UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2023~~March 31, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-39205

REYNOLDS CONSUMER PRODUCTS INC.

(Exact name of Registrant as specified in its charter)


Delaware			45-3464426
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification Number)

1900 W. Field Court

Lake Forest, Illinois 60045

(Address of principal executive offices) (Zip Code)

Telephone: (800) 879-5067

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol

Name of each exchange on which registered

Common stock, $0.001 par value

REYN

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of ~~October 31, 2023,~~April 30, 2024, the registrant had ~~210,009,231~~210,137,805 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Statements of Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~	2
	Condensed Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~	3
	Condensed Consolidated Balance Sheets as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~	5
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1615
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2924
Item 4.	Controls and Procedures	2924
PART II.	OTHER INFORMATION	3025
Item 1.	Legal Proceedings	3025
Item 1A.	Risk Factors	3025
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds ~~and Issuer Purchases of Equity Securities~~	3126
Item 3.	Defaults Upon Senior Securities	3126
Item 4.	Mine Safety Disclosures	3126
Item 5.	Other Information	3126
Item 6.	Exhibits	3227
	Signatures	3328

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “intends,” “outlook,” “forecast,” “position,” “committed,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “model,” “assumes,” “confident,” “look forward,” “potential” “on track”, or “continue,” or the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those risks and uncertainties discussed in Item 1A. “Risk ~~Factors”~~Factors.” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022~~2023 and as updated in our Quarterly Reports on Form 10-Q. You should specifically consider the numerous risks outlined in ~~those~~the “Risk Factors” sections. These risks and uncertainties include factors related to:

•changes in consumer preferences, lifestyle, economic circumstances and environmental concerns;

•relationships with our major customers, consolidation of our customer bases and loss of a significant customer;

•competition and pricing pressures;

•loss of, or disruption at, any of our key manufacturing facilities;

•our suppliers of raw materials and any interruption in our supply of raw materials;

•loss due to an accident, labor issues, weather conditions, natural disaster, ~~the emergence of a pandemic~~ or disease outbreak, ~~such as coronavirus~~including epidemics, pandemics or ~~otherwise;~~

•~~the unknown duration and economic, operational and financial impacts of the global COVID-19 pandemic;~~similar widespread public health concerns;

•costs of raw materials, energy, labor and freight, including the impact of tariffs, trade sanctions and similar matters affecting our importation of certain raw materials;

•labor shortages and increased labor costs;

•our ability to develop and maintain brands that are critical to our success;

•economic downturns in our target markets;

•our ability to acquire businesses;

•impacts from inflationary trends;

•difficulty meeting our sales growth objectives and innovation goals; and

•changes in market interest ~~rates.~~rates and the availability of capital.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We are under no duty to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q to conform our prior statements to actual results or revised expectations.

Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements is included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022,~~2023, which was filed on February ~~8, 2023,~~7, 2024, under Part I, Item 1A. “Risk Factors” and as updated in our Quarterly Reports on Form 10-Q.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Reynolds Consumer Products Inc.

Condensed Consolidated Statements of Income

(in millions, except for per share data)

(Unaudited)


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2023		2022		2023		2022
	For the Three Months Ended March 31,														For the Three Months Ended March 31,
	2024											2024				2023
Net revenues	Net revenues	$	914	$	938	$	2,689	$	2,652
Related party net revenues	Related party net revenues	21		29		61		77
Total net revenues	Total net revenues	935		967		2,750		2,729
Cost of sales	Cost of sales	(686)		(789)		(2,117)		(2,199)
Gross profit	Gross profit	249		178		633		530
Selling, general and administrative expenses	Selling, general and administrative expenses	(115)		(90)		(327)		(264)
Other income (expense), net		—		(5)		—		(17)
Other income, net
Income from operations	Income from operations	134		83		306		249
Interest expense, net	Interest expense, net	(31)		(20)		(91)		(48)
Income before income taxes	Income before income taxes	103		63		215		201
Income tax expense	Income tax expense	(25)		(15)		(54)		(49)
Net income	Net income	$	78	$	48	$	161	$	152

Earnings per share:	Earnings per share:
Earnings per share:
Earnings per share:
Basic
Basic
Basic	Basic	$	0.37	$	0.23	$	0.77	$	0.72
Diluted	Diluted	$	0.37	$	0.23	$	0.77	$	0.72

Weighted average shares outstanding:	Weighted average shares outstanding:
Weighted average shares outstanding:
Weighted average shares outstanding:
Basic
Basic
Basic	Basic	210.0		209.9		210.0		209.8		210.1			209.9
Effect of dilutive securities	Effect of dilutive securities	—		—		—		0.1		Effect of dilutive securities	—			—
Diluted	Diluted	210.0		209.9		210.0		209.9		Diluted	210.1			209.9

See accompanying notes to the condensed consolidated financial statements.

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Reynolds Consumer Products Inc.

Condensed Consolidated Statements of Comprehensive Income

(in millions)

(Unaudited)


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2023		2022		2023		2022
	For the Three Months Ended March 31,										For the Three Months Ended March 31,
	2024									2024		2023
Net income	Net income	$	78	$	48	$	161	$	152
Other comprehensive (loss) income, net of income taxes:
Other comprehensive income (loss), net of income taxes:
Currency translation adjustment
Currency translation adjustment
Currency translation adjustment	Currency translation adjustment	—		(2)		—		(2)
Employee benefit plans	Employee benefit plans	(1)		—		(3)		(1)
Interest rate derivatives	Interest rate derivatives	1		24		3		35
Other comprehensive income, net of income taxes		—		22		—		32
Other comprehensive income (loss), net of income taxes
Comprehensive income	Comprehensive income	$	78	$	70	$	161	$	184

See accompanying notes to the condensed consolidated financial statements.

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Reynolds Consumer Products Inc.

Condensed Consolidated Balance Sheets

(in millions, except for per share data)


		(Unaudited) As of September 30, 2023		As of December 31, 2022
	(Unaudited) As of March 31, 2024						(Unaudited) As of March 31, 2024	As of December 31, 2023
Assets	Assets
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	124	$	38
Accounts receivable (net of allowance for doubtful accounts of $1 and $1)	Accounts receivable (net of allowance for doubtful accounts of $1 and $1)	345		348
Other receivables	Other receivables	4		15
Related party receivables	Related party receivables	9		7
Inventories	Inventories	576		722
Other current assets	Other current assets	48		41
Total current assets	Total current assets	1,106		1,171
Property, plant and equipment (net of accumulated depreciation of $878 and $821)		719		722
Property, plant and equipment (net of accumulated depreciation of $918 and $897)
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	57		65
Goodwill	Goodwill	1,879		1,879
Intangible assets, net	Intangible assets, net	1,009		1,031
Other assets	Other assets	68		61
Total assets	Total assets	$	4,838	$	4,929
Liabilities	Liabilities					Liabilities
Accounts payable	Accounts payable	$	237	$	252
Related party payables	Related party payables	30		46
Current portion of long-term debt		—		25
Current operating lease liabilities	Current operating lease liabilities	16		14
Income taxes payable	Income taxes payable	1		14
Accrued and other current liabilities	Accrued and other current liabilities	183		145
Total current liabilities	Total current liabilities	467		496
Long-term debt	Long-term debt	1,981		2,066
Long-term operating lease liabilities	Long-term operating lease liabilities	44		53
Deferred income taxes	Deferred income taxes	364		365
Long-term postretirement benefit obligation	Long-term postretirement benefit obligation	34		34
Other liabilities	Other liabilities	56		47
Total liabilities	Total liabilities	$	2,946	$	3,061
Commitments and contingencies (Note 7)	Commitments and contingencies (Note 7)					Commitments and contingencies (Note 7)
Stockholders’ equity	Stockholders’ equity					Stockholders’ equity
Common stock, $0.001 par value; 2,000 shares authorized; 210 shares issued and outstanding		—		—
Common stock, $0.001 par value; 2,000 shares authorized; 210.1 shares issued and outstanding
Additional paid-in capital	Additional paid-in capital	1,392		1,385
Accumulated other comprehensive income	Accumulated other comprehensive income	52		52
Retained earnings	Retained earnings	448		431
Total stockholders’ equity	Total stockholders’ equity	1,892		1,868
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	4,838	$	4,929

See accompanying notes to the condensed consolidated financial statements.

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Reynolds Consumer Products Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in millions, except for per share data)

(Unaudited)


		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Equity
Balance as of December 31, 2021		$	—	$	1,381	$	365	$	10	$	1,756
Net income		—		—		52		—		52
Other comprehensive income, net of income taxes		—		—		—		7		7
Dividends ($0.23 per share declared and paid)		—		—		(48)		—		(48)
Balance as of March 31, 2022		$	—	$	1,381	$	369	$	17	$	1,767
Net income		—		—		52		—		52
Other comprehensive income, net of income taxes		—		—		—		3		3
Dividends ($0.23 per share declared and paid)		—		—		(48)		—		(48)
Other		—		2		—		—		2
Balance as of June 30, 2022		$	—	$	1,383	$	373	$	20	$	1,776
Net income		—		—		48		—		48
Other comprehensive income, net of income taxes		—		—		—		22		22
Dividends ($0.23 per share declared and paid)		—		—		(48)		—		(48)
Balance as of September 30, 2022		$	—	$	1,383	$	373	$	42	$	1,798
												Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Total Equity
Balance as of December 31, 2022	Balance as of December 31, 2022	$	—	$	1,385	$	431	$	52	$	1,868
Net income	Net income	—		—		17		—		17
Other comprehensive loss, net of income taxes	Other comprehensive loss, net of income taxes	—		—		—		(13)		(13)
Dividends ($0.23 per share declared and paid)	Dividends ($0.23 per share declared and paid)	—		—		(48)		—		(48)
Other	Other	—		1		—		—		1
Balance as of March 31, 2023	Balance as of March 31, 2023	$	—	$	1,386	$	400	$	39	$	1,825

Balance as of December 31, 2023
Net income	Net income	—		—		66		—		66
Other comprehensive income, net of income taxes	Other comprehensive income, net of income taxes	—		—		—		13		13
Dividends ($0.23 per share declared and paid)	Dividends ($0.23 per share declared and paid)	—		—		(48)		—		(48)
Other	Other	—		3		—		—		3
Balance as of June 30, 2023		$	—	$	1,389	$	418	$	52	$	1,859
Net income		—		—		78		—		78
Dividends ($0.23 per share declared and paid)		—		—		(48)		—		(48)
Other		—		3		—		—		3
Balance as of September 30, 2023		$	—	$	1,392	$	448	$	52	$	1,892
Balance as of March 31, 2024

See accompanying notes to the condensed consolidated financial statements.

