some capacity coming back online, and then, you know, yourselves and some others are, are adding some. I, I think the stuff that's coming back online is trying to more localized production. Just sort of, you know, how you're thinking about, I, I guess the potential supply-demand dynamics going into 2024, and then, like I said, your, your kind of exposure to that open market business. Okay. Just to start with the mix of our contract base, okay? If, again, 55% of our business globally is under long-term agreements that have price adjustment formulas, and 45% is open market. That tends to be one-year type of agreements that get reset, you know, generally between November and February of each year in most cases. If you take a look at that regionally, in Europe, we have about 30% fixed and 70% open market. It's, it's, it's this one skewed to the open markets. Think, think a lot of wineries, right? And smaller customers in that regard. Over in North America, 90%-95% or whatever is under long-term agreements, multi-year contracts, with very small amount into the open market. If you get in, down into Latin America, and that area, it's probably 50/50, maybe skewed a little bit more towards contracted business. Then I think there's just a natural process of working through price with the open market activities, given the history of inflation in that region. That's kind of the mix of that category. I'll make some initial comments on capacity and then see if Andres wants to jump in on that too. On the capacity side, if you take a look globally, you know, we operate in Europe and the Americas, which is about a 40 million ton demand system. That's about 40 million tons of glass is consumed each year. There, over the next three years, to our understanding, there's about 2 million tons of announced new capacity coming online, and it's split all over the different markets. That's calling it 1.5%-2% of new capacity coming online on an annual basis, if you just kind of straight line it across the period of time. That's kind of in line with the overall fundamental growth position of the marketplace. Yes, some new capacity is coming along. We're about a third of that, and some of it's actually replacing outmoded capacity, so it's not necessarily all incremental expansion. If we take a look at that over the longer arc of multiple years, we think that it's a very responsible level of a capacity relative to the expected growth profile of the marketplace. Yeah, perhaps to complement, with regards to the new capacity coming in line at the end of the second half and in 2024 for O-I, part of that capacity is in the Andean countries with a strong consumer demand still, and the premium category growing really well. So that's a pretty, pretty good investment over there. Brazil, I mentioned before, the glass is up year to date, 4.4%. Premium beer, which is our index to glass, is up 15.5%. This market is pretty solid and will have some capacity coming up in 2024 over there. The other capacity goes to the U.K. to serve the Scotch market. We have a factory that is right at the center of that region, so very well located with very good long-term prospects for growth. The investment in Canada is under contract for localization of a volume that is already there, so it's a pretty low risk. The other one is in Kentucky to serve the growing U.S. local market and export market in the spirits business. We are in a good, very good place from a new capacity coming up for O-I. Thank you both for that. The, the second was that I wanted to dig in a little bit on ULTRA, and I, and I feel like this is maybe, I don't know, a topic that's, that's misunderstood or, or sort of glossed over. We had an opportunity to talk about it in, in the second quarter, it looks like you qualified some of that, those bottles down in, in Colombia here during the second quarter. Can you just talk about, what you guys are doing there, and then, maybe the opportunity to leverage that across your system? It, it seems like it's a little bit, less capital-intensive than, than MAGMA. I just wanna, you know, maybe how quickly you can deploy something like that across some of your other, factories and, and things like that. We've been very successful qualifying ULTRA in Colombia, which is where we did it recently. We are planning other investments, in this case, in Europe, where there is a strong interest in that. As you mentioned, the capital intensity of that investment is low, so that's, that's, that's quite good. Today, what we have is, is, is quite good, that is the early horizons of that. Remember that we are planning to go as high as 30% weight reduction, which will have a very positive impact on sustainability. We're gonna be fairly soon talking about further investments in ULTRA, which will, will help to position the glass container a lot stronger from a sustainability standpoint in the future. Gabe, to your point, I think, you know, the good, you know, good aspect of, of ULTRA is it can be scaled up quicker at lower capital intensity. As we, as we work on MAGMA, which we think is the ultimate, ultimate, you know, tool to address the marketplace, you know, bringing in ULTRA in, in a medium term, will really be able to, to give us a, a boost, as we, as we really lay the foundation for, for broader MAGMA deployment down the road, which will also include ULTRA. The good news about ULTRA is it can be retrofitted to our current base as well as being able to be used in MAGMA going forward, so it's a great tool. Thanks, Gabe. As a reminder, if you would like to ask a question, please press star followed by 1 on your telephone keypad. Our next question comes from George Staphos from Bank of America. Your line is now open. Please go ahead. Thanks very much. Just a quick follow on. In terms of the $59 million or so of cost, $56 million in the Americas segment, you said $25 million, I think, or so was curtailment. Can you parse the rest by, by category? Just a quick follow-on on the commentary about the imports of glass. I think you said Andres, into the Andean region. All of that glass from your vantage point would be one-way glass, or is anybody importing returnable glass? Then, if so, you know, how do we think about that relative to what your demand should be for, for next year? Thank you. Mm-hmm. Yeah, so George, on your first question, you know, the breakdown of the $50 some odd million in the unfavorable or higher costs in the Americas, $20 million of it was inventory revaluation, which I think we again identified during the previous call. About $10 million was elevated costs for asset project activity. Again, that was something that I think that was included in our guidance before. The other $20 million or thereabout is associated with the temporary curtailment downtime. That's the one thing that was not in our original guidance, obviously, that was added in the quarter. The imports of glass, George, are primarily one way, but there is a lot of new product development activity, both in one way and returnable in Andean as well as in Brazil. If we look at Brazil, returnable glass is growing 3%, 3.5%, 3.1% year to date, and is even going into premium products, which it's fairly new, so it's supporting the growth of premium. It's. We're seeing growth in both. The imports are primarily related to one way. We have no further questions. With that, I will now hand back to Chris Manuel for final remarks. Thank you, Carla. That concludes our earnings conference call. Please note that our 3rd quarter call is currently scheduled for November 1st. Remember, make it a memorable moment by choosing safe, sustainable glass. Thank you. This concludes today's call. Thank you for your participation. You may now disconnect your line.