UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended January 2,April 3, 2021

OR

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

For the transition period from __________ to __________

Commission File Number 001-35672
graphic

BERRY GLOBAL GROUP, INC.

A Delaware corporation
 101 Oakley Street, Evansville, Indiana, 47710
(812) 424-2904
 IRS employer identification number
20-5234618

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

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareBERYNew York Stock Exchange LLC

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

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

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

Large Accelerated Filer ☒
Accelerated Filer  ☐
Non-Accelerated Filer ☐
Smaller Reporting Company ☐
Emerging Growth Company ☐

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

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

There were 134.0134.9 million shares of common stock outstanding at February 5,May 4, 2021.



CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Information included in or incorporated by reference in Berry Global Group, Inc.’s filings with the U.S. Securities and Exchange Commission (the “SEC”) and press releases or other public statements, contain or may contain forward-looking statements.  This report includes “forward-looking” statements with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events.  These statements contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “project”, “outlook,” “anticipates” or “looking forward” or similar expressions that relate to our strategy, plans, intentions, or expectations.  All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates, and financial results or to our expectations regarding future industry trends are forward-looking statements.  In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments.  These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected.  All forward-looking statements are made only as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Additionally, we caution readers that the list of important factors discussed in our most recent Form 10-K in the section titled “Risk Factors” may not contain all of the material factors that are important to you.  In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur.  Accordingly, readers should not place undue reliance on those statements.

2
Berry Global Group, Inc.
Form 10-Q Index
For Quarterly Period Ended January 2,April 3, 2021

Part I.Financial InformationPage No.
 Item 1.Financial Statements: 
  
Consolidated Statements of Income and Comprehensive Income
4
  
Consolidated Balance Sheets
5
  
Consolidated Statements of Changes in Stockholders’ Equity
6
  
Consolidated Statements of Cash Flows
7
  
Notes to Consolidated Financial Statements
8
 Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
1517
 Item 3.
Quantitative and Qualitative Disclosures about Market Risk
1925
 Item 4.
Controls and Procedures
2026
Part II.Other Information 
 Item 1.
Legal Proceedings
2127
 Item 1A.
Risk Factors
2127
 Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
2227
 Item 6.
Exhibits
2328
 
Signature
2429

3
Part I. Financial Information

Item 1.Financial Statements

Berry Global Group, Inc.
Consolidated Statements of Income
(Unaudited)
(in millions of dollars, except per share amounts)

  Quarterly Period Ended 
  January 2, 2021  December 28, 2019 
Net sales $3,136  $2,816 
Costs and expenses:        
Cost of goods sold  2,518   2,296 
Selling, general and administrative  241   229 
Amortization of intangibles  74   75 
Restructuring and transaction activities  (1)  17 
Operating income  304   199 
Other expense, net  25   13 
Interest expense, net  97   118 
Income before income taxes  182   68 
Income tax expense  52   21 
Net income $130  $47 
         
Net income per share:        
Basic $0.97  $0.36 
Diluted  0.96   0.35 
Outstanding weighted-average shares:        
Basic  133.6   132.3 
Diluted  135.7   134.3 

  Quarterly Period Ended  Two Quarterly Periods Ended 
  April 3, 2021  March 28, 2020  April 3, 2021  March 28, 2020 
Net sales $3,370  $2,975  $6,506  $5,791 
Costs and expenses:                
Cost of goods sold  2,706   2,391   5,224   4,687 
Selling, general and administrative  220   204   461   433 
Amortization of intangibles  73   77   147   152 
Restructuring and transaction activities  38   19   37   36 
Operating income  333   284   637   483 
Other expense, net  6   0   31   13 
Interest expense, net  84   111   181   229 
Income before income taxes  243   173   425   241 
Income tax expense  62   47   114   68 
Net income $181  $126  $311  $173 
                 
Net income per share:                
Basic $1.35  $0.95  $2.32  $1.31 
Diluted  1.32   0.94   2.28   1.29 






Consolidated Statements of Comprehensive Income
(Unaudited)
(in millions of dollars)

 Quarterly Period Ended  Quarterly Period Ended  Two Quarterly Periods Ended 
 January 2, 2021  December 28, 2019  April 3, 2021  March 28, 2020  April 3, 2021  March 28, 2020 
Net income $130  $47  $181  $126  $311  $173 
Other comprehensive income, net of tax:        
Other comprehensive income (loss), net of tax:                
Currency translation  178   92   (73)  (157)  105   (65)
Pension  0   (1)  0   (1)
Derivative instruments  17   13   54   (109)  71   (96)
Other comprehensive income  195   105 
Comprehensive income $325  $152 
Other comprehensive income (loss)  (19)  (267)  176   (162)
Comprehensive income (loss) $162  $(141) $487  $11 

See notes to consolidated financial statements.

4
Berry Global Group, Inc.
Consolidated Balance Sheets
(in millions of dollars)

 January 2, 2021  September 26, 2020  April 3, 2021  September 26, 2020 
 (Unaudited)     (Unaudited)    
Assets            
Current assets:            
Cash and cash equivalents $847  $750  $843  $750 
Accounts receivable, net  1,456   1,469   1,682   1,469 
Finished goods  835   708   878   708 
Raw materials and supplies  668   560   682   560 
Prepaid expenses and other current assets  177   168   180   168 
Assets held for sale  0   162   50   162 
Total current assets  3,983   3,817   4,315   3,817 
Noncurrent assets:                
Property, plant, and equipment  4,734   4,561   4,675   4,561 
Goodwill and intangible assets ��7,801   7,670   7,626   7,670 
Right-of-use assets  572   562   566   562 
Other assets  86   91   81   91 
Total assets
 $17,176  $16,701  $17,263  $16,701 
                
                
Liabilities and stockholders’ equity                
Current liabilities:                
Accounts payable $1,193  $1,115  $1,412  $1,115 
Accrued employee costs  310   324   321   324 
Other current liabilities  721   644   677   644 
Current portion of long-term debt  71   75   60   75 
Liabilities held for sale  0   25   28   25 
Total current liabilities  2,295   2,183   2,498   2,183 
Noncurrent liabilities:                
Long-term debt, less current portion  10,010   10,162   9,822   10,162 
Deferred income taxes  536   601   575   601 
Employee benefit obligations  377   368   363   368 
Operating lease liabilities  471   464   467   464 
Other long-term liabilities  1,042   831   892   831 
Total liabilities  14,731   14,609   14,617   14,609 
                
Stockholders’ equity:                
Common stock (133.9 and 133.6 million shares issued, respectively)  1   1 
Common stock (134.8 and 133.6 million shares issued, respectively)  1   1 
Additional paid-in capital  1,062   1,034   1,101   1,034 
Retained earnings  1,738   1,608   1,919   1,608 
Accumulated other comprehensive loss  (356)  (551)  (375)  (551)
Total stockholders’ equity  2,445   2,092   2,646   2,092 
Total liabilities and stockholders’ equity $17,176  $16,701  $17,263  $16,701 

See notes to consolidated financial statements.

5
BeBerryrry Global Group, Inc.
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
(in millions of dollars)

Quarterly Period Ended
 Common Stock  
Additional
Paid-in Capital
  
Accumulated Other
Comprehensive Loss
  
Retained
Earnings
  Total  
Common
Stock
  
Additional
Paid-in Capital
  
Accumulated Other
Comprehensive Loss
  
Retained
Earnings
  Total 
Balance at September 26, 2020 $1  $1,034  $(551) $1,608  $2,092 
Balance at January 2, 2021 $1  $1,062  $(356) $1,738  $2,445 
Net income  0   0   0   130   130   0   0   0   181   181 
Other comprehensive income  0   0   195   0   195 
Other comprehensive loss  0   0   (19)  0   (19)
Share-based compensation  0   21   0   0   21   0   7   0   0   7 
Proceeds from issuance of common stock  0   7   0   0   7   0   32   0   0   32 
Balance at January 2, 2021 $1  $1,062  $(356) $1,738  $2,445 
Balance at April 3, 2021 $1  $1,101  $(375) $1,919  $2,646 
                                        
Balance at September 28, 2019 $1  $949  $(386) $1,054  $1,618 
Balance at December 28, 2019 $1  $970  $(281) $1,096  $1,786 
Net income  0   0   0   47   47   0   0   0   126   126 
Other comprehensive income  0   0   105   0   105 
Other comprehensive loss  0   0   (267)  0   (267)
Share-based compensation  0   19   0   0   19   0   5   0   0   5 
Proceeds from issuance of common stock  0   2   0   0   2   0   1   0   0   1 
Adoption of lease accounting standard  0   0   0   (5)  (5)
Balance at December 28, 2019 $1  $970  $(281) $1,096  $1,786 
Balance at March 28, 2020 $1  $976  $(548) $1,222  $1,651 

 
Two Quarterly Periods Ended
 
Common
Stock
  
Additional
Paid-in Capital
  
Accumulated Other
Comprehensive Loss
  
Retained
Earnings
  Total 
Balance at September 26, 2020 $1  $1,034  $(551) $1,608  $2,092 
Net income  0   0   0   311   311 
Other comprehensive income  0   0   176   0   176 
Share-based compensation  0   28   0   0   28 
Proceeds from issuance of common stock  0   39   0   0   39 
Balance at April 3, 2021 $1  $1,101  $(375) $1,919  $2,646 
                     
Balance at September 28, 2019 $1  $949  $(386) $1,054  $1,618 
Net income  0   0   0   173   173 
Other comprehensive loss  0   0   (162)  0   (162)
Share-based compensation  0   24   0   0   24 
Proceeds from issuance of common stock  0   3   0   0   3 
Adoption of lease accounting standard  0   0   0   (5)  (5)
Balance at March 28, 2020 $1  $976  $(548) $1,222  $1,651 

See notes to consolidated financial statements.

