Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 31, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-39205 | |
Entity Registrant Name | REYNOLDS CONSUMER PRODUCTS INC. | |
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, $0.001 par value | |
Trading Symbol | REYN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 210,138,321 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001786431 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Total net revenues | $ 930 | $ 940 | $ 1,764 | $ 1,814 |
Cost of sales | (674) | (712) | (1,306) | (1,430) |
Gross profit | 256 | 228 | 458 | 384 |
Selling, general and administrative expenses | (116) | (107) | (227) | (212) |
Other income (expense), net | 0 | (1) | 0 | (1) |
Income from operations | 140 | 120 | 231 | 171 |
Interest expense, net | (25) | (31) | (51) | (60) |
Income before income taxes | 115 | 89 | 180 | 111 |
Income tax expense | (18) | (23) | (35) | (28) |
Net income | $ 97 | $ 66 | $ 145 | $ 83 |
Earnings per share: | ||||
Basic (in USD per share) | $ 0.46 | $ 0.32 | $ 0.69 | $ 0.40 |
Diluted (in USD per share) | $ 0.46 | $ 0.32 | $ 0.69 | $ 0.40 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 210.1 | 210 | 210.1 | 210 |
Effect of dilutive securities (in shares) | 0.1 | 0 | 0.1 | 0 |
Diluted (in shares) | 210.2 | 210 | 210.2 | 210 |
Net revenues | ||||
Total net revenues | $ 914 | $ 922 | $ 1,726 | $ 1,774 |
Related party net revenues | ||||
Total net revenues | $ 16 | $ 18 | $ 38 | $ 40 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 97 | $ 66 | $ 145 | $ 83 |
Other comprehensive (loss) income, net of income taxes: | ||||
Currency translation adjustment | 0 | 0 | (1) | 0 |
Employee benefit plans | (2) | (1) | (3) | (2) |
Derivative instruments | 0 | 14 | 5 | 2 |
Other comprehensive (loss) income, net of income taxes | (2) | 13 | 1 | 0 |
Comprehensive income | $ 95 | $ 79 | $ 146 | $ 83 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Cash and cash equivalents | $ 101 | $ 115 |
Accounts receivable (net of allowance for doubtful accounts of $1 and $1) | 371 | 347 |
Other receivables | 5 | 7 |
Inventories | 584 | 524 |
Other current assets | 45 | 41 |
Total current assets | 1,113 | 1,041 |
Property, plant and equipment (net of accumulated depreciation of $938 and $897) | 729 | 732 |
Operating lease right-of-use assets, net | 79 | 56 |
Goodwill | 1,895 | 1,895 |
Intangible assets, net | 987 | 1,001 |
Other assets | 62 | 55 |
Total assets | 4,865 | 4,780 |
Liabilities | ||
Current operating lease liabilities | 19 | 16 |
Income taxes payable | 1 | 22 |
Accrued and other current liabilities | 164 | 187 |
Total current liabilities | 523 | 478 |
Long-term debt | 1,784 | 1,832 |
Long-term operating lease liabilities | 63 | 42 |
Deferred income taxes | 359 | 357 |
Long-term postretirement benefit obligation | 16 | 16 |
Other liabilities | 80 | 72 |
Total liabilities | 2,825 | 2,797 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity | ||
Common stock, $0.001 par value; 2,000 shares authorized; 210.1 shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 1,404 | 1,396 |
Accumulated other comprehensive income | 51 | 50 |
Retained earnings | 585 | 537 |
Total stockholders’ equity | 2,040 | 1,983 |
Total liabilities and stockholders’ equity | 4,865 | 4,780 |
Related Party | ||
Assets | ||
Related party receivables | 7 | 7 |
Liabilities | ||
Accounts payable | 29 | 34 |
Nonrelated Party | ||
Liabilities | ||
Accounts payable | $ 310 | $ 219 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1 | $ 1 |
Property, plant and equipment, accumulated depreciation | $ 938 | $ 897 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 2,000 | 2,000 |
Common stock, shares issued (in shares) | 210.1 | 210.1 |
Common stock, shares outstanding (in shares) | 210.1 | 210.1 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Beginning balance at Dec. 31, 2022 | $ 1,868,000,000 | $ 0 | $ 1,385,000,000 | $ 431,000,000 | $ 52,000,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 17,000,000 | 17,000,000 | |||
Other comprehensive (loss) income, net of income taxes | (13,000,000) | (13,000,000) | |||
Dividends (per share declared and paid) | (48,000,000) | (48,000,000) | |||
Other | 1,000,000 | 1,000,000 | |||
Ending balance at Mar. 31, 2023 | 1,825,000,000 | 0 | 1,386,000,000 | 400,000,000 | 39,000,000 |
Beginning balance at Dec. 31, 2022 | 1,868,000,000 | 0 | 1,385,000,000 | 431,000,000 | 52,000,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 83,000,000 | ||||
Ending balance at Jun. 30, 2023 | 1,859,000,000 | 0 | 1,389,000,000 | 418,000,000 | 52,000,000 |
Beginning balance at Mar. 31, 2023 | 1,825,000,000 | 0 | 1,386,000,000 | 400,000,000 | 39,000,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 66,000,000 | 66,000,000 | |||
Other comprehensive (loss) income, net of income taxes | 13,000,000 | 13,000,000 | |||
Dividends (per share declared and paid) | (48,000,000) | (48,000,000) | |||
Other | 3,000,000 | 3,000,000 | |||
Ending balance at Jun. 30, 2023 | 1,859,000,000 | 0 | 1,389,000,000 | 418,000,000 | 52,000,000 |
Beginning balance at Dec. 31, 2023 | 1,983,000,000 | 0 | 1,396,000,000 | 537,000,000 | 50,000,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 49,000,000 | 49,000,000 | |||
Other comprehensive (loss) income, net of income taxes | 3,000,000 | 3,000,000 | |||
Dividends (per share declared and paid) | (48,000,000) | (48,000,000) | |||
Other | 2,000,000 | 3,000,000 | (1,000,000) | ||
Ending balance at Mar. 31, 2024 | 1,989,000,000 | 0 | 1,399,000,000 | 537,000,000 | 53,000,000 |
Beginning balance at Dec. 31, 2023 | 1,983,000,000 | 0 | 1,396,000,000 | 537,000,000 | 50,000,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 145,000,000 | ||||
Ending balance at Jun. 30, 2024 | 2,040,000,000 | 0 | 1,404,000,000 | 585,000,000 | 51,000,000 |
Beginning balance at Mar. 31, 2024 | 1,989,000,000 | 0 | 1,399,000,000 | 537,000,000 | 53,000,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 97,000,000 | 97,000,000 | |||
Other comprehensive (loss) income, net of income taxes | (2,000,000) | (2,000,000) | |||
Dividends (per share declared and paid) | (48,000,000) | (48,000,000) | |||
Other | 4,000,000 | 5,000,000 | (1,000,000) | ||
Ending balance at Jun. 30, 2024 | $ 2,040,000,000 | $ 0 | $ 1,404,000,000 | $ 585,000,000 | $ 51,000,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends, per share, declared (in USD per share) | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.23 |
Dividends, per share, paid (in USD per share) | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.23 |
