13Adchem Corp

In June 2017, the Company acquired Adchem Corp's ("Adchem") tapes business for a purchase price of $49 million. Adchem is a leader in the development of high performance adhesive tape systems for the automotive, construction, electronics, graphic arts, medical and general tape markets. The acquired business is operated in our Engineered Materials segment. To finance the purchase, the Company used existing liquidity.

AEP Industries Inc.

In January 2017, the Company acquired AEP Industries Inc. ("AEP") for a purchase price of $791 million, net of cash acquired. A portion of the purchase price consisted of issuing 6.4 million of Berry common shares which were valued at $324 million at the time of closing. AEP manufactures and markets an extensive and diverse line of polyethylene and polyvinyl chloride flexible plastic packaging products with consumer, industrial, and agricultural applications. The acquired business is operated in our Engineered Materials segment. To finance the purchase, the Company entered into an incremental assumption agreement to increase the commitments under the Company's existing term loan credit agreement by $500 million due 2024. The Company ~~expects~~estimates annual realized cost synergies of ~~approximately~~ $80 million from the ~~AEP transaction with full realization expected in fiscal 2018.~~transaction.

Discussion of Results of Operations for Fiscal 2018 Compared to Fiscal 2017

~~Adchem Corp~~Acquisition sales and operating income disclosed within this section represents the results from acquisitions for the current period. Business integration expenses consist of restructuring and impairment charges, acquisition related costs, and other business optimization costs. Tables present dollars in millions.

Consolidated Overview	Fiscal Year
	2018				2017				$ Change			% Change
Net sales		$	7,869			$	7,095			$	774		11	%
Operating income		$	761			$	732			$	29		4	%
Operating income percentage of net sales			10	%			10	%

The net sales growth of $774 million is primarily attributed to acquisition net sales of $624 million, organic sales growth of $92 million, and a $58 million favorable impact from foreign currency changes. The organic sales growth is primarily attributed to increased selling prices of $191 million due to the pass through of higher cost of goods sold, partially offset by a modest 1% volume decline.

The operating income increase of $29 million is primarily attributed to acquisition operating income of $62 million, a $46 million decrease in selling, general and administrative expense related to synergies and lower incentive compensation, a $26 million decrease in depreciation and amortization, and an $11 million favorable impact from foreign currency changes. These improvements were partially offset by a $96 million negative impact from under recovery of higher cost of goods sold, and a $12 million impact from the lower volumes.

Engineered Materials	Fiscal Year
	2018				2017				$ Change			% Change
Net sales		$	2,672			$	2,375			$	297		13	%
Operating income		$	368			$	316			$	52		16	%
Operating income percentage of net sales			14	%			13	%

Net sales in the Engineered Materials segment grew by $297 million primarily attributed to acquisition net sales of $319 million, partially offset by an organic sales decline of $29 million. The organic sales decline is primarily related to increased selling prices of $54 million, being more than offset by a 3% volume decline as a result of business rationalizations within legacy AEP locations.

The operating income increase of $52 million is primarily attributed to acquisition operating income of $40 million, an $18 million decrease in depreciation and amortization expense, and an $8 million decrease in selling, general and administrative expenses. These improvements were partially offset by an $11 million negative impact from the lower volumes.

Health, Hygiene & Specialties	Fiscal Year
	2018				2017				$ Change				% Change
Net sales		$	2,734			$	2,369			$	365			15	%
Operating income		$	202			$	216			$	(14	)		(6	)%
Operating income percentage of net sales			7	%			9	%

Net sales in the Health, Hygiene & Specialties segment grew by $365 million primarily attributed to acquisition net sales of $305 million, a $52 million favorable impact from foreign currency changes, and organic sales growth of $9 million. The organic sales growth is primarily attributed to increased selling prices of $56 million due to the pass through of higher cost of goods sold, partially offset by a 2% volume decline.

~~In June 2017,~~The operating income decrease of $14 million is primarily attributed to a $53 million negative impact from under recovery of higher cost of goods sold, a $7 million impact from lower volumes, and a $12 million increase in business integration. These decreases were partially offset by a $22 million decrease in selling, general and administrative expenses, acquisition operating income of $22 million from the ~~Company acquired Adchem Corp's ("Adchem") tapes business for~~Clopay acquisition, and a ~~purchase price of $49 million. Adchem is a leader~~$10 million favorable impact from foreign currency changes.

Consumer Packaging	Fiscal Year
	2018				2017				$ Change				% Change
Net sales		$	2,463			$	2,351			$	112			5	%
Operating income		$	191			$	200			$	(9	)		(5	)%
Operating income percentage of net sales			8	%			9	%

Net sales in the ~~development~~Consumer Packaging segment grew by $112 million primarily attributed to organic sales growth. The organic sales growth is primarily attributed to increased selling prices of ~~high performance adhesive tape systems for~~$81 million due to the ~~automotive, construction, electronics, graphic arts, medical~~pass through of higher cost of goods sold and ~~general tape markets. The acquired business is operated in our Engineered Materials segment. To finance the purchase, the Company used existing liquidity.~~a 1% volume improvement.

~~AVINTIV Inc.~~The operating income decrease of $9 million is primarily attributed to a $40 million negative impact from under recovery of higher cost of goods sold, partially offset by a $16 million decrease in selling, general and administrative expenses, a $6 million favorable impact from the volume improvement, and a $6 million decrease in business integration expense.

Other expense, net	Fiscal Year
	2018			2017			$ Change			% Change
Other expense, net		$	25		$	14		$	11		79	%

~~In October 2015,~~

The other expense increase of $11 million is primarily attributed to a year over year increase of $19 million in unfavorable foreign currency changes related to the ~~Company acquired 100%~~remeasurement of non-operating intercompany balances, partially offset by an $8 million decrease in debt extinguishment expense related to fewer term loan modifications in 2018 compared to 2017.

Interest expense	Fiscal Year
	2018			2017			$ Change				% Change
Interest expense, net		$	259		$	269		$	(10	)		(4	)%

The interest expense decrease of $10 million is primarily attributed to reduced interest rates resulting from the ~~capital stock of AVINTIV Inc. ("Avintiv") for a purchase price of $2.26 billion, net of cash acquired. Avintiv was one of~~term loan modifications, partially offset by additional expenses attributed to the world's leading developers, producers, and marketers of nonwoven specialty materials used in hygiene, infection prevention, personal care, industrial, construction, and filtration applications. With 23 locations in 14 countries, an employee base of over 4,500 people, the broadest range of process technologies in the nonwoven industry, and strategically located manufacturing facilities, Avintiv was positioned as a global supplier to many of the same leading consumer and industrial product manufacturers as Berry's existing business. To finance the purchase, the Company issued $400$500 million ~~aggregate principal amount of 6.0%~~4.5% second priority senior secured notes ~~due 2022~~(see Note 3).

Income tax (benefit) expense	Fiscal Year
	2018				2017			$ Change				% Change
Income tax (benefit) expense		$	(19	)		$	109		$	(128	)		(117	)%

The income tax decrease of $128 million is primarily attributed to the $124 million provisional transition benefit recorded in fiscal 2018 as a result of the recent U.S. tax legislation (see Note 8). After the exclusion of the tax reform benefit, our effective tax rate was 22% and ~~entered into an incremental assumption agreement~~was positively impacted by 2% from the share-based compensation excess tax benefit, 2% from the release of foreign valuation allowances, 1% from research and development credits, and a 1% benefit from the domestic manufacturing deduction. These favorable items were partially offset by increases of 3% from U.S. state taxes and other discrete items.

Comprehensive Income	Fiscal Year
	2018			2017			$ Change				% Change
Comprehensive Income		$	408		$	420		$	(12	)		(3	%)

The $12 million decrease in comprehensive income is primarily attributed to ~~increase the commitments under~~a $161 million decrease in currency translation and a $35 million decrease in unrealized gains on the Company's ~~existing term loan credit agreement~~pension plans, partially offset by ~~$2.1 billion due 2022. The results of Avintiv have been included~~a $156 million increase in net income and a $21 million favorable change in the ~~consolidated results~~fair value of interest rate hedges. Currency translation gains are primarily related to non-U.S. subsidiaries with a functional currency other than the U.S. Dollar whereby assets and liabilities are translated from the respective functional currency into U.S. Dollars using period-end exchange rates. The change in currency translation was primarily attributed to locations utilizing the Euro, Brazilian Real, and Canadian Dollar as their functional currency. The change in unrealized gains on pension plans in the current period were primarily attributable to actuarial losses from an increase in the underlying discount rate. As part of the overall risk management, the Company ~~since~~uses derivative instruments to reduce exposure to changes in interest rates attributed to the ~~date~~Company's floating-rate borrowings and records changes to the fair value of these instruments in Accumulated other comprehensive income. The change in fair value of these instruments in fiscal 2018 versus fiscal 2017 is primarily attributed to a change in the ~~acquisition. The Company estimates that approximately $80 million of annual cost synergies were realized from the Avintiv acquisition.~~forward interest curve between measurement dates.

Discussion of Results of Operations for Fiscal 2017 Compared to Fiscal 2016

~~Consistent with historical presentation, acquisition (businesses acquired in the last twelve months)~~Acquisition sales and operating income disclosed within this section represents the historical results from acquisitions for the comparable prior year period. The remaining change disclosed represents the changes from the prior period on a combined basis. Business integration expenses consist of restructuring and impairment charges, acquisition related costs, and other business optimization costs. Tables present dollars in millions.

Consolidated Overview	Fiscal Year
	2017				2016				$ Change			% Change
Net sales		$	7,095			$	6,489			$	606		9	%
Operating income		$	732			$	581			$	151		26	%
Operating income percentage of net sales			10	%			9	%

The net sales increase of $606 million is primarily attributed to acquisition net sales of $788 million and selling price increases of $60 million due to the pass through of higher resin prices, partially offset by a negative $136 million impact from a 2% base volume decline, $98 million from extra days in fiscal 2016, and a slight negative impact from foreign currency changes.

The operating income increase of $151 million is primarily attributed to acquisition operating income of $62 million, a $36 million decrease in integration and restructuring costs, a $35 million decrease in selling, general and administrative expense related to synergies and cost reductions, a $24 million improvement in our product mix and price/cost spread, a $16 million decrease in depreciation and amortization, and slight benefits from improved productivity in manufacturing and changes in foreign currency. These improvements were partially offset by a $20 million impact from the base volume decline and $10 million from extra days in fiscal 2016.

Engineered Materials	Fiscal Year
	2017				2016				$ Change			% Change
Net sales		$	2,375			$	1,627			$	748		46	%
Operating income		$	316			$	182			$	134		74	%
Operating income percentage of net sales			13	%			11	%

Net sales in the Engineered Materials segment increased by $748 million primarily attributed to acquisition net sales of $788 million, and selling price increases of $67 million due to the pass through of higher resin prices, partially offset by a $79 million negative impact from base volume declines, and $30 million from extra days in fiscal 2016. The base volume decline is primarily attributed to our decisions to rationalize certain lower margin products that we acquired from AEP in order to maximize earnings.

The operating income increase of $134 million is primarily attributed to acquisition operating income of $62 million, a $71 million improvement in our product mix and price/cost spread, a $13 million decrease in selling, general and administrative expenses, and slight benefits from improved productivity in manufacturing and changes in foreign currency, partially offset by a negative $8 million impact from lower base volumes, a $6 million increase in depreciation and amortization expense, and $4 million from extra days in fiscal 2016.

Health, Hygiene & Specialties	Fiscal Year
	2017				2016				$ Change				% Change
Net sales		$	2,369			$	2,400			$	(31	)		(1	)%
Operating income		$	216			$	196			$	20			10	%
Operating income percentage of net sales			9	%			8	%

Net sales in the Health, Hygiene & Specialties segment decreased by $31 million primarily attributed to extra days in fiscal 2016 of $25 million, selling price decreases of $23 million, and a slightly negative impact from foreign currency changes, partially offset by a $26 million positive impact from base volume improvements.

The operating income increase of $20 million is primarily attributed to a $27 million decrease in business integration and restructuring costs associated with the Avintiv acquisition, a $13 million improvement in productivity in manufacturing, a $12 million decrease in depreciation and amortization expense, a $5 million impact from base volumes, a $5 million decrease in selling, general and administrative expenses, and a slight benefit from changes in foreign currency. These improvements were partially offset by a $45 million decrease in our product mix and price/cost spread primarily related to inflation and market pressures within our South American business.

Consumer Packaging	Fiscal Year
	2017				2016				$ Change				% Change
Net sales		$	2,351			$	2,462			$	(111	)		(5	)%
Operating income		$	200			$	203			$	(3	)		(1	)%
Operating income percentage of net sales			9	%			8	%

Net sales in the Consumer Packaging segment decreased by $111 million primarily attributed to an $83 million negative impact from base volumes and $43 million from extra days in fiscal 2016, partially offset by selling price increases of $15 million due to the pass through of higher resin prices. The volume decline was primarily attributed to general market softness and our continued focus on volume, price, and mix in order to optimize earnings.

The operating income decrease of $3 million is primarily attributed to a base volume decline of $17 million, an $11 million negative impact from productivity in manufacturing, $5 million from extra days in fiscal 2016, and a slight decrease in our product mix and price/cost spread, partially offset by a $17 million decrease in selling, general and administrative expenses related to synergies from cost reductions, a $10 million decrease in depreciation and amortization expense, and a $5 million decrease in business integration and restructuring expense.

