Cover Cover
Cover Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-39528 | |
Entity Registrant Name | PACTIV EVERGREEN INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-1538656 | |
Entity Address, Address Line One | 1900 W. Field Court | |
Entity Address, City or Town | Lake Forest | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60045 | |
City Area Code | 847 | |
Local Phone Number | 482-2000 | |
Title of 12(b) Security | Common stock, $0.001 par value | |
Trading Symbol | PTVE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 177,157,710 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Central Index Key | 0001527508 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | $ 1,195 | $ 1,306 | $ 3,514 | $ 3,888 |
Cost of sales | (1,011) | (1,100) | (2,982) | (3,249) |
Gross profit | 184 | 206 | 532 | 639 |
Selling, general and administrative expenses | (116) | (104) | (358) | (341) |
Goodwill impairment charges | (6) | (16) | (6) | (16) |
Restructuring, asset impairment and other related charges | (14) | (39) | (18) | (45) |
Other (expense) income, net | (79) | 2 | (48) | (7) |
Operating (loss) income from continuing operations | (31) | 49 | 102 | 230 |
Non-operating income (expense), net | 17 | 0 | 50 | (2) |
Interest expense, net | (87) | (84) | (275) | (312) |
Loss from continuing operations before tax | (101) | (35) | (123) | (84) |
Income tax (expense) benefit | (42) | 0 | 95 | (16) |
Loss from continuing operations | (143) | (35) | (28) | (100) |
(Loss) income from discontinued operations, net of income taxes | (216) | 91 | (234) | 270 |
Net (loss) income | (359) | 56 | (262) | 170 |
Income attributable to non-controlling interests | 0 | 0 | (1) | (1) |
Net (loss) income attributable to Pactiv Evergreen Inc. common stockholders | $ (359) | $ 56 | $ (263) | $ 169 |
From continuing operations | ||||
Basic (USD per share) | $ (1.03) | $ (0.26) | $ (0.22) | $ (0.75) |
Diluted (USD per share) | (1.03) | (0.26) | (0.22) | (0.75) |
From discontinued operations | ||||
Basic (USD per share) | (1.56) | 0.67 | (1.72) | 2.01 |
Diluted (USD per share) | (1.56) | 0.67 | (1.72) | 2.01 |
Total | ||||
Basic (USD per share) | (2.59) | 0.41 | (1.94) | 1.26 |
Diluted (USD per share) | $ (2.59) | $ 0.41 | $ (1.94) | $ 1.26 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Related party net revenues | $ 89 | $ 72 | $ 259 | $ 213 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Other Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (359) | $ 56 | $ (262) | $ 170 |
Other comprehensive income (loss), net of income taxes: | ||||
Currency translation adjustments | 66 | (64) | (29) | (47) |
Defined benefit plans | 0 | (1) | 0 | (2) |
Other comprehensive income (loss) | 66 | (65) | (29) | (49) |
Comprehensive (loss) income | (293) | (9) | (291) | 121 |
Comprehensive income attributable to non-controlling interests | 0 | 0 | (1) | (1) |
Comprehensive (loss) income attributable to Pactiv Evergreen Inc. common stockholders | $ (293) | $ (9) | $ (292) | $ 120 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 1,756 | $ 1,155 |
Accounts receivable, less allowances for doubtful accounts of $5 and $4 | 425 | 445 |
Related party receivables | 57 | 0 |
Inventories | 744 | 753 |
Other current assets | 172 | 119 |
Assets held for sale or distribution | 23 | 1,232 |
Total current assets | 3,177 | 3,704 |
Property, plant and equipment, net | 1,666 | 1,703 |
Operating lease right-of-use assets, net | 237 | 191 |
Goodwill | 1,760 | 1,766 |
Intangible assets, net | 1,104 | 1,147 |
Deferred income taxes | 11 | 21 |
Related party receivables | 0 | 339 |
Other noncurrent assets | 221 | 161 |
Noncurrent assets held for sale or distribution | 41 | 7,143 |
Total assets | 8,217 | 16,175 |
Liabilities | ||
Accounts payable | 297 | 316 |
Related party payables | 21 | 30 |
Current portion of long-term debt | 2 | 3,587 |
Current portion of operating lease liabilities | 55 | 47 |
Income taxes payable | 16 | 14 |
Accrued and other current liabilities | 342 | 418 |
Liabilities held for sale or distribution | 8 | 485 |
Total current liabilities | 741 | 4,897 |
Long-term debt | 5,196 | 7,043 |
Long-term operating lease liabilities | 198 | 157 |
Deferred income taxes | 504 | 150 |
Long-term employee benefit obligations | 678 | 730 |
Other noncurrent liabilities | 150 | 124 |
Noncurrent liabilities held for sale or distribution | 0 | 992 |
Total liabilities | 7,467 | 14,093 |
Commitments and contingencies (Note 14) | ||
Equity | ||
Common stock, $0.001 par value; 2,000,000,000 shares authorized; 175,434,000 and 134,408,000 shares issued and outstanding, respectively | 0 | 0 |
Preferred stock, $0.001 par value; 200,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Additional paid in capital | 580 | 103 |
Accumulated other comprehensive loss | (386) | (518) |
Retained earnings | 554 | 2,494 |
Total equity attributable to Pactiv Evergreen Inc. common stockholders | 748 | 2,079 |
Non-controlling interests | 2 | 3 |
Total equity | 750 | 2,082 |
Total liabilities and equity | $ 8,217 | $ 16,175 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 5 | $ 4 |
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 175,434,000 | 134,408,000 |
Common stock, shares outstanding (in shares) | 175,434,000 | 134,408,000 |
Preferred stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Non-controlling Interests | Cumulative impact of adopting ASU 2018-02 | Cumulative impact of adopting ASU 2018-02Accumulated Other Comprehensive Loss | Cumulative impact of adopting ASU 2018-02Retained Earnings | Reynolds Consumer Products | [1] | Reynolds Consumer ProductsAdditional Paid In Capital | [1] | Reynolds Consumer ProductsAccumulated Other Comprehensive Loss | [1] | Reynolds Consumer ProductsRetained Earnings | [1] | Graham Packaging Company Inc. | [1] | Graham Packaging Company Inc.Additional Paid In Capital | [1] | Graham Packaging Company Inc.Accumulated Other Comprehensive Loss | [1] | Graham Packaging Company Inc.Retained Earnings | [1] |
Beginning balance (in shares) at Dec. 31, 2018 | 134.4 | ||||||||||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 1,785 | $ 0 | $ 103 | $ (689) | $ 2,362 | $ 9 | $ 0 | $ (41) | $ 41 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||
Net (loss) income | 170 | 169 | 1 | ||||||||||||||||||||||
Other comprehensive (loss) income, net of income taxes | (49) | (49) | |||||||||||||||||||||||
Disposition of non-controlling interest | (4) | (4) | |||||||||||||||||||||||
Distribution of Reynolds Consumer Products, Inc. and Graham Packaging Company, Inc | 0 | ||||||||||||||||||||||||
Dividends paid to non-controlling interests | (1) | (1) | |||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2019 | 134.4 | ||||||||||||||||||||||||
Ending balance at Sep. 30, 2019 | 1,901 | $ 0 | 103 | (779) | 2,572 | 5 | |||||||||||||||||||
Beginning balance (in shares) at Jun. 30, 2019 | 134.4 | ||||||||||||||||||||||||
Beginning balance at Jun. 30, 2019 | 1,910 | $ 0 | 103 | (714) | 2,516 | 5 | 0 | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||
Net (loss) income | 56 | 56 | |||||||||||||||||||||||
Other comprehensive (loss) income, net of income taxes | (65) | (65) | |||||||||||||||||||||||
Distribution of Reynolds Consumer Products, Inc. and Graham Packaging Company, Inc | 0 | ||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2019 | 134.4 | ||||||||||||||||||||||||
Ending balance at Sep. 30, 2019 | 1,901 | $ 0 | 103 | (779) | 2,572 | 5 | |||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 134.4 | ||||||||||||||||||||||||
Beginning balance at Dec. 31, 2019 | 2,082 | $ 0 | 103 | (518) | 2,494 | 3 | 0 | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||
Net (loss) income | (262) | (263) | 1 | ||||||||||||||||||||||
Other comprehensive (loss) income, net of income taxes | (29) | (29) | |||||||||||||||||||||||
Distribution of Reynolds Consumer Products, Inc. and Graham Packaging Company, Inc | 161 | $ (46) | $ (48) | $ (11) | $ 13 | $ (1,178) | $ (22) | $ 172 | $ (1,328) | ||||||||||||||||
Forgiveness of related party balances pre IPO | (362) | (362) | |||||||||||||||||||||||
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions (in shares) | 41 | ||||||||||||||||||||||||
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions | 546 | 546 | |||||||||||||||||||||||
Stock-based compensation | 1 | 1 | |||||||||||||||||||||||
Dividends paid to non-controlling interests | (2) | (2) | |||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 175.4 | ||||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | 750 | $ 0 | 580 | (386) | 554 | 2 | |||||||||||||||||||
Beginning balance (in shares) at Jun. 30, 2020 | 134.4 | ||||||||||||||||||||||||
Beginning balance at Jun. 30, 2020 | 2,037 | $ 0 | 55 | (624) | 2,603 | 3 | $ 0 | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||
Net (loss) income | (359) | (359) | |||||||||||||||||||||||
Other comprehensive (loss) income, net of income taxes | 66 | 66 | |||||||||||||||||||||||
Distribution of Reynolds Consumer Products, Inc. and Graham Packaging Company, Inc | 172 | $ (1,178) | $ (22) | $ 172 | $ (1,328) | ||||||||||||||||||||
Forgiveness of related party balances pre IPO | (362) | (362) | |||||||||||||||||||||||
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions (in shares) | 41 | ||||||||||||||||||||||||
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions | 546 | 546 | |||||||||||||||||||||||
Stock-based compensation | 1 | 1 | |||||||||||||||||||||||
Dividends paid to non-controlling interests | (1) | (1) | |||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 175.4 | ||||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | $ 750 | $ 0 | $ 580 | $ (386) | $ 554 | $ 2 | |||||||||||||||||||
[1] | Refer to Note 3 - Discontinued Operations |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201802Member |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash provided by (used in) operating activities | ||
Net (loss) income | $ (262) | $ 170 |
Adjustments to reconcile net (loss) income to operating cash flows: | ||
Depreciation and amortization | 391 | 484 |
Deferred income taxes | 310 | 3 |
Unrealized gains on derivatives | (3) | (15) |
Goodwill impairment charges | 6 | 25 |
Other asset impairment charges | 15 | 98 |
(Gain) loss on disposal of businesses and other assets | (8) | 23 |
Non-cash portion of employee benefit obligations | (44) | 9 |
Non-cash portion of operating lease expense | 78 | 81 |
Other non-cash items, net | (2) | (2) |
Change in assets and liabilities: | ||
Accounts receivable, net | (4) | (62) |
Inventories | (29) | (85) |
Other current assets | 0 | 33 |
Accounts payable | 24 | (31) |
Operating lease payments | (75) | (78) |
Income taxes payable | (121) | (55) |
Accrued and other current liabilities | (76) | 2 |
Other assets and liabilities | 70 | (37) |
Net cash provided by operating activities | 270 | 563 |
Cash provided by (used in) investing activities | ||
Acquisition of property, plant and equipment and intangible assets | (329) | (467) |
Proceeds from sale of property, plant and equipment | 1 | 21 |
Disposal of businesses, net of cash disposed | 8 | (4) |
Proceeds from related party loan repayment | 0 | 5 |
Net cash used in investing activities | (320) | (445) |
Cash provided by (used in) financing activities | ||
Long-term debt proceeds | 5,614 | 0 |
Long-term debt repayments | (5,473) | (27) |
Financing transaction costs on long-term debt | (35) | 0 |
Premium on redemption of long-term debt | (2) | 0 |
Net proceeds from issuance of shares | 546 | 0 |
Other financing activities | (4) | (2) |
Net cash provided by (used in) financing activities | 536 | (29) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (15) | (3) |
Increase (decrease) in cash, cash equivalents and restricted cash | 471 | 86 |
Cash, cash equivalents and restricted cash as of beginning of the period | 1,294 | 786 |
Cash, cash equivalents and restricted cash as of end of the period | 1,765 | 872 |
Cash, cash equivalents and restricted cash are comprised of: | ||
Cash and cash equivalents | 1,756 | 785 |
Cash and cash equivalents classified as assets held for sale or distribution | 9 | 85 |
Restricted cash included within other current assets | 0 | 2 |
Cash, cash equivalents and restricted cash as of end of the period | 1,765 | 872 |
Cash paid (received): | ||
Interest | 344 | 448 |
Income taxes (refunded) paid | (15) | 71 |
Reynolds Consumer Products | ||
Cash provided by (used in) financing activities | ||
Cash held by Reynolds Consumer Products / Graham Packaging Company at the time of distribution | (31) | 0 |
Graham Packaging Company Inc. | ||
Cash provided by (used in) financing activities | ||
Cash held by Reynolds Consumer Products / Graham Packaging Company at the time of distribution | $ (79) | $ 0 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jan. 01, 2019 | |
Operating lease right-of-use assets, net | $ 237 | $ 359 | |
Operating lease, liability | $ 370 | ||
Right-of-use assets and lease liabilities recorded during period | $ 127 | $ 73 | |
Reynolds Consumer Products Inc. | Discontinued Operations | |||
Shares repurchased and canceled during the period (in shares) | 35,791,985 | ||
Ownership interest transferred | 100.00% | ||
Graham Packaging Company Inc. | Discontinued Operations | |||
Shares repurchased and canceled during the period (in shares) | 14,036,726 | ||
Ownership interest transferred | 100.00% |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Note 1 - Nature of Operations and Basis of Presentation The accompanying condensed consolidated financial statements comprise the accounts of Pactiv Evergreen Inc. ("PTVE") (formerly known as Reynolds Group Holdings Limited) and its subsidiaries (“we”, “us”, “our” or the "Company"). We are a manufacturer and supplier of fresh food and beverage packaging products, primarily in North America. We report our business in three reportable segments: Foodservice, Food Merchandising and Beverage Merchandising. Our Foodservice segment manufactures a broad range of products that enable consumers to eat and drink where they want and when they want with convenience. Our Food Merchandising segment manufactures products that protect and attractively display food while preserving freshness. Our Beverage Merchandising segment manufactures cartons for fresh refrigerated beverage products, primarily serving dairy (including plant-based, organic and specialties), juice and other specialty beverage end-markets. On September 21, 2020 , we completed the initial public offering ("IPO") of our common stock pursuant to a Registration Statement on Form S-1 (File No. 333-248250). Prior to the closing of the IPO, we completed the following transactions which resulted in changes to our common stock and issued and outstanding shares: • On September 16, 2020, the distribution of all of our shares in GPCI to PFL in consideration for the buy-back of 14,036,726 of our outstanding shares; • On September 17, 2020, the conversion of Reynolds Group Holdings Limited into PTVE, a corporation incorporated in the state of Delaware, with 1,000 shares of common stock issued and outstanding; and • On September 21, 2020, the consummation of a stock split pursuant to which each share of our outstanding common stock was reclassified into 134,408 shares of common stock, resulting in 134,408,000 shares issued and outstanding. These transactions have been retrospectively reflected for all periods presented. In the IPO, we sold 41,026,000 shares of common stock at a public offering price of $14.00 per share, with net proceeds of $546 million . On October 20, 2020 , we sold 1,723,710 shares of common stock to the underwriters pursuant to their option to purchase additional shares at the public offering price of $14.00 per share, with net proceeds of $23 million . These condensed consolidated financial statements are unaudited and presented in U.S. dollars. They have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Our condensed consolidated balance sheet as of December 31, 2019 has been derived from our audited consolidated financial statements as of that date. Our condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2019 , which include a complete set of footnote disclosures, including our significant accounting policies. In our opinion, these condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair statement of our results of operations, financial position and cash flows for the periods presented. However, our results of operations for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All intercompany accounts and transactions have been eliminated in consolidation. Unless otherwise indicated, information in these notes to the condensed consolidated financial statements relates to our continuing operations. Certain of our operations have been presented as discontinued. We present businesses that represent components as discontinued operations when the components either meet the criteria as held for sale or are sold or distributed, and their expected or actual disposal represents a strategic shift that has, or will have, a major effect on our operations and financial results. As discussed in Note 3 - Discontinued Operations , the assets, liabilities, results of operations and supplemental cash flow information of substantially all of our Closures business, sold in December 2019, all of our former Reynolds Consumer Products ("RCP") segment, distributed in February 2020, and all of our former Graham Packaging ("GPC") segment, distributed in September 2020, are presented as discontinued operations for all periods presented. Sales from our continuing operations to our discontinued operations previously eliminated in consolidation have been recast as external revenues and are included in net revenues within operating income from continuing operations. Refer to Note 18 - Related Party Transactions for further information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could differ from what was anticipated in those estimates, which could materially affect our results of operations and balance sheet. Among other effects, such changes could result in future impairments of goodwill, intangibles and long-lived assets, and adjustments to reserves for employee benefits and income taxes. The estimated recoverable amounts associated with asset impairments recognized in all periods presented represents a Level 3 measurement in the fair value hierarchy, which includes inputs that are not based on observable market data. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could differ from what was anticipated in those estimates, which could materially affect our results of operations and financial condition. For example, the worldwide COVID-19 pandemic has had, and will continue to have, a significant impact on our results of operations, and it may also have additional far-reaching impacts on many aspects of our operations including the impact on customer behaviors, business and manufacturing operations, our employees, and the market in general. The extent to which the COVID-19 pandemic impacts our business, financial condition, results of operations, cash flows and liquidity may differ from management’s current estimates due to inherent uncertainties regarding the duration and further spread of the outbreak, actions taken to contain the virus, as well as, how quickly and to what extent normal economic and operating conditions can resume. Share Repurchases When accounting for a share repurchase and retirement of shares, including in connection with transactions that are deemed to be a reverse stock split, we record the repurchase as a reduction of common stock and additional paid in capital. The reduction in common stock represents the par value of the canceled shares, and the reduction in additional paid in capital is the lower of the excess of the repurchase amount over the par value of the repurchased shares or the pro rata portion of additional paid in capital, based on the number of shares retired as a percentage of total shares outstanding prior to the repurchase. Any residual excess of the repurchase amount over the reduction in additional paid in capital is presented as a reduction to retained earnings. Variable Interest Entities Until termination of our $ 450 million securitization facility (the “Securitization Facility”) in July 2020, we had a variable interest in one variable interest entity ("VIE") related to our non-recourse factoring arrangements in which receivables were sold from certain of our operations to a special purpose trust (“SPE”) in exchange for cash. We were the sole beneficiary of the SPE. The SPE was considered to be a VIE and we were its primary beneficiary as we had the power to direct its activities and the right to receive its benefits. Prior to July 2020, we consolidated the results, assets and liabilities of this SPE for all periods presented in these condensed consolidated financial statements. As a result of consolidating the SPE, we continued to recognize the trade receivables and external borrowings of this entity with carrying values of $789 million (including $469 million presented within assets held for sale or distribution) and $420 million , respectively, as of December 31, 2019. The obligations of the SPE were non-recourse to us and only the assets of the SPE could be used to settle those obligations. For more information regarding the Securitization Facility, refer to Note 10 - Debt . Recently Adopted Accounting Guidance In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2019-04, Financial Instruments-Credit Losses (Topic 326) , Derivatives and Hedging (Topic 815) , and Financial Instruments - Codification Improvements (Topic 825) , ASU 2019-05, Financial Instruments - Credit Losses - Targeted Transition Relief (Topic 326), ASU 2019-11, Codification Improvements, Financial Instruments - Credit Losses (Topic 326) and ASU 2020-03, Codification Improvements to Financial Instruments . These ASUs modify the impairment model to use an expected loss methodology in place of the currently used incurred loss methodology, which may result in earlier recognition of losses related to financial instruments. These ASUs are effective for fiscal years beginning after December 15, 2019, with early adoption permitted, and require a cumulative effect adjustment to the balance sheet upon adoption. We adopted these standards on January 1, 2020 and they had no material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Change to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This ASU is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. We adopted this guidance on January 1, 2020 and it had no material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs for internal-use software. This ASU is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. We adopted this standard on January 1, 2020 and it had no material impact on our condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We early adopted this guidance on January 1, 2020. Certain components of this guidance were adopted on a prospective basis. The remaining components were adopted on a modified retrospective basis and had no material impact on our condensed consolidated financial statements and related disclosures. Accounting Guidance Issued But Not Yet Adopted In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) Disclosure - Framework - Changes to the Disclosure Requirements for Defined Benefit Plans . The ASU requires sponsors of defined benefit pension or other postretirement plans to provide additional disclosures, including a narrative description of reasons for any significant gains or losses impacting the benefit obligation for the period. It also eliminates certain previous disclosure requirements. This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted, and must be applied on a retrospective basis to all periods presented. The requirements of this guidance are expected to impact our disclosures but have no impact on the measurement and recognition of amounts in our condensed consolidated financial statements. 