Stockholders' Equity Attributable to Parent | $ 2,040 | $ 1,989 | $ 1,859 | $ 1,825 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash provided by operating activities | ||
Net income | $ 145 | $ 83 |
Adjustments to reconcile net income to operating cash flows: | ||
Depreciation and amortization | 63 | 61 |
Deferred income taxes | 0 | 2 |
Stock compensation expense | 9 | 6 |
Change in assets and liabilities: | ||
Accounts receivable, net | (23) | (38) |
Other receivables | 2 | 11 |
Related party receivables | 0 | 0 |
Inventories | (60) | 108 |
Accounts payable | 92 | (15) |
Related party payables | (5) | (12) |
Income taxes payable / receivable | (22) | (11) |
Accrued and other current liabilities | (21) | 19 |
Other assets and liabilities | 3 | (7) |
Net cash provided by operating activities | 183 | 207 |
Cash used in investing activities | ||
Acquisition of property, plant and equipment | (48) | (51) |
Net cash used in investing activities | (48) | (51) |
Cash used in financing activities | ||
Repayment of long-term debt | (50) | (12) |
Dividends paid | (96) | (96) |
Other financing activities | (3) | (3) |
Net cash used in financing activities | (149) | (111) |
Net (decrease) increase in cash and cash equivalents | (14) | 45 |
Cash and cash equivalents at beginning of period | 115 | 38 |
Cash and cash equivalents at end of period | 101 | 83 |
Cash paid: | ||
Interest - long-term debt, net of interest rate swaps | 51 | 58 |
Income taxes | $ 56 | $ 36 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Description of Business: Reynolds Consumer Products Inc. and its subsidiaries (“we”, “us” or “our”) produce and sell products across three broad categories: cooking products, waste and storage products and tableware. We sell our products under brands such as Reynolds and Hefty, and also under store brands. Our product portfolio includes aluminum foil, wraps, disposable bakeware, trash bags, food storage bags and disposable tableware. We report four business segments: Reynolds Cooking & Baking; Hefty Waste & Storage; Hefty Tableware; and Presto Products. Basis of Presentation: We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for comprehensive annual financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2023, and should be read in conjunction with the disclosures therein. In our opinion, these interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to state fairly the financial condition, results of operations and cash flows for the periods presented. Operating results for interim periods are not necessarily indicative of annual operating results. Non-Cash Lease Transactions: We recorded $32 million in new operating lease right-of-use assets obtained in exchange for lease liabilities during the six months ended June 30, 2024. New operating lease right-of-use assets obtained in exchange for lease liabilities during the six months ended June 30, 2023, were not material. New finance lease right-of-use assets obtained in exchange for lease liabilities for the six months ended June 30, 2024 and 2023, were not material. Supply Chain Financing: In March 2023, we initiated a voluntary Supply Chain Finance program (the “SCF”) with a global financial institution (the “SCF Bank”). Under the SCF, qualifying suppliers may elect to sell their receivables from us to the SCF Bank. These participating suppliers negotiate their receivables sales arrangements directly with the SCF Bank. We are not party to those agreements, nor do we provide any security or other forms of guarantees to the SCF Bank. The participation in the program is at the sole discretion of the supplier, we have no economic interest in a supplier’s decision to enter into the agreement and have no direct financial relationship with the SCF Bank, as it relates to the SCF. Once a qualifying supplier elects to participate in the SCF and reaches an agreement with the SCF Bank, they elect which individual invoices they sell to the SCF Bank. The terms of our payment obligations are not impacted by a supplier’s participation in the SCF and as such, the SCF has no impact on our balance sheets, cash flows, or liquidity. Our payment terms with our suppliers for similar services and materials within individual markets are consistent between suppliers that elect to participate in the SCF and those that do not participate. All outstanding amounts related to suppliers participating in the SCF are recorded within accounts payable in our condensed consolidated balance sheet and associated payments are included as an operating cash flow in the condensed consolidated statement of cash flows. As of June 30, 2024, the amount of obligations outstanding that we have confirmed as valid under the SCF was $9 million. As of December 31, 2023, the amount of obligations outstanding that we had confirmed as valid under the SCF was $19 million. |
New Accounting Standards
New Accounting Standards | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
New Accounting Standards | New Accounting Standards Recently Adopted Accounting Guidance: In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations . These amendments require disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. These amendments were effective for fiscal years beginning after December 31, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 31, 2023. We adopted the standard as of January 1, 2023, other than the amendment on rollforward information, which will be adopted prospectively in our Annual Report on Form 10-K for the year ending December 31, 2024 as required. The adoption relates to disclosure only, and does not have an impact on our condensed consolidated financial statements. Accounting Guidance Issued But Not Yet Adopted: In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280) , which enhances disclosures about significant segment expenses by requiring disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently assessing the impact of this standard on our consolidated financial statements. In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740) , which enhances disclosures within the income tax rate reconciliation and information disclosed related to income taxes paid, and requires disaggregation of certain financial statement captions between domestic, foreign, federal and state. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently assessing the impact of this standard on our consolidated financial statements. In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors , which will require public companies to include climate-related disclosures in their annual reports and registration statements. The final rules will require, among other matters, information about climate-related risks that have materially impacted, or are reasonably likely to have a material impact on, a registrant, including on its strategy, results of operations, or financial condition. In addition, under the final rules, certain disclosures related to severe weather events and other natural conditions will be required in the audited financial statements. The disclosure requirements related to financial statements are expected to be effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We are currently assessing the impact of these rules on our consolidated financial statements and related disclosures. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: June 30, December 31, (in millions) Raw materials $ 142 $ 153 Work in progress 58 60 Finished goods 327 260 Spare parts 57 51 Inventories $ 584 $ 524 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