Debt extinguishment Fiscal Year
2017 2016 $ Change % Change
Debt extinguishment $ 10 $ 4 $ 6 150 %

~~Debt extinguishment increased by $6 million as a result of the fiscal 2017 term loan modifications.~~

Other expense (income), net	Fiscal Year													Fiscal Year
	2017			2016				$ Change			% Change			2017			2016				$ Change			% Change
Other expense (income), net		$	4		$	(22	)		$	26		118	%		$	14		$	(18	)		$	32		(178	)%

The other expense (income) increase of ~~$26~~$32 million is primarily attributed to a $10 million non-cash defined benefit pension plan settlement, a $6 million charge related to a valuation adjustment to the ~~TRA~~tax receivable agreement in fiscal 2017, ~~and~~ a year over year decline of $17 million in transactional foreign currency gains related to the remeasurement of non-operating intercompany ~~balances.~~balances, and a $6 million increase in debt extinguishment as a result of the 2017 term loan modifications.

Interest expense	Fiscal Year
	2017			2016			$ Change				% Change
Interest expense, net		$	269		$	291		$	(22	)		(8	)%

The interest expense decrease of $22 million is primarily attributed to reduced interest rates resulting from the term loan modifications.

Income tax expense	Fiscal Year
	2017			2016			$ Change			% Change
Income tax expense		$	109		$	72		$	37		51	%

The income tax expense increase of $37 million is primarily attributed to improved income before income taxes. Our effective tax rate was 24% in fiscal 2017. Our fiscal 2017 effective tax rate was lower than the U.S. federal statutory rate of 35% primarily due to a 2% benefit from lower tax rates in foreign jurisdictions, a 2% benefit from the U.S. research and development credit, a 7% benefit from share based compensation related to excess tax benefit deductions, and a 1% benefit from the Section 199 deduction. These favorable items were partially offset by an increase of 1% from the foreign valuation allowance.

Comprehensive Income	Fiscal Year
	2017			2016			$ Change			% Change
Comprehensive Income		$	420		$	207		$	213		103	%

The $213 million increase in comprehensive income is primarily attributed to a $104 million increase in net income, a $47 million increase due to unrealized gains on the Company's pension plans, net of tax, a $35 million increase in currency translation gains, and a $27 million favorable change in the fair value of interest rate hedges, net of tax. Currency translation gains are primarily related to non-U.S. subsidiaries with a functional currency other than the U.S. Dollar whereby assets and liabilities are translated from the respective functional currency into U.S. Dollars using period-end exchange rates. The change in currency translation gains were primarily attributed to locations utilizing the Euro, Pound Sterling, and Brazilian Real as their functional currency. Unrealized gains on pension plans in the current period were primarily attributable to actuarial gains from an increase in the underlying discount rate. As part of the overall risk management, the Company uses derivative instruments to reduce exposure to changes in interest rates attributed to the Company's floating-rate borrowings and records changes to the fair value of these instruments in Accumulated other comprehensive income. The change in fair value of these instruments in fiscal 2017 versus fiscal 2016 is primarily attributed to a change in the forward interest curve between measurement dates.

~~Discussion of Results of Operations for Fiscal 2016 Compared to Fiscal 2015~~

Consistent with historical presentation, acquisition (businesses acquired in the last twelve months) sales and operating income disclosed within this section represents the historical results from acquisitions for the comparable prior year period. The remaining change disclosed represents the changes from the prior period on a combined basis. Business integration expenses consist of restructuring and impairment charges, manufacturing inefficiencies associated with cost reduction plans, major innovation start-up and other business optimization costs. Tables present dollars in millions.

Consolidated Overview Fiscal Year
2016 2015 $ Change % Change
Net sales $ 6,489 $ 4,881 $ 1,608 33 %
Operating income $ 581 $ 408 $ 173 42 %
Operating income percentage of net sales 9 % 8 %

The net sales increase of $1,608 million is primarily attributed to acquisition net sales of $1,935 million, partially offset by a $237 million decline in selling prices due to the pass through of lower raw material costs, a negative $29 million impact from a less than 1% base volume decline, and a $61 million negative impact from foreign currency changes.

~~The operating income increase of $173 million is primarily~~ ~~attributed~~ to a $117 million improvement in our product mix and price/cost spread including contribution from sourcing synergies, acquisition operating income of $118 million, and $10 million from net productivity improvements in manufacturing. These improvements were partially offset by a $55 million increase in depreciation and amortization expense primarily related to purchase accounting adjustments associated with the Avintiv acquisition, a $12 million negative impact from foreign currency changes, a $6 million impact from the less than 1% base volume declines, and a slight increase in selling, general and administrative expenses.

Engineered Materials Fiscal Year
2016 2015 $ Change % Change
Net sales $ 1,627 $ 1,701 $ (74 ) (4 )%
Operating income $ 182 $ 149 $ 33 22 %
Operating income percentage of net sales 11 % 9 %

~~Net sales in the Engineered Materials segment decreased by $74 million primarily attributed to selling price decreases of $73 million due to the pass through of~~ lower resin prices and an $8 million unfavorable impact from currency translation partially offset by a $9 million impact from a 1.5% base volume improvement. Increased shipping days in the first quarter had approximately 2.0% impact on fiscal 2016 volumes.

~~The operating income increase of $33 million is primarily attributed~~ to a $39 million improvement in our product mix and price/cost spread, a $2 million improvement in productivity in manufacturing, and a slight decrease in selling, general and administrative expenses, partially offset by a $6 million non-cash legal reserve, and negative impact from foreign currency changes. The improvement in selling, general and administrative expenses is primarily attributed cost reduction efforts partially offset by increased shipping days in the first quarter and higher accrued performance-based bonus expense.

Health, Hygiene & Specialties Fiscal Year
2016 2015 $ Change % Change
Net sales $ 2,400 $ 650 $ 1,750 269 %
Operating income $ 196 $ 59 $ 137 232 %
Operating income percentage of net sales 8 % 9 %

~~Net sales in the Health, Hygiene & Specialties segment increased by $1,750 million primarily attributed to~~ acquisition net sales of $1,935 million partially offset by selling price decreases of $86 million due to the pass through of lower resin prices, a $53 million unfavorable impact from foreign currency, and a negative $49 million impact from a 2.0% volume decline. The volume decline is primarily attributed to a negative impact due to decreased shipping days in Avintiv's prior year December quarter, strategic pricing actions and improvements in the product mix in Europe.

~~The operating income increase of $137 million is primarily attributed~~ to acquisition operating income of $118 million, a $63 million improvement in our product mix and price/cost spread including contribution from sourcing synergies, an $13 million increase from net productivity improvements in manufacturing, and a $11 million decrease in selling, general and administrative expenses, partially offset by a $40 million increase in depreciation and amortization expense primarily related to purchase accounting adjustments associated with the Avintiv acquisition, $7 million from base volume declines, an $10 million increase in business integration costs, and a $11 million unfavorable impact from foreign currency changes. The increase in business integration expenses is the result of restructuring costs associated with the Avintiv acquisition and a $2 million impairment charge related to plant shutdowns.

Consumer Packaging Fiscal Year
2016 2015 $ Change % Change
Net sales $ 2,462 $ 2,530 $ (68 ) (3 )%
Operating income $ 203 $ 200 $ 3 2 %
Operating income percentage of net sales 8 % 8 %

~~Net sales in the Consumer Packaging segment decreased by $68 million primarily attributed to selling price decreases~~ of $78 million due to the pass through of lower resin prices, partially offset by improved base volumes. Increased shipping days in the first quarter had approximately 2.0% favorable impact on volumes partially offset by product light-weighting, product redesign and softer consumer packaged food demand.

~~The operating income increase of $3 million is primarily attributed to~~ a $19 million decrease in business integration and restructuring expenses, and a $15 million improvement in our product mix and price/cost spread, partially offset by a $15 million increase in selling, general and administrative expenses primarily attributed to increased shipping days in the first quarter and higher accrued performance-based bonus expense, a $14 million increase in depreciation and amortization expense, and a $4 million decline in operating performance in manufacturing. The decrease in business integration costs is the result of costs associated with the 2014 cost reduction plan recognized in fiscal 2015.

Debt extinguishment Fiscal Year
2016 2015 $ Change % Change
Debt extinguishment $ 4 $ 94 $ (90 ) (96 )%

Debt extinguishment decreased by $90 million primarily due to tender and redemption costs associated with the discharge of the 9¾% second priority senior secured notes in fiscal 2015 compared with the amendments of our term loans that occurred in fiscal 2016.

Other expense (income), net Fiscal Year
2016 2015 $ Change % Change
Other expense (income), net $ (22 ) $ 1 $ (23 ) (2,300 )%

The other expense (income) decrease of $23 million is primarily the result of translation gains of $27 million related to the remeasurement of non-operating intercompany balances, partially offset by $5 million in financing fees associated with the Avintiv acquisition.

Interest expense Fiscal Year
2016 2015 $ Change % Change
Interest expense, net $ 291 $ 191 $ 100 52 %

Interest expense increased $100 million primarily as the result of the increased borrowings under the term loans and the 6% second priority senior secured notes issued in October 2015 to finance the Avintiv acquisition, ~~partially offset by the net interest savings from the retirement of the 9¾% second priority senior secured notes and corresponding issuance of the 5~~¹/₈~~% second priority senior secured notes in June 2015.~~

Income tax expense Fiscal Year
2016 2015 $ Change % Change
Income tax expense $ 72 $ 36 $ 36 100 %

Our effective tax rate was 23% in fiscal 2016. Our fiscal 2016 effective tax rate was lower than the U.S. federal statutory rate of 35% primarily due to a 5% benefit from the new share-based compensation accounting standard related to excess tax benefit deductions, a 5% benefit from lower tax rates in foreign jurisdictions, a 3% benefit from the U.S. research and development credit, a 3% benefit from a deemed liquidation of an investment which resulted in a worthless stock deduction, and a 3% benefit from the realization of foreign currency losses on the conversion of intercompany debt (not expected to be repaid in the foreseeable future) to equity. These favorable items were partially offset by increases of 3% from U.S. state income taxes and 2% from the inclusion of foreign income for amounts subject to Subpart F and Section 956 of the U.S. tax code.

Comprehensive Income Fiscal Year
2016 2015 $ Change % Change
Comprehensive Income $ 207 $ 10 $ 197 1970 %

The $197 million increase in comprehensive income is primarily attributed to a $150 million increase in net income, a $44 million decrease in currency translation losses, and a $12 million favorable change in the fair value of interest rate hedges, net of tax, partially offset by an increase in unrealized losses on the Company's pension plans of $9 million, net of tax. Currency translation losses are primarily related to non-U.S. subsidiaries with a functional currency other than the U.S. Dollar whereby assets and liabilities are translated from the respective functional currency into U.S. Dollars using period-end exchange rates. The change in currency translation losses were primarily attributed to locations utilizing the Euro, Pound Sterling, and Brazilian Real as their functional currency. Unrealized losses on pension plans in the current period were primarily attributable to actuarial losses from the reduction in the underlying discount rate and application of the new mortality tables. As part of the overall risk management, the Company uses derivative instruments to reduce exposure to changes in interest rates attributed to the Company's floating-rate borrowings and records changes to the fair value of these instruments in Accumulated other comprehensive income. The change in fair value of these instruments in fiscal 2016 versus fiscal 2015 is primarily attributed to a change in the forward interest curve between measurement dates.

Liquidity and Capital Resources

~~Term Loans~~

In January 2017, in order to finance the AEP acquisition, the Company entered into an incremental assumption agreement to increase the commitments under the existing term loan credit agreement by $500 million, maturing in January 2024. Based on market conditions, from time to time, the Company may reprice existing term loans in order to lower interest rates. As a result of repricing activities, each of the Company's term loans currently bear interest at LIBOR plus 2.25% with a 0% LIBOR floor. All other terms remain unchanged (see footnote 3 to the Notes to the Consolidated Financial Statements incorporated herein).

Senior Secured Credit Facility

We manage our global cash requirements considering (i) available funds among the many subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances. ~~In March 2017, we entered into an agreement to increase our~~We have a $750 million asset-based revolving line of credit that matures in May ~~2020 by $100 million to $750 million.~~2020. At the end of fiscal ~~2017, there was~~2018, the Company had no outstanding balance on the revolving credit facility. The Company was in compliance with all covenants at the end of fiscal ~~2017~~2018 (see ~~footnote 3 to the Notes to the Consolidated Financial Statements incorporated herein)~~Note 3).

1815

Contractual Obligations and Off Balance Sheet Transactions

Our contractual cash obligations at the end of fiscal ~~2017~~2018 are summarized in the following table which does not give any effect to ~~the tax receivable agreement, or income~~ taxes ~~payable~~ as we cannot reasonably estimate the timing of future cash ~~outflows associated with those commitments.~~outflows.

	Payments due by period as of the end of fiscal 2017										Payments due by period as of the end of fiscal 2018
	Total		< 1 year		1-3 years		4-5 years		> 5 years		Total		< 1 year		1-3 years		4-5 years		> 5 years
Long-term debt, excluding capital leases	$	5,556	$	5	$	1,010	$	824	$	3,717	$	5,752	$	5	$	1,624	$	2,455	$	1,668
Capital leases ^(a)		146		33		60		41		12		149		37		59		34		19
Fixed interest rate payments		533		87		175		175		96		599		110		220		187		82
Variable interest rate payments^(b)		630		153		270		168		39		530		156		246		119		9
Operating leases		426		64		104		80		178		420		67		107		81		165
Total contractual cash obligations	$	7,291	$	342	$	1,619	$	1,288	$	4,042	$	7,450	$	375	$	2,256	$	2,876	$	1,943

^(a)	^{Includes anticipated interest of $15$14 million over the life of the capital leases.}

^(b)	^{Based on applicable interest rates in effect end of fiscal 2017.2018.}

Cash Flows from Operating Activities

Net cash provided by operating activities increased $29 million from fiscal 2017 primarily attributed to the settlement of interest rate hedges, improved net income before depreciation, amortization and the net impact of the Tax Act.