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 ASU provides temporary optional expedients and exceptions to the 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. This ASU is effective upon issuance and generally can be applied through the end of calendar year 2022. We are currently evaluating the impact and whether we plan to adopt the optional expedients and exceptions provided under this new standard. We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our condensed consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 3 - Discontinued Operations Our discontinued operations comprise substantially all of our Closures business, all of our former RCP business and all of our former GPC business. On September 30, 2019, we determined that our North American and Japanese closures businesses met the criteria to be classified as a discontinued operation and, as a result, their historical financial results have been reflected in our condensed consolidated financial statements as a discontinued operation. We ceased recording depreciation and amortization on these assets from September 30, 2019. We did not allocate any general corporate overhead to this discontinued operation. On December 20, 2019, we completed the sale of our North American and Japanese closures businesses to a third party. These operations represented substantially all of our Closures business. We received preliminary cash proceeds of $611 million . In June 2020, the post-closing adjustments were finalized and we received additional cash sale proceeds of $8 million . On February 4, 2020, we distributed our interest in the operations that represented our former RCP business to our shareholder, PFL. The distribution was effected in a tax-free manner. The distribution occurred prior to and in preparation for the IPO of shares of common stock of RCPI ("RCPI IPO"), which was completed on February 4, 2020. To effect the distribution of RCP, we bought back 35,791,985 of our shares from PFL, in consideration of us transferring all of our shares in RCPI to PFL. Upon the distribution of RCPI to PFL, we determined that our former RCP business met the criteria to be classified as a discontinued operation and, as a result, its historical financial results have been reflected in our condensed consolidated financial statements as a discontinued operation and its assets and liabilities have been classified as assets and liabilities held for sale or distribution as of December 31, 2019. We did not allocate any general corporate overhead to this discontinued operation. Immediately prior to its distribution and the RCPI IPO, RCP incurred $2,475 million of term loan borrowings under its new post-IPO credit facilities and $1,168 million of borrowings under an IPO settlement facility, which was subsequently repaid with the net proceeds from the RCPI IPO on February 4, 2020. We have not provided any guarantees or security in relation to RCP's external borrowings. The cash proceeds of the external borrowings, net of transaction costs and original issue discount, along with cash on-hand, were used to settle various intercompany balances between RCP and us. In August 2020, GPCI entered into new external borrowings under which only GPC entities are borrowers, and incurred $1,985 million of external borrowings. We have not provided any guarantees or security in relation to GPC’s new external borrowings. The cash proceeds of the external borrowings, net of transaction costs and original issue discount, were used to settle various intercompany balances between GPC and us, and the remaining cash balance was distributed to us. On September 16, 2020 , we distributed our interest in the operations that represented our former GPC business to our shareholder, PFL. The distribution was effected in a tax-free manner. The distribution occurred prior to and in preparation for our IPO, which was completed on September 21, 2020 . To effect the distribution of GPC, we bought back 14,036,726 of our shares from PFL, in consideration of us transferring all of our shares in GPCI to PFL. Upon the distribution of GPCI to PFL, we determined that our former GPC business met the criteria to be classified as a discontinued operation and, as a result, its historical financial results have been reflected in our condensed consolidated financial statements as a discontinued operation and its assets and liabilities have been classified as assets and liabilities held for sale or distribution as of December 31, 2019. We did not allocate any general corporate overhead to this discontinued operation. The following is a summary of the RCP assets and liabilities distributed on February 4, 2020 and a summary of the GPC assets and liabilities distributed on September 16, 2020 : RCP GPC (in millions) Assets Cash, cash equivalents and restricted cash $ 31 $ 79 Current assets 699 448 Noncurrent assets 3,630 3,461 $ 4,360 $ 3,988 Liabilities Current liabilities $ 1,467 $ 292 Noncurrent liabilities 2,847 2,518 $ 4,314 $ 2,810 Net assets distributed $ 46 $ 1,178 Income from discontinued operations, which includes the results of GPC through September 16, 2020 , the results of RCP through February 4, 2020 and the results of GPC, RCP and Closures for the three and nine months ended September 30, 2019 , was as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Net revenues $ 396 $ 1,249 $ 1,510 $ 3,788 Cost of sales (331 ) (937 ) (1,234 ) (2,868 ) Gross profit 65 312 276 920 Selling, general and administrative expenses (52 ) (159 ) (179 ) (422 ) Goodwill impairment charges — (9 ) — (9 ) Restructuring, asset impairment and other related charges (4 ) (46 ) (13 ) (66 ) Interest expense, net (1) (32 ) (47 ) (54 ) (142 ) Other expense, net — (6 ) (3 ) (8 ) (Loss) income before income taxes from discontinued operations (23 ) 45 27 273 Income tax (expense) benefit (193 ) 46 (275 ) (3 ) Net (loss) income from discontinued operations, before gain on disposal (216 ) 91 (248 ) 270 Gain on disposal, net of income taxes — — 14 — Net (loss) income from discontinued operations $ (216 ) $ 91 $ (234 ) $ 270 (1) Includes interest expense and amortization of deferred transaction costs related to debt repaid in conjunction with the distribution of RCP, as well as interest and transaction costs related to debt incurred by GPCI in August 2020; also includes a $5 million loss on extinguishment of debt from the repayment of corporate level debt on February 4, 2020. The income tax provision related to our discontinued operations for the three and nine months ended September 30, 2020 was not materially impacted by the new provisions of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and thus was attributed a disproportionately higher estimated annualized effective rate. This interim tax expense will largely reverse during the remainder of the year ending December 31, 2020. The (loss) income from discontinued operations includes depreciation and amortization expenses of $52 million and $97 million for the three months ended September 30, 2020 and 2019 , respectively, and $178 million and $286 million for the nine months ended September 30, 2020 and 2019 , respectively. The (loss) income from discontinued operations for the three and nine months ended September 30, 2020 and 2019 includes asset impairment charges of $1 million , $2 million , $9 million and $25 million , respectively, and restructuring and other related charges of $3 million , $11 million , $5 million and $7 million , respectively, arising from the ongoing rationalization of GPC's manufacturing footprint, which are included in restructuring, asset impairment and other related charges in the above table. The income from discontinued operations for the three and nine months ended September 30, 2019 includes a goodwill impairment charge of $9 million arising from the assessment of the recoverable amount of goodwill for our closures reporting unit as well as an asset impairment charge of $31 million relating to the write-down of the closures disposal group to its estimated recoverable amount, which is included in restructuring, asset impairment and other related charges in the above table. We have no significant continuing involvement in relation to the sold North American and Japanese closures businesses or GPC. Subsequent to February 4, 2020, we continue to trade with RCP in the ordinary course of business. These transactions arise under agreements that expire on December 31, 2024, but may be renewed between the parties at this time. Refer to Note 18 - Related Party Transactions . Assets and liabilities held for sale or distribution in relation to our discontinued operations were as follows: As of December 31, 2019 (in millions) Cash and cash equivalents $ 137 Accounts receivable, net 489 Inventories 559 Other current assets 47 Total current assets held for sale or distribution $ 1,232 Property, plant and equipment, net $ 1,309 Operating lease right-of-use assets, net 150 Goodwill 3,173 Intangible assets, net 2,470 Other noncurrent assets 41 Total noncurrent assets held for sale or distribution $ 7,143 Accounts payable $ 243 Accrued and other current liabilities 242 Total current liabilities held for sale or distribution $ 485 Long-term operating lease liabilities $ 126 Deferred income taxes 731 Long-term employee benefit obligations 57 Other noncurrent liabilities 78 Total noncurrent liabilities held for sale or distribution $ 992 Cash flows from discontinued operations were as follows: For the Nine Months Ended September 30, 2020 2019 (in millions) Net cash provided by operating activities $ 175 $ 523 Net cash used in investing activities (122 ) (214 ) Net cash provided by financing activities 2,441 — Net cash from discontinued operations $ 2,494 $ 309 Note 4 - Assets and Liabilities Held for Sale During the three months ended September 30, 2020 , we committed to a plan to sell the remaining South American closures businesses included in the Other operating segment. As a result, we classified the assets and liabilities of these businesses as held for sale and recognized a pre-tax charge to earnings of $11 million within restructuring, asset impairment and other related charges for the three months ended September 30, 2020 . See Note 5 - Impairment, Restructuring and Other Related Charges for additional details. The operations of the South American closures businesses did not meet the criteria to be presented as discontinued operations and are expected to be sold within the next twelve months. The carrying amounts of the major classes of the South American closures businesses’ assets and liabilities as of September 30, 2020 included the following: As of September 30, 2020 (in millions) Cash and cash equivalents $ 9 Accounts receivable, net 11 Inventories 3 Other current assets 1 Property, plant and equipment, net 8 Intangible assets, net 2 Held for sale valuation allowance (11 ) Total current assets held for sale or distribution $ 23 Accounts payable $ 3 Accrued and other current liabilities 3 Other noncurrent liabilities 2 Total current liabilities held for sale or distribution $ 8 The South American closures businesses' income from operations before income taxes for the three and nine months ended September 30, 2020 was insignificant. In addition to the above, noncurrent assets held for sale or distribution as of September 30, 2020 included $41 million related to our corporate office building that was sold in a sale-leaseback transaction in October 2020. |
Assets and Liabilities Held for
Assets and Liabilities Held for Sale | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities Held for Sale | Note 3 - Discontinued Operations Our discontinued operations comprise substantially all of our Closures business, all of our former RCP business and all of our former GPC business. On September 30, 2019, we determined that our North American and Japanese closures businesses met the criteria to be classified as a discontinued operation and, as a result, their historical financial results have been reflected in our condensed consolidated financial statements as a discontinued operation. We ceased recording depreciation and amortization on these assets from September 30, 2019. We did not allocate any general corporate overhead to this discontinued operation. On December 20, 2019, we completed the sale of our North American and Japanese closures businesses to a third party. These operations represented substantially all of our Closures business. We received preliminary cash proceeds of $611 million . In June 2020, the post-closing adjustments were finalized and we received additional cash sale proceeds of $8 million . On February 4, 2020, we distributed our interest in the operations that represented our former RCP business to our shareholder, PFL. The distribution was effected in a tax-free manner. The distribution occurred prior to and in preparation for the IPO of shares of common stock of RCPI ("RCPI IPO"), which was completed on February 4, 2020. To effect the distribution of RCP, we bought back 35,791,985 of our shares from PFL, in consideration of us transferring all of our shares in RCPI to PFL. Upon the distribution of RCPI to PFL, we determined that our former RCP business met the criteria to be classified as a discontinued operation and, as a result, its historical financial results have been reflected in our condensed consolidated financial statements as a discontinued operation and its assets and liabilities have been classified as assets and liabilities held for sale or distribution as of December 31, 2019. We did not allocate any general corporate overhead to this discontinued operation. Immediately prior to its distribution and the RCPI IPO, RCP incurred $2,475 million of term loan borrowings under its new post-IPO credit facilities and $1,168 million of borrowings under an IPO settlement facility, which was subsequently repaid with the net proceeds from the RCPI IPO on February 4, 2020. We have not provided any guarantees or security in relation to RCP's external borrowings. The cash proceeds of the external borrowings, net of transaction costs and original issue discount, along with cash on-hand, were used to settle various intercompany balances between RCP and us. In August 2020, GPCI entered into new external borrowings under which only GPC entities are borrowers, and incurred $1,985 million of external borrowings. We have not provided any guarantees or security in relation to GPC’s new external borrowings. The cash proceeds of the external borrowings, net of transaction costs and original issue discount, were used to settle various intercompany balances between GPC and us, and the remaining cash balance was distributed to us. On September 16, 2020 , we distributed our interest in the operations that represented our former GPC business to our shareholder, PFL. The distribution was effected in a tax-free manner. The distribution occurred prior to and in preparation for our IPO, which was completed on September 21, 2020 . To effect the distribution of GPC, we bought back 14,036,726 of our shares from PFL, in consideration of us transferring all of our shares in GPCI to PFL. Upon the distribution of GPCI to PFL, we determined that our former GPC business met the criteria to be classified as a discontinued operation and, as a result, its historical financial results have been reflected in our condensed consolidated financial statements as a discontinued operation and its assets and liabilities have been classified as assets and liabilities held for sale or distribution as of December 31, 2019. We did not allocate any general corporate overhead to this discontinued operation. The following is a summary of the RCP assets and liabilities distributed on February 4, 2020 and a summary of the GPC assets and liabilities distributed on September 16, 2020 : RCP GPC (in millions) Assets Cash, cash equivalents and restricted cash $ 31 $ 79 Current assets 699 448 Noncurrent assets 3,630 3,461 $ 4,360 $ 3,988 Liabilities Current liabilities $ 1,467 $ 292 Noncurrent liabilities 2,847 2,518 $ 4,314 $ 2,810 Net assets distributed $ 46 $ 1,178 Income from discontinued operations, which includes the results of GPC through September 16, 2020 , the results of RCP through February 4, 2020 and the results of GPC, RCP and Closures for the three and nine months ended September 30, 2019 , was as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Net revenues $ 396 $ 1,249 $ 1,510 $ 3,788 Cost of sales (331 ) (937 ) (1,234 ) (2,868 ) Gross profit 65 312 276 920 Selling, general and administrative expenses (52 ) (159 ) (179 ) (422 ) Goodwill impairment charges — (9 ) — (9 ) Restructuring, asset impairment and other related charges (4 ) (46 ) (13 ) (66 ) Interest expense, net (1) (32 ) (47 ) (54 ) (142 ) Other expense, net — (6 ) (3 ) (8 ) (Loss) income before income taxes from discontinued operations (23 ) 45 27 273 Income tax (expense) benefit (193 ) 46 (275 ) (3 ) Net (loss) income from discontinued operations, before gain on disposal (216 ) 91 (248 ) 270 Gain on disposal, net of income taxes — — 14 — Net (loss) income from discontinued operations $ (216 ) $ 91 $ (234 ) $ 270 (1) Includes interest expense and amortization of deferred transaction costs related to debt repaid in conjunction with the distribution of RCP, as well as interest and transaction costs related to debt incurred by GPCI in August 2020; also includes a $5 million loss on extinguishment of debt from the repayment of corporate level debt on February 4, 2020. The income tax provision related to our discontinued operations for the three and nine months ended September 30, 2020 was not materially impacted by the new provisions of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and thus was attributed a disproportionately higher estimated annualized effective rate. This interim tax expense will largely reverse during the remainder of the year ending December 31, 2020. The (loss) income from discontinued operations includes depreciation and amortization expenses of $52 million and $97 million for the three months ended September 30, 2020 and 2019 , respectively, and $178 million and $286 million for the nine months ended September 30, 2020 and 2019 , respectively. The (loss) income from discontinued operations for the three and nine months ended September 30, 2020 and 2019 includes asset impairment charges of $1 million , $2 million , $9 million and $25 million , respectively, and restructuring and other related charges of $3 million , $11 million , $5 million and $7 million , respectively, arising from the ongoing rationalization of GPC's manufacturing footprint, which are included in restructuring, asset impairment and other related charges in the above table. The income from discontinued operations for the three and nine months ended September 30, 2019 includes a goodwill impairment charge of $9 million arising from the assessment of the recoverable amount of goodwill for our closures reporting unit as well as an asset impairment charge of $31 million relating to the write-down of the closures disposal group to its estimated recoverable amount, which is included in restructuring, asset impairment and other related charges in the above table. We have no significant continuing involvement in relation to the sold North American and Japanese closures businesses or GPC. Subsequent to February 4, 2020, we continue to trade with RCP in the ordinary course of business. These transactions arise under agreements that expire on December 31, 2024, but may be renewed between the parties at this time. Refer to Note 18 - Related Party Transactions . Assets and liabilities held for sale or distribution in relation to our discontinued operations were as follows: As of December 31, 2019 (in millions) Cash and cash equivalents $ 137 Accounts receivable, net 489 Inventories 559 Other current assets 47 Total current assets held for sale or distribution $ 1,232 Property, plant and equipment, net $ 1,309 Operating lease right-of-use assets, net 150 Goodwill 3,173 Intangible assets, net 2,470 Other noncurrent assets 41 Total noncurrent assets held for sale or distribution $ 7,143 Accounts payable $ 243 Accrued and other current liabilities 242 Total current liabilities held for sale or distribution $ 485 Long-term operating lease liabilities $ 126 Deferred income taxes 731 Long-term employee benefit obligations 57 Other noncurrent liabilities 78 Total noncurrent liabilities held for sale or distribution $ 992 Cash flows from discontinued operations were as follows: For the Nine Months Ended September 30, 2020 2019 (in millions) Net cash provided by operating activities $ 175 $ 523 Net cash used in investing activities (122 ) (214 ) Net cash provided by financing activities 2,441 — Net cash from discontinued operations $ 2,494 $ 309 Note 4 - Assets and Liabilities Held for Sale During the three months ended September 30, 2020 , we committed to a plan to sell the remaining South American closures businesses included in the Other operating segment. As a result, we classified the assets and liabilities of these businesses as held for sale and recognized a pre-tax charge to earnings of $11 million within restructuring, asset impairment and other related charges for the three months ended September 30, 2020 . See Note 5 - Impairment, Restructuring and Other Related Charges for additional details. The operations of the South American closures businesses did not meet the criteria to be presented as discontinued operations and are expected to be sold within the next twelve months. The carrying amounts of the major classes of the South American closures businesses’ assets and liabilities as of September 30, 2020 included the following: As of September 30, 2020 (in millions) Cash and cash equivalents $ 9 Accounts receivable, net 11 Inventories 3 Other current assets 1 Property, plant and equipment, net 8 Intangible assets, net 2 Held for sale valuation allowance (11 ) Total current assets held for sale or distribution $ 23 Accounts payable $ 3 Accrued and other current liabilities 3 Other noncurrent liabilities 2 Total current liabilities held for sale or distribution $ 8 The South American closures businesses' income from operations before income taxes for the three and nine months ended September 30, 2020 was insignificant. In addition to the above, noncurrent assets held for sale or distribution as of September 30, 2020 included $41 million related to our corporate office building that was sold in a sale-leaseback transaction in October 2020. |
Impairment, Restructuring and O
