10q10k10q10k.net

What changed in Reynolds Consumer Products Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Reynolds Consumer Products Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+162 added−159 removedSource: 10-K (2025-02-05) vs 10-K (2024-02-07)

Top changes in Reynolds Consumer Products Inc.'s 2024 10-K

162 paragraphs added · 159 removed · 140 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

32 edited+4 added−5 removed34 unchanged
Biggest changeOur brands have #1 market share positions across nearly all our categories Category Brand Position Aluminum foil (U.S.) Aluminum foil (Canada) Parchment paper Wax paper Slow cooker liners Oven bags Freezer paper Slider bags Party cups Foam dishes Trash bags _____________________________________ Source: Circana Dollar Sales MULO latest 52 weeks ended December 31, 2023 and Nielsen MarketTrack latest 52 weeks ended December 30, 2023.
Biggest changeOur brands have #1 market share positions across nearly all our categories Category Brand Position Aluminum foil (U.S.) Aluminum foil (Canada) Parchment paper Wax paper Slow cooker liners Oven bags Freezer paper Party cups Foam dishes Slider bags Trash bags _____________________________________ Source: Circana Dollar Sales MULO+ latest 52 weeks ended December 29, 2024 and Nielsen MarketTrack latest 52 weeks ended December 28, 2024. 5 Table of Contents Our Segments We manage our operations in four reportable segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware and Presto Products. • Reynolds Cooking & Baking : Through our Reynolds Cooking & Baking segment, we sell both branded and store brand aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags and slow cooker liners.
Our products are typically used in the homes of consumers of all demographics on a frequent basis and meet the convenience-oriented preferences of consumers across a broad range of household activities. Our products help simplify daily life by assisting with cooking, serving, clean-up and storage through a range of product offerings.
Our products are typically used in the homes of consumers among all demographics on a frequent basis and meet the convenience-oriented preferences of consumers across a broad range of household activities. Our products help simplify daily life by assisting with cooking, serving, clean-up and storage through a range of product offerings.
Within each product category, most of our products compete with other widely advertised brands and store brand products. Competition in our categories is based on a number of factors including brand recognition, price and quality.
Within each product category, most of our products compete with other widely advertised brands and store brand products. Competition in our categories is based on a number of factors including brand recognition, price, quality and innovation.
Over 65% of our revenue comes from products that are #1 in their respective categories. We have developed our market-leading position by investing in our product categories, championing the categories in partnership with our retail partners and consistently developing innovative products to meet the evolving needs and preferences of the modern consumer.
Over 50% of our revenue comes from products that are #1 in their respective categories. We have developed our market-leading position by investing in our product categories, championing the categories in partnership with our retail partners and consistently developing innovative products to meet the evolving needs and preferences of the modern consumer.
Hefty has 99% brand awareness and is most commonly identified with the Brand's famous “Hefty! Hefty! Hefty!” slogan. We have the #1 branded market share in the U.S. large black trash bag and slider bag segments, and the #2 branded market share in the tall kitchen trash bag segment.
Hefty has 98% brand awareness and is most commonly identified with the Brand’s famous “Hefty! Hefty! Hefty!” slogan. We have the #1 branded market share in the U.S. large black trash bag segment, and the #2 branded market share in the slider bag and tall kitchen trash bag segments.
Approximately 23% of our employees are covered by collective bargaining agreements. We have not experienced any significant union-related work stoppages over the last ten years. We believe our relationships with our employees and labor unions are satisfactory.
Approximately 20% of our employees are covered by collective bargaining agreements. We have not experienced any significant union-related work stoppages over the last ten years. We believe our relationships with our employees and labor unions are satisfactory.
Sales to Walmart are concentrated more heavily in our Hefty Waste & Storage segment, and sales to Sam’s Club are concentrated more heavily in our Hefty Tableware segment. During fiscal year 2023, sales in North America and the United States represented 99% and 97% of our total sales, respectively.
Sales to Walmart are concentrated more heavily in our Hefty Waste & Storage segment, and sales to Sam’s Club are concentrated more heavily in our Hefty Tableware segment. During fiscal year 2024, sales in North America and the United States represented 99% and 97% of our total sales, respectively.
In addition to sales professionals, each of our top 20 customers has a dedicated customer support team, including category management, production planning and transportation teams, as well as customer service representatives. We utilize two routes of distribution to deliver our products to our customers. In many cases, we ship directly from our warehouses to the customer's distribution center.
In addition to sales professionals, each of our top 20 customers has a dedicated customer support team, including category management, production planning and transportation teams, as well as customer service representatives. We utilize two routes of distribution to deliver our products to our customers. In many cases, we ship directly from our manufacturing plants to the customer’s distribution center.
We do not believe that any of our licenses to intellectual property rights granted to third parties are material to us taken as a whole. 7 Table of Contents Employees and Human Capital Our objectives related to an engaged team include successfully identifying, recruiting, onboarding, retaining and incentivizing both new and existing employees.
We do not believe that any of our licenses to intellectual property rights granted to third parties are material to us taken as a whole. Employees and Human Capital Our objectives related to an engaged team include successfully identifying, recruiting, onboarding, retaining and incentivizing both new and existing employees.
Our Hefty branded products include dishes and party cups. Hefty branded party cups are the #1 party cup in America measured by market share. Our branded products use our Hefty brand to represent both quality and great value, and we bring this same quality and value promise to all of our store brands as well.
Our Hefty branded products include dishes, party cups, cutlery and containers. Hefty branded party cups are the #1 party cup in America measured by market share. Our branded products use our Hefty brand to represent both quality and value, and we bring this same quality and value promise to all of our store brands as well.
Our talent management and succession planning process includes the identification of primary succession roles based on current and future business strategies, the identification of potential successors, a list of action items and a plan for talent development. As of December 31, 2023, we employed approximately 6,000 people, most of whom are located in our U.S. and Canada manufacturing facilities.
Our talent management and succession planning process includes the identification of primary succession roles based on current and future business strategies, the identification of potential successors, a list of action items and a plan for talent development. As of December 31, 2024, we employed approximately 6,400 people, most of whom are located in our U.S. and Canada manufacturing facilities.
Our robust product portfolio in this segment includes a full suite of products, including sustainable solutions such as compostable bags, bags made from recycled materials and orange bags through the Hefty ReNew Program. • Hefty Tableware : Through our Hefty Tableware segment, we sell both branded and store brand disposable and compostable plates, bowls, platters, cups and cutlery.
Our robust product portfolio in this segment includes a full suite of products, including sustainable solutions such as blue and clear recycling bags, compostable bags, bags made from recycled materials and orange bags through the Hefty ReNew Program. • Hefty Tableware : Through our Hefty Tableware segment, we sell both branded and store brand disposable and compostable plates, bowls, platters, containers, cups and cutlery.
ITEM 1. BUSINESS In this Annual Report on Form 10-K, “Reynolds Consumer Products,” “RCP,” the “Company,” “we,” “us” and “our” refer to Reynolds Consumer Products Inc. and its consolidated subsidiaries. Reynolds Consumer Products Inc., formerly known as RenPac Holdings Inc., was incorporated in the state of Delaware on September 26, 2011.
ITEM 1. BUSINESS In this Annual Report on Form 10-K, “Reynolds Consumer Products,” “RCP,” the “Company,” “we,” “us” and “our” refer to Reynolds Consumer Products Inc. and its consolidated subsidiaries. Reynolds Consumer Products Inc. was incorporated in the state of Delaware on September 26, 2011.
Our tableware products generally have higher sales in the second quarter of the year, primarily due to outdoor summertime use of disposable plates, cups and bowls. Raw Materials and Suppliers We have a diverse supplier base, and are not reliant on any single supplier for our primary raw materials, including polyethylene, polystyrene and aluminum.
Our tableware products generally have higher sales in the second and fourth quarters of the year, primarily due to outdoor summertime and holiday uses of disposable plates, cups, bowls and cutlery. Raw Materials and Suppliers We have a diverse supplier base and are not reliant on any single supplier for our primary raw materials, including polyethylene, polystyrene and aluminum.
Walmart accounted for 30%, 30% and 29% and Sam’s Club accounted for 18%, 18% and 15% of our total net revenue in fiscal years 2023, 2022 and 2021, respectively. Walmart and Sam’s Club are affiliated entities.
Walmart accounted for 31%, 30% and 30% and Sam’s Club accounted for 17%, 18% and 18% of our total net revenue in fiscal years 2024, 2023 and 2022, respectively. Walmart and Sam’s Club are affiliated entities.
Overview Our mission is to simplify daily life so consumers can enjoy what matters most. We are a market-leading consumer products company with a presence in 95% of households across the United States. We produce and sell products across three broad categories: cooking products, waste and storage products and tableware.
Overview Our mission is to simplify daily life so consumers can enjoy what matters most. We are a market-leading consumer products company with a presence in 95% of households across the United States. We produce and sell products that people use in their homes for cooking, serving, cleanup and storage.
Our sales force is responsible for sales across each of our segments and our portfolio of branded and store brand products. We complement our internal sales platform by selectively utilizing third-party brokers for certain products and customers.
We have a direct sales force organized by customer type, including national accounts, regional accounts and eCommerce. Our sales force is responsible for sales across each of our segments and our portfolio of branded and store brand products. We complement our internal sales platform by selectively utilizing third-party brokers for certain products and customers.
Our business is subject to regulations that govern matters such as post-consumer recycled content, extended producer responsibility, compostability and recyclability claims, and use of Per- and Polyfluorinated Substances (“PFAS”).
Our business is subject to regulations that govern matters such as post-consumer recycled content, extended producer responsibility, compostability and recyclability claims, and use of Per- and Polyfluorinated Substances (“PFAS”). We have implemented compliance programs and procedures designed to achieve compliance with applicable laws and regulations.
Talent Acquisition: We are committed to a diverse and inclusive workplace environment in which individual differences are recognized, respected and appreciated. We provide job opportunities for individual growth in our exciting, dynamic and fast-paced manufacturing plants and corporate office.
Talent Acquisition: We are committed to a workplace environment in which individual differences are recognized, respected and appreciated. We provide job opportunities for individual growth in our exciting, dynamic and fast-paced manufacturing plants and offices. Our management and Talent Acquisition teams use data from workforce planning and recruiting.
In addition, we have invested in tools and resources for a consistent and efficient approach to identifying diverse talent. Regulatory As many of our products are used in food packaging, our business is subject to regulations governing products that may contact food in all the countries in which we have operations.
To support our plants, we have also created a comprehensive hourly employee recruiting strategy for a consistent and efficient approach to identifying and onboarding diverse talent. 8 Table of Contents Regulatory As many of our products are used in food packaging, our business is subject to regulations governing products that may contact food in all the countries in which we have operations.
