Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Entity File Number | 001-39205 | ||
Entity Registrant Name | REYNOLDS CONSUMER PRODUCTS INC. | ||
Entity Central Index Key | 0001786431 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 45-3464426 | ||
Entity Address, Address Line One | 1900 W. Field Court | ||
Entity Address, City or Town | Lake Forest | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60045 | ||
City Area Code | 800 | ||
Local Phone Number | 879-5067 | ||
Title of 12(b) Security | Common stock, $0.001 par value | ||
Trading Symbol | REYN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,623 | ||
Entity Common Stock, Shares Outstanding | 209,760,472 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
ICFR Auditor Attestation Flag | true | ||
Auditor Firm ID | 238 | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Location | Chicago, Illinois | ||
Documents incorporated by reference | Documents incorporated by reference: Portions of the Registrant’s definitive proxy statement relating to its 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Net revenues | $ 3,445 | $ 3,147 | $ 2,883 |
Related party net revenues | 111 | 116 | 149 |
Total net revenues | 3,556 | 3,263 | 3,032 |
Cost of sales | (2,745) | (2,290) | (2,152) |
Gross profit | 811 | 973 | 880 |
Selling, general and administrative expenses | (320) | (358) | (305) |
Other expense, net | (13) | (29) | (65) |
Income from operations | 478 | 586 | 510 |
Interest expense, net | (48) | (70) | (209) |
Income before income taxes | 430 | 516 | 301 |
Income tax expense | (106) | (153) | (76) |
Net income | $ 324 | $ 363 | $ 225 |
Earnings per share | |||
Basic | $ 1.54 | $ 1.78 | $ 1.45 |
Diluted | $ 1.54 | $ 1.77 | $ 1.45 |
Weighted average shares outstanding: | |||
Basic | 209.8 | 204.5 | 155.5 |
Diluted | 209.8 | 204.5 | 155.5 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $ 324 | $ 363 | $ 225 |
Other comprehensive income (loss), net of income taxes: | |||
Currency translation adjustment | 1 | ||
Employee benefit plans | 4 | (3) | (6) |
Interest rate derivatives | 5 | (1) | |
Other comprehensive income (loss), net of income taxes | 9 | (4) | (5) |
Comprehensive income | $ 333 | $ 359 | $ 220 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 164 | $ 312 |
Accounts receivable, net | 316 | 292 |
Other receivables | 12 | 9 |
Related party receivables | 10 | 8 |
Inventories | 583 | 419 |
Other current assets | 19 | 13 |
Total current assets | 1,104 | 1,053 |
Property, plant and equipment, net | 677 | 612 |
Operating lease right-of-use assets, net | 55 | 61 |
Goodwill | 1,879 | 1,879 |
Intangible assets, net | 1,061 | 1,092 |
Other assets | 36 | 25 |
Total assets | 4,812 | 4,722 |
Liabilities | ||
Accounts payable | 261 | 185 |
Related party payables | 38 | 41 |
Current portion of long-term debt | 25 | 25 |
Accrued and other current liabilities | 160 | 181 |
Total current liabilities | 484 | 432 |
Long-term debt | 2,087 | 2,208 |
Long-term operating lease liabilities | 46 | 51 |
Deferred income taxes | 351 | 326 |
Long-term postretirement benefit obligation | 50 | 53 |
Other liabilities | 38 | 37 |
Total liabilities | 3,056 | 3,107 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity | ||
Additional paid-in capital | 1,381 | 1,381 |
Accumulated other comprehensive income | 10 | 1 |
Retained earnings | 365 | 233 |
Total stockholders' equity | 1,756 | 1,615 |
Total liabilities and stockholders' equity | $ 4,812 | $ 4,722 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 210,000,000 | 210,000,000 |
Common stock, shares outstanding | 210,000,000 | 210,000,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Additional Paid-in Capital | Retained Earnings | Net Parent (Deficit) | Net Parent (Deficit)Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income | Accumulated Other Comprehensive IncomeCumulative Effect, Period of Adoption, Adjustment |
Beginning balance at Dec. 31, 2018 | $ (1,027) | $ (1,034) | $ (3) | $ 7 | $ 3 | ||
Net income | 225 | 225 | |||||
Other comprehensive income (loss), net of income taxes | (5) | (5) | |||||
Net transfers (to) from Parent | (11) | (11) | |||||
Ending balance at Dec. 31, 2019 | (818) | (823) | 5 | ||||
Net income | 363 | $ 357 | 6 | ||||
Other comprehensive income (loss), net of income taxes | (4) | (4) | |||||
Net transfers (to) from Parent | 855 | 855 | |||||
Reclassification of net parent (deficit) in RCP | $ 38 | $ (38) | |||||
Issuance of common stock, net of costs | 1,339 | 1,339 | |||||
Dividends | (124) | (124) | |||||
Other | 4 | 4 | |||||
Ending balance at Dec. 31, 2020 | 1,615 | 1,381 | 233 | 1 | |||
Net income | 324 | 324 | |||||
Other comprehensive income (loss), net of income taxes | 9 | 9 | |||||
Dividends | (192) | (192) | |||||
Ending balance at Dec. 31, 2021 | $ 1,756 | $ 1,381 | $ 365 | $ 10 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2021$ / shares | |
Statement Of Stockholders Equity [Abstract] | |
Dividends, per share, declared | $ 0.92 |
Dividends, per share, paid | $ 0.92 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash provided by operating activities | |||
Net income | $ 324 | $ 363 | $ 225 |
Adjustments to reconcile net income to operating cash flows: | |||
Depreciation and amortization | 109 | 99 | 91 |
Deferred income taxes | 22 | 67 | 1 |
Unrealized (gains) losses on commodity derivatives | (9) | ||
Stock compensation expense | 4 | 5 | |
Change in assets and liabilities: | |||
Accounts receivable, net | (24) | (279) | 2 |
Other receivables | (3) | (2) | 6 |
Related party receivables | (2) | 5 | (27) |
Inventories | (165) | 2 | |
Accounts payable | 71 | 54 | (6) |
Related party payables | (3) | (28) | (89) |
Related party accrued interest payable | (18) | 133 | |
Income taxes payable | (7) | 7 | 72 |
Accrued and other current liabilities | (15) | 38 | 9 |
Other assets and liabilities | (1) | 8 | (7) |
Net cash provided by operating activities | 310 | 319 | 403 |
Cash used in investing activities | |||
Acquisition of property, plant and equipment | (141) | (143) | (109) |
Advances to related parties | (170) | ||
Repayments from related parties | 151 | ||
Net cash used in investing activities | (141) | (143) | (128) |
Cash (used in) provided by financing activities | |||
Repayment of long-term debt | (125) | (218) | (21) |
Dividends paid | (192) | (124) | |
Proceeds from long-term debt, net of discounts | 2,472 | ||
Repayments of PEI Group Credit Agreement | (8) | ||
Advances from related parties | 240 | 67 | |
Repayments to related parties | (3,627) | (141) | |
Deferred debt transaction costs | (28) | (4) | |
Proceeds from IPO settlement facility | 1,168 | ||
Repayment of IPO settlement facility | (1,168) | ||
Issuance of common stock | 1,410 | ||
Equity issuance costs | (69) | ||
Net transfers from (to) Parent | (14) | (97) | |
Net cash (used in) provided by financing activities | (317) | 34 | (196) |
Cash and cash equivalents: | |||
(Decrease) increase in cash and cash equivalents | (148) | 210 | 79 |
Balance as of beginning of the year | 312 | 102 | 23 |
Balance as of end of the year | 164 | 312 | 102 |
Cash paid: | |||
Interest - long-term debt | 41 | 60 | 103 |
Interest - related party borrowings | 23 | 6 | |
Income taxes | $ 91 | $ 76 | $ 4 |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | 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 audited consolidated financial statements in accordance with United States generally accepted accounting principles ("GAAP"). Prior to the completion of our Corporate Reorganization, as defined in our Registration Statement on Form S-1 (File No. 333-234731), and initial public offering (“IPO”) on February 4, 2020, we operated as part of Pactiv Evergreen Inc. (“PEI”) and not as a stand-alone entity. We represented the business that was previously reported as the Reynolds Consumer Products segment in the consolidated financial statements of PEI and its subsidiaries (collectively, “PEI Group” or the “Parent”). As part of our Corporate Reorganization, we reorganized the legal structure of our entities so they are all under a single parent entity, Reynolds Consumer Products Inc. In conjunction with our Corporate Reorganization and IPO, we separated from PEI Group on February 4, 2020. All financial information presented after our Corporate Reorganization and IPO represents the consolidated financial statements of our company. Our consolidated statements of income include allocations of certain expenses for services provided by PEI Group prior to our separation in February 2020, including, but not limited to, general corporate expenses related to group wide functions including executive management, finance, legal, tax, information technology and a portion of a related party management fee incurred by PEI Group. Total costs allocated to us for these functions were $2 million and $41 million for the years ended December 31, 2020 and 2019, respectively, and were primarily included in selling, general and administrative expenses in our consolidated statements of income. These amounts include costs of $1 million and $22 million for the years ended December 31, 2020 and 2019, respectively, that were not historically allocated to us as part of PEI Group's normal monthly reporting process. Additionally, in the years ended December 31, 2020 and 2019, costs of $2 million and $28 million, Net Parent deficit represented the former Parent’s interest in our net assets. As a direct ownership relationship did not exist between the various entities of our previously combined group, a Net Parent deficit account was shown in our previously combined financial statements. The majority of transactions between us and PEI Group have a history of settlement or were settled for cash in conjunction with our separation from PEI Group and IPO. These transactions have been reflected in our consolidated balance sheets as related party receivables and payables. Transactions that did not have a history of settlement were reflected in equity (deficit) in our previously combined balance sheets as Net Parent deficit and, when cash was utilized (contributed), in our consolidated statements of cash flows as a financing activity in net transfers from (to) Parent. Refer to Note 17 - Related Party Transactions for further information. Initial Public Offering: On February 4, 2020, we completed our separation from PEI Group and the IPO of our common stock pursuant to a Registration Statement on Form S-1. In the IPO, we sold an aggregate of 54,245,500 shares of common stock, including 7,075,500 shares of common stock purchased by the underwriters on February 7, 2020 pursuant to their option to purchase additional shares, under the Registration Statement at a public offering price of $26.00 per share. In conjunction with our separation from PEI Group and IPO, we reclassified PEI Group’s historical net investment in us to additional paid-in capital. Each share of our outstanding common stock, immediately prior to our IPO, was exchanged into 155,455 shares of common stock. In addition, certain related party borrowings owed to PEI Group were contributed as additional paid-in capital without the issuance of any additional shares. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Use of Estimates: We prepare our consolidated financial statements in accordance with GAAP, which requires us to make estimates and assumptions that affect a number of amounts in our consolidated financial statements. Significant accounting policy elections, estimates and assumptions include, among others, valuation assumptions of goodwill and intangible assets, useful lives of long-lived assets, sales incentives, income taxes and benefit plan assumptions. We base our estimates on historical experience and other assumptions that we believe are reasonable. If actual amounts differ from estimates, we include the revisions in our consolidated results of operations in the period the actual amounts become known. Historically, the aggregate differences, if any, between our estimates and actual amounts in any year have not had a material effect on our consolidated financial statements. Currency Translation: Our consolidated financial statements are presented in U.S. dollars, which is our reporting currency. We translate the results of operations of our subsidiaries with functional currencies other than the U.S. dollar using average exchange rates during each period and translate balance sheet accounts using exchange rates at the end of each period. We record currency translation adjustments as a component of stockholders’ equity within accumulated other comprehensive income and transaction gains and losses in other expense, net in our consolidated statements of income. Cash and Cash Equivalents: Cash and cash equivalents include demand deposits with banks and all highly liquid investments with original maturities of three months or less. We maintain our bank accounts with a relatively small number of high quality financial institutions. Cash balances held by non-U.S. entities as of December 31, 2021 and 2020 were $7 million Accounts Receivable: Accounts receivable are recorded at face amounts less an allowance for doubtful accounts. The allowance is an estimate based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable balance. We evaluate the aging of the accounts receivable balances and the financial condition of our customers to estimate the amount of accounts receivable that may not be collected in the future and record the appropriate provision. The allowance for doubtful accounts was not material Inventories: We value our inventories using the first-in, first-out method. Inventory is valued at actual cost, which includes raw materials, supplies, direct labor and manufacturing overhead associated with production. Inventory is stated at the lower of cost or net realizable value, which includes any costs to sell or dispose. In addition, appropriate consideration is given to obsolescence, excessive inventory levels, product deterioration and other factors in evaluating net realizable value. Long-Lived Assets: Property, plant and equipment are stated at historical cost less depreciation, which is computed using the straight-line method over the estimated useful lives of the assets. Machinery and equipment are depreciated over periods ranging from 5 to 20 years and buildings and building improvements over periods ranging from 15 to 40 years. Finite-lived intangible assets, which primarily consist of customer relationships, are stated at historical cost and amortized using the straight-line method (which reflects the pattern of how the assets’ economic benefits are consumed) over the assets' estimated useful lives which range from 18 to 20 years. Expenditures for maintenance and repairs are expensed as incurred. When property, plant or equipment is sold or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts and any gain or loss realized on disposition is reflected in other expense, net in our consolidated statements of income. We review long-lived assets, including finite-lived intangible assets, for recoverability on an ongoing basis. Changes in depreciation or amortization are recorded prospectively when estimates of the remaining useful lives or residual values of long-lived assets change. We also review our long-lived assets for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, we perform undiscounted cash flow analysis to determine if an impairment exists. When testing for asset impairment, we group assets and liabilities at the lowest level for which cash flows are separately identifiable. If an impairment loss is recorded, it is calculated as the excess of the asset’s carrying value over its estimated fair value as determined by an estimate of discounted future cash flows. Depending on the nature of the asset, impairment losses are recorded in either cost of sales or selling, general and administrative expenses in our co nsolidated statements of income. There were no impairments of long-lived assets in any of the years presented . Leases: We determine whether a contract is or contains a lease at contract inception. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets are recognized at the commencement date at the value of the lease liability, adjusted for any prepayments, lease incentives received and initial direct costs incurred. Lease liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term. Following initial recognition, operating lease liability balances are amortized using the effective interest method, while the related ROU assets are adjusted by the difference between the fixed lease expense recognized and the interest expense associated with the effective interest method in the period. Some of our leases contain non-lease components, for example common area or other maintenance costs, that relate to the lease components of the agreement. Non-lease components and the lease components to which they relate are accounted for as a single lease component as we have elected to combine lease and non-lease components for all classes of underlying assets. We recognize interest on operating lease liabilities and amortization of ROU assets as a single lease expense for operating leases on a straight-line basis over the lease term, substantially all in cost of sales in our consolidated statements of income. All operating lease cash payments are recorded within cash flows from operating activities in the consolidated statements of cash flows. Our lease agreements do not include significant restrictions, covenants or residual value guarantees. Goodwill and Indefinite-Lived Intangible Assets: Goodwill represents the excess of purchase price over the fair value of net assets acquired. We test goodwill for impairment on an annual basis in the fourth quarter and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. We assess goodwill impairment risk by performing a qualitative review of entity-specific, industry, market and general economic factors affecting our goodwill reporting units. Depending on factors such as prior-year test results, current year developments, current risk evaluations and other practical considerations, we may elect to perform quantitative testing instead. In our quantitative testing, we compare a reporting unit’s estimated fair value with its carrying value. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans and industry and economic conditions. The key assumptions associated with determining the estimated fair value are forecasted Adjusted EBITDA and a relevant earnings multiple. Our actual results and conditions may differ over time. If the carrying value of a reporting unit’s net assets exceeds its fair value, we would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value. Our indefinite-lived intangible assets consist of certain trade names. We test indefinite-lived intangible assets for impairment on an annual basis in the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Depending on factors such as prior-year test results, current year developments, current risk evaluations and other practical considerations, we may elect to perform quantitative testing instead. If potential impairment risk exists for a specific asset, we quantitatively test it for impairment by comparing its estimated fair value with its carrying value. We determine estimated fair value using the relief-from-royalty method, using key assumptions including planned revenue growth rates, market-based discount rates and estimates of royalty rates. If the carrying value of the asset exceeds its fair value, we consider the asset impaired and reduce its carrying value to the estimated fair value. Revenue Recognition: After assessing our customers' creditworthiness, we recognize revenue when control over products transfers to our customers, which generally occurs upon delivery or shipment of the products. We account for product shipping, handling and insurance as fulfillment activities, with revenues for these activities recorded in net revenues and costs recorded in cost of sales. Any taxes collected on behalf of government authorities are excluded from net revenues. Consideration in our contracts with customers is variable due to anticipated reductions such as discounts, allowances and trade promotions, collectively referred to as “sales incentives”. Accordingly, revenues are recorded net of estimated sales incentives, based on known or expected adjustments. The transaction price reflects our estimate of the amount of consideration to which we will be entitled, using an expected value method. We base these estimates principally on historical utilization and redemption rates, anticipated performance and our best judgment at the time to the extent that it is probable that a significant reversal of revenue recognized will not occur. Estimates of sales incentives are monitored and adjusted each period until the sales incentives are realized. We consider purchase orders, which in some cases are governed by master supply agreements, to be the contracts with a customer. Key sales terms, such as pricing and quantities ordered, are established frequently, so most customer arrangements and related sales incentives have a duration of one year or shorter. We generally do not have any unbilled receivables at the end of a period. Deferred revenues are not material and primarily include customer advance payments typically collected a few days before product delivery, at which time deferred revenues are reclassified and recorded as net revenues. We generally do not receive non-cash consideration for the sale of goods nor do we grant payment financing terms greater than one year. We do not incur any significant costs to obtain a contract. Marketing, Advertising and Research and Development: We promote our products with marketing and advertising programs. These programs include, but are not limited to, cooperative advertising, in-store displays and consumer marketing promotions. The costs of end-consumer marketing programs that are conducted in conjunction with our customers, such as coupons, are recorded as a reduction to revenue. We do not defer these costs on our consolidated balance sheets and all marketing and advertising costs are recorded as an expense in the year incurred. Advertising expense was $43 million $36 million Stock-based Compensation: Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the period in which the awards vest in accordance with applicable guidance under Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation. In contemplation of us issuing shares to the public, we granted restricted stock units (“RSUs”) in July 2019 to certain members of management, pursuant to retention agreements entered into with these employees. These RSUs vest upon satisfaction of both a performance-based vesting condition, which was satisfied when we completed our IPO on February 4, 2020, and a service-based vesting condition, which will be satisfied with respect to one-third Financial Instruments: We are exposed to certain risks relating to our ongoing business operations. To manage the volatility relating to these exposures, we enter into various derivative instruments from time to time under our risk management policies. We are not a party to leveraged derivatives and, by policy, do not use financial instruments for speculative purposes. Interest Rate Derivatives: We manage interest rate risk by using interest rate derivative instruments. Interest rate swaps (pay fixed, receive variable) are entered into as cash flow hedges to manage a portion of the interest rate risk associated with our floating-rate borrowings. We record interest rate derivative instruments at fair value (Level 2) and on a net basis by counterparty based on our master netting arrangements. The instruments are classified in our consolidated balance sheets in other assets or other liabilities, as applicable. Cash flows from interest rate derivative instruments are classified as operating activities in our consolidated statements of cash flows based on the nature of the derivative instrument. We have elected to use hedge accounting for our interest rate derivative instruments. Accordingly, the effective portion of the gain or loss on the open hedging instrument is recorded in other comprehensive income and is reclassified into earnings as interest expense, net when settled. We terminate derivative instruments if the underlying asset or liability matures or is repaid, or if we determine the underlying forecasted transaction is no longer probable of occurring. Commodity Derivatives: We are exposed to price risk related to forecasted purchases of certain commodities that we primarily use as raw materials. From time to time we may enter into derivative financial instruments to mitigate certain risks. We record commodity derivative financial instruments at fair value (Level 2) and on a gross basis in our consolidated balance sheets in other current assets or accrued and other current liabilities due to their relatively short-term duration. Cash flows from commodity derivative instruments are classified as operating activities in our c onsolidate d statements of cash flows based on the nature of the derivative instrument. Historically, we have not elected to use hedge accounting. Accordingly, any unrealized gains or losses (mark-to-market impacts) and realized gains or losses are recorded in cost of sales in our consolidated statements of income. Income Taxes: Our income tax expense includes amounts payable or refundable for the current year, the effects of deferred taxes and impacts from uncertain tax positions. We recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax basis of our assets and liabilities, operating loss carryforwards and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those differences are expected to reverse. The realization of certain deferred tax assets is dependent on generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. When assessing the need for a valuation allowance, we consider any carryback potential, future reversals of existing taxable temporary differences (including liabilities for unrecognized tax benefits), future taxable income and tax planning strategies. We recognize the tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained based on the technical merits of the position. The amount we recognize is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon resolution. Future changes related to the expected resolution of uncertain tax positions could affect tax expense in the period when the change occurs. Fair Value Measurements and Disclosures: GAAP establishes a hierarchy for measuring fair value. A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following three levels of inputs may be used to measure fair value: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 inputs include inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. • Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our assets and liabilities measured at fair value on a recurring basis are presented in Note 8 - Financial Instruments. We had no assets or liabilities measured at fair value on a non-recurring basis in any of the years presented. In addition to fair value disclosure requirements related to financial instruments carried at fair value, accounting standards require disclosures regarding the fair value of all of our financial instruments. The carrying values of cash equivalents, accounts receivables, other receivables, related party receivables, accounts payable, related party payables and accrued and other current liabilities are reasonable estimates of their fair values as of December 31, 2021 and 2020 due to the short-term nature of these instruments. Variable Interest Entities: Variable interest entities (“VIEs”) are primarily entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns. Prior to our separation from PEI Group and IPO, we had a variable interest in one VIE related to our factoring arrangement with PEI Group, described below. Transfers of Financial Assets: Prior to our separation from PEI Group and IPO in February 2020, we accounted for transfers of financial assets, such as non-recourse accounts receivable factoring arrangements, when we surrendered control over the related assets. Determining whether control has transferred requires an evaluation of relevant legal considerations, an assessment of the nature and extent of our continuing involvement with the assets transferred and any other relevant considerations. We had a non-recourse factoring arrangement in which we sold eligible receivables to a special purpose entity (“SPE”) consolidated by PEI Group in exchange for cash. We transferred sold accounts receivables in their entirety to PEI Group and satisfied all of the conditions to report the transfer of financial assets in their entirety as a sale. The SPE was considered to be a VIE, however we were not its primary beneficiary because we did not have the power to direct any of its most significant activities through our arrangement as a collecting agent. On January 30, 2020, we repurchased all of the U.S. accounts receivable sold for $264 million, $240 million of which was settled in cash and the remaining amount used to settle certain current related party receivables. The proceeds from the sales of receivables are included in cash from operating activities in our consolidated statements of cash flows. Recently Adopted Accounting Guidance: In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Recently Issued Accounting Guidance: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 - Inventories Inventories consisted of the following: As of December 31, 2021 2020 (in millions) Raw materials $ 206 $ 138 Work in progress 63 54 Finished goods 276 194 Spare parts 38 33 Inventories $ 583 $ 419 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment, Net | Note 4 - Property, Plant and Equipment, Net Property, plant and equipment, net consisted of the following: As of December 31, 2021 2020 (in millions) Land and land improvements $ 43 $ 36 Buildings and building improvements 183 145 Machinery and equipment 1,126 1,005 Construction in progress 77 118 Property, plant and equipment, at cost 1,429 1,304 Less: accumulated depreciation (752 ) (692 ) Property, plant and equipment, net $ 677 $ 612 Depreciation expense was $78 million, $68 million and $59 million for the years ended December 31, 2021, 2020 and 2019, respectively, of which $70 million $8 million |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 5 - Goodwill and Intangible Assets Goodwill by reportable segment was as follows: Reynolds Cooking & Baking Hefty Waste & Storage Hefty Tableware Presto Products Total (in millions) Balance as of December 31, 2019 $ 794 $ 505 $ 282 $ 298 $ 1,879 Movements — — — — — Balance as of December 31, 2020 794 505 282 298 1,879 Movements — — — — — Balance as of December 31, 2021 $ 794 $ 505 $ 282 $ 298 $ 1,879 Intangible assets, net consisted of the following: As of December 31, 2021 As of December 31, 2020 Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net (in millions) Finite-lived intangible assets Customer relationships $ 580 $ (371 ) $ 209 $ 580 $ (342 ) $ 238 Trade names 25 (23 ) 2 25 (21 ) 4 Total finite-lived intangible assets 605 (394 ) 211 605 (363 ) 242 Indefinite-lived intangible assets Trade names 850 — 850 850 — 850 Total intangible assets $ 1,455 $ (394 ) $ 1,061 $ 1,455 $ (363 ) $ 1,092 Amortization expense for intangible assets was $31 million, $31 million and $32 million for the years ended December 31, 2021, 2020 and 2019, respectively, and has been recognized in selling, general and administrative expenses. For the next five years, we estimate annual amortization expense of approximately $28 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Instruments [Abstract] | |