Impairment, Restructuring and Other Related Charges | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Impairment, Restructuring and Other Related Charges | Note 5 - Impairment, Restructuring and Other Related Charges During the three months ended September 30, 2020 , we recorded the following impairment, restructuring and other related charges: Goodwill impairment Other asset impairment Employee terminations Total (in millions) Foodservice $ — $ — $ 1 $ 1 Food Merchandising — 1 — 1 Other 6 12 — 18 Total $ 6 $ 13 $ 1 $ 20 For the three months ended September 30, 2020 , we recorded non-cash impairment charges of $19 million , primarily comprised of $6 million related to goodwill and an $11 million impairment charge, both in relation to our South American closures businesses, which are reported within Other. Following these impairments, goodwill was fully impaired and the carrying value of the South American remaining closures businesses were reduced to fair value, as presented in Note 4 - Assets and Liabilities Held for Sale . The impairments arose primarily as a result of the strategic decision to sell the South American closure businesses in addition to the negative impact from current market conditions and outlook for the operations of the remaining closures businesses. The estimated recoverable amounts, or fair value, were determined based on a capitalization of earnings methodology, using Adjusted EBITDA expected to be generated multiplied by an earnings multiple. The key assumptions in developing Adjusted EBITDA include management’s assessment of future trends in the industry and are based on both external and internal sources. The forecasted 2021 Adjusted EBITDA for the remaining closures operations was prepared using certain key assumptions including selling prices, sales volumes and costs of raw materials. Earnings multiples reflect recent sale and purchase transactions and comparable company trading multiples in the same industry. These estimates represent a Level 3 measurement in the fair value hierarchy, which includes inputs that are not based on observable market data. For the three months ended September 30, 2020 , we recorded $1 million in employee termination costs. During the nine months ended September 30, 2020 , we recorded the following impairment, restructuring and other related charges: Goodwill impairment Other asset impairment Employee terminations Other restructuring charges Total (in millions) Foodservice $ — $ 1 $ 1 $ 1 $ 3 Food Merchandising — 1 — — 1 Beverage Merchandising — — 1 — 1 Other 6 12 1 — 19 Total $ 6 $ 14 $ 3 $ 1 $ 24 For the nine months ended September 30, 2020 , in addition to the impairments discussed above, we also recorded $3 million of employee termination and other restructuring costs. During the three months ended September 30, 2019 , we recorded the following impairment, restructuring and other related charges: Goodwill impairment Other asset impairment Employee terminations Total (in millions) Foodservice $ — $ 1 $ — $ 1 Other 16 37 1 54 Total $ 16 $ 38 $ 1 $ 55 For the three months ended September 30, 2019 , we recorded non-cash impairment charges of $54 million , primarily comprised of $29 million related to property, plant and equipment, $16 million for goodwill, $5 million related to operating lease right-of-use assets and $3 million for customer relationships, in our remaining closures businesses which are reported above in Other. Following these impairments, the remaining carrying values of property, plant and equipment, goodwill, operating lease right-of-use assets and customer relationships were $17 million , $6 million , $3 million and $4 million , respectively. The impairments arose as a result of various commercial dis-synergies triggered by the separation of these remaining businesses from the closures operations that were sold, as discussed in Note 3 - Discontinued Operations . The estimated recoverable amounts, or fair value, were determined based on a capitalization of earnings methodology, using Adjusted EBITDA expected to be generated multiplied by an earnings multiple. The key assumptions in developing Adjusted EBITDA include management’s assessment of future trends in the industry and are based on both external and internal sources. The forecasted 2019 Adjusted EBITDA for the remaining closures operations was prepared using certain key assumptions including selling prices, sales volumes and costs of raw materials. Earnings multiples reflect recent sale and purchase transactions and comparable company trading multiples in the same industry. These estimates represent a Level 3 measurement in the fair value hierarchy, which includes inputs that are not based on observable market data. For the three months ended September 30, 2019 , we recorded $1 million in employee termination costs. During the nine months ended September 30, 2019 , we recorded the following impairment, restructuring and other related charges: Goodwill impairment Other asset impairment Employee terminations Total (in millions) Foodservice $ — $ 1 $ — $ 1 Food Merchandising — 4 — 4 Other 16 37 3 56 Total $ 16 $ 42 $ 3 $ 61 For the nine months ended September 30, 2019 , in addition to the impairments discussed above, we also recorded non-cash impairment charges of $4 million in aggregate relating to obsolete property, plant and equipment in respect of our Foodservice and Food Merchandising segments, as well as $2 million relating to employee termination costs. The aggregate of the remaining carrying values of the assets impaired at Foodservice and Food Merchandising was $1 million . The following tables summarize the changes to our restructuring liability for the nine months ended September 30, 2020 : December 31, 2019 Charges to earnings Cash paid September 30, 2020 (in millions) Employee termination costs $ 1 $ 3 $ (3 ) $ 1 Total $ 1 $ 3 $ (3 ) $ 1 We expect to settle our restructuring liability within twelve months. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 6 - Inventories The components of inventories consisted of the following: As of September 30, 2020 As of December 31, 2019 (in millions) Raw materials $ 167 $ 168 Work in progress 101 106 Finished goods 389 397 Spare parts 87 82 Inventories $ 744 $ 753 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | Note 7 - Property, Plant and Equipment, Net Property, plant and equipment, net consisted of the following: As of September 30, 2020 As of December 31, 2019 (in millions) Land and land improvements $ 85 $ 92 Buildings and building improvements 518 551 Machinery and equipment 3,043 2,973 Construction in progress 229 204 Property, plant and equipment, at cost 3,875 3,820 Less: accumulated depreciation (2,209 ) (2,117 ) Property, plant and equipment, net $ 1,666 $ 1,703 Depreciation expense related to property, plant and equipment was recognized in the following components in the condensed consolidated statements of income (loss): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Cost of sales $ 54 $ 51 $ 157 $ 148 Selling, general and administrative expenses 4 3 14 8 Total depreciation expense $ 58 $ 54 $ 171 $ 156 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 8 - Goodwill and Intangible Assets Goodwill by reportable segment was as follows: Foodservice (1) Food Merchandising (1) Beverage Merchandising Other (2) Total (in millions) Balance as of December 31, 2019 $ 924 $ 770 $ 66 $ 6 $ 1,766 Impairment charges — — — (6 ) (6 ) Balance as of September 30, 2020 $ 924 $ 770 $ 66 $ — $ 1,760 Accumulated impairment losses $ — $ — $ — $ 22 $ 22 (1) The information presented above reflects the retrospective application of the March 2020 change in segments. See Note 17 - Segment Information for further details. (2) Other includes operations that do not meet the quantitative threshold for reportable segments. Refer to Note 5 - Impairment, Restructuring and Other Related Charges for information related to goodwill impairment charges. Intangible assets, net consisted of the following: As of September 30, 2020 As of December 31, 2019 Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net (in millions) Finite-lived intangible assets Customer relationships $ 1,015 $ (525 ) $ 490 $ 1,026 $ (494 ) $ 532 Other 20 (18 ) 2 21 (18 ) 3 Total finite-lived intangible assets $ 1,035 $ (543 ) $ 492 $ 1,047 $ (512 ) $ 535 Indefinite-lived intangible assets Trademarks $ 554 $ — $ 554 $ 554 $ — $ 554 Other 58 — 58 58 — 58 Total indefinite-lived intangible assets $ 612 $ — $ 612 $ 612 $ — $ 612 Total intangible assets $ 1,647 $ (543 ) $ 1,104 $ 1,659 $ (512 ) $ 1,147 Amortization expense related to intangible assets of $15 million and $14 million for the three months ended September 30, 2020 and 2019 , respectively, and $42 million and $42 million for the nine months ended September 30, 2020 and 2019 , respectively, was recognized in selling, general and administrative expenses in the condensed consolidated statements of income (loss). |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | Note 9 - Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following: As of September 30, 2020 As of December 31, 2019 (in millions) Accrued personnel costs $ 115 $ 108 Accrued interest 41 115 Accrued rebates and credits 66 67 Other (1) 120 128 Accrued and other current liabilities $ 342 $ 418 (1) Other includes items such as accruals for freight, utilities and property and other non-income related taxes. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 10 - Debt Debt consisted of the following: As of September 30, 2020 As of December 31, 2019 (in millions) Securitization Facility $ — $ 420 Credit Agreement 2,487 3,487 Notes: 5.750% Senior Secured Notes due 2020 — 3,137 Floating Rate Senior Secured Notes due 2021 — 750 5.125% Senior Secured Notes due 2023 1,599 1,600 7.000% Senior Notes due 2024 650 800 Pactiv Debentures: 7.950% Debentures due 2025 276 276 8.375% Debentures due 2027 200 200 Other 13 15 Total principal amount of borrowings 5,225 10,685 Deferred financing transaction costs (23 ) (46 ) Original issue discounts, net of premiums (4 ) (9 ) 5,198 10,630 Less: current portion (2 ) (3,587 ) Long-term debt $ 5,196 $ 7,043 Securitization Facility Until its termination on July 31, 2020, we had a $450 million securitization facility (the “Securitization Facility”) that was scheduled to mature on March 22, 2022. Prior to its distribution, RCP ceased to participate in our Securitization Facility, and consequently in January 2020, the size of this facility was reduced from $600 million to $450 million and the outstanding borrowings were reduced to $397 million . In February 2020, we made an additional repayment of $17 million reducing the outstanding borrowings to $380 million . On July 31, 2020, we repaid the outstanding amount of $380 million and terminated the facility. The Securitization Facility was secured by all of the assets of the borrower, which were primarily the eligible trade receivables and cash. The terms of the arrangement did not result in the derecognition of the trade receivables. The Securitization Facility had an interest rate equal to one-month LIBOR with a 0.0% floor, plus a margin of 1.75% per annum. Credit Agreement Certain subsidiaries of the Company are parties to a senior secured credit agreement dated August 5, 2016 as amended (the "Credit Agreement"). The Credit Agreement comprises the following term and revolving tranche: Currency Maturity date Value drawn or utilized as of September 30, 2020 (in millions) Applicable interest rate as of September 30, 2020 Term Tranches U.S. term loans $ February 5, 2023 2,487 LIBOR (floor of 0.000%) + 2.750% Revolving Tranche (1) U.S. Revolving Loans $ August 5, 2021 47 — (1) The Revolving Tranche represents a $302 million facility. The amount utilized is in the form of letters of credit. In January 2020, we repaid $18 million of borrowings under the Credit Agreement with the net proceeds from the sale of our North American and Japanese closures businesses. On August 4, 2020, we repaid in full €236 million ( $279 million ) of borrowings under the European term loans and all obligations under this tranche terminated. The early repayment of these borrowings resulted in a loss on extinguishment of debt of less than $1 million in respect of the write-off of unamortized deferred financing transaction costs, which was recognized in interest expense, net in the condensed consolidated statements of income (loss). On August 4, 2020, we repaid $700 million of borrowings under the U.S. term loans. The weighted average contractual interest rates related to our U.S. term loans as of September 30, 2020 and 2019 , were 3.71% and 5.16% , respectively. The effective interest rates of our debt obligations under the Credit Agreement are not materially different from the contractual interest rates. Certain of our subsidiaries have guaranteed on a senior basis the obligations under the Credit Agreement and related documents to the extent permitted by law. The guarantors have granted security over substantially all of their assets to support the obligations under the Credit Agreement. This security is expected to be shared on a first priority basis with the note holders under the 5.125% Senior Secured Notes due 2023 (" 5.125% Notes”). Indebtedness under the Credit Agreement may be voluntarily repaid in whole or in part and must be mandatorily repaid in certain circumstances. Following the August 4, 2020 $700 million repayment, the borrowers are no longer required to make quarterly amortization payments in respect of the U.S. term loans referred to above. The borrowers are required to make annual prepayments of term loans with up to 50% of excess cash flow (which will be reduced to 25% or 0% if specified senior secured first lien leverage ratios are met) as determined in accordance with the Credit Agreement. No excess cash flow prepayments were due in 2019 for the year ended December 31, 2018 or are due in 2020 for the year ended December 31, 2019. Notes Outstanding notes, as of September 30, 2020 , are summarized below: Description Maturity date Semi-annual interest payment dates 5.125% Senior Secured Notes due 2023 (1) July 15, 2023 January 15 and July 15 7.000% Senior Notes due 2024 July 15, 2024 January 15 and July 15 (1) $250 million aggregate principal amount of 5.125% Notes were issued at an issue price of 103.500% . The effective interest rate is not materially different from the contractual interest rates. Between December 31, 2019 and September 30, 2020 , we made the following repayments on our notes: • In January 2020, we repaid (i) $18 million aggregate principal amount of 5.750% Senior Secured Notes due 2020; (ii) $1 million aggregate principal amount of Floating Rate Senior Secured Notes due 2021; and (iii) $1 million aggregate principal amount of 5.125% Notes, at face value, with the net proceeds from the sale of our North American and Japanese closures businesses. • On February 4, 2020, we repaid in full the $3.1 billion aggregate principal amount outstanding of our 5.750% Senior Secured Notes due 2020 at face value. The repayment of these borrowings resulted in a $5 million loss on extinguishment of debt. Refer to Note 3 - Discontinued Operations . • On August 4, 2020, we repaid $749 million aggregate principal amount outstanding under the Floating Rate Senior Secured Notes due 2021 at face value. The early repayment of these notes resulted in a loss on extinguishment of debt of $4 million in respect of the write-off of unamortized deferred financing transaction costs and original issue discount, which was recognized in interest expense, net in the condensed consolidated statements of income (loss). On August 7, 2020, we terminated and settled the outstanding interest rate swap related to the Floating Rate Senior Secured Notes due 2021, resulting in the payment of $7 million to settle the liability. • On August 29, 2020, we repaid $150 million aggregate principal amount of the 7.000% Senior Notes due 2024 (“ 7.000% Notes”) at a price of 101.750% . The early repayment of these notes resulted in a loss on extinguishment of debt of $4 million in respect of the write-off of unamortized deferred financing transaction costs and the premium on redemption, which was recognized in interest expense, net in the condensed consolidated statements of income (loss). Subsequent events related to debt In connection with our IPO, but subsequent to September 30, 2020, the following debt transactions and repayments occurred: • On October 1, 2020 we issued $1,000 million aggregate principal amount of 4.000% Senior Secured Notes maturing on October 15, 2027 (“ 4.000% Notes”). The notes are guaranteed and secured on a senior basis by the same subsidiaries that guarantee and secure the obligations under our Credit Agreement and our 5.125% Notes. The proceeds from the new notes were used to repay indebtedness, as described below, and pay related transaction costs. • On October 1, 2020, we incurred $1,250 million of new term loans maturing on February 5, 2026 and obtained commitments for a new $250 million senior secured revolving credit facility maturing on August 5, 2024. The new term loans have an interest rate equal to one-month LIBOR with a 0.0% floor, plus a margin of 3.25% per annum. The proceeds from the new term loans were used to refinance a portion of our existing term loans, as described below, and to pay related transaction costs. The new revolving credit facility replaced our existing $302 million revolving credit facility. • During October 2020, we repaid an aggregate of $3,400 million principal amount of borrowings from the net proceeds of our IPO, new borrowings described above and cash on hand. These repayments comprised: ◦ $650 million of our 7.000% Notes, resulting in the extinguishment of these notes; ◦ $1,470 million of our 5.125% Notes; and ◦ $1,280 million of existing term loans maturing in February 2023. These repayments will result in a loss of $51 million in respect of the write-off of unamortized deferred transaction costs and call premiums and third party fees recorded in the fourth quarter. • On October 23, 2020, we issued a redemption notice to redeem $70 million aggregate principal amount of 5.125% Notes at a price of 101.281% . The redemption payment is scheduled to occur on November 23, 2020. Assets pledged as security for borrowings We, and certain of our subsidiaries, have pledged substantially all of our assets as collateral to support the obligations under the Credit Agreement and the 5.125% Notes. Guarantee and security arrangements All of the guarantors of the Credit Agreement have guaranteed the obligations under the notes to the extent permitted by law. The guarantors have granted security over substantially all of their assets to support the obligations under the 5.125% Notes. This security is expected to be shared on a first priority basis with the creditors under the Credit Agreement. On February 4, 2020 and August 4, 2020, the relevant legal entities within RCP and GPC, respectively, were released as borrowers under the Credit Agreement, unconditionally released as guarantors of the Credit Agreement, and released as guarantors of the notes. In connection with such releases, the security granted by such entities was also released. Pactiv Debentures As of September 30, 2020 , we had outstanding the following debentures (together, the “Pactiv Debentures”): Description Maturity date Semi-annual interest payment dates 7.950% Debentures due 2025 December 15, 2025 June 15 and December 15 8.375% Debentures due 2027 April 15, 2027 April 15 and October 15 The effective interest rates of our debt obligations under the Pactiv Debentures are not materially different from the contractual interest rates. Other borrowings Other borrowings include finance lease obligations of $13 million and $15 million as of September 30, 2020 and December 31, 2019 , respectively. Scheduled maturities Below is a schedule of required future repayments on our debt outstanding as of September 30, 2020 : (in millions) 2020 $ 1 2021 2 2022 3 2023 4,087 2024 651 Thereafter 481 Total principal amount of borrowings $ 5,225 Fair value of our long-term debt The fair value of our long-term debt as of September 30, 2020 and December 31, 2019 is a Level 2 fair value measurement. Below is a schedule of carrying values and fair values of our debt outstanding as of September 30, 2020 and December 31, 2019 : As of September 30, 2020 As of December 31, 2019 Carrying Fair Carrying Fair (in millions) Securitization Facility $ — $ — $ 418 $ 420 Credit Agreement 2,479 2,487 3,476 3,487 Notes: 5.750% Senior Secured Notes due 2020 — — 3,130 3,144 Floating Rate Senior Secured Notes due 2021 — — 739 753 5.125% Senior Secured Notes due 2023 1,592 1,620 1,591 1,641 7.000% Senior Notes due 2024 644 662 791 828 Pactiv Debentures: 7.950% Debentures due 2025 272 301 272 311 8.375% Debentures due 2027 198 213 198 220 Other 13 13 15 15 Total $ 5,198 $ 5,296 $ 10,630 $ 10,819 Interest expense, net Interest expense, net consisted of the following: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Interest expense: Notes $ 36 $ 48 $ 123 $ 147 Pactiv Debentures 11 11 30 30 Credit Agreement 21 44 87 134 Securitization Facility — 4 6 13 Interest income, related party (1) (3 ) (4 ) (9 ) (12 ) Interest income, other — (5 ) (6 ) (11 ) Amortization of deferred transaction costs (2) 3 3 12 9 Derivative losses 1 3 15 20 Net foreign currency exchange losses (gains) 6 (23 ) — (24 ) Other (3) 12 3 17 6 Interest expense, net (4) $ 87 $ 84 $ 275 $ 312 (1) Refer to Note 18 - Related Party Transactions for additional information. (2) The amount for the nine months ended September 30, 2020 includes an adjustment of $5 million related to prior periods. (3) Amounts primarily include write-offs of unamortized debt issuance costs and original issue discount premium, as well as redemption premiums. (4) Amounts presented in the above table exclude interest expense and amortization of deferred transaction costs related to our 5.750% Notes repaid in conjunction with the distribution of RCP, as well as interest and transaction costs related to debt held by GPCI; also excludes a $5 million loss on extinguishment of debt from the repayment of corporate level debt on February 4, 2020. Covenants As of September 30, 2020 , we were in compliance with all of our covenants. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Note 11 - Financial Instruments Fair Value of Derivative Instruments We had the following derivative instruments recorded at fair value in our condensed consolidated balance sheets: As of September 30, 2020 As of December 31, 2019 Asset Liability Asset Liability (in millions) Interest rate swap derivatives $ — $ — $ 7 $ — Commodity swap contracts 2 (2 ) 1 (5 ) Total fair value $ 2 $ (2 ) $ 8 $ (5 ) Recorded in: Other current assets $ 2 $ — $ 6 $ — Other noncurrent assets — — 2 — Accrued and other current liabilities — (2 ) — (5 ) Total fair value $ 2 $ (2 ) $ 8 $ (5 ) Our derivatives comprise commodity swaps and previously included interest rate swaps. All derivatives represent Level 2 financial assets and liabilities. Our derivatives are valued using an income approach based on the observable market index prices less the contract rate multiplied by the notional amount or based on pricing models that rely on market observable inputs such as commodity prices. Our calculation of the fair value of these financial instruments takes into consideration the risk of non-performance, including counterparty credit risk. The majority of our derivative contracts do not have a legal right of set-off. We manage the credit risk in connection with our derivatives by limiting the amount of exposure with each counterparty and monitoring the financial condition of our counterparties. During the three and nine months ended September 30, 2020 , we recognized unrealized gains of $1 million and $3 million , respectively, compared to an unrealized loss of $1 million and an unrealized gain of $6 million in the comparable prior year periods, in cost of sales in the condensed consolidated statements of income (loss). The following table provides the detail of outstanding commodity derivative contracts as of September 30, 2020 : Type Unit of measure Contracted volume Contracted price range Contracted date of maturity Natural gas swaps million BTU 1,963,628 $2.40 - $2.94 Nov 2020 - Dec 2021 Polymer-grade propylene swaps pound 39,250,071 $0.29 - $0.39 Oct 2020 - May 2021 Benzene swaps U.S. liquid gallon 5,251,376 $1.08 - $2.42 Nov 2020 - Jun 2021 Diesel swaps U.S. liquid gallon 936,628 $2.41 - $3.26 Oct 2020 - Dec 2021 Low-density polyethylene swaps pound 15,000,000 $0.52 - $0.71 Oct 2020 - Dec 2021 Ethylene swaps pound 2,105,278 $0.26 Oct 2020 - Apr 2021 |