Intellectual Property We have a significant number of registered patents and registered trademarks, including Reynolds and Hefty, as well as several copyrights, which, along with our trade secrets and manufacturing know-how, help support our ability to add value within the market and sustain our competitive advantages.
In certain instances, we purchase selected finished goods from third-party suppliers to supplement capacity and source specialty items. 7 Table of Contents Intellectual Property We have a significant number of registered patents and registered trademarks, including Reynolds and Hefty, as well as several copyrights, which, along with our trade secrets and manufacturing know-how, help support our ability to add value within the market and sustain our competitive advantages.
Reynolds is one of the most recognized household brands in the United States and has been the top trusted brand in the consumer foil market for over 75 years, with greater than 50% market share in most of its categories. 5 Table of Contents • Hefty Waste & Storage : Through our Hefty Waste & Storage segment, we produce both branded and store brand trash and food storage bags.
Reynolds is one of the most recognized household brands in the United States, with 98% brand awareness, and has been the top trusted brand in the consumer foil market for over 75 years, with greater than 50% market share in most of its categories.
We generally have one to two year contracts with resin and aluminum suppliers, which have historically provided us with a steady supply of raw materials. In certain instances, we purchase selected finished goods from third-party suppliers to supplement capacity and source specialty items.
We generally have one to two year contracts with resin and aluminum suppliers, which have historically provided us with a steady supply of raw materials.
Sales and Distribution Through our sales and marketing organization, we are able to manage our relationships with customers at the national, regional and local levels, depending on their needs.
Sales and Distribution Through our sales and marketing organization, we are able to manage our relationships with customers at the national, regional and local levels, depending on their needs. We believe that our dedicated sales representatives, category management teams and our participation in both branded and store brand products create a significant competitive advantage.
Our consolidated net revenues by product line for fiscal years 2023, 2022 and 2021 were as follows: For the Years Ended December 31, (in millions) 2023 2022 2021 Waste and storage (1) $ 1,535 $ 1,550 $ 1,448 Cooking products 1,273 1,287 1,314 Tableware 967 1,000 815 Unallocated (19) (20) (21) Net revenues $ 3,756 $ 3,817 $ 3,556 (1) Waste and storage products are comprised of our Hefty Waste & Storage and Presto Products segments.
Our consolidated net revenues by product line for fiscal years 2024, 2023 and 2022 were as follows: For the Years Ended December 31, (in millions) 2024 2023 2022 Waste and storage (1) $ 1,555 $ 1,535 $ 1,550 Cooking products 1,247 1,273 1,287 Tableware 918 967 1,000 Unallocated (25) (19) (20) Net revenues $ 3,695 $ 3,756 $ 3,817 (1) Waste and storage products are comprised of our Hefty Waste & Storage and Presto Products segments. 6 Table of Contents Customers Our customer base includes leading grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets and eCommerce retailers.
Customers Our customer base includes leading grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets and eCommerce retailers. We sell both branded and store brand products across our customer base. We generally sell our branded products pursuant to informal trading policies and our store brand products under one year or multi-year agreements.
We sell both branded and store brand products across our customer base. We generally sell our branded products pursuant to informal trading policies and our store brand products under one year or multi-year agreements.
For example, the United States Congress has in the past considered legislation to reduce emissions of greenhouse gases. In addition, the Environmental Protection Agency is regulating certain greenhouse gas emissions under existing laws such as the Clean Air Act.
In addition, the Environmental Protection Agency is regulating certain greenhouse gas emissions under existing laws such as the Clean Air Act. A number of states and local governments in the United States have also implemented or announced their intentions to implement their own programs to reduce greenhouse gases.
We have internal programs in place to manage and monitor global compliance with these various requirements. Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.
Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. We also make financial information, news releases and other information available on our corporate website at www.reynoldsconsumerproducts.com.
We have made investments in our Talent Acquisition team to better enable us to source and recruit talent in today’s challenging labor market, assist in a great candidate experience and provide a welcoming new hire onboarding. To support our plants, we have also created a comprehensive hourly employee recruiting strategy and social media plan.
In 2024, we updated our applicant tracking system to better enable us to source and recruit talent in today’s challenging labor market, assist in a great candidate experience and provide a welcoming new-hire onboarding.
A number of states and local governments in the United States have also implemented or announced their intentions to implement their own programs to reduce greenhouses gases. We are also subject to various laws and regulations related to data privacy and protection, including the California Privacy Act of 2018 (“CCPA”) and the European Union’s General Data Protection Regulation (“GDPR”).
We are also subject to various laws and regulations related to data privacy and protection, including the California Consumer Privacy Act of 2018 (“CCPA”) and the European Union’s General Data Protection Regulation (“GDPR”). We have internal programs in place to manage and monitor global compliance with these various requirements.
We have implemented compliance programs and procedures designed to achieve compliance with applicable laws and regulations. 8 Table of Contents Moreover, as environmental issues, such as climate change, have become more prevalent, governments have responded, and are expected to continue to respond, with increased legislation and regulation, which could negatively affect us.
Moreover, as environmental issues, such as climate change, have become more prevalent, governments have responded, and are expected to continue to respond, with increased legislation and regulation, which could negatively affect us. For example, the United States Congress has in the past considered legislation to reduce emissions of greenhouse gases.
In 2023, we also tapped into the nostalgia trend and brought back Zoo Pals plates, garnering 3.7 billion media impressions. • Presto Products : Through our Presto Products segment, we primarily sell store brand products in four main categories: food storage bags, trash bags, reusable storage containers and plastic wrap.
In 2024, we increased the post-consumer recycled content in some of our cups and we added compostable party cups to our assortment. • Presto Products : Through our Presto Products segment, we primarily sell store brand products in four main categories: food storage bags, trash bags, reusable storage containers and plastic wrap.
Removed
Our Segments We manage our operations in four reportable segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware and Presto Products. • Reynolds Cooking & Baking : Through our Reynolds Cooking & Baking segment, we sell both branded and store brand aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags and slow cooker liners.
Added
We also offer more sustainable solutions, such as Reynolds Wrap 100% recycled aluminum, unbleached parchment paper made with a chlorine-free process and coreless wax paper, which uses less packaging material than traditional wax paper rolls. • Hefty Waste & Storage : Through our Hefty Waste & Storage segment, we produce both branded and store brand trash and food storage bags.
Removed
We believe that our dedicated sales representatives, category management teams and our participation in both branded and store brand products create a significant competitive advantage. 6 Table of Contents We have a direct sales force organized by customer type, including national accounts, regional accounts and eCommerce.
Added
People & Culture: We have built a culture based on treating others with respect and working collaboratively on shared goals. Our value of putting safety first promotes a culture of caring and watching out for the safety of each other. Treating others with dignity, empathy and respect is the foundation of our culture.
Removed
Diversity, Equity & Inclusion: We believe that a diverse, equitable and inclusive organization will enhance the sense of belonging for our colleagues, retail partners, consumers, shareholders and communities. We are committed to building a respectful workplace, educating our colleagues and integrating DE&I within our overall business strategy.
Added
We value our relationships with our colleagues, retail partners, consumers, shareholders and communities. We are committed to communicating our goals, offering training and development opportunities and integrating an inclusive approach to talent management into our overall business strategy.
Removed
Treating others with dignity, empathy and respect are the foundation of our DE&I journey, and we will continue to implement best practices, educate our colleagues on the importance of implementing DE&I strategies, promote a culture where all feel they belong and implement specific solutions to build and retain a more diverse and inclusive experience based upon equity.
Added
We will continue to promote a culture that values inclusion and belonging and sees unique experiences and viewpoints as growing our understanding of how we can work better together. We will continue our efforts to build and retain a robust workforce that welcomes talent and capability to strengthen all aspects of our business.
Removed
We also make financial information, news releases and other information available on our corporate website at www.reynoldsconsumerproducts.com.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

35 edited+6 added−2 removed198 unchanged
Biggest changePotential conflicts or disputes may arise between PEI Group, PFL or Rank and us in a number of areas relating to our past or ongoing relationships, including: • tax, employee benefit, indemnification and other matters arising from our relationship with PEI Group, PFL or Rank; • business combinations involving us; • the nature, quality and pricing of services PEI Group and Rank have agreed to provide us; • business opportunities that may be attractive to us and PEI Group; • intellectual property or other proprietary rights; and • joint sales and marketing activities with PEI Group.
Biggest changePotential conflicts or disputes may arise between PEI Group, PFL or Rank and us in a number of areas relating to our past or ongoing relationships, including: • tax, employee benefit, indemnification and other matters arising from our relationship with PEI Group, PFL or Rank; • business combinations involving us; • the nature, quality and pricing of services PEI Group and Rank have agreed to provide us; • business opportunities that may be attractive to us and PEI Group; • intellectual property or other proprietary rights; and • joint sales and marketing activities with PEI Group. 23 Table of Contents The resolution of any potential conflicts or disputes between us, PEI Group, PFL or Rank or their subsidiaries over these or other matters may be less favorable to us than the resolution we might achieve if we were dealing with an unaffiliated third party.
Although we have control measures and systems in place that are designed to ensure that the safety and quality of our products are maintained, the consequences of not being able to do so could be severe, including adverse effects on consumer health, our reputation, the loss of customers and market share, financial costs and loss of revenue.
Although we have quality control measures and systems in place that are designed to ensure that the safety and quality of our products are maintained, the consequences of not being able to do so could be severe, including adverse effects on consumer health, our reputation, the loss of customers and market share, financial costs and loss of revenue.
As a result of any of the above factors, we may be precluded from pursuing certain opportunities that we would otherwise pursue, including growth opportunities, which in turn may adversely affect our business, financial condition and results of operations. 21 Table of Contents We have entered, and may continue to enter, into certain related party transactions.
As a result of any of the above factors, we may be precluded from pursuing certain 21 Table of Contents opportunities that we would otherwise pursue, including growth opportunities, which in turn may adversely affect our business, financial condition and results of operations. We have entered, and may continue to enter, into certain related party transactions.
These changes in consumer lifestyle, environmental concerns or other considerations may result in a decrease in the demand for certain of our current products, an increase in expenditures to attempt to adapt and respond to these concerns, and an inability to respond through innovation or acquisition of assets we do not currently own, could materially and adversely affect our business, financial condition and results of operations.
These changes in consumer lifestyle, environmental concerns or other considerations may result in a decrease in the demand for certain of our current products, an increase in expenditures to attempt to adapt and respond to these concerns, and an inability to respond through innovation or acquisition of assets we do not currently own, any of which could materially and adversely affect our business, financial condition and results of operations.
