BERRY PLASTICS CORPORATION
101 Oakley Street
Evansville, IN 47710
July 13, 2012
VIA EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, DC 20549-7010
Attention: Terence O’Brien
Tracey Smith
Al Pavot
RE: Berry Plastics Corporation
Form 10-K for Fiscal Year Ended October 1, 2011
Filed December 19, 2011
File No. 33-75706-01
Dear Mr. O’Brien, Ms. Smith and Mr. Pavot:
Please find below the responses of Berry Plastics Corporation (“we,” “us,” “our” or the “Company”)to the comments of the staff (the “Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission (the “Commission”) provided duringa telephone conversation held June 28, 2012 regarding theCompany’s Annual Report on Form 10-K for Fiscal Year Ended October 1, 2011 (the “Form 10-K”). Our response below is set forth underneath the italicized comment reproduced from the call.
1. The Staff has requested that we revise our proposed Guarantor and Non-Guarantor Financial Information footnote presentation to quantify changes to the condensed supplemental consolidated financial statements in a tabular format within your revised disclosure.
In response to the Staff’s request, we have provided the revised disclosure as set forth below:
14. Guarantor and Non-Guarantor Financial Information
The Company has notes outstanding which are fully, jointly, severally, and unconditionally guaranteed by substantially all of Berry’s domestic subsidiaries. Separate narrative information or financial statements of the guarantor subsidiaries have not been included because they are wholly owned by the parent company and the guarantor subsidiaries unconditionally guarantee such debt on a joint and several basis. Presented below is condensed consolidated financial information for the parent company, guarantor subsidiaries and non-guarantor subsidiaries. Our guarantor financial information includes substantially all of our domestic operating subsidiaries and our non-guarantor subsidiaries include our foreign subsidiaries and BP Parallel, LLC, a domestic non-guarantor subsidiary that was established to repurchase debt obligations of the Company and Berry Plastics Group, Inc., the parent company of Berry Plastics Corporation. These debt repurchases were all made in open-market transactions with third parties.
See footnotes three and eleven for additional discussion of these transactions.
1
The Company has revised its presentation for the Guarantor and Non-Guarantor Financial Information from what was initially filed in our Form 10-K on December 19, 2011. The Company uses the equity method to account for its investment in its subsidiaries. The revised presentation separates intercompany receivable balance that was previously included in our Parent Company – Investment in Subsidiary line item on the balance sheet. The revised presentation also separates the intercompany payable from total equity. There is no stated redemption date on these intercompany balances, so they are recorded as a current asset and a current liability in our balance sheet. We have also revised the presentation of our statement of cash flows and reclassified the activity for our Parent Company from Operating Activities to Investing Activities and for our Guarantor and Non-Guarantor subsidiaries from Operating Activities to Investing and Financing Activities. The principal elimination entries eliminate investments in subsidiaries, intercompany balances and repurchases of debt obligations of Berry Plastics Corporation by BP Parallel, LLC.
The below tables represent changes from ouroriginally filedCondensed Supplemental Consolidated Financials:
|
|
Condensed Supplemental Consolidated Balance Sheet | ||||
|
| As of Fiscal Year end 2011 | ||||