Employee Benefits
Employee Benefits | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Note 12 - Employee Benefits Net periodic benefit income (cost) for defined benefit pension plans and other post-employment benefit plans consisted of the following: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Service cost $ (2 ) $ (2 ) $ (5 ) $ (6 ) Interest cost (35 ) (45 ) (105 ) (136 ) Expected return on plan assets 52 45 155 134 Amortization of prior service cost (1 ) — (1 ) — Amortization of actuarial gains (losses) 1 — 1 — Total net periodic benefit income (cost) $ 15 $ (2 ) $ 45 $ (8 ) Net periodic benefit income (cost) for defined benefit pension plans and other post-employment benefit plans has been recognized in our condensed consolidated statements of income (loss) as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Cost of sales $ (1 ) $ (1 ) $ (4 ) $ (3 ) Selling, general and administrative expenses (1 ) (1 ) (1 ) (3 ) Non-operating income (expense), net 17 — 50 (2 ) Total net periodic benefit income (cost) $ 15 $ (2 ) $ 45 $ (8 ) On October 2, 2020, we made a contribution of $121 million to the Pactiv Evergreen Pension Plan (the “PEPP”) (formerly known as the Reynolds Group Pension Plan). No further contributions to the PEPP are expected to be made in 2020. |
Other (Expense) Income, Net
Other (Expense) Income, Net | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Other (Expense) Income, Net | Note 13 - Other (Expense) Income, Net Other (expense) income, net consisted of the following: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Related party management fee (1) $ (44 ) $ (3 ) $ (49 ) $ (8 ) Loss on sale of businesses and noncurrent assets (1 ) (13 ) (1 ) (24 ) Foreign exchange (losses) gains on cash (2) (42 ) 17 (14 ) 17 Transition service agreement income (1) 5 — 15 1 Other 3 1 1 7 Other (expense) income, net $ (79 ) $ 2 $ (48 ) $ (7 ) (1) See Note 18 - Related Party Transactions for additional information. (2) Primarily arose from holding U.S. dollars in non-U.S. dollar functional currency entities. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14 - Commitments and Contingencies We are from time to time party to litigation, legal proceedings and tax examinations arising from our operations. Most of these matters involve allegations of damages against us relating to employment matters, personal injury and commercial or contractual disputes. We record estimates for claims and proceedings that constitute a present obligation when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of such obligation can be made. While it is not possible to predict the outcome of any of these matters, based on our assessment of the facts and circumstances, we do not believe any of these matters, individually or in the aggregate, will have a material adverse effect on our balance sheet, results of operations or cash flows. However, actual outcomes may differ from those expected and could have a material effect on our balance sheet, results of operations or cash flows in a future period. Except for amounts provided, there were no legal proceedings pending other than those for which we have determined that the possibility of a material outflow is remote. As part of the agreements for the sale of various businesses, we have provided certain warranties and indemnities to the respective purchasers as set out in the respective sale agreements. These warranties and indemnities are subject to various terms and conditions affecting the duration and total amount of the indemnities. As of September 30, 2020 , we are not aware of any material claims under these agreements that would give rise to an additional liability. However, if such claims arise in the future, they could have a material effect on our balance sheet, results of operations and cash flows. We previously disclosed a contingency for the payment of a management fee to related parties of up to $22 million in respect of the 2009 and 2010 financial years. This management fee has now been recognized and paid in the three and nine months ended September 30, 2020 . Refer to Note 18 - Related Party Transactions for further information. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 15 - Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in our balances of each component of accumulated other comprehensive loss ("AOCL"): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Currency translation adjustments: Balance as of beginning of period $ (447 ) $ (425 ) $ (354 ) $ (442 ) Currency translation adjustments 65 (77 ) (30 ) (67 ) Amounts reclassified from AOCL 1 13 1 20 Other comprehensive income (loss) 66 (64 ) (29 ) (47 ) Distribution of RCP and GPC (1) 171 — 173 — Balance as of end of period $ (210 ) $ (489 ) $ (210 ) $ (489 ) Defined benefit plans: Plans associated with continuing operations Balance as of beginning of period $ (176 ) $ (302 ) $ (176 ) $ (258 ) Cumulative impact of adopting ASU 2018-02 — — — (44 ) Balance as of end of period $ (176 ) $ (302 ) $ (176 ) $ (302 ) Plans held for sale or distribution Balance as of beginning of period $ (1 ) $ 13 $ 12 $ 11 (Gains) and losses reclassified from AOCL: Amortization of actuarial gain (2) — (1 ) — (2 ) Other comprehensive loss — (1 ) — (2 ) Cumulative impact of adopting ASU 2018-02 — — — 3 Distribution of RCP and GPC (3) 1 — (12 ) — Balance as of end of period $ — $ 12 $ — $ 12 AOCL Balance as of beginning of period $ (624 ) $ (714 ) $ (518 ) $ (689 ) Other comprehensive income (loss) 66 (65 ) (29 ) (49 ) Cumulative impact of adopting ASU 2018-02 — — — (41 ) Distribution of RCP and GPC (1)(3) 172 — 161 — Balance as of end of period $ (386 ) $ (779 ) $ (386 ) $ (779 ) (1) Currency translation adjustment reclassifications associated with the distribution of RCP are recorded directly to additional paid in capital. Currency translation adjustment reclassifications associated with the distribution of GPC are recorded directly to retained earnings. See Note 3 - Discontinued Operations for additional details. (2) Amortization of actuarial gain associated with plans related to our discontinued operations is recorded in income from discontinued operations. (3) Defined benefit plan reclassifications associated with the distribution of RCP and GPC are recorded directly to retained earnings. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 16 - Income Taxes The effective tax rates for the three and nine months ended September 30, 2020 and 2019 represent our estimate of the effective rates expected to be applicable for the respective full fiscal years, adjusted for any discrete events which are recorded in the period that they occur. During the three months ended September 30, 2020 , we recognized tax expense of $42 million on a loss from continuing operations before tax of $101 million . This effective tax rate was primarily attributable to a $105 million discrete adjustment to increase our valuation allowance for deferred interest deductions. The increase in the valuation allowance reflects the reassessment of the recoverability of our deferred interest deductions following the distribution of Graham Packaging in September 2020. During the nine months ended September 30, 2020 , we recognized a tax benefit of $95 million on a loss from continuing operations before tax of $123 million . The effective tax rate is primarily attributable to the mix of income and losses taxed at varying rates among the jurisdictions in which we operate and includes the benefit of the CARES Act, primarily from the ability to utilize additional deferred interest deductions. The year to date effective tax rate also includes a $132 million return to provision benefit from our 2019 federal return, partially offset by a $105 million discrete adjustment for additional valuation allowance. The return to provision benefit was primarily attributable to the retroactive provisions of the CARES Act, enabling the utilization of additional deferred interest deductions. The increase in the valuation allowance reflects the reassessment of the recoverability of our deferred interest deductions following the distribution of Graham Packaging in September 2020. During the three months ended September 30, 2019 , we recognized no tax expense on a loss from continuing operations before tax of $35 million . During the nine months ended September 30, 2019 , we recognized tax expense of $16 million on a loss from continuing operations before tax of $84 million . The effective tax rates in each period were primarily attributable to additional valuation allowances, mainly in relation to the deductibility of deferred interest expense, and the mix of book income and losses among the jurisdictions in which we operate. The tax expense during the three months ended September 30, 2019, was offset by a discrete benefit as a result of filing amended returns to claim a foreign tax credit in lieu of a foreign tax deduction. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Note 17 - Segment Information ASC 280 Segment Reporting establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280 and in conjunction with the distribution of our former RCP segment, as of March 31, 2020, we realigned our reportable segments. As a result of this realignment and the GPC distribution on September 16, 2020 , we now have three reportable segments: Foodservice, Food Merchandising and Beverage Merchandising. These reportable segments reflect the change in our operating structure and the manner in which our Chief Operating Decision Maker (“CODM”) assesses information for decision-making purposes. The key factors used to identify these reportable segments are the organization and alignment of our internal operations and the nature of our products. This reflects how our CODM monitors performance, allocates capital and makes strategic and operational decisions. Our reportable segments are described as follows: Foodservice Foodservice manufactures a broad range of products that enable consumers to eat and drink where they want and when they want with convenience. Foodservice manufactures food containers, hot and cold cups and lids, tableware items and other products which make eating on-the-go more enjoyable and easy to do. Food Merchandising Food Merchandising manufactures products that protect and attractively display food while preserving freshness. Food Merchandising products include clear rigid-display containers, containers for prepared and ready-to-eat food, trays for meat and poultry and molded fiber cartons. Beverage Merchandising Beverage Merchandising manufactures cartons for fresh refrigerated beverage products, primarily serving dairy (including plant-based, organic and specialties), juice and other specialty beverage end-markets. Beverage Merchandising manufactures and supplies integrated fresh carton systems, which include printed cartons, spouts and filling machinery. It also produces fiber-based liquid packaging board for its internal requirements and to sell to other fresh beverage carton manufacturers, as well as a range of paper-based products which it sells to paper and packaging converters. Other In addition to our reportable segments, we have other operating segments that do not meet the threshold for presentation as a reportable segment. These operating segments include the remaining components of our former closures business, which generate revenue from the sale of caps and closures, and are presented as Other in the reconciliation between total reportable segment amounts and the equivalent consolidated measure. Unallocated Unallocated includes corporate costs, primarily relating to companywide functions such as finance, tax and legal and the effects of the PEPP. Information by Segment We present reportable segment adjusted EBITDA ("Adjusted EBITDA") as this is the financial measure by which management and our CODM allocate resources and analyze the performance of our reportable segments. Adjusted EBITDA represents each segment's earnings before interest, tax, depreciation and amortization and is further adjusted to exclude certain items of a significant or unusual nature, including but not limited to, foreign exchange gains or losses on cash, related party management fees, unrealized gains or losses on derivatives, gains or losses on the sale of businesses and noncurrent assets, impairment charges, restructuring, asset impairment and other related charges, operational process engineering-related consultancy costs, non-cash pension income or expense and strategic review and transaction-related costs. Segment reportable assets represent trade receivables, inventory and property, plant and equipment. Foodservice Food Merchandising Beverage Merchandising Reportable segment total (in millions) For the Three Months Ended September 30, 2020 Net revenues $ 473 $ 354 $ 338 $ 1,165 Intersegment revenues — — 23 23 Total reportable segment net revenues $ 473 $ 354 $ 361 $ 1,188 Adjusted EBITDA $ 81 $ 72 $ 24 $ 177 For the Three Months Ended September 30, 2019 Net revenues $ 546 $ 351 $ 372 $ 1,269 Intersegment revenues — — 29 29 Total reportable segment net revenues $ 546 $ 351 $ 401 $ 1,298 Adjusted EBITDA $ 89 $ 56 $ 45 $ 190 For the Nine Months Ended Septemb er 30, 2020 Net revenues $ 1,351 $ 1,046 $ 1,030 $ 3,427 Intersegment revenues — — 76 76 Total reportable segment net revenues $ 1,351 $ 1,046 $ 1,106 $ 3,503 Adjusted EBITDA $ 170 $ 186 $ 112 $ 468 For the Nine Months Ended September 30, 2019 Net revenues $ 1,630 $ 1,037 $ 1,094 $ 3,761 Intersegment revenues — — 94 94 Total reportable segment net revenues $ 1,630 $ 1,037 $ 1,188 $ 3,855 Adjusted EBITDA $ 262 $ 161 $ 142 $ 565 Reportable segment assets consisted of the following: Foodservice Food Merchandising Beverage Merchandising Reportable segment total (in millions) As of September 30, 2020 $ 1,060 $ 706 $ 1,023 $ 2,789 As of December 31, 2019 1,090 727 972 2,789 The following table presents a reconciliation of reportable segment Adjusted EBITDA to consolidated U.S. GAAP income from continuing operations before income taxes: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Reportable segment Adjusted EBITDA $ 177 $ 190 $ 468 $ 565 Other 2 4 6 10 Unallocated (6 ) (17 ) (29 ) (57 ) 173 177 445 518 Adjustments to reconcile to U.S. GAAP income (loss) from continuing operations before income taxes Depreciation and amortization (73 ) (68 ) (213 ) (198 ) Interest expense, net (87 ) (84 ) (275 ) (312 ) Foreign exchange (losses) gains on cash (42 ) 17 (14 ) 17 Goodwill impairment charges (6 ) (16 ) (6 ) (16 ) Loss on sale of businesses and noncurrent assets (1 ) (13 ) (1 ) (24 ) Non-cash pension income 18 — 55 2 Operational process engineering-related consultancy costs (3 ) (5 ) (12 ) (18 ) Related party management fee (44 ) (3 ) (49 ) (8 ) Restructuring, asset impairment and other related charges (14 ) (39 ) (18 ) (45 ) Strategic review and transaction-related costs (24 ) (1 ) (39 ) (2 ) Unrealized gains (losses) on derivatives 1 (1 ) 3 6 Other 1 1 1 (4 ) Loss from continuing operations before tax $ (101 ) $ (35 ) $ (123 ) $ (84 ) The following table presents a reconciliation of reportable segment assets to consolidated assets: As of September 30, 2020 As of December 31, 2019 (in millions) Reportable segment assets $ 2,789 $ 2,789 Other 39 65 Unallocated (1) 5,389 13,321 Total assets $ 8,217 $ 16,175 (1) Unallocated includes unallocated assets, which are comprised of cash and cash equivalents, other current assets, assets held for sale or distribution, entity-wide property, plant and equipment, operating lease right-of-use assets, goodwill, intangible assets, deferred income taxes, related party receivables and other noncurrent assets. Information in Relation to Products Net revenues by product line are as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Foodservice Cups and lids $ 198 $ 242 $ 560 $ 691 Containers 187 196 549 587 Dinnerware 34 52 108 157 Other 54 56 134 195 Food Merchandising Meat trays 93 91 287 262 Bakery/snack/produce/fruit containers 75 79 218 236 Prepared food trays 33 43 95 126 Egg cartons 24 24 74 73 Dinnerware 88 79 257 230 Other 41 35 115 110 Beverage Merchandising Cartons for fresh beverage products 199 205 597 593 Liquid packaging board 92 109 296 335 Paper products 70 87 213 260 Reportable segment net revenues 1,188 1,298 3,503 3,855 Other / Unallocated Other 30 37 87 127 Inter-segment eliminations (23 ) (29 ) (76 ) (94 ) Net revenues $ 1,195 $ 1,306 $ 3,514 $ 3,888 For all product lines, there is a relatively short time period between the receipt of the order and the transfer of control over the goods to the customer. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 18 - Related Party Transactions As of September 30, 2020, 79% of our shares are owned by PFL or other entities of which Mr. Graeme Hart is the ultimate shareholder. In addition to the distributions of RCPI and GPCI to PFL, as described further in Note 3 - Discontinued Operations , the related party entities and types of transactions we entered into with them are detailed below. All related parties detailed below have a common ultimate controlling shareholder, except for the joint ventures. Transaction value for the Three Months Ended September 30, Transaction value for the Nine Months Ended September 30, Balance outstanding as of 2020 2019 2020 2019 September 30, 2020 December 31, 2019 (in millions) Balances and transactions with joint ventures Included in other current assets $ 7 $ 8 Sale of goods and services (a) $ 5 $ 3 $ 23 $ 19 Balances and transactions with other entities controlled by Mr. Graeme Hart Current related party receivables 57 — Sale of goods and services (b) 89 72 259 213 Transition services agreement and rental income (b) 3 — 11 — Tax loss transfer (c) — — 13 — Recharges (d) 1 — 2 4 Forgiveness of a balance (e) (15 ) — (15 ) — Noncurrent related party receivables (f) — 339 Interest income 3 4 9 12 Loan forgiveness (347 ) — (347 ) — Related party payables (21 ) (30 ) Purchase of goods (b) (28 ) (36 ) (91 ) (114 ) Recharges (d) (1 ) (6 ) (11 ) (16 ) Management fee (g) (57 ) (8 ) (65 ) (21 ) Tax loss transfer (c) (10 ) — (11 ) (2 ) (a) All transactions with joint ventures are settled in cash. Sales of goods and services are negotiated on a cost-plus basis allowing a margin ranging from 3% to 6% . All amounts are unsecured, non-interest bearing and repayable on demand. (b) Following the distribution of RCP on February 4, 2020, we continue to trade with them, selling and purchasing various goods and services under contractual arrangements that expire over a variety of periods through to 2024. Prior to February 4, 2020, our continuing operations recognized revenue and cost of sales in respect of sales to and purchases from RCP. Refer to Note 3 - Discontinued Operations . As part of the separation process, amongst other agreements, we have entered into two lease arrangements with RCP and entered into a transition services agreement to provide ongoing agreed services to RCP, as requested. We do not trade with GPC on an ongoing basis. We have entered into a transition services agreement to provide ongoing agreed services to GPC, as requested. We have also entered into a tax matters agreement with GPC. We have recognized a receivable of $8 million under the tax matters agreement in relation to GPC’s estimated share of U.S. federal taxes in respect of the period from January 1, 2020 through to September 16, 2020. (c) Represents payments received or made for tax losses transferred between our entities and other entities controlled by Mr. Graeme Hart. (d) Represents certain costs paid on our behalf that were subsequently recharged to us. These charges are for various costs incurred including services provided, financing and other activities. All amounts are unsecured, non-interest bearing and settled on normal trade terms. As part of our IPO, we have entered into a transition services agreement with Rank Group Limited ("Rank") under which Rank will, upon our request, continue to provide certain administrative and support services to us, and we will provide support services to Rank upon request. All services provided will be charged at an agreed hourly rate plus any third party costs. (e) In connection with our IPO, $15 million of current related party receivables owed by Rank was forgiven. We recognized this forgiveness as a reduction in retained earnings. (f) The loan with Rank, which was included in noncurrent related party receivables, accrued interest at a rate based on the average 90-day New Zealand bank bill rate, set quarterly, plus a margin of 3.25% . During the three and nine months ended September 30, 2020 , interest was charged at 3.550% and 3.458% to 4.275% , respectively. During the three and nine months ended September 30, 2019 , interest was charged at 4.567% and 4.567% to 5.149% , respectively. In preparation for our IPO, the loan receivable was forgiven. We recognized this forgiveness as a reduction in retained earnings. (g) Our financing agreements permit the payment of management fees to related parties for management, consulting, monitoring and advising services. The management fees were paid pursuant to a services agreement with Rank. In connection with our IPO, we (i) paid an additional management fee of $22 million , in respect of the 2009 and 2010 financial years and (ii) paid a termination fee of $45 million for the termination of, and release from, the Rank services agreement, which included the $8 million management fee payable for the period January 1, 2020 to the date of termination of September 16, 2020 which was previously accrued. During the three and nine months ended September 30, 2020 , management fees of $44 million and $49 million , respectively, were recognized in other (expense) income, net, with the remainder in discontinued operations. During the three and nine months ended September 30, 2019 , management fees of $3 million and $8 million , respectively, were recognized in other (expense) income, net, with the remainder in discontinued operations. The services agreement with Rank was terminated in connection with our IPO, and we will no longer be charged a management fee. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Note 19 - Stock-based Compensation In conjunction with our IPO, we established the Pactiv Evergreen Inc. Equity Incentive Plan (the “Equity Incentive Plan”) for purposes of granting stock- and cash-based compensation awards to our employees (including our senior management), directors, consultants and advisors. The maximum number of shares of common stock initially available for issuance under our Equity Incentive Plan was 9,079,395 shares. During 2019 and 2020, in anticipation of our IPO, we granted 297,296 restricted stock units (“RSUs”) to certain members of management, which included a performance condition that required the Company to complete an IPO. Certain of these RSUs vest over three years , with one-third of an employee’s RSUs vesting on each anniversary from the date of our IPO, subject to the employee’s continued employment through the applicable vesting date. The remaining portion of the RSUs vests on December 31, 2021, subject to the employee’s continued employment through this vesting date. We recognized approximately $1 million of stock-based compensation expense during the three and nine months ended September 30, 2020 related to these grants. There was no stock-based compensation expense recorded during the three and nine months ended September 30, 2019. As of September 30, 2020 , we had 8,782,099 shares available under the Equity Incentive Plan. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 20 - Earnings Per Share A reconciliation of the number of shares used for our (loss) earnings per share calculation was as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions, except per share amounts) Net (loss) income attributable to Pactiv Evergreen Inc. common stockholders From continuing operations $ (143 ) $ (35 ) $ (29 ) $ (101 ) From discontinued operations (216 ) 91 (234 ) 270 Total $ (359 ) $ 56 $ (263 ) $ 169 Weighted average number of shares outstanding Basic 138.9 134.4 135.9 134.4 Effect of dilutive securities — — — — Diluted 138.9 134.4 135.9 134.4 (Loss) earnings per share attributable to Pactiv Evergreen Inc. common stockholders From continuing operations Basic $ (1.03 ) $ (0.26 ) $ (0.22 ) $ (0.75 ) Diluted $ (1.03 ) $ (0.26 ) $ (0.22 ) $ (0.75 ) From discontinued operations Basic $ (1.56 ) $ 0.67 $ (1.72 ) $ 2.01 Diluted $ (1.56 ) $ 0.67 $ (1.72 ) $ 2.01 Total Basic $ (2.59 ) $ 0.41 $ (1.94 ) $ 1.26 Diluted $ (2.59 ) $ 0.41 $ (1.94 ) $ 1.26 The weighted average number of shares outstanding prior to our IPO reflects PTVE’s conversion to a Delaware incorporated entity and the subsequent stock split, as detailed in Note 1 - Nature of Operations and Basis of Presentation . The stock split has been retroactively reflected, resulting in 134.4 million weighted average number of shares outstanding for the three and nine months ended September 30, 2019. The weighted average number of shares outstanding during the three and nine months ended September 30, 2020 reflects the weighted average number of shares outstanding, as described above, including the weighted average shares issued on September 21, 2020 as part of our IPO. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 21 - Subsequent Events Except as described elsewhere in this document, there have been no events subsequent to September 30, 2020 that would require accrual or disclosure in these condensed consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | These condensed consolidated financial statements are unaudited and presented in U.S. dollars. They have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Our condensed consolidated balance sheet as of December 31, 2019 has been derived from our audited consolidated financial statements as of that date. Our condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2019 , which include a complete set of footnote disclosures, including our significant accounting policies. In our opinion, these condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair statement of our results of operations, financial position and cash flows for the periods presented. However, our results of operations for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All intercompany accounts and transactions have been eliminated in consolidation. |
Discontinued Operations | Certain of our operations have been presented as discontinued. We present businesses that represent components as discontinued operations when the components either meet the criteria as held for sale or are sold or distributed, and their expected or actual disposal represents a strategic shift that has, or will have, a major effect on our operations and financial results. As discussed in Note 3 - Discontinued Operations |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could differ from what was anticipated in those estimates, which could materially affect our results of operations and balance sheet. Among other effects, such changes could result in future impairments of goodwill, intangibles and long-lived assets, and adjustments to reserves for employee benefits and income taxes. The estimated recoverable amounts associated with asset impairments recognized in all periods presented represents a Level 3 measurement in the fair value hierarchy, which includes inputs that are not based on observable market data. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could differ from what was anticipated in those estimates, which could materially affect our results of operations and financial condition. For example, the worldwide COVID-19 pandemic has had, and will continue to have, a significant impact on our results of operations, and it may also have additional far-reaching impacts on many aspects of our operations including the impact on customer behaviors, business and manufacturing operations, our employees, and the market in general. The extent to which the COVID-19 pandemic impacts our business, financial condition, results of operations, cash flows and liquidity may differ from management’s current estimates due to inherent uncertainties regarding the duration and further spread of the outbreak, actions taken to contain the virus, as well as, how quickly and to what extent normal economic and operating conditions can resume. |
Share Repurchases | Share Repurchases When accounting for a share repurchase and retirement of shares, including in connection with transactions that are deemed to be a reverse stock split, we record the repurchase as a reduction of common stock and additional paid in capital. The reduction in common stock represents the par value of the canceled shares, and the reduction in additional paid in capital is the lower of the excess of the repurchase amount over the par value of the repurchased shares or the pro rata portion of additional paid in capital, based on the number of shares retired as a percentage of total shares outstanding prior to the repurchase. Any residual excess of the repurchase amount over the reduction in additional paid in capital is presented as a reduction to retained earnings. |
Variable Interest Entities | Variable Interest Entities Until termination of our $ 450 million securitization facility (the “Securitization Facility”) in July 2020, we had a variable interest in one variable interest entity ("VIE") related to our non-recourse factoring arrangements in which receivables were sold from certain of our operations to a special purpose trust (“SPE”) in exchange for cash. We were the sole beneficiary of the SPE. The SPE was considered to be a VIE and we were its primary beneficiary as we had the power to direct its activities and the right to receive its benefits. Prior to July 2020, we consolidated the results, assets and liabilities of this SPE for all periods presented in these condensed consolidated financial statements. As a result of consolidating the SPE, we continued to recognize the trade receivables and external borrowings of this entity with carrying values of $789 million (including $469 million presented within assets held for sale or distribution) and $420 million |
Recently Adopted and Recently Issued But Not Yet Accounting Guidance | Recently Adopted Accounting Guidance In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2019-04, Financial Instruments-Credit Losses (Topic 326) , Derivatives and Hedging (Topic 815) , and Financial Instruments - Codification Improvements (Topic 825) , ASU 2019-05, Financial Instruments - Credit Losses - Targeted Transition Relief (Topic 326), ASU 2019-11, Codification Improvements, Financial Instruments - Credit Losses (Topic 326) and ASU 2020-03, Codification Improvements to Financial Instruments . These ASUs modify the impairment model to use an expected loss methodology in place of the currently used incurred loss methodology, which may result in earlier recognition of losses related to financial instruments. These ASUs are effective for fiscal years beginning after December 15, 2019, with early adoption permitted, and require a cumulative effect adjustment to the balance sheet upon adoption. We adopted these standards on January 1, 2020 and they had no material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Change to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This ASU is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. We adopted this guidance on January 1, 2020 and it had no material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs for internal-use software. This ASU is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. We adopted this standard on January 1, 2020 and it had no material impact on our condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We early adopted this guidance on January 1, 2020. Certain components of this guidance were adopted on a prospective basis. The remaining components were adopted on a modified retrospective basis and had no material impact on our condensed consolidated financial statements and related disclosures. Accounting Guidance Issued But Not Yet Adopted In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) Disclosure - Framework - Changes to the Disclosure Requirements for Defined Benefit Plans . The ASU requires sponsors of defined benefit pension or other postretirement plans to provide additional disclosures, including a narrative description of reasons for any significant gains or losses impacting the benefit obligation for the period. It also eliminates certain previous disclosure requirements. This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted, and must be applied on a retrospective basis to all periods presented. The requirements of this guidance are expected to impact our disclosures but have no impact on the measurement and recognition of amounts in our condensed consolidated financial statements. 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 ASU provides temporary optional expedients and exceptions to the 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. This ASU is effective upon issuance and generally can be applied through the end of calendar year 2022. We are currently evaluating the impact and whether we plan to adopt the optional expedients and exceptions provided under this new standard. We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our condensed consolidated financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Discontinued Operations Financial Information | Income from discontinued operations, which includes the results of GPC through September 16, 2020 , the results of RCP through February 4, 2020 and the results of GPC, RCP and Closures for the three and nine months ended September 30, 2019 , was as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Net revenues $ 396 $ 1,249 $ 1,510 $ 3,788 Cost of sales (331 ) (937 ) (1,234 ) (2,868 ) Gross profit 65 312 276 920 Selling, general and administrative expenses (52 ) (159 ) (179 ) (422 ) Goodwill impairment charges — (9 ) — (9 ) Restructuring, asset impairment and other related charges (4 ) (46 ) (13 ) (66 ) Interest expense, net (1) (32 ) (47 ) (54 ) (142 ) Other expense, net — (6 ) (3 ) (8 ) (Loss) income before income taxes from discontinued operations (23 ) 45 27 273 Income tax (expense) benefit (193 ) 46 (275 ) (3 ) Net (loss) income from discontinued operations, before gain on disposal (216 ) 91 (248 ) 270 Gain on disposal, net of income taxes — — 14 — Net (loss) income from discontinued operations $ (216 ) $ 91 $ (234 ) $ 270 (1) Includes interest expense and amortization of deferred transaction costs related to debt repaid in conjunction with the distribution of RCP, as well as interest and transaction costs related to debt incurred by GPCI in August 2020; also includes a $5 million loss on extinguishment of debt from the repayment of corporate level debt on February 4, 2020. The following is a summary of the RCP assets and liabilities distributed on February 4, 2020 and a summary of the GPC assets and liabilities distributed on September 16, 2020 : RCP GPC (in millions) Assets Cash, cash equivalents and restricted cash $ 31 $ 79 Current assets 699 448 Noncurrent assets 3,630 3,461 $ 4,360 $ 3,988 Liabilities Current liabilities $ 1,467 $ 292 Noncurrent liabilities 2,847 2,518 $ 4,314 $ 2,810 Net assets distributed $ 46 $ 1,178 Assets and liabilities held for sale or distribution in relation to our discontinued operations were as follows: As of December 31, 2019 (in millions) Cash and cash equivalents $ 137 Accounts receivable, net 489 Inventories 559 Other current assets 47 Total current assets held for sale or distribution $ 1,232 Property, plant and equipment, net $ 1,309 Operating lease right-of-use assets, net 150 Goodwill 3,173 Intangible assets, net 2,470 Other noncurrent assets 41 Total noncurrent assets held for sale or distribution $ 7,143 Accounts payable $ 243 Accrued and other current liabilities 242 Total current liabilities held for sale or distribution $ 485 Long-term operating lease liabilities $ 126 Deferred income taxes 731 Long-term employee benefit obligations 57 Other noncurrent liabilities 78 Total noncurrent liabilities held for sale or distribution $ 992 Cash flows from discontinued operations were as follows: For the Nine Months Ended September 30, 2020 2019 (in millions) Net cash provided by operating activities $ 175 $ 523 Net cash used in investing activities (122 ) (214 ) Net cash provided by financing activities 2,441 — Net cash from discontinued operations $ 2,494 $ 309 The carrying amounts of the major classes of the South American closures businesses’ assets and liabilities as of September 30, 2020 included the following: As of September 30, 2020 (in millions) Cash and cash equivalents $ 9 Accounts receivable, net 11 Inventories 3 Other current assets 1 Property, plant and equipment, net 8 Intangible assets, net 2 Held for sale valuation allowance (11 ) Total current assets held for sale or distribution $ 23 Accounts payable $ 3 Accrued and other current liabilities 3 Other noncurrent liabilities 2 Total current liabilities held for sale or distribution $ 8 |
Assets and Liabilities Held f_2
Assets and Liabilities Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Assets and Liabilities Held for Sale | Income from discontinued operations, which includes the results of GPC through September 16, 2020 , the results of RCP through February 4, 2020 and the results of GPC, RCP and Closures for the three and nine months ended September 30, 2019 , was as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Net revenues $ 396 $ 1,249 $ 1,510 $ 3,788 Cost of sales (331 ) (937 ) (1,234 ) (2,868 ) Gross profit 65 312 276 920 Selling, general and administrative expenses (52 ) (159 ) (179 ) (422 ) Goodwill impairment charges — (9 ) — (9 ) Restructuring, asset impairment and other related charges (4 ) (46 ) (13 ) (66 ) Interest expense, net (1) (32 ) (47 ) (54 ) (142 ) Other expense, net — (6 ) (3 ) (8 ) (Loss) income before income taxes from discontinued operations (23 ) 45 27 273 Income tax (expense) benefit (193 ) 46 (275 ) (3 ) Net (loss) income from discontinued operations, before gain on disposal (216 ) 91 (248 ) 270 Gain on disposal, net of income taxes — — 14 — Net (loss) income from discontinued operations $ (216 ) $ 91 $ (234 ) $ 270 (1) Includes interest expense and amortization of deferred transaction costs related to debt repaid in conjunction with the distribution of RCP, as well as interest and transaction costs related to debt incurred by GPCI in August 2020; also includes a $5 million loss on extinguishment of debt from the repayment of corporate level debt on February 4, 2020. The following is a summary of the RCP assets and liabilities distributed on February 4, 2020 and a summary of the GPC assets and liabilities distributed on September 16, 2020 : RCP GPC (in millions) Assets Cash, cash equivalents and restricted cash $ 31 $ 79 Current assets 699 448 Noncurrent assets 3,630 3,461 $ 4,360 $ 3,988 Liabilities Current liabilities $ 1,467 $ 292 Noncurrent liabilities 2,847 2,518 $ 4,314 $ 2,810 Net assets distributed $ 46 $ 1,178 Assets and liabilities held for sale or distribution in relation to our discontinued operations were as follows: As of December 31, 2019 (in millions) Cash and cash equivalents $ 137 Accounts receivable, net 489 Inventories 559 Other current assets 47 Total current assets held for sale or distribution $ 1,232 Property, plant and equipment, net $ 1,309 Operating lease right-of-use assets, net 150 Goodwill 3,173 Intangible assets, net 2,470 Other noncurrent assets 41 Total noncurrent assets held for sale or distribution $ 7,143 Accounts payable $ 243 Accrued and other current liabilities 242 Total current liabilities held for sale or distribution $ 485 Long-term operating lease liabilities $ 126 Deferred income taxes 731 Long-term employee benefit obligations 57 Other noncurrent liabilities 78 Total noncurrent liabilities held for sale or distribution $ 992 Cash flows from discontinued operations were as follows: For the Nine Months Ended September 30, 2020 2019 (in millions) Net cash provided by operating activities $ 175 $ 523 Net cash used in investing activities (122 ) (214 ) Net cash provided by financing activities 2,441 — Net cash from discontinued operations $ 2,494 $ 309 The carrying amounts of the major classes of the South American closures businesses’ assets and liabilities as of September 30, 2020 included the following: As of September 30, 2020 (in millions) Cash and cash equivalents $ 9 Accounts receivable, net 11 Inventories 3 Other current assets 1 Property, plant and equipment, net 8 Intangible assets, net 2 Held for sale valuation allowance (11 ) Total current assets held for sale or distribution $ 23 Accounts payable $ 3 Accrued and other current liabilities 3 Other noncurrent liabilities 2 Total current liabilities held for sale or distribution $ 8 |
Impairment, Restructuring and_2
Impairment, Restructuring and Other Related Charges (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Summary of Impairment, Restructuring and Other Related Charges | During the three months ended September 30, 2019 , we recorded the following impairment, restructuring and other related charges: Goodwill impairment Other asset impairment Employee terminations Total (in millions) Foodservice $ — $ 1 $ — $ 1 Other 16 37 1 54 Total $ 16 $ 38 $ 1 $ 55 During the nine months ended September 30, 2019 , we recorded the following impairment, restructuring and other related charges: Goodwill impairment Other asset impairment Employee terminations Total (in millions) Foodservice $ — $ 1 $ — $ 1 Food Merchandising — 4 — 4 Other 16 37 3 56 Total $ 16 $ 42 $ 3 $ 61 During the nine months ended September 30, 2020 , we recorded the following impairment, restructuring and other related charges: Goodwill impairment Other asset impairment Employee terminations Other restructuring charges Total (in millions) Foodservice $ — $ 1 $ 1 $ 1 $ 3 Food Merchandising — 1 — — 1 Beverage Merchandising — — 1 — 1 Other 6 12 1 — 19 Total $ 6 $ 14 $ 3 $ 1 $ 24 During the three months ended September 30, 2020 , we recorded the following impairment, restructuring and other related charges: Goodwill impairment Other asset impairment Employee terminations Total (in millions) Foodservice $ — $ — $ 1 $ 1 Food Merchandising — 1 — 1 Other 6 12 — 18 Total $ 6 $ 13 $ 1 $ 20 |
Summary of Restructuring Liability | The following tables summarize the changes to our restructuring liability for the nine months ended September 30, 2020 : December 31, 2019 Charges to earnings Cash paid September 30, 2020 (in millions) Employee termination costs $ 1 $ 3 $ (3 ) $ 1 Total $ 1 $ 3 $ (3 ) $ 1 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Summary of the Components of Inventory | The components of inventories consisted of the following: As of September 30, 2020 As of December 31, 2019 (in millions) Raw materials $ 167 $ 168 Work in progress 101 106 Finished goods 389 397 Spare parts 87 82 Inventories $ 744 $ 753 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment, Net and Depreciation | Property, plant and equipment, net consisted of the following: As of September 30, 2020 As of December 31, 2019 (in millions) Land and land improvements $ 85 $ 92 Buildings and building improvements 518 551 Machinery and equipment 3,043 2,973 Construction in progress 229 204 Property, plant and equipment, at cost 3,875 3,820 Less: accumulated depreciation (2,209 ) (2,117 ) Property, plant and equipment, net $ 1,666 $ 1,703 Depreciation expense related to property, plant and equipment was recognized in the following components in the condensed consolidated statements of income (loss): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Cost of sales $ 54 $ 51 $ 157 $ 148 Selling, general and administrative expenses 4 3 14 8 Total depreciation expense $ 58 $ 54 $ 171 $ 156 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill by Reportable Segment | Goodwill by reportable segment was as follows: Foodservice (1) Food Merchandising (1) Beverage Merchandising Other (2) Total (in millions) Balance as of December 31, 2019 $ 924 $ 770 $ 66 $ 6 $ 1,766 Impairment charges — — — (6 ) (6 ) Balance as of September 30, 2020 $ 924 $ 770 $ 66 $ — $ 1,760 Accumulated impairment losses $ — $ — $ — $ 22 $ 22 (1) The information presented above reflects the retrospective application of the March 2020 change in segments. See Note 17 - Segment Information for further details. (2) Other includes operations that do not meet the quantitative threshold for reportable segments. |
Summary of Indefinite-Lived Intangible Assets | Intangible assets, net consisted of the following: As of September 30, 2020 As of December 31, 2019 Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net (in millions) Finite-lived intangible assets Customer relationships $ 1,015 $ (525 ) $ 490 $ 1,026 $ (494 ) $ 532 Other 20 (18 ) 2 21 (18 ) 3 Total finite-lived intangible assets $ 1,035 $ (543 ) $ 492 $ 1,047 $ (512 ) $ 535 Indefinite-lived intangible assets Trademarks $ 554 $ — $ 554 $ 554 $ — $ 554 Other 58 — 58 58 — 58 Total indefinite-lived intangible assets $ 612 $ — $ 612 $ 612 $ — $ 612 Total intangible assets $ 1,647 $ (543 ) $ 1,104 $ 1,659 $ (512 ) $ 1,147 |