If we no longer benefit from this relationship, whether because we are no longer affiliated with PEI Group or otherwise, it may result in increased costs for us and higher prices to our customers because we may be unable to obtain goods, services and technology from unaffiliated third parties on terms as favorable as those previously obtained.
If we no longer benefit from the relationship with PEI Group, whether because we are no longer affiliated with PEI Group or otherwise, it may result in increased costs for us and higher prices to our customers because we may be unable to obtain goods, services and technology from unaffiliated third parties on terms as favorable as those previously obtained.
While we concluded that our goodwill and indefinite-lived intangible assets were not impaired during our annual impairment review performed during the fourth quarter of 2023, future events could cause us to conclude that the goodwill associated with a given reporting unit, or one of our indefinite-lived intangible assets, may have become impaired.
While we concluded that our goodwill and indefinite-lived intangible assets were not impaired during our annual impairment review performed during the fourth quarter of 2024, future events could cause us to conclude that the goodwill associated with a given reporting unit, or one of our indefinite-lived intangible assets, may have become impaired.
Any resulting impairment charge, although non-cash, could have a material adverse effect on our results of operations and financial condition. Some of our workforce is covered by collective bargaining agreements, and our business could be harmed in the event of a prolonged work stoppage. Approximately 23% of our employees are covered by collective bargaining agreements.
Any resulting impairment charge, although non-cash, could have a material adverse effect on our results of operations and financial condition. Some of our workforce is covered by collective bargaining agreements, and our business could be harmed in the event of a prolonged work stoppage. Approximately 20% of our employees are covered by collective bargaining agreements.
Resin prices have also historically fluctuated with changes in crude oil and natural gas prices as well as changes in refining capacity and the demand for other petroleum-based products. We experienced significant increases in material costs in both 2021 and 2022, particularly in resin and aluminum prices, which negatively impacted our results.
Resin prices have also historically fluctuated with changes in crude oil and natural gas prices as well as changes in refining capacity and the demand for other petroleum-based products. We experienced significant increases in material costs in 2022, particularly in resin and aluminum prices, which negatively impacted our results.
In addition, we have implemented price increases and may implement additional price increases in the future, which may slow sales growth or create volume declines in the short term as customers and consumers adjust to these price increases. Competitors may or may not take competitive actions, which may lead to sales declines and loss of market share.
In addition, we have implemented price increases and may implement additional price increases in the future, which may slow sales growth or create volume declines in the short term as customers and consumers adjust to these price increases. Competitors may or may not take competitive actions, which may lead to sales declines and loss of market share for us.
The majority of sales contracts for our products generally do not contain cost pass-through mechanisms for raw material costs.
The majority of sales contracts for our products generally do not contain contractual cost pass-through mechanisms for raw material costs.
If market conditions change, resulting in us overestimating or underestimating demand for any of our products during a given season, we may not maintain appropriate inventory levels, which could materially and adversely affect our business, financial condition and results of operation.
If market conditions change, resulting in us overestimating or underestimating demand for any of our products during a given season, we may not maintain appropriate inventory levels, which could materially and adversely affect our business, financial condition and results of operations.
Such legislation, as well as voluntary initiatives, aimed at reducing the level of plastic wastes could reduce the demand for certain plastic products, result in greater costs for manufacturers of plastic products or otherwise impact our business, financial condition and results of operations.
Such legislation, as well as voluntary initiatives, aimed at reducing the level of plastic waste could reduce the demand for certain plastic products, result in greater costs for manufacturers of plastic products or otherwise impact our business, financial condition and results of operations.
In addition, changes to the mix of products that we sell may adversely impact our net sales, profitability and cash flow. We may incur liabilities, experience harm to our reputation and brands, or be forced to recall products as a result of real or perceived product quality or other product-related issues.
In addition, changes to the mix of products that we sell or product portfolio optimization efforts may adversely impact our net sales, profitability and cash flow. We may incur liabilities, experience harm to our reputation and brands, or be forced to recall products as a result of real or perceived product quality or other product-related issues.
There can be no assurance that our tax positions will be sustained if challenged by relevant tax authorities and if not sustained, there could be a material adverse effect on our results of operations, financial condition and cash flows. 15 Table of Contents Impacts associated with a future pandemic and associated responses could adversely impact our business and results of operations.
There can be no assurance that our tax positions will be sustained if challenged by relevant tax authorities and if not sustained, there could be a material adverse effect on our results of operations, financial condition and cash flows. Impacts associated with a future pandemic and associated responses could adversely impact our business and results of operations.
Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq. 22 Table of Contents PEI Group may compete with us, and its competitive position in certain markets may constrain our ability to build and maintain partnerships.
Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq. PEI Group may compete with us, and its competitive position in certain markets may constrain our ability to build and maintain partnerships.
A resurgence of the COVID-19 pandemic, or a future pandemic or health epidemic, could adversely impact our business and results of operations in a number of ways, including but not limited to: • a shutdown, disruption or less than full utilization of one or more of our manufacturing, warehousing or distribution facilities, or disruption in our supply chain or customer base, including but not limited to, as a result of illness, government restrictions or other workforce disruptions; • the failure of third parties on which we rely, including but not limited to those that supply our raw materials and other necessary operating materials, co-manufacturers and independent contractors, to meet their obligations to us, or significant disruptions in their ability to do so; • new or escalated government or regulatory responses in markets where we manufacture, sell or distribute our products, or in the markets of third parties on which we rely, could prevent or disrupt our business operations; • higher costs in certain areas such as front-line employee compensation, as well as incremental costs associated with newly added health screenings, temperature checks and enhanced cleaning and sanitation protocols to protect our employees, which we expect could increase in these or other areas; • significant reductions or volatility in demand for one or more of our products, which may be caused by, among other things: the temporary inability of consumers to purchase our products due to illness, quarantine or other travel restrictions, or financial hardship; or other pandemic related restrictions impacting consumer behavior; • an inability to respond to or capitalize on increased demand, including challenges and increased costs associated with adding capacity and related staffing issues; • a change in demand for or availability of our products as a result of retailers, distributors or carriers modifying their inventory, fulfillment or shipping practices; and • the unknown duration and magnitude of a pandemic and all of its related impacts.
A future pandemic or health epidemic could adversely impact our business and results of operations in a number of ways, including but not limited to: • a shutdown, disruption or less than full utilization of one or more of our manufacturing, warehousing or distribution facilities, or disruption in our supply chain or customer base, including but not limited to, as a result of illness, government restrictions or other workforce disruptions; • the failure of third parties on which we rely, including but not limited to those that supply our raw materials and other necessary operating materials, co-manufacturers and independent contractors, to meet their obligations to us, or significant disruptions in their ability to do so; • government or regulatory responses in markets where we manufacture, sell or distribute our products, or in the markets of third parties on which we rely, preventing or disrupting our business operations; • higher costs in certain areas such as front-line employee compensation, as well as incremental costs associated with newly added health screenings, temperature checks and enhanced cleaning and sanitation protocols to protect our employees; • significant reductions or volatility in demand for one or more of our products, which may be caused by, among other things: the temporary inability of consumers to purchase our products due to illness, quarantine or other travel restrictions, or financial hardship; or other pandemic related restrictions impacting consumer behavior; • an inability to respond to or capitalize on increased demand, including challenges and increased costs associated with adding capacity and related staffing issues; • a change in demand for or availability of our products as a result of retailers, distributors or carriers modifying their inventory, fulfillment or shipping practices; and • the unknown duration and magnitude of a pandemic and all of its related impacts.
While PFL controls a majority of the voting power of our outstanding common stock, we intend to rely on these exemptions and, as a result, will not have a majority of independent directors on our board of directors or a compensation, nominating and corporate governance committee consisting entirely of independent directors.
While PFL controls a majority of the voting power of our outstanding common stock, we intend to rely on these exemptions and, as a result, will not have a majority of independent directors on our board of directors or a compensation, nominating and corporate 22 Table of Contents governance committee consisting entirely of independent directors.
We have entered into various transactions with Rank Group Limited (“Rank”) and other related parties that are members of PEI Group, including, among others: • the lease for our corporate headquarters in Lake Forest, Illinois; • the lease for a facility used for certain research and development activities in Canandaigua, New York; • supply agreements where we sell certain products (primarily aluminum foil containers and roll foil) to, and purchase certain products (primarily tableware) from Pactiv LLC (“Pactiv”), a member of PEI Group; and • a warehousing and freight services agreement whereby Pactiv provides certain logistics services to us.
We have entered into various transactions with Rank Group Limited (“Rank”) and other related parties that are members of PEI Group, including, among others: • the lease for our corporate headquarters in Lake Forest, Illinois; • the lease for a facility used for certain research and development activities in Canandaigua, New York; • supply agreements where we sell certain products (primarily aluminum foil containers and roll foil) to, and purchase certain products (primarily foam-related tableware) from Pactiv LLC (“Pactiv”), a member of PEI Group; • a warehousing and freight services agreement whereby Pactiv provides certain logistics services to us; and • insurance participation in a broader affiliated program.
Programs have included banning certain types of products, mandating certain rates of recycling and/or the use of recycled materials, imposing deposits or taxes on plastic bags and packaging material, and requiring retailers or manufacturers to take back packaging used for their products.
Programs have included banning certain types of products, mandating certain rates of recycling and/or the use of recycled materials, imposing deposits or taxes on plastic bags and packaging material, imposing extended producer responsibility and requiring retailers or manufacturers to take back packaging used for their products.
Higher interest rates during the year ended December 31, 2023, have increased our debt service obligations on the unhedged variable rate indebtedness, and our net income and cash flows, including cash available for servicing our indebtedness, has correspondingly decreased.
Higher interest rates during the year ended December 31, 2023, increased our debt service obligations on the unhedged variable rate indebtedness, and our net income and cash flows, including cash available for servicing our indebtedness, had correspondingly decreased.
We adjust prices, where possible, to mitigate the effect of production cost increases, including raw materials, but these increases are not always possible or may not cover the increased raw material costs. For example, we implemented multiple rounds of price increases in both 2021 and 2022, however those pricing actions typically lagged material cost increases.
We adjust prices, where possible, to attempt to mitigate the effect of production cost increases, including raw materials, but these increases are not always possible or may not cover the increased raw material costs. For example, we implemented multiple rounds of price increases in 2022, however those pricing actions typically lagged material cost increases.
However, these rights do not afford complete protection against third parties. For example, patents, trademarks and copyrights are territorial; thus, our business will only be protected by these rights in those jurisdictions in which we have been issued patents or have trademarks or copyrights, or have obtained licenses to use such patents, trademarks or copyrights.