Debt | Note 6 - Debt Long-Term Debt: Long-term debt consisted of the following: As of December 31, 2021 2020 (in millions) Term Loan Facility $ 2,132 $ 2,257 Deferred financing transaction costs (18 ) (21 ) Original issue discounts (2 ) (3 ) 2,112 2,233 Less: current portion (25 ) (25 ) Long-term debt $ 2,087 $ 2,208 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 addition, on February 4, 2020 we entered into, and extinguished, a $1,168 million facility (“IPO Settlement Facility”). The proceeds from the Term Loan Facility and IPO Settlement Facility, net of transaction costs and original issue discounts, together with available cash, were used to repay accrued related party interest and a portion of the related party loans payable. Borrowings under the External Debt Facilities bear interest at a rate per annum equal to, at our option, either a base rate or a LIBO rate plus an applicable margin of 1.75%. During September 2020, we entered into a series of interest rate swaps to hedge a portion of the interest rate exposure resulting from these borrowings. Refer to Note 8 – Financial Instruments for further details. The External Debt Facilities contain a springing financial covenant requiring compliance with a ratio of first lien net indebtedness to consolidated EBITDA, 35% If an event of default occurs, the lenders under the External Debt Facilities are entitled to take various actions, including the acceleration of amounts due under the External Debt Facilities and all actions permitted to be taken by secured creditors. Term Loan Facility The Term Loan Facility matures in February 2027 we made voluntary principal payments of $100 million on our Term Loan Facility. Revolving Facility The Revolving Facility matures in February 2025 Fair Value of Our Long-Term Debt The fair value of our long-term debt as of December 31, 2021, 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. Interest expense, net: Interest expense, net consisted of the following: For the Years Ended December 31, 2021 2020 2019 (in millions) Interest expense, Term Loan Facility $ 41 $ 52 $ — Amortization of deferred financing transaction costs 4 4 1 Interest expense, PEI Group U.S. Term Loan — 8 101 Interest expense, related party borrowings (1) — 5 140 Interest income, related party receivables (1) — — (33 ) Other 3 1 — Interest expense, net $ 48 $ 70 $ 209 (1) Refer to Note 17 – Related Party Transactions for additional information. Scheduled Maturities Below is a schedule of required future repayments on our debt outstanding as of December 31, 2021: (in millions) 2022 $ 25 2023 25 2024 25 2025 25 2026 25 Thereafter 2,007 Total long-term debt $ 2,132 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Note 7 - Leases We lease certain buildings and plant and equipment. Our leases have reasonably assured remaining lease terms of up to 8 years. Certain leases include options to renew for up to 15 years Lease costs consisted of the following: As of December 31, 2021 2020 2019 (in millions) Operating lease costs $ 15 $ 16 $ 11 Variable lease costs 1 1 1 Short-term lease costs 3 3 5 Total lease costs $ 19 $ 20 $ 17 Future lease payments under non-cancellable leases were as follows: As of December 31, 2021 (in millions) 2022 $ 14 2023 12 2024 12 2025 10 2026 6 Thereafter 11 Total undiscounted lease payments 65 Less: imputed interest (8 ) Operating lease liabilities $ 57 As of December 31, 2021, there were no material lease transactions that we have entered into but have not yet commenced. Operating lease liabilities and ROU assets included in our consolidated balance sheets were as follows: As of December 31, 2021 2020 (in millions) Accrued and other current liabilities $ 11 $ 13 Long-term operating lease liabilities 46 51 $ 57 $ 64 Operating lease right-of-use assets, net $ 55 $ 61 During the years ended December 31, 2021 and 2020, new leases and lease modifications resulted in the recognition of ROU assets and corresponding lease liabilities of $9 million and $31 million, respectively $15 million, $14 million, and $10 million, respectively, As of December 31, 2021, the weighted average remaining lease term and weighted average discount rate for operating leases was 5.42 years and 5.09 |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Financial Instruments Disclosure [Abstract] | |
Financial Instruments | Note 8 - Financial Instruments Interest Rate Derivatives During the year ended December 31, 2020, we entered into a series of interest rate swaps which fixed the LIBO rate to an annual rate of 0.18% to 0.47% (for an annual effective interest rate of 1.93% to 2.22%, including margin) for an aggregate notional amount of $1,650 million, of which $800 million notional value was still in effect as of December 31, 2021. These interest rate swaps hedge a portion of the interest rate exposure resulting from our Term Loan Facility. We classified these instruments as cash flow hedges. Our cash flow hedge contracts outstanding as of December 31, 2021 cover periods ranging from one to four years. The effective portion of the gain or loss on the open hedging instrument is recorded in accumulated other comprehensive income and will be 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 |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Benefit Plans | Note 9 - Benefit Plans Defined Benefit Plan After our separation from PEI Group and IPO in February 2020, we established a defined benefit plan for certain of our employees. The initial liability was $2 million which was funded during 2020. The plan is non-contributory and eligible employees are fully vested after five years of service. The impact of the liability of the defined benefit plan on our consolidated balance sheets as of December 31, 2021 and 2020 was not material. Defined Contribution Plans We offer defined contribution plans to eligible employees in the United States as well as employees in certain other countries. Our expense relating to defined contribution plans was $26 million Postretirement Benefit Plan Certain of our employees in the United States participate in a postretirement benefit plan. Our postretirement benefit plan is not funded. The changes in and the amount of the accumulated postretirement benefit obligation were as follows: As of December 31, 2021 2020 (in millions) Accumulated postretirement benefit obligation as of January 1 $ 54 $ 51 Service cost 1 1 Interest cost 1 2 Benefits paid (3 ) (4 ) Actuarial (gains) losses (5 ) 4 Accumulated postretirement benefit obligation as of December 31 $ 48 $ 54 The accrued benefit obligation was included in our consolidated balance sheets as follows: As of December 31, 2021 2020 (in millions) Accrued and other current liabilities $ 3 $ 3 Long-term postretirement benefit obligation 45 51 $ 48 $ 54 A portion of our accrued benefit obligation has been recorded in accumulated other comprehensive income as follows: As of December 31, 2019 Changes As of December 31, 2020 Changes As of December 31, 2021 (in millions) Net actuarial gain (loss) $ 15 $ (5 ) $ 10 $ 5 $ 15 Deferred income tax (expense) benefit (4 ) 2 (2 ) (1 ) (3 ) Accumulated other comprehensive income $ 11 $ (3 ) $ 8 $ 4 $ 12 We used the following weighted-average assumptions to determine our postretirement benefit obligations: As of December 31, 2021 2020 Discount rate 2.90 % 2.54 % Health care cost trend rate assumed for next year 6.60 % 6.90 % Ultimate trend rate 4.50 % 4.50 % Year that the rate reaches the ultimate trend rate 2029 2029 The year-end discount rate for our plan reflects a weighted-average rate from a high-quality corporate bond yield curve that matches the expected duration of the benefit payments. Changes in our discount rates were primarily the result of changes in bond yields year-over-year. Our expected health care cost trend rate is based on historical costs and long-term expectations. Components of Net Periodic Postretirement Costs: Our total net periodic pension and postretirement benefit cost for each of the years ended December 31, 2021, 2020 and 2019 was not material. Prior to the separation from PEI Group in February 2020, our net periodic benefit costs included only our other postretirement benefit plan. After the separation, total net periodic benefit costs include all costs associated with our defined benefit and other postretirement plans. The service cost component of net periodic postretirement costs, interest cost and amortization of actuarial gain are recognized in cost of sales in the consolidated statements of income. We used the following weighted-average assumptions to determine our net periodic postretirement health care cost: For the Years Ended December 31, 2021 2020 2019 Discount rate 2.54 % 3.24 % 4.37 % Health care cost trend rate assumed for next year 6.90 % 7.20 % 7.70 % Ultimate trend rate 4.50 % 4.50 % 4.50 % Year that the rate reaches the ultimate trend rate 2029 2029 2029 Future Benefit Payments: Expected contributions for the next fiscal year equal the estimated benefit payments of $3 Our estimated future benefit payments for our postretirement benefit plan as of December 31, 2021 were as follows: (in millions) 2022 $ 3 2023 3 2024 3 2025 3 2026 3 2027-2031 14 |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | Note 10 - Stock-based Compensation We granted restricted stock units (“RSUs”) in July 2019 to certain members of management, pursuant to retention agreements entered into with these employees (the “IPO Grants”). These RSUs vest upon satisfaction of both a performance-based vesting condition, which was satisfied when we completed our IPO on February 4, 2020, and a service-based vesting condition, which will be satisfied with respect to one-third In addition, in conjunction with our Corporate Reorganization and IPO in February 2020, we established an equity incentive plan for purposes of granting stock-based compensation awards to certain 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 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. 10.5 . In the years ended December 31, 2021 and 2020, 0.2 million and 0.3 million A summary of activity for RSUs and PSUs for the years ended December 31, 2021 and 2020, is as follows (in millions, except for per share data): Shares Weighted-Average Grant-Date Fair Value Per Share Unvested, at January 1, 2020 — $ — Granted 0.5 29 Forfeited (0.1 ) 27 Vested — — Unvested, at December 31, 2020 0.4 $ 29 Granted 0.3 30 Forfeited — — Vested (0.1 ) 28 PSU performance adjustment (0.2 ) 30 Unvested, at December 31, 2021 0.4 $ 29 Unrecognized compensation expense relating to unvested RSUs and PSUs as of December 31, 2021, was $6 million, which is expected to be recognized over a weighted average period of 1.4 years. There were stock-based compensation awards representing 0.4 |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Accrued and Other Current Liabilities | Note 11 - Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following: As of December 31, 2021 2020 (in millions) Trade promotion allowances $ 40 $ 35 Accrued personnel costs 34 63 Other 86 83 Accrued and other current liabilities $ 160 $ 181 |
Other Expense, Net
Other Expense, Net | 12 Months Ended |
Dec. 31, 2021 | |
Other Expense Net [Abstract] | |
Other Expense, Net | Note 12 - Other Expense, Net Other expense, net consisted of the following: For the Years Ended December 31, 2021 2020 2019 (in millions) Factoring discount (1) $ — $ — $ 25 Allocated related party management fee (2) — — 10 IPO and separation-related costs (3) 14 31 31 Other (1 ) (2 ) (1 ) Other expense, net $ 13 $ 29 $ 65 (1) Reflects the loss on sale that we incurred when we sold our U.S. trade receivables through PEI Group’s securitization facility. Our participation in this facility ceased upon the completion of our Corporate Reorganization and IPO. (2) Reflects our allocation, from PEI Group, of a management fee that was charged by Rank to PEI Group, which ceased upon the completion of our Corporate Reorganization and IPO. (3) Reflects costs related to our separation to operate as a stand-alone public company and the IPO process. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 - 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, 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, 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. As of December 31, 2021, there were no legal proceedings pending other than those for which we have determined that the possibility of a material outflow is remote. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Note 14 - Accumulated Other Comprehensive Income The following table summarizes the changes in our balances of each component of accumulated other comprehensive income. For the Years Ended December 31, 2021 2020 2019 (in millions) Currency translation adjustments: Balance as of beginning of period $ (6 ) $ (6 ) $ (7 ) Currency translation adjustments — — 1 Other comprehensive income — — 1 Balance as of end of period $ (6 ) $ (6 ) $ (6 ) Employee benefit plans: Balance as of beginning of period $ 8 $ 11 $ 14 Adoption of new accounting principle — — 3 Net actuarial gain (loss) arising during period 6 (4 ) (5 ) Deferred tax (expense) benefit on net actuarial gain (loss) (1 ) 2 1 (Gains) and losses reclassified into net income: Amortization of actuarial gain (1 ) (1 ) (2 ) Other comprehensive income (loss) 4 (3 ) (6 ) Balance as of end of period $ 12 $ 8 $ 11 Interest rate derivatives: Balance as of beginning of period $ (1 ) $ — $ — Gain (loss) arising during period, net of income tax 5 (1 ) — Other comprehensive income (loss) 5 (1 ) — Balance as of end of period $ 4 $ (1 ) $ — Accumulated other comprehensive income Balance as of beginning of period $ 1 $ 5 $ 7 Adoption of new accounting principle — — 3 Other comprehensive income (loss) 9 (4 ) (5 ) Balance as of end of period $ 10 $ 1 $ 5 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15 - Income Taxes Prior to our separation from PEI Group and IPO in February 2020, our U.S. operations were included in the U.S. federal consolidated and certain state and local tax returns filed by PEI Group. We also file certain separate U.S. state and local and foreign income tax returns. For the periods prior to the separation, income tax (expense) benefit are presented in the consolidated financial statements as if we filed tax returns on a stand-alone basis. Upon separation from PEI Group, becoming a separate taxable entity and the change from carve-out financial statements to consolidated financial statements, we have remeasured certain deferred taxes. These adjustments have been recognized directly in equity. The components of income before income tax were as follows: For the Years Ended December 31, 2021 2020 2019 (in millions) Income before income taxes: United States $ 424 $ 511 $ 300 International 6 5 1 Total income before income taxes $ 430 $ 516 $ 301 Significant components of income tax expense were as follows: For the Years Ended December 31, 2021 2020 2019 (in millions) Current United States Federal $ 69 $ 70 $ 68 State 14 14 8 Foreign 1 1 — Total current income tax expense 84 85 76 Deferred United States Federal 19 54 3 State 3 13 (3 ) Foreign — 1 — Total deferred income tax expense 22 68 — Total income tax expense $ 106 $ 153 $ 76 A reconciliation of income taxes computed at the U.S. Federal statutory income tax rate of 21% for 2021, 2020 and 2019, to our income tax expense was as follows: For the Years Ended December 31, 2021 2020 2019 (in millions) U.S. Federal income tax expense at the statutory rate $ 90 $ 108 $ 63 U.S. State income tax expense 15 17 2 Non-deductible expenses — 2 6 CARES Act — 27 — Return to provision adjustments 1 (2 ) 3 Other — 1 2 Total income tax expense $ 106 $ 153 $ 76 Deferred Tax Assets and Liabilities Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of our net deferred income tax liability were as follows: As of December 31, 2021 2020 (in millions) Deferred tax assets Employee benefits $ 26 $ 24 Lease obligations 13 15 Inventory 9 7 Reserves 4 2 Tax losses 4 4 Tax credits — 4 Total deferred tax assets 56 56 Valuation allowance (6 ) (5 ) Total deferred tax assets after valuation allowance 50 51 Deferred tax liabilities Intangible assets (293 ) (291 ) Property, plant and equipment (93 ) (72 ) Lease right-of-use assets (13 ) (14 ) Other (2 ) — Total deferred tax liabilities (401 ) (377 ) Net deferred tax liabilities $ (351 ) $ (326 ) State and foreign net operating loss carryforwards, presented on a gross basis, and tax credit carryforwards were as follows: As of December 31, 2021 2020 (in millions) State and foreign net operating loss carryforwards Expires within 5 years $ — $ — Expires after 5 years or no expiration 42 49 Total net operating loss carryforwards $ 42 $ 49 Tax credit carryforwards Expires within 5 years $ — $ 4 Total tax credit carryforwards $ — $ 4 Deferred tax assets related to state and foreign net operating loss carryforwards and state tax credit carryforwards are available to offset future state and foreign taxable earnings. We have provided a valuation allowance to reduce the carrying value of certain of these deferred tax assets, as we have concluded that, based on the available evidence, it is more likely than not that the deferred tax assets will not be fully realized. Valuation allowances relating to these losses were $4 million and $5 million as of December 31, 2021 and 2020, respectively. There were no material changes in valuation allowances in any of the years presented. Uncertain Tax Positions ASC 740 prescribes a recognition threshold of more-likely-than not to be sustained upon examination as it relates to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. Our policy is to include interest and penalties related to gross unrecognized tax benefits in income tax expense. The following table summarizes the activity related to our gross unrecognized tax benefits: For the Years Ended December 31, 2021 2020 2019 (in millions) Balance as of beginning of the year $ 4 $ 2 $ 1 Increase associated with tax positions taken during the current year 1 2 1 Ending unrecognized tax benefits $ 5 $ 4 $ 2 Each year we file income tax returns in the various federal, state, local and foreign income taxing jurisdictions in which we operate. Foreign jurisdictions comprise Canada and China. Our income tax returns are subject to examination and possible challenge by the tax authorities. Although ultimate timing is uncertain, the net amount of tax liability for unrecognized tax benefits may change within the next twelve months due to changes in audit status, settlements of tax assessments and other events. Prior to February 4, 2020, we were part of consolidated U.S. federal tax returns filed by PEI Group. Under a Tax Matters Agreement, entered into as part of our corporate reorganization prior to our IPO, PEI Group has retained responsibility for all U.S. federal tax matters for periods to and including February 4, 2020. Taxes Paid Taxes paid were $91 million, $76 million and $4 million for the years ended December 31, 2021, 2020 and 2019, respectively. Prior to our separation from PEI Group and IPO, our U.S. entities were members of a consolidated U.S. tax entity group for federal and certain state tax returns filed by the PEI Group. For periods prior to our separation, the current U.S. federal and state tax liabilities of our U.S. entities was aggregated with the other members of the consolidated U.S. tax entity group and settled on a net basis by a related party. There was no formal tax sharing agreement. The settlement of our current U.S. federal and state taxes for the periods prior to our separation were recognized directly as a movement in Net Parent deficit. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Note 16 - 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 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 E-Z 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 is further adjusted to e xclude unrealized gains on commodity derivatives, factoring discounts, the allocated related party management fee and IPO and separation-related costs. 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. The accounting policies applied by our segments are the same as those described in Note 2 - Summary of Significant Accounting Policies. Transactions between segments are at negotiated prices. Reynolds Cooking & Baking Hefty Waste & Storage Hefty Tableware Presto Products Segment total Unallocated (1) Total 2021 (in millions) Net revenues $ 1,314 $ 876 $ 815 $ 560 $ 3,565 $ (9 ) $ 3,556 Intersegment revenues — 8 — 4 12 (12 ) — Total segment net revenues 1,314 884 815 564 3,577 (21 ) 3,556 Adjusted EBITDA 255 173 137 69 634 Depreciation and amortization 21 18 16 21 76 33 109 Capital expenditures 42 22 19 53 136 5 141 Total assets 562 290 165 247 1,264 3,548 4,812 Reynolds Cooking & Baking Hefty Waste & Storage Hefty Tableware Presto Products Segment total Unallocated (1) Total 2020 (in millions) Net revenues $ 1,159 $ 809 $ 763 $ 532 $ 3,263 $ — $ 3,263 Intersegment revenues — 9 — 1 10 (10 ) — Total segment net revenues 1,159 818 763 533 3,273 (10 ) 3,263 Adjusted EBITDA 254 236 170 98 758 Depreciation and amortization 20 15 14 19 68 31 99 Capital expenditures 33 30 24 38 125 18 143 Total assets 433 248 157 204 1,042 3,680 4,722 Reynolds Cooking & Baking Hefty Waste & Storage Hefty Tableware Presto Products Segment total Unallocated (1) Total 2019 (in millions) Net revenues $ 1,076 $ 695 $ 751 $ 510 $ 3,032 $ — $ 3,032 Intersegment revenues — 14 — 1 15 (15 ) — Total segment net revenues 1,076 709 751 511 3,047 (15 ) 3,032 Adjusted EBITDA 209 190 178 91 668 Depreciation and amortization 20 13 9 21 63 28 91 Capital expenditures (2) 34 41 6 24 105 8 113 (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 ROU assets, goodwill, intangible assets, related party receivables and other assets. (2) Until October 31, 2019, the property, plant and equipment included in our Hefty Tableware segment was contributed to us from PEI Group. No capital expenditures were incurred by us in relation to these items. On November 1, 2019, as part of our separation from PEI Group, we acquired the legal title to these assets. The following table presents a reconciliation of segment Adjusted EBITDA to consolidated GAAP income before income taxes: For the Years Ended December 31, 2021 2020 2019 (in millions) Segment Adjusted EBITDA $ 634 $ 758 $ 668 Corporate / unallocated expenses (33 ) (41 ) (13 ) 601 717 655 Adjustments to reconcile to GAAP income before income taxes Depreciation and amortization (109 ) (99 ) (91 ) Interest expense, net (48 ) (70 ) (209 ) Factoring discount — — (25 ) Allocated related party management fee — — (10 ) IPO and separation-related costs (14 ) (31 ) (31 ) Unrealized gains on derivatives — — 9 Other — (1 ) 3 Consolidated GAAP income before income taxes $ 430 $ 516 $ 301 Information in Relation to Products Net revenues by product line are as follows: For the Years Ended December 31, 2021 2020 2019 (in millions) Waste and storage products (1) $ 1,448 $ 1,351 $ 1,220 Cooking products 1,314 1,159 1,076 Tableware 815 763 751 Unallocated (21 ) (10 ) (15 ) Net revenues $ 3,556 $ 3,263 $ 3,032 (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. Geographic Data Geographic data for net revenues (recognized based on location of our business operations) and long-lived assets (representing property, plant and equipment) are as follows: For the Years Ended December 31, 2021 2020 2019 (in millions) Net revenues: United States $ 3,495 $ 3,206 $ 2,982 Other 61 57 50 Net revenues $ 3,556 $ 3,263 $ 3,032 As of December 31, 2021 2020 (in millions) Long-lived assets United States $ 671 $ 606 Other 6 6 Long-lived assets $ 677 $ 612 Entity-wide Disclosures Net revenues from our largest customer and its affiliates were 44%, 43% and 43% of total net revenues for the years ended December 31, 2021, 2020 and 2019, respectively. The net revenues from our largest customer were recognized across all of our segments. No other customers accounted for 10% or more of our total net revenues in any of the years presented. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 17 - Related Party Transactions We historically operated as part of PEI Group. In preparation for our IPO in February 2020, PEI Group transferred its interest in us to Packaging Finance Limited (“PFL”). PFL owns the majority of our outstanding common stock and owns the majority of the outstanding common stock of PEI Group. In addition to the pre-IPO allocation of expenses for certain services related to group wide functions provided by PEI Group discussed in Note 1 – Description of Business and Basis of Presentation, other transactions between us and PEI Group are described below. On-going Related Party Transactions For the years ended December 31, 2021, 2020 and 2019, revenues from products sold to PEI Group were $111 million, $116 million and $149 million, respectively. For the years ended December 31, 2021, 2020 and 2019, products purchased from PEI Group were $343 million, $330 million and $438 million, respectively. For the years ended December 31, 2021, 2020 and 2019, PEI Group charged us freight and warehousing costs of $60 million, $80 million and $134 million, respectively, which were included in cost of sales. The resulting related party receivables and payables are settled regularly with PEI Group in the normal course of business. Furthermore, $143 million and $92 million of dividends were paid to PFL during the years ended December 31, 2021 and 2020, respectively. Transactions Related to our Separation from PEI Group On November 1, 2019, as part of our separation from PEI Group, we acquired the legal title to certain property, plant and equipment and inventories from PEI Group for cash consideration of $112 million which represented fair market value and is presented within net transfers from (to) Parent in our consolidated statements of cash flows. These assets are directly attributable to our business and have been historically reflected in our consolidated financial statements, at their respective net book values, within our Hefty Tableware segment. We had written interest-bearing loan agreements in place with PEI Group. In June 2019, all of our non-current related party receivables and a portion of current related party receivables were used to reduce the balances outstanding of various related party borrowings, related party accrued interest payable and related party payables. As a result of this process, we net settled related party borrowings of $1,714 million, related party accrued interest payable of $655 million and related party payables of $94 million. Accordingly, we had no related party long-term receivables as of December 31, 2019. Related party borrowings were $ 2,214 million as of December 31, 2019. Related party accrued i nterest payable was $ 18 million as of December 31, 2019. We remit ted accrued interest payable on the borrowings to PEI Group as and when requested in conjunction with its cash management activities. Interest expense and income related to these loan agreements w ere accrued based on the written l oan agreements. During the year ended December 31, 2019, we borrowed $ 98 million ($ 31 million non-cash), from PEI Group and repaid borrowings of $ 141 million. In addition, during the year ended December 31, 2019, $ 36 million of accrued interest was capitalized into related pa rty borrowings. During the year ended December 31, 2019, we advanced loans of $ 170 million to PEI Group and received repayments of $ 151 million. The weighted average contractual interest rate related to our related party borrowings as of December 31, 2019 was 2.20 % . On January 30, 2020, we repurchased all of the U.S. accounts receivable that we previously sold through PEI Group’s securitization facility for $264 million, $240 million of which was settled in cash and the remaining amount used to settle certain current related party receivables. The cash to purchase these receivables was provided by an increase in related party borrowings, which was subsequently settled as discussed below. On January 30, 2020, our outstanding borrowings, net of deferred financing transaction costs and original issue discounts plus accrued interest incurred under the PEI Group Credit Agreement were reallocated to an entity within PEI Group and on February 4, 2020, we were fully and unconditionally released from the security and guarantee arrangements relating to PEI Group’s borrowings. This reallocation resulted in a payment to PEI Group of $8 million for accrued interest and an increase of $2,001 million in related party borrowings, which was subsequently settled as discussed below. On February 4, 2020, we repaid $3,627 million of related party borrowings and $22 million of related party accrued interest owed to PEI Group and capitalized, as additional paid-in capital without the issuance of any additional shares, the remaining $831 million balance of the related party borrowings owed to PEI Group. On February 4, 2020, we entered into a transition services agreement with a subsidiary of PEI Group, whereby PEI Group will continue to provide certain administrative services to us, including information technology services; accounting, treasury, financial reporting and transaction support; human resources; procurement; tax, legal and compliance related services; and other corporate services for up to 24 months. In addition, we entered into a transition services agreement with Rank Group Limited (an affiliate of PEI Group) whereby, upon our request, Rank Group Limited will provide certain administrative services to us, including financial reporting, consulting and compliance services, insurance procurement and human resources support, legal and corporate secretarial support, and related services for up to 24 months. For the years ended December 31, 2021 and 2020, we incurred $6 million and $10 million, respectively, related to transition services which was included in selling, general and administrative expenses in our consolidated statements of income. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18 - Subsequent Events Quarterly Cash Dividend On January 27, 2022, our Board of Directors approved a cash dividend of $0.23 per common share to be paid on February 28, 2022 to shareholders of record on February 14, 2022. Except as described above, there have been no events subsequent to December 31, 2021 which would require accrual or disclosure in these consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Description of Business | 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 | Basis of Presentation: We have prepared the accompanying audited consolidated financial statements in accordance with United States generally accepted accounting principles ("GAAP"). Prior to the completion of our Corporate Reorganization, as defined in our Registration Statement on Form S-1 (File No. 333-234731), and initial public offering (“IPO”) on February 4, 2020, we operated as part of Pactiv Evergreen Inc. (“PEI”) and not as a stand-alone entity. We represented the business that was previously reported as the Reynolds Consumer Products segment in the consolidated financial statements of PEI and its subsidiaries (collectively, “PEI Group” or the “Parent”). As part of our Corporate Reorganization, we reorganized the legal structure of our entities so they are all under a single parent entity, Reynolds Consumer Products Inc. In conjunction with our Corporate Reorganization and IPO, we separated from PEI Group on February 4, 2020. All financial information presented after our Corporate Reorganization and IPO represents the consolidated financial statements of our company. Our consolidated statements of income include allocations of certain expenses for services provided by PEI Group prior to our separation in February 2020, including, but not limited to, general corporate expenses related to group wide functions including executive management, finance, legal, tax, information technology and a portion of a related party management fee incurred by PEI Group. Total costs allocated to us for these functions were $2 million and $41 million for the years ended December 31, 2020 and 2019, respectively, and were primarily included in selling, general and administrative expenses in our consolidated statements of income. These amounts include costs of $1 million and $22 million for the years ended December 31, 2020 and 2019, respectively, that were not historically allocated to us as part of PEI Group's normal monthly reporting process. Additionally, in the years ended December 31, 2020 and 2019, costs of $2 million and $28 million, Net Parent deficit represented the former Parent’s interest in our net assets. As a direct ownership relationship did not exist between the various entities of our previously combined group, a Net Parent deficit account was shown in our previously combined financial statements. The majority of transactions between us and PEI Group have a history of settlement or were settled for cash in conjunction with our separation from PEI Group and IPO. These transactions have been reflected in our consolidated balance sheets as related party receivables and payables. Transactions that did not have a history of settlement were reflected in equity (deficit) in our previously combined balance sheets as Net Parent deficit and, when cash was utilized (contributed), in our consolidated statements of cash flows as a financing activity in net transfers from (to) Parent. Refer to Note 17 - Related Party Transactions for further information. |
Initial Public Offering | Initial Public Offering: On February 4, 2020, we completed our separation from PEI Group and the IPO of our common stock pursuant to a Registration Statement on Form S-1. In the IPO, we sold an aggregate of 54,245,500 shares of common stock, including 7,075,500 shares of common stock purchased by the underwriters on February 7, 2020 pursuant to their option to purchase additional shares, under the Registration Statement at a public offering price of $26.00 per share. In conjunction with our separation from PEI Group and IPO, we reclassified PEI Group’s historical net investment in us to additional paid-in capital. Each share of our outstanding common stock, immediately prior to our IPO, was exchanged into 155,455 shares of common stock. In addition, certain related party borrowings owed to PEI Group were contributed as additional paid-in capital without the issuance of any additional shares. |