Debt Instruments [Abstract] | |
Debt | Debt Long-term debt consisted of the following: June 30, December 31, (in millions) Term loan facility $ 1,795 $ 1,845 Deferred financing transaction costs (10) (12) Original issue discounts (1) (1) 1,784 1,832 Less: current portion — — Long-term debt $ 1,784 $ 1,832 External Debt Facilities In February 2020, we entered into new external debt facilities (“External Debt Facilities”), which consist of (i) a $2,475 million senior secured term loan facility (“Term Loan Facility”); and (ii) a $250 million senior secured revolving credit facility (“Revolving Facility”). In February 2023, we amended the External Debt Facilities (“Amendment No.1”) which replaced the interest rate benchmark from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”). Additionally, in November 2023, we further amended the External Debt Facilities (“Amendment No. 2”) to extend the maturity of the Revolving Facility by one year. Other than the foregoing, the material terms of the External Debt Facilities, as amended by Amendment No. 1 and Amendment No. 2 (“Amended External Debt Facilities”) remain unchanged, and our election to use practical expedients under ASU 2020-04 and ASU 2021-01 resulted in no material impacts on our condensed consolidated financial statements. Borrowings under the Amended External Debt Facilities bear interest at a rate per annum equal to, at our option, either a base rate plus an applicable margin of 0.75% or a SOFR plus an applicable margin of 1.75%. We have entered into a series of interest rate swaps to hedge a portion of the interest rate exposure resulting from these borrowings. Refer to Note 5 – Financial Instruments for further details. The Amended External Debt Facilities contain a springing financial covenant requiring compliance with a ratio of first lien net indebtedness to consolidated EBITDA, applicable solely to the Revolving Facility. The financial covenant is tested on the last day of any fiscal quarter only if the aggregate principal amount of borrowings under the Revolving Facility and drawn but unreimbursed letters of credit exceed 35% of the total amount of commitments under the Revolving Facility on such day. We are currently in compliance with the covenants contained in our Amended External Debt Facilities. If an event of default occurs, the lenders under the Amended External Debt Facilities are entitled to take various actions, including the acceleration of amounts due under the Amended External Debt Facilities and all actions permitted to be taken by secured creditors. Term Loan Facility The Term Loan Facility matures in February 2027. The Term Loan Facility amortizes in equal quarterly installments of $6 million, which commenced in June 2020, with the balance payable on maturity. During the year ended December 31, 2023, we made voluntary principal payments of $250 million related to our Term Loan Facility, which were first applied to pay the remaining quarterly amortization payments in full, with the residual balance applied to the outstanding principal balance due at maturity. During the three months ended June 30, 2024, we made a voluntary principal payment of $50 million related to our Term Loan Facility, which was applied to the outstanding principal balance due at maturity. Revolving Facility In November 2023, we amended the External Debt Facilities to extend the maturity date of the Revolving Facility by one year. The Revolving Facility matures in February 2026 and includes a sub-facility for letters of credit. As of June 30, 2024, we had no outstanding borrowings under the Revolving Facility, and we had $6 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility. Fair Value of Our Long-Term Debt The fair value of our long-term debt as of June 30, 2024, which is a Level 2 fair value measurement, approximates the carrying value due to the variable market interest rate and the stability of our credit profile. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2024 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Financial Instruments Interest Rate Derivatives During 2020 and 2022, we entered into a series of interest rate swaps to fix the LIBOR of our External Debt Facilities. In February 2023, we amended our interest rate swaps to replace the interest rate benchmark from the LIBOR to SOFR. Other than the foregoing, the material terms of the interest rate swap agreements remained unchanged, and our election to use practical expedients under ASUs 2020-04 and 2021-01, resulted in no material impacts on our condensed consolidated financial statements. The aggregate notional amount of the interest rate swaps still in effect as of June 30, 2024 was $1,150 million, and the SOFR is fixed at an annual rate of 0.40% to 3.40% (for an annual effective interest rate of 2.15% to 5.15%, including margin). The interest rate swaps outstanding as of June 30, 2024 hedge a portion of the interest rate exposure resulting from our Term Loan Facility for a period of approximately one The following table provides the notional amounts, the annual rates, the weighted average annual effective rates, and the fair value of our interest rate derivatives: (In millions) Notional Amount Annual Rate Weighted Average Annual Fair Value - Other Current Assets Fair Value - Other Assets As of June 30, 2024 $ 1,150 2.15% to 5.15% 4.38 % $ 26 $ 8 As of December 31, 2023 $ 1,150 2.15% to 5.15% 4.38 % $ 23 $ 7 |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Our equity incentive plan was established in 2020, for purposes of granting stock-based compensation awards to certain members of our senior management, our non-executive directors and to certain employees, to incentivize their performance and align their interests with ours. We have granted