Hello, and welcome to today's O-I Glass Full Year and Fourth Quarter 2024 Earnings Conference Call. My name is Bailey, and I will be the moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I'd now like to pass the conference over to Chris Manuel, Vice President of investor relations. please go ahead when you're ready. Thank you, Bailey, and welcome everyone to the O-I Glass Full Year and Fourth Quarter 2024 Earnings Call. Our discussion today will be led by our CEO, Gordon Hardie, and our CFO, John Haudrich. 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 the disclosure of our use of non-GAAP financial measures included in those materials. Now, I'd like to turn the call over to Gordon, who will begin on slide three. Thanks, Chris. Good morning, everyone, and thank you for your interest in O-I Glass. Today, we will walk you through our 2024 performance, our recent market trends, and our strategic initiatives, which we believe will drive solid recovery this year but first, I would like to take the opportunity to thank all my colleagues at O-I across the world for their efforts in 2024 and for their agility and focus in driving the changes needed to turn O-I around. 2024 was a challenging year for O-I. A sluggish market demand and macro conditions impacted our performance. Full-year adjusted earnings were $0.81 per share, slightly exceeding our most recent guidance range, but down from historically high performance in 2023. For the fourth quarter, we reported an adjusted loss of $0.05 per share compared to the adjusted earnings of $0.12 per share in the same period last year. These results reflected tough market conditions with sluggish demand, high in-home spirits inventories, especially in the U.S., overcapacity in certain European markets impacting net price. We also took aggressive inventory management actions in the second half of the year. While market conditions remained soft, demand has stabilized in recent months, and our fourth quarter costs and operating performance were better than anticipated, reflecting actions taken. This stabilization gives us confidence as we move forward. We are rapidly implementing our Fit to Win way of working, which is designed to improve our overall competitiveness by reducing our total cost of doing business, which will enable future sustainable growth. We believe these actions and the way of operating will significantly improve future earnings and cash flow. While our commercial outlook remains cautious until macroeconomic conditions improve and consumer confidence increases, we expect solid earnings improvement in 2025, driven by the benefits of our strategic initiatives. Specifically, we anticipate 2025 Adjusted EPS to be in the range of $1.20-$1.50 per share, representing a 50%-85% increase from 2024 levels. Additionally, we expect Free Cash Flow will be between $150 million and $200 million, a substantial improvement from previous year's cash use. Now, I will turn over to John to provide a review of the 2024 results. Thanks, Gordon, and good morning, everyone. As mentioned, 2024 was a tough year that impacted most of our key performance measures, as you can see on the chart. Yet, it was also a year marked by critical decisions and decisive actions to set the business up for future performance improvement and value creation. Net sales were down from the prior year due to a 2% decline in selling prices and 4% lower sales volume, reflecting the market factors Gordon discussed. Adjusted EBITDA was also lower given market headwinds, which led to additional temporary production curtailment in 2024 to align supply with softer demand and reduce our inventory levels in the second half of the year. The impact of curtailment was partially offset by lower corporate retained expense. Higher interest expense and tax rate also weighed on our full-year EPS. However, adjusted earnings of $0.81 per share was slightly higher than our most recent guidance, thanks to better operating and cost performance later in the year. Free cash flow was a $128 million use of cash, reflecting lower earnings along with elevated restructuring, interest, and tax payments. However, free cash flow was slightly favorable to our guidance range due to good working capital management, despite CapEx being above guidance. We were able to accelerate some in-flight capital projects, which set the stage for substantially lower CapEx spending in 2025, which we will review a bit later. While debt remained fairly stable, the leverage ratio increased to 3.9 times, reflecting lower adjusted EBITDA. Finally, our economic spread was WACC minus 2% versus plus 2% in 2023, which was in line with our previous communications and reflected softer earnings. The appendix includes more information on 2024 trends. We expect most of our key performance measures to improve significantly in 2025 as we implement our strategic initiatives. Let's review our fourth quarter 2024 performance on page five. O-I reported an adjusted loss of $0.05 per share in the fourth quarter, down from adjusted earnings of $0.12 in the same period last year. Net price was a headwind, although much less so than in the third quarter, and global sales volume was about flat as anticipated. Commercial headwinds were mostly offset by lower operating and corporate costs, thanks to early benefits from our cost reduction efforts. Consistent with the prior year, we temporarily curtailed about 17% of capacity in the fourth quarter to align supply with lower demand and rebalance inventories. Lower earnings also reflected an elevated tax rate due to a shift in regional earnings mix and minimum withholding tax requirements. Let's shift to segment profit, as illustrated on the right. Segment operating profit in the Americas was $96 million, compared to $93 million in the fourth quarter of 2023. Earnings benefited from a 5% growth in sales volume and lower operating costs, which was partially offset by unfavorable net price. Segment operating profit in Europe was $40 