Use of Estimates | Use of Estimates: We prepare our consolidated financial statements in accordance with GAAP, which requires us to make estimates and assumptions that affect a number of amounts in our consolidated financial statements. Significant accounting policy elections, estimates and assumptions include, among others, valuation assumptions of goodwill and intangible assets, useful lives of long-lived assets, sales incentives, income taxes and benefit plan assumptions. We base our estimates on historical experience and other assumptions that we believe are reasonable. If actual amounts differ from estimates, we include the revisions in our consolidated results of operations in the period the actual amounts become known. Historically, the aggregate differences, if any, between our estimates and actual amounts in any year have not had a material effect on our consolidated financial statements. |
Currency Translation | Currency Translation: Our consolidated financial statements are presented in U.S. dollars, which is our reporting currency. We translate the results of operations of our subsidiaries with functional currencies other than the U.S. dollar using average exchange rates during each period and translate balance sheet accounts using exchange rates at the end of each period. We record currency translation adjustments as a component of stockholders’ equity within accumulated other comprehensive income and transaction gains and losses in other expense, net in our consolidated statements of income. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash and cash equivalents include demand deposits with banks and all highly liquid investments with original maturities of three months or less. We maintain our bank accounts with a relatively small number of high quality financial institutions. Cash balances held by non-U.S. entities as of December 31, 2021 and 2020 were $7 million |
Accounts Receivable | Accounts Receivable: Accounts receivable are recorded at face amounts less an allowance for doubtful accounts. The allowance is an estimate based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable balance. We evaluate the aging of the accounts receivable balances and the financial condition of our customers to estimate the amount of accounts receivable that may not be collected in the future and record the appropriate provision. The allowance for doubtful accounts was not material |
Inventories | Inventories: We value our inventories using the first-in, first-out method. Inventory is valued at actual cost, which includes raw materials, supplies, direct labor and manufacturing overhead associated with production. Inventory is stated at the lower of cost or net realizable value, which includes any costs to sell or dispose. In addition, appropriate consideration is given to obsolescence, excessive inventory levels, product deterioration and other factors in evaluating net realizable value. |
Long-Lived Assets | Long-Lived Assets: Property, plant and equipment are stated at historical cost less depreciation, which is computed using the straight-line method over the estimated useful lives of the assets. Machinery and equipment are depreciated over periods ranging from 5 to 20 years and buildings and building improvements over periods ranging from 15 to 40 years. Finite-lived intangible assets, which primarily consist of customer relationships, are stated at historical cost and amortized using the straight-line method (which reflects the pattern of how the assets’ economic benefits are consumed) over the assets' estimated useful lives which range from 18 to 20 years. Expenditures for maintenance and repairs are expensed as incurred. When property, plant or equipment is sold or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts and any gain or loss realized on disposition is reflected in other expense, net in our consolidated statements of income. We review long-lived assets, including finite-lived intangible assets, for recoverability on an ongoing basis. Changes in depreciation or amortization are recorded prospectively when estimates of the remaining useful lives or residual values of long-lived assets change. We also review our long-lived assets for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, we perform undiscounted cash flow analysis to determine if an impairment exists. When testing for asset impairment, we group assets and liabilities at the lowest level for which cash flows are separately identifiable. If an impairment loss is recorded, it is calculated as the excess of the asset’s carrying value over its estimated fair value as determined by an estimate of discounted future cash flows. Depending on the nature of the asset, impairment losses are recorded in either cost of sales or selling, general and administrative expenses in our co nsolidated statements of income. There were no impairments of long-lived assets in any of the years presented . |
Leases | Leases: We determine whether a contract is or contains a lease at contract inception. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets are recognized at the commencement date at the value of the lease liability, adjusted for any prepayments, lease incentives received and initial direct costs incurred. Lease liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term. Following initial recognition, operating lease liability balances are amortized using the effective interest method, while the related ROU assets are adjusted by the difference between the fixed lease expense recognized and the interest expense associated with the effective interest method in the period. Some of our leases contain non-lease components, for example common area or other maintenance costs, that relate to the lease components of the agreement. Non-lease components and the lease components to which they relate are accounted for as a single lease component as we have elected to combine lease and non-lease components for all classes of underlying assets. We recognize interest on operating lease liabilities and amortization of ROU assets as a single lease expense for operating leases on a straight-line basis over the lease term, substantially all in cost of sales in our consolidated statements of income. All operating lease cash payments are recorded within cash flows from operating activities in the consolidated statements of cash flows. Our lease agreements do not include significant restrictions, covenants or residual value guarantees. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets: Goodwill represents the excess of purchase price over the fair value of net assets acquired. We test goodwill for impairment on an annual basis in the fourth quarter and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. We assess goodwill impairment risk by performing a qualitative review of entity-specific, industry, market and general economic factors affecting our goodwill reporting units. Depending on factors such as prior-year test results, current year developments, current risk evaluations and other practical considerations, we may elect to perform quantitative testing instead. In our quantitative testing, we compare a reporting unit’s estimated fair value with its carrying value. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans and industry and economic conditions. The key assumptions associated with determining the estimated fair value are forecasted Adjusted EBITDA and a relevant earnings multiple. Our actual results and conditions may differ over time. If the carrying value of a reporting unit’s net assets exceeds its fair value, we would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value. Our indefinite-lived intangible assets consist of certain trade names. We test indefinite-lived intangible assets for impairment on an annual basis in the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Depending on factors such as prior-year test results, current year developments, current risk evaluations and other practical considerations, we may elect to perform quantitative testing instead. If potential impairment risk exists for a specific asset, we quantitatively test it for impairment by comparing its estimated fair value with its carrying value. We determine estimated fair value using the relief-from-royalty method, using key assumptions including planned revenue growth rates, market-based discount rates and estimates of royalty rates. If the carrying value of the asset exceeds its fair value, we consider the asset impaired and reduce its carrying value to the estimated fair value. |
Revenue Recognition | Revenue Recognition: After assessing our customers' creditworthiness, we recognize revenue when control over products transfers to our customers, which generally occurs upon delivery or shipment of the products. We account for product shipping, handling and insurance as fulfillment activities, with revenues for these activities recorded in net revenues and costs recorded in cost of sales. Any taxes collected on behalf of government authorities are excluded from net revenues. Consideration in our contracts with customers is variable due to anticipated reductions such as discounts, allowances and trade promotions, collectively referred to as “sales incentives”. Accordingly, revenues are recorded net of estimated sales incentives, based on known or expected adjustments. The transaction price reflects our estimate of the amount of consideration to which we will be entitled, using an expected value method. We base these estimates principally on historical utilization and redemption rates, anticipated performance and our best judgment at the time to the extent that it is probable that a significant reversal of revenue recognized will not occur. Estimates of sales incentives are monitored and adjusted each period until the sales incentives are realized. We consider purchase orders, which in some cases are governed by master supply agreements, to be the contracts with a customer. Key sales terms, such as pricing and quantities ordered, are established frequently, so most customer arrangements and related sales incentives have a duration of one year or shorter. We generally do not have any unbilled receivables at the end of a period. Deferred revenues are not material and primarily include customer advance payments typically collected a few days before product delivery, at which time deferred revenues are reclassified and recorded as net revenues. We generally do not receive non-cash consideration for the sale of goods nor do we grant payment financing terms greater than one year. We do not incur any significant costs to obtain a contract. |
Marketing, Advertising and Research and Development | Marketing, Advertising and Research and Development: We promote our products with marketing and advertising programs. These programs include, but are not limited to, cooperative advertising, in-store displays and consumer marketing promotions. The costs of end-consumer marketing programs that are conducted in conjunction with our customers, such as coupons, are recorded as a reduction to revenue. We do not defer these costs on our consolidated balance sheets and all marketing and advertising costs are recorded as an expense in the year incurred. Advertising expense was $43 million $36 million |
Stock-based Compensation | Stock-based Compensation: Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the period in which the awards vest in accordance with applicable guidance under Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation. In contemplation of us issuing shares to the public, we granted restricted stock units (“RSUs”) in July 2019 to certain members of management, pursuant to retention agreements entered into with these employees. These RSUs vest upon satisfaction of both a performance-based vesting condition, which was satisfied when we completed our IPO on February 4, 2020, and a service-based vesting condition, which will be satisfied with respect to one-third |
Financial Instruments | Financial Instruments: We are exposed to certain risks relating to our ongoing business operations. To manage the volatility relating to these exposures, we enter into various derivative instruments from time to time under our risk management policies. We are not a party to leveraged derivatives and, by policy, do not use financial instruments for speculative purposes. Interest Rate Derivatives: We manage interest rate risk by using interest rate derivative instruments. Interest rate swaps (pay fixed, receive variable) are entered into as cash flow hedges to manage a portion of the interest rate risk associated with our floating-rate borrowings. We record interest rate derivative instruments at fair value (Level 2) and on a net basis by counterparty based on our master netting arrangements. The instruments are classified in our consolidated balance sheets in other assets or other liabilities, as applicable. Cash flows from interest rate derivative instruments are classified as operating activities in our consolidated statements of cash flows based on the nature of the derivative instrument. We have elected to use hedge accounting for our interest rate derivative instruments. Accordingly, the effective portion of the gain or loss on the open hedging instrument is recorded in other comprehensive income and is reclassified into earnings as interest expense, net when settled. We terminate derivative instruments if the underlying asset or liability matures or is repaid, or if we determine the underlying forecasted transaction is no longer probable of occurring. Commodity Derivatives: We are exposed to price risk related to forecasted purchases of certain commodities that we primarily use as raw materials. From time to time we may enter into derivative financial instruments to mitigate certain risks. We record commodity derivative financial instruments at fair value (Level 2) and on a gross basis in our consolidated balance sheets in other current assets or accrued and other current liabilities due to their relatively short-term duration. Cash flows from commodity derivative instruments are classified as operating activities in our c onsolidate d statements of cash flows based on the nature of the derivative instrument. Historically, we have not elected to use hedge accounting. Accordingly, any unrealized gains or losses (mark-to-market impacts) and realized gains or losses are recorded in cost of sales in our consolidated statements of income. |
Income Taxes | Income Taxes: Our income tax expense includes amounts payable or refundable for the current year, the effects of deferred taxes and impacts from uncertain tax positions. We recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax basis of our assets and liabilities, operating loss carryforwards and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those differences are expected to reverse. The realization of certain deferred tax assets is dependent on generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. When assessing the need for a valuation allowance, we consider any carryback potential, future reversals of existing taxable temporary differences (including liabilities for unrecognized tax benefits), future taxable income and tax planning strategies. We recognize the tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained based on the technical merits of the position. The amount we recognize is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon resolution. Future changes related to the expected resolution of uncertain tax positions could affect tax expense in the period when the change occurs. |
Fair Value Measurements and Disclosures | Fair Value Measurements and Disclosures: GAAP establishes a hierarchy for measuring fair value. A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following three levels of inputs may be used to measure fair value: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 inputs include inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. • Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our assets and liabilities measured at fair value on a recurring basis are presented in Note 8 - Financial Instruments. We had no assets or liabilities measured at fair value on a non-recurring basis in any of the years presented. In addition to fair value disclosure requirements related to financial instruments carried at fair value, accounting standards require disclosures regarding the fair value of all of our financial instruments. The carrying values of cash equivalents, accounts receivables, other receivables, related party receivables, accounts payable, related party payables and accrued and other current liabilities are reasonable estimates of their fair values as of December 31, 2021 and 2020 due to the short-term nature of these instruments. |