However, these rights do not afford complete protection against third parties. For example, patents, trademarks and copyrights are territorial; thus, our business will only be protected by these rights in those jurisdictions in 14 Table of Contents which we have been issued patents or have trademarks or copyrights, or have obtained licenses to use such patents, trademarks or copyrights.
There can be no assurance that our effective tax rate or tax payments will not be adversely affected by these legislative measures. In addition, U.S. federal, state and local tax laws and regulations are extremely complex and subject to varying interpretations.
There can be no assurance that our effective tax rate or tax payments will not be adversely affected by these legislative measures. 15 Table of Contents In addition, U.S. federal, state and local tax laws and regulations are extremely complex and subject to varying interpretations.
Increased regulatory requirements, including in relation to various aspects of ESG, such as the SEC’s disclosure proposal on climate change and California’s recent enactment of climate-related disclosure laws, or environmental causes may result in increased compliance costs or input costs of energy, raw materials or compliance with emissions standards, which may cause disruptions in the manufacture of our products or an increase in operating costs.
Increased regulatory requirements, including in relation to various aspects of ESG, such as California’s recent enactment of climate-related disclosure laws, or environmental causes may result in increased compliance costs or input costs of energy, raw materials or compliance with emissions standards, which may cause disruptions in the manufacture of our products or an increase in operating costs.
As a result of this seasonality, any factors negatively affecting us during these periods of any year, including unfavorable economic conditions or pandemic-related impacts, could have a material adverse effect on our financial condition and results of operations for the entire year.
As a result of this seasonality, any factors negatively affecting us during these periods of any year, including unfavorable economic conditions, could have a material adverse effect on our financial condition and results of operations for the entire year.
It is also likely that we may enter into related party transactions in the future.
It is also possible that we may enter into related party transactions in the future.
As of December 31, 2023, the unhedged portion of our Term Loan Facility was approximately $695 million, and any borrowings under our Revolving Facility are subject to interest rate volatility.
As of December 31, 2024, the unhedged portion of our Term Loan Facility was approximately $545 million, and any borrowings under our Revolving Facility are subject to interest rate volatility.
We do not have written agreements with most of our customers. Our contracts generally do not obligate the customer to purchase any given amount of product. If our major customers reduce purchasing volumes or stop purchasing our products for any reason, our business and results of operations would likely be materially and adversely affected.
Our contracts generally do not obligate the customer to purchase any given amount of product. If our major customers reduce purchasing volumes or stop purchasing our products for any reason, our business and results of operations would likely be materially and adversely affected.
In 2023, sales to our top ten customers accounted for 72% of our total revenue, and our two largest customers, Walmart and Sam’s Club, individually accounted for 30% and 18%, respectively, of our total revenue. Walmart and Sam’s Club are affiliated entities.
In 2024, sales to our top ten customers accounted for 72% of our total revenue, and our two largest customers, Walmart and Sam’s Club, individually accounted for 31% and 17%, respectively, of our total revenue. Walmart and Sam’s Club are affiliated entities.
As of December 31, 2023, we had $1,845 million of outstanding indebtedness under our senior secured term loan facility (“Term Loan Facility”) maturing in 2027 and $244 million of borrowing capacity under our senior secured revolving credit facility (“Revolving Facility”) maturing in 2026 (the Term Loan Facility and the Revolving Facility, the “External Debt Facilities”).
As of December 31, 2024, we had $1,695 million of outstanding indebtedness under our senior secured term loan facility (“Term Loan Facility”) maturing in 2027 and $694 million of borrowing capacity under our senior secured revolving credit facility (“Revolving Facility”) maturing in 2029 (the Term Loan Facility and the Revolving Facility, the “External Debt Facilities”).
Our tableware products generally have higher sales in the second quarter of the year, primarily due to outdoor summertime use of disposable plates, cups and bowls.
Our tableware products generally have higher sales in the second and fourth quarters of the year, primarily due to outdoor summertime and holiday uses of disposable plates, cups, bowls and cutlery.
In particular, reduced trucking capacity, due to a shortage of drivers, the federal regulation requiring drivers to electronically log their driving hours and adverse weather conditions, among other reasons, have caused an increase in the cost of transportation for us and many other companies.
In particular, reduced trucking capacity, due to a shortage of drivers, the federal regulation requiring drivers to electronically log their driving hours and adverse weather conditions, among other reasons, have caused an increase in our cost of transportation. Any interruption in our supply of raw materials could harm our business, financial condition and results of operations.
Any interruption in our supply of raw materials could harm our business, financial condition and results of operations. We are dependent on our suppliers for an uninterrupted supply of key raw materials in a timely manner.
We are dependent on our suppliers for an uninterrupted supply of key raw materials in a timely manner.
Additionally, there can be no assurance that others will not independently develop knowledge and trade secrets that are similar to ours, or develop products or brands that compete effectively with our products and brands without infringing, misusing or otherwise violating any of our intellectual property rights. 14 Table of Contents We cannot be certain that any of our current or pending patents, trademarks and copyrights will provide us with sufficient protection from competitors, or that any intellectual property rights we do hold will not be invalidated, circumvented or challenged in the future.
Additionally, there can be no assurance that others will not independently develop knowledge and trade secrets that are similar to ours, or develop products or brands that compete effectively with our products and brands without infringing, misusing or otherwise violating any of our intellectual property rights.
The resolution of any potential conflicts or disputes between us, PEI Group, PFL or Rank or their subsidiaries over these or other matters may be less favorable to us than the resolution we might achieve if we were dealing with an unaffiliated third party. 23 Table of Contents The agreements we have entered into with PEI Group and Rank are of varying durations and may be amended upon agreement of the parties.
The agreements we have entered into with PEI Group and Rank are of varying durations and may be amended upon agreement of the parties.
Removed
The COVID-19 pandemic negatively affected certain parts of our business and operations.
Added
Effective January 1, 2025, our long-term President, Chief Executive Officer and member of our Board of Directors, Lance Mitchell, stepped down from such positions due to his voluntary retirement.
Removed
We have leveraged our combined scale to coordinate purchases across our operations to reduce costs.
Added
Scott Huckins, previously our Chief Financial Officer, was appointed as President and Chief Executive Officer and as a member of our Board of Directors, and Nathan Lowe, previously our Senior Vice President of Financial Planning & Analysis, was appointed as Chief Financial Officer.
Added
Any significant leadership change or senior management transition involves inherent risks, and any failure to successfully transition key roles could impact our ability to execute on our strategic plans, make it difficult to meet our performance objectives and be disruptive to our business.
Added
Lance Mitchell will remain with the Company as an employee in an advisory capacity through his voluntary retirement on July 31, 2025.
Added
We cannot be certain that any of our current or pending patents, trademarks and copyrights will provide us with sufficient protection from competitors, or that any intellectual property rights we do hold will not be invalidated, circumvented or challenged in the future.
Added
We have leveraged our combined scale to coordinate purchases across our operations to reduce costs. In December 2024, the PEI Group announced it has entered into a definitive agreement to be acquired by an unrelated third party (the “PEI Group Acquisition”), pending regulatory approval. If the PEI Group Acquisition is completed, we will no longer be affiliated with PEI Group.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+2 added−1 removed1 unchanged
Biggest changeOur cyber crisis management program includes a documented plan that provides guidance to address the overall coordination of our response to a cyber crisis and plan for resources, actions and decisions we may need to be prepared for; a cyber crisis communication plan for timely and accurate dissemination of evolving information to stakeholders during the crisis, including the timeline, approval process and monitoring of messaging; and business continuity plans that document the application of specific strategies and measures to enable core business activities to continue during a cyber event.
Biggest changeOur cyber crisis management program includes a documented plan that provides overall coordination of our response to a major cyber incident as well as a resource engagement plan. As part of our crisis management plan, our cyber crisis communication plan accounts for timely and accurate dissemination of information to stakeholders during the crisis.
ITEM 1C. CYBERSECURITY Governance Our information security program is managed by a dedicated Chief Information Security Officer (“CISO”), whose team is responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture and processes, including assessing and managing our material risks from cybersecurity threats.
ITEM 1C. CYBERSECURITY Governance Our information security program is managed by a Chief Information Security Officer (“CISO”), whose team is responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture and processes, including assessing and managing our material risks from cybersecurity threats.
Our cybersecurity processes are integrated into our overall risk management system, and include a comprehensive cyber crisis management program that would apply if a cybersecurity related incident were to occur. We perform simulations, tabletop exercises and response readiness tests on an annual basis. In addition, we engage external consultants to perform penetration testing at least annually.
Our cybersecurity processes are integrated into our overall risk management program, and include a comprehensive cyber crisis management program that would apply if a cybersecurity related incident were to occur. We perform response simulations, tabletop exercises and recovery tests on a quarterly basis. In addition, we engage external consultants to perform penetration testing at least annually.
Refer to "A cyber-attack or failure of one or more key information technology systems, operational technology systems, networks, processes, associated sites or service providers could have a material adverse impact on our business and reputation" in Item 1A. "Risk Factors" for information regarding material risks from cybersecurity threats that affect us.
Refer to “A cyber-attack or failure of one or more key information technology systems, operational technology systems, networks, processes, associated sites or service providers could have a material adverse impact on our business and reputation” in Item 1A. “Risk Factors” for information regarding material risks from cybersecurity threats that affect us.
We also perform periodic due diligence reviews for existing third-party service providers based on the risks identified in the initial review, or if events and circumstances necessitate a review.
We also perform periodic information security capabilities reviews for existing third-party service providers based on the risks identified in the initial review, or if events and circumstances necessitate a review.
The ongoing development and maturity of our cyber crisis management program is reported to senior management quarterly. Tabletop testing of the various plans occur annually with quarterly preparedness exercises. With respect to third-party service providers, we perform information security assessments and due diligence reviews prior to entering into a contractual agreement.
The ongoing development and maturity of our cyber crisis management program is reported to senior management quarterly. With respect to third-party service providers, we perform assessments of their information security capabilities prior to entering into a contractual agreement.
The framework leverages International Organization for Standardization 27001/27002 standards for general information technology controls, the National Institute of Standards and Technology Cyber Security Framework for measuring overall readiness to respond to cyber threats, and Sarbanes-Oxley Act for assessment in internal controls.
We leverage the National Institute of Standards and Technology Cyber Security Framework 2.0 for measuring overall readiness to respond to cyber threats and the Sarbanes-Oxley Act for assessment in internal controls.
The CISO provides quarterly reports to the Audit Committee, as well as more frequent reports to our Chief Executive Officer and other members of our senior management. These reports include updates on our cyber risks and threats, the status of projects to strengthen our information security systems, assessments of our information security program, and the emerging threat landscape.