Net cash provided by operating activities increased $118 million from fiscal 2016 primarily attributed to improved net income before depreciation, amortization and other non-cash charges.

Net cash provided by operating activities increased $220 million from fiscal 2015 primarily attributed to higher net income before depreciation and amortization partially offset by lower debt extinguishment charges.

Cash Flows from Investing Activities

Net cash used in investing activities increased $261 million from fiscal 2017 primarily attributed to increased capital expenditures and higher acquisition spending compared to fiscal 2017.

Net cash used in investing activities decreased $1,805 million from fiscal 2016 primarily attributed to the Avintiv acquisition in fiscal 2016, partially offset by the AEP and Adchem acquisitions in fiscal 2017.

Net cash used in investing activities increased $2,414 million from fiscal 2015 primarily attributed to the Avintiv acquisition and higher capital expenditures to support the larger consolidated business.

Cash Flows from Financing Activities

Net cash from financing activities increased $339 million from fiscal 2017 primarily attributed to lower repayments of long-term borrowings and a lower tax receivable agreement payment in fiscal 2018, partially offset by fiscal 2018 payments to repurchase common stock.

Net cash from financing activities decreased $2,043 million from fiscal 2016 primarily attributed to 2016 net borrowings related to the Avintiv acquisition and $78 million purchase of noncontrolling interest, partially offset by a higher ~~TRA~~tax receivable agreement payment in fiscal 2017.

~~Net cash provided by financing activities increased $2,182~~Share Repurchases

The Company's share repurchases totaled $35 million ~~from~~in fiscal 2015 primarily attributed to incremental financing related to the Avintiv acquisition, partially offset by the $78 million purchase of non-controlling interest and repayment of $524 million on long-term borrowings.2018. The repurchases were completed using existing liquidity (see Note 12).

Adjusted Free Cash Flow

We define "Adjusted free cash flow" as cash flow from operating activities less net additions to property, plant and equipment and payments of the tax receivable agreement.

Based on our definition, our consolidated adjusted free cash flow is summarized as follows:

	Years Ended									Years Ended
	September 30, 2017			October 1, 2016			September 26, 2015			September 29, 2018			September 30, 2017			October 1, 2016
Cash flow from operating activities	$	975		$	857		$	637		$	1,004		$	975		$	857
Net additions to property, Additions to property, plant and equipment, net		(263	)		(283	)		(162	)		(333	)		(263	)		(283	)
Payments of tax receivable agreement		(111	)		(57	)		(39	)		(37	)		(111	)		(57	)
Adjusted free cash flow	$	601		$	517		$	436		$	634		$	601		$	517

Adjusted free cash flow, as presented in this document, is a supplemental financial measure that is not required by, or presented in accordance with, generally accepted accounting principles in the U.S. ("GAAP"). Adjusted free cash flow is not a GAAP financial measure and should not be considered as an alternative to cash flow from operating activities or any other measure determined in accordance with GAAP. We use Adjusted free cash flow as a measure of liquidity because it assists us in assessing our company's ability to fund its growth through its generation of cash, and believe it is useful to investors for such purpose. In addition, Adjusted free cash flow and similar measures are widely used by investors, securities analysts and other interested parties in our industry to measure a company's liquidity. Adjusted free cash flow may be calculated differently by other companies, including other companies in our industry, limiting its usefulness as a comparative measure.

Liquidity Outlook

At the end of fiscal ~~2017,~~2018, our cash balance was ~~$306~~$381 million, of which approximately ~~92%~~64% was located outside the U.S. The Company has deemed cash located outside the U.S. to be indefinitely reinvested and will use for future international expansion. We believe our existing U.S. based cash and cash flow from U.S. operations, together with available borrowings under our senior secured credit facilities, will be adequate to meet our liquidity needs over the next twelve months. We do not expect our free cash flow to be sufficient to cover all long-term debt obligations and intend to refinance these obligations prior to maturity. ~~However, we cannot predict our future results of~~

In addition to projecting continued strong cash flow from operations and adjusted free cash flows, based on current market conditions we anticipate continuing to repurchase our ~~ability to meet our obligations involves numerous risks and uncertainties, including, but not limited to, those described~~shares in the ~~"Risk Factors" section in this Form 10-K.~~first quarter of fiscal 2019.

Critical Accounting Policies and Estimates

We disclose those accounting policies that we consider to be significant in determining the amounts to be utilized for communicating our consolidated financial position, results of operations and cash flows in the first note to our consolidated financial statements included elsewhere herein. Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with ~~accounting principles generally accepted in the U.S.~~GAAP. The preparation of financial statements in conformity with these principles requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Our estimates and judgments are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

~~Revenue Recognition~~. Revenue from the sales of products is recognized at the time title and risks and rewards of ownership pass to the customer (either when the products reach the free-on-board shipping point or destination depending on the contractual terms), there is persuasive evidence of an arrangement, the sales price is fixed and determinable and collection is reasonably assured.

Accrued Rebates. We offer various rebates to our customers in exchange for their purchases. These rebate programs are individually negotiated with our customers and contain a variety of different terms and conditions. Certain rebates are calculated as flat percentages of purchases, while others include tiered volume incentives. These rebates may be payable monthly, quarterly, or annually. The calculation of the accrued rebate balance involves ~~significant~~ management estimates, especially where the terms of the rebate involve tiered volume levels that require estimates of expected annual sales. These provisions are based on estimates derived from current program requirements and historical experience. We use all available information when calculating these reserves. Our accrual for customer rebates was $58 million and ~~$54~~$58 million as of the end of fiscal ~~2017~~2018 and ~~2016, respectively.~~

~~Impairments of Long-Lived Assets~~. In accordance with the guidance from the FASB for the impairment or disposal of long-lived assets we review long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. We recognized non-cash asset impairment of long-lived assets of $2 million, $3 million and $2 million in fiscal 2017, ~~2016 and 2015,~~ respectively.

Goodwill and Other Indefinite Lived Intangible Assets. We evaluate goodwill using a qualitative assessment to determine whether it is more likely than not that the fair value of any reporting unit is less that the carrying amount. If we determine that the fair value of the reporting unit may be less than its carrying amount, we evaluate the goodwill of that reporting unit using the one-step impairment test. Otherwise, we conclude that no impairment is indicated and no further impairment test is performed.

For purposes of conducting our evaluation, we have seven reporting units, Health, Hygiene & Specialties ("HHS") – North America ("NA"), HHS – South America ("SA"), HHS – Europe ("EU"), HHS – Asia ("AS"), Consumer Packaging, Engineered Materials, and Tapes. We determined that each of the components within our respective reporting units should be aggregated and tested at the respective level as one reporting unit. We reached this conclusion, because within each of our reporting units we have similar products, production processes, markets served, geographic region, and/or management oversight which allows us to share assets and resources across the components. We regularly re-align our production equipment and manufacturing facilities in order to take advantage of cost savings opportunities, obtain synergies and create manufacturing efficiencies. We utilize our research and development centers, design center, tool shops, and graphics center which all provide benefits to each of the reporting units and work on new products that can benefit multiple components. We also believe that the goodwill is recoverable from the overall operations of the unit given the synergies from leveraging the combined resources, common raw materials, common research and development, similar margins, management oversight and similar distribution methodologies.

2017

In conducting a qualitative assessment, we analyze a variety of events or factors that may influence the fair value of the reporting unit, including, but not limited to the results of prior quantitative tests performed; changes in the carrying amount of the reporting unit; operating results; relevant market data for both the Company and its peer companies; industry outlooks; macroeconomic conditions; liquidity; changes in key personnel; and our competitive position. Significant judgment is used to evaluate the totality of these events and factors to make the determination of whether it is more likely than not that the fair value of the reporting unit is less than its carrying value.

We completed our qualitative screen as of the first day of the fourth fiscal quarter and determined that it was more likely than not that the fair value of each of our reporting units, with the exception of ~~HHS-South America and HHS-Asia,~~HHS-SA, was greater than the carrying value. We reached this conclusion based on ~~the increased~~strong valuations within the packaging industry and operating results of our reporting units, in addition to leveraging the step one test performed in fiscal 2016 in conjunction with the Avintiv acquisition and our segment re-alignment. The identified increased valuations within the plastics industry is supported by the Company's increase in stock price, market capitalization, and total enterprise value.units.

Based on ~~the results of prior year quantitative tests performed and~~continued macroeconomic pressures in South America, we concluded that step one was necessary for ~~the HHS – South America and HHS – Asia~~our HHS-SA reporting ~~units.~~unit. The reporting unit's fair value is estimated based on a market approach and a discounted cash flow analysis and is reconciled back to the current market capitalization for Berry ~~Global Group~~ to ensure that the implied control premium is reasonable. Our forecasts included overall revenue growth of ~~4-8% through and including~~2% increasing to 4% in the terminal year, ~~which is 4%,~~margins consistent with historical results, a discount rate of 14% applied to the forecasted cash flows, and capital expenditure levels consistent with historical spend. The fair value of the ~~HHS – South America and HHS – Asia~~HHS-SA reporting unit exceeded ~~their~~its carrying value by ~~9% and 49%, respectively,~~11% and thus no impairment was recorded. However, ~~an incremental sustained declines of 10%-15% in earnings, or~~ future declines in ~~our peer companies, market capitalizations, or total enterprise value, as well as lower~~ valuation market multiples, sustained lower earnings, or macroeconomic challenges could impact future impairment tests or may require a more frequent assessment.

The Company's fair value, carrying value, and goodwill balance for the HHS-SA reporting ~~units~~unit subject to step 1one of the annual goodwill impairment test for fiscal ~~2017 are~~2018 is as follows:

Fair Value
July 1, 2017
Carrying Value July 1, 2017
Goodwill as of
September 30, 2017
HHS – South America 390 359 107
HHS – Asia 530 356 75

	Fair Value July 1, 2018				Carrying Value July 1, 2018				Goodwill as of September 29, 2018
HHS – South America			380				342				86

We also performed our annual impairment test for fiscal ~~2017~~2018 of our indefinite lived intangible assets, which relates to the "Berry Global," "Reemay," "Typar," and "Chicopee" trade names. We performed a qualitative screen for the Berry Global tradename, which totaled $207 million at September ~~30, 2017~~29, 2018 and a quantitative assessment for the recently acquired Avintiv tradenames that were valued on October 1, 2015 when acquired. The fair value is estimated based on the income approach using the revenue streams associated with each trade name. Our forecasted revenue growth for the Berry Global trade name ranged from 0-3% through and including the terminal year. In conducting our qualitative screen, we did not observe any changes in our long-term forecasted revenue growth for the Reemay and Typar trade names which ranged from 3-4%, and for the Chicopee trade name which was 1%. Future declines in revenue or operating performance could impact future impairment tests and our ability to recover the fair value of our indefinite lived tradenames.

Deferred Taxes and Effective Tax Rates. We estimate the effective tax ~~rates~~rate ("ETR") and associated liabilities or assets for each of our legal entities of ours in accordance with authoritative guidance. We use tax planning to minimize or defer tax liabilities to future periods. In recording ETRs and related liabilities and assets, we rely upon estimates, which are based upon our interpretation of U.S. and local tax laws as they apply to our legal entities and our overall tax structure. Audits by local tax jurisdictions, including the U.S. Government, could yield different interpretations from our own and cause the Company to owe more taxes than originally recorded. For interim periods, we accrue our tax provision at the ETR that we expect for the full year. As the actual results from our various businesses vary from our estimates earlier in the year, we adjust the succeeding interim periods' ETRs to reflect our best estimate for the year-to-date results and for the full year. As part of the ETR, if we determine that a deferred tax asset arising from temporary differences is not likely to be utilized, we will establish a valuation allowance against that asset to record it at its expected realizable value. In multiple foreign jurisdictions, the Company believes that it will not generate sufficient future taxable income to realize the related tax benefits. The Company has provided a full valuation allowance against its foreign net operating losses included within the deferred tax assets in multiple foreign jurisdictions. The Company has not provided a valuation allowance on its federal net operating losses in the U.S. because it has determined that future reversals of its temporary taxable differences will occur in the same periods and are of the same nature as the temporary differences giving rise to the deferred tax assets. Changes in our valuation allowance could also impact our tax receivable agreement obligation. Our valuation allowance against deferred tax assets was $93 million ~~and $82 million~~ as of the ~~end of~~ fiscal ~~2017~~years ended 2018 and ~~2016, respectively.~~2017.

Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, we believe that our consolidated financial statements provide a meaningful and fair perspective of the Company and its consolidated subsidiaries. This is not to suggest that other risk factors such as changes in economic conditions, changes in material costs, our ability to pass through changes in material costs, and others could not materially adversely impact our consolidated financial position, results of operations and cash flows in future periods.