Variable Interest Entities | Variable Interest Entities: Variable interest entities (“VIEs”) are primarily entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns. Prior to our separation from PEI Group and IPO, we had a variable interest in one VIE related to our factoring arrangement with PEI Group, described below. |
Transfers of Financial Assets | Transfers of Financial Assets: Prior to our separation from PEI Group and IPO in February 2020, we accounted for transfers of financial assets, such as non-recourse accounts receivable factoring arrangements, when we surrendered control over the related assets. Determining whether control has transferred requires an evaluation of relevant legal considerations, an assessment of the nature and extent of our continuing involvement with the assets transferred and any other relevant considerations. We had a non-recourse factoring arrangement in which we sold eligible receivables to a special purpose entity (“SPE”) consolidated by PEI Group in exchange for cash. We transferred sold accounts receivables in their entirety to PEI Group and satisfied all of the conditions to report the transfer of financial assets in their entirety as a sale. The SPE was considered to be a VIE, however we were not its primary beneficiary because we did not have the power to direct any of its most significant activities through our arrangement as a collecting agent. On January 30, 2020, we repurchased all of the U.S. accounts receivable sold for $264 million, $240 million of which was settled in cash and the remaining amount used to settle certain current related party receivables. The proceeds from the sales of receivables are included in cash from operating activities in our consolidated statements of cash flows. |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance: In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: As of December 31, 2021 2020 (in millions) Raw materials $ 206 $ 138 Work in progress 63 54 Finished goods 276 194 Spare parts 38 33 Inventories $ 583 $ 419 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Summary of Property, Plant and Equipment, Net | Property, plant and equipment, net consisted of the following: As of December 31, 2021 2020 (in millions) Land and land improvements $ 43 $ 36 Buildings and building improvements 183 145 Machinery and equipment 1,126 1,005 Construction in progress 77 118 Property, plant and equipment, at cost 1,429 1,304 Less: accumulated depreciation (752 ) (692 ) Property, plant and equipment, net $ 677 $ 612 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill by Reportable Segment | Goodwill by reportable segment was as follows: Reynolds Cooking & Baking Hefty Waste & Storage Hefty Tableware Presto Products Total (in millions) Balance as of December 31, 2019 $ 794 $ 505 $ 282 $ 298 $ 1,879 Movements — — — — — Balance as of December 31, 2020 794 505 282 298 1,879 Movements — — — — — Balance as of December 31, 2021 $ 794 $ 505 $ 282 $ 298 $ 1,879 |
Schedule of Intangible Assets, Net | Intangible assets, net consisted of the following: As of December 31, 2021 As of December 31, 2020 Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net (in millions) Finite-lived intangible assets Customer relationships $ 580 $ (371 ) $ 209 $ 580 $ (342 ) $ 238 Trade names 25 (23 ) 2 25 (21 ) 4 Total finite-lived intangible assets 605 (394 ) 211 605 (363 ) 242 Indefinite-lived intangible assets Trade names 850 — 850 850 — 850 Total intangible assets $ 1,455 $ (394 ) $ 1,061 $ 1,455 $ (363 ) $ 1,092 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Instruments [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: As of December 31, 2021 2020 (in millions) Term Loan Facility $ 2,132 $ 2,257 Deferred financing transaction costs (18 ) (21 ) Original issue discounts (2 ) (3 ) 2,112 2,233 Less: current portion (25 ) (25 ) Long-term debt $ 2,087 $ 2,208 |
Schedule of Interest Expense, Net | Interest expense, net consisted of the following: For the Years Ended December 31, 2021 2020 2019 (in millions) Interest expense, Term Loan Facility $ 41 $ 52 $ — Amortization of deferred financing transaction costs 4 4 1 Interest expense, PEI Group U.S. Term Loan — 8 101 Interest expense, related party borrowings (1) — 5 140 Interest income, related party receivables (1) — — (33 ) Other 3 1 — Interest expense, net $ 48 $ 70 $ 209 (1) Refer to Note 17 – Related Party Transactions for additional information. |
Schedule of Required Future Repayments on Debt Outstanding | Below is a schedule of required future repayments on our debt outstanding as of December 31, 2021: (in millions) 2022 $ 25 2023 25 2024 25 2025 25 2026 25 Thereafter 2,007 Total long-term debt $ 2,132 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Summary of Lease Costs | Lease costs consisted of the following: As of December 31, 2021 2020 2019 (in millions) Operating lease costs $ 15 $ 16 $ 11 Variable lease costs 1 1 1 Short-term lease costs 3 3 5 Total lease costs $ 19 $ 20 $ 17 |
Summary of Future Lease Payments Under Non-Cancellable Leases | Future lease payments under non-cancellable leases were as follows: As of December 31, 2021 (in millions) 2022 $ 14 2023 12 2024 12 2025 10 2026 6 Thereafter 11 Total undiscounted lease payments 65 Less: imputed interest (8 ) Operating lease liabilities $ 57 |
Summary of Operating Lease Liabilities and ROU Assets Included in Consolidated Balance Sheets | Operating lease liabilities and ROU assets included in our consolidated balance sheets were as follows: As of December 31, 2021 2020 (in millions) Accrued and other current liabilities $ 11 $ 13 Long-term operating lease liabilities 46 51 $ 57 $ 64 Operating lease right-of-use assets, net $ 55 $ 61 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Schedule of Changes in and Amount of Accumulated Postretirement Benefit Obligation | The changes in and the amount of the accumulated postretirement benefit obligation were as follows: As of December 31, 2021 2020 (in millions) Accumulated postretirement benefit obligation as of January 1 $ 54 $ 51 Service cost 1 1 Interest cost 1 2 Benefits paid (3 ) (4 ) Actuarial (gains) losses (5 ) 4 Accumulated postretirement benefit obligation as of December 31 $ 48 $ 54 |
Schedule of Accrued Benefit Obligation Included in Consolidated Balance Sheets | The accrued benefit obligation was included in our consolidated balance sheets as follows: As of December 31, 2021 2020 (in millions) Accrued and other current liabilities $ 3 $ 3 Long-term postretirement benefit obligation 45 51 $ 48 $ 54 |
Schedule of Accrued Benefit Obligation Recorded in Accumulated Other Comprehensive Income | A portion of our accrued benefit obligation has been recorded in accumulated other comprehensive income as follows: As of December 31, 2019 Changes As of December 31, 2020 Changes As of December 31, 2021 (in millions) Net actuarial gain (loss) $ 15 $ (5 ) $ 10 $ 5 $ 15 Deferred income tax (expense) benefit (4 ) 2 (2 ) (1 ) (3 ) Accumulated other comprehensive income $ 11 $ (3 ) $ 8 $ 4 $ 12 |
Schedule of Weighted-Average Assumptions to Determine Postretirement Benefit Obligations | We used the following weighted-average assumptions to determine our postretirement benefit obligations: As of December 31, 2021 2020 Discount rate 2.90 % 2.54 % Health care cost trend rate assumed for next year 6.60 % 6.90 % Ultimate trend rate 4.50 % 4.50 % Year that the rate reaches the ultimate trend rate 2029 2029 |
Schedule of Weighted-Average Assumptions to Determine Net Periodic Postretirement Health Care Cost | We used the following weighted-average assumptions to determine our net periodic postretirement health care cost: For the Years Ended December 31, 2021 2020 2019 Discount rate 2.54 % 3.24 % 4.37 % Health care cost trend rate assumed for next year 6.90 % 7.20 % 7.70 % Ultimate trend rate 4.50 % 4.50 % 4.50 % Year that the rate reaches the ultimate trend rate 2029 2029 2029 |
Schedule of Estimated Future Benefit Payments | Our estimated future benefit payments for our postretirement benefit plan as of December 31, 2021 were as follows: (in millions) 2022 $ 3 2023 3 2024 3 2025 3 2026 3 2027-2031 14 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Activity for RSUs and PSUs | A summary of activity for RSUs and PSUs for the years ended December 31, 2021 and 2020, is as follows (in millions, except for per share data): Shares Weighted-Average Grant-Date Fair Value Per Share Unvested, at January 1, 2020 — $ — Granted 0.5 29 Forfeited (0.1 ) 27 Vested — — Unvested, at December 31, 2020 0.4 $ 29 Granted 0.3 30 Forfeited — — Vested (0.1 ) 28 PSU performance adjustment (0.2 ) 30 Unvested, at December 31, 2021 0.4 $ 29 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Summary of Accrued and Other Current Liabilities | Accrued and other current liabilities consisted of the following: As of December 31, 2021 2020 (in millions) Trade promotion allowances $ 40 $ 35 Accrued personnel costs 34 63 Other 86 83 Accrued and other current liabilities $ 160 $ 181 |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Expense Net [Abstract] | |
Summary of Other Expense, Net | Other expense, net consisted of the following: For the Years Ended December 31, 2021 2020 2019 (in millions) Factoring discount (1) $ — $ — $ 25 Allocated related party management fee (2) — — 10 IPO and separation-related costs (3) 14 31 31 Other (1 ) (2 ) (1 ) Other expense, net $ 13 $ 29 $ 65 (1) Reflects the loss on sale that we incurred when we sold our U.S. trade receivables through PEI Group’s securitization facility. Our participation in this facility ceased upon the completion of our Corporate Reorganization and IPO. (2) Reflects our allocation, from PEI Group, of a management fee that was charged by Rank to PEI Group, which ceased upon the completion of our Corporate Reorganization and IPO. (3) Reflects costs related to our separation to operate as a stand-alone public company and the IPO process. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Summary of Changes in Balances for Each Component of Accumulated Other Comprehensive Income | The following table summarizes the changes in our balances of each component of accumulated other comprehensive income. For the Years Ended December 31, 2021 2020 2019 (in millions) Currency translation adjustments: Balance as of beginning of period $ (6 ) $ (6 ) $ (7 ) Currency translation adjustments — — 1 Other comprehensive income — — 1 Balance as of end of period $ (6 ) $ (6 ) $ (6 ) Employee benefit plans: Balance as of beginning of period $ 8 $ 11 $ 14 Adoption of new accounting principle — — 3 Net actuarial gain (loss) arising during period 6 (4 ) (5 ) Deferred tax (expense) benefit on net actuarial gain (loss) (1 ) 2 1 (Gains) and losses reclassified into net income: Amortization of actuarial gain (1 ) (1 ) (2 ) Other comprehensive income (loss) 4 (3 ) (6 ) Balance as of end of period $ 12 $ 8 $ 11 Interest rate derivatives: Balance as of beginning of period $ (1 ) $ — $ — Gain (loss) arising during period, net of income tax 5 (1 ) — Other comprehensive income (loss) 5 (1 ) — Balance as of end of period $ 4 $ (1 ) $ — Accumulated other comprehensive income Balance as of beginning of period $ 1 $ 5 $ 7 Adoption of new accounting principle — — 3 Other comprehensive income (loss) 9 (4 ) (5 ) Balance as of end of period $ 10 $ 1 $ 5 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Summary of Components of Income Before Income Tax | The components of income before income tax were as follows: For the Years Ended December 31, 2021 2020 2019 (in millions) Income before income taxes: United States $ 424 $ 511 $ 300 International 6 5 1 Total income before income taxes $ 430 $ 516 $ 301 |
Summary of Significant Components of Income Tax Expense | Significant components of income tax expense were as follows: For the Years Ended December 31, 2021 2020 2019 (in millions) Current United States Federal $ 69 $ 70 $ 68 State 14 14 8 Foreign 1 1 — Total current income tax expense 84 85 76 Deferred United States Federal 19 54 3 State 3 13 (3 ) Foreign — 1 — Total deferred income tax expense 22 68 — Total income tax expense $ 106 $ 153 $ 76 |
Summary of Reconciliation of Income Taxes Computed at U.S. Federal Statutory Income Tax Rate to Income Tax Expense | A reconciliation of income taxes computed at the U.S. Federal statutory income tax rate of 21% for 2021, 2020 and 2019, to our income tax expense was as follows: For the Years Ended December 31, 2021 2020 2019 (in millions) U.S. Federal income tax expense at the statutory rate $ 90 $ 108 $ 63 U.S. State income tax expense 15 17 2 Non-deductible expenses — 2 6 CARES Act — 27 — Return to provision adjustments 1 (2 ) 3 Other — 1 2 Total income tax expense $ 106 $ 153 $ 76 |
Summary of Components of Net Deferred Income Tax Liability | The components of our net deferred income tax liability were as follows: As of December 31, 2021 2020 (in millions) Deferred tax assets Employee benefits $ 26 $ 24 Lease obligations 13 15 Inventory 9 7 Reserves 4 2 Tax losses 4 4 Tax credits — 4 Total deferred tax assets 56 56 Valuation allowance (6 ) (5 ) Total deferred tax assets after valuation allowance 50 51 Deferred tax liabilities Intangible assets (293 ) (291 ) Property, plant and equipment (93 ) (72 ) Lease right-of-use assets (13 ) (14 ) Other (2 ) — Total deferred tax liabilities (401 ) (377 ) Net deferred tax liabilities $ (351 ) $ (326 ) |
Summary of State and Foreign Net Operating Loss Carryforwards on Gross Basis and Tax Credit Carryforwards | State and foreign net operating loss carryforwards, presented on a gross basis, and tax credit carryforwards were as follows: As of December 31, 2021 2020 (in millions) State and foreign net operating loss carryforwards Expires within 5 years $ — $ — Expires after 5 years or no expiration 42 49 Total net operating loss carryforwards $ 42 $ 49 Tax credit carryforwards Expires within 5 years $ — $ 4 Total tax credit carryforwards $ — $ 4 |
Summary of Activity Related to Gross Unrecognized Tax Benefits | The following table summarizes the activity related to our gross unrecognized tax benefits: For the Years Ended December 31, 2021 2020 2019 (in millions) Balance as of beginning of the year $ 4 $ 2 $ 1 Increase associated with tax positions taken during the current year 1 2 1 Ending unrecognized tax benefits $ 5 $ 4 $ 2 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Summary of Adjusted EBITDA | Reynolds Cooking & Baking Hefty Waste & Storage Hefty Tableware Presto Products Segment total Unallocated (1) Total 2021 (in millions) Net revenues $ 1,314 $ 876 $ 815 $ 560 $ 3,565 $ (9 ) $ 3,556 Intersegment revenues — 8 — 4 12 (12 ) — Total segment net revenues 1,314 884 815 564 3,577 (21 ) 3,556 Adjusted EBITDA 255 173 137 69 634 Depreciation and amortization 21 18 16 21 76 33 109 Capital expenditures 42 22 19 53 136 5 141 Total assets 562 290 165 247 1,264 3,548 4,812 Reynolds Cooking & Baking Hefty Waste & Storage Hefty Tableware Presto Products Segment total Unallocated (1) Total 2020 (in millions) Net revenues $ 1,159 $ 809 $ 763 $ 532 $ 3,263 $ — $ 3,263 Intersegment revenues — 9 — 1 10 (10 ) — Total segment net revenues 1,159 818 763 533 3,273 (10 ) 3,263 Adjusted EBITDA 254 236 170 98 758 Depreciation and amortization 20 15 14 19 68 31 99 Capital expenditures 33 30 24 38 125 18 143 Total assets 433 248 157 204 1,042 3,680 4,722 Reynolds Cooking & Baking Hefty Waste & Storage Hefty Tableware Presto Products Segment total Unallocated (1) Total 2019 (in millions) Net revenues $ 1,076 $ 695 $ 751 $ 510 $ 3,032 $ — $ 3,032 Intersegment revenues — 14 — 1 15 (15 ) — Total segment net revenues 1,076 709 751 511 3,047 (15 ) 3,032 Adjusted EBITDA 209 190 178 91 668 Depreciation and amortization 20 13 9 21 63 28 91 Capital expenditures (2) 34 41 6 24 105 8 113 (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 ROU assets, goodwill, intangible assets, related party receivables and other assets. (2) Until October 31, 2019, the property, plant and equipment included in our Hefty Tableware segment was contributed to us from PEI Group. No capital expenditures were incurred by us in relation to these items. On November 1, 2019, as part of our separation from PEI Group, we acquired the legal title to these assets. |