million, down from $75 million in the fourth quarter of 2023. This decline was due to unfavorable net price, a 5% decrease in sales volume, while operating costs were modestly favorable. Now, I'll turn it back to Gordon, who will discuss market conditions on page six. Thanks, John. As illustrated on the left of the slide, our shipment trend over the past few years reflected the broader business cycle that emerged during and after the pandemic. For background, we have shown consolidated volume with and without our strategic JVs. The chart on the right illustrates our quarterly shipment patterns over the past three years. Challenges began to surface in late 2022. However, after several quarters of unfavorable demand trends, shipments stabilized in the latter half of 2024. Notably, fourth quarter shipments remained flat compared to the previous year. During the fourth quarter, our shipments in the Americas increased by 5%, with all markets showing year-over-year growth. The strongest rebound was in Mexico and in Brazil. Conversely, shipments in Europe declined by approximately 5%, with the beer category experiencing notable softness. Wine and spirits also remained soft in Southwest Europe. As we enter 2025, we continue to maintain a cautious commercial outlook. There is still some way to go to align consumer real income with the inflation experienced over the past few years and to see destocking moderate across the value chain to pre-COVID levels, particularly in the spirits category. Fortunately, the year is starting off pretty well, with January sales volumes up low single digits from the prior year in both Europe and the Americas, coupled with disciplined cost management. Let's now turn to page seven. While near-term performance is under pressure given sluggish market conditions, we are rapidly implementing our Fit to Win priorities to boost performance. As previously discussed, this program will be implemented in two phases. In phase A, we are streamlining the organizational structure. In phase B, we are optimizing the supply chain. Both phases will boost competitiveness to allow us to access growth. We expect phase A will generate savings in excess of $300 million over the next three years. We are making rapid progress and have achieved $25 million of savings in the fourth quarter of 2024 and have increased our savings target to between $175 million and $200 million in 2025. We are working with urgency. During the fourth quarter, activity primarily focused on reshaping SG&A, driving productivity, and reducing excess inventory. With regard to organizational restructuring, we have made considerable progress delayering the structure, shifting accountability to local markets, and reducing central operating costs. Completed actions should yield targeted savings of $100 million in 2025. After reducing SG&A as a percentage of sales from 9% to 8% last year, we should land between 7% and 7.5% in 2025. More effort is underway as we aim to lower costs to less than 5% of sales on a run rate basis by 2026, representing an annualized savings of $200 million compared to 2024. As part of our initial network optimization efforts, we've either completed or announced the closure of 7% of capacity, which should be finalized by mid-2025. We continue to evaluate further opportunities to optimize the znetwork and will provide an updated I-Day. As a result, we are increasing our targeted savings to between $75 million and $100 million in 2025. With regard to reducing inventory, we cut inventory by $108 million in 2024 from the prior year levels. There is more work to be done, and we expect further inventory reductions by an additional $50 million to $100 million in 2025. As we execute phase A, we have commenced phase B. During this next stage of activity, we expect to generate value through total supply chain optimization by driving productivity across the fleet, closing high-cost operations, and transferring profitable volume into our remaining network. Efforts will also include end-to-end supply chain efficiencies, procurement productivity, operational improvements, and more disciplined sales force management. The cornerstone of phase B is our Total Organization Effectiveness program, which aims to optimize capacity utilization and productivity across the network. We have chosen Toano, Virginia, to be our first plant to go live in North America. We are very pleased by the early progress that has been achieved there thus far. These new ways of working should deliver further savings and higher margins, helping us achieve our 2027 performance targets. They should also streamline how we work with customers and suppliers, helping both parts of the value chain to be more efficient. With regard to MAGMA, we continue to ramp up production at our first greenfield line in Bowling Green, Kentucky. The achievement of key operating and financial milestones at this site over the course of 2025 will be critical as we chart the future of the MAGMA program. As we focus on these milestones at Bowling Green, we have paused the development of generation three. As with any capital project, MAGMA will be required to generate returns of at least WACC plus 2%. We will provide more details on our long-term strategic plan next month at our Investor Day. Now, let's move to page eight and review our guidance for 2025. While our commercial outlook remains cautious until macroeconomic conditions improve further and uncertainty around tariffs abates, we expect solid financial improvement in 2025, driven by the benefits of our strategic initiatives. As previously noted, we anticipate a 50%-85% increase in Adjusted EPS, driven by Adjusted EBITDA of $1.15-$1.2 billion, up from $1.1 billion in 2024. Sales volume is expected to be flat or down slightly. While we foresee a gradual recovery in the overall market, we may intentionally exit some unprofitable business as we optimize our network and drive higher economic profit. Net price will likely be a headwind as flat gross price