restricted stock units (“RSUs”) to certain employees and non-employee directors that have a service-based vesting condition. In addition, we have granted performance stock units (“PSUs”) to certain members of management that have a performance-based vesting condition. We account for forfeitures of outstanding but unvested grants in the period they occur. A maximum of 10.5 million shares of common stock were initially available for issuance under equity incentive awards granted pursuant to the plan. In the three and six months ended June 30, 2024, zero and 0.3 million RSUs and zero and 0.3 million PSUs were granted, respectively. As of June 30, 2024, there were stock-based compensation awards representing 1.4 million shares outstanding compared to 0.8 million shares outstanding as of December 31, 2023. Stock-based compensation expense was $5 million and $9 million for the three and six months ended June 30, 2024, respectively, compared to $3 million and $6 million in the comparable prior year periods. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings: We are from time to time party to litigation, legal proceedings and tax examinations arising from our operations. Most of these matters involve allegations of damages against us relating to employment matters, consumer complaints, advertising/labelling claims, personal injury and commercial or contractual disputes. We record estimates for claims and proceedings that constitute a present obligation when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of such obligation can be made. While it is not possible to predict the outcome of any of these matters, based on our assessment of the facts and circumstances as of June 30, 2024, we do not believe any of these matters, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations or cash flows. However, actual outcomes may differ from those expected and could have a material effect on our financial position, results of operations or cash flows in a future period. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table summarizes the changes in our balances of each component of accumulated other comprehensive income. (In millions) Currency Translation Adjustments Employee Benefit Plans Derivative Instruments Accumulated Other Comprehensive Income Balance as of December 31, 2022 $ (7) $ 23 $ 36 $ 52 Loss arising during the period — — (10) (10) Reclassification to earnings — (1) (6) (7) Effect of deferred taxes — — 4 4 Balance as of March 31, 2023 $ (7) $ 22 $ 24 $ 39 Gain arising during the period — — 25 25 Reclassification to earnings — (1) (7) (8) Effect of deferred taxes — — (4) (4) Balance as of June 30, 2023 $ (7) $ 21 $ 38 $ 52 Balance as of December 31, 2023 $ (7) $ 34 $ 23 $ 50 Gain (loss) arising during the period (1) — 15 14 Reclassification to earnings — (1) (8) (9) Effect of deferred taxes — — (2) (2) Balance as of March 31, 2024 $ (8) $ 33 $ 28 $ 53 Gain arising during the period — — 8 8 Reclassification to earnings — (2) (8) (10) Effect of deferred taxes — — — — Balance as of June 30, 2024 $ (8) $ 31 $ 28 $ 51 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended June 30, 2024, we recorded income tax expense of $18 million on income before income taxes of $115 million, or an effective tax rate of 16.0%, compared to income tax expense of $23 million on income before income taxes of $89 million, or an effective tax rate of 25.4%, for the three months ended June 30, 2023. For the six months ended June 30, 2024, we recorded income tax expense of $35 million on income before income taxes of $180 million, or an effective tax rate of 19.2%, compared to income tax expense of $28 million on income before income taxes of $111 million, or an effective tax rate of 25.3% for the six months ended June 30, 2023. For the three and six months ended June 30, 2024, our income tax expense included a discrete tax benefit for the remeasurement of deferred tax liabilities due to a change in our state tax rates after apportionment. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our Chief Executive Officer, who has been identified as our Chief Operating Decision Maker (“CODM”), has evaluated how he views and measures our performance. In applying the criteria set forth in the standards for reporting information about segments in financial statements, we have determined that we have four reportable segments - Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware and Presto Products. The key factors used to identify these reportable segments are the organization and alignment of our internal operations and the nature of our products. This reflects how our CODM monitors performance, allocates capital and makes strategic and operational decisions. Our segments are described as follows: Reynolds Cooking & Baking Our Reynolds Cooking & Baking segment produces branded and store brand aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags and slow cooker liners. Our branded products are sold under the Reynolds Wrap, Reynolds KITCHENS and EZ Foil brands in the United States and selected international markets, under the ALCAN brand in Canada and under the Diamond brand outside of North America. Hefty Waste & Storage Our Hefty Waste & Storage segment produces both branded and store brand trash and food storage bags. Our branded products are sold under the Hefty Ultra Strong and Hefty Strong brands for trash bags, and as the Hefty and Baggies brands for our food storage bags. Hefty Tableware Our Hefty Tableware segment sells both branded and store brand disposable and compostable plates, bowls, platters, cups and cutlery. Our Hefty branded products include dishes and party cups. Presto Products Our Presto Products segment primarily sells store brand products in four main categories: food storage bags, trash bags, reusable storage containers and plastic wrap. Our Presto Products segment also includes our specialty business, which serves other consumer products companies by providing Fresh-Lock and Slide-Rite resealable closure systems. Information by Segment We present segment adjusted EBITDA (“Adjusted EBITDA”) as this is the financial measure by which management and our CODM allocate resources and analyze the performance of our reportable segments. Adjusted EBITDA represents each segment’s earnings before interest, tax, depreciation and amortization and may be further adjusted to exclude certain non-recurring costs, if applicable. Total assets by segment are those assets directly associated with the respective operating activities, comprising inventory, property, plant and equipment and operating lease right-of-use assets. Other assets, such