The CISO provides quarterly reports to the Audit Committee, as well as more frequent reports to our Cyber Security Steering Committee, which includes the Chief Executive Officer, Chief Financial Officer and other members of our senior management.
Our cybersecurity program is regularly evaluated by internal and external experts, with the results of those reviews reported to senior management and the Audit Committee. We also actively engage with key vendors, industry participants and intelligence and law enforcement communities as part of our continuing efforts to evaluate and enhance the effectiveness of our information security policies and procedures.
We also actively engage with key vendors and industry participants as part of our continuing efforts to evaluate and enhance the effectiveness of our information security policies and procedures. Risk Management and Strategy We have a comprehensive cybersecurity and information security framework that includes risk assessment and mitigation.
Removed
Risk Management and Strategy We have a comprehensive cybersecurity and information security framework that includes risk assessment and mitigation through a threat intelligence-driven approach, application controls and enhanced security with ransomware defense.
Added
These reports include updates on our cyber risks and threats, the status of projects to strengthen our information security systems, assessments of our information security program, and the emerging threat landscape. Our cybersecurity program is periodically evaluated by internal and external experts, with the results of those reviews reported to senior management and the Audit Committee.
Added
Other components of our crisis management plan are our business continuity plan, that documents the application of specific strategies and measures to enable core business activities to continue during a cyber event, and our disaster recovery plan, that is designed to restore data and systems to their operational state.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in Lake Forest, Illinois. In addition, as of December 31, 2023, our production and distribution network consisted of 25 manufacturing and warehouse facilities in 12 states and one manufacturing facility in Canada, which are used to produce and store the products sold in all four of our business segments.
Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in Lake Forest, Illinois. In addition, as of December 31, 2024, our production and distribution network consisted of 27 manufacturing and warehouse facilities in 12 states and one manufacturing facility and one warehouse in Canada, which are used to produce and store the products sold in all four of our business segments.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we are a party to various claims, charges and litigation matters arising in the ordinary course of business. Management and legal counsel regularly review the probable outcome of such proceedings. We have established reserves for legal matters that are probable and estimable, and at December 31, 2023, these reserves were not significant.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we are a party to various claims, charges and litigation matters arising in the ordinary course of business. Management and legal counsel regularly review the probable outcome of such proceedings. We have established reserves for legal matters that are probable and estimable, and at December 31, 2024, these reserves were not significant.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed5 unchanged
Biggest changePrior to that date, there was no public trading market for our common stock. Stockholders As of January 31, 2024, there were four holders of record of our common stock. The actual number of our stockholders is greater than this number, and includes beneficial owners whose shares are held in “street name” by banks, brokers and other nominees.
Biggest changePrior to that date, there was no public trading market for our common stock. Stockholders As of January 31, 2025, there were three holders of record of our common stock. The actual number of our stockholders is greater than this number, and includes beneficial owners whose shares are held in “street name” by banks, brokers and other nominees.
Equity Compensation Plan Information The information required by this Item concerning our equity compensation plan is incorporated herein by reference to Part III, Item 12 of this report. 27 Table of Contents Performance Graph The following graph compares our cumulative total stockholder return from January 31, 2020 to December 31, 2023 to that of the S&P 500 Index, the Russell MidCap Index and a peer group.
Equity Compensation Plan Information The information required by this Item concerning our equity compensation plan is incorporated herein by reference to Part III, Item 12 of this report. 27 Table of Contents Performance Graph The following graph compares our cumulative total stockholder return from January 31, 2020 to December 31, 2024 to that of the S&P 500 Index, the Russell MidCap Index and a peer group.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

54 edited+10 added−11 removed82 unchanged
Biggest changeYear Ended December 31, 2023 Compared with the Year Ended December 31, 2022 Total Reynolds Consumer Products For the Years Ended December 31, (in millions, except for %) 2023 % of Revenue 2022 % of Revenue Change % Change Net revenues $ 3,673 98 % $ 3,716 97 % $ (43) (1) % Related party net revenues 83 2 % 101 3 % (18) (18) % Total net revenues 3,756 100 % 3,817 100 % (61) (2) % Cost of sales (2,814) (75) % (3,041) (80) % 227 7 % Gross profit 942 25 % 776 20 % 166 21 % Selling, general and administrative expenses (430) (11) % (340) (9) % (90) (26) % Other expense, net — — % (22) (1) % 22 100 % Income from operations 512 14 % 414 11 % 98 24 % Interest expense, net (119) (3) % (76) (2) % (43) (57) % Income before income taxes 393 10 % 338 9 % 55 16 % Income tax expense (95) (3) % (80) (2) % (15) (19) % Net income $ 298 8 % $ 258 7 % $ 40 16 % Adjusted EBITDA (1) $ 636 17 % $ 546 14 % $ 90 16 % (1) Adjusted EBITDA is a non-GAAP measure.
Biggest changeYear Ended December 31, 2024 Compared with the Year Ended December 31, 2023 Total Reynolds Consumer Products For the Years Ended December 31, (in millions, except for %) 2024 % of Revenue 2023 % of Revenue Change % Change Net revenues $ 3,618 98 % $ 3,673 98 % $ (55) (1) % Related party net revenues 77 2 % 83 2 % (6) (7) % Total net revenues 3,695 100 % 3,756 100 % (61) (2) % Cost of sales (2,717) (74) % (2,814) (75) % 97 3 % Gross profit 978 26 % 942 25 % 36 4 % Selling, general and administrative expenses (429) (12) % (430) (11) % 1 — % Other expense, net — — % — — % — — % Income from operations 549 15 % 512 14 % 37 7 % Interest expense, net (98) (3) % (119) (3) % 21 18 % Income before income taxes 451 12 % 393 10 % 58 15 % Income tax expense (99) (3) % (95) (3) % (4) (4) % Net income $ 352 10 % $ 298 8 % $ 54 18 % Adjusted EBITDA (1) $ 678 18 % $ 636 17 % $ 42 7 % (1) Adjusted EBITDA is a non-GAAP measure.
Detailed comparisons of revenue and results are presented in the discussions of the operating segments, which follow our consolidated results discussion. Certain discussions in this section provide a breakdown of net revenues between our retail business and our non-retail business.
Detailed comparisons of revenue and results are presented in the discussions of the operating segments, which follow our consolidated results discussion. Certain discussions in this section provide a breakdown of net revenues between our retail business and non-retail business.
Our retail business net revenues consist of sales to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets and eCommerce retailers. Our non-retail business net revenues consist of sales to food service customers, which are classified as related party revenues, and industrial customers.
Our retail business net revenues consist of sales to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets and eCommerce retailers. Our non-retail business net revenues consist of aluminum sales to food service customers, which are classified as related party revenues, and industrial customers.
No instances of impairment were identified during the fiscal year 2023 annual impairment review. All of our reporting units had fair values that significantly exceeded recorded carrying values. However, future changes in the judgments, assumptions and estimates that are used in the impairment testing for goodwill as described below could result in significantly different estimates of the fair values.
No instances of impairment were identified during the fiscal year 2024 annual impairment review. All of our reporting units had fair values that significantly exceeded recorded carrying values. However, future changes in the judgments, assumptions and estimates that are used in the impairment testing for goodwill as described below could result in significantly different estimates of the fair values.
These interest rate swaps hedge a portion of the interest rate exposure resulting from our Term Loan Facility for periods ranging from two to three years. Prepayments The Term Loan Facility contains customary mandatory prepayments, including with respect to excess cash flow, asset sale proceeds and proceeds from certain incurrences of indebtedness.
These interest rate swaps hedge a portion of the interest rate exposure resulting from our Term Loan Facility for periods ranging from one to two years. Prepayments The Term Loan Facility contains customary mandatory prepayments, including with respect to excess cash flow, asset sale proceeds and proceeds from certain incurrences of indebtedness.
No impairments were identified as a result of our impairment review performed annually during the fourth quarter of fiscal years 2023, 2022 and 2021. Goodwill Our reporting units for goodwill impairment testing purposes are Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware and Presto Products.
No impairments were identified as a result of our impairment review performed annually during the fourth quarter of fiscal years 2024, 2023 and 2022. Goodwill Our reporting units for goodwill impairment testing purposes are Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware and Presto Products.
Changes in such estimates or the use of alternative assumptions could produce different results. No instances of impairment were identified during the fiscal year 2023 annual impairment review. Each of our indefinite-lived intangible assets had fair values that significantly exceeded recorded carrying values.
Changes in such estimates or the use of alternative assumptions could produce different results. No instances of impairment were identified during the fiscal year 2024 annual impairment review. Each of our indefinite-lived intangible assets had fair values that significantly exceeded recorded carrying values.
As of December 31, 2023, we had no outstanding borrowings under the Revolving Facility, and we had $6 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility. The borrower under the Amended External Debt Facilities is Reynolds Consumer Products LLC (the “Borrower”). The Revolving Facility includes a sub-facility for letters of credit.
As of December 31, 2024, we had no outstanding borrowings under the Revolving Facility, and we had $6 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility. The borrower under the Amended External Debt Facilities is Reynolds Consumer Products LLC (the “Borrower”). The Revolving Facility includes a sub-facility for letters of credit.
The aggregate notional amount of our interest rate swaps still in effect as of December 31, 2023 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 aggregate notional amount of our interest rate swaps still in effect as of December 31, 2024 was $1,150 million, and the SOFR is fixed at an annual rate of 0.40% to 3.40% (for an annual effective interest rate of 2.15% to 5.15%, including margin).
External Debt Facilities In February 2020, we entered into the External Debt Facilities which consists of a $2,475 million Term Loan Facility and a Revolving Facility that provides for additional borrowing capacity of up to $250 million, reduced by amounts used for letters of credit.
External Debt Facilities In February 2020, we entered into the External Debt Facilities which consists of a $2,475 million Term Loan Facility and a Revolving Facility that provided for additional borrowing capacity of up to $250 million, reduced by amounts used for letters of credit.
Hefty has 99% brand awareness and is most commonly identified with the Brand's famous “Hefty! Hefty! Hefty!” slogan. We have the #1 branded market share in the U.S. large black trash bag and slider bag segments, and the #2 branded market share in the tall kitchen trash bag segment.
Hefty has 98% brand awareness and is most commonly identified with the Brand’s famous “Hefty! Hefty! Hefty!” slogan. We have the #1 branded market share in the U.S. large black trash bag segment, and the #2 branded market share in the slider bag and tall kitchen trash bag segments.
Over 65% of our revenue comes from products that are #1 in their respective categories. We have developed our market-leading position by investing in our product categories and consistently developing innovative products that meet the evolving needs and preferences of the modern consumer.
Over 50% of our revenue comes from products that are #1 in their respective categories. We have developed our market-leading position by investing in our product categories and consistently developing innovative products that meet the evolving needs and preferences of the modern consumer.