2118

Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Sensitivity

We are exposed to market risk from changes in interest rates primarily through our senior secured credit facilities. At September ~~30, 2017,~~29, 2018, our senior secured credit facilities are comprised of ~~$4.0~~$3.7 billion in term loans and a $750 million revolving credit facility with no borrowings outstanding. The borrowings under the senior secured credit facilities bear interest at a rate equal to an applicable margin plus LIBOR. The applicable margin for LIBOR rate borrowings under the revolving credit facility ranges from 1.25% to 1.75%, and the margin for ~~all of~~ the term loans ~~are 2.25%~~range from 1.75% to 2.00% per ~~annum with a 0% LIBOR floor.~~annum. At September ~~30, 2017,~~29, 2018, the LIBOR rate of approximately ~~1.23%~~2.23% was applicable to the term loans. A 0.25% change in LIBOR would increase our annual interest expense by $4$6 million on variable rate term loans.

We seek to minimize interest rate volatility risk through regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. These financial instruments are not used for trading or other speculative purposes. As of year-end, the Company effectively had ~~(1)~~(i) a $450 million interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of ~~2.00%~~2.000%, with an effective date in May 2017 and expiration in May 2022 ~~(2)~~and (ii) a $1 billion interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of ~~1.5190%~~2.808% with an effective date in ~~March 2017 and expiration in~~ June ~~2019, (3) a $1 billion interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 2.0987% with an effective date in February 2017~~2018 and expiration in September 2021.

Foreign Currency Exchange Rates

As a global company, we face foreign currency risk exposure from fluctuating currency exchange rates, primarily the U.S. dollar against the euro, Brazilian real, Argentine peso, Chinese ~~yuan,~~renminbi, Canadian dollar and Mexican peso. Significant fluctuations in currency exchange rates can have a substantial impact, either positive or negative, on our revenue, cost of sales, and operating expenses. Currency translation gains and losses are primarily related to non-U.S. subsidiaries with a functional currency other than U.S. dollars whereby assets and liabilities are translated from the respective functional currency into U.S. dollars using period-end exchange rates and impact our Comprehensive income. A 10% decline in foreign currency exchange rates would have a negative $6 million impact on our Net Income. While future consolidated results of operations could be materially impacted by future fluctuations in currency rates, we may attempt to manage our foreign currency risk on our anticipated cash movements by entering into foreign currency forward contracts to offset potential foreign exchange gains or losses. As of year-end we had no outstanding foreign currency contracts as these contracts are typically entered into and settled within the given quarter.income.

In November 2017, we entered into certain cross-currency swap agreements with a notional amount of 250 million euro to effectively convert a portion of our fixed-rate USD denominated term loans, including the monthly interest payments, to ~~fixed rate euro-denominated~~fixed-rate euro denominated debt. The swap agreements mature May 2022. The risk management objective is to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in ~~euros~~foreign currencies and reduce the variability in the functional currency cash flows of a portion of our term loans. In the future, we may attempt to manage our foreign currency risk on our anticipated cash movements by entering into foreign currency forward contracts to offset potential foreign exchange gains or losses.

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

Reports of Independent Registered Public Accounting Firm	2623
Consolidated Statements of Income and Comprehensive Income for fiscal 2018, 2017 ~~2016~~ and ~~2015~~2016	2825
Consolidated Balance Sheets as of fiscal ~~2017~~2018 and ~~2016~~2017	2926
Consolidated Statements of Changes in Stockholders' Equity ~~(Deficit)~~ for fiscal 2018, 2017 ~~2016~~ and ~~2015~~2016	3027
Consolidated Statements of Cash Flows for fiscal 2018, 2017 ~~2016~~ and ~~2015~~2016	3128
Notes to Consolidated Financial Statements	3229

Index to Financial Statement Schedules

All schedules have been omitted because they are not applicable or not required or because the required information is included in the consolidated financial statements or notes thereto.

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A.

CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.

We maintain "disclosure controls and procedures," as such term is defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

In connection with the preparation of this Form 10-K, management evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September ~~30, 2017.~~29, 2018. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of September ~~30, 2017.~~29, 2018.

Management's Report on Internal Controls over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013 Framework). The Company acquired ~~AEP~~Clopay and ~~Adchem~~Laddawn during fiscal ~~2017,~~2018, and management has excluded ~~AEP~~Clopay and ~~Adchem's~~Laddawn's internal control over financial reporting from our assessment of the effectiveness of our internal control as of September ~~30, 2017. AEP~~29, 2018. Clopay and ~~Adchem~~Laddawn represent approximately 8% and 6% of ~~our consolidated~~total and net assets, respectively, as of September ~~30, 2017~~29, 2018 and ~~approximately 11%~~4% and 2% of ~~our consolidated~~ net sales and net income, respectively, for ~~fiscal 2017.~~the year then ended.

Based on this assessment, management concluded that as of September ~~30, 2017,~~29, 2018, the Company's internal control over financial reporting was effective. ~~In addition, Ernst & Young LLP as of September 30, 2017, the~~The Company's independent registered public accounting firm provided an attestation report on the Company's internal ~~control~~controls over financial ~~reporting.~~ reporting, which appears on page 24 of this Form 10-K.

Changes in Internal Controls over Financial Reporting

During fiscal 2017, we developed and implemented new control procedures designed to address the ineffectiveness identified as of the end of fiscal 2016 related to the timeliness of our annual income tax provision process and the adequacy of written documentation around aspects of our foreign tax provisions. These changes included allocating resources internally to allow us to accelerate the timing of the completion of foreign tax provisions and increasing the level of written documentation related to all aspects of the income tax provision process.

~~In fiscal 2017, we acquired 100% of the capital stock of AEP which added 14 facilities, 1 of which is located outside the U.S, as well as Adchem Corp's tapes business which added 1 facility.~~ The Company is in the process of ~~migrating AEP and Adchem's operations into their shared service center, migrating information technology platforms and standardizing~~implementing our standardized control procedures ~~across the overall operations~~within Clopay and ~~expect~~Laddawn and expects this to ~~continue~~be completed during fiscal ~~2018.~~2019.

There were no other changes in our internal control over financial reporting that occurred during the quarter ended September ~~30, 2017~~29, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial ~~reporting, except as described above.~~reporting.

Item 9B.

OTHER INFORMATION

None.

2320

PART III

Item 10.

DIRECTORS, ~~AND~~ EXECUTIVE OFFICERS OF THE REGISTRANT, AND CORPORATE GOVERNANCE

Except as set forth below, the information required by this Item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with the ~~2018~~2019 Annual Meeting of Stockholders.

Code of Ethics

We have a Code of Business Ethics that applies to all directors and employees, including our Chief Executive Officer and senior financial officers. These standards are designed to deter wrongdoing and to promote the highest ethical, moral, and legal conduct of all employees. We also have adopted a Supplemental Code of Ethics, which is in addition to the standards set by our Code of Business Ethics, in order to establish a higher level of expectation for the most senior leaders of the Company. The Supplemental Code of Ethics sets the expectations as to how our senior leaders conduct themselves in dealings with the Company, customers, suppliers and coworkers and it further defines our commitment to compliance with the Company's policies, procedures and government regulations. Our Code of Business Ethics and Supplemental Code of Ethics can be obtained, free of charge, by contacting our corporate headquarters or can be obtained from the Corporate Governance section of the Investors page on the Company's internet site.

Item 11.

EXECUTIVE COMPENSATION

The information required by this Item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with the ~~2018~~2019 Annual Meeting of Stockholders.

Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item, is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with the ~~2018~~2019 Annual Meeting of Stockholders.

Item 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with the ~~2018~~2019 Annual Meeting of Stockholders.

Item 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with the ~~2018~~2019 Annual Meeting of Stockholders.

2421

PART IV

Item 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements

The financial statements listed under Item 8 are filed as part of this report.

Financial Statement Schedules

Schedules have been omitted because they are either not applicable or the required information has been disclosed in the financial statements or notes thereto.

Exhibits

The exhibits listed on the Exhibit Index immediately following the signature page of this annual report are filed as part of this report.

Item 16.

FORM 10-K SUMMARY

None.

2522

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

of Berry Global Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Berry Global Group, Inc. ~~(formerly known as Berry Plastics Group, Inc.)~~(the Company) as of September 29, 2018, and September 30, 2017, ~~and October 1, 2016,~~ and the related consolidated statements of income, comprehensive income, changes in stockholders' equity ~~(deficit)~~ and cash flows for each of the three years in the period ended September 29, 2018, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in material respects, the financial position of Berry Global Group, Inc. at September 29, 2018 and September 30, ~~2017.~~ 2017, and the results of its operations and its cash flows for each of the three years in the period ended September 29, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the "PCAOB"), Berry Global Group, Inc.'s internal control over financial reporting as of September 29, 2018, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November 16, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on ~~these~~the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material ~~misstatement. An audit includes~~misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the financial statements. ~~An audit~~Our audits also ~~includes assessing~~included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial ~~statement presentation.~~statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as Berry Global Group, Inc.'s auditor since 1991.

Indianapolis, Indiana

November 16, 2018

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Berry Global Group, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Berry Global Group Inc.'s internal control over financial reporting as of September 29, 2018, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission "(2013 framework)" (the COSO criteria). In our opinion, ~~the financial statements referred to above present fairly,~~Berry Global Group, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 29, 2018, based on the COSO criteria.

As indicated in the accompanying Management's Report on Internal Controls over Financial Reporting, management's assessment and conclusion of the effectiveness of internal control over financial reporting did not include the internal controls of Clopay Plastic Products Company, Inc. and Laddawn, Inc., which are included in the 2018 consolidated financial ~~position of Berry Global Group, Inc. at September 30, 2017, and October 1, 2016, and the consolidated results of its operations and its cash flows for each~~statements of the ~~three years in~~Company and constituted 8% and 6% of total and net assets, respectively, as of September 29, 2018 and 4% and 2% of net sales and net income, respectively, for the ~~period ended September 30, 2017, in conformity with U.S. generally accepted accounting principles.~~year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Clopay and Laddawn.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the "PCAOB"), the consolidated balance sheets of Berry Global Group, Inc.~~'s internal control over financial reporting~~ as of September 29, 2018 and September 30, 2017, ~~based on criteria established~~and the related consolidated statements of income, comprehensive income, changes in ~~Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations~~stockholders' equity and cash flows for each of the ~~Treadway Commission "(2013 framework)"~~three years in the period ended September 29, 2018, and the related notes and our report dated November ~~21, 2017,~~16, 2018 expressed an unqualified opinion thereon.

~~/s/ Ernst & Young LLP~~

~~Indianapolis, Indiana~~

~~November 21, 2017~~

~~Report of Independent Registered Public Accounting Firm~~Basis for Opinion

The ~~Board of Directors and Stockholders~~

~~Berry Global Group, Inc.~~

We have audited Berry Global Group, Inc.'s (formerly known as Berry Plastics Group, Inc.) internal control over financial reporting as of September 30, 2017, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission "(2013 framework)" (the COSO criteria). Berry Global Group, Inc.'sCompany's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal ~~Controls over~~Control Over Financial Reporting. Our responsibility is to express an opinion on the ~~company's~~Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management's Report on Internal Controls over Financial Reporting, management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include internal controls of AEP Industries, Inc. and Adchem Corp., which are included in the 2017 consolidated financial statements of Berry Global Group, Inc. and constituted 8% of total assets as of September 30, 2017 and 11% of net sales for the year then ended. Our audit of internal control over financial reporting of Berry Global Group, Inc. also did not include an evaluation of internal control over financial reporting of AEP and Adchem.

~~In our opinion, Berry Global Group, Inc. maintained, in all material respects, effective internal control over financial reporting as of September 30, 2017, based on the COSO criteria.~~

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Berry Global Group, Inc. as of September 30, 2017 and October 1, 2016, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity (deficit) and cash flows for each of the three years in the period ended September 30, 2017 of Berry Global Group, Inc. and our report dated November 21, 2017 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Indianapolis, Indiana

November ~~21, 2017~~

16, 2018

2724

Berry Global Group, Inc.

Consolidated Statements of Income

(in millions of dollars)

	Fiscal years ended							Fiscal years ended
	September 30, 2017		October 1, 2016			September 26, 2015		September 29, 2018			September 30, 2017		October 1, 2016
Net sales	$	7,095	$	6,489		$	4,881	$	7,869		$	7,095	$	6,489
Costs and expenses:
Cost of goods sold		5,691		5,202			4,012		6,438			5,691		5,202
Selling, general and administrative		494		531			357		480			494		531
Amortization of intangibles		154		143			91		154			154		143
Restructuring and impairment charges		24		32			13		36			24		32
Operating income		732		581			408		761			732		581

Debt extinguishment		10		4			94
Other (income) expense, net		4		(22	)		1
Other expense (income), net									25			14		(18	)
Interest expense, net		269		291			191		259			269		291
Income before income taxes		449		308			122		477			449		308
Income tax expense		109		72			36
Income tax (benefit) expense									(19	)		109		72
Net income	$	340	$	236		$	86	$	496		$	340	$	236
Net income per share:
Basic (see footnote 14)	$	2.66	$	1.95		$	0.72
Diluted (see footnote 14)	$	2.56	$	1.89		$	0.70
Basic (see Note 14)								$	3.77		$	2.66	$	1.95
Diluted (see Note 14)								$	3.67		$	2.56	$	1.89

Berry Global Group, Inc.