Reconciliation of Segment Adjusted EBITDA to Consolidated GAAP Income Before Income Taxes | The following table presents a reconciliation of segment Adjusted EBITDA to consolidated GAAP income before income taxes: For the Years Ended December 31, 2021 2020 2019 (in millions) Segment Adjusted EBITDA $ 634 $ 758 $ 668 Corporate / unallocated expenses (33 ) (41 ) (13 ) 601 717 655 Adjustments to reconcile to GAAP income before income taxes Depreciation and amortization (109 ) (99 ) (91 ) Interest expense, net (48 ) (70 ) (209 ) Factoring discount — — (25 ) Allocated related party management fee — — (10 ) IPO and separation-related costs (14 ) (31 ) (31 ) Unrealized gains on derivatives — — 9 Other — (1 ) 3 Consolidated GAAP income before income taxes $ 430 $ 516 $ 301 |
Summary of Net Revenues by Product Line | Net revenues by product line are as follows: For the Years Ended December 31, 2021 2020 2019 (in millions) Waste and storage products (1) $ 1,448 $ 1,351 $ 1,220 Cooking products 1,314 1,159 1,076 Tableware 815 763 751 Unallocated (21 ) (10 ) (15 ) Net revenues $ 3,556 $ 3,263 $ 3,032 (1) Waste and storage products are comprised of our Hefty Waste & Storage and Presto Products segments. |
Summary of Geographic Data for Net Revenues and Long-Lived Assets | Geographic data for net revenues (recognized based on location of our business operations) and long-lived assets (representing property, plant and equipment) are as follows: For the Years Ended December 31, 2021 2020 2019 (in millions) Net revenues: United States $ 3,495 $ 3,206 $ 2,982 Other 61 57 50 Net revenues $ 3,556 $ 3,263 $ 3,032 As of December 31, 2021 2020 (in millions) Long-lived assets United States $ 671 $ 606 Other 6 6 Long-lived assets $ 677 $ 612 |
Description of Business and B_2
Description of Business and Basis of Presentation - Additional Information (Details) $ / shares in Units, $ in Millions | Feb. 07, 2020shares | Feb. 04, 2020$ / sharesshares | Dec. 31, 2021Segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Related Party Transaction [Line Items] | |||||
Number of reportable segments | Segment | 4 | ||||
Pactiv Evergreen Inc. | |||||
Related Party Transaction [Line Items] | |||||
Cost allocated to related party service provided | $ | $ 2 | $ 41 | |||
Related party transaction historical expenses not allocated | $ | 1 | 22 | |||
Outstanding common stock shares exchanged immediately prior to IPO | shares | 155,455 | ||||
Pactiv Evergreen Inc. | Underwriters | |||||
Related Party Transaction [Line Items] | |||||
Number of common stock shares sold | shares | 7,075,500 | ||||
IPO | Pactiv Evergreen Inc. | |||||
Related Party Transaction [Line Items] | |||||
Issuance costs | $ | $ 2 | $ 28 | |||
Number of common stock shares sold | shares | 54,245,500 | ||||
Shares issued, price per share | $ / shares | $ 26 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | Jan. 30, 2020USD ($) | Dec. 31, 2021USD ($)VIE | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Related Party Transaction [Line Items] | ||||
Impairments of long-lived assets | $ 0 | $ 0 | $ 0 | |
Advertising expense | 43,000,000 | 72,000,000 | 57,000,000 | |
Research and development expense | $ 36,000,000 | 41,000,000 | 33,000,000 | |
Percentage of employees can satisfied the service condition | 33.33% | |||
Minimum period of employees need to continued employment | 3 years | |||
PEI Group | ||||
Related Party Transaction [Line Items] | ||||
Number of variable interest entity | VIE | 1 | |||
PEI Group | Variable Interest Entity, Not Primary Beneficiary | ||||
Related Party Transaction [Line Items] | ||||
Amount of Accounts Receivable Repurchased | $ 264,000,000 | |||
Payments for repurchase of accounts receivable | $ 240,000,000 | |||
Fair Value, Nonrecurring | ||||
Related Party Transaction [Line Items] | ||||
Assets measured at fair value | $ 0 | 0 | 0 | |
Liabilities measured at fair value | $ 0 | 0 | $ 0 | |
Minimum | Machinery and Equipment | ||||
Related Party Transaction [Line Items] | ||||
Property, plant and equipment estimated useful life | 5 years | |||
Minimum | Buildings and Building Improvements | ||||
Related Party Transaction [Line Items] | ||||
Property, plant and equipment estimated useful life | 15 years | |||
Minimum | Customer Relationships | ||||
Related Party Transaction [Line Items] | ||||
Finite-lived intangible assets, estimated useful life | 18 years | |||
Maximum | Machinery and Equipment | ||||
Related Party Transaction [Line Items] | ||||
Property, plant and equipment estimated useful life | 20 years | |||
Maximum | Buildings and Building Improvements | ||||
Related Party Transaction [Line Items] | ||||
Property, plant and equipment estimated useful life | 40 years | |||
Maximum | Customer Relationships | ||||
Related Party Transaction [Line Items] | ||||
Finite-lived intangible assets, estimated useful life | 20 years | |||
Non-U.S. Entities | ||||
Related Party Transaction [Line Items] | ||||
Cash balances | $ 7,000,000 | $ 9,000,000 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 206 | $ 138 |
Work in progress | 63 | 54 |
Finished goods | 276 | 194 |
Spare parts | 38 | 33 |
Inventories | $ 583 | $ 419 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net - Summary of Property,Plant and Equipment, Net (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 1,429 | $ 1,304 |
Less: accumulated depreciation | (752) | (692) |
Property, plant and equipment, net | 677 | 612 |
Land and Land Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 43 | 36 |
Buildings and Building Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 183 | 145 |
Machinery and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, at cost | 1,126 | 1,005 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 77 | $ 118 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property Plant And Equipment [Line Items] | |||
Depreciation expense | $ 78 | $ 68 | $ 59 |
Cost of Sales | |||
Property Plant And Equipment [Line Items] | |||
Depreciation expense | 70 | 62 | 55 |
Selling, General and Administrative Expenses | |||
Property Plant And Equipment [Line Items] | |||
Depreciation expense | $ 8 | $ 6 | $ 4 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill by Reportable Segment (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | |||
Goodwill | $ 1,879 | $ 1,879 | $ 1,879 |
Reynolds Cooking & Baking | |||
Goodwill [Line Items] | |||
Goodwill | 794 | 794 | 794 |
Hefty Waste & Storage | |||
Goodwill [Line Items] | |||
Goodwill | 505 | 505 | 505 |
Hefty Tableware | |||
Goodwill [Line Items] | |||
Goodwill | 282 | 282 | 282 |
Presto Products | |||
Goodwill [Line Items] | |||
Goodwill | $ 298 | $ 298 | $ 298 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross carrying amount | $ 1,455 | $ 1,455 |
Intangible assets, Accumulated amortization | (394) | (363) |
Intangible assets, net | 1,061 | 1,092 |
Finite-Lived Intangible Assets | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross carrying amount | 605 | 605 |
Intangible assets, Accumulated amortization | (394) | (363) |
Intangible assets, net | 211 | 242 |
Finite-Lived Intangible Assets | Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross carrying amount | 580 | 580 |
Intangible assets, Accumulated amortization | (371) | (342) |
Intangible assets, net | 209 | 238 |
Finite-Lived Intangible Assets | Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross carrying amount | 25 | 25 |
Intangible assets, Accumulated amortization | (23) | (21) |
Intangible assets, net | 2 | 4 |
Indefinite-Lived Intangible Assets | Trade Names | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross carrying amount | 850 | 850 |
Intangible assets, net | $ 850 | $ 850 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | |||
Estimated amortization expense for year one | $ 28 | ||
Estimated amortization expense for year two | 28 | ||
Estimated amortization expense for year three | 28 | ||
Estimated amortization expense for year four | 28 | ||
Estimated amortization expense for year five | 28 | ||
Selling, General and Administrative Expenses | |||
Finite Lived Intangible Assets [Line Items] | |||
Intangible assets amortization expense | $ 31 | $ 31 | $ 32 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Deferred financing transaction costs | $ (18) | $ (21) |
Original issue discounts | (2) | (3) |
Total debt | 2,112 | 2,233 |
Less: current portion | (25) | (25) |
Long-term debt | 2,087 | 2,208 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Debt | $ 2,132 | $ 2,257 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Feb. 29, 2020 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Line of credit facility, description | The 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 External Debt Facilities. | |
Quarterly unreimbursed letters of credit minimum percentage | 35.00% | |
Debt instrument, maturity period | Feb. 28, 2025 | |
Letters of credit outstanding | $ 8,000,000 | |
Outstanding borrowings under revolving facility | $ 0 | |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, maturity period | Feb. 28, 2027 | |
Debt instrument, periodic payment | $ 6,000,000 | |
Debt instrument, voluntary principal payments | $ 100,000,000 | |
External Debt Facilities | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 1.75% | |
External Debt Facilities | Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, maximum borrowing capacity | $ 2,475,000,000 | |
External Debt Facilities | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, maximum borrowing capacity | 250,000,000 | |
External Debt Facilities | IPO Settlement Facility | ||
Debt Instrument [Line Items] | ||
Extinguishment of debt | $ 1,168,000,000 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Amortization of deferred financing transaction costs | $ 4 | $ 4 | $ 1 |
Interest expense, related party borrowings | 5 | 140 | |
Interest income, related party receivables | (33) | ||
Other | 3 | 1 | |
Interest expense, net | 48 | 70 | 209 |
Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Interest expense | $ 41 | 52 | |
PEI Group U.S. Term Loan | |||
Debt Instrument [Line Items] | |||
Interest expense | $ 8 | $ 101 |
Debt - Schedule of Required Fut
Debt - Schedule of Required Future Repayments on Debt Outstanding (Details) $ in Millions | Dec. 31, 2021USD ($) |
Maturities Of Long Term Debt [Abstract] | |
2022 | $ 25 |
2023 | 25 |
2024 | 25 |
2025 | 25 |
2026 | 25 |
Thereafter | 2,007 |
Total long-term debt | $ 2,132 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee Lease Description [Line Items] | |||
Lease term | Leases with an initial term of 12 months or less are not recorded in our consolidated balance sheets and we recognize lease expense for these leases on a straight-line basis over the lease term. | ||
Lease not yet commenced description | there were no material lease transactions that we have entered into but have not yet commenced. | ||
Recognition of ROU assets | $ 9 | $ 31 | |
Recognition of lease liabilities | 9 | 31 | |
Payments for operating lease liabilities | $ 15 | $ 14 | $ 10 |
Weighted average remaining operating lease term | 5 years 5 months 1 day | ||
Weighted average discount rate for operating leases | 5.09% | ||
Maximum | |||
Lessee Lease Description [Line Items] | |||
Remaining lease term | 8 years | ||
Options to renew lease term | 15 years |
Leases - Summary of Lease Costs
Leases - Summary of Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease Cost [Abstract] | |||
Operating lease costs | $ 15 | $ 16 | $ 11 |
Variable lease costs | 1 | 1 | 1 |
Short-term lease costs | 3 | 3 | 5 |
Total lease costs | $ 19 | $ 20 | $ 17 |
Leases - Summary of Future Leas
Leases - Summary of Future Lease Payments Under Non-Cancellable Leases (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Lease Cost [Abstract] | ||
2022 | $ 14 | |
2023 | 12 | |
2024 | 12 | |
2025 | 10 | |
2026 | 6 | |
Thereafter | 11 | |
Total undiscounted lease payments | 65 | |
Less: imputed interest | (8) | |
Operating lease liabilities | $ 57 | $ 64 |
Leases - Summary of Operating L
Leases - Summary of Operating Lease Liabilities and ROU Assets Included in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets And Liabilities Lessee [Abstract] | ||
Accrued and other current liabilities | $ 11 | $ 13 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued and other current liabilities | Accrued and other current liabilities |
Long-term operating lease liabilities | $ 46 | $ 51 |
Operating lease liabilities | 57 | 64 |
Operating lease right-of-use assets, net | $ 55 | $ 61 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - Interest Rate Swaps - Cash Flow Hedges - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | |
Derivative Instruments Gain Loss [Line Items] | ||
Aggregate notional amount | $ 1,650 | $ 800 |
Minimum | ||
Derivative Instruments Gain Loss [Line Items] | ||
Derivative, annual LIBO rate | 0.18% | |
Derivative, effective interest rate | 1.93% | |
Cash flow hedge contracts period | 1 year | |
Maximum | ||
Derivative Instruments Gain Loss [Line Items] | ||
Derivative, annual LIBO rate | 0.47% | |
Derivative, effective interest rate | 2.22% | |
Cash flow hedge contracts period | 4 years |
Benefit Plans - Additional Info
Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |||
Contributed to pension plan | $ 2 | ||
Eligible employees vesting period of service | 5 years | ||
Expense relating to defined contribution plans | $ 26 | $ 24 | $ 20 |
Expected contributions for the next fiscal year | $ 3 |
Benefit Plans - Schedule of Cha
Benefit Plans - Schedule of Changes in and Amount of Accumulated Postretirement Benefit Obligation (Details) - Postretirement Benefit Plan - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Balance as of beginning of period | $ 54 | $ 51 |
Service cost | 1 | 1 |
Interest cost | 1 | 2 |
Benefits paid | (3) | (4) |
Actuarial (gains) losses | (5) | 4 |
Balance as of end of period | $ 48 | $ 54 |
Benefit Plans - Schedule of Acc
Benefit Plans - Schedule of Accrued Benefit Obligation Included in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Defined Benefit Plan Disclosure [Line Items] | ||
Accrued and other current liabilities | $ 160 | $ 181 |
Long-term postretirement benefit obligation | 50 | 53 |
Postretirement Benefit Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accrued and other current liabilities | 3 | 3 |
Long-term postretirement benefit obligation | 45 | 51 |
Total | $ 48 | $ 54 |
Benefit Plans - Schedule of A_2
Benefit Plans - Schedule of Accrued Benefit Obligation Recorded in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Deferred income tax (expense) benefit | $ 22 | $ 68 | |
Postretirement Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial gain (loss) | 15 | 10 | $ 15 |
Deferred income tax (expense) benefit | (3) | (2) | (4) |
Accumulated other comprehensive income | 12 | 8 | $ 11 |
Postretirement Benefit Plan | Changes | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial gain (loss) | 5 | (5) | |
Deferred income tax (expense) benefit | (1) | 2 | |
Accumulated other comprehensive income | $ 4 | $ (3) |
Benefit Plans - Schedule of Wei
Benefit Plans - Schedule of Weighted-Average Assumptions to Determine Postretirement Benefit Obligations (Details) - Postretirement Benefit Plan | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 2.90% | 2.54% |
Health care cost trend rate assumed for next year | 6.60% | 6.90% |
Ultimate trend rate | 4.50% | 4.50% |
Year that the rate reaches the ultimate trend rate | 2029 | 2029 |
Benefit Plans - Schedule of W_2
Benefit Plans - Schedule of Weighted-Average Assumptions to Determine Net Periodic Postretirement Health Care Cost (Details) - Net Periodic Postretirement Health Care Cost | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 2.54% | 3.24% | 4.37% |
Health care cost trend rate assumed for next year | 6.90% | 7.20% | 7.70% |
Ultimate trend rate | 4.50% | 4.50% | 4.50% |
Year that the rate reaches the ultimate trend rate | 2029 | 2029 | 2029 |
Benefit Plans - Schedule of Est
Benefit Plans - Schedule of Estimated Future Benefit Payments (Details) $ in Millions | Dec. 31, 2021USD ($) |
Compensation And Retirement Disclosure [Abstract] | |
2022 | $ 3 |
2023 | 3 |
2024 | 3 |
2025 | 3 |
2026 | 3 |