|
|
|
|
|
|
|
|
| Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total |
Intercompany receivable | 4,016 | - | - | (4,016) | - | |
Investment in Subsidiaries | (4,016) | - | - | 4,016 | - | |
Total Assets | $ - | $ - | $ - | $ - | $ - | |
|
|
|
|
|
|
|
Intercompany payable | - | 3,956 | 60 | (4,016) | - | |
Total equity | - | ( 3,956) | (60) | 4,016 | - | |
Total Liabilities & Equity | $ - | $ - | $ - | $ - | $ - | |
|
|
Condensed Supplemental Consolidated Balance Sheet | ||||
|
| As of Fiscal Year end 2010 | ||||
|
|
|
|
|
|
|
|
| Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total |
Intercompany receivable | 3,691 | - | - | (3,691) | - | |
Investment in Subsidiaries | (3,691) | - | - | 3,691 | - | |
Total Assets | $ - | $ - | $ - | $ - | $ - | |
|
|
|
|
|
|
|
Intercompany payable | - | 3,638 | 53 | (3,691) | - | |
Total equity | - | ( 3,638) | (53) | 3,691 | - | |
Total Liabilities & Equity | $ - | $ - | $ - | $ - | $ - | |
2
|
| Condensed Supplemental Consolidated Statement of Cash Flows | ||||
|
| Fiscal 2011 | ||||
|
|
|
|
|
|
|
|
| Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total |
Cash Flow from Operating Activities |
| $ (166) | $ 186 | $ (20) | $ - | $ - |
|
|
|
|
|
|
|
Cash Flow from Investing |
|
|
|
|
| - |
(Contributions) distributions to/from subsidiaries |
| (39) | - | - | 39 | - |
Changes in intercompany balances |
| 166 | - | - | (166) | - |
Investment in Berry Plastics debt securities |
| - | - | (39) | 39 | - |
Net cash used in investing activities |
| 127 | - | (39) | (88) | - |
|
|
|
|
|
|
|
Cash Flow from Financing |
|
|
|
|
|
|
Repayment of long-term debt |
| 39 | - | - | (39) | - |
Changes in intercompany balances |
| - | (186) | 20 | 166 | - |
Contribution from Parent |
| - | - | 39 | (39) | - |
Net cash provided by financing activities |
| 39 | (186) | 59 | 88 | - |
|
|
|
|
|
|
|
|
| Condensed Supplemental Consolidated Statement of Cash Flows | ||||
|
| Fiscal 2010 | ||||
|
|
|
|
|
|
|
|
| Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total |
Cash Flow from Operating Activities |
| $ 71 | $ (23) | $ (48) | $ - | $ - |
|
|
|
|
|
| |
Cash Flow from Investing |
|
|
|
|
| - |
(Contributions) distributions to/from subsidiaries |
| (81) | - | - | 81 | - |
Changes in intercompany balances |
| (71) | - | - | 71 | - |
Investment in Berry Plastics debt securities |
| - | - | (56) | 56 | - |
Net cash used in investing activities |
| (152) | - | (56) | 208 | - |
|
|
|
|
|
|
|
Cash Flow from Financing |
|
|
|
|
|
|
Repayment of long-term debt |
| 56 | - | - | (56) | - |
Changes in intercompany balances |
| - | 23 | 48 | (71) | - |
Contribution from Parent |
| - | - | 81 | (81) | - |
Net cash provided by financing activities |
| 56 | 23 | 129 | (208) | - |
|
|
|
|
|
|
|
3
|
| Condensed Supplemental Consolidated Statement of Cash Flows | ||||
|
| Fiscal 2009 | ||||
|
|
|
|
|
|
|
|
| Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total |
Cash Flow from Operating Activities |
| $ (199) | $ 184 | $ 15 | $ - | $ - |
|
|
|
|
|
| |
Cash Flow from Investing |
|
|
|
|
| - |
(Contributions) distributions to/from subsidiaries |
| (190) | - | - | 190 | - |
Changes in intercompany balances |
| (199) | - | - | (199) | - |
Investment in Berry Plastics debt securities |
| - | - | (21) | 21 | - |
Net cash used in investing activities |
| 9 | - | (21) | 12 | - |
|
|
|
|
|
|
|
Cash Flow from Financing |
|
|
|
|
|
|
Repayment of long-term debt |
| 21 | - | - | (21) | - |
Changes in intercompany balances |
| - | (184) | (15) | 199 | - |
Contribution from Parent |
| - | - | 190 | (190) | - |
Net cash provided by financing activities |
| 21 | (184) | 175 | (12) | - |
|
|
|
|
|
|
|