Consolidated Statements of Comprehensive Income

(in millions of dollars)

	Fiscal years ended									Fiscal years ended
	September 30, 2017			October 1, 2016			September 26, 2015			September 29, 2018			September 30, 2017			October 1, 2016
Net income	$	340		$	236		$	86		$	496		$	340		$	236
Currency translation		34			(1	)		(45	)		(127	)		34			(1	)
Defined benefit pension and retiree health benefit plans		38			(23	)		(16	)
Pension and postretirement benefits											3			38			(23	)
Interest rate hedges		28			(14	)		(33	)		49			28			(14	)
Provision for income taxes related to other comprehensive income items		(20	)		9			18
Other comprehensive income, net of tax		80			(29	)		(76	)
Provision for income taxes											(13	)		(20	)		9
Other comprehensive (loss) income, net of tax											(88	)		80			(29	)
Comprehensive income	$	420		$	207		$	10		$	408		$	420		$	207

See notes to consolidated financial statements.

2825

Berry Global Group, Inc.

Consolidated Balance Sheets

(in millions of dollars)

	September 30, 2017			October 1, 2016			September 29, 2018			September 30, 2017
Assets
Current assets:
Cash and cash equivalents	$	306		$	323		$	381		$	306
Accounts receivable, net		847			704			941			847
Inventories		762			660			887			762
Prepaid expenses and other current assets		89			105			76			89
Total current assets		2,004			1,792			2,285			2,004
Property, plant and equipment, net		2,366			2,224			2,488			2,366
Goodwill and intangible assets, net		4,061			3,606			4,284			4,061
Other assets		45			31			74			45
Total assets	$	8,476		$	7,653		$	9,131		$	8,476

Liabilities
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	638		$	539		$	783		$	638
Accrued expenses and other current liabilities		463			449			416			463
Current portion of long-term debt		33			43			38			33
Total current liabilities		1,134			1,031			1,237			1,134
Long-term debt, less current portion		5,608			5,712			5,806			5,608
Deferred income taxes		419			272			365			419
Other long-term liabilities		300			417			289			300
Total liabilities		7,461			7,432			7,697			7,461
Commitments and contingencies

Stockholders' Equity:
Common stock: (130.9 and 122.0 shares issued, respectively)		1			1
Stockholders' equity:
Common stock (131.4 and 130.9 shares issued, respectively)								1			1
Additional paid-in capital		823			449			867			823
Non-controlling interest		3			3			3			3
Retained earnings (deficit)		256			(84	)
Retained earnings								719			256
Accumulated other comprehensive loss		(68	)		(148	)		(156	)		(68	)
Total stockholders' equity		1,015			221			1,434			1,015
Total liabilities and stockholders' equity	$	8,476		$	7,653		$	9,131		$	8,476

See notes to consolidated financial statements.

2926

Berry Global Group, Inc.

Consolidated Statements of Changes in Stockholders' Equity ~~(Deficit)~~

(in millions of dollars)

	Common Stock		Additional Paid-in Capital			Non-Controlling Interest		Accumulated Other Comprehensive Loss			Retained Earnings (Deficit)			Total			Common Stock		Additional Paid-in Capital			Non-Controlling Interest		Accumulated Other Comprehensive Loss			Retained Earnings (Deficit)			Total
Balance at September 27, 2014	$	1	$	367		$	3	$	(43	)	$	(442	)	$	(114	)
Stock compensation expense		—		21			—		—			—			21
Proceeds from issuance of common stock		—		18			—		—			—			18
Interest rate hedge, net of tax		—		—			—		(21	)		—			(21	)
Net income attributable to the Company		—		—			—		—			86			86
Currency translation		—		—			—		(45	)		—			(45	)
Defined benefit pension and retiree health benefit plans, net of tax		—		—			—		(10	)		—			(10	)
Balance at September 26, 2015	$	1	$	406		$	3	$	(119	)	$	(356	)	$	(65	)	$	1	$	406		$	3	$	(119	)	$	(356	)	$	(65	)
Stock compensation expense		—		20			—		—			—			20
Share-based compensation expense																		—		20			—		—			—			20
Cumulative effect of excess tax benefit from the adoption of ASU 2016-09		—		—			—		—			36			36			—		—			—		—			36			36
Proceeds from issuance of common stock		—		26			—		—			—			26			—		26			—		—			—			26
Interest rate hedge, net of tax		—		—			—		(9	)		—			(9	)		—		—			—		(9	)		—			(9	)
Net income attributable to the Company		—		—			—		—			236			236			—		—			—		—			236			236
Currency translation		—		—			—		(1	)		—			(1	)		—		—			—		(1	)		—			(1	)
Defined benefit pension and retiree health benefit plans, net of tax		—		—			—		(19	)		—			(19	)		—		—			—		(19	)		—			(19	)
Other equity		—		(3	)		—		—			—			(3	)		—		(3	)		—		—			—			(3	)
Balance at October 1, 2016	$	1	$	449		$	3	$	(148	)	$	(84	)	$	221		$	1	$	449		$	3	$	(148	)	$	(84	)	$	221
Stock compensation expense		—		20			—		—			—			20
Share-based compensation expense																		—		20			—		—			—			20
Proceeds from issuance of common stock		—		31			—		—			—			31			—		31			—		—			—			31
Interest rate hedge, net of tax		—		—			—		18			—			18			—		—			—		18			—			18
Net income attributable to the Company		—		—			—		—			340			340			—		—			—		—			340			340
Currency translation		—		—			—		34			—			34			—		—			—		34			—			34
Defined benefit pension and retiree health benefit plans, net of tax		—		—			—		28			—			28			—		—			—		28			—			28
Equity issuance, net (see Footnote 2)		—		323			—		—			—			323
Equity issuance, net (see Note 2)																		—		323			—		—			—			323
Balance at September 30, 2017	$	1	$	823		$	3	$	(68	)	$	256		$	1,015		$	1	$	823		$	3	$	(68	)	$	256		$	1,015
Share-based compensation expense																		—		23			—		—			—			23
Proceeds from issuance of common stock																		—		23			—		—			—			23
Common stock repurchased and retired																		—		(2	)		—		—			(33	)		(35	)
Interest rate hedge, net of tax																		—		—			—		36			—			36
Net income attributable to the Company																		—		—			—		—			496			496
Currency translation																		—		—			—		(127	)		—			(127	)
Defined benefit pension and retiree health benefit plans, net of tax																		—		—			—		3			—			3
Balance at September 29, 2018																	$	1	$	867		$	3	$	(156	)	$	719		$	1,434

See notes to consolidated financial statements.

3027

Berry Global Group, Inc.

Consolidated Statements of Cash Flows

(in millions of dollars)

	Fiscal years ended
	September 30, 2017			October 1, 2016			September 26, 2015			Fiscal years ended
										September 29, 2018			September 30, 2017			October 1, 2016
Cash Flows from Operating Activities:
Net income	$	340		$	236		$	86		$	496		$	340		$	236

Adjustments to reconcile net cash from operating activities:
Depreciation		367			382			259			384			367			382
Amortization of intangibles		154			143			91			154			154			143
Non-cash interest expense		9			9			6			4			9			9
Debt extinguishment		10			4			94
Stock compensation expense		20			20			21
Share-based compensation expense											23			20			20
Deferred income tax		5			31			26			(86	)		5			31
Settlement of interest rate hedge											30			—			—
Other non-cash operating activities, net		15			(13	)		2			16			25			(9	)
Changes in operating assets and liabilities:																	—
Accounts receivable, net		(41	)		(34	)		46			(53	)		(41	)		(34	)
Inventories		10			9			74			(79	)		10			9
Prepaid expenses and other assets		27			21			(8	)		18			27			21
Accounts payable and other liabilities		59			49			(60	)		97			59			49
Net cash from operating activities		975			857			637			1,004			975			857

Cash Flows from Investing Activities:
Additions to property, plant and equipment		(269	)		(288	)		(180	)		(336	)		(269	)		(288	)
Proceeds from sale of assets		6			5			18			3			6			5
Acquisition of business, net of cash acquired		(515	)		(2,283	)		(3	)
Acquisition of business, net											(702	)		(515	)		(2,283	)
Other investing activities, net		4			(13	)		—			—			4			(13	)
Net cash from investing activities		(774	)		(2,579	)		(165	)		(1,035	)		(774	)		(2,579	)

Cash Flows from Financing Activities:
Proceeds from long-term borrowings		495			2,490			693			498			495			2,490
Repayment of long-term borrowings		(636	)		(524	)		(951	)		(335	)		(636	)		(524	)
Proceeds from issuance of common stock		31			26			18			23			31			26
Repurchase of common stock											(33	)		—			—
Payment of tax receivable agreement		(111	)		(57	)		(39	)		(37	)		(111	)		(57	)
Debt financing costs		(5	)		(40	)		(86	)		(3	)		(5	)		(40	)
Purchase of non-controlling interest		—			(78	)		—			—			—			(78	)
Net cash from financing activities		(226	)		1,817			(365	)		113			(226	)		1,817
Effect of currency translation on cash		8			—			(8	)		(7	)		8			—
Net change in cash and cash equivalents		(17	)		95			99			75			(17	)		95
Cash and cash equivalents at beginning of period		323			228			129			306			323			228
Cash and cash equivalents at end of period	$	306		$	323		$	228		$	381		$	306		$	323

See notes to consolidated financial statements.

3128

Berry Global Group, Inc.

Notes to Consolidated Financial Statements

(in millions of dollars, except as otherwise noted)

1. Basis of Presentation and Summary of Significant Accounting Policies

Background

Berry Global Group, Inc. ("Berry," "we," or the "Company") is a leading provider of value-added engineered materials, nonwoven specialty materials and consumer packaging with a track record of delivering high-quality customized solutions to our customers. We sell our products predominantly into stable, consumer-oriented end-markets, such as healthcare, personal care, and food and beverage. Our customers consistglobal supplier of a ~~diverse mix~~broad range of ~~leading global, national, mid-sized regional~~innovative non-woven, flexible, and ~~local specialty businesses. The size~~rigid products used every day within consumer and ~~scope of our customer network allows us to introduce new products we develop or acquire to a vast audience that is familiar with our business.~~

Effective April 2017, the Company changed its name from Berry Plastics Group, Inc. to Berry Global Group, Inc. The new name is reflected throughout this Form 10-K. Common Shares of the Company stock continue to be traded on the New York Stock Exchange under the symbol BERY. In addition, Berry Plastics Corporation, a wholly owned subsidiary, changed its name to Berry Global, Inc.industrial end markets.

Basis of Presentation

Periods presented in these financial statements include fiscal periods ending September 29, 2018 ("fiscal 2018"), September 30, 2017 ("fiscal 2017"), and October 1, 2016 ("fiscal 2016")~~, and September 26, 2015 ("fiscal 2015")~~. The Company has recast certain prior period amounts to conform to current reporting. The Company's customers are located principally throughout the U.S., without significant concentration with any one customer. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. Fiscal ~~2017~~2018 and fiscal ~~2015~~2017 were fifty-two week periods, and fiscal 2016 was a fifty-three week period. The Company has evaluated subsequent events through the date the financial statements were issued.

The consolidated financial statements include the accounts of Berry and its subsidiaries, all of which includes our wholly owned and majority owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Where our ownership of consolidated subsidiaries is less than 100% the non-controlling interests are reflected in Non-controlling interest.

Revenue Recognition

Revenue from the sales of products is recognized at the time title and risks and rewards of ownership pass to the customer, there is persuasive evidence of an arrangement, the sales price is fixed and determinable and collection is reasonably assured. Provisions for certain rebates, sales incentives, trade promotions, coupons, product returns and discounts to customers are accounted for as reductions in gross sales to arrive at net sales. In accordance with the Revenue Recognition standards of the Accounting Standards Codification ("Codification" or "ASC"), the Company provides for these items as reductions of revenue at the later of the date of the sale or the date the incentive is offered. These provisions are based on estimates derived from current program requirements and historical experience.

Shipping, handling, purchasing, receiving, inspecting, warehousing, and other costs of distribution are presented in Cost of goods sold in the Consolidated Statements of Income. The Company classifies amounts charged to its customers for shipping and handling in Net sales in the Consolidated Statements of Income.

Purchases of Raw Materials and Concentration of Risk

The Company's most significant raw material used in the production of its products is plastic resin. The largest supplier of the Company's total resin material requirements represented approximately ~~15%~~16% of purchases in fiscal ~~2017.~~2018. The Company uses a variety of suppliers to meet its resin requirements.

Research and Development

Research and development costs are expensed when incurred. The Company incurred research and development expenditures of $45 million, ~~$48~~$45 million, and ~~$33~~$48 million in fiscal 2018, 2017, ~~2016,~~ and ~~2015,~~2016, respectively.

~~Stock-Based~~Share-Based Compensation

The compensation guidance of the FASB requires that the compensation cost relating to share-based payment transactions be recognized in financial statements based on alternative fair value models. The share-based compensation cost is measured based on the fair value of the equity or liability instruments issued. The Company's share-based compensation plan is more fully described in Note 12. The Company recorded total stock compensation expense of $20 million, $20 million, and $21 million for fiscal 2017, 2016, and 2015, respectively.

The Company utilizes the Black-Scholes option valuation model for estimating the fair value of stock options and amortizes the ~~stock options.~~estimated fair value on a straight-line basis over the requisite service period. The ~~model allows for the use of a range of assumptions. Expected volatilities utilized~~share-based compensation plan is more fully described in the Black-Scholes model are based on implied volatilities from traded stocks of peer companies. Similarly, the dividend yield is based on historical experience and the estimate of future dividend yields. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The Company's options have a ten year contractual life. For purposes of the valuation model in fiscal years 2017, 2016, and 2015, the Company used the simplified method for determining the granted options expected lives (see footnote 12).Note 12.