Branded products and store brand products accounted for 62% and 38% of our revenue, excluding business-to-business revenue, respectively, in the year ended December 31, 2023. We intend to continue investing in both our branded and store brand products to grow the entire product category.
Branded products and store brand products accounted for 62% and 38% of our revenue, excluding business-to-business revenue, respectively, in the year ended December 31, 2024. We intend to continue investing in both our branded and store brand products to grow the entire product category.
Our Hefty branded products include dishes and party cups. Hefty branded party cups are the #1 party cup in America measured by market share. Our branded products use our Hefty brand to represent both quality and great value, and we bring this same quality and value promise to all of our store brands as well.
Our Hefty branded products include dishes, party cups, cutlery and containers. Hefty branded party cups are the #1 party cup in America measured by market share. Our branded products use our Hefty brand to represent both quality and value, and we bring this same quality and value promise to all of our store brands as well.
Our robust product portfolio in this segment includes a full suite of products, including sustainable solutions such as compostable bags, bags made from recycled materials and orange bags through the Hefty ReNew Program. • Hefty Tableware: Through our Hefty Tableware segment, we sell both branded and store brand disposable and compostable plates, bowls, platters, cups and cutlery.
Our robust product portfolio in this segment includes a full suite of products, including sustainable solutions such as blue and clear recycling bags, compostable bags, bags made from recycled materials and orange bags through the Hefty ReNew Program. • Hefty Tableware: Through our Hefty Tableware segment, we sell both branded and store brand disposable and compostable plates, bowls, platters, containers, cups and cutlery.
Our scale across household aisles and ability to offer both branded and store brand products enable us to grow the overall category. Through our category captain level advisor roles with our retail partners, we offer marketing and consumer shopping strategies, both in store and online, which expand usage occasions and stimulate consumption.
Our scale across household aisles and ability to offer both branded and store brand products enable us to grow the overall category. Through our category captain level advisorship roles with our retail partners, we offer marketing and consumer shopping strategies, both in store and online, which expand usage occasions and stimulate consumption for our categories.
Sales incentives represented 5%, 4%, and 4% of total net revenues for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 and 2022, we had accruals of $40 million and $38 million, respectively, reflected on our consolidated balance sheets in Accrued and other current liabilities related to sales incentive programs.
Sales incentives represented 5%, 5%, and 4% of total net revenues for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024 and 2023, we had accruals of $36 million and $40 million, respectively, reflected on our consolidated balance sheets in Accrued and other current liabilities related to sales incentive programs.
As of December 31, 2023, the amount of obligations outstanding that we have confirmed as valid under the SCF was $19 million. 39 Table of Contents Dividends During the year ended December 31, 2023, cash dividends totaling $0.92 per share were declared and paid.
As of December 31, 2024 and 2023, the amount of obligations outstanding that we have confirmed as valid under the SCF were $12 million and $19 million, respectively. 39 Table of Contents Dividends During the year ended December 31, 2024, cash dividends totaling $0.92 per share were declared and paid.
The interest rate on the floating rate debt balances has been assumed to be the same as the rate in effect as of December 31, 2023. (2) Total operating lease liabilities include $55 million in commitments related to operating leases executed that have not yet commenced.
The interest rate on the floating rate debt balances has been assumed to be the same as the rate in effect as of December 31, 2024. (2) Total operating lease liabilities include $17 million in commitments related to operating leases executed that have not yet commenced.
Discussions of the year ended December 31, 2022 items and comparisons between the year ended December 31, 2022 and the year ended December 31, 2021 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed on February 8, 2023.
Discussions of the year ended December 31, 2023 items and comparisons between the year ended December 31, 2023 and the year ended December 31, 2022 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed on February 7, 2024.
As of December 31, 2023, our liabilities for uncertain tax positions and defined benefit pension obligations totaled $13 million. The ultimate timing of these liabilities cannot be determined; therefore, we have excluded these amounts from the contractual obligations table above.
As of December 31, 2024, our liabilities for uncertain tax positions and defined benefit pension obligations totaled $12 million. The ultimate timing of these liabilities cannot be determined; therefore, we have excluded these amounts from the contractual obligations table above.
See “Non-GAAP Measures” for details, including a reconciliation between net income and Adjusted EBITDA. 34 Table of Contents Components of Change in Net Revenues for the Year Ended December 31, 2023 vs. the Year Ended December 31, 2022 Price Volume/Mix Total Reynolds Cooking & Baking — % (1) % (1) % Hefty Waste & Storage 2 % (2) % — % Hefty Tableware 5 % (8) % (3) % Presto Products — % (2) % (2) % Total RCP 2 % (4) % (2) % Total Net Revenues .
See “Non-GAAP Measures” for details, including a reconciliation between net income and Adjusted EBITDA. 34 Table of Contents Components of Change in Net Revenues for the Year Ended December 31, 2024 vs. the Year Ended December 31, 2023 Price Volume/Mix Total Retail Non-Retail Reynolds Cooking & Baking — % (1) % (1) % (2) % Hefty Waste & Storage 1 % 1 % — % 2 % Hefty Tableware (2) % (3) % — % (5) % Presto Products 1 % — % — % 1 % Total RCP (1) % (1) % — % (2) % Total Net Revenues .
Presto Products is a market leader in food storage bags and differentiates itself by providing access to category management, consumer insights, marketing, merchandising and R&D resources. Presto Products was the first in the U.S. market to offer a store branded sandwich bag made with an approximately 20% proprietary blend of plant and ocean, renewable materials.
Presto Products is a market leader in food storage bags and differentiates itself by providing access to category management, consumer insights, marketing, merchandising and research and development (“R&D”) resources. Presto Products was the first in the U.S. market to offer a store branded sandwich bag made with an approximately 20% proprietary blend of plant and ocean, renewable materials.
Our tableware products generally have higher sales in the second quarter of the year, primarily due to outdoor summertime use of disposable plates, cups and bowls. 36 Table of Contents Liquidity and Capital Resources Our principal sources of liquidity are existing cash and cash equivalents, cash generated from operating activities, including proceeds from factored receivables, and available borrowings under the Revolving Facility.
Our tableware products generally have higher sales in the second and fourth quarters of the year, primarily due to outdoor summertime and holiday uses of disposable plates, cups, bowls and cutlery. 36 Table of Contents Liquidity and Capital Resources Our principal sources of liquidity are existing cash and cash equivalents, cash generated from operating activities, including proceeds from factored receivables, and available borrowings under the Revolving Facility.
We define Adjusted EBITDA as net income calculated in accordance with GAAP, plus the sum of income tax expense, net interest expense, depreciation and amortization and further adjusted to exclude IPO and separation-related costs, as well as other non-recurring costs.
We define Adjusted EBITDA as net income calculated in accordance with GAAP, plus the sum of income tax expense, net interest expense, depreciation and amortization and as may be further adjusted to exclude IPO and separation-related costs, as well as other non-recurring items, if applicable.
Accounts Receivable Factoring We are party to a factoring agreement with JP Morgan Chase Bank, N.A. to sell certain accounts receivable up to $95 million. We had no outstanding balance owed under the factoring arrangement as of December 31, 2023. The outstanding balance owed under the factoring arrangement as of December 31, 2022 was $15 million.
Accounts Receivable Factoring We are party to a factoring agreement with JP Morgan Chase Bank, N.A. to sell certain accounts receivable up to $95 million. We had no outstanding balance owed under the factoring arrangement as of December 31, 2024 and 2023.
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. As of December 31, 2023, the outstanding balance under the Term Loan Facility was $1,845 million.
Other than the foregoing, the material terms of the External Debt Facilities, as amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3 (“Amended External Debt Facilities”) remain unchanged. As of December 31, 2024, the outstanding balance under the Term Loan Facility was $1,695 million.
The following table presents a reconciliation of our net income and diluted EPS, the most directly comparable GAAP financial measures, to Adjusted Net Income and Adjusted EPS: Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 (in millions, except for per share data) Net Income Diluted Shares Diluted EPS Net Income Diluted Shares Diluted EPS Net Income Diluted Shares Diluted EPS As Reported - GAAP $ 298 210 $ 1.42 $ 258 210 $ 1.23 $ 324 210 $ 1.54 Adjustments: IPO and separation-related costs (1) — — — 9 210 0.04 11 210 0.05 Other (1) — — — 2 210 0.01 — — — Adjusted (Non-GAAP) $ 298 210 $ 1.42 $ 269 210 $ 1.28 $ 335 210 $ 1.59 (1) Amounts are after tax, calculated using a tax rate of 23.6% for the year ended December 31, 2022 and 24.6% for the year ended December 31, 2021, which is our effective tax rate for the periods presented. 33 Table of Contents Results of Operations The following discussion should be read in conjunction with our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
No such costs were incurred during the years ended December 31, 2024 and 2023. 32 Table of Contents The following table presents a reconciliation of our net income and diluted EPS, the most directly comparable GAAP financial measures, to Adjusted Net Income and Adjusted EPS: Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 (in millions, except for per share data) Net Income Diluted Shares Diluted EPS Net Income Diluted Shares Diluted EPS Net Income Diluted Shares Diluted EPS As Reported - GAAP $ 352 210.4 $ 1.67 $ 298 210.0 $ 1.42 $ 258 209.9 $ 1.23 Adjustments: IPO and separation-related costs (1) — — — — — — 9 209.9 0.04 Other (1) — — — — — — 2 209.9 0.01 Adjusted (Non-GAAP) $ 352 210.4 $ 1.67 $ 298 210.0 $ 1.42 $ 269 209.9 $ 1.28 (1) Amounts are after tax, calculated using a tax rate of 23.6% for the year ended December 31, 2022, which is our effective tax rate for that period. 33 Table of Contents Results of Operations The following discussion should be read in conjunction with our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs, as well as lower logistics costs, partially offset by lower volume. Seasonality Portions of our business historically have been moderately seasonal. Overall, our strongest sales are in our fourth quarter and our weakest sales are in our first quarter.
The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs and the benefit of product portfolio optimization. Seasonality Portions of our business historically have been moderately seasonal. Overall, our strongest sales are in our fourth quarter and our weakest sales are in our first quarter.
On January 25, 2024, a quarterly cash dividend of $0.23 per share was declared and is to be paid on February 29, 2024.
On January 30, 2025, a quarterly cash dividend of $0.23 per share was declared and is to be paid on February 28, 2025.
Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP.
Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP financial measures presented by other companies.