The tables below represent our Condensed Supplemental Consolidate Financials:
Condensed Supplemental Consolidated Statements of Operations
| Fiscal 2011 | ||||||||
| Parent |
| Guarantor |
| Non- |
| Eliminations |
| Total |
Net sales | $ 695 |
| $3,503 |
| $363 |
| — |
| $4,561 |
Cost of sales | 626 |
| 2,937 |
| 315 |
| — |
| 3,878 |
Selling, general and administrative expenses | 56 |
| 295 |
| 30 |
| — |
| 381 |
Restructuring and impairment charges, net | 30 |
| 190 |
| 1 |
| — |
| 221 |
Other operating expenses | — |
| 11 |
| 28 |
| — |
| 39 |
Operating income (loss) | (17) |
| 70 |
| (11) |
| — |
| 42 |
Other income | 62 |
| (1) |
| — |
| — |
| 61 |
Interest expense, net | 49 |
| 249 |
| (77) |
| — |
| 221 |
Equity in net income of subsidiaries | 85 |
| — |
| — |
| (85) |
| — |
Gain (loss) from continuing operations before income taxes | (213) |
| (178) |
| 66 |
| 85 |
| (240) |
Income tax expense (benefit) | 16 |
| (29) |
| 2 |
| — |
| (11) |
Net income (loss) | $(229) |
| $ (149) |
| $64 |
| $85 |
| $ (229) |
4
| Condensed Supplemental Consolidated Statements of Operations | ||||||||
| Fiscal 2010 | ||||||||
| Parent |
| Guarantor |
| Non- |
| Eliminations |
| Total |
Net sales | $ 758 |
| $3,166 |
| $333 |
| — |
| $4,257 |
Cost of sales | 709 |
| 2,666 |
| 292 |
| — |
| 3,667 |
Selling, general and administrative expenses | 63 |
| 285 |
| 31 |
| — |
| 379 |
Restructuring and impairment charges, net | 15 |
| 24 |
| 2 |
| — |
| 41 |
Other operating expenses | 12 |
| 17 |
| 17 |
| — |
| 46 |
Operating income (loss) | (41) |
| 174 |
| (9) |
| — |
| 124 |
Other income | (19) |
| — |
| — |
| — |
| (19) |
Interest expense, net | 54 |
| 229 |
| (51) |
| — |
| 232 |
Gain (loss) from continuing operations before income taxes | (76) |
| (55) |
| 42 |
|
|
| (89) |
Income tax expense (benefit) | (8) |
| (17) |
| 4 |
| — |
| (21) |
Net income (loss) | $(68) |
| $ (38) |
| $38 |
| — |
| $ (68) |
5
| Condensed Supplemental Consolidated Statements of Operations | ||||||||
| Fiscal 2009 | ||||||||
| Parent |
| Guarantor |
| Non- |
| Eliminations |
| Total |
Net sales | $ 736 |
| $2,252 |
| $199 |
| — |
| $3,187 |
Cost of sales | 670 |
| 1,802 |
| 169 |
| — |
| 2,641 |
Selling, general and administrative expenses | 75 |
| 230 |
| 20 |
| — |
| 325 |
Restructuring and impairment charges, net | 4 |
| — |
| 7 |
| — |
| 11 |
Other operating expenses | 5 |
| 15 |
| 4 |
| — |
| 24 |
Operating income (loss) | (18) |
| 205 |
| (1) |
| — |
| 186 |
Other (income) expense | (37) |
| 6 |
| — |
| — |
| (31) |
Interest expense, net | 60 |
| 186 |
| (1) |
| — |
| 245 |
Equity in net income of subsidiaries | (21) |
| — |
| — |
| 21 |
| — |
Gain (loss) from continuing operations before income taxes | (20) |
| 13 |
| — |
| (21) |
| (28) |
Income tax expense (benefit) | 2 |
| (12) |
| 4 |
| — |
| (6) |
Income (loss) from continuing operations | (22) |
| 25 |
| (4) |
| (21) |
| (22) |
Discontinued operations, net of income taxes | 4 |
| — |
| — |
| — |
| 4 |
Net income (loss) | $(26) |
| $ 25 |
| $ (4) |
| (21) |
| $ (26) |
6
Condensed Supplemental Consolidated Balance Sheet
As of fiscal year-end 2011
($ in millions)
| Parent |
| Guarantor |
| Non- |
| Eliminations |
| Total |
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents | $ 20 |
| $ 5 |
| $ 17 |
| $ — |
| $ 42 |
Accounts receivable, net of allowance | 80
|
| 411 |
| 52
|
| — |
| 543
|
Inventories | 98 |
| 445 |
| 35 |
| — |
| 578 |
Prepaid expenses and other current | 72 |
| 9 |
| 11 |
| — |
| 92 |
Intercompany receivable | 4,016 |
| — |
| — |
| (4,016) |
| — |
Total current assets | 4,286 |
| 870 |
| 115 |
| (4,016) |
| 1,255 |
Property, plant and equipment, net | 129 |
| 1,048 |
| 73 |