6
Berry Global Group, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in millions of dollars)

 Quarterly Period Ended  Two Quarterly Periods Ended 
 January 2, 2021  December 28, 2019  April 3, 2021  March 28, 2020 
Cash Flows from Operating Activities:            
Net income 
$
130  $47  
$
311  $173 
Adjustments to reconcile net cash provided by operating activities:                
Depreciation  141   141   280   277 
Amortization of intangibles  74   75   147   152 
Non-cash interest  8   4   16   9 
Deferred income tax  (19)  (16)  (28)  12 
Share-based compensation expense  21   19   28   24 
Other non-cash operating activities, net  5   17   51   33 
Changes in working capital  (49)  (68)  (156)  (114)
Changes in other assets and liabilities  4   (1)  (11)  (33)
Net cash from operating activities  315   218   638   533 
                
Cash Flows from Investing Activities:                
Additions to property, plant and equipment, net  (162)  (148)  (364)  (263)
Divestiture of business  140   0 
Divestitures  143   0 
Settlement of net investment hedges  0   246 
Other  0   (10)
Net cash from investing activities  (22)  (148)  (221)  (27)
                
Cash Flows from Financing Activities:                
Proceeds from long-term borrowings  750   0   2,316   1,202 
Repayments on long-term borrowings  (985)  (164)  (2,683)  (1,484)
Proceeds from issuance of common stock  7   2   39   3 
Debt financing costs  (6)  (2)  (16)  (17)
Net cash from financing activities  (234)  (164)  (344)  (296)
Effect of exchange rate changes on cash  38   17   20   (7)
Net change in cash  97   (77)  93   203 
Cash and cash equivalents at beginning of period  750   750   750   750 
Cash and cash equivalents at end of period $847  $673  $843  $953 

See notes to consolidated financial statements.

7
Berry Global Group, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
(tables in millions of dollars, except per share data)


1.  Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Berry Global Group, Inc. (“the Company,” “we,” or “Berry”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts and disclosures at the date of the financial statements and during the reporting period.  Actual results could differ from those estimates.The Company’s U.S. based results for the quarterly period ended January 2,fiscal 2021 and December 28, 2019fiscal 2020 are based on a fourteenfifty-three and thirteenfifty-two week period, respectively.  The extra week in fiscal 2021 occurred in the first quarter.  In October 2020, the Company reorganized portions of its 4 operating segments in order to better align our various businesses for future growth.  The Company has recast all prior period amounts to conform to this new reporting structure.In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included, and all subsequent events up to the time of the filing have been evaluated.  For further information, refer to the Company’s most recent Form 10-K filed with the Securities and Exchange Commission.


2.  Recent Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates to the FASB’s Accounting Standards Codification.  During fiscal 2021, with the exception of the below, there have been no developments to the recently adopted accounting pronouncements from those disclosed in the Company’s 2020 Annual Report on Form 10-K that are considered to have a material impact on our unaudited consolidated financial statements.

Credit Losses

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) and issued subsequent amendments to the initial guidance. The new standard requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model, which includes historical experience, current conditions, and reasonable and supportable forecasts. The new standard also requires enhanced disclosure. The Company adopted the new standard on September 27, 2020beginning fiscal 2021 with no material impact to the Company’s consolidated financial statements.  See Note 3. Revenue and Accounts Receivable.

Defined Benefit Plans

In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans. The new standard removes requirements to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and the effects of a one-percentage-point changes in assumed health care cost trend rates. The standard also adds requirements to disclose the reasons for significant gains and losses related to changes in the benefit obligations for the period and the accumulated benefit obligation (“ABO”) for plans with ABOs in excess of plan assets. The new standard will be effective for the Company beginning fiscal 2022. The Company is currently evaluating the impact of the adoption of this standard to our disclosures.

Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740). The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. The new standard will be effective for the Company beginning fiscal 2022. The Company is currently evaluating the impact of the adoption of this standard to the Company’s consolidated financial statements.

8
Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). This standard provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR. ASU 2020-04 is effective upon issuance and generally can be applied through the end of calendar year 2022. The Company is currently evaluating the impact and whether it plans to adopt the optional expedients and exceptions provided under this new standard.


3.  Revenue and Accounts Receivable


Our revenues are primarily derived from the sale of plastic packaging products to customers.  Revenue is recognized when performance obligations are satisfied, in an amount reflecting the consideration to which the Company expects to be entitled.  We consider the promise to transfer products to be our sole performance obligation.  If the consideration agreed to in a contract includes a variable amount, we estimate the amount of considerationconsideration we expect to be entitled to in exchange for transferring the promised goods to the customer using the most likely amount method.  Our main source of variable consideration is customer rebates.  There are no material instances where variable consideration is constrained and not recorded at the initial time of sale.  Generally, our revenue is recognized at a point in time for standard promised goods at the time of shipment, when title and risk of loss pass to the customer.  The accrual for customer rebates was $110$90 million and $104 million at January 2,April 3, 2021 and September 26, 2020, respectively, and is included in Other current liabilities on the Consolidated Balance Sheets.  The Company disaggregates revenue based on reportable business segment, geography, and significant product line.  Refer to Note 10. Segment and Geographic Data for further information.


Accounts receivable, net are presented net of allowance for credit losses of  $21 million and $25 million at January 2,April 3, 2021 and September 26, 2020.2020, respectively.  The Company records its current expected credit losses based on a variety of factors including historical loss experience, current conditions including the COVID-19 pandemic, and customer financial condition.  The changes to our current expected credit losses, write-off activity, and recoveries were not material for any of the periods presented.


The Company has entered into various qualifying factoring agreements to sell certain receivables to third-party financial institutions. The transfer of receivables is accounted for as a sale, without recourse.  Net sales available under qualifying U.S. based programs were $247$257 million and $222$236 million for the quarterly periods ended January 2,April 3, 2021 and DecemberMarch 28, 2019,2020, respectively.  Net sales available under qualifying U.S. based programs were $504 million and $458 million for the two quarterly periods ended April 3, 2021 and March 28, 2020, respectively.  There were 0 amounts outstanding from financial institutions related to these programs.  The fees associated with the transfer of receivables for all programs were not material for any of the periods presented.


4.  Dispositions

U.S. Flexible Packaging Converting Disposition

In November 2020,During fiscal 2021, the Company completed the sale of its U.S. Flexible Packaging Converting business which was primarily operated in itsthe Engineered Materials reporting segment for net proceeds of $140 million and is divesting a non-core Czech Republic Reaction Injection Molding business which is operated in the Consumer Packaging International segment for an estimated sales price of approximately $22 million.  A net pretax gainloss on salethe divestitures of $7$22 million was recorded in fiscal 2021 within Restructuring and transaction activities on the Consolidated Statements of Income.  The divestedU.S. Flexible Packaging Converting business and the Czech Republic Reaction Injection Molding business recorded $203 million in net sales during fiscal 2020.2020 of $203 million and $41 million, respectively.  For the period ended April 3, 2021, the Company has classified assets of $50 million and liabilities of $28 million as held for sale.