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Reynolds Consumer Products Inc.

Condensed Consolidated Statements of Cash Flows

(in millions)

(Unaudited)

Nine Months Ended
September 30,
2023 2022
Cash provided by operating activities
Net income $ 161 $ 152
Adjustments to reconcile net income to operating cash flows:
Depreciation and amortization 92 87
Deferred income taxes (3) (1)
Stock compensation expense 10 4
Change in assets and liabilities:
Accounts receivable, net 3 27
Other receivables 11 —
Related party receivables (2) —
Inventories 146 (213)
Accounts payable (5) 40
Related party payables (16) 6
Income taxes payable / receivable (11) —
Accrued and other current liabilities 39 23
Other assets and liabilities (2) (7)
Net cash provided by operating activities 423 118
Cash used in investing activities
Acquisition of property, plant and equipment (77) (86)
Net cash used in investing activities (77) (86)
Cash used in financing activities
Repayment of long-term debt (113) (19)
Dividends paid (144) (144)
Other financing activities (3) —
Net cash used in financing activities (260) (163)
Net increase (decrease) in cash and cash equivalents 86 (131)
Cash and cash equivalents at beginning of period 38 164
Cash and cash equivalents at end of period $ 124 $ 33
Cash paid:
Interest 86 42
Income taxes 65 49


	Three Months Ended March 31,
	2024		2023
Cash provided by operating activities
Net income	$	49	$	17
Adjustments to reconcile net income to operating cash flows:
Depreciation and amortization	32		30
Deferred income taxes	(1)		(9)
Stock compensation expense	4		3
Change in assets and liabilities:
Accounts receivable, net	17		6
Other receivables	—		12
Related party receivables	—		(11)
Inventories	(45)		40
Accounts payable	77		(15)
Related party payables	(4)		19
Income taxes payable / receivable	15		12
Accrued and other current liabilities	(45)		(15)
Other assets and liabilities	—		(1)
Net cash provided by operating activities	99		88
Cash used in investing activities
Acquisition of property, plant and equipment	(29)		(22)
Net cash used in investing activities	(29)		(22)
Cash used in financing activities
Repayment of long-term debt	—		(6)
Dividends paid	(48)		(48)
Other financing activities	(2)		—
Net cash used in financing activities	(50)		(54)
Net increase in cash and cash equivalents	20		12
Cash and cash equivalents at beginning of period	115		38
Cash and cash equivalents at end of period	$	135	$	50

Cash paid:
Interest - long-term debt, net of interest rate swaps	25		28

See accompanying notes to the condensed consolidated financial statements.

Reynolds Consumer Products Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 – Description of Business and Basis of Presentation

Description of Business:

Reynolds Consumer Products Inc. and its subsidiaries (“we”, “us” or “our”) produce and sell products across three broad categories: cooking products, waste and storage products and tableware. We sell our products under brands such as Reynolds and Hefty, and also under store brands. Our product portfolio includes aluminum foil, wraps, disposable bakeware, trash bags, food storage bags and disposable tableware. We report four business segments: Reynolds Cooking & Baking; Hefty Waste & Storage; Hefty Tableware; and Presto Products.

Basis of Presentation:

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with United States generally accepted accounting principles (“(“GAAP”) for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“(“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for comprehensive annual financial statements.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting policies described in our Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, and should be read in conjunction with the disclosures therein. In our opinion, these interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to state fairly the financial condition, results of operations and cash flows for the periods presented. Operating results for interim periods are not necessarily indicative of annual operating results.

Non-Cash Lease Transactions:

We recorded $32 million in operating lease right-of-use assets obtained in exchange for lease liabilities during the three months ended March 31, 2024. Operating lease right-of-use assets obtained in exchange for lease liabilities during the three months ended March 31, 2023, as well as finance lease right-of-use assets obtained in exchange for lease liabilities during the three months ended March 31, 2024 and 2023, were not material.

Supply Chain Financing:

In March 2023, we initiated a voluntary Supply Chain Finance program (the ~~“SCF”~~“SCF”) with a global financial institution (the ~~“SCF~~“SCF Bank”). Under the SCF, qualifying suppliers may elect to sell their receivables from us to the SCF Bank. These participating suppliers negotiate their receivables sales arrangements directly with the SCF Bank. We are not party to those agreements, nor do we provide any security or other forms of guarantees to the SCF Bank. The participation in the program is at the sole discretion of the supplier, we have no economic interest in a supplier’s decision to enter into the agreement and have no direct financial relationship with the SCF Bank, as it relates to the SCF. Once a qualifying supplier elects to participate in the SCF and reaches an agreement with the SCF Bank, they elect which individual invoices they sell to the SCF Bank.

The terms of our payment obligations are not impacted by a supplier’s participation in the SCF and as such, the SCF has no ~~direct~~ impact on our balance sheets, cash flows, or liquidity. ~~Amounts due~~Our payment terms with our suppliers for similar services and materials within individual markets are consistent between suppliers that elect to ~~suppliers who voluntarily~~ participate in the SCF and those that do not participate.

All outstanding amounts related to suppliers participating in the SCF are ~~included in~~recorded within accounts payable in our condensed consolidated balance sheet and ~~our~~associated payments ~~made under the SCF~~ are ~~reflected~~included as an operating cash flow in the condensed consolidated statement of cash flows. As of ~~September 30, 2023~~March 31, 2024, the amount of obligations outstanding that we have confirmed as valid under the SCF was ~~$18~~$9 million. As of March 31, 2023, there were no obligations outstanding that we had confirmed as valid under the SCF.

Note 2 – New Accounting Standards

Recently Adopted Accounting Guidance:

In ~~March 2020,~~September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and subsequently in January 2021, FASB issued ASU 2021-01,~~ ~~Reference Rate Reform (Topic 848): Scope~~, both of which provide optional expedients and exceptions to applying the guidance on contract modifications, hedge accounting, and other transactions, to simplify the accounting for transitioning from the London Interbank Offered Rate (“LIBOR”), and other interbank offered rates expected to be discontinued, to alternative reference rates. Each of these ASUs were effective upon its issuance and could be applied prospectively through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, ~~Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848~~, which amended the sunset date of the guidance in Topic 848 to December 31, 2024 from December 31, 2022. We adopted the standards as of January 1, 2023. As a result of the planned phase out of the LIBOR as a reference rate and adoption of ASU 2020-04 and ASU 2021-01, we have amended our Credit Agreement and interest rate swaps and applied practical expedients under the guidance. The adoption did not have a material impact on our condensed consolidated financial statements.

~~In September 2022, FASB issued ASU~~ 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. These amendments require disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. These amendments ~~are~~were effective for fiscal years beginning after December 31, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 31, 2023. We adopted the standard as of January 1, 2023, other than the amendment on rollforward information, which will be adopted prospectively in our Annual Report on Form 10-K for the year ending December 31, 2024 as ~~of January 1, 2023.~~required. The adoption relates to disclosure only, and does not have an impact on our condensed consolidated financial statements.

Accounting Guidance Issued But Not Yet Adopted:

In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280), which enhances disclosures about significant segment expenses by requiring disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently assessing the impact of this standard on our consolidated financial statements.

In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740), which enhances disclosures within the income tax rate reconciliation and information disclosed related to income taxes paid, and requires disaggregation of certain financial statement captions between domestic, foreign, federal and state. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently assessing the impact of this standard on our consolidated financial statements.

In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors, which will require public companies to include climate-related disclosures in their annual reports and registration statements. The final rules will require, among other matters, information about climate-related risks that have materially impacted, or are reasonably likely to have a material impact on, a registrant, including on its strategy, results of operations, or financial condition. In addition, under the final rules, certain disclosures related to severe weather events and other natural conditions will be required in the audited financial statements. The disclosure requirements related to financial statements are expected to be effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We are currently assessing the impact of these rules on our consolidated financial statements and related disclosures.

Note 3 – Inventories

Inventories consisted of the following:


		September 30, 2023		December 31, 2022
		(in millions)
	March 31, 2024					March 31, 2024		December 31, 2023
	(in millions)						(in millions)
Raw materials	Raw materials	$	171	$	215
Work in progress	Work in progress	53		81
Finished goods	Finished goods	303		383
Spare parts	Spare parts	49		43
Inventories	Inventories	$	576	$	722

Note 4 – Debt

Long-term debt consisted of the following:


		September 30, 2023		December 31, 2022
		(in millions)
	March 31, 2024					March 31, 2024		December 31, 2023
	(in millions)						(in millions)
Term loan facility	Term loan facility	$	1,995	$	2,107
Deferred financing transaction costs	Deferred financing transaction costs	(13)		(14)
Original issue discounts	Original issue discounts	(1)		(2)
		1,981		2,091
	1,833
Less: current portion	Less: current portion	—		(25)
Long-term debt	Long-term debt	$	1,981	$	2,066

External Debt Facilities

In February 2020, we entered into new external debt facilities (“External Debt Facilities”), which consist of (i) a $2,475 million senior secured term loan facility (“Term Loan Facility”); and (ii) a $250 million senior secured revolving credit facility (“Revolving Facility”). In February 2023, we amended the External Debt Facilities ~~(as amended, the “Amended External Debt Facilities”~~(“Amendment No. 1”) which replaced the interest rate benchmark from the ~~LIBOR~~London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“(“SOFR”). Additionally, in November 2023, we further amended the External Debt Facilities (“Amendment No. 2”) to extend the maturity of the Revolving Facility by one year. Other than the foregoing, the material terms of the External Debt Facilities, as amended by Amendment No. 1 and Amendment No. 2 (“Amended External Debt Facilities”) remain unchanged, and our election to use practical expedients under ASU 2020-04 and ASU 2021-01 ~~as described in Note 2 - New Accounting Standards,~~ resulted in no material impacts on our condensed consolidated financial statements.

Borrowings under the Amended External Debt Facilities bear interest at a rate per annum equal to, at our option, either a base rate plus an applicable margin of 0.75% or a SOFR plus an applicable margin of 1.75%. ~~During September 2020, May 2022 and August 2022, we~~We have entered into a series of interest rate swaps to hedge a portion of the interest rate exposure resulting from these borrowings. ~~In conjunction with the amendment of our External Debt Facilities, we amended the outstanding interest rate swaps to replace the interest rate benchmark from the LIBOR to SOFR.~~ Refer to Note 5 – Financial Instruments for further details.