Foreign Currency

For the non-U.S. subsidiaries that account in a functional currency other than U.S. Dollars, assets and liabilities are translated into U.S. Dollars using period-end exchange rates. Sales and expenses are translated at the average exchange rates in effect during the period. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive income (loss) within stockholders' equity. Gains and losses resulting from foreign currency transactions are included in the Consolidated Statements of Income.

Cash and Cash Equivalents

All highly liquid investments purchased with a maturity of three months or less from the time of purchase are considered to be cash equivalents.

Allowance for Doubtful Accounts

The Company's accounts receivable and related allowance for doubtful accounts are analyzed in detail on a quarterly basis and all significant customers with delinquent balances are reviewed to determine future collectability. The determinations are based on legal issues (such as bankruptcy status), past history, current financial and credit agency reports, and the experience of the credit representatives. Reserves are established in the quarter in which the Company makes the determination that the account is deemed uncollectible. The Company maintains additional reserves based on its historical bad debt experience. The following table summarizes the activity for fiscal years ended for the allowance for doubtful accounts:

	2017			2016			2015			2018			2017			2016
Allowance for doubtful accounts, beginning	$	8		$	3		$	3		$	13		$	8		$	3
Acquisition allowance for doubtful accounts		5			6			—			2			5			6
Bad debt expense		1			1			2			1			1			1
Write-offs against allowance		(1	)		(2	)		(2	)		(3	)		(1	)		(2	)
Allowance for doubtful accounts, ending	$	13		$	8		$	3		$	13		$	13		$	8

Accounts Receivable Factoring Agreements

The Company has entered into various factoring agreements, both in the U.S. and at a number of foreign subsidiaries, to sell certain receivables to unrelated third-party financial institutions. The Company accounts for these transactions in accordance with ASC 860, "Transfers and Servicing" ("ASC 860"). ASC 860 allows for the ownership transfer of accounts receivable to qualify for sale treatment when the appropriate criteria is met, which permits the Company to present the balances sold under the program to be excluded from Accounts receivable, net on the Consolidated Balance Sheets. Receivables are considered sold when (i) they are transferred beyond the reach of the Company and its creditors, (ii) the purchaser has the right to pledge or exchange the receivables, and (iii) the Company has surrendered control over the transferred receivables. In addition, the Company provides no other forms of continued financial support to the purchaser of the receivables once the receivables are sold.

There were no amounts outstanding from financial institutions related to U.S. based programs at September 29, 2018 or September 30, ~~2017 or October 1, 2016.~~2017. Gross amounts factored under these U.S. based programs at September 29, 2018 and September 30, 2017 ~~and October 1, 2016~~ were ~~$129~~$162 million and ~~$118~~$129 million, respectively. The fees associated with transfer of receivables for all programs were not material for any of the periods presented.

Inventories

Inventories are stated at the lower of cost or market and are valued using the first-in, first-out method. Management periodically reviews inventory balances, using recent and future expected sales to identify slow-moving and/or obsolete items. The cost of spare parts is charged to cost of goods sold when purchased. We evaluate our reserve for inventory obsolescence on a quarterly basis and review inventory on-hand to determine future salability. We base our determinations on the age of the inventory and the experience of our personnel. We reserve inventory that we deem to be not salable in the quarter in which we make the determination. We believe, based on past history and our policies and procedures, that our net inventory is salable. Inventory as of fiscal ~~2017~~2018 and ~~2016~~2017 was:

Inventories:	2017		2016		2018		2017
Finished goods	$	428	$	397	$	503	$	428
Raw materials		334		263		384		334
	$	762	$	660	$	887	$	762

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is computed primarily by the straight-line method over the estimated useful lives of the assets ranging from 515 to 2540 years for buildings and improvements, 2 to 1020 years for machinery, equipment, and tooling, and over the term of the agreement for capital leases. Leasehold improvements are depreciated over the shorter of the useful life of the improvement or the lease term. Repairs and maintenance costs are charged to expense as incurred. The Company capitalized interest of $7$9 million, $6$7 million, and $6 million in fiscal 2018, 2017, ~~2016,~~ and ~~2015,~~2016, respectively. Property, plant and equipment as of fiscal ~~2017~~2018 and ~~2016~~2017 was:

Property, plant and equipment: 2017 2016
Land, buildings and improvements $ 792 $ 667
Equipment and construction in progress 3,895 3,552
4,687 4,219
Less accumulated depreciation (2,321 ) (1,995 )
$ 2,366 $ 2,224

Property, plant and equipment:	2018			2017
Land, buildings and improvements	$	875		$	792
Equipment and construction in progress		4,242			3,895
		5,117			4,687
Less accumulated depreciation		(2,629	)		(2,321	)
	$	2,488		$	2,366

Long-lived Assets

Long-lived assets, including property, plant and equipment and definite lived intangible assets are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment," whenever facts and circumstances indicate that the carrying amount may not be recoverable. Specifically, this process involves comparing an asset's carrying value to the estimated undiscounted future cash flows the asset is expected to generate over its remaining life. If this process were to result in the conclusion that the carrying value of a long-lived asset would not be recoverable, a write-down of the asset to fair value would be recorded through a charge to operations. Fair value is determined based upon discounted cash flows or appraisals as appropriate. Long-lived assets that are held for sale are reported at the lower of the assets' carrying amount or fair value less costs related to the assets' disposition. We recorded impairment charges totaling $2 million ~~$3 million,~~ and $2$3 million to property, plant and equipment assets to their net realizable valuables in connection with facility shutdowns during fiscal years 2017 and 2016, ~~and 2015,~~ respectively. Impairment charges are recorded in Other expense (income), net in the Consolidated Statements of Income. There were no impairments in fiscal 2018.

Goodwill

The Company follows the principles provided by ASC 350, "Intangibles - Goodwill and Other." Goodwill is not amortized but rather reviewed annually for impairment. In connection with the Company's segment re-alignment, the Company performed a goodwill assessment before and after the segment realignment to determine if any impairment was present, noting that in each case the fair value of the reporting unit for each of historical reporting units exceeded its carrying value. The Company performed ~~their~~its annual impairment evaluation on the first day of the fourth fiscal quarter. For purposes of conducting our annual goodwill impairment test, the Company determined that we have seven reporting units, Health, Hygiene & Specialties ("HHS") – North America ("NA"), HHS – South America ("SA"), HHS – Europe ("EU"), HHS – Asia ("AS"), Consumer Packaging, Engineered Materials, and Tapes. We determined that each of the components within our respective reporting units should be aggregated for our Consumer Packaging, Engineered Materials and Tapes reporting units. We reached this conclusion because within each of these three reporting units, we have similar products, management oversight, production processes, markets served, and/or common geographic region which allow us to share resources across the product lines. We regularly re-align our production equipment and manufacturing facilities in order to take advantage of cost savings opportunities, obtain synergies and create manufacturing efficiencies. In addition, we utilize our research and development centers, design center, tool shops, and graphics center which all provide benefits to each of the reporting units and work on new products that can benefit multiple product lines. We also believe that the goodwill is recoverable from the overall operations of the unit given our synergies from leveraging the combined resources, common raw materials, common research and development, similar margins and similar distribution methodologies. In our HHS segment, we operate in four geographical regions where our management teams for each geography oversee the operations and allocate the resources across the entire region. In fiscal year ~~2017,~~2018, the Company applied the qualitative assessment ~~to determine whether it is more likely than not that the fair value of the reporting units may be less than the carrying amount,~~ and concluded that it was more likely than not that the fair value of each reporting unit exceeded the carrying amount except for the ~~HHS-South America~~HHS-SA reporting unit due to continued macroeconomic pressures in South America. The Company completed step one in fiscal 2018, which concluded the fair value of the HHS-SA reporting unit exceeded its carrying value by 11% and ~~HHS-Asia~~thus no impairment was recorded. However, future declines in valuation market multiples, sustained lower earnings, or macroeconomic challenges could impact future impairment tests. In fiscal year 2017, the Company applied the qualitative assessment and concluded that it was more likely than not that the fair value of each reporting unit exceeded the carrying amount except for the HHS-SA and HHS-AS reporting units due to prior year quantitative tests performed and macroeconomic pressures in South America. The Company completed step 1one in fiscal 2017, which concluded the fair value of the ~~HHS – South America~~HHS-SA and ~~HHS – Asia~~HHS-AS reporting units exceeded their carrying value by 9% and 49%, respectively, and thus no impairment was recorded. However, an incremental sustained decline of 10%-15% in earnings, or future declines in our peer companies, market capitalizations, or total enterprise value, as well as lower valuation market multiples could impact future impairment tests or may require a more frequent assessment. In fiscal year 2016, due to the segment realignment, the Company opted to perform a step 1one quantitative evaluation in accordance with ASC 350 to establish a baseline for the fair value of each reporting unit. The Company utilizes a combination of the discounted cash flow analysis and comparable company valuation methods to determine the fair values of its reporting units in accordance with ASC 820. The Company determined that the fair value of each reporting unit exceeded its carrying amount. ~~In fiscal 2015, the Company applied the qualitative assessment and determined that it is more likely than not that the fair value of each reporting unit exceeded its carrying amount.~~ The Company has recognized cumulative goodwill impairment charges of $165 million, which occurred in fiscal 2011.

3431

The changes in the carrying amount of goodwill by reportable segment are as follows:

	Consumer Packaging			Health, Hygiene & Specialties		Engineered Materials			Total		Consumer Packaging			Health, Hygiene & Specialties			Engineered Materials			Total
Balance as of fiscal 2015	$	1,520		$	48	$	84		$	1,652
Foreign currency translation adjustment		—			13		1			14
Acquisitions, net		—			740		—			740
Balance as of fiscal 2016	$	1,520		$	801	$	85		$	2,406	$	1,520		$	801		$	85		$	2,406
Segment re-alignment		(110	)		7		103			—		(110	)		7			103			—
Foreign currency translation adjustment		1			11		(1	)		11		1			11			(1	)		11
Acquisitions, net		—			—		358			358		—			—			358			358
Balance as of fiscal 2017	$	1,411		$	819	$	545		$	2,775	$	1,411		$	819		$	545		$	2,775
Foreign currency translation adjustment												(2	)		(26	)		1			(27	)
Acquisitions, net												—			109			87			196
Balance as of fiscal 2018											$	1,409		$	902		$	633		$	2,944

Deferred Financing Fees

Deferred financing fees are amortized to interest expense using the effective interest method over the lives of the respective debt agreements. Pursuant to ASC 835-30 the Company presents ~~$48~~$43 million of debt issuance and deferred financing costs on the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. ~~In addition, the remaining $3 million of deferred charges, which relate to the Company's revolving line of credit, are presented in Other assets.~~

Intangible Assets

Customer relationships are being amortized using an accelerated amortization method which corresponds with the customer attrition rates used in the initial valuation of the intangibles over the estimated life of the relationships which range from 5 to 15 years. Definite lived trademarks are being amortized using the straight-line method over the estimated life of the asset which is not more than 15 years. Other intangibles, which include technology and licenses, are being amortized using the straight-line method over the estimated life of the asset which ranges from 5 to 14 years. The Company evaluates the remaining useful life of intangible assets on a periodic basis to determine whether events and circumstances warrant a revision to the remaining useful life. ~~Trademarks~~Certain trademarks that are expected to remain in use, which are indefinite lived intangible assets, are required to be reviewed for impairment annually. The Company has ~~certain~~ trademarks that total approximately $248 million that are indefinite lived and we test annually for impairment on the first day of the fourth quarter. We completed the annual impairment test of our indefinite lived trade names utilizing the relief from royalty method ~~on the first day of the fourth quarter for each of our indefinite lived assets~~ and noted no impairment in fiscal 2018, 2017 ~~2016~~ and ~~2015.~~2016.