9
5.  Restructuring and Transaction Activities

The table below includes the significant components of the restructuring and transaction activities, by reporting segment:

 Quarterly Period Ended  Quarterly Period Ended  Two Quarterly Periods Ended 
 January 2, 2021  December 28, 2019  April 3, 2021  March 28, 2020  April 3, 2021  March 28, 2020 
Consumer Packaging International $3  $10  $38  $14  $41  $24 
Consumer Packaging North America  1   2   0   3   1   4 
Health, Hygiene & Specialties  0   1   0   4 
Engineered Materials  (5)  3   0   1   (5)  4 
Health, Hygiene & Specialties  0   2 
Consolidated $(1) $17  $38  $19  $37  $36 

9
The table below sets forth the activity with respect to the restructuring and transaction activities accrual at January 2,April 3, 2021:

 Restructuring        Restructuring       
 
Employee Severance
and Benefits
  
Facility
Exit Costs
  
Non-cash
Impairment Charges
  
Transaction
Activities
  Total  
Employee Severance
and Benefits
  
Facility
Exit Costs
  
Non-cash
Impairment Charges
  
Transaction
Activities
  Total 
Balance at September 26, 2020 $10  $7  $0  $0  $17 
Balance as of September 26, 2020 $10  $7  $0  $0  $17 
Charges  3   1   0   (5)  (1)  4   2   2   29   37 
Non-cash items  0   0   (2)  (29)  (31)
Cash  (5)  (1)  0   5   (1)  (9)  (3)  0   0   (12)
Balance at January 2, 2021 $8  $7  $0  $0  $15 
Balance as of April 3, 2021 $5  $6  $0  $0  $11 

6.  Leases

The Company leases certain manufacturing facilities, warehouses, office space, manufacturing equipment, office equipment, and automobiles.

We recognize right-of-use assets and lease liabilities for leases with original lease terms greater than one year based on the present value of lease payments over the lease term using our incremental borrowing rate on a collateralized basis.  Short-term leases, with original lease terms of less than one year, are not recognized on the balance sheet.  We are party to certain leases, namely for manufacturing facilities, which offer renewal options to extend the original lease term.  Renewal options are included in the right-of-use asset and lease liability based on our assessment of the probability that the options will be exercised.

Supplemental lease information is as follows:

LeasesClassification January 2, 2021  September 26, 2020 Classification April 3, 2021  September 26, 2020 
Operating leases:              
Operating lease right-of-use assets
Right-of-use asset
 $572  $562 
Right-of-use assets
 $566  $562 
Current operating lease liabilities
Other current liabilities
  118   115 
Other current liabilities
  116   115 
Noncurrent operating lease liabilities
Operating lease liability
  471   464 
Operating lease liability
  467   464 
Finance leases:                  
Finance lease right-of-use assets
Property, plant, and equipment, net
 $67  $78 
Property, plant, and equipment, net
 $64  $78 
Current finance lease liabilities
Current portion of long-term debt
  14   17 
Current finance lease liability
Current portion of long-term debt
  13   17 
Noncurrent finance lease liabilities
Long-term debt, less current portion
  51   59 
Long-term debt, less current portion
  49   59 

Cash paid for amounts included in lease liabilities 
Quarterly Period Ended
January 2, 2021
  
Quarterly Period Ended
December 28, 2019
  
Two Quarterly Periods Ended
April 3, 2021
  
Two Quarterly Periods Ended
March 28, 2020
 
Operating cash flows from operating leases $31  $29  $57  $57 
Operating cash flows from finance leases  1   1   1   1 
Financing cash flows from finance leases  11   13   16   17 

Right-of-use assets obtained in exchange for new operating lease liabilities were $11$23 million and $34 million for the quarterly periodand two quarterly periods ended January 2, 2021.April 3, 2021, respectively.

10
7.  Long-Term Debt

Long-term debt consists of the following:

FacilityMaturity Date January 2, 2021  September 26, 2020 Maturity Date April 3, 2021  September 26, 2020 
Term loanOctober 2022 $800  $1,545 July 2026 $3,840   4,208 
Term loanJanuary 2024  446   448 
Term loanJuly 2026  4,186   4,208 
Revolving line of creditMay 2024  0   0 May 2024  0   0 
1.00% First Priority Senior Secured Notes (a)
July 2025  860   814 
1.57% First Priority Senior Secured NotesJanuary 2026  750   0 
4.875% First Priority Senior Secured NotesJuly 2026  1,250   1,250 
1.50% First Priority Senior Secured Notes (a)
July 2027  461   436 
5.125% Second Priority Senior Secured NotesJuly 2023  300   300 
4.50% Second Priority Senior Secured NotesFebruary 2026  500   500 
5.625% Second Priority Senior Secured NotesJuly 2027  500   500 
0.95% First Priority Senior Secured Notes
February 2024  800   0 
1.00% First Priority Senior Secured Notes (a)
July 2025  823   814 
1.57% First Priority Senior Secured Notes
January 2026  1,525   0 
4.875% First Priority Senior Secured Notes
July 2026  1,250   1,250 
1.50% First Priority Senior Secured Notes (a)
July 2027  441   436 
5.125% Second Priority Senior Secured Notes
July 2023  200   300 
4.50% Second Priority Senior Secured Notes
February 2026  500   500 
5.625% Second Priority Senior Secured Notes
July 2027  500   500 
Debt discounts and deferred fees   (81)  (85)   (87)  (85)
Finance leases and otherVarious  109   121 Various  90   121 
Retired debtVarious  0   200 Various  0   2,193 
Total long-term debt   10,081   10,237    9,882   10,237 
Current portion of long-term debt   (71)  (75)   (60)  (75)
Long-term debt, less current portion  $10,010   10,162   $9,822   10,162 
(a)Euro denominated

In December 2020,fiscal 2021, the Company issued $750$800 million aggregate principal amount of 0.95% first priority senior secured notes due 2024, and $1,525 million aggregate principal amount of 1.57% first priority senior secured notes due 2026.  The proceeds were used to prepay a portion of the term loan maturing in 2022.  outstanding Term loans.

Debt extinguishment costs of $4$14 million, primarily comprised of deferred debt discount and financing fees, were recorded in Other expense, net on the Consolidated Statements of Income upon the extinguishment of a portion of the term loan.Term loans.

Debt discounts and deferred financing fees are presented net of Long-term debt, less the current portion on the Consolidated Balance Sheets and are amortized to Interest expense, net on the Consolidated Statements of Income through maturity.


8.  Financial Instruments and Fair Value Measurements

In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors.  The Company may use derivative financial instruments to help manage market risk and reduce the exposure to fluctuations in interest rates and foreign currencies.  These financial instruments are not used for trading or other speculative purposes.

Cross-Currency Swaps

The Company is party to certain cross-currency swaps to hedge a portion of our foreign currency risk. The swap agreements mature May 2022 (€250 million), June 2024 (€1,625 million) and July 2027 (£700 million). In addition to the cross-currency swaps, we hedge a portion of our foreign currency risk by designating foreign currency denominated long-term debt as net investment hedges of certain foreign operations. As of January 2,April 3, 2021, we had outstanding long-term debt of €785 million that was designated as a hedge of our net investment in certain euro-denominated foreign subsidiaries. When valuing cross-currency swaps the Company utilizes Level 2 inputs (substantially observable).

11
Interest Rate Swaps

The primary purpose of the Company’s interest rate swap activities is to manage interest expense variability associated with our outstanding variable rate term loan debt. When valuing interest rate swaps the Company utilizes Level 2 inputs (substantially observable).

11
As of January 2,April 3, 2021, the Company effectively had (i) a $450 million interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 1.398%, with an expiration in June 2026, (ii) a $1 billion interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 1.835% with an expiration in June 2026, (iii) a $400 million interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 1.916% with an expiration in June 2026, (iv) ana $884 million interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 1.857%, with an expiration in June 2024, and (v) a $473 million interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 2.050%, with an expiration in June 2024.

The Company records the fair value positions of all derivative financial instruments on a net basis by counterparty for which a master netting arrangement is utilized. Balances on a gross basis are as follows:

Derivative InstrumentsHedge DesignationBalance Sheet Location January 2, 2021  September 26, 2020 Hedge DesignationBalance Sheet Location April 3, 2021  September 26, 2020 
Cross-currency swapsDesignatedOther long-term liabilities  499   270 DesignatedOther long-term liabilities $423  $270 
Interest rate swapsDesignatedOther long-term liabilities  207   226 DesignatedOther long-term liabilities  138   226 

The effect of the Company’s derivative instruments on the Consolidated Statements of Income is as follows:

 Quarterly Period Ended  Quarterly Period Ended  Two Quarterly Periods Ended 
Derivative InstrumentsStatements of Income Location January 2, 2021  December 28, 2019  Statements of Income Location April 3, 2021  March 28, 2020  April 3, 2021  March 28, 2020 
Cross-currency swapsInterest expense, net $(3) $(2)Interest expense, net $(1) $(1) $(4) $(3)
Interest rate swapsInterest expense, net  17   17 Interest expense, net  17   17   34   34 

Non-recurring Fair Value Measurements

The Company has certain assets that are measured at fair value on a non-recurring basis when impairment indicators are present or when the Company completes an acquisition. The Company adjusts certain long-lived assets to fair value only when the carrying values exceed the fair values. The categorization of the framework used to value the assets is considered Level 3, due to the subjective nature of the unobservable inputs used to determine the fair value. These assets that are subject to our annual impairment analysis primarily include our definite lived and indefinite lived intangible assets, including Goodwill and our property, plant and equipment.  The Company reviews Goodwill and other indefinite lived assets for impairment as of the first day of the fourth fiscal quarter each year and more frequently if impairment indicators exist. The Company determined Goodwill and other indefinite lived assets were not impaired in our annual fiscal 2020 assessment. No impairment indicators were identified in the current quarter.

