Unless otherwise noted, the financial results we are presenting today relate to adjusted net earnings, which exclude certain items that management considers not representative of ongoing operation. A reconciliation of GAAP to non-GAAP earnings can be found in our earnings press release and in the appendix to this presentation.I will now turn the call over to Al. Albert P. L. Stroucken Thank you, Jason, and good morning. O-I posted strong results for the second quarter with earnings of $0.81 per share compared to adjusted earnings of $0.59 in the second quarter last year. We have made good progress regaining manufacturing and supply-chain efficiencies. This has been most evident in our North American region, which have the largest year-over-year improvement in the second quarter of any of our segments. On the other hand, macroeconomic conditions in Europe continue to generate uncertainties, and our business in that region has been impacted by slower sales this quarter. As a result, we have implemented production curtailments in Europe to balance capacity with customer demands and to ensure that we meet our cash flow targets. I am pleased to introduce our new Chief Financial Officer, Steve Bramlage. We welcome Steve back to Perrysburg after serving 2 years in leadership roles in our Asia-Pacific region. And for those who do not know Steve, he joined O-I in 2006 as our Corporate Treasurer and then became our Finance Lead in Europe, followed by a term as our Corporate Controller. He moved to New Zealand in 2010 to lead our operations there, and subsequently became President of our Asia-Pacific region. Steve will now review our financial results, after which I will provide an overview of our regions performance in the quarter. Steve? Stephen P. Bramlage Thanks, Al. It's nice to be on the call this morning and I look forward to working with all of O-I's stakeholders in my new role. I would also like to take this opportunity to thank Ed White for his first many years of dedicated service and leadership to O-I, as well as for assisting me in the CFO transition over the past month.
Now let's move to Chart 2 and review the second quarter reconciliations for sales, operating profit and earnings per share. Second quarter 2012 segment sales were nearly $1.8 billion. Price and mix in the quarter were up $82 million or more than 4% from the prior year. As in prior quarters, cost pass-through provision had a small impact on sales. These provisions are in certain customer contracts and are principally for fluctuations in energy costs. Lower sales volumes decreased the top line by $95 million this quarter. This impact was primarily due to lower sales in Europe, which were partially offset by higher sales in the North and South American regions.Finally, currency translation had the most significant impact on the top line, reducing it by $159 million in the quarter, primarily due to a 12% decline in the euro and a 25% decline in the Brazilian real from the prior year quarter. Moving over one column to segment operating profit. The second quarter was $266 million, up $42 million from the same period last year. Globally, price/mix improvements stayed ahead of inflation by $30 million this quarter and this has helped recapture some of last year's unrecovered inflation. Lower sales volumes impacted segment profit by $26 million in the quarter. Manufacturing and delivery costs were $49 million lower than the second quarter of last year, and were the main drivers of higher segment profit. The primary reason for this year-over-year improvement relates to our actions to regain manufacturing and supply-chain efficiencies, especially in our North American region. In addition, the permanent footprint adjustments that we have taken in Australia over the past year have reduced fixed costs, increased asset utilization and improved the competitive position of this business versus the prior year. Read the rest of this transcript for free on seekingalpha.com