Summary of Finite-Lived Intangible Assets | Intangible assets, net consisted of the following: As of September 30, 2020 As of December 31, 2019 Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net (in millions) Finite-lived intangible assets Customer relationships $ 1,015 $ (525 ) $ 490 $ 1,026 $ (494 ) $ 532 Other 20 (18 ) 2 21 (18 ) 3 Total finite-lived intangible assets $ 1,035 $ (543 ) $ 492 $ 1,047 $ (512 ) $ 535 Indefinite-lived intangible assets Trademarks $ 554 $ — $ 554 $ 554 $ — $ 554 Other 58 — 58 58 — 58 Total indefinite-lived intangible assets $ 612 $ — $ 612 $ 612 $ — $ 612 Total intangible assets $ 1,647 $ (543 ) $ 1,104 $ 1,659 $ (512 ) $ 1,147 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued and other current liabilities consisted of the following: As of September 30, 2020 As of December 31, 2019 (in millions) Accrued personnel costs $ 115 $ 108 Accrued interest 41 115 Accrued rebates and credits 66 67 Other (1) 120 128 Accrued and other current liabilities $ 342 $ 418 (1) Other includes items such as accruals for freight, utilities and property and other non-income related taxes. |
Summary of Other Current Liabilities | Accrued and other current liabilities consisted of the following: As of September 30, 2020 As of December 31, 2019 (in millions) Accrued personnel costs $ 115 $ 108 Accrued interest 41 115 Accrued rebates and credits 66 67 Other (1) 120 128 Accrued and other current liabilities $ 342 $ 418 (1) Other includes items such as accruals for freight, utilities and property and other non-income related taxes. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Debt | Debt consisted of the following: As of September 30, 2020 As of December 31, 2019 (in millions) Securitization Facility $ — $ 420 Credit Agreement 2,487 3,487 Notes: 5.750% Senior Secured Notes due 2020 — 3,137 Floating Rate Senior Secured Notes due 2021 — 750 5.125% Senior Secured Notes due 2023 1,599 1,600 7.000% Senior Notes due 2024 650 800 Pactiv Debentures: 7.950% Debentures due 2025 276 276 8.375% Debentures due 2027 200 200 Other 13 15 Total principal amount of borrowings 5,225 10,685 Deferred financing transaction costs (23 ) (46 ) Original issue discounts, net of premiums (4 ) (9 ) 5,198 10,630 Less: current portion (2 ) (3,587 ) Long-term debt $ 5,196 $ 7,043 |
Schedule of Long-term Debt Instruments | Outstanding notes, as of September 30, 2020 , are summarized below: Description Maturity date Semi-annual interest payment dates 5.125% Senior Secured Notes due 2023 (1) July 15, 2023 January 15 and July 15 7.000% Senior Notes due 2024 July 15, 2024 January 15 and July 15 (1) $250 million aggregate principal amount of 5.125% Notes were issued at an issue price of 103.500% . As of September 30, 2020 , we had outstanding the following debentures (together, the “Pactiv Debentures”): Description Maturity date Semi-annual interest payment dates 7.950% Debentures due 2025 December 15, 2025 June 15 and December 15 8.375% Debentures due 2027 April 15, 2027 April 15 and October 15 |
Summary of Components of the Credit Agreement | The Credit Agreement comprises the following term and revolving tranche: Currency Maturity date Value drawn or utilized as of September 30, 2020 (in millions) Applicable interest rate as of September 30, 2020 Term Tranches U.S. term loans $ February 5, 2023 2,487 LIBOR (floor of 0.000%) + 2.750% Revolving Tranche (1) U.S. Revolving Loans $ August 5, 2021 47 — (1) The Revolving Tranche represents a $302 million facility. The amount utilized is in the form of letters of credit. |
Schedule of Required Future Repayments of Outstanding Debt | Below is a schedule of required future repayments on our debt outstanding as of September 30, 2020 : (in millions) 2020 $ 1 2021 2 2022 3 2023 4,087 2024 651 Thereafter 481 Total principal amount of borrowings $ 5,225 |
Schedule of Carrying Values and Fair Values of Debt Outstanding | Below is a schedule of carrying values and fair values of our debt outstanding as of September 30, 2020 and December 31, 2019 : As of September 30, 2020 As of December 31, 2019 Carrying Fair Carrying Fair (in millions) Securitization Facility $ — $ — $ 418 $ 420 Credit Agreement 2,479 2,487 3,476 3,487 Notes: 5.750% Senior Secured Notes due 2020 — — 3,130 3,144 Floating Rate Senior Secured Notes due 2021 — — 739 753 5.125% Senior Secured Notes due 2023 1,592 1,620 1,591 1,641 7.000% Senior Notes due 2024 644 662 791 828 Pactiv Debentures: 7.950% Debentures due 2025 272 301 272 311 8.375% Debentures due 2027 198 213 198 220 Other 13 13 15 15 Total $ 5,198 $ 5,296 $ 10,630 $ 10,819 |
Interest Income and Interest Expense Disclosure | Interest expense, net consisted of the following: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Interest expense: Notes $ 36 $ 48 $ 123 $ 147 Pactiv Debentures 11 11 30 30 Credit Agreement 21 44 87 134 Securitization Facility — 4 6 13 Interest income, related party (1) (3 ) (4 ) (9 ) (12 ) Interest income, other — (5 ) (6 ) (11 ) Amortization of deferred transaction costs (2) 3 3 12 9 Derivative losses 1 3 15 20 Net foreign currency exchange losses (gains) 6 (23 ) — (24 ) Other (3) 12 3 17 6 Interest expense, net (4) $ 87 $ 84 $ 275 $ 312 (1) Refer to Note 18 - Related Party Transactions for additional information. (2) The amount for the nine months ended September 30, 2020 includes an adjustment of $5 million related to prior periods. (3) Amounts primarily include write-offs of unamortized debt issuance costs and original issue discount premium, as well as redemption premiums. (4) Amounts presented in the above table exclude interest expense and amortization of deferred transaction costs related to our 5.750% Notes repaid in conjunction with the distribution of RCP, as well as interest and transaction costs related to debt held by GPCI; also excludes a $5 million loss on extinguishment of debt from the repayment of corporate level debt on February 4, 2020. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | We had the following derivative instruments recorded at fair value in our condensed consolidated balance sheets: As of September 30, 2020 As of December 31, 2019 Asset Liability Asset Liability (in millions) Interest rate swap derivatives $ — $ — $ 7 $ — Commodity swap contracts 2 (2 ) 1 (5 ) Total fair value $ 2 $ (2 ) $ 8 $ (5 ) Recorded in: Other current assets $ 2 $ — $ 6 $ — Other noncurrent assets — — 2 — Accrued and other current liabilities — (2 ) — (5 ) Total fair value $ 2 $ (2 ) $ 8 $ (5 ) |
Summary of Outstanding Commodity Derivative Contracts | The following table provides the detail of outstanding commodity derivative contracts as of September 30, 2020 : Type Unit of measure Contracted volume Contracted price range Contracted date of maturity Natural gas swaps million BTU 1,963,628 $2.40 - $2.94 Nov 2020 - Dec 2021 Polymer-grade propylene swaps pound 39,250,071 $0.29 - $0.39 Oct 2020 - May 2021 Benzene swaps U.S. liquid gallon 5,251,376 $1.08 - $2.42 Nov 2020 - Jun 2021 Diesel swaps U.S. liquid gallon 936,628 $2.41 - $3.26 Oct 2020 - Dec 2021 Low-density polyethylene swaps pound 15,000,000 $0.52 - $0.71 Oct 2020 - Dec 2021 Ethylene swaps pound 2,105,278 $0.26 Oct 2020 - Apr 2021 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Income (Cost) | Net periodic benefit income (cost) for defined benefit pension plans and other post-employment benefit plans consisted of the following: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Service cost $ (2 ) $ (2 ) $ (5 ) $ (6 ) Interest cost (35 ) (45 ) (105 ) (136 ) Expected return on plan assets 52 45 155 134 Amortization of prior service cost (1 ) — (1 ) — Amortization of actuarial gains (losses) 1 — 1 — Total net periodic benefit income (cost) $ 15 $ (2 ) $ 45 $ (8 ) Net periodic benefit income (cost) for defined benefit pension plans and other post-employment benefit plans has been recognized in our condensed consolidated statements of income (loss) as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Cost of sales $ (1 ) $ (1 ) $ (4 ) $ (3 ) Selling, general and administrative expenses (1 ) (1 ) (1 ) (3 ) Non-operating income (expense), net 17 — 50 (2 ) Total net periodic benefit income (cost) $ 15 $ (2 ) $ 45 $ (8 ) |
Other (Expense) Income, Net (Ta
Other (Expense) Income, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Income (Expense), Net | Other (expense) income, net consisted of the following: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Related party management fee (1) $ (44 ) $ (3 ) $ (49 ) $ (8 ) Loss on sale of businesses and noncurrent assets (1 ) (13 ) (1 ) (24 ) Foreign exchange (losses) gains on cash (2) (42 ) 17 (14 ) 17 Transition service agreement income (1) 5 — 15 1 Other 3 1 1 7 Other (expense) income, net $ (79 ) $ 2 $ (48 ) $ (7 ) (1) See Note 18 - Related Party Transactions for additional information. (2) Primarily arose from holding U.S. dollars in non-U.S. dollar functional currency entities. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in our balances of each component of accumulated other comprehensive loss ("AOCL"): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Currency translation adjustments: Balance as of beginning of period $ (447 ) $ (425 ) $ (354 ) $ (442 ) Currency translation adjustments 65 (77 ) (30 ) (67 ) Amounts reclassified from AOCL 1 13 1 20 Other comprehensive income (loss) 66 (64 ) (29 ) (47 ) Distribution of RCP and GPC (1) 171 — 173 — Balance as of end of period $ (210 ) $ (489 ) $ (210 ) $ (489 ) Defined benefit plans: Plans associated with continuing operations Balance as of beginning of period $ (176 ) $ (302 ) $ (176 ) $ (258 ) Cumulative impact of adopting ASU 2018-02 — — — (44 ) Balance as of end of period $ (176 ) $ (302 ) $ (176 ) $ (302 ) Plans held for sale or distribution Balance as of beginning of period $ (1 ) $ 13 $ 12 $ 11 (Gains) and losses reclassified from AOCL: Amortization of actuarial gain (2) — (1 ) — (2 ) Other comprehensive loss — (1 ) — (2 ) Cumulative impact of adopting ASU 2018-02 — — — 3 Distribution of RCP and GPC (3) 1 — (12 ) — Balance as of end of period $ — $ 12 $ — $ 12 AOCL Balance as of beginning of period $ (624 ) $ (714 ) $ (518 ) $ (689 ) Other comprehensive income (loss) 66 (65 ) (29 ) (49 ) Cumulative impact of adopting ASU 2018-02 — — — (41 ) Distribution of RCP and GPC (1)(3) 172 — 161 — Balance as of end of period $ (386 ) $ (779 ) $ (386 ) $ (779 ) (1) Currency translation adjustment reclassifications associated with the distribution of RCP are recorded directly to additional paid in capital. Currency translation adjustment reclassifications associated with the distribution of GPC are recorded directly to retained earnings. See Note 3 - Discontinued Operations for additional details. (2) Amortization of actuarial gain associated with plans related to our discontinued operations is recorded in income from discontinued operations. (3) Defined benefit plan reclassifications associated with the distribution of RCP and GPC are recorded directly to retained earnings. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | We present reportable segment adjusted EBITDA ("Adjusted EBITDA") as this is the financial measure by which management and our CODM allocate resources and analyze the performance of our reportable segments. Adjusted EBITDA represents each segment's earnings before interest, tax, depreciation and amortization and is further adjusted to exclude certain items of a significant or unusual nature, including but not limited to, foreign exchange gains or losses on cash, related party management fees, unrealized gains or losses on derivatives, gains or losses on the sale of businesses and noncurrent assets, impairment charges, restructuring, asset impairment and other related charges, operational process engineering-related consultancy costs, non-cash pension income or expense and strategic review and transaction-related costs. Segment reportable assets represent trade receivables, inventory and property, plant and equipment. Foodservice Food Merchandising Beverage Merchandising Reportable segment total (in millions) For the Three Months Ended September 30, 2020 Net revenues $ 473 $ 354 $ 338 $ 1,165 Intersegment revenues — — 23 23 Total reportable segment net revenues $ 473 $ 354 $ 361 $ 1,188 Adjusted EBITDA $ 81 $ 72 $ 24 $ 177 For the Three Months Ended September 30, 2019 Net revenues $ 546 $ 351 $ 372 $ 1,269 Intersegment revenues — — 29 29 Total reportable segment net revenues $ 546 $ 351 $ 401 $ 1,298 Adjusted EBITDA $ 89 $ 56 $ 45 $ 190 For the Nine Months Ended Septemb er 30, 2020 Net revenues $ 1,351 $ 1,046 $ 1,030 $ 3,427 Intersegment revenues — — 76 76 Total reportable segment net revenues $ 1,351 $ 1,046 $ 1,106 $ 3,503 Adjusted EBITDA $ 170 $ 186 $ 112 $ 468 For the Nine Months Ended September 30, 2019 Net revenues $ 1,630 $ 1,037 $ 1,094 $ 3,761 Intersegment revenues — — 94 94 Total reportable segment net revenues $ 1,630 $ 1,037 $ 1,188 $ 3,855 Adjusted EBITDA $ 262 $ 161 $ 142 $ 565 Reportable segment assets consisted of the following: Foodservice Food Merchandising Beverage Merchandising Reportable segment total (in millions) As of September 30, 2020 $ 1,060 $ 706 $ 1,023 $ 2,789 As of December 31, 2019 1,090 727 972 2,789 |
Reconciliation of Operating Profit (Loss) | The following table presents a reconciliation of reportable segment Adjusted EBITDA to consolidated U.S. GAAP income from continuing operations before income taxes: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Reportable segment Adjusted EBITDA $ 177 $ 190 $ 468 $ 565 Other 2 4 6 10 Unallocated (6 ) (17 ) (29 ) (57 ) 173 177 445 518 Adjustments to reconcile to U.S. GAAP income (loss) from continuing operations before income taxes Depreciation and amortization (73 ) (68 ) (213 ) (198 ) Interest expense, net (87 ) (84 ) (275 ) (312 ) Foreign exchange (losses) gains on cash (42 ) 17 (14 ) 17 Goodwill impairment charges (6 ) (16 ) (6 ) (16 ) Loss on sale of businesses and noncurrent assets (1 ) (13 ) (1 ) (24 ) Non-cash pension income 18 — 55 2 Operational process engineering-related consultancy costs (3 ) (5 ) (12 ) (18 ) Related party management fee (44 ) (3 ) (49 ) (8 ) Restructuring, asset impairment and other related charges (14 ) (39 ) (18 ) (45 ) Strategic review and transaction-related costs (24 ) (1 ) (39 ) (2 ) Unrealized gains (losses) on derivatives 1 (1 ) 3 6 Other 1 1 1 (4 ) Loss from continuing operations before tax $ (101 ) $ (35 ) $ (123 ) $ (84 ) |
Reconciliation of Assets from Segment to Consolidated | The following table presents a reconciliation of reportable segment assets to consolidated assets: As of September 30, 2020 As of December 31, 2019 (in millions) Reportable segment assets $ 2,789 $ 2,789 Other 39 65 Unallocated (1) 5,389 13,321 Total assets $ 8,217 $ 16,175 (1) Unallocated includes unallocated assets, which are comprised of cash and cash equivalents, other current assets, assets held for sale or distribution, entity-wide property, plant and equipment, operating lease right-of-use assets, goodwill, intangible assets, deferred income taxes, related party receivables and other noncurrent assets. |
Summary of Net Revenues by Product Line | Net revenues by product line are as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Foodservice Cups and lids $ 198 $ 242 $ 560 $ 691 Containers 187 196 549 587 Dinnerware 34 52 108 157 Other 54 56 134 195 Food Merchandising Meat trays 93 91 287 262 Bakery/snack/produce/fruit containers 75 79 218 236 Prepared food trays 33 43 95 126 Egg cartons 24 24 74 73 Dinnerware 88 79 257 230 Other 41 35 115 110 Beverage Merchandising Cartons for fresh beverage products 199 205 597 593 Liquid packaging board 92 109 296 335 Paper products 70 87 213 260 Reportable segment net revenues 1,188 1,298 3,503 3,855 Other / Unallocated Other 30 37 87 127 Inter-segment eliminations (23 ) (29 ) (76 ) (94 ) Net revenues $ 1,195 $ 1,306 $ 3,514 $ 3,888 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Transaction value for the Three Months Ended September 30, Transaction value for the Nine Months Ended September 30, Balance outstanding as of 2020 2019 2020 2019 September 30, 2020 December 31, 2019 (in millions) Balances and transactions with joint ventures Included in other current assets $ 7 $ 8 Sale of goods and services (a) $ 5 $ 3 $ 23 $ 19 Balances and transactions with other entities controlled by Mr. Graeme Hart Current related party receivables 57 — Sale of goods and services (b) 89 72 259 213 Transition services agreement and rental income (b) 3 — 11 — Tax loss transfer (c) — — 13 — Recharges (d) 1 — 2 4 Forgiveness of a balance (e) (15 ) — (15 ) — Noncurrent related party receivables (f) — 339 Interest income 3 4 9 12 Loan forgiveness (347 ) — (347 ) — Related party payables (21 ) (30 ) Purchase of goods (b) (28 ) (36 ) (91 ) (114 ) Recharges (d) (1 ) (6 ) (11 ) (16 ) Management fee (g) (57 ) (8 ) (65 ) (21 ) Tax loss transfer (c) (10 ) — (11 ) (2 ) (a) All transactions with joint ventures are settled in cash. Sales of goods and services are negotiated on a cost-plus basis allowing a margin ranging from 3% to 6% . All amounts are unsecured, non-interest bearing and repayable on demand. (b) Following the distribution of RCP on February 4, 2020, we continue to trade with them, selling and purchasing various goods and services under contractual arrangements that expire over a variety of periods through to 2024. Prior to February 4, 2020, our continuing operations recognized revenue and cost of sales in respect of sales to and purchases from RCP. Refer to Note 3 - Discontinued Operations . As part of the separation process, amongst other agreements, we have entered into two lease arrangements with RCP and entered into a transition services agreement to provide ongoing agreed services to RCP, as requested. We do not trade with GPC on an ongoing basis. We have entered into a transition services agreement to provide ongoing agreed services to GPC, as requested. We have also entered into a tax matters agreement with GPC. We have recognized a receivable of $8 million under the tax matters agreement in relation to GPC’s estimated share of U.S. federal taxes in respect of the period from January 1, 2020 through to September 16, 2020. (c) Represents payments received or made for tax losses transferred between our entities and other entities controlled by Mr. Graeme Hart. (d) Represents certain costs paid on our behalf that were subsequently recharged to us. These charges are for various costs incurred including services provided, financing and other activities. All amounts are unsecured, non-interest bearing and settled on normal trade terms. As part of our IPO, we have entered into a transition services agreement with Rank Group Limited ("Rank") under which Rank will, upon our request, continue to provide certain administrative and support services to us, and we will provide support services to Rank upon request. All services provided will be charged at an agreed hourly rate plus any third party costs. (e) In connection with our IPO, $15 million of current related party receivables owed by Rank was forgiven. We recognized this forgiveness as a reduction in retained earnings. (f) The loan with Rank, which was included in noncurrent related party receivables, accrued interest at a rate based on the average 90-day New Zealand bank bill rate, set quarterly, plus a margin of 3.25% . During the three and nine months ended September 30, 2020 , interest was charged at 3.550% and 3.458% to 4.275% , respectively. During the three and nine months ended September 30, 2019 , interest was charged at 4.567% and 4.567% to 5.149% , respectively. In preparation for our IPO, the loan receivable was forgiven. We recognized this forgiveness as a reduction in retained earnings. (g) Our financing agreements permit the payment of management fees to related parties for management, consulting, monitoring and advising services. The management fees were paid pursuant to a services agreement with Rank. In connection with our IPO, we (i) paid an additional management fee of $22 million , in respect of the 2009 and 2010 financial years and (ii) paid a termination fee of $45 million for the termination of, and release from, the Rank services agreement, which included the $8 million management fee payable for the period January 1, 2020 to the date of termination of September 16, 2020 which was previously accrued. During the three and nine months ended September 30, 2020 , management fees of $44 million and $49 million , respectively, were recognized in other (expense) income, net, with the remainder in discontinued operations. During the three and nine months ended September 30, 2019 , management fees of $3 million and $8 million , respectively, were recognized in other (expense) income, net, with the remainder in discontinued operations. The services agreement with Rank was terminated in connection with our IPO, and we will no longer be charged a management fee. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Summary of the Reconciliation of the Number of Shares Used for Calculation of (Loss) Earnings Per Share | A reconciliation of the number of shares used for our (loss) earnings per share calculation was as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 (in millions, except per share amounts) Net (loss) income attributable to Pactiv Evergreen Inc. common stockholders From continuing operations $ (143 ) $ (35 ) $ (29 ) $ (101 ) From discontinued operations (216 ) 91 (234 ) 270 Total $ (359 ) $ 56 $ (263 ) $ 169 Weighted average number of shares outstanding Basic 138.9 134.4 135.9 134.4 Effect of dilutive securities — — — — Diluted 138.9 134.4 135.9 134.4 (Loss) earnings per share attributable to Pactiv Evergreen Inc. common stockholders From continuing operations Basic $ (1.03 ) $ (0.26 ) $ (0.22 ) $ (0.75 ) Diluted $ (1.03 ) $ (0.26 ) $ (0.22 ) $ (0.75 ) From discontinued operations Basic $ (1.56 ) $ 0.67 $ (1.72 ) $ 2.01 Diluted $ (1.56 ) $ 0.67 $ (1.72 ) $ 2.01 Total Basic $ (2.59 ) $ 0.41 $ (1.94 ) $ 1.26 Diluted $ (2.59 ) $ 0.41 $ (1.94 ) $ 1.26 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) $ / shares in Units, $ in Millions | Oct. 20, 2020USD ($)$ / sharesshares | Sep. 21, 2020USD ($)$ / sharesshares | Sep. 16, 2020segmentshares | Sep. 30, 2020segmentshares | Sep. 17, 2020shares | Dec. 31, 2019shares |
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of reportable segments | segment | 3 | 3 | ||||
Common stock, shares issued (in shares) | 134,408,000 | 175,434,000 | 1,000 | 134,408,000 | ||
Common stock, shares outstanding (in shares) | 134,408,000 | 175,434,000 | 1,000 | 134,408,000 | ||
Stock split conversion ratio | 134,408 | |||||
IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares issued during period (in shares) | 41,026,000 | |||||
Price per share issued (In USD per share) | $ / shares | $ 14 | |||||
Net proceeds received on the transaction | $ | $ 546 | |||||
Underwriters | Subsequent event | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares issued during period (in shares) | 1,723,710 | |||||
Price per share issued (In USD per share) | $ / shares | $ 14 | |||||
Net proceeds received on the transaction | $ | $ 23 | |||||
Discontinued Operations | Graham Packaging Company Inc. | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares repurchased and canceled during the period (in shares) | 14,036,726 | 14,036,726 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Sep. 30, 2020USD ($)entity | Jul. 31, 2020USD ($) | Feb. 29, 2020USD ($) | Jan. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Variable Interest Entity [Line Items] | |||||
Number of VIEs | entity | 1 | ||||