Included in the following table are the major categories of assets measured at fair value on a non-recurring basis as of January 2,April 3, 2021 and September 26, 2020, along with the impairment loss recognized on the fair value measurement during the period:

 As of January 2, 2021  As of April 3, 2021 
 Level 1  Level 2  Level 3  Total  Impairment  Level 1  Level 2  Level 3  Total  Impairment 
Indefinite-lived trademarks $0  $0  $248  $248  $0  $0  $0  $248  $248  $0 
Goodwill  0   0   5,312   5,312   0   0   0   5,229   5,229   0 
Definite lived intangible assets  0   0   2,241   2,241   0   0   0   2,149   2,149   0 
Property, plant, and equipment  0   0   4,734   4,734   0   0   0   4,675   4,675   2 
Total $0  $0  $12,535  $12,535  $0  $0  $0  $12,301  $12,301  $2 

  As of September 26, 2020 
  Level 1  Level 2  Level 3  Total  Impairment 
Indefinite-lived trademarks $0  $0  $248  $248  $0 
Goodwill  0   0   5,173   5,173   0 
Definite lived intangible assets  0   0   2,249   2,249   0 
Property, plant, and equipment  0   0   4,561   4,561   2 
Total $0  $0  $12,231  $12,231  $2 

12
The Company’s financial instruments consist primarily of cash and cash equivalents, long-term debt, interest rate and cross-currency swap agreements, and finance lease obligations. The fair value of our marketable long-term indebtedness exceeded book value by $177$101 million as of January 2,April 3, 2021. The Company’s long-term debt fair values were determined using Level 2 inputs (substantially observable).

12
9.  Income Taxes

In comparison to the statutory rate, the higher effective tax rate of 29% for the quarter and year-to-date was negatively impacted by 5% from divestituredivestitures and 3% from global intangible low-taxed income provisions.

10.  Segment and Geographic Data

The Company’s operations are organized into 4 reporting segments: Consumer Packaging International, Consumer Packaging North America, Engineered Materials, and Health, Hygiene & Specialties.  The structure is designed to align us with our customers, provide optimal service, drive future growth, and to facilitate synergies realization.  In October 2020, the Company realigned portions of our operating segments.  As a result of these organizational realignments, we have recast prior period segment amounts resultedresulting in the following Net sales movements for the two quarterly periodperiods ended DecemberMarch 28, 2019:2020: (1.) Tapes business: $69$138 million from Engineered Materials to Health, Hygiene & Specialties, (2.) North American Healthcare: $69$142 million from Consumer Packaging North America to Consumer Packaging International and (3.) European Films: $149$347 million from Consumer Packaging International to Engineered Materials.

Selected information by reportable segment is presented in the following tables:

 Quarterly Period Ended  Quarterly Period Ended  Two Quarterly Periods Ended 
 January 2, 2021  December 28, 2019  April 3, 2021  March 28, 2020  April 3, 2021  March 28, 2020 
Net sales:                  
Consumer Packaging International $988  $930  $1,060  $970  $2,048  $1,900 
Consumer Packaging North America  686   611   731   633   1,417   1,244 
Health, Hygiene & Specialties  781   644   1,521   1,254 
Engineered Materials  722   665   798   728   1,520   1,393 
Health, Hygiene & Specialties  740   610 
Total net sales $3,136  $2,816  $3,370  $2,975  $6,506  $5,791 
Operating income:                        
Consumer Packaging International $71  $38  $59  $53  $135  $96 
Consumer Packaging North America  59   44   77   69   136   113 
Health, Hygiene & Specialties  114   66   210   113 
Engineered Materials  78   70   83   96   156   161 
Health, Hygiene & Specialties  96   47 
Total operating income $304  $199  $333  $284  $637  $483 
Depreciation and amortization:                        
Consumer Packaging International $89  $87  $87  $79  $170  $161 
Consumer Packaging North America  56   56   54   60   111   116 
Health, Hygiene & Specialties  42   46   87   93 
Engineered Materials  25   26   29   28   59   59 
Health, Hygiene & Specialties  45   47 
Total depreciation and amortization $215  $216  $212  $213  $427  $429 

13
Selected information by geographical region is presented in the following tables:

 Quarterly Period Ended  Quarterly Period Ended  Two Quarterly Periods Ended 
 January 2, 2021  December 28, 2019  April 3, 2021  March 28, 2020  April 3, 2021  March 28, 2020 
Net sales:                  
United States & Canada $1,677  $1,513 
United States and Canada $1,728  $1,705  $3,405  $3,218 
Europe  1,093   1,003   1,257   981   2,350   1,984 
Rest of world  366   300   385   289   751   589 
Total net sales $3,136  $2,816  $3,370  $2,975  $6,506  $5,791 

13
Selected information by product line is presented in the following tables:

 Quarterly Period Ended  Quarterly Period Ended  Two Quarterly Periods Ended 
 January 2, 2021  December 28, 2019  April 3, 2021  March 28, 2020  April 3, 2021  March 28, 2020 
Net sales:                  
Packaging  81   82   81   83   81   83 
Non-packaging  19   18   19   17   19   17 
Consumer Packaging International  100%  100%  100%  100%  100%  100%
                        
Rigid Open Top  55   57   54   55   55   56 
Rigid Closed Top  45   43   46   45   45   44 
Consumer Packaging North America  100%  100%  100%  100%  100%  100%
                        
Core Films  58   59 
Retail & Industrial  42   41 
Engineered Materials  100%  100%
        
Health  19   14   19   15   19   14 
Hygiene  46   49   45   47   45   48 
Specialties  35   37   36   38   36   38 
Health, Hygiene & Specialties  100%  100%  100%  100%  100%  100%
                
Core Films  64   63   61   61 
Retail & Industrial  36   37   39   39 
Engineered Materials  100%  100%  100%  100%


11.  Contingencies and Commitments

The Company is party to various legal proceedings involving routine claims which are incidental to its business.  Although the Company’s legal and financial liability with respect to such proceedings cannot be estimated with certainty, we believe that any ultimate liability would not be material to our financial statements.

The Company has various purchase commitments for raw materials, supplies, and property and equipment incidental to the ordinary conduct of business.

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12.  Share Repurchase Program

NaN shares were repurchased during the quarter.two quarterly periods ended April 3, 2021.  Authorized share repurchases of $393 million remain available to the Company.


13.  Basic and Diluted Net Income Per Share

Basic net income per share is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents.  Diluted net income per share is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method.  For purposes of this calculation, stock options and restricted stock units are considered to be common stock equivalents and are only included in the calculation of diluted net income per share when their effect is dilutive.  For the threesix months ended January 2,April 3, 2021, and December 28, 2019, 3.2 million and 7.2 million shares respectively, werewere excluded from the diluted net income per share calculation as their effect would be anti-dilutive.  NaN shares were excluded from the diluted net income per share calculation for the three months ended April 3, 2021.  For the three and six months ended March 28, 2020, 7.1 million and 7.1 million shares, respectively, were excluded.

14
The following tables provide a reconciliation of the numerator and denominator of the basic and diluted net income per share calculations:calculations.