| — |
| 1,250 |
Intangible assets, net | 207 |
| 2,447 |
| 52 |
| (2) |
| 2,704 |
Investment in Subsidiaries | 417 |
| — |
| — |
| (417) |
| — |
Other assets | — |
| 7 |
| 511 |
| (122) |
| 396 |
Total Assets | $5,039 |
| $4,372 |
| $751 |
| $(4,557) |
| $5,605 |
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable | $ 98 |
| $ 231 |
| $ 23 |
| $ — |
| $ 352 |
Accrued and other current liabilities | 147 |
| 126 |
| 13 |
| (1) |
| 285 |
Long-term debt—current portion | 32 |
| — |
| 2 |
| — |
| 34 |
Intercompany payable | — |
| 3,956 |
| 60 |
| (4,016) |
| — |
Total current liabilities | 277 |
| 4,313 |
| 98 |
| (4,017) |
| 671 |
Long-term debt | 4,688 |
| — |
| 3 |
| (154) |
| 4,537 |
Deferred tax liabilities | — |
| 194 |
| 10 |
| — |
| 204 |
Other long term liabilities | 68 |
| 114 |
| 5 |
| — |
| 187 |
Total long-term liabilities | 4,756 |
| 308 |
| 18 |
| (154) |
| 4,928 |
Total Liabilities | 5,033 |
| 4,621 |
| 116 |
| (4,171) |
| 5,599 |
Total Equity | 6 |
| (249) |
| 635 |
| (386) |
| 6 |
Total Liabilities and Equity | $5,039 |
| $4,372 |
| $751 |
| $(4,557) |
| $5,605 |
7
Condensed Supplemental Consolidated Balance Sheet
As of fiscal year-end 2010
($ in millions)
| Parent |
| Guarantor |
| Non- |
| Eliminations |
| Total |
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents | $ 132 |
| $ 2 |
| $ 14 |
| $ — |
| $ 148 |
Accounts receivable, net of allowance | 89
|
| 341 |
| 55
|
| — |
| 485
|
Inventories | 116 |
| 430 |
| 37 |
| — |
| 583 |
Prepaid expenses and other current | 68 |
| 15 |
| 16 |
| — |
| 99 |
Intercompany receivable | 3,691 |
| — |
| — |
| (3,691) |
| — |
Total current assets | 4,096 |
| 788 |
| 122 |
| (3,691) |
| 1,315 |
Property, plant and equipment, net | 179 |
| 894 |
| 73 |
| — |
| 1,146 |
Intangible assets, net | 224 |
| 2,595 |
| 55 |
| (2) |
| 2,872 |
Investment in Subsidiaries | 429 |
| — |
| — |
| (429) |
| — |
Other assets | 4 |
| 2 |
| 373 |
| (82) |
| 297 |
Total Assets | $4,932 |
| $4,279 |
| $623 |
| $(4,204) |
| $5,630 |
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable | $ 118 |
| $ 215 |
| $ 29 |
| $ — |
| $ 362 |
Accrued and other current liabilities | 134 |
| 121 |
| 16 |
| (1) |
| 270 |
Long-term debt—current portion | 12 |
| 17 |
| — |
| — |
| 29 |
Intercompany payable | — |
| 3,638 |
| 53 |
| (3,691) |
| — |
Total current liabilities | 264 |
| 3,991 |
| 98 |
| (3,692) |
| 661 |
Long-term debt | 4,383 |
| 66 |
| 7 |
| (111) |
| 4,345 |
Deferred tax liabilities | — |
| 213 |
| 10 |
| — |
| 223 |
Other long term liabilities | 28 |
| 109 |
| 7 |
| — |
| 144 |
Total long-term liabilities | 4,411 |
| 388 |
| 24 |
| (111) |
| 4,712 |
Total Liabilities | 4,675 |
| 4,379 |
| 122 |
| (3,803) |
| 5,373 |
Total Equity | 257 |
| (100) |
| 501 |
| (401) |
| 257 |
Total Liabilities and Equity | $4,932 |
| $4,279 |
| $623 |
| $(4,204) |
| $5,630 |
8
Condensed Supplemental Consolidated Statements of Cash Flows
| Fiscal 2011 | ||||||||||||||
|
| Parent |
| Guarantor |
| Non- |
| Eliminations |
| Total | |||||
Cash Flow from Operating Activities |
| $ | 15 |
| $ | 322 |
| $ | (11) |
| $ | — |
| $ | 326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant, and equipment |
|
| (16) |
|
| (138) |
|
| (6) |
|
| — |
|
| (160) |
Proceeds from disposal of assets |
|
| — |
|
| 5 |
|
| — |
|
| — |
|
| 5 |
(Contributions) distributions to/from subsidiaries |
|
| (39) |
|
| — |
|
| — |
|
| 39 |
|
| — |
Intercompany advances (redemptions) |
|
| 166 |
|
| — |
|
| — |
|
| (166) |
|
| — |
Investment in Berry Plastics debt |
|
| — |
|
| — |
|
| (39) |
|
| 39 |
|
| — |
Acquisition of business net of cash acquired |
|
| (368) |
|
| — |
|
| — |
|
| — |
|
| (368) |
Net cash used in investing activities |