as cash, accounts receivable and intangible assets, are monitored on an entity-wide basis and not included in segment information that is regularly reviewed by our CODM. Transactions between segments are at negotiated prices. Reynolds Hefty Hefty Presto Segment Unallocated (1) Total Three Months Ended June 30, 2024 (in millions) Net revenues $ 304 $ 236 $ 245 $ 147 $ 932 $ (2) $ 930 Intersegment revenues — 2 — 3 5 (5) — Total segment net revenues $ 304 $ 238 $ 245 $ 150 $ 937 $ (7) $ 930 Adjusted EBITDA 56 69 39 37 201 Depreciation and amortization 8 5 4 5 22 10 32 Reynolds Hefty Hefty Presto Segment Unallocated (1) Total Three Months Ended June 30, 2023 (in millions) Net revenues $ 321 $ 227 $ 251 $ 144 $ 943 $ (3) $ 940 Intersegment revenues — 2 — 1 3 (3) — Total segment net revenues $ 321 $ 229 $ 251 $ 145 $ 946 $ (6) $ 940 Adjusted EBITDA 40 62 45 28 175 Depreciation and amortization 7 5 4 5 21 9 30 Reynolds Hefty Hefty Presto Segment Unallocated (1) Total Six Months Ended June 30, 2024 (in millions) Net revenues $ 568 $ 462 $ 450 $ 287 $ 1,767 $ (3) $ 1,764 Intersegment revenues — 6 — 6 12 (12) — Total segment net revenues $ 568 $ 468 $ 450 $ 293 $ 1,779 $ (15) $ 1,764 Adjusted EBITDA 89 134 70 66 359 Depreciation and amortization 16 9 8 11 44 19 63 Reynolds Hefty Hefty Presto Segment Unallocated (1) Total Six Months Ended June 30, 2023 (in millions) Net revenues $ 604 $ 457 $ 475 $ 285 $ 1,821 $ (7) $ 1,814 Intersegment revenues — 6 — 3 9 (9) — Total segment net revenues $ 604 $ 463 $ 475 $ 288 $ 1,830 $ (16) $ 1,814 Adjusted EBITDA 43 117 76 47 283 Depreciation and amortization 14 10 8 11 43 18 61 Segment assets consisted of the following: Reynolds Hefty Hefty Presto Segment Unallocated (1) Total (in millions) As of June 30, 2024 $ 584 $ 274 $ 234 $ 242 $ 1,334 $ 3,531 $ 4,865 As of December 31, 2023 556 267 216 239 1,278 3,502 4,780 (1) Unallocated includes the elimination of intersegment revenues, other revenue adjustments and certain corporate costs, depreciation and amortization and assets not allocated to segments. Unallocated assets are comprised of cash, accounts receivable, other receivables, entity-wide property, plant and equipment, entity-wide operating lease right-of-use assets, goodwill, intangible assets, related party receivables and other assets. The following table presents a reconciliation of segment Adjusted EBITDA to GAAP income before income taxes: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions) (in millions) Segment Adjusted EBITDA $ 201 $ 175 $ 359 $ 283 Corporate / unallocated expenses (29) (25) (65) (51) 172 150 294 232 Adjustments to reconcile to GAAP income before income taxes Depreciation and amortization (32) (30) (63) (61) Interest expense, net (25) (31) (51) (60) Consolidated GAAP income before income taxes $ 115 $ 89 $ 180 $ 111 Information in Relation to Products Net revenues by product line are as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions) (in millions) Waste and storage products (1) $ 388 $ 374 $ 761 $ 751 Cooking products 304 321 568 604 Tableware 245 251 450 475 Unallocated (7) (6) (15) (16) Net revenues $ 930 $ 940 $ 1,764 $ 1,814 (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. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Packaging Finance Limited (“PFL”) owns the majority of our outstanding common stock and owns the majority of the outstanding common stock of Pactiv Evergreen Inc. and its subsidiaries (“PEI Group”). We sell and purchase various goods and services with PEI Group under contractual arrangements that expire over a variety of periods through December 31, 2027. During the year ended December 31, 2023 and the six months ended June 30, 2024, we amended these contractual arrangements with PEI Group, which, among other things, extended the expiration date for certain arrangements. Transactions between us and PEI Group are described below. For each of the three and six months ended June 30, 2024, revenues from products sold to PEI Group were $16 million and $38 million, respectively, compared to $18 million and $40 million in the comparable prior year periods. For the three and six months ended June 30, 2024, products purchased from PEI Group were $83 million and $163 million, respectively, compared to $93 million and $199 million in the comparable prior year periods. For the three and six months ended June 30, 2024, PEI Group charged us freight and warehousing costs of $7 million and $15 million, respectively, compared to $9 million and $18 million in the comparable prior year periods, which were included in cost of sales. The resulting related party receivables and payables are settled regularly in the normal course of business. Furthermore, $36 million of the dividends paid during each of the three months ended June 30, 2024 and June 30, 2023, and $72 million of the dividends paid during each of the six months ended June 30, 2024 and June 30, 2023, were paid to PFL. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Quarterly Cash Dividend On July 25, 2024, our Board of Directors approved a cash dividend of $0.23 per common share to be paid on August 30, 2024 to shareholders of record on August 16, 2024. Term Loan Facility Subsequent to June 30, 2024, we made a voluntary principal payment of $50 million related to our Term Loan Facility. Except as described above, there have been no events subsequent to June 30, 2024 which would require accrual or disclosure in these condensed consolidated financial statements. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||||
Net income | $ 97 | $ 49 | $ 66 | $ 17 | $ 145 | $ 83 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for comprehensive annual financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2023, and should be read in conjunction with the disclosures therein. In our opinion, these interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to state fairly the financial condition, results of operations and cash flows for the periods presented. Operating results for interim periods are not necessarily indicative of annual operating results. |