is more than offset by low single-digit cost inflation. While prices should rise slightly in the Americas, we anticipate pricing pressure in certain areas across Europe due to lower demand and overcapacity in certain markets. Costs should decrease across the system, reflecting our strategic initiatives as well as higher production network utilization based on current commercial assumptions. However, please note that currency translation would be a clear headwind, assuming prevailing rates at the end of January, given a stronger dollar. Cash flow is expected to rebound to between $150 million and $200 million, reflecting higher earnings and lower CapEx, as previously discussed. The outlook does embed higher restructuring costs totaling $120 million as we optimize our network and organization structure. More details are provided on the slide. Please note that this outlook does not include the potential impact of recently announced tariffs, which remain uncertain at this early stage. Let's now turn to page nine. In conclusion, 2024 presented significant challenges for O-I, but also significant opportunities to initiate a program of self-help to improve the competitive position and earnings power of the business over the next three years. Markets also began to stabilize in the second half of the year. Our Fit to Win initiative is already yielding very positive results and should drive substantial improvement in operational efficiencies and financial performance in 2025. We are implementing our value creation roadmap across three horizons, which is illustrated on the right. We remain confident in our 2027 targets, which include achieving at least $1.45 billion in sustainable EBITDA, free cash flow of at least 5% of revenue, and an economic spread exceeding 2% of our cost of capital. Our commitment to optimizing our supply chain, working with suppliers and customers, enhancing productivity, and driving total enterprise costs positions us well for future success. We remain determined and dedicated to delivering value to our shareholders through disciplined execution of our business turnaround plan. Thank you for your continued support and confidence in O-I. We look forward to a promising 2025 and to your attendance at our next Investor Day on March 14th as we further outline our roadmap to restore value in O-I. We are now ready to take your questions. Thank you. If you would like to ask a question on today's call, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star followed by one. We politely request that you keep to one question and one follow-up before returning to the queue if you have any further questions. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question, and please do ensure that you are unmuted locally. Our first question today comes from the line of Ghansham Panjabi from Baird. Please go ahead. Your line is now open. Thank you. Good morning, everybody. You know, Gordon, can you just expand on the comment on signs of volume stability? Which end markets have you started to see signs of, you know, early stability, if you will? And also, just given the controversy around alcohol and the sort of the media crusade narrative, just give us a sense as to how big alcohol is for you specifically. And as you kind of think about the various verticals within alcohol, what sort of trends are you seeing at this point? Thanks. Yeah. In terms of alcohol in the portfolio, Ghansham, it's around 75% of the portfolio and about 25% in non-alcoholic beverages and food. In response to the first part of the question, it really is a story of two hemispheres, so in the Americas, we see, you know, volume growth, particularly in Brazil and Mexico and in Colombia, and we are starting to see early signs of growth in North America. Europe, we're seeing, as we pointed out, a 5% decline in sales, and we see choppy, you know, soft consumer demand, and we also see, you know, the impact of, you know, consumption decline in China with exports down of things like higher-end wines and cognacs and spirits to China out of Europe, so really, it's a story of two hemispheres: growth in the Americas and then, you know, sluggish to slight decline in Europe. Got it. And then in terms of your confidence level as it relates to the pricing component in 2025, I know there's always uncertainty on European pricing, especially, you know, this part of the year. Just in terms of the broader, maybe some broader comments as it relates to the competitive backdrop in Europe, you know, this year versus over the last couple of years. Thank you. Yeah. Again, it's a story of the two hemispheres. You know, in the Americas, we see that growth coupled with sort of tighter capacity utilization in all markets. And there's, you know, less, if no pricing pressure, and some pricing growth, actually. And then in Europe, particularly in Southwest Europe, where there is overcapacity, we are seeing, you know, some price pressure. But if we look at where we are in the cycle and if we look at where we said we would be in October, I think we're landing just where we thought we would be. I can add a little bit of color on that one too, Ghansham. You know, about 55% of our global portfolio is under long-term contracts with price adjustment formulas that play out every year. So that area is pretty stable in that regard. The other 45% tends to be local business that gets renegotiated on an annual basis. And as you referenced, the key area is over in Europe, where there's a lot of smaller wineries and smaller customers that negotiate every year. We're about, you know, between 65% and 70% done in that effort over in Europe. So if you take a look at the whole overall portfolio, we're probably 80% to 90%, you know, landed on our prices for 2025. So that gives us the confidence, building off of what Gordon says, that things are coming in line with what we expect and should be fairly stabilized, except for the remaining negotiations, which are rather minor given the full portfolio. Okay. Very