 Quarterly Period Ended  Quarterly Period Ended  Two Quarterly Periods Ended 
(in millions, except per share amounts) January 2, 2021  December 28, 2019  April 3, 2021  March 28, 2020  April 3, 2021  March 28, 2020 
Numerator                  
Consolidated net income $130  $47  $181  $126  $311  $173 
Denominator                        
Weighted average common shares outstanding - basic  133.6   132.3   134.3   132.4   133.9   132.4 
Dilutive shares  2.1   2.0   2.5   1.7   2.7   1.8 
Weighted average common and common equivalent shares outstanding - diluted  135.7   134.3   136.8   134.1   136.6   134.2 
                        
Per common share income                        
Basic $0.97  $0.36  $1.35  $0.95  $2.32  $1.31 
Diluted $0.96  $0.35  $1.32  $0.94  $2.28  $1.29 

15
14.  Accumulated Other Comprehensive Loss

The components and activity of Accumulated other comprehensive loss are as follows:

Quarterly Period Ended 
Currency
Translation
  
Defined Benefit
Pension and Retiree
Health Benefit Plans
  
Derivative
Instruments
  
Accumulated Other
Comprehensive Loss
  
Currency
Translation
  
Defined Benefit
Pension and Retiree
Health Benefit Plans
  
Derivative
Instruments
  
Accumulated Other
Comprehensive Loss
 
Balance at September 26, 2020 $(278) $(116) $(157) $(551)
Other comprehensive income before reclassifications  178   0   15   193 
Balance at January 2, 2021 $(100) $(116) $(140) $(356)
Other comprehensive income (loss) before reclassifications  (73)  0   52   (21)
Net amount reclassified from accumulated other comprehensive loss  0   0   2   2   0   0   2   2 
Balance at January 2, 2021 $(100) $(116) $(140) $(356)
Balance at April 3, 2021 $(173) $(116) $(86) $(375)

  
Currency
Translation
  
Defined Benefit
Pension and Retiree
Health Benefit Plans
  
Derivative
Instruments
  
Accumulated Other
Comprehensive Loss
 
Balance at September 28, 2019 $(279) $(56) $(51) $(386)
Other comprehensive loss before reclassifications  92   0   (4)  88 
Net amount reclassified from accumulated other comprehensive loss  0   0   17   17 
Balance at December 28, 2019 $(187) $(56) $(38) $(281)
  
Currency
Translation
  
Defined Benefit
Pension and Retiree
Health Benefit Plans
  
Derivative
Instruments
  
Accumulated Other
Comprehensive Loss
 
Balance at December 28, 2019 $(187) $(56) $(38) $(281)
Other comprehensive loss before reclassifications  (157)  (1)  (144)  (302)
Net amount reclassified from accumulated other comprehensive loss  0   0   35   35 
Balance at March 28, 2020 $(344) $(57) $(147) $(548)

15.  Subsequent Events
Two Quarterly Periods Ended 
Currency
Translation
  
Defined Benefit
Pension and Retiree
Health Benefit Plans
  
Derivative
Instruments
  
Accumulated Other
Comprehensive Loss
 
Balance at September 26, 2020 $(278) $(116) $(157) $(551)
Other comprehensive income before reclassifications  105   0   67   172 
Net amount reclassified from accumulated other comprehensive loss  0   0   4   4 
Balance at April 3, 2021 $(173) $(116) $(86) $(375)

In January 2021, the Company issued $800 million aggregate principal amount of 0.95% first priority senior secured notes due 2024.  The proceeds were used to prepay the term loan maturing in 2022.
  
Currency
Translation
  
Defined Benefit
Pension and Retiree
Health Benefit Plans
  
Derivative
Instruments
  
Accumulated Other
Comprehensive Loss
 
Balance at September 28, 2019 $(279) $(56) $(51) $(386)
Other comprehensive loss before reclassifications  (65)  (1)  (148)  (214)
Net amount reclassified from accumulated other comprehensive loss  0   0   52   52 
Balance at March 28, 2020 $(344) $(57) $(147) $(548)

1516
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

Business.  The Company’s operations are organized into four operating segments: Consumer Packaging International, Consumer Packaging North America, Engineered Materials and Health, Hygiene & Specialties, and Engineered Materials in order to better align our various businesses for future growth.  The structure is designed to align us with our customers, provide improved service, drive future growth, and to facilitate synergies realization.  The Consumer Packaging International segment primarily consists of containers, closures, dispensing systems, pharmaceutical devices and packaging, and technical components.  The Consumer Packaging North America segment primarily consists of containers, foodservice items, closures, overcaps, bottles, and tubes.  The Engineered Materials segment primarily consists of polyethylene-based film products, can liners, and specialty coated and laminated products.  The Health, Hygiene & Specialties segment primarily consists of nonwoven specialty materials, tapes and adhesives, and films used in hygiene, infection prevention, personal care, industrial, construction, and filtration applications.  The Engineered Materials segment primarily consists of polyethylene-based film products, and can liners.

Acquisitions and Dispositions.  Our acquisition strategy is focused on improving our long-term financial performance, enhancing our market positions, and expanding our existing and complementary product lines.  We seek to obtain businesses for attractive post-synergy multiples, creating value for our stockholders from synergy realization, leveraging the acquired products across our customer base, creating new platforms for future growth, and assuming best practices from the businesses we acquire.  While the expected benefits on earnings is estimated at the commencement of each transaction, once the execution of the plan and integration occur, we are generally unable to accurately estimate or track what the ultimate effects have been due to system integrations and movements of activities to multiple facilities.  As historical business combinations and restructuring plans have not allowed us to accurately separate realized synergies compared to what was initially identified, we estimate the synergy realization based on the overall segment profitability post integration.

U.S. Flexible Packaging Converting Disposition

In November 2020,During fiscal 2021, the Company completed the sale of its U.S. Flexible Packaging Converting business which was primarily operated in itsthe Engineered Materials reporting segment for net proceeds of $140 million and is divesting a non-core Czech Republic Reaction Injection Molding business which is operated in the Consumer Packaging International segment for an estimated sales price of approximately $22 million.  A net pretax loss on the divestitures of $22 million was recorded in fiscal 2021 within Restructuring and transaction activities on the Consolidated Statements of Income.  The soldU.S Flexible Packaging Converting business and the Czech Republic Reaction Injection Molding business recorded $203 million in net sales during fiscal 2020.2020 of $203 million and $41 million, respectively.

Raw Material Trends.  Our primary raw material is plastic resin.  Due to differences in the timing of passing through resin cost changes to our customers on escalator/de-escalator programs, segments are negatively impacted in the short term when plastic resin costs increase and are positively impacted when plastic resin costs decrease.  This timing lag and competitor behaviors related to passing through raw material cost changes could affect our results as plastic resin costs fluctuate.  In addition, we use other materials such as butyl rubber, adhesives, paper and packaging materials, linerboard, rayon, polyester fiber, and foil, in various manufacturing processes.  These raw materials are available from multiple sources and we purchase from a variety of global suppliers.  While temporary shortages of raw materials can occur, we expect to continue to successfully manage raw materials supplies without significant supply interruptions.

Outlook.  The Company is affected by general economic and industrial growth, plastic resin availability and affordability, and general industrial production.  Covid-19COVID-19 pandemic has resulted in both advantaged and disadvantagedisadvantaged products within all segments.  Our results are affected by both the duration certain products remain advantaged and timing of when disadvantage products normalize.  Our business has both geographic and end market diversity, which reduces the effect of any one of these factors on our overall performance.  Our results are affected by our ability to pass through raw material and other cost changes to our customers, improve manufacturing productivity and adapt to volume changes of our customers.  In the near term, recent resin inflation will create a headwind for the Company, which we believe will be offset by the continued favorable product mix associated with pivoting our assets to produce products related to COVID-19 protection.  By providing advantaged products in targeted markets, we continue to believe our underlying long-term demand fundamental in all divisions will remain strong as we focus on delivering protective solutions that enhance consumer safety and execute on the Company’s mission of “Always Advancing to Protect What’s Important.”  For fiscal 2021, we project cash flow from operations between $1,625$1,675 to $1,525$1,575 million and $650$700 million of capital spending.

1617
Results of Operations

Comparison of the Quarterly Period Ended January 2,April 3, 2021 (the “Quarter”) and the Quarterly Period Ended DecemberMarch 28, 20192020 (the “Prior Quarter”)

The Company’s U.S. based results for the Quarter and Prior Quarter are based on a fourteen and thirteen week period, respectively.   Business integration expenses consist of restructuring and impairment charges, acquisition and divestiture related costs, and other business optimization costs.  Tables present dollars in millions.

Consolidated Overview                  
 Quarter  Prior Quarter  $ Change  % Change  Quarter  Prior Quarter  $ Change  % Change 
Net sales $3,136  $2,816  $320   11% $3,370  $2,975  $395   13%
Cost of goods sold  2,706   2,391   315   13%
Other operating expenses  331   300   31   10%
Operating income $304  $199  $105   53% $333  $284  $49   17%
Operating income percentage of net sales  10%  7%        

Net Sales:  The net sales growth is primarily attributed to increased selling prices of $192 million due to the pass through of higher resin costs, organic volume growth of 7%5%, and a $50$92 million favorable impact from foreign currency changes and a $112 million benefit from extra shipping days in the Quarter,changes. These increases were partially offset by Prior Quarter divestiture sales of $15$53 million.  The organic volume growth was primarily due to organic growth investments, modest recovery of certain markets that had previously been facing COVID-19 headwinds, and higher demand in our advantaged health and hygiene products as the result of COVID-19.

Cost of goods sold:The cost of goods sold increase is attributed to the organic volume growth, product mix, higher resin costs and a $74 million increase from foreign currency changes.  These increases were partially offset by Prior Quarter divestiture cost of goods sold of $42 million and a $19 million inventory step-up.