In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP financial measures presented by other companies. 32 Table of Contents The following table presents a reconciliation of our net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA: For the Years Ended December 31, 2023 2022 2021 (in millions) Net income – GAAP $ 298 $ 258 $ 324 Income tax expense 95 80 106 Interest expense, net 119 76 48 Depreciation and amortization 124 117 109 IPO and separation-related costs (1) — 12 14 Other — 3 — Adjusted EBITDA (Non-GAAP) $ 636 $ 546 $ 601 (1) Reflects costs during the years ended December 31, 2022 and 2021 related to our separation to operate as a stand-alone public company as well as costs related to the IPO process.
The following table presents a reconciliation of our net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA: For the Years Ended December 31, 2024 2023 2022 (in millions) Net income – GAAP $ 352 $ 298 $ 258 Income tax expense 99 95 80 Interest expense, net 98 119 76 Depreciation and amortization 129 124 117 IPO and separation-related costs (1) — — 12 Other — — 3 Adjusted EBITDA (Non-GAAP) $ 678 $ 636 $ 546 (1) Reflects costs during the year ended December 31, 2022 related to our separation to operate as a stand-alone public company as well as costs related to the IPO process.
Description of the Company and its Business Segments We are a market-leading consumer products company with a presence in 95% of households across the United States. We produce and sell products across three broad categories: cooking products, waste and storage products and tableware.
Description of the Company and its Business Segments We are a market-leading consumer products company with a presence in 95% of households across the United States. We produce and sell products that people use in their homes for cooking, serving, cleanup and storage.
Reynolds is one of the most recognized household brands in the United States and has been the top trusted brand in the consumer foil market for over 75 years, with greater than 50% market share in most of its categories. • Hefty Waste & Storage: Through our Hefty Waste & Storage segment, we produce both branded and store brand trash and food storage bags.
Reynolds is one of the most recognized household brands in the United States, with 98% brand awareness, and has been the top trusted brand in the consumer foil market for over 75 years, with greater than 50% market share in most of its categories.
Presto Products For the Years Ended December 31, (in millions, except for %) 2023 2022 Change % Change Total segment net revenues $ 593 $ 604 $ (11) (2) % Segment Adjusted EBITDA 112 96 16 17 % Segment Adjusted EBITDA Margin 19 % 16 % Total Segment Net Revenues.
Presto Products For the Years Ended December 31, (in millions, except for %) 2024 2023 Change % Change Total segment net revenues $ 596 $ 593 $ 3 1 % Segment Adjusted EBITDA 130 112 18 16 % Segment Adjusted EBITDA Margin 22 % 19 % Total Segment Net Revenues.
We intend to continue sustainability innovation in our efforts to be at the leading edge of recyclability, renewability and compostability in order to offer our customers environmentally sustainable choices.
We intend to continue sustainability innovation in our efforts to be at the leading edge of recyclability, renewability and compostability in order to offer our customers environmentally sustainable choices. Our 2023 acquisition of privately held Atacama Manufacturing Inc. enhanced our innovation pipeline with sustainable products from plant-based resins.
Aggregation of Segment Revenue and Adjusted EBITDA (in millions) Reynolds Cooking & Baking Hefty Waste & Storage Hefty Tableware Presto Products Unallocated⁽²⁾ Total Reynolds Consumer Products Net revenues 2023 $ 1,273 $ 942 $ 967 $ 593 $ (19) $ 3,756 2022 1,287 946 1,000 604 (20) 3,817 Adjusted EBITDA (1) 2023 $ 184 $ 261 $ 174 $ 112 $ (95) $ 636 2022 142 207 134 96 (33) 546 (1) Adjusted EBITDA is a non-GAAP measure.
Aggregation of Segment Revenue and Adjusted EBITDA (in millions) Reynolds Cooking & Baking Hefty Waste & Storage Hefty Tableware Presto Products Unallocated⁽²⁾ Total Reynolds Consumer Products Net revenues 2024 $ 1,247 $ 959 $ 918 $ 596 $ (25) $ 3,695 2023 1,273 942 967 593 (19) 3,756 Adjusted EBITDA (1) 2024 $ 222 $ 272 $ 147 $ 130 $ (93) $ 678 2023 184 261 174 112 (95) 636 (1) Adjusted EBITDA is a non-GAAP measure.
The increase in Adjusted EBITDA was primarily driven by the optimization of our retail product portfolio mix, lower material and manufacturing costs and lower logistics costs, partially offset by an increased investment in advertising. 35 Table of Contents Hefty Waste & Storage For the Years Ended December 31, (in millions, except for %) 2023 2022 Change % Change Total segment net revenues $ 942 $ 946 $ (4) — % Segment Adjusted EBITDA 261 207 54 26 % Segment Adjusted EBITDA Margin 28 % 22 % Total Segment Net Revenues .
The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs. 35 Table of Contents Hefty Waste & Storage For the Years Ended December 31, (in millions, except for %) 2024 2023 Change % Change Total segment net revenues $ 959 $ 942 $ 17 2 % Segment Adjusted EBITDA 272 261 11 4 % Segment Adjusted EBITDA Margin 28 % 28 % Total Segment Net Revenues .
Segment Information Reynolds Cooking & Baking For the Years Ended December 31, (in millions, except for %) 2023 2022 Change % Change Retail net revenues $ 1,076 $ 1,019 $ 57 6 % Non-retail net revenues 197 268 (71) (26) % Total segment net revenues $ 1,273 $ 1,287 $ (14) (1) % Segment Adjusted EBITDA $ 184 $ 142 $ 42 30 % Segment Adjusted EBITDA Margin 14 % 11 % Total Segment Net Revenues .
Segment Information Reynolds Cooking & Baking For the Years Ended December 31, (in millions, except for %) 2024 2023 Change % Change Retail net revenues $ 1,070 $ 1,076 $ (6) (1) % Non-retail net revenues 177 197 (20) (10) % Total segment net revenues $ 1,247 $ 1,273 $ (26) (2) % Segment Adjusted EBITDA $ 222 $ 184 $ 38 21 % Segment Adjusted EBITDA Margin 18 % 14 % Total Segment Net Revenues .
The following table discloses our cash flows for the years presented: For the Years Ended December 31, (in millions) 2023 2022 Net cash provided by operating activities $ 644 $ 219 Net cash used in investing activities (110) (128) Net cash used in financing activities (457) (217) Increase (decrease) in cash and cash equivalents $ 77 $ (126) Cash provided by operating activities Net cash from operating activities increased by $425 million, or 194%, to $644 million.
The following table discloses our cash flows for the years presented: For the Years Ended December 31, (in millions) 2024 2023 Net cash provided by operating activities $ 489 $ 644 Net cash used in investing activities (120) (110) Net cash used in financing activities (346) (457) Effect of exchange rate on cash and cash equivalents (1) — Net increase in cash and cash equivalents $ 22 $ 77 Cash provided by operating activities Net cash from operating activities decreased by $155 million, or 24%, to $489 million.
Hefty Tableware For the Years Ended December 31, (in millions, except for %) 2023 2022 Change % Change Total segment net revenues $ 967 $ 1,000 $ (33) (3) % Segment Adjusted EBITDA 174 134 40 30 % Segment Adjusted EBITDA Margin 18 % 13 % Total Segment Net Revenues.
Hefty Tableware For the Years Ended December 31, (in millions, except for %) 2024 2023 Change % Change Total segment net revenues $ 918 $ 967 $ (49) (5) % Segment Adjusted EBITDA 147 174 (27) (16) % Segment Adjusted EBITDA Margin 16 % 18 % Total Segment Net Revenues.
The Borrower may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary breakage costs with respect to SOFR based loans. During the year ended December 31, 2023, we made voluntary principal payments of $250 million related to the Term Loan Facility, which were not subject to a prepayment premium.
The Borrower may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary breakage costs with respect to SOFR based loans.
Our tableware products generally have higher sales in the second quarter of the year, primarily due to outdoor summertime use of disposable plates, cups and bowls. Sustainability Interest in environmental sustainability has increased over the past decade, and it has played, and we expect it will continue to play, an increasing role in consumer purchasing decisions.
Sustainability Interest in environmental sustainability has increased over the past decade, and it has played, and we expect it will continue to play, an increasing role in consumer purchasing decisions.
Contractual Obligations The following table summarizes our material contractual obligations as of December 31, 2023: (in millions) Total Less than one year One to three years Three to five years Greater than five years Long-term debt (1) $ 2,262 $ 135 $ 270 $ 1,857 $ — Operating lease liabilities (2) 119 21 43 26 29 Finance lease liabilities 22 2 4 4 12 Unconditional capital expenditure obligations 40 40 — — — Postretirement benefit plan obligations 16 2 4 2 8 Total contractual obligations $ 2,459 $ 200 $ 321 $ 1,889 $ 49 (1) Total obligations for long-term debt consist of the principal amounts and interest obligations.
Contractual Obligations The following table summarizes our material contractual obligations as of December 31, 2024: (in millions) Total Less than one year One to three years Three to five years Greater than five years Long-term debt (1) $ 1,918 $ 107 $ 1,811 $ — $ — Operating lease liabilities (2) 123 27 47 32 17 Finance lease liabilities 20 2 4 4 10 Unconditional capital expenditure obligations 51 51 — — — Postretirement benefit plan obligations 15 2 3 2 8 Total contractual obligations $ 2,127 $ 189 $ 1,865 $ 38 $ 35 (1) Total obligations for long-term debt consist of the principal amounts and interest obligations.
The increase in Adjusted EBITDA was primarily driven by higher pricing due to previously implemented pricing actions and lower material and manufacturing costs, as well as lower logistics costs, partially offset by lower volume and an increased investment in advertising.
The increase in Adjusted EBITDA was primarily due to lower material and manufacturing costs, partially offset by higher logistics costs and the impact of lower net revenues.
Presto Products total segment net revenues decreased by $11 million, or 2%, to $593 million. The decrease in net revenues was primarily due to lower volume. Adjusted EBITDA . Presto Products Adjusted EBITDA increased by $16 million, or 17%, to $112 million.
Reynolds Cooking & Baking total segment net revenues decreased by $26 million, or 2%, to $1,247 million. The decrease in net revenues was primarily due to lower non-retail volume. Adjusted EBITDA . Reynolds Cooking & Baking Adjusted EBITDA increased by $38 million, or 21%, to $222 million.
The increase in Adjusted EBITDA was primarily driven by higher pricing due to previously implemented pricing actions and lower material and manufacturing costs, as well as lower logistics costs, partially offset by lower volume and an increased investment in advertising.
The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs and the benefit of higher net revenues, partially offset by higher logistics costs.
Hefty Waste & Storage total segment net revenues decreased by $4 million, to $942 million. The decrease in net revenues was primarily due to lower volume, mostly offset by higher pricing due to previously implemented pricing actions. Adjusted EBITDA. Hefty Waste & Storage Adjusted EBITDA increased by $54 million, or 26%, to $261 million.