helpful. Thank you. The next question today comes from the line of George Staphos from Bank of America. Please go ahead. Your line is now open. Thanks so much. Hi, everybody. Good morning. Thanks for all the details. My questions. How are you doing? I know it's impossible to peg with precision, but had there been a 25% tariff to the extent that you spoke with your customers and studied it, what effect would that have had on your volume during 2025? Again, if, you know, let's say it stayed on for a quarter or two, time it however you want. Relatedly in that question, how volume-dependent are your Fit to Win performance improvements? You know, I guess in some regard, they're going to be relatively unaffected, but at some point, volume affects everything. So how much of a shock absorber do you have to get those savings to the bottom line relative to the volume outlook? And then a quick follow-on. Yeah. Well, thanks for that, George. You know, as we said from the outset in July, you know, our Fit to Win program, you know, is not volume-dependent, okay? And I think that thesis is still intact. The self-help levers that we have, you know, they are largely with costs that we control and not dependent on volume. And we assume for the plan that we would have flat volume through the whole plan to 2027. But specifically with regard to tariffs, you know, there's a lot of uncertainty. And like everybody else, we've spent a lot of time thinking it over the last number of weeks and modeling things out. But if we look at our volume that crosses, we say, the Mexican border or Canadian border, it's about 2% of empty box, put it that way. We also have exposure to customers that either export from Canada or export from, you know, from Mexico. You can land in different places depending on what assumptions, because if there are declines in volumes into the U.S., you know, given consumer demand, that volume is going to be picked up by domestic beer. We have the largest network in the U.S., and therefore, you know, we would see positive exposure to growth in domestic brands, you know? We also expect, you know, talking to customers that, you know, should they have declines in one market, they are actively going to chase volume in other markets and look to deepen their penetration in markets in Latin America and in Europe, for example. So we, you know, we're talking probably exposure somewhere between, you know, $10 and $15 million number in that range, which, you know, by accelerating some of our initiatives, we would expect to cover. But there's a lot of uncertainty, as one could expect. And we have a number of scenarios planned, but that's kind of where we landed. The only thing I would add to that one is the only tariff, George, that we do know about right now is China. And there's about 1.4 million tons of empty glass that comes into the United States from export markets. The majority does come in from China. And we should have an advantage on that piece of the pie. And we'll see where the other parts come into play. Okay. Thanks, John. My follow-on is just a point of clarification. If we go to slide seven and we look at the network optimization savings for 2025, and it says $75-$100 million. And then I look at the right-hand bullet, the lower of the two in that section, it says, "Evaluating further opportunity to yield total savings of $75-$100 million." Is that basically addressing the $75-$100, or that means there could be an incremental $75-$100 million from, you know, efforts you discuss, evaluate, and talk to us about in March? Thank you. Yeah, George, I can clarify that one. The first bullet point, the actions that we've done, the 7% is about $75 million of benefit in 2025. We would anticipate potential actions bringing the cumulative number to $75-$100, as we show kind of in the middle column. Those two numbers are not additive, okay? Got it. Very good. Thank you so much. Thank you. Our next question today comes from the line of Anthony Pettinari from Citi. Please go ahead. Your line is now open. Good morning. One of the large can makers, I think, recently suggested that glass-to-metal substitution had maybe kind of run its course in North American beer, but maybe not in Europe. And I think the can makers have had pretty strong volumes in Europe. I'm just wondering, as you look across your portfolio, are there regions or categories where substrate substitution is either, you know, a meaningful headwind or tailwind in 2025? And just how you think about that dynamic? Yeah. You know, you know, from the outset, I think we've laid out that we need to reframe, you know, within our own business, you know, competition. And it's not just glass, but we, you know, have a clear drive to get much more competitive with cans. And, you know, from the analysis that we've done over the years, there's a clear sort of pattern that when glass gets to within about 15% of the cost of cans, then you see a quite measurable flow from cans back into glass. And, you know, history is a great teacher. And I think if you look back at the history of O-I in the U.S. and cans probably did not frame that competition sufficiently and focus on really, you know, getting the cost base and the cost competitiveness right. So, you know, armed with that knowledge, you know, we're taking the business forward with a view to getting competitive with cans in any market in which we compete with cans, yeah? So I think that's our approach. You know, when you look at food and beverage packaging, we say over the last 10 years, there's been some sort of solid growth. But most of that growth has gone to cans, and most of it has gone to cans because glass, and particularly O-I Glass, hasn't been competitive enough. And that's part of the rationale and the reason why we're embarking on the course we're embarking to get competitive, not just with glass, but to get competitive with cans and to offer our customers, again, the opportunity to put, you know, glass back in their portfolios