The Amended External Debt Facilities contain a springing financial covenant requiring compliance with a ratio of first lien net indebtedness to consolidated EBITDA, applicable solely to the Revolving Facility. The financial covenant is tested on the last day of any fiscal quarter only if the aggregate principal amount of borrowings under the Revolving Facility and drawn but unreimbursed letters of credit exceed 35% of the total amount of commitments under the Revolving Facility on such day. We are currently in compliance with the covenants contained in our Amended External Debt Facilities.

If an event of default occurs, the lenders under the Amended External Debt Facilities are entitled to take various actions, including the acceleration of amounts due under the Amended External Debt Facilities and all actions permitted to be taken by secured creditors.

Term Loan Facility

The Term Loan Facility matures in February 2027. The Term Loan Facility amortizes in equal quarterly installments of $6 million, which commenced in June 2020, with the balance payable on maturity. During the ~~three months~~year ended ~~September 30,~~December 31, 2023, we made a voluntary principal ~~payment~~payments of ~~$100~~$250 million ~~related to~~on our Term Loan Facility, which ~~was~~were first applied to pay the remaining quarterly amortization payments in full, with the residual balance applied to the outstanding principal balance due at maturity.

Revolving Facility

In November 2023, we amended the External Debt Facilities to extend the maturity date of the Revolving Facility by one year. The Revolving Facility matures in February ~~2025~~2026 and includes a sub-facility for letters of credit. As of ~~September 30, 2023,~~March 31, 2024, we had no outstanding borrowings under the Revolving Facility, and we had $6 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility.

Fair Value of Our Long-Term Debt

The fair value of our long-term debt as of ~~September 30, 2023,~~March 31, 2024, which is a Level 2 fair value measurement, approximates the carrying value due to the variable market interest rate and the stability of our credit profile.

Note 5 - Financial Instruments

Interest Rate Derivatives

During 2020 and 2022, we entered into a series of interest rate swaps to fix the LIBOR of our External Debt Facilities. In February 2023, we amended our interest rate swaps to replace the interest rate benchmark from the LIBOR to SOFR. Other than the foregoing, the material terms of the interest rate swap agreements remained unchanged, and our election to use practical expedients under ASUs 2020-04 and 2021-01 ~~as described in Note 2 - New Accounting Standards,~~ resulted in no material impacts on our condensed consolidated financial statements. The aggregate notional amount of the interest rate swaps still in effect as of ~~September 30, 2023~~March 31, 2024 was $1,150 million, and the SOFR is fixed at an annual rate of 0.40% to 3.40% (for an annual effective interest rate of 2.15% to 5.15%, including margin).

The interest rate swaps outstanding as of ~~September 30, 2023~~March 31, 2024 hedge a portion of the interest rate exposure resulting from our Term Loan Facility for ~~periods ranging from~~ a period of approximately two ~~to three~~ years. We classified these instruments as cash flow hedges. The effective portion of the gain or loss on the open hedging instrument is recorded in accumulated other comprehensive income and is reclassified into earnings as interest expense, net when settled. The associated asset or liability on the open hedges is recorded at its fair value in other assets or other liabilities, as applicable. The fair value of the interest rate swaps was determined using a discounted cash flow method based on market-based swap yield curves, taking into account current interest rates, and is classified as Level 2 within the fair value hierarchy.

The following table provides the notional amounts, the annual rates, the weighted average annual effective rates, and the fair value of our interest rate derivatives:

(In millions) Notional Amount Annual Rate Weighted Average Annual
Effective Rate Fair Value - Other Current Assets Fair Value - Other Assets
As of September 30, 2023 $ 1,150 2.15% to 5.15% 4.38 % $ 30 $ 22
As of December 31, 2022⁽¹⁾ $ 1,150 2.19% to 5.19% 4.42 % $ 25 $ 23


(In millions)	Notional Amount		Annual Rate	Weighted Average Annual Effective Rate	Fair Value - Other Current Assets		Fair Value - Other Assets
As of March 31, 2024	$	1,150	2.15% to 5.15%	4.38%	$	26	$	11
As of December 31, 2023	$	1,150	2.15% to 5.15%	4.38%	$	23	$	7

~~(1)Based on the interest rate swaps prior to the amendments entered into in February 2023, which was based on the LIBOR as of December 31, 2022.~~

Note 6 – Stock-based Compensation

Our equity incentive plan was established in 2020, for purposes of granting stock-based compensation awards to certain members of our senior management, our non-executive directors and to certain employees, to incentivize their performance and align their interests with ours. We have granted restricted stock units (“(“RSUs”) to certain employees and non-employee directors that have a service-based vesting condition. In addition, we have granted performance stock units (“PSUs”) to certain members of management that have a performance-based vesting condition. We account for forfeitures of outstanding but unvested grants in the period they occur. A maximum of 10.5 million shares of common stock were initially available for issuance under equity incentive awards granted pursuant to the plan. In the three ~~and nine~~ months ended ~~September 30, 2023, zero and 0.2~~March 31, 2024, 0.3 million RSUs and ~~zero and 0.2~~0.3 million PSUs were ~~granted, respectively.~~granted.

As of ~~September 30, 2023,~~March 31, 2024, there were stock-based compensation awards representing ~~0.7~~1.4 million shares outstanding compared to ~~0.4~~0.8 million shares outstanding as of December 31, ~~2022.~~2023. Stock-based compensation expense was ~~$3 million and $10~~$4 million for the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024 compared to ~~zero and $4~~$3 million infor the ~~comparable prior year periods.~~three months ended March 31, 2023.

Note 7 – Commitments and Contingencies

Legal Proceedings:

We are from time to time party to litigation, legal proceedings and tax examinations arising from our operations. Most of these matters involve allegations of damages against us relating to employment matters, consumer complaints, advertising/labelling claims, personal injury and commercial or contractual disputes. We record estimates for claims and proceedings that constitute a present obligation when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of such obligation can be made. While it is not possible to predict the outcome of any of these matters, based on our assessment of the facts and circumstances as of ~~September 30, 2023,~~March 31, 2024, we do not believe any of these matters, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations or cash flows. However, actual outcomes may differ from those expected and could have a material effect on our financial position, results of operations or cash flows in a future period.

Note 8 – Accumulated Other Comprehensive Income

The following table summarizes the changes in our balances of each component of accumulated other comprehensive income.


(In millions)	(In millions)	Currency Translation Adjustments		Employee Benefit Plans		Interest Rate Derivatives		Accumulated Other Comprehensive Income		(In millions)	Currency Translation Adjustments	Employee Benefit Plans	Interest Rate Derivatives	Accumulated Other Comprehensive Income
Balance as of December 31, 2021		$	(6)	$	12	$	4	$	10
Gain arising during the period		—		—		9		9
Reclassification to earnings		—		—		—		—
Effect of deferred taxes		—		—		(2)		(2)
Balance as of March 31, 2022		$	(6)	$	12	$	11	$	17
Gain arising during the period		—		—		5		5
Reclassification to earnings		—		(1)		—		(1)
Effect of deferred taxes		—		—		(1)		(1)
Balance as of June 30, 2022		$	(6)	$	11	$	15	$	20
Gain (loss) arising during the period		(2)		—		34		32
Reclassification to earnings		—		—		(3)		(3)
Effect of deferred taxes		—		—		(7)		(7)
Balance as of September 30, 2022		$	(8)	$	11	$	39	$	42

Balance as of December 31, 2022	Balance as of December 31, 2022	$	(7)	$	23	$	36	$	52
Loss arising during the period	Loss arising during the period	—		—		(10)		(10)
Reclassification to earnings	Reclassification to earnings	—		(1)		(6)		(7)
Effect of deferred taxes	Effect of deferred taxes	—		—		4		4
Balance as of March 31, 2023	Balance as of March 31, 2023	(7)		22		24		39
Gain arising during the period		—		—		25		25

Balance as of December 31, 2023
Balance as of December 31, 2023
Balance as of December 31, 2023
Gain (loss) arising during the period
Reclassification to earnings	Reclassification to earnings	—		(1)		(7)		(8)
Effect of deferred taxes	Effect of deferred taxes	—		—		(4)		(4)
Balance as of June 30, 2023		(7)		21		38		52
Gain arising during the period		—		—		9		9
Reclassification to earnings		—		(1)		(8)		(9)
Effect of deferred taxes		—		—		—		—
Balance as of September 30, 2023		$	(7)	$	20	$	39	$	52
Balance as of March 31, 2024

Note 9 – Segment Information

Our Chief Executive Officer, who has been identified as our Chief Operating Decision Maker (“(“CODM”), has evaluated how he views and measures our performance. In applying the criteria set forth in the standards for reporting information about segments in financial statements, we have determined that we have four reportable segments - Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware and Presto Products. The key factors used to identify these reportable segments are the organization and alignment of our internal operations and the nature of our products. This reflects how our CODM monitors performance, allocates capital and makes strategic and operational decisions. Our segments are described as follows:

Reynolds Cooking & Baking

Our Reynolds Cooking & Baking segment produces branded and store brand aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags and slow cooker liners. Our branded products are sold under the Reynolds Wrap, Reynolds KITCHENS and EZ Foil brands in the United States and selected international markets, under the ALCAN brand in Canada and under the Diamond brand outside of North America.

Hefty Waste & Storage

Our Hefty Waste & Storage segment produces both branded and store brand trash and food storage bags. Our branded products are sold under the Hefty Ultra Strong and Hefty Strong brands for trash bags, and as the Hefty and Baggies brands for our food storage bags.

Hefty Tableware

Our Hefty Tableware segment sells both branded and store brand disposable and compostable plates, bowls, platters, cups and cutlery. Our Hefty branded products include dishes and party cups.

Presto Products

Our Presto Products segment primarily sells store brand products in four main categories: food storage bags, trash bags, reusable storage containers and plastic wrap. Our Presto Products segment also includes our specialty business, which serves other consumer products companies by providing Fresh-Lock and Slide-Rite resealable closure systems.

Information by Segment

We present segment adjusted EBITDA (“Adjusted EBITDA”) as this is the financial measure by which management and our CODM allocate resources and analyze the performance of our reportable segments.

Adjusted EBITDA represents each segment’s earnings before interest, tax, depreciation and amortization and ismay be further adjusted to exclude ~~IPO and separation-related costs.~~certain non-recurring costs, if applicable.

Total assets by segment are those assets directly associated with the respective operating activities, comprising inventory, property, plant and equipment and operating lease right-of-use assets. Other assets, such as cash, accounts receivable and intangible assets, are monitored on an entity-wide basis and not included in segment information that is regularly reviewed by our CODM.

Transactions between segments are at negotiated prices.