	Customer Relationships			Trademarks			Other Intangibles		Accumulated Amortization			Total			Customer Relationships			Trademarks			Other Intangibles			Accumulated Amortization			Total
Balance as of fiscal 2015	$	1,159		$	281		$	106	$	(853	)	$	693
Adjustment for income taxes		(3	)		—			—		—			(3	)
Foreign currency translation adjustment		11			—			1		(2	)		10
Amortization expense		—			—			—		(143	)		(143	)
Acquisition intangibles		523			45			75		—			643
Balance as of fiscal 2016	$	1,690		$	326		$	182	$	(998	)	$	1,200		$	1,690		$	326		$	182		$	(998	)	$	1,200

Adjustment for income taxes		—			1			—		—			1			—			1			—			—			1
Foreign currency translation adjustment		6			(1	)		1		(3	)		3			6			(1	)		1			(3	)		3
Amortization expense		—			—			—		(154	)		(154	)		—			—			—			(154	)		(154	)
Acquisition intangibles		226			9			1		—			236			226			9			1			—			236
Balance as of fiscal 2017	$	1,922		$	335		$	184	$	(1,155	)	$	1,286		$	1,922		$	335		$	184		$	(1,155	)	$	1,286

Foreign currency translation adjustment																(17	)		(1	)		(2	)		8			(12	)
Amortization expense																—			—			—			(154	)		(154	)
Acquisition intangibles																177			9			34			—			220
Netting of fully amortized intangibles																(200	)		(50	)		(31	)		281			—
Balance as of fiscal 2018															$	1,882		$	293		$	185		$	(1,020	)	$	1,340

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value per share	New York Stock Exchange

Class		Outstanding at November ~~21, 2017~~16, 2018
Common Stock, $.01 par value per share		~~131.0~~131.2 million shares

	Fiscal 2017				Fiscal 2016
	High		Low		High		Low
1st quarter	$	51.68	$	42.46	$	37.59	$	28.41
2nd quarter		52.97		47.19		36.66		27.79
3rd quarter		58.95		47.24		40.00		34.96
4th quarter		58.85		54.89		46.26		38.19

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Dollar Value of Shares that May Yet be Purchased Under the Program (in millions)
Fiscal August		400,455	$	46.75		400,455	$	481
Fiscal September		330,565		48.80		330,565		465
Total		731,020	$	47.75		731,020	$	465

	Polyethylene Butene Film						Polypropylene						Polyethylene Butene Film						Polypropylene
	2017		2016		2015		2017		2016		2015		2018		2017		2016		2018		2017		2016
1st quarter	$	.75	$	.69	$	.86	$	.69	$	.70	$	.92	$	.68	$	.56	$	.50	$	.71	$	.56	$	.57
2nd quarter		.77		.66		.75		.80		.75		.73		.69		.58		.47		.75		.67		.62
3rd quarter		.79		.73		.76		.74		.71		.68		.68		.60		.54		.76		.61		.58
4th quarter		.81		.75		.73		.75		.71		.66		.66		.62		.56		.85		.62		.58

		Page
	PART I

Item 1	BUSINESS	3
Item 1A.	RISK FACTORS	65
Item 1B.	UNRESOLVED STAFF COMMENTS	98
Item 2.	PROPERTIES	108
Item 3.	LEGAL PROCEEDINGS	108
Item 4.	MINE SAFETY DISCLOSURES	108

	PART II

Item 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	119
Item 6	SELECTED FINANCIAL DATA	1210
Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1210
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2219
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	2219
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	2319
Item 9A.	CONTROLS AND PROCEDURES	2319
Item 9B.	OTHER INFORMATION	2320

	PART III

Item 10.	DIRECTORS, ~~AND~~ EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE	2421
Item 11.	EXECUTIVE COMPENSATION	2421
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	2421
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	2421
Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	2421

	PART IV

Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	2522
Item 16.	FORM 10-K SUMMARY	2522

Geographic Region	Total Facilities	Leased Facilities	Total Facilities	Leased Facilities
North America	98	27	103	27
Europe, Middle East	16	5	18	5
South America	4	1	5	1
Asia, Australia	9	2
Asia			9	2

	Fiscal 2017			Fiscal 2016			Fiscal 2015			Fiscal 2014			Fiscal 2013			Fiscal 2018			Fiscal 2017			Fiscal 2016			Fiscal 2015			Fiscal 2014
Statement of Operations Data: Net sales	$	7,095		$	6,489		$	4,881		$	4,958		$	4,647		$	7,869		$	7,095		$	6,489		$	4,881		$	4,958
Operating income		732			581			408			316			386			761			732			581			408			316
Net income		340			236			86			62			57			496			340			236			86			62
Net Income Per Share Data:
Basic, net income per share	$	2.66		$	1.95		$	0.72		$	0.53		$	0.50		$	3.77		$	2.66		$	1.95		$	0.72		$	0.53
Diluted, net income per share		2.56			1.89			0.70			0.51			0.48			3.67			2.56			1.89			0.70			0.51
Balance Sheet Data:
Total assets	$	8,476		$	7,653		$	5,028		$	5,252		$	5,111		$	9,127		$	8,476		$	7,653		$	5,028		$	5,252
Long-term debt obligations		5,641			5,755			3,685			3,902			3,922			5,844			5,641			5,755			3,685			3,902
Statement of Cash Flow Data:
Net cash from operating activities	$	975		$	857		$	637		$	530		$	464		$	1,004		$	975		$	857		$	637		$	530
Net cash from investing activities		(774	)		(2,579	)		(165	)		(422	)		(245	)		(1,035	)		(774	)		(2,579	)		(165	)		(422	)
Net cash from financing activities		(226	)		1,817			(365	)		(119	)		(164	)		113			(226	)		1,817			(365	)		(119	)

	Fair Value July 1, 2017		Carrying Value July 1, 2017		Goodwill as of September 30, 2017
HHS – South America		390		359		107
HHS – Asia		530		356		75

	Currency Translation			Defined Benefit Pension and Retiree Health Benefit Plans			Interest Rate Swaps			Accumulated Other Comprehensive Loss			Currency Translation			Defined Benefit Pension and Retiree Health Benefit Plans			Interest Rate Swaps			Accumulated Other Comprehensive Loss
Balance as of fiscal 2014	$	(36	)	$	(15	)	$	8		$	(43	)
Other comprehensive loss		(45	)		(16	)		(33	)		(94	)
Provision for income taxes		—			6			12			18
Balance as of fiscal 2015	$	(81	)	$	(25	)	$	(13	)	$	(119	)	$	(81	)	$	(25	)	$	(13	)	$	(119	)
Other comprehensive loss		(1	)		(25	)		(30	)		(56	)		(1	)		(25	)		(30	)		(56	)
Net amount reclassified from accumulated other comprehensive income (loss)		—			2			16			18			—			2			16			18
Provision for income taxes		—			4			5			9			—			4			5			9
Balance as of fiscal 2016	$	(82	)	$	(44	)	$	(22	)	$	(148	)	$	(82	)	$	(44	)	$	(22	)	$	(148	)
Other comprehensive income		34			25			7			66			34			25			7			66
Net amount reclassified from accumulated other comprehensive income (loss)														—			13			21			34
Provision for income taxes														—			(10	)		(10	)		(20	)
Balance as of fiscal 2017													$	(48	)	$	(16	)	$	(4	)	$	(68	)
Other comprehensive income (loss)														(127	)		9			46			(72	)
Net amount reclassified from accumulated other comprehensive income (loss) ^(a)		—			13			21			34			—			(6	)		3			(3	)
Provision for income taxes		—			(10	)		(10	)		(20	)		—			—			(13	)		(13	)
Balance as of fiscal 2017	$	(48	)	$	(16	)	$	(4	)	$	(68	)
Balance as of fiscal 2018													$	(175	)	$	(13	)	$	32		$	(156	)

Working capital^(a)	$	70
Property and equipment		164
Intangible assets		125
Goodwill		110
Other assets and long-term liabilities		6
^(a) Includes a $3 million step up of inventory to fair value

Working capital (a)	$	140
Property and equipment		223
Intangible assets		214
Goodwill		343
Historical AEP debt assumed		(7	)
Other assets and long-term liabilities		(122	)
(a) Includes a $5 million step up of inventory to fair value

Maturity Date		September 30, 2017			October 1, 2016
								Maturity Date		September 29, 2018			September 30, 2017
Term loan	February 2020	$	1,000		$	1,351		February 2020	$	800		$	1,000
Term loan	January 2021		814			814		January 2021		814			814
Term loan	October 2022		1,645			1,895		October 2022		1,545			1,645
Term loan	January 2024		498			—		January 2024		493			498
Revolving line of credit	May 2020		—			—		May 2020		—			—
5 ¹/₈% Second Priority Senior Secured Notes	July 2023		700			700
5 ¹/₂% Second Priority Senior Secured Notes	May 2022		500			500		May 2022		500			500
6% Second Priority Senior Secured Notes	October 2022		400			400		October 2022		400			400
5 ¹/₈% Second Priority Senior Secured Notes								July 2023		700			700
4 ¹/₂% Second Priority Senior Secured Notes								February 2026		500			—
Debt discounts and deferred fees			(48	)		(58	)			(43	)		(48	)
Capital leases and other	Various		132			153		Various		135			132
Total long-term debt			5,641			5,755				5,844			5,641
Current portion of long-term debt			(33	)		(43	)			(38	)		(33	)
Long-term debt, less current portion		$	5,608		$	5,712			$	5,806		$	5,608

Fiscal Year	Maturities		Maturities
2018	$	33
2019		33	$	38
2020		1,033		837
2021		839		842
2022		21		27
2023				2,458
Thereafter		3,730		1,685
	$	5,689	$	5,887

Derivatives Instruments	Hedge Designation	Balance Sheet Location	2017		2016		Hedge Designation	Balance Sheet Location	2018		2017
Foreign currency forward contracts	Not designated	Other assets	$	—	$	3
Cross-currency swaps							Designated	Other long-term liabilities	$	11	$	—
Interest rate swaps	Designated	Other assets		1		—	Designated	Other assets		16		1
Interest rate swaps	Not designated	Other assets		13		—	Not designated	Other assets		—		13
Interest rate swaps	Designated	Other long-term liabilities		15		48	Designated	Other long-term liabilities		—		15
Interest rate swaps	Not designated	Other long-term liabilities		13		—	Not designated	Other long-term liabilities		1		13

	As of the end of fiscal 2018
	Level 1		Level 2		Level 3		Total		Impairment
Indefinite-lived trademarks	$	—	$	—	$	248	$	248	$	—
Goodwill		—		—		2,944		2,944		—
Definite lived intangible assets		—		—		1,092		1,092		—
Property, plant and equipment		—		—		2,488		2,488		—
Total	$	—	$	—	$	6,772	$	6,772	$	—

	As of the end of fiscal 2017
	Level 1		Level 2		Level 3		Total		Impairment
Indefinite-lived trademarks	$	—	$	—	$	248	$	248	$	—
Goodwill		—		—		2,775		2,775		—
Definite lived intangible assets		—		—		1,038		1,038		—
Property, plant and equipment		—		—		2,366		2,366		2
Total	$	—	$	—	$	6,427	$	6,427	$	2

	As of the end of fiscal 2016
	Level 1		Level 2		Level 3		Total		Impairment
Indefinite-lived trademarks	$	—	$	—	$	248	$	248	$	—
Goodwill		—		—		2,406		2,406		—
Definite lived intangible assets		—		—		952		952		—
Property, plant and equipment		—		—		2,224		2,224		3
Total	$	—	$	—	$	5,830	$	5,830	$	3

	As of the end of fiscal 2015
	Level 1		Level 2		Level 3		Total		Impairment
Indefinite-lived trademarks	$	—	$	—	$	207	$	207	$	—
Goodwill		—		—		1,652		1,652		—
Definite lived intangible assets		—		—		486		486		—
Property, plant and equipment		—		—		1,294		1,294		2
Total	$	—	$	—	$	3,639	$	3,639	$	2

	2017			2016			Amortization Period	2018			2017			Amortization Period
Goodwill	$	2,775		$	2,406		Indefinite lived	$	2,944		$	2,775		Indefinite lived

Customer relationships		1,922			1,690		5 – 15 years		1,882			1,922		5 – 15 years
Trademarks (indefinite lived)		248			248		Indefinite lived		248			248		Indefinite lived
Trademarks (definite lived)		87			78		Not more than 15 years		45			87		Not more than 15 years
Other intangibles		184			182		5 – 14 years		185			184		5 – 14 years
Accumulated amortization		(1,155	)		(998	)			(1,020	)		(1,155	)
Intangible assets, net		1,286			1,200				1,340			1,286
Total goodwill and intangible assets, net	$	4,061		$	3,606			$	4,284		$	4,061

	Capital Leases			Operating Leases		Capital Leases			Operating Leases
2018	$	33		$	64
2019		32			57	$	37		$	67
2020		28			47		32			56
2021		24			43		27			51
2022		17			37		24			44
2023							10			37
Thereafter		13			178		19			165
		147		$	426		149		$	420
Less: amount representing interest		(15	)				(14	)
Present value of net minimum lease payments	$	132				$	135

	Defined Benefit Pension Plans						Retiree Health Plans						Defined Benefit Pension Plans						Retiree Health Plans
	2017			2016			2017			2016			2018			2017			2018			2017
Change in Projected Benefit Obligations (PBO)

PBO at beginning of period	$	492		$	193		$	7		$	2		$	330		$	492		$	7		$	7
Acquisitions		—			256			—			5
Service cost		—			3			—			—
Interest cost		11			15			—			—			11			11			—			—
Actuarial loss (gain)		(15	)		44			—			—			(17	)		(15	)		—			—
Currency impact		—			1			—			—
Plan conversion ^(a)		(139	)		—			—			—			—			(139	)		—			—
Benefit settlements		(3	)		—			—			—			—			(3	)		—			—
Benefits paid		(16	)		(20	)		—			—			(17	)		(16	)		(1	)		—
PBO at end of period	$	330		$	492		$	7		$	7		$	307		$	330		$	6		$	7

Change in Fair Value of Plan Assets

Plan assets at beginning of period	$	418		$	142		$	—		$	—		$	291		$	418		$	—		$	—
Acquisitions		—			253			—			—
Currency impact		—			1			—			—
Actual return on plan assets		22			37			—			—			3			22			—			—
Company contributions		7			5			1			—			—			7			1			1
Plan conversion ^(a)		(136	)		—			—			—			—			(136	)		—			—
Benefit settlements		(2	)		—			—			—			—			(2	)		—			—
Benefits paid		(18	)		(20	)		(1	)		—			(17	)		(18	)		(1	)		(1	)
Plan assets at end of period		291			418			—			—			277			291			—			—
Net amount recognized	$	(39	)	$	(74	)	$	(7	)	$	(7	)	$	(30	)	$	(39	)	$	(6	)	$	(7	)