in a greater proportion. One thing I'll flag up is just before Christmas, you know, we had the announcement that glass was now available for RTDs in 12 ounces, and that had not been the case for well over 20 years, and that opens up opportunities for glass volume growth in a category that's growing in, you know, mid-teen year on year and has been for a number of years, and so we see opportunities there for glass to penetrate RTDs in a way it never did over the last 20 years, so I think where we're focused on is getting competitive, not just with other glass competitors, but getting more competitive with cans overall. Okay. That's helpful. I'll turn it over. Thank you. The next question today comes from the line of Joshua Spector from UBS. Please go ahead. Your line is now open. Yeah. Hi, good morning. I wanted to ask about your plan for your energy contracts, or at least any update you can give as those start to come due in 2026. Just as we're trying to think about the bridging items to your Fit to Win plan, what's baked in for an assumption there in terms of that headwind? And are you doing anything now to potentially position yourself to offset that? Yeah. So I can give you, Josh, I can touch base on that to start with. You know, obviously, we don't want to get into 2026 and out periods. I mean, we just gave guidance for 2025. But I want to focus on, you know, what we are saying for 2027. You know, we have looked at the outlook for our business commercially, procurement energy, as well as Fit to Win and the initiatives we're doing there. That has landed the $1.45 billion and the other numbers that Gordon referenced earlier. So as we look to the future, you know, we have already identified over $300 million of benefits in Fit to Win. We're already $175 million-$200 million of that should be realized in 2025 alone. We have all of phase B in front of us. We'll lay that out during I-Day at next month at that event. And so that will provide additional benefits as we look to de-risking the future period and some of the commercial activities of the business that could include energy and other areas. So we'll lay that all out next month with the moving pieces. But that's all comprehended in the outlook that we have for that 2027 period. Just as a bit of a note, you know, from the outset, we laid out that Fit to Win is an end-to-end review of the business. Energy is included in that review. I think in the past, we probably had a fragmented approach to energy, you know, either by region or by sub-region or even down to plant level. We now have an enterprise-wide program running where we're looking at energy across the business in a very standard way with a standard program for each plant now on how to reduce energy, backed up by state-of-the-art software going into all of the plants to track energy usage throughout the plants. That hasn't been done before in the business. We expect to yield, you know, usage savings from that. That's part of our plan to offset any headwind that might arise as we move forward. I think also just kind of a final view on that. As we reconfigure the network, you know, going forward, you know, we'll have lower energy costs. Okay. No, that makes sense. I'll follow up with you guys on that in a month or so. One question on 2025 is just with your working capital guidance and your free cash flow, you said about flat. I think earlier in your slides, you said about a $50-$100 million reduction in inventory. So I guess are there offsets in receivables or payables, or is that working capital assumption in the bridge for free cash flow a bit conservative? Yeah. One thing I would say is we're going to get, you know, $50-$100 million of favorable working capital through the inventory reduction. But at the same token, we are taking out and reducing the scope of our operating network, which, you know, drives the efficiencies of the operations, but it also does result in a smaller AP balance because you just have a smaller population of plants. And so there's some effect of that. Now, that's kind of a one-time step down as you move those through. It's not indicative of working capital management. It's just, you know, pruning down to a smaller, more efficient base. So we're looking at that as the balancing act. I would like to think that we'll be able to do better than that with some additional decisions that we can make over the course of the year. But we'll update you as the year goes by. Yeah. Just as an addition to that, that whole working capital inventory management piece is a focus of the Fit to Win program. You know, we landed sort of, you know, around the, you know, the mid-50s day mark at the end of the year. Yet we have parts of our business that are down below 30. So you look at the shape of those businesses, the, you know, the customer spreads, you know, the footprint, you know, logistics footprint around those plants. And, you know, there's no particular reason why other plants can't get there. So that really is a massive focus for us in managing the one element of the efficiency of the business going forward to, you know, to push more cash out of the business. Got it. Thank you. The next question today comes from the line of Arun Viswanathan from RBC. Please go ahead. Your line is now open. Great. Thanks for taking my question. Congrats on the progress thus far in the transformation. So I guess just on that point, you know, I guess you noted still sluggish volumes across many of the categories. So I think you said that the program isn't really volume dependent. But what if volumes are actually negative in 2025? Do you still expect to realize the full extent of your Fit to Win benefits? And I guess I'm specifically thinking about, would you have to take swifter action on some of the furnace closures? And maybe you can just give your thoughts on some of those items. Thanks. Yeah. You know, as we've mentioned, you know, our Fit to Win program is not sort of volume dependent as such, right? Our