Other operating incomeexpenses:  The other operating expenses increase is primarily attributed to a $46$21 million increase in business integration expense and a $15 million increase in selling, general, and administrative expense.

Operating Income:  The operating income increase is primarily attributed to a $35 million increase from the organic volume growth, a $17$19 million inventory step-up in the Prior Quarter related to the RPC acquisition, a $16 million favorable impact from price cost spread including synergies and product mix, and a $12 million decrease in business integration expense, a $7 million gain on the divested business, a $7$16 million favorable impact from foreign currency, changes,partially offset by a $21 million increase in business integration expense, and a $19$15 million benefit from extra shipping daysincrease in the Quarter.selling, general, and administrative expense.

Consumer Packaging International                  
 Quarter  Prior Quarter  $ Change  % Change  Quarter  Prior Quarter  $ Change  % Change 
Net sales $988  $930  $58   6% $1,060  $970  $90   9%
Cost of goods sold  842   785   57   7%
Other operating expenses  159   132   27   20%
Operating income $71  $38  $33   87% $59  $53  $6   11%
Operating income percentage of net sales  7%  4%        

Net Sales:  The net sales growth in the Consumer Packaging International segment is primarily attributed to organic volume growth of 4%, and a $44$71 million favorable impact from foreign currency changeschanges.  The organic volume growth was primarily due to recovery in emerging markets.

Cost of goods sold:  The cost of goods sold increase is attributed to the organic volume growth and a $57 million increase from foreign currency changes.  These increases were partially offset by lower selling prices of $28 million.change in product mix and the Prior Quarter $19 million inventory step-up.

Other operating expenses:  The other operating expenses increase is primarily attributed to a $24 million increase in business integration activities.

Operating Income:  The operating income increase is primarily attributed to a $9$12 million decrease in selling, general, and administrative expense, a $7favorable impact from foreign currency, an $11 million increase from the organic volume growth, and a $6$19 million favorable impact from price cost spread,inventory step-up in the Prior Quarter, partially offset by a $6$24 million decreaseincrease in business integration expense,activities, and a $6 million favorable impact from foreign currency.an increase in depreciation and amortization.
18

Consumer Packaging North America                  
 Quarter  Prior Quarter  $ Change  % Change  Quarter  Prior Quarter  $ Change  % Change 
Net sales $686  $611  $75   12% $731  $633  $98   15%
Cost of goods sold  597   508   89   18%
Other operating expenses  57   56   1   2%
Operating income $59  $44  $15   34% $77  $69  $8   12%
Operating income percentage of net sales  9%  7%        

Net Sales:  The net sales growth in the Consumer Packaging North America segment is primarily attributed to increased selling prices of $60 million due to the pass through of higher resin costs and organic volume growth of 8% and a $34 million benefit from extra shipping days in the Quarter.  5%.  The organic volume growth was primarily due to continued strength in closures, bottles and containers.

Cost of goods sold:  The cost of goods sold increase is attributed to the organic volume growth, product mix and higher resin costs.

Operating Income:  The operating income increase is primarily attributed to a $13$9 million increase from the organic volume growth and a $6 million benefit from extra shipping daysdecrease in the Quarter,depreciation and amortization, partially offset by a $5 million increase in selling, general, and administrative expense.
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Engineered Materials         
  Quarter  Prior Quarter  $ Change  % Change 
Net sales $722  $665  $57   9%
Operating income $78  $70  $8   11%
Operating income percentage of net sales  11%  11%        

The net sales growth in the Engineered Materials segment is primarily attributed to increased selling prices of $14 million, a organic volume growth of 2%, a $7 million favorable impact from foreign currency, and a $37 million benefit from extra shipping days in the Quarter, partially offset by Prior Quarter divestiture sales of $11 million.

The operating income increase is primarily attributed to a $7 million gain on the divested business and a $5 million benefit from extra shipping days in the current quarter, partially offset by a $5 million negative impact from price cost spread.

Health, Hygiene & Specialties                  
 Quarter  Prior Quarter  $ Change  % Change  Quarter  Prior Quarter  $ Change  % Change 
Net sales $740  $610  $130   21% $781  $644  $137   21%
Cost of goods sold  609   519   90   17%
Other operating expenses  58   59   (1)  (2)%
Operating income $96  $47  $49   104% $114  $66  $48   73%
Operating income percentage of net sales  13%  8%        

Net Sales:  The net sales growth in the Health, Hygiene & Specialties segment is primarily attributed to organic volume growth of 15%8%,  and increased selling prices of $7$83 million and a $36 million benefit from extra shipping days indue to the Quarter.pass through of higher resin costs.  The organic volume growth was primarily due to organic growth investments and higher demand in our advantagedadvantage health and hygiene products as the result of COVID-19.

Cost of goods sold:  The cost of goods sold increase is attributed to the organic volume growth, product mix and higher resin costs.

Operating Income:  The operating income increase is primarily attributed to a $24$12 million impact from the organic volume growth and a $16$31 million favorable impact from price cost spread and a $7 million benefit from extra shipping daysproduct mix.

Engineered Materials         
  Quarter  Prior Quarter  $ Change  % Change 
Net sales $798  $728  $70   10%
Cost of goods sold  658   579   79   14%
Other operating expenses  57   53   4   8%
Operating income $83  $96  $(13)  (14)%

Net Sales:  The net sales growth in the Quarter.Engineered Materials segment is primarily attributed to increased selling prices of $69 million due to the pass through of higher resin costs, organic volume growth of 3%, and a $15 million favorable impact from foreign currency changes, partially offset by Prior Quarter divestiture sales of $43 million.

Other expense, net         
  Quarter  Prior Quarter  $ Change  % Change 
Other expense, net $25  $13  $12   92%
Cost of goods sold:   The cost of goods sold increase is attributed to the organic volume growth, product mix, higher resin costs, and a $13 million increase from foreign currency changes.  These increases were partially offset by Prior Quarter divestiture cost of goods sold of $35 million.

Operating Income:  The operating income decrease is primarily attributed to a $10 million negative impact from price cost spread and Prior Quarter divestiture operating income.
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Other expense, net         
  Quarter  Prior Quarter  $ Change  % Change 
Other expense, net $6  $—  $6   N/A 

The other expense increaseis primarily attributed to debt extinguishment costs partially offset by foreign currency changes related to the remeasurement of non-operating intercompany balances.

Interest expense, net                  
 Quarter  Prior Quarter  $ Change  % Change  Quarter  Prior Quarter  $ Change  % Change 
Interest expense, net $97  $118  $(21)  (18)% $84  $111  $(27)  (24)%

The interest expense decrease is primarily the result of repayments on long-term borrowings in fiscal 2020.2020 and recent refinancing activities (see Note 7).

Changes in Comprehensive Income

The $173$303 million increaseimprovement in Comprehensivecomprehensive income from the Prior Quarter is primarily attributed to an $86 million increase in currency translation and an $83 million improvement in Net income.  Currency translation changes are primarily related to non-U.S. subsidiaries with a functional currency other than the U.S. Dollar whereby assets and liabilities are translated from the respective functional currency into U.S. Dollars using period-end exchange rates.  The change in currency translation was primarily attributed to locations utilizinga $55 million improvement in net income, a $163 million favorable change in the Euro, British pound sterling, Canadian Dollarfair value of derivative instruments, net of tax, and Chinese Renminbi as their functional currency.an $84 million favorable change in currency translation.  As part of the overall risk management, the Company uses derivative instruments to (i) reduce our exposure to changes in interest rates attributed to the Company’s floating-rate borrowings and (ii) reduce foreign currency exposure to translation of certain foreign operations.  The Company records changes to the fair value of these instruments in Accumulated other comprehensive loss.  The change in fair value of these instruments in fiscal 2021 versus fiscal 2020 is primarily attributed to the change in the forward interest and foreign exchange curves between measurement dates.

Comparison of the Two Quarterly Periods Ended April 3, 2021 (the “YTD”) and the Two Quarterly Periods Ended March 28, 2020 (the “Prior YTD”)

The Company’s U.S. based results for the YTD and Prior YTD are based on a twenty-seven and twenty-six week period, respectively.   Business integration expenses consist of restructuring and impairment charges, acquisition and divestiture related costs, and other business optimization costs.  Tables present dollars in millions.

Consolidated Overview         
  YTD  Prior YTD  $ Change  % Change 
Net sales $6,506  $5,791  $715   12%
Cost of goods sold  5,224   4,687   537   11%
Other operating expenses  645   621   24   4%
Operating income $637  $483  $154   32%

Net Sales:  2020The net sales growth is primarily attributed to organic volume growth of 6%, increased selling prices of $181 million due to the pass through of higher resin costs, a $142 million favorable impact from foreign currency changes, and a $131 million increase from extra shipping days in the YTD. These increases were partially offset by Prior Quarter divestiture sales of $68 million.  The organic volume growth was primarily due to organic growth investments, modest recovery of certain markets that had previously been facing COVID-19 headwinds, and higher demand in our advantaged health and hygiene products as the result of COVID-19.