	Defined Benefit Pension Plans				Retiree Health Plan				Defined Benefit Pension Plans				Retiree Health Plan
(Percents)	2017		2016		2017		2016
(Percentages)									2018		2017		2018		2017
Weighted-average assumptions:
Discount rate for benefit obligation		3.5		2.7		3.3		2.9		4.0		3.5		3.8		3.3
Discount rate for net benefit cost		3.2		3.5		2.9		3.5		3.5		3.2		3.3		2.9
Expected return on plan assets for net benefit costs		6.4		5.3		—		—		6.1		6.4		—		—

Fiscal 2018 Asset Category	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	6	$	—	$	—	$	6
U.S. large cap comingled equity funds		—		67		—		67
U.S. mid cap equity mutual funds		50		—		—		50
U.S. small cap equity mutual funds		3		—		—		3
International equity mutual funds		15		—		—		15
Real estate equity investment funds		3		—		—		3
Corporate bond mutual funds		11		—		—		11
Corporate bonds		—		108		—		108
Guaranteed investment account		—		—		8		8
International fixed income funds		6		—		—		6
Total	$	94	$	175	$	8	$	277

Fiscal 2017 Asset Category	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	6	$	—	$	—	$	6
U.S. large cap comingled equity funds		—		61		—		61
U.S. mid cap equity mutual funds		57		—		—		57
U.S. small cap equity mutual funds		3		—		—		3
International equity mutual funds		14		—		—		14
Real estate equity investment funds		4		—		—		4
Corporate bond mutual funds		17		—		—		17
Corporate bonds		—		114		—		114
Guaranteed investment account		—		—		9		9
International fixed income funds		6		—		—		6
Total	$	107	$	175	$	9	$	291

Fiscal 2016 Asset Category	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	9	$	—	$	—	$	9
U.S. large cap comingled equity funds		—		55		—		55
U.S. mid cap equity mutual funds		45		—		—		45
U.S. small cap equity mutual funds		3		—		—		3
International equity mutual funds		13		—		—		13
Real estate equity investment funds		4		—		—		4
Corporate bond mutual funds		20		—		—		20
Corporate bonds		—		114		—		114
Guaranteed investment account		—		—		10		10
International fixed income funds		6		—		—		6
International insurance contracts		—		—		139		139
Total	$	100	$	169	$	149	$	418

	Expected Total Costs		Cumulative charges through Fiscal 2017		To be Recognized in Future		Expected Total Costs		Cumulative Charges through Fiscal 2018		To be Recognized in Future
Severance and termination benefits	$	45	$	45	$	—	$	75	$	75	$	—
Facility exit costs		20		17		3		15		12		3
Asset impairment		7		7		—		5		5		—
Total	$	72	$	69	$	3	$	95	$	92	$	3

	Employee Severance and Benefits			Facility Exit Costs			Non-cash impairment charges			Total			Employee Severance and Benefits			Facility Exit Costs			Non-cash Impairment Charges			Total
Balance as of fiscal 2015	$	2		$	8		$	—		$	10
Charges		23			6			3			32
Non-cash asset impairment		—			—			(3	)		(3	)
Cash payments		(18	)		(8	)		—			(26	)
Balance as of fiscal 2016	$	7		$	6		$	—		$	13		$	7		$	6		$	—		$	13
Acquisition		13			—			—			13			13			—			—			13
Charges		18			4			2			24			18			4			2			24
Non-cash asset impairment		—			—			(2	)		(2	)		—			—			(2	)		(2	)
Cash payments		(24	)		(5	)		—			(29	)		(24	)		(5	)		—			(29	)
Balance as of fiscal 2017	$	14		$	5		$	—		$	19		$	14		$	5		$	—		$	19
Charges														34			2			—			36
Cash payments														(39	)		(3	)		—			(42	)
Balance as of fiscal 2018													$	9		$	4		$	—		$	13

Range of Exercise Prices					Number Outstanding (in thousands)			Intrinsic Value of Outstanding (in millions)				Weighted Remaining Contractual Life	Weighted Exercise Price				Number Exercisable (in thousands)				Intrinsic Value of Exercisable (in millions)				Unrecognized Compensation (in millions)				Weighted Recognition Period
	$	3.04-49.53				10,760			$	306		7 years		$	28.18				4,108			$	146			$	35		2 years

	2017		2016
Total assets:
Consumer Packaging	$	3,177	$	3,315
Health, Hygiene & Specialties		3,496		3,504
Engineered Materials		1,803		834
Total assets	$	8,476	$	7,653
Goodwill:
Consumer Packaging	$	1,411	$	1,410
Health, Hygiene & Specialties		819		808
Engineered Materials		545		188
Total goodwill	$	2,775	$	2,406

(in percentages)	2017			2016			2015			2018			2017			2016
Net sales:
Rigid Open Top		43	%		42	%		42	%
Rigid Closed Top		57			58			58
Consumer Packaging		100	%		100	%		100	%
Core Films											46	%		49	%		72	%
Retail & Industrial											54			51			28
Engineered Materials											100	%		100	%		100	%

Health		22	%		20	%		27	%		19	%		22	%		20	%
Hygiene		44			45			43			43			44			45
Specialties		34			35			30			38			34			35
Health, Hygiene & Specialties		100	%		100	%		100	%		100	%		100	%		100	%

Core Films		49	%		72	%		72	%
Retail & Industrial		51			28			28
Engineered Materials		100	%		100	%		100	%
Rigid Open Top											44	%		43	%		42	%
Rigid Closed Top											56			57			58
Consumer Packaging											100	%		100	%		100	%

(in millions, except per share amounts)	2017		2016		2015		2018		2017		2016
Numerator
Net income attributable to the Company	$	340	$	236	$	86	$	496	$	340	$	236
Denominator
Weighted average common shares outstanding - basic		127.6		120.8		119.1		131.4		127.6		120.8
Dilutive shares		5.0		4.2		4.3		3.8		5.0		4.2
Weighted average common and common equivalent shares outstanding - diluted		132.6		125.0		123.4		135.2		132.6		125.0

Per common share income
Basic	$	2.66	$	1.95	$	0.72	$	3.77	$	2.66	$	1.95
Diluted	$	2.56	$	1.89	$	0.70	$	3.67	$	2.56	$	1.89

	Fiscal 2017																	Fiscal 2018
	Parent			Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Eliminations			Total			Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	—		$	587		$	4,861		$	1,647	$	—		$	7,095		$	—		$	574		$	5,465		$	1,830		$	—		$	7,869
Cost of goods sold		—			438			3,920			1,333		—			5,691			—			346			4,558			1,534			—			6,438
Selling, general and administrative		—			55			335			104		—			494			—			63			309			108			—			480
Amortization of intangibles		—			6			120			28		—			154			—			1			127			26			—			154
Restructuring and impairment charges		—			—			14			10		—			24			—			—			20			16			—			36
Operating income		—			88			472			172		—			732			—			164			451			146			—			761
Debt extinguishment		—			10			—			—		—			10
Other (income) expense, net		—			(2	)		(1	)		7		—			4			—			8			8			9			—			25
Interest expense, net		—			12			229			28		—			269			—			8			225			26			—			259
Equity in net income of subsidiaries		(449	)		(341	)		—			—		790			—			(477	)		(307	)		—			—			784			—
Income (loss) before income taxes		449			409			244			137		(790	)		449			477			455			218			111			(784	)		477
Income tax expense (benefit)		109			69			—			40		(109	)		109			(19	)		(41	)		(2	)		24			19			(19	)
Net income (loss)	$	340		$	340		$	244		$	97	$	(681	)	$	340		$	496		$	496		$	220		$	87		$	(803	)	$	496
Currency translation		34			—			—			34		(34	)		34			(127	)		(11	)		(3	)		(113	)		127			(127	)
Interest rate hedges		28			28			—			—		(28	)		28			49			49			—			—			(49	)		49
Defined benefit pension and retiree health benefit plans		38			25			—			13		(38	)		38			3			—			—			3			(3	)		3
Provision for income taxes related to other comprehensive income items		(20	)		(20	)		—			—		20			(20	)		(13	)		(13	)		—			—			13			(13	)
Comprehensive income (loss)	$	420		$	373		$	244		$	144	$	(761	)	$	420		$	408		$	521		$	217		$	(23	)	$	(715	)	$	408

Exhibit No		Description of Exhibit

	2.1	Agreement and Plan of Merger, dated as of July 30, 2015, by and among AVINTIV Inc., Berry Plastics Group, Inc., Berry Plastics Acquisition Corporation IX and Blackstone Capital Partners (Cayman) V L.P., as the security holder representative (the Exhibits and Disclosure Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the SEC upon request) (incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed on August 5, 2015).

	2.2	Agreement and Plan of Merger, dated as of August 24, 2016, by and among Berry Plastics Group, Inc., Berry Plastics Corporation, Berry Plastics Acquisition Corporation XVI, Berry Plastics Acquisition Corporation XV, LLC and AEP Industries Inc. (the Exhibits and Disclosure Schedules have been omitted pursuant to Item 601(b)(2) of Regulation SK and will be provided to the SEC upon request) (incorporated by reference to Annex A Amendment No. 1 to the Company's Registration Statement S-4 (Reg. No. 333-2138030 filed on November 8, 2016).

	2.3	Amendment No. 1 to the Agreement and Plan of Merger, dated as of December 7, 2016, by and among Berry Plastics Group, Inc., Berry Plastics Corporation, Berry Plastics Acquisition Corporation XVI, Berry Plastics Acquisition Corporation XV, LLC and AEP Industries Inc. (incorporated by reference to Annex A of Amendment No. 2 to Berry's Registration Statement on Form S-4 (Reg. No. 333-213803) filed on December 9, 2016).

	3.1*3.1	Amended and Restated Certificate of Incorporation of Berry Plastics Group, Inc., as amended through April ~~13,~~12, 2017. (incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K filed with the SEC on November 21, 2017).

	3.2	Amended and Restated Bylaws of Berry Plastics Group, Inc., as amended and restated on March 2, 2017. (incorporated by reference to Exhibit 3.2 to the Company's Form 8-K filed on March 3, 2017).

	3.3	Amended and Restated Bylaws of Berry Global Group, Inc., as amended and restated effective November 30, 2017 (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed with the SEC on November 30, 2017).

	4.1	Indenture, dated as of May 12, 2014, by and among Berry Plastics Corporation, the guarantors party thereto and U.S. Bank National Association, as Trustee, relating to the 5.50% second priority senior secured notes due 2022 (incorporated herein by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K filed on May 13, 2014).

	4.2	Indenture, dated as of June 5, 2015, by and among Berry Plastics Corporation, the guarantors party thereto and U.S. Bank National Association, as Trustee, relating to the 5.125% second priority senior secured notes due 2023 (incorporated by reference to Exhibit 4.2 to the Company's Form 8-K filed on June 5, 2015).

	4.3	Indenture, dated as of October 1, 2015, by and between Berry Plastics Escrow Corporation, as Issuer, and U.S. Bank National Association, as Trustee, relating to the 6.00% second priority senior secured notes due 2022 (incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on October 6, 2015).

	4.4	First Supplemental Indenture, dated as of October 1, 2015, by and between Berry Plastics Corporation, Berry Plastics Group, Inc., the subsidiaries of Berry Plastics Corporation party thereto, Berry Plastics Escrow Corporation, and U.S. Bank National Association, as Trustee, relating to the Indenture, by and between Berry Plastics Escrow Corporation, as Issuer, and U.S. Bank, National Association, as Trustee, relating to the 6.00% second priority senior secured notes due 2022, dated October 1, 2015 (incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on October 6, 2015).

	4.5	Registration Rights Agreement, dated as of October 1, 2015, by and between Berry Plastics Corporation, Berry Plastics Group, Inc., each subsidiary of Berry Plastics Corporation identified therein, and Goldman, Sachs & Co., and Credit Suisse, on behalf of themselves and as representatives of the initial purchasers, relating to the 6.00% second priority senior secured notes due 2022 (incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on October 6, 2015).

	~~10.1~~4.6	Form of common stock certificate of Berry Plastics Group, Inc. (incorporated by reference to Exhibit 4.27 of Amendment No. 5 to the Company's Registration Statement on Form S-1 (File No. 333-180294) filed on September 19, 2012).

	10.1	$650,000,000 Second Amended and Restated Revolving Credit Agreement, dated as of May 14, 2015, by and among Berry Plastics Corporation., Berry Plastics Group, Inc., certain domestic subsidiaries party thereto from time to time, Bank of America, N.A., as collateral agent and administrative agent, the lenders party thereto from time to time, and the financial institutions party thereto, which is attached to Amendment No. 4 to Amended and Restated Revolving Credit Agreement dated as of April 3, 2007 (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on May ~~20,~~14, 2015).

	10.2*10.2		Amendment No. 5 to the Amended and Restated Credit Agreement, dated as of March 24, 2017, by and among Berry Plastics Group, Inc., Berry Plastics Corporation, certain domestic subsidiaries party thereto, Bank of America, N.A., as collateral agent and administrative agent, and the lenders party ~~thereto.~~thereto (incorporated herein by reference to Exhibit 10.2 to the Company's Form 10-K filed on November 21, 2017).

	10.3*10.3		Amendment No. 6 to the Amended and Restated Credit Agreement, dated as of March 24, 2017, by and among Berry Plastics Group, Inc., Berry Plastics Corporation, certain domestic subsidiaries party thereto, Bank of America, N.A., as collateral agent and administrative agent, and the lenders party thereto. (incorporated herein by reference to Exhibit 10.3 to the Company's Form 10-K filed on November 21, 2017).