Supply Chain Financing | Supply Chain Financing: In March 2023, we initiated a voluntary Supply Chain Finance program (the “SCF”) with a global financial institution (the “SCF Bank”). Under the SCF, qualifying suppliers may elect to sell their receivables from us to the SCF Bank. These participating suppliers negotiate their receivables sales arrangements directly with the SCF Bank. We are not party to those agreements, nor do we provide any security or other forms of guarantees to the SCF Bank. The participation in the program is at the sole discretion of the supplier, we have no economic interest in a supplier’s decision to enter into the agreement and have no direct financial relationship with the SCF Bank, as it relates to the SCF. Once a qualifying supplier elects to participate in the SCF and reaches an agreement with the SCF Bank, they elect which individual invoices they sell to the SCF Bank. The terms of our payment obligations are not impacted by a supplier’s participation in the SCF and as such, the SCF has no impact on our balance sheets, cash flows, or liquidity. Our payment terms with our suppliers for similar services and materials within individual markets are consistent between suppliers that elect to participate in the SCF and those that do not participate. |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance: In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations . These amendments require disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. These amendments were effective for fiscal years beginning after December 31, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 31, 2023. We adopted the standard as of January 1, 2023, other than the amendment on rollforward information, which will be adopted prospectively in our Annual Report on Form 10-K for the year ending December 31, 2024 as required. The adoption relates to disclosure only, and does not have an impact on our condensed consolidated financial statements. Accounting Guidance Issued But Not Yet Adopted: In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280) , which enhances disclosures about significant segment expenses by requiring disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently assessing the impact of this standard on our consolidated financial statements. In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740) , which enhances disclosures within the income tax rate reconciliation and information disclosed related to income taxes paid, and requires disaggregation of certain financial statement captions between domestic, foreign, federal and state. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently assessing the impact of this standard on our consolidated financial statements. In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors , which will require public companies to include climate-related disclosures in their annual reports and registration statements. The final rules will require, among other matters, information about climate-related risks that have materially impacted, or are reasonably likely to have a material impact on, a registrant, including on its strategy, results of operations, or financial condition. In addition, under the final rules, certain disclosures related to severe weather events and other natural conditions will be required in the audited financial statements. The disclosure requirements related to financial statements are expected to be effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We are currently assessing the impact of these rules on our consolidated financial statements and related disclosures. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: June 30, December 31, (in millions) Raw materials $ 142 $ 153 Work in progress 58 60 Finished goods 327 260 Spare parts 57 51 Inventories $ 584 $ 524 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Instruments [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: June 30, December 31, (in millions) Term loan facility $ 1,795 $ 1,845 Deferred financing transaction costs (10) (12) Original issue discounts (1) (1) 1,784 1,832 Less: current portion — — Long-term debt $ 1,784 $ 1,832 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Investments, All Other Investments [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The following table provides the notional amounts, the annual rates, the weighted average annual effective rates, and the fair value of our interest rate derivatives: (In millions) Notional Amount Annual Rate Weighted Average Annual Fair Value - Other Current Assets Fair Value - Other Assets As of June 30, 2024 $ 1,150 2.15% to 5.15% 4.38 % $ 26 $ 8 As of December 31, 2023 $ 1,150 2.15% to 5.15% 4.38 % $ 23 $ 7 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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. (In millions) Currency Translation Adjustments Employee Benefit Plans Derivative Instruments Accumulated Other Comprehensive Income Balance as of December 31, 2022 $ (7) $ 23 $ 36 $ 52 Loss arising during the period — — (10) (10) Reclassification to earnings — (1) (6) (7) Effect of deferred taxes — — 4 4 Balance as of March 31, 2023 $ (7) $ 22 $ 24 $ 39 Gain arising during the period — — 25 25 Reclassification to earnings — (1) (7) (8) Effect of deferred taxes — — (4) (4) Balance as of June 30, 2023 $ (7) $ 21 $ 38 $ 52 Balance as of December 31, 2023 $ (7) $ 34 $ 23 $ 50 Gain (loss) arising during the period (1) — 15 14 Reclassification to earnings — (1) (8) (9) Effect of deferred taxes — — (2) (2) Balance as of March 31, 2024 $ (8) $ 33 $ 28 $ 53 Gain arising during the period — — 8 8 Reclassification to earnings — (2) (8) (10) Effect of deferred taxes — — — — Balance as of June 30, 2024 $ (8) $ 31 $ 28 $ 51 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Summary of Adjusted EBITDA | Reynolds Hefty Hefty Presto Segment Unallocated (1) Total Three Months Ended June 30, 2024 (in millions) Net revenues $ 304 $ 236 $ 245 $ 147 $ 932 $ (2) $ 930 Intersegment revenues — 2 — 3 5 (5) — Total segment net revenues $ 304 $ 238 $ 245 $ 150 $ 937 $ (7) $ 930 Adjusted EBITDA 56 69 39 37 201 Depreciation and amortization 8 5 4 5 22 10 32 Reynolds Hefty Hefty Presto Segment Unallocated (1) Total Three Months Ended June 30, 2023 (in millions) Net revenues $ 321 $ 227 $ 251 $ 144 $ 943 $ (3) $ 940 Intersegment revenues — 2 — 1 3 (3) — Total segment net revenues $ 321 $ 229 $ 251 $ 145 $ 946 $ (6) $ 940 Adjusted EBITDA 40 62 45 28 175 Depreciation and amortization 7 5 4 5 21 9 30 Reynolds Hefty Hefty Presto Segment Unallocated (1) Total Six Months Ended June 30, 2024 (in millions) Net revenues $ 568 $ 462 $ 450 $ 287 $ 1,767 $ (3) $ 1,764 Intersegment revenues — 6 — 6 12 (12) — Total segment net revenues $ 568 $ 468 $ 450 $ 293 $ 1,779 $ (15) $ 1,764 Adjusted EBITDA 89 134 70 66 359 Depreciation and amortization 16 9 8 11 44 19 63 Reynolds Hefty Hefty Presto Segment Unallocated (1) Total Six Months Ended June 30, 2023 (in millions) Net revenues $ 604 $ 457 $ 475 $ 285 $ 1,821 $ (7) $ 1,814 Intersegment revenues — 6 — 3 9 (9) — Total segment net revenues $ 604 $ 463 $ 475 $ 288 $ 1,830 $ (16) $ 1,814 Adjusted EBITDA 43 117 76 47 283 Depreciation and amortization 14 10 8 11 43 18 61 |