Reynolds
Cooking
& Baking Hefty
Waste &
Storage Hefty
Tableware Presto
Products Segment
Total
Unallocated(1)
Total
Three Months Ended September 30, 2023 (in millions)
Net revenues $ 312 $ 241 $ 233 $ 147 $ 933 $ 2 $ 935
Intersegment revenues — 3 — 5 8 (8) —
Total segment net revenues $ 312 $ 244 $ 233 $ 152 $ 941 $ (6) $ 935
Adjusted EBITDA 51 71 41 31 194
Depreciation and amortization 8 5 4 5 22 9 31
Reynolds
Cooking
& Baking Hefty
Waste &
Storage Hefty
Tableware Presto
Products Segment
Total
Unallocated(1)
Total
Three Months Ended September 30, 2022 (in millions)
Net revenues $ 327 $ 234 $ 251 $ 154 $ 966 $ 1 $ 967
Intersegment revenues — 3 — 1 4 (4) —
Total segment net revenues $ 327 $ 237 $ 251 $ 155 $ 970 $ (3) $ 967
Adjusted EBITDA 33 44 24 23 124
Depreciation and amortization 6 5 4 6 21 9 30


		Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Segment Total		Unallocated(1)		Total			Reynolds Cooking & Baking		Hefty Waste & Storage			Hefty Tableware			Presto Products			Segment Total		Unallocated(1)	Total
Nine Months Ended September 30, 2023		(in millions)
Three Months Ended March 31, 2024																Three Months Ended March 31, 2024	(in millions)
Net revenues	Net revenues	$	916	$	697	$	708	$	433	$	2,754	$	(4)	$	2,750
Intersegment revenues	Intersegment revenues	—		8		—		8		16		(16)		—
Total segment net revenues	Total segment net revenues	$	916	$	705	$	708	$	441	$	2,770	$	(20)	$	2,750
Adjusted EBITDA	Adjusted EBITDA	94		188		117		78		477						Adjusted EBITDA	33	66		66	30		30	29		29	158		158
Depreciation and amortization	Depreciation and amortization	22		15		12		16		65		27		92

		Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Segment Total		Unallocated(1)		Total
Nine Months Ended September 30, 2022		(in millions)
		Reynolds Cooking & Baking
		Reynolds Cooking & Baking
		Reynolds Cooking & Baking																	Hefty Waste & Storage			Hefty Tableware			Presto Products			Segment Total		Unallocated(1)	Total
Three Months Ended March 31, 2023																Three Months Ended March 31, 2023	(in millions)
Net revenues	Net revenues	$	889	$	696	$	701	$	443	$	2,729	$	—	$	2,729
Intersegment revenues	Intersegment revenues	—		8		—		4		12		(12)		—
Total segment net revenues	Total segment net revenues	$	889	$	704	$	701	$	447	$	2,741	$	(12)	$	2,729
Adjusted EBITDA	Adjusted EBITDA	97		135		72		67		371						Adjusted EBITDA	4	55		55	30		30	19		19	108		108
Depreciation and amortization	Depreciation and amortization	18		14		12		17		61		26		87

Segment assets consisted of the following:

Reynolds
Cooking
& Baking Hefty
Waste &
Storage Hefty
Tableware Presto
Products Segment
Total
Unallocated(1)
Total
(in millions)
As of September 30, 2023 $ 595 $ 262 $ 224 $ 236 $ 1,317 $ 3,521 $ 4,838
As of December 31, 2022 646 314 226 274 1,460 3,469 4,929


	Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Segment Total		Unallocated(1)		Total
	(in millions)
As of March 31, 2024	$	572	$	271	$	240	$	238	$	1,321	$	3,537	$	4,858
As of December 31, 2023	556		267		216		239		1,278		3,502		4,780

(1)Unallocated includes the elimination of intersegment revenues, other revenue adjustments and certain corporate costs, depreciation and amortization and assets not allocated to segments. Unallocated assets are comprised of cash, accounts receivable, other receivables, entity-wide property, plant and equipment, entity-wide operating lease right-of-use assets, goodwill, intangible assets, related party receivables and other assets.

The following table presents a reconciliation of segment Adjusted EBITDA to GAAP income before income taxes:


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		(in millions)				(in millions)
	Three Months Ended March 31,											Three Months Ended March 31,
	2024										2024		2023
	(in millions)											(in millions)
Segment Adjusted EBITDA	Segment Adjusted EBITDA	$	194	$	124	$	477	$	371
Corporate / unallocated expenses	Corporate / unallocated expenses	(29)		(8)		(79)		(25)
		165		116		398		346
	122
Adjustments to reconcile to GAAP income before income taxes	Adjustments to reconcile to GAAP income before income taxes									Adjustments to reconcile to GAAP income before income taxes
Depreciation and amortization	Depreciation and amortization	(31)		(30)		(92)		(87)
Interest expense, net	Interest expense, net	(31)		(20)		(91)		(48)
IPO and separation-related costs		—		(3)		—		(10)
Consolidated GAAP income before income taxes	Consolidated GAAP income before income taxes	$	103	$	63	$	215	$	201

Information in Relation to Products

Net revenues by product line are as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		(in millions)				(in millions)
	Three Months Ended March 31,										Three Months Ended March 31,
	2024									2024		2023
	(in millions)										(in millions)
Waste and storage products (1)	Waste and storage products (1)	$	396	$	392	$	1,146	$	1,151
Cooking products	Cooking products	312		327		916		889
Tableware	Tableware	233		251		708		701
Unallocated	Unallocated	(6)		(3)		(20)		(12)
Net revenues	Net revenues	$	935	$	967	$	2,750	$	2,729

(1)Waste and storage products are comprised of our Hefty Waste & Storage and Presto Products segments.

Our different product lines are generally sold to a common group of customers. For all product lines, there is a relatively short time period between the receipt of the order and the transfer of control over the goods to the customer.

Note 10 – Related Party Transactions

Packaging Finance Limited (“PFL”) owns the majority of our outstanding common stock and owns the majority of the outstanding common stock of Pactiv Evergreen Inc. and its subsidiaries (“PEI Group”). We sell and purchase various goods and services with PEI Group under contractual arrangements that expire over a variety of periods through December 31, 2027. During the ~~nine months~~year ended ~~September 30,~~December 31, 2023, we amended these contractual arrangements with PEI Group, which, among other things, extended the expiration date for certain arrangements. Transactions between us and PEI Group are described below.

For each of the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and March 31, 2023, revenues from products sold to PEI Group were ~~$21~~$22 million. For the three months ended March 31, 2024, products purchased from PEI Group were $80 million, ~~and $61 million, respectively,~~ compared to ~~$29 million and $77~~$106 million in the comparable prior year ~~periods.~~period. For the three ~~and nine~~ months ended September 30, 2023, products purchased from PEI Group were $92 million and $291 million, respectively, compared to $101 million and $294 million in the comparable prior year periods. For the three and nine months ended September 30, 2023,March 31, 2024, PEI Group charged us freight and warehousing costs of $9$8 million, ~~and $28 million, respectively,~~ compared to ~~$12 million and $42~~$9 million in the comparable prior year ~~periods,~~period, which were included in cost of sales. The resulting related party receivables and payables are settled regularly in the normal course of business.

Furthermore, $36 million of the dividends paid during each of the three months ended ~~September 30,~~March 31, 2024 and March 31, 2023, ~~and September 30, 2022, and $107 million of the dividends paid during each of the nine months ended September 30, 2023 and September 30, 2022,~~ were paid to PFL.

Note 11 – Subsequent Events

Quarterly Cash Dividend

On ~~October 26, 2023,~~April 25, 2024, our Board of Directors approved a cash dividend of $0.23 per common share to be paid on ~~November 30, 2023~~May 31, 2024 to shareholders of record on ~~November 16, 2023.~~May 17, 2024.

Term Loan Facility

Subsequent to ~~September 30, 2023,~~March 31, 2024, we made a voluntary principal payment of ~~$100~~$50 million related to our Term Loan Facility.

Except as described above, there have been no events subsequent to ~~September 30, 2023~~March 31, 2024 which would require accrual or disclosure in these condensed consolidated financial statements.

1514

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Our management’s discussion and analysis is intended to help the reader understand our results of operations and financial condition and is provided as an addition to, and should be read in connection with, our condensed consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and the accompanying notes contained in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

Description of the Company and its Business Segments

We are a market-leading consumer products company with a presence in 95% of households across the United States. We produce and sell products across three broad categories: cooking products, waste and storage products and tableware. We sell our products under iconic brands such as Reynolds and Hefty and also under store brands that are strategically important to our ~~customers.~~retail partners. Overall, across both our branded and store brand offerings, we hold the #1 or #2 U.S. market share position in the majority of product categories in which we participate. Over 65% of our revenue comes from products that are #1 in their respective categories. We have developed our market-leading position by investing in our product categories and consistently developing innovative products that meet the evolving needs and preferences of the modern consumer.

Our mix of branded and store brand products is a key competitive advantage that aligns our goal of growing the overall product categories ~~with our customers’ goals and~~where we have offerings. Our retail partners also measure their success in category growth, which positions us as a trusted strategic ~~partner to our retailers. Our Reynolds and Hefty brands have preeminent positions in their categories and carry strong brand recognition in household aisles.~~partner.

We manage our operations in four operating and reportable segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware and Presto Products:

•Reynolds Cooking & Baking: Through our Reynolds Cooking & Baking segment, we ~~produce~~sell both branded and store brand aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags and slow cooker liners. Our branded products are sold under the Reynolds Wrap, Reynolds KITCHENS and EZ Foil brands in the United States and selected international markets, under the ALCAN brand in Canada and under the Diamond brand outside of North America. With our flagship Reynolds Wrap products, we hold the #1 market position in the U.S. consumer foil market measured by retail sales and volume. We also hold the #1 market position in the Canadian branded foil market under the ALCAN brand. We have no significant branded competitor in this market. Reynolds is one of the most recognized household brands in the United States and has been the top trusted brand in the consumer foil market for over 75 years, with greater than 50% market share in most of its categories.

•Hefty Waste & Storage: Through our Hefty Waste & Storage segment, we produce both branded and store brand trash and food storage bags. Hefty is a well-recognized leader in the trash bag and food storage bag categories and our private label products offer value to our retail partners. Our branded products are sold under the Hefty Ultra Strong and Hefty Strong brands for trash bags, and as the Hefty and Baggies brands for our food storage bags. We have the #1 branded market share in the U.S. large black trash bag and slider bag segments, and the #2 branded market share in the tall kitchen trash bag segment. Our robust product portfolio in this segment includes a full suite of products, including sustainable solutions such as blue and clear recycling bags, compostable bags, bags made from recycled materials and orange bags through the Hefty ~~ReNew~~™ ~~Program, formerly the Hefty EnergyBag~~ReNew™ Program.

