We are pleased to report third quarter adjusted earnings of $0.58 per share.
Demand for glass containers is strong yet our shipments were down about 1% in the quarter due to choppy demand patterns stemming from low inventory levels and ongoing global supply chain issues.
We now anticipate 2021 adjusted earnings will range between $1.77 and $1.82 per share and we expect at least $260 million of free cash flow.
We expect 4th quarter adjusted earnings will approximate $0.30 to $0.35 per share and with elevated cost inflation pending price recovery starting in early 2022.
I'll touch base on each of our 3 platforms.
We have targeted $50 million of initiative benefits as well as continued performance improvement in North America.
As you can see, we have already achieved our full-year initiative target and now expect benefits with total around $60 million in 2021.
Next, we seek to Revolutionize Glass, our new Magma Generation 1 line has been commercialized in Germany and our Generation 2 line in Streator, Illinois is being piloted in the second half of 2021.
Regarding our divestiture program, we have entered into agreements for over $1 billion of asset sales to date including the recently announced intent to sell our Le Parfait brand and business in Europe.
As laid out during our Investor Day, we are investing up to $680 million over the next 3 years that include up to 11 Magma lines to enable profitable growth.
As John will expand upon, year-to-date free cash flow is quite favorable compared to past trends and we continue to advance other important efforts including the Paddock Chapter 11 process.
Reflecting these tail winds, global market growth is anticipated to rise 1.6% a year and higher in the principal regions where we operate.
I'll start with a review of our 3rd quarter performance on page 6.
O-I reported adjusted earnings of $0.58 per share.
As noted during our Investor Day, we expected results would be at the high end or slightly exceed our guidance of $0.47 to $0.52.
Segment operating profit was $243 million, which significantly exceeded prior year.
While demand remains strong, sales volumes dipped 1% due to choppy demand and ongoing supply chain challenges in several markets we serve.
Likewise, favorable cost performance was driven by an 8% improvement in production levels as the prior year was impacted by forced curtailment due to lockdown measures.
Moving to page 7, we have provided more information by segment.
In the Americas segment profit was $133 million, up from $113 million last year, despite significant cost inflation pressures, favorable net price reflected timely pass-through on cost and the benefits of our revenue optimization initiatives.
Sales volume was down 3%.
On the other hand production rebounded 9% and earnings benefited from good ongoing operating performance as well as our margin expansion initiatives, which offset elevated freight costs.
In Europe, segment profit was $110 million compared to $88 million last year.
Sales volume was up nearly 2% with strong growth in the wine category, while higher selling prices, partially mitigated elevated cost inflation.
Significantly lower operating cost reflected an 8% improvement in production levels very good operating performance and benefits from our margin expansion initiatives.
I'm now on page 8.
as illustrated on the chart, our 3rd quarter free cash flow was $213 million.
Year-to-date cash flows approximated $181 million, so we are well positioned to achieve our full year guidance of at least $260 million of free cash flow.
Second, we preserved our strong liquidity and finished the 3rd quarter with approximately $2.1 billion of committed liquidity well above the established floor.
At the end of the 3rd quarter, our net debt was $4.3 billion, the lowest level since 2015 and our BCA leverage ratio was around 3.6 times.
So far this year, we have entered into agreements to sell $128 million of assets as part of our portfolio optimization effort.
This includes today's announcement of a binding commitment from a subsidiary of Berlin Packaging to acquire our Le Parfait brand and business for EUR72 million or about $84 million.
The EBITDA for this business was EUR7.5 million in 2020 with a similar performance on a 12 month trailing basis.
This represents a compelling valuation in excess of a 9 multiple.
Finally, we intend to de-risk legacy liabilities as we advance the Paddock Chapter 11 process.
As previously announced, we have an agreement in principle for a consensual plan of reorganization where O-I will support Paddocks funding of a 524 (g) trust.
Total consideration is $610 million to be funded at the effective date of the plan.
I'm now on page 9.
We have increased our full year earnings guidance to between $1.77 and $1.82 per share reflecting favorable 3rd quarter results.
We now expect free cash flow will be at least $260 million.
We anticipate 4th quarter adjusted earnings will approximate $0.30 to $0.35 per share.

Summary:
We are pleased to report third quarter adjusted earnings of $0.58 per share.
We now anticipate 2021 adjusted earnings will range between $1.77 and $1.82 per share and we expect at least $260 million of free cash flow.
We expect 4th quarter adjusted earnings will approximate $0.30 to $0.35 per share and with elevated cost inflation pending price recovery starting in early 2022.
Reflecting these tail winds, global market growth is anticipated to rise 1.6% a year and higher in the principal regions where we operate.
O-I reported adjusted earnings of $0.58 per share.
We have increased our full year earnings guidance to between $1.77 and $1.82 per share reflecting favorable 3rd quarter results.
We anticipate 4th quarter adjusted earnings will approximate $0.30 to $0.35 per share.