Hefty Waste & Storage total segment net revenues increased by $17 million, to $959 million. The increase in net revenues was primarily due to higher volume and timing of promotional activities. Adjusted EBITDA. Hefty Waste & Storage Adjusted EBITDA increased by $11 million, or 4%, to $272 million.
Total net revenues decreased by $61 million, or 2%, to $3,756 million. The 2% decrease was driven by a 2% volume decline and 1% lower pricing in our non-retail business, as well as a 2% volume decline in our retail business, partially offset by 3% higher pricing in our retail business.
Total net revenues decreased by $61 million, or 2%, to $3,695 million. The 2% decrease was driven by lower volume and lower pricing. Cost of Sales . Cost of sales decreased by $97 million, or 3%, to $2,717 million.
The decrease was primarily driven by lower volume and lower material and manufacturing costs, as well as lower logistics costs. Selling, General and Administrative Expenses. Selling, general and administrative expenses ("SG&A") increased by $90 million, or 26%, to $430 million, primarily due to higher personnel costs, increased investment in advertising and higher professional fees. Other Expense, Net.
The decrease was primarily driven by lower material and manufacturing costs, as well as lower volume, partially offset by higher logistics costs. Selling, General and Administrative Expenses. Selling, general and administrative expenses (“SG&A”) decreased by $1 million to $429 million. Other Expense, Net. Other expense, net was zero in each of the twelve months ended December 31, 2024 and 2023.
In 2023, we also tapped into the nostalgia trend and brought back Zoo Pals plates, garnering 3.7 billion media impressions. • Presto Products: Through our Presto Products segment, we primarily sell store brand products in four main categories: food storage bags, trash bags, reusable storage containers and plastic wrap.
In 2024, we increased the post-consumer recycled content in some of our cups and we added compostable party cups to our assortment. • Presto Products: Through our Presto Products segment, we primarily sell store brand products in four main categories: food storage bags, trash bags, reusable storage containers and plastic wrap.
Hefty Tableware total segment net revenues decreased by $33 million, or 3%, to $967 million. The decrease in net revenues was primarily due to lower volume, partially offset by higher pricing due to previously implemented pricing actions. Adjusted EBITDA. Hefty Tableware Adjusted EBITDA increased by $40 million, or 30%, to $174 million.
Hefty Tableware total segment net revenues decreased by $49 million, or 5%, to $918 million. The decrease in net revenues was primarily due to lower foam volume driven by foam-related consumer behavior and regulatory pressure, as well as lower pricing. Adjusted EBITDA. Hefty Tableware Adjusted EBITDA decreased by $27 million, or 16%, to $147 million.
The increase was primarily due to higher interest rates, partially offset by the lower principal balance on our term loan facility. Income Tax Expense.
Interest Expense , Net . Interest expense, net decreased by $21 million, or 18%, to $98 million. The decrease was primarily due to a lower outstanding principal balance on our external debt facilities as a result of voluntary principal payments made on our term loan facility. Income Tax Expense.
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. As amended, the Revolving Facility matures in February 2026.
During the years ended December 31, 2024 and 2023, we made voluntary principal payments of $150 million and $250 million, respectively, related to the Term Loan Facility, which were not subject to a prepayment premium. Subsequent to December 31, 2024, we made a voluntary principal payment of $50 million related to our Term Loan Facility.
Removed
During the year ended December 31, 2023, we acquired privately held Atacama Manufacturing Inc., which is an innovation driven company that designs, formulates, manufactures and commercializes products that include recycled or renewable, plant-based materials.
Added
We also offer more sustainable solutions, such as Reynolds Wrap 100% recycled aluminum, unbleached parchment paper made with a chlorine-free process and coreless wax paper, which uses less packaging material than traditional wax paper rolls. • Hefty Waste & Storage: Through our Hefty Waste & Storage segment, we produce both branded and store brand trash and food storage bags.
Removed
No such costs were incurred during the year ended December 31, 2023.
Added
Our tableware products generally have higher sales in the second and fourth quarters of the year, primarily due to outdoor summertime and holiday uses of disposable plates, cups, bowls and cutlery.
Removed
This resulted in a net revenue decline of $71 million in our non-retail business, which is in our Reynolds Cooking & Baking segment, partially offset by a $10 million increase in net revenue in our retail business across all segments. Cost of Sales . Cost of sales decreased by $227 million, or 7%, to $2,814 million.
Added
Our effective tax rate declined by 2.2%, from 24.1% for the year ended December 31, 2023, to 21.9% for the year ended December 31, 2024. The decrease was primarily due to the recognition of a discrete tax benefit for the remeasurement of deferred tax liabilities. Adjusted EBITDA. Adjusted EBITDA increased by $42 million, or 7%, to $678 million.
Removed
Other expense, net decreased by $22 million, or 100%, to $0 million. The decrease was primarily attributable to IPO and separation-related costs in the prior year period that did not reoccur in the current year period. Interest Expense , Net . Interest expense, net increased by $43 million, or 57%, to $119 million.
Added
The decrease in Adjusted EBITDA was primarily driven by the impact of lower net revenues.
Removed
We recognized income tax expense of $95 million on income before income taxes of $393 million (an effective tax rate of 24.1%) for the year ended December 31, 2023 compared to income tax expense of $80 million on income before income taxes of $338 million (an effective tax rate of 23.6%) for the year ended December 31, 2022. Adjusted EBITDA.
Added
Presto Products total segment net revenues increased by $3 million, or 1%, to $596 million. The increase in net revenues was primarily due to the timing of the pass through of higher commodity costs. Adjusted EBITDA . Presto Products Adjusted EBITDA increased by $18 million, or 16%, to $130 million.
Removed
Adjusted EBITDA increased by $90 million, or 16%, to $636 million. The increase in Adjusted EBITDA was primarily due to previously implemented pricing actions and lower material and manufacturing costs, as well as lower logistics costs, partially offset by higher SG&A.
Added
The decrease was primarily driven by the normalization of inventory levels following significant reductions implemented in the year ended December 31, 2023. This was partially offset by other working capital optimization initiatives and improved earnings.
Removed
Reynolds Cooking & Baking total segment net revenues decreased by $14 million, or 1%, to $1,273 million. The decrease in net revenues was due to a $71 million decline in our non-retail business, partially offset by a $57 million increase in our retail business. Adjusted EBITDA .
Added
Cash used in investing activities Net cash used in investing activities increased by $10 million, or 9%, to $120 million due to an increase in capital spend. Cash used in financing activities Net cash used in financing activities decreased by $111 million, or 24%, to $346 million.
Removed
Reynolds Cooking & Baking Adjusted EBITDA increased by $42 million, or 30%, to $184 million.
Added
We made voluntarily principal payments of $150 million during the year ended December 31, 2024 compared to voluntary principal payments of $250 million during the year ended December 31, 2023.
Removed
The increase was primarily driven by improved earnings and the benefit of various working capital reduction initiatives. Cash used in investing activities Net cash used in investing activities decreased by $18 million, or 14%, to $110 million. The decrease was driven primarily by decreased cash outlays for capital expenditures.
Added
In October 2024, we further amended our External Debt Facilities (“Amendment No. 3”) to replace the undrawn $250 million revolving facility maturing in February 2026 with an undrawn $700 million revolving facility maturing in October 2029.
Removed
Cash used in financing activities Net cash used in financing activities increased by $240 million, or 111%, to $457 million. The increase was primarily attributable to voluntary principal payments related to our Term Loan Facility that were made throughout the year ended December 31, 2023.
Added
Amortization and maturity The Term Loan Facility matures in February 2027. As a result of previous voluntary principal repayments, we have no further quarterly amortization payments due on the Term Loan Facility. As amended, the Revolving Facility matures in October 2029.
Removed
Amortization and maturity The Term Loan Facility matures in February 2027. The Term Loan Facility amortizes in equal quarterly installments of $6 million, which commenced in June 2020, with the balance payable on maturity.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−0 removed5 unchanged
Biggest change(in millions) Pay fixed / receive variable notional Average pay rate (1) 2024 — — 2025 150 2.2 % 2026 1,000 4.7 % Total $ 1,150 (1) Includes 1.75% applicable margin on the one-month SOFR.
Biggest changeMaturity date Pay fixed / receive variable notional (in millions) Average pay rate (1) 2025 $ 150 2.2 % 2026 1,000 4.7 % Total $ 1,150 (1) Includes 1.75% applicable margin on the one-month SOFR.
These interest rate swaps hedge a portion of the interest rate exposure resulting from our Term Loan Facility for periods ranging from two to three years. We classify these instruments as cash flow hedges. Our average variable rate for the remaining notional amount of $1,150 million is a one-month SOFR plus an applicable margin of 1.75%.
These interest rate swaps hedge a portion of the interest rate exposure resulting from our Term Loan Facility for periods ranging from one to two years. We classify these instruments as cash flow hedges. Our average variable rate for the remaining notional amount of $1,150 million is a one-month SOFR plus an applicable margin of 1.75%.
The aggregate notional amount of our interest rate swaps still in effect as of December 31, 2023 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 aggregate notional amount of our interest rate swaps still in effect as of December 31, 2024 was $1,150 million, and the SOFR is fixed at an annual rate of 0.40% to 3.40% (for an annual effective interest rate of 2.15% to 5.15%, including margin).
Interest Rate Risk We had significant variable rate debt commitments outstanding as of December 31, 2023, which accrue interest at the SOFR rate plus an applicable margin of 1.75%. These on-balance sheet financial instruments expose us to interest rate risk.
Interest Rate Risk We had significant variable rate debt commitments outstanding as of December 31, 2024, which accrue interest at the SOFR rate plus an applicable margin of 1.75%. These on-balance sheet financial instruments expose us to interest rate risk.
Based on the unhedged outstanding borrowings under the Term Loan Facility as of December 31, 2023, a 100-basis point increase (decrease) in the interest rates under the Term Loan Facility would result in a $7 million increase (decrease) in interest expense, per annum, on our borrowings.
Based on the unhedged outstanding borrowings under the Term Loan Facility as of December 31, 2024, a 100-basis point increase (decrease) in the interest rates under the Term Loan Facility would result in a $5 million increase (decrease) in interest expense, per annum, on our borrowings.
The fair value of our interest rate swaps included on our consolidated balance sheets as of December 31, 2023 was $30 million. Refer to Note 8 – Financial Instruments for further detail.
The fair value of our interest rate swaps included on our consolidated balance sheets as of December 31, 2024 was $16 million. Refer to Note 8 – Financial Instruments for further detail.

Other REYN 10-K year-over-year comparisons