•Hefty Tableware: Through our Hefty Tableware segment, we sell both branded and store brand disposable and compostable plates, bowls, platters, cups and cutlery. Our Hefty branded products include dishes and party cups. Hefty branded party cups are the #1 party cup in America measured by market share. Our branded products use our Hefty brand to represent both quality and great ~~price,~~value, and we bring this same quality and value promise to all of our store brands as well. We sell across a broad range of materials and price points in all retail channels, allowing our consumers to select the product that best suits their price, function and aesthetic needs. These materials include sustainable solutions, such as Hefty ECOSAVE™ and Hefty Compostable Printed Paper Plates.

•Presto Products: Through our Presto Products segment, we primarily sell store brand products in four main categories: food storage bags, trash bags, reusable storage containers and plastic wrap. Presto Products is a market leader in food storage bags and differentiates itself by providing access to category management, consumer insights, marketing, merchandising and research and development (“R&D”) resources. Presto Products was the first in the U.S. market to offer a store branded sandwich bag made with an approximately 20% proprietary blend of plant and ocean, renewable materials. Our Presto Products segment also includes our specialty business, which serves other consumer products companies by providing Fresh-Lock and Slide-Rite resealable closure systems.

Overview

Total net revenues decreased 3%5% in the three months ended ~~September 30, 2023~~March 31, 2024 compared to the same period in ~~2022.~~2023. The revenue decrease ~~was primarily due to~~ consisted of lower volume ~~slightly offset~~in both our retail and non-retail businesses. Our retail and lower-margin non-retail net revenue declined by higher pricing due to previously implemented pricing actions. Total net revenues increased 1% in the nine months ended September 30, 2023 compared to the same period in 2022. The revenue increase was primarily due to higher pricing due to previously implemented pricing actions, partially offset by lower volume.$23 million and $18 million, respectively.

During the three months ended ~~September 30, 2023, our~~March 31, 2024, net income ~~improved by 63% compared to the prior year period, primarily~~increased $32 million driven by ~~higher pricing due to previously implemented pricing actions and lower~~declines in material and manufacturing costs, as well as ~~lower logistics costs. These were partially offset by higher selling, general and administrative expenses,~~a reduction in interest expense ~~and income tax expense.~~

~~During the nine months ended September 30, 2023, our net income improved by 6% compared to the prior year period, primarily driven by higher pricing~~as a result of a lower outstanding principal balance due to previously implemented pricing actions and lower material and manufacturing costs, as well as lower logistics costs. These were partially offset by higher selling, general and administrative expenses, interest expense and income tax expense.repayments made on our term loan facility throughout 2023.

Non-GAAP Measures

In this Quarterly Report on Form 10-Q we use the non-GAAP financial ~~measures~~measure “Adjusted EBITDA”, ~~“Adjusted Net Income” and “Adjusted Diluted Earnings Per Share” (“Adjusted EPS”),~~ which ~~are measures adjusted for the impact of specified items and are not in accordance with GAAP.~~is a non-GAAP measure.

We define Adjusted EBITDA as net income calculated in accordance with GAAP, plus the sum of income tax expense, net interest expense, depreciation and amortization and as may be further adjusted to exclude ~~IPO and separation-related costs. We define Adjusted Net Income and Adjusted EPS as Net Income and Earnings Per Share calculated in accordance with GAAP, plus IPO and separation-related costs.~~certain non-recurring items, if applicable.

We present Adjusted EBITDA because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans and make strategic decisions. In addition, our chief operating decision maker uses Adjusted EBITDA of each reportable segment to evaluate the operating performance of such segments. We use Adjusted Net Income and Adjusted EPS as supplemental measures to evaluate our business’ performance in a way that also considers our ability to generate profit without the impact of certain items. Accordingly, we believe presenting ~~these measures~~this measure provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors.

Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP financial measures presented by other companies.

The following table presents a reconciliation of our net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA:


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		(in millions)				(in millions)
	Three Months Ended March 31,										Three Months Ended March 31,
	2024									2024		2023
	(in millions)										(in millions)
Net income – GAAP	Net income – GAAP	$	78	$	48	$	161	$	152
Income tax expense	Income tax expense	25		15		54		49
Interest expense, net	Interest expense, net	31		20		91		48
Depreciation and amortization	Depreciation and amortization	31		30		92		87
IPO and separation-related costs ⁽¹⁾		—		3		—		10
Adjusted EBITDA (Non-GAAP)	Adjusted EBITDA (Non-GAAP)	$	165	$	116	$	398	$	346

~~(1)~~Reflects costs related to the IPO process, as well as costs related to our separation to operate as a stand-alone public company. These costs are included in Other expense, net in our condensed consolidated statements of income.

~~The following tables present reconciliations of our net income and diluted EPS, the most directly comparable GAAP financial measures, to Adjusted Net Income and Adjusted EPS:~~

Three Months Ended September 30, 2023 Three Months Ended September 30, 2022
(in millions, except for per share data) Net Income Diluted Shares Diluted EPS Net Income Diluted Shares Diluted EPS
As Reported - GAAP $ 78 210 $ 0.37 $ 48 210 $ 0.23
Adjustments:
IPO and separation-related costs ⁽¹⁾ — 210 — 2 210 0.01
Adjusted (Non-GAAP) $ 78 210 $ 0.37 $ 50 210 $ 0.24

~~(1)Amount is after tax, calculated using a tax rate of 24.0% for the three months ended September 30, 2022, which was our effective tax rate for the period presented.~~

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
(in millions, except for per share data) Net Income Diluted Shares Diluted EPS Net Income Diluted Shares Diluted EPS
As Reported - GAAP $ 161 210 $ 0.77 $ 152 210 $ 0.72
Adjustments:
IPO and separation-related costs ⁽¹⁾ — 210 — 8 210 0.04
Adjusted (Non-GAAP) $ 161 210 $ 0.77 $ 160 210 $ 0.76

~~(1)Amount is after tax, calculated using a tax rate of 24.5% for the nine months ended September 30, 2022, which was our effective tax rate for the period presented.~~

Results of Operations – Three Months Ended ~~September 30, 2023~~March 31, 2024

The following discussion should be read in conjunction with our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Detailed comparisons of revenue and results are presented in the discussions of the operating segments, which follow our consolidated results discussion.

Certain discussions in this section provide a breakdown of net revenues between our retail and non-retail businesses. Our retail business net revenues consist of sales to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets and eCommerce retailers. Our non-retail business net revenues consist of sales to food service customers, which are classified as related party revenues, and industrial customers.

Aggregation of Segment Revenue and Adjusted EBITDA

(in millions) Reynolds
Cooking &
Baking Hefty
Waste &
Storage Hefty
Tableware Presto
Products
Unallocated⁽1⁾
Total
Reynolds
Consumer
Products
Net revenues for the three months ended September 30:
2023 $ 312 $ 244 $ 233 $ 152 $ (6) $ 935
2022 327 237 251 155 (3) 967
Adjusted EBITDA⁽²⁾ for the three months ended September 30:
2023 $ 51 $ 71 $ 41 $ 31 $ (29) $ 165
2022 33 44 24 23 (8) 116


(in millions)	Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Unallocated⁽1⁾		Total Reynolds Consumer Products
Net revenues for the three months ended March 31:
2024	$	264	$	229	$	205	$	143	$	(8)	$	833
2023	283		233		224		144		(10)		874
Adjusted EBITDA(2) for the three months ended March 31:
2024	$	33	$	66	$	30	$	29	$	(36)	$	122
2023	4		55		30		19		(26)		82

(1)The unallocated net revenues include elimination of intersegment revenues and other revenue adjustments. The unallocated Adjusted EBITDA represents the combination of corporate expenses which are not allocated to our segments and other unallocated revenue adjustments.

(2)Adjusted EBITDA is a non-GAAP measure. See ~~“Non-GAAP~~“Non-GAAP Measures” for details, including a reconciliation between net income and Adjusted EBITDA.

Three Months Ended ~~September 30, 2023~~March 31, 2024 Compared with the Three Months Ended ~~September 30, 2022~~March 31, 2023

Total Reynolds Consumer Products


		For the Three Months Ended September 30,
	For the Three Months Ended March 31,
(in millions, except for %)	(in millions, except for %)	2023		% of Revenue		2022		% of Revenue		Change		% Change
(in millions, except for %)
(in millions, except for %)
Net revenues
Net revenues
Net revenues	Net revenues	$	914	98	%	$	938	97	%	$	(24)	(3)	%	$	811			97		97		%		$	852			97			97			%			$	(41)			(5)				(5)		%
Related party net revenues	Related party net revenues	21		2	%	29		3	%	(8)		(28)	%	Related party net revenues		22			3		3		%			22			3				3			%			—			—				—		%
Total net revenues	Total net revenues	935		100	%	967		100	%	(32)		(3)	%	Total net revenues		833			100		100		%			874			100				100			%			(41)			(5)				(5)		%
Cost of sales	Cost of sales	(686)		(73)	%	(789)		(82)	%	103		13	%	Cost of sales		(632)			(76)		(76)		%			(719)			(82)				(82)			%			87			12				12		%
Gross profit	Gross profit	249		27	%	178		18	%	71		40	%	Gross profit		201			24		24		%			155			18				18			%			46			30				30		%
Selling, general and administrative expenses	Selling, general and administrative expenses	(115)		(12)	%	(90)		(9)	%	(25)		(28)	%	Selling, general and administrative expenses		(111)			(13)		(13)		%			(105)			(12)				(12)			%			(6)			(6)				(6)		%
Other expense, net		—		—	%	(5)		(1)	%	5		NM
Other income, net														Other income, net		—				—		%		2						—		%			(2)								NM	%
Income from operations	Income from operations	134		14	%	83		9	%	51		61	%	Income from operations		90			11		11		%			52			6				6			%			38			73				73		%
Interest expense, net	Interest expense, net	(31)		(3)	%	(20)		(2)	%	(11)		(55)	%	Interest expense, net		(25)			(3)		(3)		%			(29)			(3)				(3)			%			4			14				14		%
Income before income taxes	Income before income taxes	103		11	%	63		7	%	40		63	%	Income before income taxes		65			8		8		%			23			3				3			%			42			183				183		%
Income tax expense	Income tax expense	(25)		(3)	%	(15)		(2)	%	(10)		(67)	%	Income tax expense		(16)			(2)		(2)		%			(6)			(1)				(1)			%			(10)			(167)				(167)		%
Net income	Net income	$	78	8	%	$	48	5	%	$	30	63	%	Net income		$	49		6		6		%			$	17		2				2			%			$	32		188				188		%
Adjusted EBITDA ⁽¹⁾	Adjusted EBITDA ⁽¹⁾	$	165	18	%	$	116	12	%	$	49	42	%	Adjusted EBITDA ⁽¹⁾		$	122		15		15		%			$	82		9				9			%			$	40		49				49		%

NM - Percentage change is not meaningful.