biggest opportunity is to take the volume we have and make it more profitable and to get, you know, higher returns on the capital we have currently invested. And we see that as the path over the next two to three years to boost the value of the business. And we know we have volume that is currently challenged on an EP level. And we are working through what we need to do on our side to make that more profitable. And if after those efforts, it's not profitable and we can't get to an agreement with a customer around the price increase, then we will be taking that volume out. And if there's capacity to come out with it, we will be doing that. Our whole focus is on really getting much better returns on the capital that we have currently in place by boosting the profitability of the volume we have. We're not actively chasing volume for volume's sake. This really is about boosting, you know, the returns on the capital we invested by making the volume we currently have more profitable. We see a line of sight to that this year. It may well be, you know, as we take out volume, we may, you know, have slightly less volume, you know, at the end of the year. But that would be because of deliberate decision-making around economic profit. Okay. That's helpful. So it sounds like it's mostly on the cost side. But again, just going back to one of your earlier comments about oversupply in certain European countries, it sounds like, you know, there's a possibility that some of those you would have some price deterioration. So again, just in a similar vein, you know, to the extent that you can take cost out, would you, you know, how do you expect to combat price competition and the possibility of rolling back some of that pricing that you were able to achieve in the 2022, 2023 period? Yeah. Look, I think the equation in terms of how we look at the business is revenue minus our target EBIT equals our cost base, right? So we've got a number to deliver. And, you know, we'll obviously look to manage our margins. But, you know, if there's excessive, you know, price activity, then we'll adjust the cost base, yeah? So as John said, you know, we're 80%-90% through the season. You know, a lot of our, the majority of our contracts or our volume is contracted for the year. And, you know, we are where we thought we would be in October. You know, there may be some skirmishing throughout the year, but, you know, we'll manage that through effective cost management. Yeah. The only thing I would add on that. Sure. Yeah. One thing I'd add on that, keep in mind, we're looking at, after a number of years of positive price improvement, you know, earlier in the decade, you know, we're looking at flat prices this year on an absolute basis. Up a little bit in the Americas is down in Europe with the pressure point. Keep in mind the negative net prices because we're seeing inflation starting to normalize, assuming that in this marketplace. And with more than half of our business being under long-term contracts, there's a timing issue there of recapturing that inflation, which probably becomes more of a 2025, 2026 element, right? So part of the negative price that you're seeing in our outlook is a little bit of a timing, at least on the contracted business. And so keep that in mind as you look at the texture of the outlook. Okay. That's helpful. And just lastly, if I may, just on the CapEx, so it's nice to see that come down a little bit. What's kind of the longer-term CapEx thought? I know you're maybe moderating your MAGMA spend. But what makes up the CapEx? And I guess what's your longer-term target fix? Unfortunately, it appears we have lost the speaker team. We'll be back with you momentarily. Thank you for your patience. Hello. This is the O-I team. We had a little bit of a technical glitch there, but we are back online. Sorry about that. Thanks, guys. Just to close out on your question, you know, as we go forward, you know, productivity is the cornerstone of how we're running the business. And, you know, as we drive, you know, further productivity through the business, we would expect to be less dependent on, you know, pricing to cover inflation, yeah? And then we will price for value in terms of what we deliver to the customer. So that really is how we're thinking about the model as we go forward. So really accelerate productivity year on year to beat inflation. And then we'll price for value where we bring innovation and bring extra services to the customer. Okay. Thanks. I'll turn it over. Thank you. Our next question today comes from the line of Gabe Hajde from Wells Fargo. Please go ahead. Your line is now open. Gordon, John. Good morning. Good morning. I appreciate it's a little bit of a moving target with plant closures, meaning you're not able to realize the fixed cost savings and improved overhead absorption. But I think you guys were kind of carrying $170 million-$180 million of under-absorbed fixed overhead. In slide eight, you call out, I think, $50 million of higher production, but you're also talking about, obviously, still whittling down some inventory. So I'm just curious, maybe your best estimate of how much under-absorbed fixed overhead or production is still stuck in the system that could be unlocked, I guess, in 2026, 2027? Yeah, sure. I can. If you're a better man. Yeah. I can touch base on that one. And let me kind of just get the bigger picture here. So we had about 13% capacity curtailment in 2024. So the absolute level of fixed cost absorption was about $250 million, okay? So, you know, that ramped up over a two-year period of time. We had about $70 million, you know, impact calendar year in 2023, and about $180 million impact in 2024 for that cumulative $250. So as we move forward into 2025, we expect that to be halved, okay? So go from $250 down to about $125 million in the calendar year. We expect that to improve. The biggest driver is because we're taking out, as we referred to before, $75-$100 million from permanent closures and