Cost of goods sold:  The cost of goods sold increase is attributed to the organic volume growth, product mix, higher resin costs, a $114 million increase from foreign currency changes, and a $101 million increase from extra shipping day in the YTD.  These increases were partially offset by Prior YTD divestiture cost of goods sold of $55 million and a $19 million inventory step-up.

Other operating expenses:  The other operating expenses increase is primarily attributed to an $11 million increase in selling, general, and administrative expenses and an increase from extra shipping days in the YTD.

Operating Income:  The operating income increase is primarily attributed to an $81 million increase from the organic volume growth, a $33 million favorable impact from price cost spread including synergies and product mix, a $23 million favorable impact from foreign currency, a $22 million benefit from extra shipping days in the YTD, and a $19 million inventory step-up in the Prior YTD related to the RPC acquisition, partially offset by an $11 million increase in selling, general, and administrative expenses, and Prior YTD divestiture operating income.
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Consumer Packaging International         
  YTD  Prior YTD  $ Change  % Change 
Net sales $2,048  $1,900  $148   8%
Cost of goods sold  1,634   1,535   99   6%
Other operating expenses  279   269   10   4%
Operating income $135  $96  $39   41%

Net Sales:  The net sales growth in the Consumer Packaging International segment is primarily attributed to organic volume growth of 4% and a $115 million favorable impact from foreign currency changes, partially offset by lower selling prices of $48 million.  The organic volume growth was primarily due to recovery in emerging markets.

Cost of goods sold:  The cost of goods sold increase is attributed to the organic volume growth and a $93 million increase from foreign currency changes.  These increases were partially offset by change in product mix and a $19 million inventory step-up in the Prior YTD.

Other operating expenses:  The other operating expenses increase is primarily attributed to an increase in business integration expense.

Operating Income: The operating income increase is primarily attributed to an $18 million increase from the organic volume growth, an $18 million favorable impact from foreign currency, and a $19 million inventory step-up in the Prior YTD related to the RPC acquisition, partially offset by an $18 million increase in business integration activities.

Consumer Packaging North America         
  YTD  Prior YTD  $ Change  % Change 
Net sales $1,417  $1,244  $173   14%
Cost of goods sold  1,155   1,017   138   14%
Other operating expenses  126   114   12   11%
Operating income $136  $113  $23   20%

Net Sales:  The net sales growth in the Consumer Packaging North America segment is primarily attributed to organic volume growth of 6%, increased selling prices of $56 million, and a $40 million increase from extra shipping days in the YTD.  The organic volume growth was primarily due to continued strength in closures, bottles and containers.

Cost of goods sold:  The cost of goods sold increase is attributed to the organic volume growth, product mix, higher resin costs, and a $30 million increase from extra shipping day in the YTD.

Other operating expenses:  The other operating expenses increase is primarily attributed an increase in selling, general, and administrative expense.

Operating Income:  The operating income increase is primarily attributed to a $22 million increase from the organic volume growth and a $7 million benefit from extra shipping days in the YTD, partially offset by increased selling, general, and administrative expense.
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Health, Hygiene & Specialties         
  YTD  Prior YTD  $ Change  % Change 
Net sales $1,521  $1,254  $267   21%
Cost of goods sold  1,182   1,013   169   17%
Other operating expenses  129   128   1   1%
Operating income $210  $113  $97   86%

Net Sales:  The net sales growth in the Health, Hygiene & Specialties segment is primarily attributed to organic volume growth of 12%, increased selling prices of $90 million due to the pass through of higher resin costs, and a $42 million increase from extra shipping days in the YTD, partially offset by Prior YTD divestiture sales of $14 million.  The organic volume growth was primarily due to organic growth investments and higher demand in our advantage health and hygiene products as the result of COVID-19.

Cost of goods sold:  The cost of goods sold increase is attributed to the organic volume growth, product mix, higher resin costs, and a $31 million increase from extra shipping day in the YTD.  These increases were partially offset by Prior YTD divestiture cost of goods sold.

Operating Income: The operating income increase is primarily attributed to a $36 million increase from the organic volume growth, a $47 million favorable impact from price cost spread including synergies and product mix, and a benefit from extra shipping days in the YTD.

Engineered Materials         
  YTD  Prior YTD  $ Change  % Change 
Net sales $1,520  $1,393  $127   9%
Cost of goods sold  1,253   1,122   131   12%
Other operating expenses  111   110   1   1%
Operating income $156  $161  $(5)  (3)%

Net Sales:  The net sales growth in the Engineered Materials segment is primarily attributed to increased selling prices of $83 million due to the pass through of higher resin costs, a $44 million increase from extra shipping days in the YTD, organic volume growth of 2%, and a $22 million favorable impact from foreign currency changes, partially offset by Prior YTD divestiture sales of $54 million.

Cost of goods sold:  The cost of goods sold increase is attributed to the organic volume growth, product mix, higher resin costs, an $18 million increase from foreign currency changes, and a $35 million increase from extra shipping day in the YTD.  These increases were partially offset by Prior YTD divestiture cost of goods sold of $45 million.

Operating Income: The operating income decrease is primarily attributed to a $15 million unfavorable impact from price cost spread and Prior YTD divestiture operating income.  These decreases were partially offset by an improvement from the organic volume growth, and a benefit from extra shipping days in the YTD.

Other expense, net         
  YTD  Prior YTD  $ Change  % Change 
Other expense, net $31  $13  $18   138%

The other expense increase is primarily attributed to foreign currency changes related to the remeasurement of non-operating intercompany balances.

Interest expense, net         
  YTD  Prior YTD  $ Change  % Change 
Interest expense, net $181  $229  $(48)  (21)%

The interest expense decrease is primarily the result of repayments on long-term borrowings in fiscal 2020 and recent refinancing activities.

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Changes in Comprehensive Income

The $476 million improvement in comprehensive income from the Prior YTD was primarily attributed to a $138 million improvement in net income, a $170 million favorable change in currency translation, and a $167 million favorable change in the fair value of derivative instruments, net of tax.  Currency translation gains and losses are primarily related to non-U.S. subsidiaries with a functional currency other than U.S. dollars whereby assets and liabilities are translated from the respective functional currency into U.S. dollars using period-end exchange rates.  The change in currency translation in the YTD was primarily attributed to locations utilizing the euro, British pound sterling, Brazilian real, Canadian dollar, Chinese renminbi and Mexican peso as the functional currency.  As part of the overall risk management, the Company uses derivative instruments to (i) reduce our exposure to changes in interest rates attributed to the Company’s borrowings and (ii) reduce foreign currency exposure to translation of certain foreign operations.  The Company records changes to the fair value of these instruments in Accumulated other comprehensive loss.  The change in fair value of these instruments in fiscal 2021 versus fiscal 2020 is primarily attributed to the change in the forward interest curveand foreign exchange curves between measurement dates.

Liquidity and Capital Resources

Senior Secured Credit Facility

We manage our global cash requirements considering (i) available funds among the many subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances.  At the end of the Quarter, the Company had no outstanding balance on its $850 million asset-based revolving line of credit that matures in May 2024. The Company was in compliance with all covenants at the end of the Quarter. (see Note 7)

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Cash Flows

Net cash from operating activities increased $97$105 million from the Prior QuarterYTD primarily attributed to improved net income.income prior to non-cash activities.

Net cash used in investing activities decreased $126increased $194 million from the Prior QuarterYTD primarily attributed to increased capital expenditures and proceeds from the U.S. Flexible Packaging Converting disposition.settlement of cross-currency derivatives in the Prior YTD, partially offset by proceeds from the divestiture of business in the YTD.

Net cash used in financing activities increased $70$48 million from the Prior QuarterYTD primarily attributed to increasedhigher net debt repayments.repayments, partially offset by higher proceeds from issuance of common stock.

Share Repurchases

No shares were repurchased during the quarter. Authorized share repurchases of $393 $393 million remain available to the Company.

Liquidity Outlook

At January 2,April 3, 2021, our cash balance was $847$843 million, of which approximately 80% was located outside the U.S.  We believe our existing U.S. based cash and cash flow from U.S. operations, together with available borrowings under our senior secured credit facilities, will be adequate to meet our liquidity needs over the next twelve months.  We do not expect our free cash flow to be sufficient to cover all long-term debt obligations and intend to refinance these obligations prior to maturity.