(1)Adjusted EBITDA is a non-GAAP measure. See “Non-GAAP Measures” for details, including a reconciliation between net income and Adjusted EBITDA.

Components of Change in Net Revenues for the Three Months Ended ~~September 30, 2023~~March 31, 2024 vs. the Three Months Ended ~~September 30, 2022~~March 31, 2023


		Price			Volume/Mix		Total
				Volume/Mix
		Price
		Price
		Price
Reynolds Cooking & Baking
Reynolds Cooking & Baking
Reynolds Cooking & Baking	Reynolds Cooking & Baking	(2)	%		(3)	%	(5)	%	1		%		(2)		%		(6)		%		(7)		%
Hefty Waste & Storage	Hefty Waste & Storage	2	%		1	%	3	%	Hefty Waste & Storage	—		%		(2)		%		—		%		(2)		%
Hefty Tableware	Hefty Tableware	4	%		(11)	%	(7)	%	Hefty Tableware	(2)		%		(6)		%		—		%		(8)		%
Presto Products	Presto Products	1	%		(3)	%	(2)	%	Presto Products	—		%		(1)		%		—		%		(1)		%
Total RCP	Total RCP	1	%		(4)	%	(3)	%	Total RCP	—		%		(3)		%		(2)		%		(5)		%

Total Net Revenues. Total net revenues decreased by ~~$32~~$41 million, or 3%5%, to ~~$935~~$833 million. The 5% decrease ~~was primarily driven~~ byconsisted of lower volume ~~slightly offset~~in both our retail and non-retail businesses. Our retail and lower-margin non-retail net revenue declined by ~~higher pricing due to previously implemented pricing actions.~~$23 million and $18 million, respectively.

Cost of Sales. Cost of sales decreased by ~~$103~~$87 million, or ~~13%~~12%, to ~~$686~~$632 million. The decrease was primarily driven by lower volume ~~and~~as well as lower material and manufacturing ~~costs, as well as lower logistics~~ costs.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by ~~$25~~$6 million, or ~~28%~~6%, to ~~$115~~$111 million, primarily due to higher personnel costs and advertising ~~costs and professional fees.~~costs.

Other ~~expense, net.~~Income, Net. Other ~~expense,~~income, net ~~decreased by $5 million, or 100%, to~~was zero ~~primarily due to IPO and separation-related costs~~ in the ~~prior year period that did not reoccur~~three months ended March 31, 2024 compared to $2 million in the ~~current year period.~~three months ended March 31, 2023.

Interest Expense, Net. Interest expense, net ~~increased~~decreased by ~~$11~~$4 million, or ~~55%~~14%, to ~~$31~~$25 million. The ~~increase~~decrease was primarily due to ~~higher interest rates.~~a lower outstanding principal balance on our external debt facilities as a result of principal payments made throughout 2023.

Income Tax Expense. We recognized income tax expense of ~~$25~~$16 million on income before income taxes of ~~$103~~$65 million (an effective tax rate of ~~24.5%~~24.9%) for the three months ended ~~September 30, 2023~~March 31, 2024 compared to income tax expense of ~~$15~~$6 million on income before income taxes of ~~$63~~$23 million (an effective tax rate of ~~24.0%~~24.9%) for the three months ended ~~September 30, 2022.~~March 31, 2023.

Adjusted EBITDA. Adjusted EBITDA increased by ~~$49~~$40 million, or ~~42%~~49%, to ~~$165~~$122 million. The increase in Adjusted EBITDA was primarily due to ~~higher pricing due to previously implemented pricing actions and~~ lower material and manufacturing ~~costs, as well as lower logistics costs, partially offset by higher selling, general and administrative expenses.~~costs.

Segment Information

Reynolds Cooking & Baking

For the Three Months Ended September 30,
(in millions, except for %) 2023 2022 Change % Change
Total segment net revenues $ 312 $ 327 $ (15) (5) %
Segment Adjusted EBITDA 51 33�� 18 55 %
Segment Adjusted EBITDA Margin 16 % 10 %


	For the Three Months Ended March 31,
(in millions, except for %)	2024			2023			Change		% Change
Retail net revenues	$	225		$	226		$	(1)	—	%
Non-retail net revenues	39			57			(18)		(32)	%
Total segment net revenues	$	264		$	283		$	(19)	(7)	%
Segment Adjusted EBITDA	33			4			29		725	%
Segment Adjusted EBITDA Margin	13		%	1		%

Total Segment Net Revenues. Reynolds Cooking & Baking total segment net revenues decreased by ~~$15~~$19 million, or 5%7%, to ~~$312~~$264 million. The decrease in net revenues was primarily due to an $18 million decline in our non-retail net revenues driven by lower ~~volume and lower pricing, primarily in non-retail sales.~~volume.

Adjusted EBITDA. Reynolds Cooking & Baking Adjusted EBITDA increased by ~~$18~~$29 million, or ~~55%~~725%, to ~~$51~~$33 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing ~~costs, partially offset by lower pricing and higher advertising~~ costs.

Hefty Waste & Storage

For the Three Months Ended September 30,
(in millions, except for %) 2023 2022 Change % Change
Total segment net revenues $ 244 $ 237 $ 7 3 %
Segment Adjusted EBITDA 71 44 27 61 %
Segment Adjusted EBITDA Margin 29 % 19 %


	For the Three Months Ended March 31,
(in millions, except for %)	2024			2023			Change		% Change
Total segment net revenues	$	229		$	233		$	(4)	(2)	%
Segment Adjusted EBITDA	66			55			11		20	%
Segment Adjusted EBITDA Margin	29		%	24		%

Total Segment Net Revenues. Hefty Waste & Storage total segment net revenues ~~increased by $7~~decreased $4 million, or 3%2%, to ~~$244~~$229 million. The ~~increase~~decrease in net revenues was primarily due to ~~higher pricing due to previously implemented pricing actions.~~lower volume.

Adjusted EBITDA. Hefty Waste & Storage Adjusted EBITDA increased by ~~$27~~$11 million, or ~~61%~~20%, to ~~$71~~$66 million. The increase in Adjusted EBITDA was primarily driven by ~~higher pricing due to previously implemented pricing actions and~~ lower material and manufacturing ~~costs, as well as lower logistics~~ costs.

Hefty Tableware

For the Three Months Ended September 30,
(in millions, except for %) 2023 2022 Change % Change
Total segment net revenues $ 233 $ 251 $ (18) (7) %
Segment Adjusted EBITDA 41 24 17 71 %
Segment Adjusted EBITDA Margin 18 % 10 %


	For the Three Months Ended March 31,
(in millions, except for %)	2024			2023			Change		% Change
Total segment net revenues	$	205		$	224		$	(19)	(8)	%
Segment Adjusted EBITDA	30			30			—		—	%
Segment Adjusted EBITDA Margin	15		%	13		%

Total Segment Net Revenues. Hefty Tableware total segment net revenues decreased by ~~$18~~$19 million, or 7%8%, to ~~$233~~$205 million. The decrease in net revenues was primarily due to lower volume ~~partially offset by higher pricing due to previously implemented pricing actions.~~and lower pricing.

Adjusted EBITDA. Hefty Tableware Adjusted EBITDA ~~increased by $17 million, or 71%, to $41 million. The increase in Adjusted EBITDA was primarily driven by higher pricing due to previously implemented pricing actions and~~remained flat, with lower material and manufacturing costs ~~as well as lower logistics costs, partially~~ offset by ~~higher advertising costs.~~lower volume.

Presto Products

For the Three Months Ended September 30,
(in millions, except for %) 2023 2022 Change % Change
Total segment net revenues $ 152 $ 155 $ (3) (2) %
Segment Adjusted EBITDA 31 23 8 35 %
Segment Adjusted EBITDA Margin 20 % 15 %


	For the Three Months Ended March 31,
(in millions, except for %)	2024			2023			Change		% Change
Total segment net revenues	$	143		$	144		$	(1)	(1)	%
Segment Adjusted EBITDA	29			19			10		53	%
Segment Adjusted EBITDA Margin	20		%	13		%

Total Segment Net Revenues. Presto Products total segment net revenues ~~decreased by $3 million, or 2%,~~were relatively flat during the three months ended March 31, 2024, compared to ~~$152 million. The decrease in net revenues was primarily due to lower volume.~~the prior year period.

Adjusted EBITDA. Presto Products Adjusted EBITDA increased by $8$10 million, or ~~35%~~53%, to ~~$31~~$29 million. The increase ~~in Adjusted EBITDA~~ was primarily driven by lower material and manufacturing ~~costs, as well as lower logistics~~ costs.

~~Results of Operations – Nine Months Ended September 30, 2023~~

~~Aggregation of Segment Revenue and Adjusted EBITDA~~

(in millions) Reynolds
Cooking &
Baking Hefty
Waste &
Storage Hefty
Tableware Presto
Products
Unallocated⁽1⁾
Total
Reynolds
Consumer
Products
Net revenues for the nine months ended September 30:
2023 $ 916 $ 705 $ 708 $ 441 $ (20) $ 2,750
2022 889 704 701 447 (12) 2,729
Adjusted EBITDA⁽²⁾ for the nine months ended September 30:
2023 $ 94 $ 188 $ 117 $ 78 $ (79) $ 398
2022 97 135 72 67 (25) 346

~~(1)~~The unallocated net revenues include elimination of intersegment revenues and other revenue adjustments. The unallocated Adjusted EBITDA represents the combination of corporate expenses which are not allocated to our segments and other unallocated revenue adjustments.