something like, you know, $25-$50 million through requiring less inventory management as we go through 2025 itself. So we expect to have substantial improvement in that. And keep in mind, since this is activity over the course of the year, really the exit run rate in 2025 is more like $75 million of carrying of excess inventory, I mean, excess capacity as we continue to work things down. And as we referenced in our prepared comments, we continue to look at opportunities to make further adjustments to be able to minimize and ideally fully reduce in due time that overhead absorption there. Hopefully, that gives you the context you're looking for. Okay. And it's one of two things, right? It's either volumes started to recover or they're more permanent closures, which I know you guys have alluded to. Yeah, correct. And right now, we're working off of our assumption of kind of flattish or we may ultimately exit some business. So we're being, you know, cautious on the commercial side. So, you know, we continue to look at the capacity optimization. And keep in mind, you know, as Gordon referenced, you know, the Phase B of what we're doing on Fit to Win is much more through our Total Organization Effectiveness about optimizing our capacity, which will allow us to get more capacity out of our current network that will allow further network optimization. Not to confuse the two of those, but they do kind of go hand in hand over time as we look to optimize the network and reduce fixed costs. Yep. Okay. I wanted to kind of go to phase B a little bit. You're calling out again in slide eight, $120 million-$150 million of cash restructuring. I guess as you evaluate phase B, is that equally as cash intensive or would some of those improvements be more maybe system dependent that you'd have to install new systems or is it process oriented that is less capital intensive? And I guess maybe even on phase A, as we look into 2026 and think about cash restructuring, knowing what we know today, you know, would we expect kind of at that midpoint restructuring spend of $135 million, which where would it go in 2026? Yeah. What I would say is we probably will have a fair amount of restructuring activity going on in 2025 and some level into 2026, okay? It will carry over there. I mean, you know, at $120-$150 million in 2025, that's covering the phase A activities in the beginning of some of the phase Bs. So we're trying to capture our best estimate right now of the cumulative effect of that. It could shift around a little bit. But then as you go into 2026, it'll be mostly the phase B activity. It'll probably be peak restructuring in 2025. Got it. Okay. And then shifting gears a little bit, aluminum is already up. Aluminum premiums have moved quite a bit higher in anticipation of some of these trade discrepancies. And then obviously, the Real is depreciated against the dollar. So does that influence or impact how you guys are thinking about the summer sales season for 2025, 2026? I appreciate it's, you know, we're in February right now, but I think those customers kind of tend to hedge out 9-12 months. So maybe that presents a better opportunity in Brazil? Yeah. I think overall, anything that, you know, closes the gap in cost between glass and cans is helpful to us. You know, as we said, you know, when glass gets within, and particularly our glass gets within 15% of the cost of cans, you know, we see a growth in glass volumes. But our targets of getting within 15% excludes any movement in aluminum because it's something we can't control. So our focus is on the elements that we control in driving that competitiveness of cans. And, you know, so anything that closes that gap, obviously, we would see as advantageous glass, yeah. Got it. Thank you. Thanks. The next question today comes from the line of Niccolò Piccini from Truist Securities. Please go ahead. Your line is now open. Yeah. Hi, guys. Thanks for taking my questions. Nico. I guess just to start off, it looks like bourbon and whiskey, you know, they're impaired. They've been weak for a while and that might continue. And one of your customers there recently announced the restructuring and workforce action. I'm just wondering if you can comment on Bowling Green and how that's operating given it's right in the middle of bourbon country and if there's any concerns about filling the line or maybe reorienting mix going forward? Niccolò, can you repeat the first part of that question? It was a little garbled on our end. We didn't hear. Oh, sorry about that. Just, it looks like whiskey and bourbon could be impaired for a while longer, and one of your customers announced some layoffs and restructuring, so can you comment on Bowling Green and how that plant's operating and if there's any concerns filling the line? Yeah, I'll take that, so with regard to Bowling Green, you know, as we said, we've got two objectives there this year. One is to have the plant operate at industrial scale efficiently and then to fit it with the right mix. We know the core MAGMA technology is working. So it's about ramp up and fitting with the right mix of volume. We have a book of business that's building and it's building in the right mix. And, you know, it's very much towards the premium and super premium end of the market. As we look forward this year, we see opportunities to put the right mix in place. Remember, this plant is, you know, its capacity is somewhere around 30-40,000 at full tilt. So it's not as if, you know, it's a 100,000-ton kind of furnace to fill. So, you know, that's what we're focused on and that's what the commercial teams are driving to. Understood. Thank you. And I just going back to the question we've asked before on the difference between, you know, your margins in Europe and your competitors over there, there's maybe like a 6% or 7% difference on average. I wonder, Gordon, now that you've been in the seat for nine months, what you think is driving that and if you have with Fit to Win an idea of how