2027-2031 | $ 14 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award Line Items | ||
Percentage of employees can satisfied the service condition | 33.33% | |
Minimum period of employees need to continued employment | 3 years | |
Number of common stock available for issuance | 10.5 | |
Shares issued | 0.4 | 0.4 |
Stock-based compensation expense | $ 4 | $ 5 |
RSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award Line Items | ||
Shares granted | 0.2 | 0.3 |
PSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award Line Items | ||
Shares granted | 0.2 | 0.2 |
RSUs and PSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award Line Items | ||
Shares granted | 0.3 | 0.5 |
Unrecognized compensation expense | $ 6 | |
Unrecognized stock-based compensation expense, weighted-average recognition period | 1 year 4 months 24 days | |
Shares issued | 0.4 | 0.4 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Activity for RSUs and PSUs (Details) - $ / shares shares in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award Line Items | ||
Unvested, Beginning balance | 0.4 | |
Unvested, Ending balance | 0.4 | 0.4 |
RSUs and PSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award Line Items | ||
Unvested, Beginning balance | 0.4 | |
Granted | 0.3 | 0.5 |
Forfeited | (0.1) | |
Vested | (0.1) | |
PSU performance adjustment | (0.2) | |
Unvested, Ending balance | 0.4 | 0.4 |
Unvested, Beginning balance | $ 29 | |
Granted | 30 | $ 29 |
Forfeited | 27 | |
Vested | 28 | |
PSU performance adjustment | 30 | |
Unvested, Ending balance | $ 29 | $ 29 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities - Summary of Accrued and Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Liabilities And Other Liabilities [Abstract] | ||
Trade promotion allowances | $ 40 | $ 35 |
Accrued personnel costs | 34 | 63 |
Other | 86 | 83 |
Accrued and other current liabilities | $ 160 | $ 181 |
Other Expense, Net - Summary of
Other Expense, Net - Summary of Other Expense, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other Expense Net [Abstract] | |||
Factoring discount | $ 25 | ||
Allocated related party management fee | 10 | ||
IPO and separation-related costs | $ 14 | $ 31 | 31 |
Other | (1) | (2) | (1) |
Other expense, net | $ 13 | $ 29 | $ 65 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Summary of Changes in Balances for Each Component of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning balance | $ 1,615 | $ (818) | $ (1,027) |
Other comprehensive income (loss) | 9 | (4) | (5) |
Ending balance | 1,756 | 1,615 | (818) |
Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance as of beginning of period | (6) | (6) | (7) |
Currency translation adjustments | 1 | ||
Other comprehensive income (loss) | 1 | ||
Balance as of end of period | (6) | (6) | (6) |
Employee Benefit Plans | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance as of beginning of period | 8 | 11 | 14 |
Adoption of new accounting principle | 3 | ||
Net actuarial gain (loss) arising during period | 6 | (4) | (5) |
Deferred tax (expense) benefit on net actuarial gain (loss) | (1) | 2 | 1 |
Amortization of actuarial gain | (1) | (1) | (2) |
Other comprehensive income (loss) | 4 | (3) | (6) |
Balance as of end of period | 12 | 8 | 11 |
Interest Rate Derivatives | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance as of beginning of period | (1) | ||
Gain (loss) arising during period, net of income tax | 5 | (1) | |
Other comprehensive income (loss) | 5 | (1) | |
Balance as of end of period | 4 | (1) | |
Accumulated Other Comprehensive Income | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning balance | 1 | 5 | 7 |
Adoption of new accounting principle | 3 | ||
Other comprehensive income (loss) | 9 | (4) | (5) |
Ending balance | $ 10 | $ 1 | $ 5 |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of Income Before Income Tax (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income before income taxes: | |||
United States | $ 424 | $ 511 | $ 300 |
International | 6 | 5 | 1 |
Income before income taxes | $ 430 | $ 516 | $ 301 |
Income Taxes - Summary of Signi
Income Taxes - Summary of Significant Components of Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current | |||
Foreign | $ 1 | $ 1 | |
Total current income tax expense | 84 | 85 | $ 76 |
Deferred | |||
Foreign | 1 | ||
Total deferred income tax expense | 22 | 68 | |
Total income tax expense | 106 | 153 | 76 |
United States | |||
Current | |||
Federal | 69 | 70 | 68 |
State | 14 | 14 | 8 |
Deferred | |||
Federal | 19 | 54 | 3 |
State | $ 3 | $ 13 | $ (3) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax [Line Items] | |||
U.S. Federal statutory income tax rate | 21.00% | 21.00% | 21.00% |
Valuation allowances | $ 6 | $ 5 | |
Taxes paid | 91 | 76 | $ 4 |
State | |||
Income Tax [Line Items] | |||
Valuation allowances | $ 4 | $ 5 |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation of Income Taxes Computed at U.S. Federal Statutory Income Tax Rate to Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
U.S. Federal income tax expense at the statutory rate | $ 90 | $ 108 | $ 63 |
U.S. State income tax expense | 15 | 17 | 2 |
Non-deductible expenses | 2 | 6 | |
CARES Act | 27 | ||
Return to provision adjustments | 1 | (2) | 3 |
Other | 1 | 2 | |
Total income tax expense | $ 106 | $ 153 | $ 76 |
Income Taxes - Summary of Com_2
Income Taxes - Summary of Components of Net Deferred Income Tax Liability (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||
Employee benefits | $ 26 | $ 24 |
Lease obligations | 13 | 15 |
Inventory | 9 | 7 |
Reserves | 4 | 2 |
Tax losses | 4 | 4 |
Tax credits | 4 | |
Total deferred tax assets | 56 | 56 |
Valuation allowance | (6) | (5) |
Total deferred tax assets after valuation allowance | 50 | 51 |
Deferred tax liabilities | ||
Intangible assets | (293) | (291) |
Property, plant and equipment | (93) | (72) |
Lease right-of-use assets | (13) | (14) |
Other | (2) | |
Total deferred tax liabilities | (401) | (377) |
Net deferred tax liabilities | $ (351) | $ (326) |
Income Taxes - Summary of State
Income Taxes - Summary of State and Foreign Net Operating Loss Carryforwards on Gross Basis and Tax Credit Carryforwards (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax [Line Items] | ||
Total tax credit carryforwards | $ 4 | |
Expires within 5 Years | ||
Income Tax [Line Items] | ||
Total tax credit carryforwards | 4 | |
State and Foreign Net Operating Loss Carryforwards | ||
Income Tax [Line Items] | ||
Total net operating loss carryforwards | $ 42 | 49 |
State and Foreign Net Operating Loss Carryforwards | Expires after 5 Years or No Expiration | ||
Income Tax [Line Items] | ||
Total net operating loss carryforwards | $ 42 | $ 49 |
Income Taxes - Summary of Activ
Income Taxes - Summary of Activity Related to Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Balance as of beginning of the year | $ 4 | $ 2 | $ 1 |
Increase associated with tax positions taken during the current year | 1 | 2 | 1 |
Ending unrecognized tax benefits | $ 5 | $ 4 | $ 2 |
Segment Information - Additiona
Segment Information - Additional Information (Details) - Segment | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 4 | ||
Customer and its Affiliates | Net Revenue | Major Customers | |||
Segment Reporting Information [Line Items] | |||
Net revenue, percentage | 44.00% | 43.00% | 43.00% |
Segment Information - Summary o
Segment Information - Summary of Adjusted EBITDA (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 3,556,000,000 | $ 3,263,000,000 | $ 3,032,000,000 | |
Adjusted EBITDA | 601,000,000 | 717,000,000 | 655,000,000 | |
Depreciation and amortization | 109,000,000 | 99,000,000 | 91,000,000 | |
Capital expenditures | $ 0 | 141,000,000 | 143,000,000 | 113,000,000 |
Total assets | 4,812,000,000 | 4,722,000,000 | ||
Net Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 3,556,000,000 | 3,263,000,000 | 3,032,000,000 | |
Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 3,577,000,000 | 3,273,000,000 | 3,047,000,000 | |
Adjusted EBITDA | 634,000,000 | 758,000,000 | 668,000,000 | |
Depreciation and amortization | 76,000,000 | 68,000,000 | 63,000,000 | |
Capital expenditures | 136,000,000 | 125,000,000 | 105,000,000 | |
Total assets | 1,264,000,000 | 1,042,000,000 | ||
Operating Segment | Net Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 3,565,000,000 | 3,263,000,000 | 3,032,000,000 | |
Operating Segment | Intersegment Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 12,000,000 | 10,000,000 | 15,000,000 | |
Operating Segment | Reynolds Cooking & Baking | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,314,000,000 | 1,159,000,000 | 1,076,000,000 | |
Adjusted EBITDA | 255,000,000 | 254,000,000 | 209,000,000 | |
Depreciation and amortization | 21,000,000 | 20,000,000 | 20,000,000 | |
Capital expenditures | 42,000,000 | 33,000,000 | 34,000,000 | |
Total assets | 562,000,000 | 433,000,000 | ||
Operating Segment | Reynolds Cooking & Baking | Net Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,314,000,000 | 1,159,000,000 | 1,076,000,000 | |
Operating Segment | Hefty Waste & Storage | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 884,000,000 | 818,000,000 | 709,000,000 | |
Adjusted EBITDA | 173,000,000 | 236,000,000 | 190,000,000 | |
Depreciation and amortization | 18,000,000 | 15,000,000 | 13,000,000 | |
Capital expenditures | 22,000,000 | 30,000,000 | 41,000,000 | |
Total assets | 290,000,000 | 248,000,000 | ||
Operating Segment | Hefty Waste & Storage | Net Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 876,000,000 | 809,000,000 | 695,000,000 | |
Operating Segment | Hefty Waste & Storage | Intersegment Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 8,000,000 | 9,000,000 | 14,000,000 | |
Operating Segment | Hefty Tableware | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 815,000,000 | 763,000,000 | 751,000,000 | |
Adjusted EBITDA | 137,000,000 | 170,000,000 | 178,000,000 | |
Depreciation and amortization | 16,000,000 | 14,000,000 | 9,000,000 | |
Capital expenditures | 19,000,000 | 24,000,000 | 6,000,000 | |
Total assets | 165,000,000 | 157,000,000 | ||
Operating Segment | Hefty Tableware | Net Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 815,000,000 | 763,000,000 | 751,000,000 | |
Operating Segment | Presto Products | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 564,000,000 | 533,000,000 | 511,000,000 | |
Adjusted EBITDA | 69,000,000 | 98,000,000 | 91,000,000 | |
Depreciation and amortization | 21,000,000 | 19,000,000 | 21,000,000 | |
Capital expenditures | 53,000,000 | 38,000,000 | 24,000,000 | |
Total assets | 247,000,000 | 204,000,000 | ||
Operating Segment | Presto Products | Net Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 560,000,000 | 532,000,000 | 510,000,000 | |
Operating Segment | Presto Products | Intersegment Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 4,000,000 | 1,000,000 | 1,000,000 | |
Unallocated | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | (21,000,000) | (10,000,000) | (15,000,000) | |
Adjusted EBITDA | (33,000,000) | (41,000,000) | (13,000,000) | |
Depreciation and amortization | 33,000,000 | 31,000,000 | 28,000,000 | |
Capital expenditures | 5,000,000 | 18,000,000 | 8,000,000 | |
Total assets | 3,548,000,000 | 3,680,000,000 | ||
Unallocated | Net Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | (9,000,000) | |||
Unallocated | Intersegment Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | $ (12,000,000) | $ (10,000,000) | $ (15,000,000) |
Segment Information - Summary_2
Segment Information - Summary of Adjusted EBITDA (Parenthetical) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting [Abstract] | ||||
Capital expenditures | $ 0 | $ 141,000,000 | $ 143,000,000 | $ 113,000,000 |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Adjusted EBITDA to Consolidated GAAP Income Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | $ 601 | $ 717 | $ 655 |
Adjustments to reconcile to GAAP income before income taxes | |||
Depreciation and amortization | (109) | (99) | (91) |
Interest expense, net | (48) | (70) | (209) |
Factoring discount | (25) | ||
Allocated related party management fee | (10) | ||
IPO and separation-related costs | (14) | (31) | (31) |
Unrealized gains on derivatives | 9 | ||
Other | (1) | 3 | |
Income before income taxes | 430 | 516 | 301 |
Segment Adjusted EBITDA | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | 634 | 758 | 668 |
Adjustments to reconcile to GAAP income before income taxes | |||
Depreciation and amortization | (76) | (68) | (63) |
Corporate / Unallocated Expenses | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | (33) | (41) | (13) |
Adjustments to reconcile to GAAP income before income taxes | |||
Depreciation and amortization | $ (33) | $ (31) | $ (28) |
Segment Information - Summary_3
Segment Information - Summary of Net Revenues by Product Line (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Net revenues | $ 3,556 | $ 3,263 | $ 3,032 |
Waste and Storage Products | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 1,448 | 1,351 | 1,220 |
Cooking Products | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 1,314 | 1,159 | 1,076 |
Tableware | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 815 | 763 | 751 |
Unallocated | |||
Segment Reporting Information [Line Items] | |||
Net revenues | $ (21) | $ (10) | $ (15) |
Segment Information - Summary_4
Segment Information - Summary of Geographic Data for Net Revenues and Long-Lived Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net revenues: | |||
Net revenues | $ 3,556 | $ 3,263 | $ 3,032 |
Long-lived assets | |||
Long-lived assets | 677 | 612 | |
United States | |||
Net revenues: | |||
Net revenues | 3,495 | 3,206 | 2,982 |
Long-lived assets | |||
Long-lived assets | 671 | 606 | |
Other | |||
Net revenues: | |||
Net revenues | 61 | 57 | $ 50 |
Long-lived assets | |||
Long-lived assets | $ 6 | $ 6 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Feb. 04, 2020 | Jan. 30, 2020 | Nov. 01, 2019 | Jun. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | |||||||
Revenues | $ 3,556,000,000 | $ 3,263,000,000 | $ 3,032,000,000 | ||||
Costs of sales | 2,745,000,000 | 2,290,000,000 | 2,152,000,000 | ||||
Repayments to related parties | 3,627,000,000 | 141,000,000 | |||||
Related party payables | (3,000,000) | (28,000,000) | (89,000,000) | ||||
Repayments from related parties | 151,000,000 | ||||||
Related party borrowings | 38,000,000 | 41,000,000 | |||||
PEI Group | |||||||
Related Party Transaction [Line Items] | |||||||
Revenues | 111,000,000 | 116,000,000 | 149,000,000 | ||||
Products purchased | 343,000,000 | 330,000,000 | 438,000,000 | ||||
Cash consideration | $ 112,000,000 | ||||||
Repayments of related party borrowings | $ 3,627,000,000 | $ 1,714,000,000 | |||||
Repayments to related parties | 141,000,000 | ||||||
Repayment of related party accrued interest | 22,000,000 | $ 8,000,000 | 655,000,000 | 18,000,000 | |||
Related party payables | $ 94,000,000 | ||||||
Long-term related party receivables | 0 | ||||||
Long-term related party borrowings | 2,214,000,000 | ||||||
Related party borrowings | 98,000,000 | ||||||
Related party non cash borrowings | 31,000,000 | ||||||
Accrued interest capitalized in to related party borrowings | 36,000,000 | ||||||
Related party transactions loans advanced | 170,000,000 | ||||||
Repayments from related parties | $ 151,000,000 | ||||||
Weighted average interest rate | 2.20% | ||||||
Repurchase of accounts receivable | 264,000,000 | ||||||
Cash payments to acquire receivables | 240,000,000 | ||||||
Increase in related party borrowings | $ 2,001,000,000 | ||||||
Related party borrowings | $ 831,000,000 | ||||||
PEI Group | Selling, General and Administrative Expenses | |||||||
Related Party Transaction [Line Items] | |||||||
Transition services | 6,000,000 | 10,000,000 | |||||
PFL | |||||||
Related Party Transaction [Line Items] | |||||||
Dividend paid | 143,000,000 | 92,000,000 | |||||
Freight and Warehousing Costs | PEI Group | |||||||
Related Party Transaction [Line Items] | |||||||
Costs of sales | $ 60,000,000 | $ 80,000,000 | $ 134,000,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - $ / shares | Jan. 27, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | |||
Cash dividend per common share | $ 0.92 | $ 0.59 | |
Subsequent Events | |||
Subsequent Event [Line Items] | |||
Cash dividend per common share | $ 0.23 | ||
Cash dividend per common share, date to be paid | Feb. 28, 2022 | ||
Cash dividend per common share, date of record | Feb. 14, 2022 |