Variable interest entity, primary beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Accounts receivable less doubtful accounts, including disposal group | $ 789,000,000 | ||||
Accounts receivable, net | 469,000,000 | ||||
Securitization Facility | Line of credit | |||||
Variable Interest Entity [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 | 600,000,000 | |
Long-term debt, gross | $ 0 | $ 380,000,000 | $ 397,000,000 | $ 420,000,000 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Millions | Sep. 16, 2020 | Feb. 04, 2020 | Dec. 20, 2019 | Aug. 31, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Discontinued operations, disposed of by sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Depreciation and amortization expense | $ 52 | $ 97 | $ 178 | $ 286 | |||||
Asset impairment | 31 | ||||||||
Goodwill impairment charges | 0 | 9 | 0 | 9 | |||||
Discontinued operations, disposed of by sale | North American and Japanese closures businesses | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Proceeds from sale of business | $ 611 | $ 8 | |||||||
Discontinued operations, disposed of by sale | Graham Packaging Company Inc. | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Asset impairment | 1 | 9 | 2 | 25 | |||||
Restructuring and other related charges | $ 3 | $ 5 | $ 11 | $ 7 | |||||
Discontinued Operations | Reynolds Consumer Products Inc. | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Shares repurchased and canceled during the period (in shares) | 35,791,985 | 35,791,985 | |||||||
Discontinued Operations | Graham Packaging Company Inc. | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Shares repurchased and canceled during the period (in shares) | 14,036,726 | 14,036,726 | |||||||
Line of credit | Credit Agreement | Secured debt | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Borrowings incurred | $ 2,475 | ||||||||
Line of credit | Credit Agreement | Secured debt | Graham Packaging Company Inc. | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Borrowings incurred | $ 1,985 | ||||||||
Line of credit | IPO Settlement Facility | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Borrowings incurred | $ 1,168 |
Discontinued Operations - Dispo
Discontinued Operations - Disposal Group Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Sep. 16, 2020 | Feb. 04, 2020 | Dec. 31, 2019 |
Assets | ||||
Noncurrent assets | $ 41 | $ 7,143 | ||
Liabilities | ||||
Current liabilities | 8 | 485 | ||
Noncurrent liabilities | $ 0 | $ 992 | ||
Reynolds Consumer Products Inc. | Discontinued operations, disposed of by sale | ||||
Assets | ||||
Cash, cash equivalents and restricted cash | $ 31 | |||
Current assets | 699 | |||
Noncurrent assets | 3,630 | |||
Total current assets held for sale or distribution | 4,360 | |||
Liabilities | ||||
Current liabilities | 1,467 | |||
Noncurrent liabilities | 2,847 | |||
Total current liabilities held for sale or distribution | 4,314 | |||
Net assets distributed | $ 46 | |||
Graham Packaging Company Inc. | Discontinued operations, disposed of by sale | ||||
Assets | ||||
Cash, cash equivalents and restricted cash | $ 79 | |||
Current assets | 448 | |||
Noncurrent assets | 3,461 | |||
Total current assets held for sale or distribution | 3,988 | |||
Liabilities | ||||
Current liabilities | 292 | |||
Noncurrent liabilities | 2,518 | |||
Total current liabilities held for sale or distribution | 2,810 | |||
Net assets distributed | $ 1,178 |
Discontinued Operations - Incom
Discontinued Operations - Income from Discontinued Operations (Details) - USD ($) $ in Millions | Feb. 04, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net (loss) income from discontinued operations | $ (216) | $ 91 | $ (234) | $ 270 | |
Discontinued operations, disposed of by sale | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net revenues | 396 | 1,249 | 1,510 | 3,788 | |
Cost of sales | (331) | (937) | (1,234) | (2,868) | |
Gross profit | 65 | 312 | 276 | 920 | |
Selling, general and administrative expenses | (52) | (159) | (179) | (422) | |
Goodwill impairment charges | 0 | (9) | 0 | (9) | |
Restructuring, asset impairment and other related charges | (4) | (46) | (13) | (66) | |
Interest expense, net | (32) | (47) | (54) | (142) | |
Other expense, net | 0 | (6) | (3) | (8) | |
(Loss) income before income taxes from discontinued operations | (23) | 45 | 27 | 273 | |
Income tax (expense) benefit | (193) | 46 | (275) | (3) | |
Net (loss) income from discontinued operations, before gain on disposal | (216) | 91 | (248) | 270 | |
Gain on disposal, net of income taxes | 0 | 0 | 14 | 0 | |
Net (loss) income from discontinued operations | $ (216) | $ 91 | $ (234) | $ 270 | |
5.750% Senior Secured Notes due 2020 | Senior notes | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on extinguishment of debt | $ 5 |
Discontinued Operations - Asset
Discontinued Operations - Assets and Liabilities Held-for-Sale (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash and cash equivalents | $ 9 | $ 85 | |
Total current assets held for sale or distribution | 23 | $ 1,232 | |
Total noncurrent assets held for sale or distribution | 41 | 7,143 | |
Total current liabilities held for sale or distribution | 8 | 485 | |
Total noncurrent liabilities held for sale or distribution | $ 0 | 992 | |
Discontinued Operations, Held-for-sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash and cash equivalents | 137 | ||
Accounts receivable, net | 489 | ||
Inventories | 559 | ||
Other current assets | 47 | ||
Total current assets held for sale or distribution | 1,232 | ||
Property, plant and equipment, net | 1,309 | ||
Operating lease right-of-use assets, net | 150 | ||
Goodwill | 3,173 | ||
Intangible assets, net | 2,470 | ||
Other noncurrent assets | 41 | ||
Total noncurrent assets held for sale or distribution | 7,143 | ||
Accounts payable | 243 | ||
Accrued and other current liabilities | 242 | ||
Total current liabilities held for sale or distribution | 485 | ||
Long-term operating lease liabilities | 126 | ||
Deferred income taxes | 731 | ||
Long-term employee benefit obligations | 57 | ||
Other noncurrent liabilities | 78 | ||
Total noncurrent liabilities held for sale or distribution | $ 992 |
Discontinued Operations - Cash
Discontinued Operations - Cash Flows (Details) - Discontinued operations, disposed of by sale - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net cash provided by operating activities | $ 175 | $ 523 |
Net cash used in investing activities | (122) | (214) |
Net cash provided by financing activities | 2,441 | 0 |
Net cash from discontinued operations | $ 2,494 | $ 309 |
Assets and Liabilities Held f_3
Assets and Liabilities Held for Sale - Narrative (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Building, Sale-Lease Back | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Noncurrent assets held for sale or distribution | $ 41 |
South American closures business | Disposal Group, Held-for-sale, Not Discontinued Operations | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Pre-tax charges related to assets and liabilities held-for-sale | $ 11 |
Assets and Liabilities Held f_4
Assets and Liabilities Held for Sale - Summary of Assets and Liabilities Held-for-Sale (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Sep. 30, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash and cash equivalents | $ 9 | $ 85 |
South American closures business | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash and cash equivalents | 9 | |
Accounts receivable, net | 11 | |
Inventories | 3 | |
Other current assets | 1 | |
Property, plant and equipment, net | 8 | |
Intangible assets, net | 2 | |
Held for sale valuation allowance | (11) | |
Total current assets held for sale or distribution | 23 | |
Accounts payable | 3 | |
Accrued and other current liabilities | 3 | |
Other noncurrent liabilities | 2 | |
Total current liabilities held for sale or distribution | $ 8 |
Impairment, Restructuring and_3
Impairment, Restructuring and Other Related Charges - Costs by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill impairment charges | $ 6 | $ 16 | $ 6 | $ 16 |
Other asset impairment charges | 13 | 38 | 14 | 42 |
Employee terminations | 1 | 1 | 3 | 3 |
Other restructuring charges | 1 | |||
Total | 20 | 55 | 24 | 61 |
Foodservice | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill impairment charges | 0 | 0 | 0 | 0 |
Other asset impairment charges | 0 | 1 | 1 | 1 |
Employee terminations | 1 | 0 | 1 | 0 |
Other restructuring charges | 1 | |||
Total | 1 | 1 | 3 | 1 |
Food Merchandising | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill impairment charges | 0 | 0 | 0 | |
Other asset impairment charges | 1 | 1 | 4 | |
Employee terminations | 0 | 0 | 0 | |
Other restructuring charges | 0 | |||
Total | 1 | 1 | 4 | |
Beverage Merchandising | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill impairment charges | 0 | |||
Other asset impairment charges | 0 | |||
Employee terminations | 1 | |||
Other restructuring charges | 0 | |||
Total | 1 | |||
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill impairment charges | 6 | 16 | 6 | 16 |
Other asset impairment charges | 12 | 37 | 12 | 37 |
Employee terminations | 0 | 1 | 1 | 3 |
Other restructuring charges | 0 | |||
Total | $ 18 | $ 54 | $ 19 | $ 56 |
Impairment, Restructuring and_4
Impairment, Restructuring and Other Related Charges - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Non-cash impairment charges | $ 19 | |||
Goodwill impairment charges | 6 | $ 16 | $ 6 | $ 16 |
Other asset impairment charges | 13 | 38 | 14 | 42 |
Employee terminations | 1 | 1 | 3 | 3 |
Carrying values of the impaired assets (less than) | 17 | 17 | ||
Goodwill | 6 | 6 | ||
Operating lease right-of-use assets, net | 3 | 3 | ||
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill impairment charges | 6 | 16 | 6 | 16 |
Other asset impairment charges | 12 | 37 | 12 | 37 |
Employee terminations | 0 | 1 | $ 1 | 3 |
Non-cash impairment charges | 54 | |||
Impairment related to property, plant and equipment | 29 | |||
Operating lease, impairment | 5 | |||
Foodservice and Food Merchandising | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee terminations | 2 | |||
Impairment related to property, plant and equipment | 4 | |||
Carrying values of the impaired assets (less than) | 1 | 1 | ||
Customer relationships | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Finite lived intangible assets, net | 4 | $ 4 | ||
Customer relationships | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment of finite-lived, intangible assets | $ 3 | |||
South American closures business | Disposal Group, Held-for-sale, Not Discontinued Operations | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill impairment charges | 6 | |||
Other asset impairment charges | $ 11 |
Impairment, Restructuring and_5
Impairment, Restructuring and Other Related Charges - Restructuring Reserve (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Restructuring Reserve [Roll Forward] | |
December 31, 2019 | $ 1 |
Charges to earnings | 3 |
Cash paid | (3) |
September 30, 2020 | 1 |
Employee terminations | |
Restructuring Reserve [Roll Forward] | |
December 31, 2019 | 1 |
Charges to earnings | 3 |
Cash paid | (3) |
September 30, 2020 | $ 1 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 167 | $ 168 |
Work in progress | 101 | 106 |
Finished goods | 389 | 397 |
Spare parts | 87 | 82 |
Inventories | $ 744 | $ 753 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net - Components of Property, Plant, and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 3,875 | $ 3,820 |
Less: accumulated depreciation | (2,209) | (2,117) |
Property, plant and equipment, net | 1,666 | 1,703 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 85 | 92 |
Buildings and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 518 | 551 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 3,043 | 2,973 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 229 | $ 204 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net - Depreciation Expense Related to Property, Plant and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Cost of sales | $ 54 | $ 51 | $ 157 | $ 148 |
Selling, general and administrative expenses | 4 | 3 | 14 | 8 |
Total depreciation expense | $ 58 | $ 54 | $ 171 | $ 156 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill by Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill [Roll Forward] | ||||
Balance as of December 31, 2019 | $ 1,766 | |||
Impairment charges | $ (6) | $ (16) | (6) | $ (16) |
Balance as of September 30, 2020 | 1,760 | 1,760 | ||
Accumulated impairment losses | 22 | 22 | ||
Foodservice | ||||
Goodwill [Roll Forward] | ||||
Balance as of December 31, 2019 | 924 | |||
Impairment charges | 0 | 0 | 0 | 0 |
Balance as of September 30, 2020 | 924 | 924 | ||
Accumulated impairment losses | 0 | 0 | ||
Food Merchandising | ||||
Goodwill [Roll Forward] | ||||
Balance as of December 31, 2019 | 770 | |||
Impairment charges | 0 | 0 | 0 | |
Balance as of September 30, 2020 | 770 | 770 | ||
Accumulated impairment losses | 0 | 0 | ||
Beverage Merchandising | ||||
Goodwill [Roll Forward] | ||||
Balance as of December 31, 2019 | 66 | |||
Impairment charges | 0 | |||
Balance as of September 30, 2020 | 66 | 66 | ||
Accumulated impairment losses | 0 | 0 | ||
Other | ||||
Goodwill [Roll Forward] | ||||
Balance as of December 31, 2019 | 6 | |||
Impairment charges | (6) | $ (16) | (6) | $ (16) |
Balance as of September 30, 2020 | 0 | 0 | ||
Accumulated impairment losses | $ 22 | $ 22 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets, Net (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 1,035 | $ 1,047 |
Accumulated amortization | (543) | (512) |
Net | 492 | 535 |
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 612 | 612 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross carrying amount | 1,647 | 1,659 |
Accumulated amortization | (543) | (512) |
Net | 1,104 | 1,147 |
Trademarks | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 554 | 554 |
Other | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 58 | 58 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,015 | 1,026 |
Accumulated amortization | (525) | (494) |
Net | 490 | 532 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | (525) | (494) |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 20 | 21 |
Accumulated amortization | (18) | (18) |
Net | 2 | 3 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (18) | $ (18) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 15 | $ 14 | $ 42 | $ 42 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued personnel costs | $ 115 | $ 108 |
Accrued interest | 41 | 115 |
Accrued rebates and credits | 66 | 67 |
Other | 120 | 128 |
Accrued and other current liabilities | $ 342 | $ 418 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Feb. 29, 2020 | Jan. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||
Other | $ 13 | $ 15 | ||
Total principal amount of borrowings | 5,225 | 10,685 | ||
Deferred financing transaction costs | (23) | (46) | ||
Original issue discounts, net of premiums | (4) | (9) | ||
Debt, net | 5,198 | 10,630 | ||
Less: current portion | (2) | (3,587) | ||
Long-term debt | 5,196 | 7,043 | ||
Securitization Facility | Line of credit | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 0 | $ 380 | $ 397 | 420 |
5.750% Senior Secured Notes due 2020 | Senior notes | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 0 | $ 3,137 | ||
Interest rate | 5.75% | |||
Floating Rate Senior Secured Notes due 2021 | Senior notes | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 0 | $ 750 | ||
5.125% Senior Secured Notes due 2023 | Senior notes | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 1,599 | 1,600 | ||
Interest rate | 5.125% | |||
7.000% Senior Notes due 2024 | Senior notes | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 650 | 800 | ||
Interest rate | 7.00% | |||
7.950% Debentures due 2025 | Unsecured debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 276 | 276 | ||
Interest rate | 7.95% | |||
8.375% Debentures due 2027 | Unsecured debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 200 | 200 | ||
Interest rate | 8.375% | |||
Secured debt | Credit Agreement | Line of credit | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 2,487 | $ 3,487 |
Debt - Securitization Facility
Debt - Securitization Facility (Details) - USD ($) | Jul. 31, 2020 | Feb. 29, 2020 | Jul. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Jan. 31, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | |||||||
Repayment of outstanding debt | $ 5,473,000,000 | $ 27,000,000 | |||||
Securitization Facility | Line of credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 450,000,000 | $ 450,000,000 | 450,000,000 | $ 450,000,000 | $ 600,000,000 | ||
Long-term debt, gross | $ 380,000,000 | $ 0 | $ 397,000,000 | $ 420,000,000 | |||
Repayment of outstanding debt | $ 380,000,000 | $ 17,000,000 | |||||
London Interbank Offered Rate (LIBOR) | Securitization Facility | Line of credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Variable rate floor | 0.00% | ||||||
Basis spread on variable rate | 1.75% |
Debt - Summary of Credit Agreem
Debt - Summary of Credit Agreement (Details) - Line of credit - Credit Agreement - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
U.S. term loans | ||
Line of Credit Facility [Line Items] | ||
Value drawn | $ 2,487,000,000 | $ 3,487,000,000 |
U.S. Revolving Loans | ||
Line of Credit Facility [Line Items] | ||
Value utilized | 47,000,000 | |
Line of credit facility, maximum borrowing capacity | $ 302,000,000 | |
London Interbank Offered Rate (LIBOR) | U.S. term loans | ||
Line of Credit Facility [Line Items] | ||
Variable rate floor | 0.00% | |
Basis spread on variable rate | 2.75% |
Debt - Credit Agreement Additio
Debt - Credit Agreement Additional Information (Details) € in Millions, $ in Millions | Aug. 04, 2020USD ($) | Aug. 04, 2020EUR (€) | Jan. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Line of Credit Facility [Line Items] | |||||
Long-term debt repayments | $ 5,473 | $ 27 | |||
European Term Loans | Line of credit | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt repayments | $ 279 | € 236 | |||
Loss on extinguishment of debt | 1 | ||||
Credit Agreement | Line of credit | Secured debt | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt repayments | $ 700 | $ 18 | |||
Weighted average contractual interest rates | 3.71% | 5.16% | |||
Periodic prepayment % of excess cash flow | 50.00% | ||||
5.125% Senior Secured Notes due 2023 | Senior notes | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt repayments | $ 1 | ||||
Interest rate | 5.125% | ||||
Maximum | Credit Agreement | Line of credit | Secured debt | |||||
Line of Credit Facility [Line Items] | |||||
Periodic prepayment percentage if leverage ratio threshold met | 25.00% | ||||
Minimum | Credit Agreement | Line of credit | Secured debt | |||||
Line of Credit Facility [Line Items] | |||||
Periodic prepayment percentage if leverage ratio threshold met | 0.00% |
Debt - Notes (Details)
Debt - Notes (Details) - USD ($) | Aug. 29, 2020 | Aug. 07, 2020 | Aug. 04, 2020 | Feb. 04, 2020 | Jan. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||||||
Long-term debt repayments | $ 5,473,000,000 | $ 27,000,000 | ||||||
Payment to settle derivative liability | $ 7,000,000 | |||||||
Senior notes | 5.125% Senior Secured Notes due 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 5.125% | |||||||
Face amount of debt | $ 250,000,000 | |||||||
Issue price as % of face value of debt | 103.50% | |||||||
Long-term debt repayments | $ 1,000,000 | |||||||
Senior notes | 7.000% Senior Notes due 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 7.00% | |||||||
Long-term debt repayments | $ 150,000,000 | |||||||
Loss on extinguishment of debt | $ 4,000,000 | |||||||
Redemption price percentage | 101.75% | |||||||
Senior notes | 5.750% Senior Secured Notes due 2020 | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 5.75% | |||||||
Long-term debt repayments | $ 3,100,000,000 | 18,000,000 | ||||||
Loss on extinguishment of debt | $ 5,000,000 | |||||||
Senior notes | Floating Rate Senior Secured Notes due 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt repayments | $ 749,000,000 | $ 1,000,000 | ||||||
Loss on extinguishment of debt | $ 4,000,000 |
Debt - Subsequent Events Relate
Debt - Subsequent Events Related To Debt, Assets Pledged as Security for Borrowings, and Guarantee and Security Arrangements (Details) - USD ($) | Nov. 23, 2020 | Oct. 01, 2020 | Aug. 29, 2020 | Aug. 04, 2020 | Oct. 31, 2020 | Jan. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||||||
Long-term debt repayments | $ 5,473,000,000 | $ 27,000,000 | |||||||
Senior notes | 5.125% Senior Secured Notes due 2023 | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount of debt | $ 250,000,000 | ||||||||
Interest rate | 5.125% | ||||||||
Long-term debt, gross | $ 1,599,000,000 | $ 1,600,000,000 | |||||||
Long-term debt repayments | $ 1,000,000 | ||||||||
Senior notes | 7.000% Senior Notes due 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 7.00% | ||||||||
Long-term debt, gross | $ 650,000,000 | 800,000,000 | |||||||
Loss on extinguishment of debt | $ 4,000,000 | ||||||||
Long-term debt repayments | $ 150,000,000 | ||||||||
Redemption price percentage | 101.75% | ||||||||
Secured debt | Line of credit | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | 2,487,000,000 | $ 3,487,000,000 | |||||||
Long-term debt repayments | $ 700,000,000 | $ 18,000,000 | |||||||
Revolving Credit Facility | Line of credit | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 302,000,000 | ||||||||
Subsequent event | |||||||||
Debt Instrument [Line Items] | |||||||||
Loss on extinguishment of debt | $ 51,000,000 | ||||||||
Long-term debt repayments | 3,400,000,000 | ||||||||
Subsequent event | Senior notes | 4.000% Notes due 2027 | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount of debt | $ 1,000,000,000 | ||||||||
Interest rate | 4.00% | ||||||||
Subsequent event | Senior notes | 5.125% Senior Secured Notes due 2023 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt repayments | 1,470,000,000 | ||||||||
Subsequent event | Senior notes | 7.000% Senior Notes due 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt repayments | 650,000,000 | ||||||||
Subsequent event | Secured debt | Senior Secured Term Loans Maturing February 5, 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | $ 1,250,000,000 | ||||||||
Subsequent event | Secured debt | Line of credit | Senior Secured Revolving Credit Facility Maturing August 5, 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 250,000,000 | ||||||||
Subsequent event | Secured debt | Line of credit | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt repayments | $ 1,280,000,000 | ||||||||
London Interbank Offered Rate (LIBOR) | Secured debt | Line of credit | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate floor | 0.00% | ||||||||
Basis spread on variable rate | 2.75% | ||||||||
London Interbank Offered Rate (LIBOR) | Subsequent event | Secured debt | Senior Secured Term Loans Maturing February 5, 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate floor | 0.00% | ||||||||
Basis spread on variable rate | 3.25% | ||||||||
Forecast | Subsequent event | Senior notes | 5.125% Senior Secured Notes due 2023 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 5.125% | ||||||||