much of that differential could be made up? Yeah. You know, it's largely cost and footprint. You know, many of our competitors have a smaller footprint and probably our main competitor there has a smaller footprint with roughly the same volume. So there's a cost advantage there. And yes, you know, Fit to Win is designed to get us, you know, as competitive and probably more competitive than competitors through the cycle. That's what we're setting out to achieve. And, you know, that's the focus. Less about margins and mix of business, I would say. And in many cases, we may actually have a better mix. When we look, we probably have more premium business than any other player. So, you know, Fit to Win is designed to address the reality that our cost base has been too high. And so we intend to close that gap. Hello? Bailey, I think we're ready for the next question. Thank you. Our next question today comes from the line of George Staphos from Bank of America. Please go ahead. Your line is now open. Thanks. Hi, guys. Thanks for taking the follow-on. I want to take a bit of a different tack. So we fully appreciate that Fit to Win is designed to correct what you see as gaps between your performance, your cost versus your peers, both glass and elsewhere in rigid. When you've done the work on the other end, you know, talking to your customers about their fieldwork, what you've done to study this, you know, and I recognize you're going to be biased, you should be positively towards glass, but what are you finding in terms of customers' willingness to use glass based on what the consumer is telling them? Because you can become very competitive, improve your margins, but if the consumer has moved away or your customers moved away from it in terms of their mix, it will be less helpful. So what are you finding on the field in marketing in terms of that outlook right now? Thank you, guys. Good luck in the quarter. Yeah. Thanks, George. So, you know, I spend a lot of time out with customers and I just come back from an extensive customer trip. I mean, the one thing is clear and we laid this out next month is the power of glass, you know, in the minds and in the taste of consumers. You know, glass is the preferred mode of packaging. You know, consumers consistently say across any market that the product tastes better from glass. And nothing can be, you know, the holding of the package, you know, the glass package. Many of our customers have said to us, "Look, we actually think, you know, there's not enough glass in our portfolio." And if you see the, you know, the rising concerns around plastics, microplastics, you know, we're seeing a fairly significant switch in food brands into glass. In fact, across all our markets, I'd say, you know, food is the standout. I'm seeing some quite significant growth in food, particularly in Latin America where food is, you know, in the last quarter, for example, was up 15%. So from a consumer point of view, from a health point of view, and from a portfolio point of view, because there tends to, you know, with glass, you know, more opportunity to strengthen the equity of brands. And what we are hearing is glass needs to get more competitive with cans, right? And that's what we're doing. We're addressing that. The other thing I think that, you know, gives us confidence that all of our customers, when you talk to them about Fit to Win, and we explain that us getting fit benefits them because it will allow us to, you know, invest more in their business and help them get more efficient, help them grow, help them differentiate, and help them get more sustainable. And they're the four elements we focus on with customers. And that you look at their plans over the next, you know, three to four years, they all have growth plans and it all includes glass. I was in Latin America recently and one of our largest customers was talking to us about their plans for their portfolio and their glass demand looking anywhere between, you know, 10% and 25% increases depending on the market. So the growth is there, George, and this has been a foundation part of the hypothesis. The growth is there. We need to be competitive to access all of it, yeah? And that's the path we're on. So I'm not concerned about consumers and their attitudes to glass. Quite the opposite. That reinforces our hypothesis and reinforces our drive to, you know, make glass more competitive so we can get it into the hands of more people. Look, from some of the work that we've done on new products, you've actually seen a pickup in glass as well. So we would concur. I'm sorry, John, go ahead. No, no, finish your thought. I just wanted to correct a data point that I gave some bum information to Gordon earlier. Our portfolio is about 62% alcohol-related and the balance is non-alcoholic beverages and food. I think earlier referenced 75%, and actually, maybe a little bit of this conversation, we've actually seen a shift in the non-alcoholic categories and things like that, and glass has done well in a number of these categories too. So I think it feeds a little bit into the discussion. Yeah, and we see the, you know, non-alcoholic beverages across the, you know, across all markets is growing. Either non-alcoholic beers, particularly in Europe or in the Americas and particularly North America, water. Thank you. This concludes today's question and answer session. I'd like to pass back over to Chris Manuel for any closing remarks. Thank you, Bailey, for being so nimble with us. And that concludes our earnings call. Please note that our first quarter 2025 earnings call is currently scheduled for Wednesday, April 30th. Additionally, as we noted earlier, please mark your calendars. We'd love to see you at I-D ay on March 14th at the New York Stock Exchange. And in conclusion, remember to make it a memorable moment by choosing safe, healthy, sustainable glass. Thank you. This concludes today's call. Thank you all for your participation. You may now disconnect your lines.