Summary of Segment Assets | Segment assets consisted of the following: Reynolds Hefty Hefty Presto Segment Unallocated (1) Total (in millions) As of June 30, 2024 $ 584 $ 274 $ 234 $ 242 $ 1,334 $ 3,531 $ 4,865 As of December 31, 2023 556 267 216 239 1,278 3,502 4,780 (1) Unallocated includes the elimination of intersegment revenues, other revenue adjustments and certain corporate costs, depreciation and amortization and assets not allocated to segments. Unallocated assets are comprised of cash, accounts receivable, other receivables, entity-wide property, plant and equipment, entity-wide operating lease right-of-use assets, goodwill, intangible assets, related party receivables and other assets. |
Reconciliation of Segment Adjusted EBITDA to GAAP Income Before Income Taxes | The following table presents a reconciliation of segment Adjusted EBITDA to GAAP income before income taxes: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions) (in millions) Segment Adjusted EBITDA $ 201 $ 175 $ 359 $ 283 Corporate / unallocated expenses (29) (25) (65) (51) 172 150 294 232 Adjustments to reconcile to GAAP income before income taxes Depreciation and amortization (32) (30) (63) (61) Interest expense, net (25) (31) (51) (60) Consolidated GAAP income before income taxes $ 115 $ 89 $ 180 $ 111 |
Summary of Net Revenues by Product Line | Net revenues by product line are as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions) (in millions) Waste and storage products (1) $ 388 $ 374 $ 761 $ 751 Cooking products 304 321 568 604 Tableware 245 251 450 475 Unallocated (7) (6) (15) (16) Net revenues $ 930 $ 940 $ 1,764 $ 1,814 (1) Waste and storage products are comprised of our Hefty Waste & Storage and Presto Products segments. |
Description of Business and B_3
Description of Business and Basis of Presentation (Details) $ in Millions | 6 Months Ended | ||
Jun. 30, 2024 USD ($) segment category | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Accounting Policies [Abstract] | |||
Number of product categories | category | 3 | ||
Number of reportable segments | segment | 4 | ||
Operating lease right-of-use assets | $ 32 | $ 0 | |
SCF obligation | $ 9 | $ 19 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 142 | $ 153 |
Work in progress | 58 | 60 |
Finished goods | 327 | 260 |
Spare parts | 57 | 51 |
Inventories | $ 584 | $ 524 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Deferred financing transaction costs | $ (10) | $ (12) |
Original issue discounts | (1) | (1) |
Total debt | 1,784 | 1,832 |
Less: current portion | 0 | 0 |
Long-term debt | 1,784 | 1,832 |
Term loan facility | ||
Debt Instrument [Line Items] | ||
Debt | $ 1,795 | $ 1,845 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Feb. 29, 2020 | Jun. 30, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||
Quarterly unreimbursed letters of credit minimum percentage | 35% | ||
Outstanding borrowings under revolving facility | $ 0 | ||
Letters of credit outstanding | 6 | ||
Term loan facility | |||
Debt Instrument [Line Items] | |||
Debt instrument, periodic payment | $ 6 | ||
Principal payment | $ 50 | $ 250 | |
External Debt Facilities | Base Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.75% | ||
External Debt Facilities | Secured Overnight Financing Rate (SOFR) | |||
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 | ||
External Debt Facilities | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt instrument, maximum borrowing capacity | $ 250 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Derivative Instruments Gain Loss [Line Items] | ||
Aggregate notional amount | $ 1,150 | $ 1,150 |
Interest Rate Swaps | Cash Flow Hedges | ||
Derivative Instruments Gain Loss [Line Items] | ||
Aggregate notional amount | $ 1,150 | |
Minimum | ||
Derivative Instruments Gain Loss [Line Items] | ||
Derivative, annual SOFR rate | 2.15% | 2.15% |
Minimum | Interest Rate Swaps | Cash Flow Hedges | ||
Derivative Instruments Gain Loss [Line Items] | ||
Derivative, annual SOFR rate | 0.40% | |
Derivative, effective interest rate | 2.15% | |
Cash flow hedge contracts period | 1 year | |
Maximum | ||
Derivative Instruments Gain Loss [Line Items] | ||
Derivative, annual SOFR rate | 5.15% | 5.15% |
Maximum | Interest Rate Swaps | Cash Flow Hedges | ||
Derivative Instruments Gain Loss [Line Items] | ||
Derivative, annual SOFR rate | 3.40% | |
Derivative, effective interest rate | 5.15% | |
Cash flow hedge contracts period | 2 years |
Financial Instruments - Schedul
Financial Instruments - Schedule of Interest Rate Derivatives (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Derivative Instruments Gain Loss [Line Items] | ||
Notional Amount | $ 1,150 | $ 1,150 |
Weighted Average Annual Effective Rate | 4.38% | 4.38% |
Fair Value - Other Current Assets | $ 26 | $ 23 |
Fair Value - Other Assets | $ 8 | $ 7 |
Minimum | ||
Derivative Instruments Gain Loss [Line Items] | ||
Annual Rate | 2.15% | 2.15% |
Maximum | ||
Derivative Instruments Gain Loss [Line Items] | ||
Annual Rate | 5.15% | 5.15% |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of common stock available for issuance (in shares) | 10.5 | 10.5 | |||
Shares issued (in shares) | 1.4 | 1.4 | 0.8 | ||
Stock-based compensation expense | $ 5 | $ 3 | $ 9 | $ 6 | |
RSUs | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted (in shares) | 0 | 0.3 | |||
PSUs | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted (in shares) | 0 | 0.3 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,989 | $ 1,983 | $ 1,825 | $ 1,868 |
Gain (loss) arising during the period | 8 | 14 | 25 | (10) |
Reclassification to earnings | (10) | (9) | (8) | (7) |
Effect of deferred taxes | 0 | (2) | (4) | 4 |
Ending balance | 2,040 | 1,989 | 1,859 | 1,825 |
Accumulated Other Comprehensive Income | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 53 | 50 | 39 | 52 |
Ending balance | 51 | 53 | 52 | 39 |
Currency Translation Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (8) | (7) | (7) | (7) |
Gain (loss) arising during the period | (1) | |||
Ending balance | (8) | (8) | (7) | (7) |
Employee Benefit Plans | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 33 | 34 | 22 | 23 |
Reclassification to earnings | (2) | (1) | (1) | (1) |
Ending balance | 31 | 33 | 21 | 22 |
Derivative Instruments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 28 | 23 | 24 | 36 |
Gain (loss) arising during the period | 8 | 15 | 25 | (10) |
Reclassification to earnings | (8) | (8) | (7) | (6) |
Effect of deferred taxes | (2) | (4) | 4 | |