|
| (257) |
|
| (133) |
|
| (45) |
|
| (88) |
|
| (523) 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt |
|
| 995 |
|
| — |
|
| — |
|
| — |
|
| 995 |
Equity contributions |
|
| (1) |
|
| — |
|
| — |
|
| — |
|
| (1) |
Repayment of long-term debt |
|
| (841) |
|
| — |
|
| — |
|
| (39) |
|
| (880) |
Changes in intercompany balances |
|
| — |
|
| (186) |
|
| 20 |
|
| 166 |
|
| — |
Contribution from Parent |
|
| — |
|
| — |
|
| 39 |
|
| (39) |
|
| — |
Deferred financing costs |
|
| (23) |
|
| — |
|
| — |
|
| — |
|
| (23) |
Net cash provided by (used in) financing activities |
|
| 130 |
|
| (186) |
|
| 59 |
|
| 88 |
|
| 91 |
Net increase in cash and cash equivalents |
|
| (112) |
|
| 3 |
|
| 3 |
|
| — |
|
| (106) |
Cash and cash equivalents at beginning of period |
|
| 132 |
|
| 2 |
|
| 14 |
|
| — |
|
| 148 |
Cash and cash equivalents at end of period |
| $ | 20 |
| $ | 5 |
| $ | 17 |
| $ | — |
| $ | 42 |
9
| Condensed Supplemental Consolidated Statements of Cash Flows
| ||||||||||||||
| Fiscal 2010 | ||||||||||||||
|
| Parent |
| Guarantor |
| Non- |
| Eliminations |
| Total | |||||
Cash Flow from Operating Activities |
| $ | 37 |
| $ | 100 |
| $ | (25) |
| $ | — |
| $ | 112 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant, and equipment |
|
| (61) |
|
| (150) |
|
| (12) |
|
| — |
|
| (223) |
Proceeds from disposal of assets |
|
| — |
|
| 29 |
|
| — |
|
| — |
|
| 29 |
Investment in Berry Group debt |
|
| — |
|
| — |
|
| (25) |
|
| — |
|
| (25) |
(Contributions) distributions to/from subsidiaries |
|
| (81) |
|
| — |
|
| — |
|
| 81 |
|
| — |
Intercompany advances (redemptions) |
|
| (71) |
|
| — |
|
| — |
|
| 71 |
|
| — |
Investment in Berry Plastics debt |
|
| — |
|
| — |
|
| (56) |
|
| 56 |
|
| — |
Acquisition of business net of cash acquired |
|
| (658) |
|
| — |
|
| — |
|
| — |
|
| (658) |
Net cash used in investing activities |
|
| (871) |
|
| (121) |
|
| (93) |
|
| 208 |
|
| (877) 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt |
|
| 1,097 |
|
| — |
|
| — |
|
| — |
|
| 1,097 |
Equity contributions |
|
| (3) |
|
| — |
|
| — |
|
| — |
|
| (3) |
Repayment of long-term debt |
|
| (97) |
|
| — |
|
| — |
|
| (56) |
|
| (153) |
Changes in intercompany balances |
|
| — |
|
| 23 |
|
| 48 |
|
| (71) |
|
| — |
Contribution from Parent |
|
| — |
|
| — |
|
| 81 |
|
| (81) |
|
| — |
Deferred financing costs |
|
| (38) |
|
| — |
|
| — |
|
| — |
|
| (38) |
Net cash provided by (used in) financing activities |
|
| 959 |
|
| 23 |
|
| 129 |
|
| (208) |
|
| 903 |
Net increase in cash and cash equivalents |
|
| 125 |
|
| 2 |
|
| 11 |
|
| — |
|
| 138 |
Cash and cash equivalents at beginning of period |
|
| 7 |
|
| — |
|
| 3 |
|
| — |
|
| 10 |
Cash and cash equivalents at end of period |
| $ | 132 |
| $ | 2 |
| $ | 14 |
| $ | — |
| $ | 148 |
10
| Condensed Supplemental Consolidated Statements of Cash Flows
| ||||||||||||||
| Fiscal 2009 | ||||||||||||||
|
| Parent |
| Guarantor |
| Non- |
| Eliminations |
| Total | |||||
Cash Flow from Operating Activities |
| $ | 89 |
| $ | 317 |
| $ | 8 |
| $ | — |
| $ | 414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant, and equipment |
|
| (47) |
|
| (143) |
|
| (4) |
|
| — |
|
| (194) |
Proceeds from disposal of assets |
|
| — |
|
| 1 |
|
| 3 |
|
| — |
|
| 4 |
Investment in Berry Group |
|
| — |
|
| — |
|
| (169) |
|
| — |
|
| (169) |
(Contributions) distributions to/from subsidiaries |
|
| (190) |
|
| — |
|
| — |
|
| 190 |
|
| — |
Intercompany advances (redemptions) |
|
| 199 |
|
| — |
|
| — |
|
| (199) |
|
| — |
Investment in Berry Plastics debt |
|
| — |
|
| — |
|
| (21) |
|
| 21 |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of business net of cash acquired |