~~(2)Adjusted EBITDA is a non-GAAP measure. See “Non-GAAP Measures” for details, including a reconciliation between net income and Adjusted EBITDA.~~

~~Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022~~

~~Total Reynolds Consumer Products~~

For the Nine Months Ended September 30,
(in millions, except for %) 2023 % of
Revenue 2022 % of
Revenue Change % Change
Net revenues $ 2,689 98 % $ 2,652 97 % $ 37 1 %
Related party net revenues 61 2 % 77 3 % (16) (21) %
Total net revenues 2,750 100 % 2,729 100 % 21 1 %
Cost of sales (2,117) (77) % (2,199) (81) % 82 4 %
Gross profit 633 23 % 530 19 % 103 19 %
Selling, general and administrative expenses (327) (12) % (264) (10) % (63) (24) %
Other expense, net — — % (17) (1) % 17 100 %
Income from operations 306 11 % 249 9 % 57 23 %
Interest expense, net (91) (3) % (48) (2) % (43) (90) %
Income before income taxes 215 8 % 201 7 % 14 7 %
Income tax expense (54) (2) % (49) (2) % (5) (10) %
Net income $ 161 6 % $ 152 6 % $ 9 6 %
Adjusted EBITDA ⁽¹⁾ $ 398 14 % $ 346 13 % $ 52 15 %

~~(1)Adjusted EBITDA is a non-GAAP measure. See “Non-GAAP Measures” for details, including a reconciliation between net income and Adjusted EBITDA.~~

~~Components of Change in Net Revenues for the Nine Months Ended September 30, 2023 vs. the Nine Months Ended September 30, 2022~~

Price Volume/Mix Total
Reynolds Cooking & Baking (1) % 4 % 3 %
Hefty Waste & Storage 3 % (3) % — %
Hefty Tableware 9 % (8) % 1 %
Presto Products 1 % (2) % (1) %
Total RCP 3 % (2) % 1 %

~~Total Net Revenues~~. Total net revenues increased by $21 million, or 1%, to $2,750 million. The increase was primarily driven by higher pricing due to previously implemented pricing actions, partially offset by lower volume.

~~Cost of Sales. Cost of sales decreased by $82 million, or 4%, to $2,117 million. The decrease was driven by lower volume and lower material and manufacturing costs, as well as lower logistics costs.~~

~~Selling, General and Administrative Expenses.~~ ~~Selling, general and administrative expenses increased by $63 million, or 24%, to $327 million primarily due to higher personnel costs, advertising costs and professional fees.~~

~~Other expense, net.~~ Other expense, net decreased by $17 million, or 100%, to zero primarily due to IPO and separation-related costs and changes in our deferred compensation plan assets in the prior year period that did not reoccur in the current year period.

~~Interest Expense~~, ~~Net. Interest expense, net increased by $43 million, or 90%, to $91 million due to higher interest rates.~~

~~Income Tax Expense.~~ We recognized income tax expense of $54 million on income before income taxes of $215 million (an effective tax rate of 24.9%) for the nine months ended September 30, 2023 compared to income tax expense of $49 million on income before income taxes of $201 million (an effective tax rate of 24.5%) for the nine months ended September 30, 2022.

~~Adjusted EBITDA.~~ Adjusted EBITDA increased by $52 million, or 15%, to $398 million. The increase in Adjusted EBITDA was primarily attributable to higher pricing due to previously implemented pricing actions and lower material and manufacturing costs, as well as lower logistics costs, partially offset by higher selling, general and administrative expenses.

~~Segment Information~~

~~Reynolds Cooking & Baking~~

For the Nine Months Ended September 30,
(in millions, except for %) 2023 2022 Change % Change
Total segment net revenues $ 916 $ 889 $ 27 3 %
Segment Adjusted EBITDA 94 97 (3) (3) %
Segment Adjusted EBITDA Margin 10 % 11 %

~~Total Segment Net Revenues. Reynolds Cooking & Baking total segment net revenues increased by $27 million, or 3%, to $916 million. The increase in net revenues was primarily driven~~ by higher volume, slightly offset by lower pricing. Retail sales increased $58 million compared to the prior year period while non-retail sales, which are consistently low margin, were down $31 million compared to the prior year period.

~~Adjusted EBITDA~~. Reynolds Cooking & Baking Adjusted EBITDA decreased by $3 million, or 3%, to $94 million. The decrease in Adjusted EBITDA was primarily driven by higher material and manufacturing costs, partially offset by higher volume.

~~Hefty Waste & Storage~~

For the Nine Months Ended September 30,
(in millions, except for %) 2023 2022 Change % Change
Total segment net revenues $ 705 $ 704 $ 1 — %
Segment Adjusted EBITDA 188 135 53 39 %
Segment Adjusted EBITDA Margin 27 % 19 %

~~Total Segment Net Revenues~~. Hefty Waste & Storage total segment net revenues increased by $1 million, to $705 million. The increase in net revenues was primarily driven by higher pricing due to previously implemented pricing actions, mostly offset by lower volume.

~~Adjusted EBITDA.~~ Hefty Waste & Storage Adjusted EBITDA increased by $53 million, or 39%, to $188 million. The increase in Adjusted EBITDA was primarily driven by higher pricing due to previously implemented pricing actions and lower material and manufacturing costs, partially offset by lower volume and higher advertising costs.

~~Hefty Tableware~~

For the Nine Months Ended September 30,
(in millions, except for %) 2023 2022 Change % Change
Total segment net revenues $ 708 $ 701 $ 7 1 %
Segment Adjusted EBITDA 117 72 45 63 %
Segment Adjusted EBITDA Margin 17 % 10 %

~~Total Segment Net Revenues.~~ Hefty Tableware total segment net revenues increased by $7 million, or 1%, to $708 million. The increase in net revenues was primarily driven by higher pricing due to previously implemented pricing actions, mostly offset by lower volume.

~~Adjusted EBITDA.~~ Hefty Tableware Adjusted EBITDA increased by $45 million, or 63%, to $117 million. The increase in Adjusted EBITDA was primarily driven by higher pricing due to previously implemented pricing actions and lower logistics costs, partially offset by lower volume and higher material and manufacturing costs.

~~Presto Products~~

For the Nine Months Ended September 30,
(in millions, except for %) 2023 2022 Change % Change
Total segment net revenues $ 441 $ 447 $ (6) (1) %
Segment Adjusted EBITDA 78 67 11 16 %
Segment Adjusted EBITDA Margin 18 % 15 %

~~Total Segment Net Revenues.~~ ~~Presto Products total segment net revenues decreased by $6 million, or 1%, to $441 million. The decrease in net revenues was primarily driven by lower volume.~~

~~Adjusted EBITDA~~. Presto Products Adjusted EBITDA increased by $11 million, or 16%, to $78 million. The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs, as well as lower logistics costs, partially offset by lower volume.

Liquidity and Capital Resources

Our principal sources of liquidity are existing cash and cash equivalents, cash generated from operating activities and available borrowings under the Revolving Facility.

The following table discloses our cash flows for the periods presented:


		For the Nine Months Ended September 30,
	For the Three Months Ended March 31,								For the Three Months Ended March 31,
(in millions)	(in millions)	2023		2022		(in millions)	2024	2023
Net cash provided by operating activities	Net cash provided by operating activities	$	423	$	118
Net cash used in investing activities	Net cash used in investing activities	(77)		(86)
Net cash used in financing activities	Net cash used in financing activities	(260)		(163)
Increase (decrease) in cash and cash equivalents		$	86	$	(131)
Increase in cash and cash equivalents

Cash provided by operating activities

Net cash from operating activities increased by ~~$305~~$11 million to ~~$423~~$99 million in the ~~nine~~three months ended ~~September 30, 2023.~~March 31, 2024. The increase was primarily driven by ~~improved earnings~~the benefit from working capital initiatives and ~~a reduction~~higher net income, partially offset by higher net investment in ~~working capital.~~inventory during the current period.

Cash used in investing activities

Net cash used in investing activities ~~decreased~~increased by $9$7 million to ~~$77~~$29 million. The ~~decrease~~increase was driven ~~primarily~~ by ~~decreased~~increased cash outlays for capital expenditures.

Cash used in financing activities

Net cash used in financing activities ~~increased~~decreased by ~~$97~~$4 million to ~~$260~~$50 million. The ~~increase~~decrease was primarily ~~attributable to a~~driven by voluntary principal ~~payment of $100 million~~payments related to our Term Loan Facility, ~~that was~~which were made in 2023 and first applied to pay the remaining quarterly amortization payments in full. As a result, no quarterly amortization payments were made during the ~~third quarter~~three months ended March 31, 2024, compared to $6 million of amortization payments made during the three months ended March 31, 2023.

External Debt Facilities

In February 2020, we entered into the External Debt Facilities which consist of a $2,475 million Term Loan Facility and a Revolving Facility that provides for additional borrowing capacity of up to $250 million, reduced by amounts used for letters of credit. In February 2023, we amended the External Debt Facilities ~~(“Amended External Debt Facilities”~~(“Amendment No. 1”) which replaced the interest rate benchmark from LIBOR to the ~~London Interbank Offered Rate~~SOFR. Additionally, in November 2023, we further amended the External Debt Facilities (“~~LIBOR”~~Amendment No. 2”) to extend the ~~Secured Overnight Financing Rate (“SOFR”).~~maturity of the Revolving Facility by one year. Other than the foregoing, the material terms of the agreement remained unchanged.

As of ~~September 30, 2023,~~March 31, 2024, the outstanding balance under the Term Loan Facility was ~~$1,995~~$1,845 million. As of ~~September 30, 2023,~~March 31, 2024, we had no outstanding borrowings under the Revolving Facility, and we had $6 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility.

The borrower under the Amended External Debt Facilities is Reynolds Consumer Products LLC (the “Borrower”). The Revolving Facility includes a sub-facility for letters of credit. In addition, the Amended External Debt Facilities provide that the Borrower has the right at any time, subject to customary conditions, to request incremental term loans or incremental revolving credit commitments in amounts and on terms set forth therein. The lenders under the Amended External Debt Facilities are not under any obligation to provide any such incremental loans or commitments, and any such addition of or increase in loans is subject to certain customary conditions precedent and other provisions.

Interest rate ~~and fees~~

Borrowings under the Amended External Debt Facilities bear interest at a rate per annum equal to, at our option, either a base rate plus an applicable margin of 0.75% or SOFR plus an applicable margin of 1.75%.

During 2020 and 2022, we entered into a series of interest rate swaps to fix the LIBOR of our External Debt Facilities. OnIn February ~~28,~~ 2023, we amended our interest rate swaps to replace the interest rate benchmark from ~~the~~ LIBOR to SOFR. Other than the foregoing, the material terms of the interest rate swap agreements remained unchanged, and our election to use practical expedients under ASUs 2020-04 and 2021-01 resulted in no material impacts on the condensed consolidated financial statements. The aggregate notional amount of ~~our~~the interest rate swaps still in effect as of ~~September 30, 2023~~March 31, 2024 was $1,150 million, and the SOFR is fixed at an annual rate of 0.40% to 3.40% (for an annual effective interest rate of 2.15% to 5.15%, including margin). These interest rate swaps hedge a portion of the interest rate exposure resulting from our Term Loan Facility for periods ranging from two to three years.