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Summarized Guarantor Financial Information

Berry Global, Inc. (“Issuer”) has notes outstanding which are fully, jointly, severally, and unconditionally guaranteed by its parent, Berry Global Group, Inc. (for purposes of this section, “Parent”) and substantially all of Issuer’s domestic subsidiaries. Separate narrative information or financial statements of the guarantor subsidiaries have not been included because they are 100% owned by Parent and the guarantor subsidiaries unconditionally guarantee such debt on a joint and several basis. A guarantee of a guarantor subsidiary of the securities will terminate upon the following customary circumstances: the sale of the capital stock of such guarantor if such sale complies with the indentures, the designation of such guarantor as an unrestricted subsidiary, the defeasance or discharge of the indenture or in the case of a restricted subsidiary that is required to guarantee after the relevant issuance date, if such guarantor no longer guarantees certain other indebtedness of Issuer. The guarantees of the guarantor subsidiaries are also limited as necessary to prevent them from constituting a fraudulent conveyance under applicable law and any guarantees guaranteeing subordinated debt are subordinated to certain other of the Company’s debts. Parent also guarantees Issuer’s term loans and revolving credit facilities. The guarantor subsidiaries guarantee our term loans and are co-borrowers under our revolving credit facility.

Presented below is summarized financial information for the Parent, Issuer and guarantor subsidiaries on a combined basis, after intercompany transactions have been eliminated.

 Quarterly Period Ended  Two Quarterly Periods Ended 
 January 2, 2021  April 3, 2021 
Net sales $1,619  $3,278 
Gross profit  315   641 
Earnings from continuing operations  360   167 
Net income $360  $167 

Includes $6$12 million of income associated with intercompany activity with non-guarantor subsidiaries.

 January 2, 2021  September 26, 2020  April 3, 2021  September 26, 2020 
Assets            
Current assets $1,609  $1,417  $1,712  $1,417 
Noncurrent assets  6,038   6,153   5,926   6,153 
                
Liabilities                
Current liabilities $1,051  $841  $1,048  $841 
Noncurrent liabilities  11,904   11,936   11,619   11,936 

Includes $600$715 million and $572 million of intercompany payables due to non-guarantor subsidiaries as of January 2,April 3, 2021 and September 26, 2020, respectively.

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Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

We are exposed to market risk from changes in interest rates primarily through our senior secured credit facilities. Our senior secured credit facilities are comprised of (i) $5.4$3.8 billion term loans and (ii) a $850 million revolving credit facility with no borrowings outstanding. Borrowings under our senior secured credit facilities bear interest at a rate equal to an applicable margin plus LIBOR.  The applicable margin for LIBOR rate borrowings under the revolving credit facility ranges from 1.25% to 1.50%, and the margin for term loans is 2.00%1.75% per annum. As of period end, the LIBOR rate of approximately 0.14%0.12% was applicable to the term loans. A 0.25% change in LIBOR would increase our annual interest expense by $6$2 million on variable rate term loans.

We seek to minimize interest rate volatility risk through regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. These financial instruments are not used for trading or other speculative purposes. At period end, the Company effectively had (i) a $450 million interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 1.398%, with an expiration in June 2026, (ii) a $1 billion interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 1.835% with an expiration in June 2026, (iii) a $400 million interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 1.916% with an expiration in June 2026, (iv) a $884 million interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 1.857%, with an expiration in June 2024, and (v) a $473 million interest rate swap transaction that swaps a one-month variable LIBOR contract for a fixed annual rate of 2.050%, with an expiration in June 2024.

Foreign Currency Risk

As a global company, we face foreign currency risk exposure from fluctuating currency exchange rates, primarily the U.S. dollar against the euro, British pound sterling, Brazilian real, Chinese renminbi, Canadian dollar and Mexican peso.  Significant fluctuations in currency rates can have a substantial impact, either positive or negative, on our revenue, cost of sales, and operating expenses.  Currency translation gains and losses are primarily related to non-U.S. subsidiaries with a functional currency other than U.S. dollars whereby assets and liabilities are translated from the respective functional currency into U.S. dollars using period-end exchange rates and impact our Comprehensive income.  A 10% decline in foreign currency exchange rates would have had a $8an $18 million unfavorable impact on our Net income for the two quarterly periodperiods ended January 2,April 3, 2021.

The Company is party to certain cross-currency swaps to hedge a portion of our foreign currency risk. The swap agreements mature May 2022 (€250 million), June 2024 (€1,625 million) and July 2027 (£700 million). In addition to cross-currency swaps, we hedge a portion of our foreign currency risk by designating foreign currency denominated long-term debt as net investment hedges of certain foreign operations. As of January 2,April 3, 2021, we had outstanding long-term debt of €785 million that was designated as a hedge of our net investment in certain euro-denominated foreign subsidiaries.

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Item 4.  Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

Under applicable Securities and Exchange Commission regulations, management of a reporting company, with the participation of the principal executive officer and principal financial officer, must periodically evaluate the company’s “disclosure controls and procedures,” which are defined generally as controls and other procedures of a reporting company designed to ensure that information required to be disclosed by the reporting company in its periodic reports filed with the commission (such as this Form 10-Q) is recorded, processed, summarized, and reported on a timely basis.

The Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures as of the end of the period covered by this report.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.

(b) Changes in internal control over financial reporting.

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

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Part II.  Other Information

Item 1.  Legal Proceedings

There have been no material changes in legal proceedings from the items disclosed in our Form 10-K filed with the Securities and Exchange Commission.

Item 1A.  Risk Factors

Before investing in our securities, we recommend that investors carefully consider the risks described in our most recent Form 10-K filed with the Securities and Exchange Commission, including those under the heading “Risk Factors”.  Realization of any of these risks could have a material adverse effect on our business, financial condition, cash flows and results of operations.

Additionally, we caution readers that the list of risk factors discussed in our most recent Form 10-K may not contain all of the material factors that are important to you.  In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur.  Accordingly, readers should not place undue reliance on those statements.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Repurchases of Equity Securities

During the quarter, the Company did not repurchase any shares. As of January 2,April 3, 2021, $393 million of authorized shares remained available to purchase under the program.

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Item 6.  Exhibits

Exhibit No. Description of Exhibit
3.1 
Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Berry Global Group, Inc., as amended through March 6, 2019dated February 24, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s QuarterlyCurrent Report on Form 10-Q8-K filed on May 2, 2019)February 25, 2021).
3.2 
Amended and Restated Bylaws of Berry Global Group, Inc., as amended and restated effective as of March 6, 2019February 24, 2021 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on March 8, 2019)February 25, 2021).
4.1 
Indenture, among Berry Global, Inc., certain guarantors party thereto, U.S. Bank National Association, as Trustee and Collateral Agent, relating to the 1.57%0.95% First Priority Senior Secured Notes due 2026,2024, dated December 22, 2020January 15, 2021 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 23, 2020)January 15, 2021).
4.2 
Registration Rights Agreement, amongby and between Berry Global, Inc., BerryGlobal Group, Inc., each subsidiary of Berry Global, Inc. identified therein, and Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, on behalf of themselves and as representatives of the initial purchasers, relatedrelating to the 1.57%0.95% First Priority Senior Secured Notes due 2026, dated December 22, 20202024 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on December 23, 2020)January 15, 2021).
4.3
First Supplemental Indenture, among Berry Global, Inc., certain guarantors party thereto, U.S. Bank National Association, as Trustee and Collateral Agent, relating to the 1.57% First Priority Senior Secured Notes due 2026, dated March 4, 2021 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 5, 2021).
4.4
Registration Rights Agreement, dated March 4, 2021, by and between Berry Global, Inc., Berry Global Group, Inc., each subsidiary of Berry Global, Inc. identified therein, and Citigroup Global Markets Inc. Goldman Sachs & Co. LLC and Wells Fargo Securities, LLC, on behalf of themselves and as representatives of the initial purchasers, relating to the 1.57% First Priority Senior Secured Notes due 2026 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on March 5, 2021).
10.1 
Form of Employee Non-Qualified Stock Option Award AgreementAmended and Restated Berry Global Group, Inc. 2015 Long-Term Incentive Plan, effective February 24, 2021 (incorporated(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 30, 2020)February 25, 2021).
10.2
22*
 
Form of Employee Performance-Based Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 30, 2020).
10.3
Form of Director Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 30, 2020).
10.4
Form of Director Performance-Based Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 30, 2020).
Subsidiary Guarantors
31.1*
 Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.
31.2*
 Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.
32.1**
 Section 1350 Certification of the Chief Executive Officer.
32.2**
 Section 1350 Certification of the Chief Financial Officer.
101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101).

*Filed herewith
**Furnished herewith

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SIGNATURE

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

 Berry Global Group, Inc. 
    
February 5,May 4, 2021By:/s/ Mark W. Miles 
  Mark W. Miles 
  Chief Financial Officer 

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