Ending balance | $ 28 | $ 28 | $ 38 | $ 24 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 18 | $ 23 | $ 35 | $ 28 |
Income before income taxes | $ 115 | $ 89 | $ 180 | $ 111 |
Effective tax rate | 16% | 25.40% | 19.20% | 25.30% |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2024 segment category | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | segment | 4 |
Presto Products | |
Segment Reporting Information [Line Items] | |
Number of brand product categories | category | 4 |
Segment Information - Summary o
Segment Information - Summary of Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Total segment net revenues | $ 930 | $ 940 | $ 1,764 | $ 1,814 |
Adjusted EBITDA | 172 | 150 | 294 | 232 |
Depreciation and amortization | 32 | 30 | 63 | 61 |
Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 937 | 946 | 1,779 | 1,830 |
Adjusted EBITDA | 201 | 175 | 359 | 283 |
Depreciation and amortization | 22 | 21 | 44 | 43 |
Operating Segment | Net revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 932 | 943 | 1,767 | 1,821 |
Operating Segment | Intersegment revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 5 | 3 | 12 | 9 |
Operating Segment | Reynolds Cooking & Baking | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 304 | 321 | 568 | 604 |
Adjusted EBITDA | 56 | 40 | 89 | 43 |
Depreciation and amortization | 8 | 7 | 16 | 14 |
Operating Segment | Reynolds Cooking & Baking | Net revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 304 | 321 | 568 | 604 |
Operating Segment | Reynolds Cooking & Baking | Intersegment revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segment | Hefty Waste & Storage | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 238 | 229 | 468 | 463 |
Adjusted EBITDA | 69 | 62 | 134 | 117 |
Depreciation and amortization | 5 | 5 | 9 | 10 |
Operating Segment | Hefty Waste & Storage | Net revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 236 | 227 | 462 | 457 |
Operating Segment | Hefty Waste & Storage | Intersegment revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2 | 2 | 6 | 6 |
Operating Segment | Hefty Tableware | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 245 | 251 | 450 | 475 |
Adjusted EBITDA | 39 | 45 | 70 | 76 |
Depreciation and amortization | 4 | 4 | 8 | 8 |
Operating Segment | Hefty Tableware | Net revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 245 | 251 | 450 | 475 |
Operating Segment | Hefty Tableware | Intersegment revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segment | Presto Products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 150 | 145 | 293 | 288 |
Adjusted EBITDA | 37 | 28 | 66 | 47 |
Depreciation and amortization | 5 | 5 | 11 | 11 |
Operating Segment | Presto Products | Net revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 147 | 144 | 287 | 285 |
Operating Segment | Presto Products | Intersegment revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3 | 1 | 6 | 3 |
Corporate Nonsegment | ||||
Segment Reporting Information [Line Items] | ||||
Total segment net revenues | (2) | (3) | (3) | (7) |
Depreciation and amortization | 10 | 9 | 19 | 18 |
Intersegment revenues | ||||
Segment Reporting Information [Line Items] | ||||
Total segment net revenues | (5) | (3) | (12) | (9) |
Unallocated | ||||
Segment Reporting Information [Line Items] | ||||
Total segment net revenues | (7) | (6) | (15) | (16) |
Adjusted EBITDA | $ (29) | $ (25) | $ (65) | $ (51) |
Segment Information - Summary_2
Segment Information - Summary of Segment Assets (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Segment Reporting Information [Line Items] | ||
Assets | $ 4,865 | $ 4,780 |
Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,334 | 1,278 |
Operating Segment | Reynolds Cooking & Baking | ||
Segment Reporting Information [Line Items] | ||
Assets | 584 | 556 |
Operating Segment | Hefty Waste & Storage | ||
Segment Reporting Information [Line Items] | ||
Assets | 274 | 267 |
Operating Segment | Hefty Tableware | ||
Segment Reporting Information [Line Items] | ||
Assets | 234 | 216 |
Operating Segment | Presto Products | ||
Segment Reporting Information [Line Items] | ||
Assets | 242 | 239 |
Unallocated | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 3,531 | $ 3,502 |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Adjusted EBITDA to GAAP Income Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | $ 172 | $ 150 | $ 294 | $ 232 |
Adjustments to reconcile to GAAP income before income taxes | ||||
Depreciation and amortization | (32) | (30) | (63) | (61) |
Interest expense, net | (25) | (31) | (51) | (60) |
Income before income taxes | 115 | 89 | 180 | 111 |
Segment Adjusted EBITDA | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | 201 | 175 | 359 | 283 |
Adjustments to reconcile to GAAP income before income taxes | ||||
Depreciation and amortization | (22) | (21) | (44) | (43) |
Corporate / Unallocated Expenses | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | $ (29) | $ (25) | $ (65) | $ (51) |
Segment Information - Summary_3
Segment Information - Summary of Net Revenues by Product Line (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 930 | $ 940 | $ 1,764 | $ 1,814 |
Waste and Storage Products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 388 | 374 | 761 | 751 |
Cooking products | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 304 | 321 | 568 | 604 |
Tableware | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 245 | 251 | 450 | 475 |
Unallocated | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ (7) | $ (6) | $ (15) | $ (16) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Related Party Transaction [Line Items] | ||||
Revenues | $ 930 | $ 940 | $ 1,764 | $ 1,814 |
Products purchased | 83 | |||
Costs of sales | 674 | 712 | 1,306 | 1,430 |
Majority Shareholder | ||||
Related Party Transaction [Line Items] | ||||
Revenues | 16 | 18 | 38 | 40 |
Products purchased | 93 | 163 | 199 | |
Dividend paid | 36 | 36 | 72 | 72 |
Freight and Warehousing Costs | Majority Shareholder | ||||
Related Party Transaction [Line Items] | ||||
Costs of sales | $ 7 | $ 9 | $ 15 | $ 18 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jul. 25, 2024 | Aug. 07, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Subsequent Event [Line Items] | ||||||||
Cash dividend per common share (in USD per share) | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.23 | ||||
Principal payment | $ 50 | $ 12 | ||||||
Subsequent Events | ||||||||
Subsequent Event [Line Items] | ||||||||
Cash dividend per common share (in USD per share) | $ 0.23 | |||||||
Subsequent Events | Term loan facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Principal payment | $ 50 |