|
| (5) |
|
| — |
|
| — |
|
| — |
|
| (5) |
Net cash used in investing activities |
|
| (43) |
|
| (142) |
|
| (191) |
|
| — |
|
| (364) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt |
|
| — |
|
| — |
|
| 4 |
|
| — |
|
| 4 |
Repayment of long-term debt |
|
| (211) |
|
| — |
|
| (1) |
|
| (21) |
|
| (233) |
Changes intercompany balances |
|
| — |
|
| (184) |
|
| (15) |
|
| 199 |
|
| — |
Contribution from Parent |
|
| — |
|
| — |
|
| 190 |
|
| (190) |
|
| — |
Deferred financing costs |
|
| (1) |
|
| — |
|
| — |
|
| — |
|
| (1) |
Net cash provided by (used in) financing activities |
|
| (212) |
|
| (184) |
|
| 178 |
|
| (12) |
|
| (230) |
Net increase in cash and cash equivalents |
|
| (166) |
|
| (9) |
|
| (5) |
|
| — |
|
| (180) |
Cash and cash equivalents at beginning of period |
|
| 173 |
|
| 9 |
|
| 8 |
|
| — |
|
| 190 |
Cash and cash equivalents at end of period |
| $ | 7 |
| $ | — |
| $ | 3 |
| $ | — |
| $ | 10 |
2. Due to the amended disclosures in the Management's Discussion and Analysis of Financial Condition and Results of Operations section, the Company has considered management's assessment of disclosure controls and procedures discussed in Item 9A. of the Form 10-K.
We acknowledge the Staff's comment and respectfully advise the Staff that the Company has concluded its disclosures controls and procedures were not effective and will amend its Form 10-K to modify Item 9A to include the following:
Item 9A. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
Under applicable SEC regulations, management of a reporting company, with the participation of the principal executive officer and principal financial officer, must periodically evaluate the company's“disclosure controls and procedures,”which are defined generally as controls and other procedures of areporting company designed to ensure that information required to be disclosed by the reporting company in its periodic reports filed with the commission is recorded, processed, summarized, and reported on a timely basis.
11
Based on the evaluation, and our amended filings, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were not effective to ensure that information required to be disclosed was reported at the acceptable level of detail for the period covered by this report. The following deficient disclosure was identified:
· Critical Accounting Policy and Estimates:Goodwill and Other Indefinite Lived Intangible Assets. We did not provide readers with sufficient information explaining the factors that led to the recognition of the goodwill impairment charge, along with the future implications to our business.
Plans to remediate material weakness in disclosure controls and procedures.
In addition to our historical disclosure controls and procedures, the Company will begin a more comprehensive review and approval procedure of disclosures related to our critical accounting policies and estimates to ensure the level of information we disclose provides readers with a sufficient level of detail to understand these policies and estimates. We believe that these actions will remediate the material weakness in our disclosure controls and procedures.
12
* * * *
Please contact me ((812) 306-2370) or Andrew J. Nussbaum ((212) 403-1269), special counsel to the Company, if you have any questions or comments relating to the matters referenced above. Thank you for your attention to this matter.
Sincerely,
__/s/ James M. Kratochvil________________
James M. Kratochvil
Chief Financial Officer
Berry Plastics Corporation
cc: Jonathan D. Rich, Chief Executive Officer
Jeffrey D. Thompson, Chief Legal Officer
Andrew J. Nussbaum, Wachtell, Lipton, Rosen & Katz
13