Prepayments

The Term Loan Facility contains customary mandatory prepayments, including with respect to excess cash flow, asset sale proceeds and proceeds from certain incurrences of indebtedness.

The Borrower may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary breakage costs with respect to SOFR based loans. ~~During the third quarter of 2023, we made a voluntary principal payment of $100 million related to the Term Loan Facility, which was not subject to a prepayment premium.~~

Subsequent to ~~September 30, 2023,~~March 31, 2024, we made an additional voluntary principal payment of ~~$100~~$50 million related to the Term Loan ~~Facility, which was not subject to a prepayment premium.~~Facility.

Amortization and maturity

The Term Loan Facility matures in February 2027. The Term Loan Facility amortizes in equal quarterly installments of $6 million, which commenced in June 2020, with the balance payable on maturity. During the ~~three months~~year ended ~~September 30,~~December 31, 2023, we made a voluntary principal ~~payment~~payments of ~~$100~~$250 million related to our Term Loan Facility, which ~~was~~were first applied to pay the remaining quarterly amortization payments in full, with the residual balance applied to the outstanding principal balance due at maturity. ~~The~~

As amended, the Revolving Facility matures in February ~~2025.~~2026.

Guarantee and security

All obligations under the Amended External Debt Facilities and certain hedge agreements and cash management arrangements provided by any lender party to the Amended External Debt Facilities or any of its affiliates and certain other persons are unconditionally guaranteed by Reynolds Consumer Products Inc. (“RCPI”), the Borrower (with respect to hedge agreements and cash management arrangements not entered into by the Borrower) and certain of RCPI’s existing and subsequently acquired or organized direct or indirect material wholly-owned U.S. restricted subsidiaries, with customary exceptions including, among other things, where providing such guarantees is not permitted by law, regulation or contract or would result in material adverse tax consequences.

All obligations under the Amended External Debt Facilities and certain hedge agreements and cash management arrangements provided by any lender party to the Amended External Debt Facilities or any of its affiliates and certain other persons, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by: (i) a perfected first-priority pledge of all the equity interests of each wholly-owned material restricted subsidiary of RCPI, the Borrower or a subsidiary guarantor, including the equity interests of the Borrower (limited to 65% of voting stock in the case of first-tier non-U.S. subsidiaries of RCPI, the Borrower or any subsidiary guarantor) and (ii) perfected first-priority security interests in substantially all tangible and intangible personal property of RCPI, the Borrower and the subsidiary guarantors (subject to certain other exclusions).

Certain covenants and events of default

The Amended External Debt Facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of the restricted subsidiaries of RCPI to:

•incur additional indebtedness and guarantee indebtedness;

•create or incur liens;

•engage in mergers or consolidations;

•sell, transfer or otherwise dispose of assets;

•pay dividends and distributions or repurchase capital stock;

•prepay, redeem or repurchase certain indebtedness;

•make investments, loans and advances;

•enter into certain transactions with affiliates;

•enter into agreements which limit the ability of our restricted subsidiaries to incur restrictions on their ability to make distributions; and

•enter into amendments to certain indebtedness in a manner materially adverse to the lenders.

We are currently in compliance with the covenants contained in our Amended External Debt Facilities.

Accounts Receivable Factoring

~~Our accounts receivable~~We are party to a factoring agreement with JP Morgan Chase Bank, N.A. ~~allows us~~ to sell certain accounts receivable up to ~~$190~~$95 million. We had no outstanding balance owed under the factoring arrangement as of ~~September 30, 2023~~March 31, 2024.Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the condensed consolidated balance sheet at the time of the sales transaction. We classify the proceeds received from the sales of accounts receivable as an operating cash flow in the condensed consolidated statement of cash flows. We record the discount as other expense, net in the condensed consolidated statement of income.

Supply Chain Financing

In March 2023, we initiated a voluntary Supply Chain Finance program (the “SCF”) with a global financial institution (the “SCF Bank”). Under the SCF, qualifying suppliers may elect to sell their receivables from us to the SCF Bank. These participating suppliers negotiate their receivables sales arrangements directly with the SCF Bank. We are not party to those agreements, nor do we provide any security or other forms of guarantees to the SCF Bank. The participation in the program is at the sole discretion of the supplier, we have no economic interest in a supplier’s decision to enter into the agreement and have no direct financial relationship with the SCF Bank, as it relates to the SCF. Once a qualifying supplier elects to participate in the SCF and reaches an agreement with the SCF Bank, they elect which individual invoices they sell to the SCF Bank.

The terms of our payment obligations are not impacted by a supplier’s participation in the SCF and as such, the SCF has no direct impact on our balance sheets, cash flows, or liquidity. Our payment terms with our suppliers for similar services and materials within individual markets are consistent between suppliers that elect to participate in the SCF and those that do not participate.

All outstanding amounts related to suppliers participating in the SCF are recorded within accounts payable in ~~the~~our condensed consolidated balance sheet and ~~the~~ associated payments are included as an operating cash flow in the condensed consolidated statement of cash flows. As of ~~September 30, 2023~~,March 31, 2024, the amount of obligations outstanding that we have confirmed as valid under the SCF was ~~$18 million.~~$9 million. As of March 31, 2023, there were no obligations outstanding that we had confirmed as valid under the SCF.

Dividends

During the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, a cash ~~dividends~~dividend of $0.23 ~~and $0.69~~ per share ~~respectively, were~~was declared and paid. On ~~October 26, 2023,~~April 25, 2024, a quarterly cash dividend of $0.23 per share was declared and is to be paid on ~~November 30, 2023.~~May 31, 2024. We expect to continue paying cash dividends on a quarterly basis; however, future dividends are at the discretion of our Board of Directors and will depend upon our earnings, capital requirements, financial condition, contractual limitations (including under the ~~Term Loan Facility)~~Amended External Debt Facilities) and other factors.

****

We believe that our projected cash position, cash flows from operations, including proceeds from factored receivables, and available borrowings under the Revolving Facility are sufficient to meet debt service, capital expenditures and working capital needs for the foreseeable future. However, we cannot ensure that our business will generate sufficient cash flow from operations or that future borrowings will be available under our borrowing agreements in amounts sufficient to pay indebtedness or fund other liquidity needs. Actual results of operations will depend on numerous factors, many of which are beyond our control as further discussed in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023.

Critical Accounting Policies and Estimates

Accounting policies and estimates are considered critical when they require management to make subjective and complex judgments, estimates and assumptions about matters that have a material impact on the presentation of our financial statements and accompanying notes. For a description of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023.

2823

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

See “Item 7A: Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023. During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, there have been no material changes in our exposure to market risk.

Item 4. Controls and Procedures.

a)Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

In connection with the preparation of this report, management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of ~~September 30, 2023.~~March 31, 2024. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~September 30, 2023,~~March 31, 2024, our disclosure controls and procedures were effective.

b)Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~September 30, 2023~~March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The information required to be set forth under this heading is incorporated by reference from Note 7 - Commitments and Contingencies, to the condensed consolidated financial statements included in Part I, Item 1.

Item 1A. Risk Factors.

There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

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Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds, and Issuer Purchases of Equity Securities.~~Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the three months ended ~~September 30, 2023,~~March 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading arrangement (as identified in Item 408(c) of Regulation S-K).

3126

Item 6. Exhibits.


Exhibit Number						Description

3.1						Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 4, 2020)
3.2						Certificate of Amendment to Amended and Restated Certificate of Incorporation of Reynolds Consumer Products Inc. (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on April 25, 2024)
3.3						Amended and Restated By-Laws (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 4, 2020)
~~10.1~~10.1*						~~Offer Letter, dated as~~Form of ~~September 15, 2023,~~Assignment and Assumption Agreement for Employment Agreements, and Form of Assignment and Assumption Agreement for Restrictive Covenant Agreement, each by and ~~between Reynolds Consumer Products Inc. and Scott E. Huckins (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 12, 2023)~~
~~10.2~~						~~Employment Agreement, effective October 23, 2023, by and between~~among Reynolds Consumer Products LLC, Reynolds Consumer Products Holdings LLC, and Lance Mitchell, Scott E. Huckins, ~~(including the Restrictive Covenant Agreement attached thereto) (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on October 12, 2023)~~Rachel Bishop, Judith Buckner and Lisa Smith
31.1*						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

_____________________________

*Filed herewith.

3227

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


REYNOLDS CONSUMER PRODUCTS INC.
(Registrant)

By:	/s/ Chris Mayrhofer
	Chris Mayrhofer
	Senior Vice President and Controller (Principal Accounting Officer)
	May 8, 2024	~~November 8, 2023~~

3328


	Nine Months Ended September 30,
	2023		2022
Cash provided by operating activities
Net income	$	161	$	152
Adjustments to reconcile net income to operating cash flows:
Depreciation and amortization	92		87
Deferred income taxes	(3)		(1)
Stock compensation expense	10		4
Change in assets and liabilities:
Accounts receivable, net	3		27
Other receivables	11		—
Related party receivables	(2)		—
Inventories	146		(213)
Accounts payable	(5)		40
Related party payables	(16)		6
Income taxes payable / receivable	(11)		—
Accrued and other current liabilities	39		23
Other assets and liabilities	(2)		(7)
Net cash provided by operating activities	423		118
Cash used in investing activities
Acquisition of property, plant and equipment	(77)		(86)
Net cash used in investing activities	(77)		(86)
Cash used in financing activities
Repayment of long-term debt	(113)		(19)
Dividends paid	(144)		(144)
Other financing activities	(3)		—
Net cash used in financing activities	(260)		(163)
Net increase (decrease) in cash and cash equivalents	86		(131)
Cash and cash equivalents at beginning of period	38		164
Cash and cash equivalents at end of period	$	124	$	33

Cash paid:
Interest	86		42
Income taxes	65		49


	Three Months Ended September 30, 2023					Three Months Ended September 30, 2022
(in millions, except for per share data)	Net Income		Diluted Shares	Diluted EPS		Net Income		Diluted Shares	Diluted EPS
As Reported - GAAP	$	78	210	$	0.37	$	48	210	$	0.23
Adjustments:
IPO and separation-related costs ⁽¹⁾	—		210	—		2		210	0.01
Adjusted (Non-GAAP)	$	78	210	$	0.37	$	50	210	$	0.24