Long-term debt repayments | $ 70,000,000 | ||||||||
Redemption price percentage | 101.281% |
Debt - Debentures (Details)
Debt - Debentures (Details) - Unsecured debt | Sep. 30, 2020 |
7.950% Debentures due 2025 | |
Debt Instrument [Line Items] | |
Interest rate | 7.95% |
8.375% Debentures due 2027 | |
Debt Instrument [Line Items] | |
Interest rate | 8.375% |
Debt - Other Debt (Details)
Debt - Other Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Finance lease obligations | $ 13 | $ 15 |
Debt - Scheduled Maturities (De
Debt - Scheduled Maturities (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2020 | $ 1 | |
2021 | 2 | |
2022 | 3 | |
2023 | 4,087 | |
2024 | 651 | |
Thereafter | 481 | |
Total principal amount of borrowings | $ 5,225 | $ 10,685 |
Debt - Fair Value of Long-Term
Debt - Fair Value of Long-Term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other | $ 13 | $ 15 |
5.750% Senior Secured Notes due 2020 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate | 5.75% | |
5.125% Senior Secured Notes due 2023 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate | 5.125% | |
7.000% Senior Notes due 2024 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate | 7.00% | |
7.950% Debentures due 2025 | Unsecured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate | 7.95% | |
8.375% Debentures due 2027 | Unsecured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate | 8.375% | |
Carrying value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other | $ 13 | $ 15 |
Total | 5,198 | 10,630 |
Carrying value | 5.750% Senior Secured Notes due 2020 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | 3,130 |
Carrying value | Floating Rate Senior Secured Notes due 2021 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | 739 |
Carrying value | 5.125% Senior Secured Notes due 2023 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 1,592 | 1,591 |
Carrying value | 7.000% Senior Notes due 2024 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 644 | 791 |
Carrying value | 7.950% Debentures due 2025 | Unsecured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 272 | 272 |
Carrying value | 8.375% Debentures due 2027 | Unsecured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 198 | 198 |
Carrying value | Secured debt | Securitization Facility | Line of credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | 418 |
Carrying value | Secured debt | Credit Agreement | Line of credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 2,479 | 3,476 |
Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other | 13 | 15 |
Total | 5,296 | 10,819 |
Fair value | 5.750% Senior Secured Notes due 2020 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | 3,144 |
Fair value | Floating Rate Senior Secured Notes due 2021 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | 753 |
Fair value | 5.125% Senior Secured Notes due 2023 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 1,620 | 1,641 |
Fair value | 7.000% Senior Notes due 2024 | Senior notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 662 | 828 |
Fair value | 7.950% Debentures due 2025 | Unsecured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 301 | 311 |
Fair value | 8.375% Debentures due 2027 | Unsecured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 213 | 220 |
Fair value | Secured debt | Securitization Facility | Line of credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | 420 |
Fair value | Secured debt | Credit Agreement | Line of credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 2,487 | $ 3,487 |
Debt - Interest Expense, Net (D
Debt - Interest Expense, Net (Details) - USD ($) $ in Millions | Feb. 04, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||||
Interest income, related party | $ (3) | $ (4) | $ (9) | $ (12) | ||
Interest income, other | 0 | (5) | (6) | (11) | ||
Amortization of deferred transaction costs | 3 | 3 | 12 | 9 | ||
Derivative losses | 1 | 3 | 15 | 20 | ||
Net foreign currency exchange losses (gains) | 6 | (23) | 0 | (24) | ||
Other | 12 | 3 | 17 | 6 | ||
Interest expense, net | 87 | 84 | 275 | 312 | ||
Senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense, debt | 36 | 48 | 123 | 147 | ||
Senior notes | 5.750% Senior Secured Notes due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 5.75% | |||||
Loss on extinguishment of debt | $ 5 | |||||
Unsecured debt | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense, debt | 11 | 11 | 30 | 30 | ||
Secured debt | Line of credit | Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense, debt | 21 | 44 | 87 | 134 | ||
Secured debt | Line of credit | Securitization Facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense, debt | $ 0 | $ 4 | 6 | $ 13 | ||
Prior period adjustment | Scenario, adjustment | ||||||
Debt Instrument [Line Items] | ||||||
Amortization of deferred transaction costs | $ 5 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value of Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Asset derivatives | $ 2 | $ 8 |
Liability derivatives | (2) | (5) |
Other current assets | ||
Derivative [Line Items] | ||
Asset derivatives | 2 | 6 |
Liability derivatives | 0 | 0 |
Other noncurrent assets | ||
Derivative [Line Items] | ||
Asset derivatives | 0 | 2 |
Liability derivatives | 0 | 0 |
Accrued and other current liabilities | ||
Derivative [Line Items] | ||
Asset derivatives | 0 | 0 |
Liability derivatives | (2) | (5) |
Interest rate swap derivatives | ||
Derivative [Line Items] | ||
Asset derivatives | 0 | 7 |
Liability derivatives | 0 | 0 |
Commodity swap contracts | ||
Derivative [Line Items] | ||
Asset derivatives | 2 | 1 |
Liability derivatives | $ (2) | $ (5) |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Unrealized gains (losses) on derivatives | $ 1 | $ (1) | $ 3 | $ 6 |
Financial Instruments - Commodi
Financial Instruments - Commodity Derivative Contracts (Details) | 9 Months Ended |
Sep. 30, 2020MMBTUlb$ / gal$ / MMBTU$ / BTU$ / lbgal | |
Natural gas swaps | |
Derivative [Line Items] | |
Derivative, Nonmonetary Notional Amount, Energy Measure | MMBTU | 1,963,628 |
Natural gas swaps | Minimum | |
Derivative [Line Items] | |
Contracted price range | $ / BTU | 2.40 |
Natural gas swaps | Maximum | |
Derivative [Line Items] | |
Contracted price range | $ / MMBTU | 2.94 |
Polymer-grade propylene swaps | |
Derivative [Line Items] | |
Contracted volume | lb | 39,250,071 |
Polymer-grade propylene swaps | Minimum | |
Derivative [Line Items] | |
Contracted price range | 0.29 |
Polymer-grade propylene swaps | Maximum | |
Derivative [Line Items] | |
Contracted price range | 0.39 |
Benzene swaps | |
Derivative [Line Items] | |
Contracted volume | gal | 5,251,376 |
Benzene swaps | Minimum | |
Derivative [Line Items] | |
Contracted price range | $ / gal | 1.08 |
Benzene swaps | Maximum | |
Derivative [Line Items] | |
Contracted price range | $ / gal | 2.42 |
Diesel swaps | |
Derivative [Line Items] | |
Contracted volume | gal | 936,628 |
Diesel swaps | Minimum | |
Derivative [Line Items] | |
Contracted price range | $ / gal | 2.41 |
Diesel swaps | Maximum | |
Derivative [Line Items] | |
Contracted price range | $ / gal | 3.26 |
Low-density polyethylene swaps | |
Derivative [Line Items] | |
Contracted volume | lb | 15,000,000 |
Low-density polyethylene swaps | Minimum | |
Derivative [Line Items] | |
Contracted price range | 0.52 |
Low-density polyethylene swaps | Maximum | |
Derivative [Line Items] | |
Contracted price range | 0.71 |
Ethylene swaps | |
Derivative [Line Items] | |
Contracted volume | lb | 2,105,278 |
Contracted price range | 0.26 |
Employee Benefits - Net Periodi
Employee Benefits - Net Periodic Benefit Income (Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ (2) | $ (2) | $ (5) | $ (6) |
Interest cost | (35) | (45) | (105) | (136) |
Expected return on plan assets | 52 | 45 | 155 | 134 |
Amortization of prior service cost | (1) | 0 | (1) | 0 |
Amortization of actuarial gains (losses) | 1 | 0 | 1 | 0 |
Total net periodic benefit income (cost) | 15 | (2) | 45 | (8) |
Cost of sales | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total net periodic benefit income (cost) | (1) | (1) | (4) | (3) |
Selling, general and administrative expenses | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total net periodic benefit income (cost) | (1) | (1) | (1) | (3) |
Nonoperating Income (Expense) | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Total net periodic benefit income (cost) | $ 17 | $ 0 | $ 50 | $ (2) |
Employee Benefits - Narrative (
Employee Benefits - Narrative (Details) - Subsequent event | Oct. 02, 2020USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions made | $ 121,000,000 |
Further contributions expected to be made in current fiscal year | $ 0 |
Other (Expense) Income, Net (De
Other (Expense) Income, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | ||||
Related party management fee | $ (44) | $ (3) | $ (49) | $ (8) |
Loss on sale of businesses and noncurrent assets | (1) | (13) | (1) | (24) |
Foreign exchange (losses) gains on cash | (42) | 17 | (14) | 17 |
Transition service agreement income | 5 | 0 | 15 | 1 |
Other | 3 | 1 | 1 | 7 |
Other (expense) income, net | $ (79) | $ 2 | $ (48) | $ (7) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Dec. 31, 2019USD ($) |
Management fee, related parties | |
Loss Contingencies [Line Items] | |
Contingency for a potential payment | $ 22 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | $ 2,037 | $ 1,910 | $ 2,082 | $ 1,785 | |
Ending balance | 750 | 1,901 | 750 | 1,901 | $ 1,785 |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201802Member | ||||
Currency translation adjustments | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | (447) | (425) | (354) | (442) | |
Currency translation adjustments | 65 | (77) | (30) | (67) | |
Amounts reclassified from AOCL | 1 | 13 | 1 | 20 | |
Other comprehensive income (loss) | 66 | (64) | (29) | (47) | |
Distribution of RCP and GPC | 171 | 0 | 173 | 0 | |
Ending balance | (210) | (489) | (210) | (489) | $ (442) |
AOCL | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | (624) | (714) | (518) | (689) | |
Other comprehensive income (loss) | 66 | (65) | (29) | (49) | |
Distribution of RCP and GPC | 172 | 0 | 161 | 0 | |
Ending balance | (386) | (779) | (386) | (779) | (689) |
Cumulative impact of adopting ASU 2018-02 | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | 0 | ||||
Ending balance | 0 | ||||
Cumulative impact of adopting ASU 2018-02 | AOCL | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | 0 | 0 | 0 | (41) | |
Ending balance | (41) | ||||
Continuing operations | Defined benefit plans | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | (176) | (302) | (176) | (258) | |
Ending balance | (176) | (302) | (176) | (302) | (258) |
Continuing operations | Cumulative impact of adopting ASU 2018-02 | Defined benefit plans | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | 0 | 0 | 0 | (44) | |
Ending balance | (44) | ||||
Discontinued Operations | Defined benefit plans | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | (1) | 13 | 12 | 11 | |
Amounts reclassified from AOCL | 0 | (1) | 0 | (2) | |
Other comprehensive income (loss) | 0 | (1) | 0 | (2) | |
Distribution of RCP and GPC | 1 | 0 | (12) | 0 | |
Ending balance | 0 | 12 | 0 | 12 | 11 |
Discontinued Operations | Cumulative impact of adopting ASU 2018-02 | Defined benefit plans | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | $ 0 | $ 0 | $ 0 | $ 3 | |
Ending balance | $ 3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 42 | $ 0 | $ (95) | $ 16 |
Loss from continuing operations before tax | 101 | $ 35 | 123 | $ 84 |
Discrete adjustment to increase valuation allowance for deferred interest deductions | $ 105 | 105 | ||
Return to provision benefit from 2019 federal return | $ 132 |
Segment Information - Narrative
Segment Information - Narrative (Details) - segment | Sep. 16, 2020 | Sep. 30, 2020 |
Segment Reporting [Abstract] | ||
Number of reportable segments | 3 | 3 |
Segment Information - Segment F
Segment Information - Segment Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | $ 1,195 | $ 1,306 | $ 3,514 | $ 3,888 | |
Adjusted EBITDA | 173 | 177 | 445 | 518 | |
Assets | 8,217 | 8,217 | $ 16,175 | ||
Reportable Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 1,165 | 1,269 | 3,427 | 3,761 | |
Foodservice | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 473 | 546 | 1,351 | 1,630 | |
Food Merchandising | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 354 | 351 | 1,046 | 1,037 | |
Beverage Merchandising | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 338 | 372 | 1,030 | 1,094 | |
Inter-segment eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | (23) | (29) | (76) | (94) | |
Inter-segment eliminations | Reportable Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 23 | 29 | 76 | 94 | |
Inter-segment eliminations | Foodservice | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 0 | 0 | 0 | 0 | |
Inter-segment eliminations | Food Merchandising | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 0 | 0 | 0 | 0 | |
Inter-segment eliminations | Beverage Merchandising | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 23 | 29 | 76 | 94 | |
Operating segments | Reportable Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 1,188 | 1,298 | 3,503 | 3,855 | |
Adjusted EBITDA | 177 | 190 | 468 | 565 | |
Assets | 2,789 | 2,789 | 2,789 | ||
Operating segments | Foodservice | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 473 | 546 | 1,351 | 1,630 | |
Adjusted EBITDA | 81 | 89 | 170 | 262 | |
Assets | 1,060 | 1,060 | 1,090 | ||
Operating segments | Food Merchandising | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 354 | 351 | 1,046 | 1,037 | |
Adjusted EBITDA | 72 | 56 | 186 | 161 | |
Assets | 706 | 706 | 727 | ||
Operating segments | Beverage Merchandising | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 361 | 401 | 1,106 | 1,188 | |
Adjusted EBITDA | 24 | 45 | 112 | 142 | |
Assets | 1,023 | 1,023 | 972 | ||
Operating segments | Other | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues (includes related party net revenues of $89, $72, $259 and $213) | 30 | 37 | 87 | 127 | |
Adjusted EBITDA | 2 | 4 | 6 | 10 | |
Assets | 39 | 39 | 65 | ||
Unallocated | |||||
Segment Reporting Information [Line Items] | |||||
Adjusted EBITDA | (6) | $ (17) | (29) | $ (57) | |
Assets | $ 5,389 | $ 5,389 | $ 13,321 |
Segment Information - Reconcili
Segment Information - Reconciliation of EBITDA to Income (Loss) from Continuing Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | $ 173 | $ 177 | $ 445 | $ 518 |
Depreciation and amortization | (73) | (68) | (213) | (198) |
Interest expense, net | (87) | (84) | (275) | (312) |
Foreign exchange (losses) gains on cash | (42) | 17 | (14) | 17 |
Goodwill impairment charges | (6) | (16) | (6) | (16) |
Loss on sale of businesses and noncurrent assets | (1) | (13) | (1) | (24) |
Non-cash pension income | 18 | 0 | 55 | 2 |
Operational process engineering-related consultancy costs | (3) | (5) | (12) | (18) |
Related party management fee | (44) | (3) | (49) | (8) |
Restructuring, asset impairment and other related charges | (14) | (39) | (18) | (45) |
Strategic review and transaction-related costs | (24) | (1) | (39) | (2) |
Unrealized gains (losses) on derivatives | 1 | (1) | 3 | 6 |
Other | 1 | 1 | 1 | (4) |
Loss from continuing operations before tax | (101) | (35) | (123) | (84) |
Unallocated | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | (6) | (17) | (29) | (57) |
Reportable Segments | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | 177 | 190 | 468 | 565 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill impairment charges | (6) | (16) | (6) | (16) |
Other | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | $ 2 | $ 4 | $ 6 | $ 10 |
Segment Information - Net Reven
Segment Information - Net Revenues by Product Lines (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 1,195 | $ 1,306 | $ 3,514 | $ 3,888 |
Reportable Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,165 | 1,269 | 3,427 | 3,761 |
Foodservice | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 473 | 546 | 1,351 | 1,630 |
Food Merchandising | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 354 | 351 | 1,046 | 1,037 |
Beverage Merchandising | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 338 | 372 | 1,030 | 1,094 |
Operating segments | Reportable Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,188 | 1,298 | 3,503 | 3,855 |
Operating segments | Foodservice | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 473 | 546 | 1,351 | 1,630 |
Operating segments | Foodservice | Cups and lids | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 198 | 242 | 560 | 691 |
Operating segments | Foodservice | Containers | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 187 | 196 | 549 | 587 |
Operating segments | Foodservice | Dinnerware | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 34 | 52 | 108 | 157 |
Operating segments | Foodservice | Other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 54 | 56 | 134 | 195 |
Operating segments | Food Merchandising | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 354 | 351 | 1,046 | 1,037 |
Operating segments | Food Merchandising | Dinnerware | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 88 | 79 | 257 | 230 |
Operating segments | Food Merchandising | Other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 41 | 35 | 115 | 110 |
Operating segments | Food Merchandising | Meat trays | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 93 | 91 | 287 | 262 |
Operating segments | Food Merchandising | Bakery/snack/produce/fruit containers | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 75 | 79 | 218 | 236 |
Operating segments | Food Merchandising | Prepared food trays | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 33 | 43 | 95 | 126 |
Operating segments | Food Merchandising | Egg cartons | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 24 | 24 | 74 | 73 |
Operating segments | Beverage Merchandising | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 361 | 401 | 1,106 | 1,188 |
Operating segments | Beverage Merchandising | Cartons for fresh beverage products | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 199 | 205 | 597 | 593 |
Operating segments | Beverage Merchandising | Liquid packaging board | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 92 | 109 | 296 | 335 |
Operating segments | Beverage Merchandising | Paper products | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 70 | 87 | 213 | 260 |
Operating segments | Other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 30 | 37 | 87 | 127 |
Inter-segment eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | (23) | (29) | (76) | (94) |
Inter-segment eliminations | Reportable Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 23 | 29 | 76 | 94 |
Inter-segment eliminations | Foodservice | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 0 | 0 | 0 | 0 |
Inter-segment eliminations | Food Merchandising | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 0 | 0 | 0 | 0 |
Inter-segment eliminations | Beverage Merchandising | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 23 | $ 29 | $ 76 | $ 94 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | Sep. 30, 2020 |
Packaging Finance Limited And Other Entities | |
Related Party Transaction [Line Items] | |
Ownership percentage | 79.00% |
Related Party Transactions - Re
Related Party Transactions - Related Party Transactions (Details) $ in Millions | Sep. 21, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)lease_agreement | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Related Party Transaction [Line Items] | ||||||
Due from related parties, current | $ 57 | $ 57 | $ 0 | |||
Related party transactions, revenues | 89 | $ 72 | 259 | $ 213 | ||
Related party receivables | 0 | 0 | 339 | |||
Interest income | 3 | 4 | 9 | 12 | ||
Related party management fee | 44 | 3 | 49 | 8 | ||
Joint Ventures | ||||||
Related Party Transaction [Line Items] | ||||||
Due from related parties, current | 7 | 7 | 8 | |||
Related party transactions, revenues | 5 | 3 | 23 | 19 | ||
Affiliated entity | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties, current | 57 | 57 | 0 | |||
Related party receivables | 0 | 0 | 339 | |||
Interest income | 3 | 4 | 9 | 12 | ||
Related party payables | (21) | (21) | $ (30) | |||
Purchase of goods | (28) | (36) | (91) | (114) | ||
Loan forgiveness | 15 | |||||
Affiliated entity | Sale of goods and services | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transactions, revenues | 89 | 72 | 259 | 213 | ||
Affiliated entity | Transition services agreement and rental income | ||||||
Related Party Transaction [Line Items] | ||||||
Transition services agreement and rental income | 3 | 0 | 11 | 0 | ||
Affiliated entity | Tax loss transfer | ||||||
Related Party Transaction [Line Items] | ||||||
Amount of related party transaction | 0 | 0 | 13 | 0 | ||
Related party transactions, expenses | (10) | 0 | (11) | (2) | ||
Affiliated entity | Recharges | ||||||
Related Party Transaction [Line Items] | ||||||
Amount of related party transaction | 1 | 0 | 2 | 4 | ||
Related party transactions, expenses | (1) | (6) | (11) | (16) | ||
Affiliated entity | Forgiveness of a balance | ||||||
Related Party Transaction [Line Items] | ||||||
Amount of related party transaction | 15 | 0 | 15 | 0 | ||
Affiliated entity | Loan forgiveness | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transactions, expenses | (347) | 0 | (347) | 0 | ||
Affiliated entity | Management fee | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transactions, expenses | $ (22) | (57) | $ (8) | $ (65) | $ (21) | |
Reversal of current period accrual recognized | $ 8 | |||||
Affiliated entity | Lease arrangements | ||||||
Related Party Transaction [Line Items] | ||||||
Number of lease agreements | lease_agreement | 2 | |||||
Affiliated entity | Tax matters agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties, current | $ 8 | $ 8 | ||||
Affiliated entity | Loan transaction | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, rate | 3.55% | 4.567% | 3.25% | |||
Affiliated entity | Termination fee | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transactions, expenses | $ (45) | |||||
Minimum | Affiliated entity | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, profit margin | 3.00% | |||||
Minimum | Affiliated entity | Loan transaction | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, rate | 3.458% | 4.567% | ||||
Maximum | Affiliated entity | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, profit margin | 6.00% | |||||
Maximum | Affiliated entity | Loan transaction | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, rate | 4.275% | 5.149% |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) | Sep. 21, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 20, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized (in shares) | 9,079,395 | |||||
Stock-based compensation expense | $ 1,000,000 | $ 0 | $ 1,000,000 | $ 0 | ||
Number of shares available for grant (in shares) | 8,782,099 | 8,782,099 | ||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of awards granted in the period (in shares) | 297,296 | |||||
Award vesting period | 3 years | |||||
Share-based Payment Arrangement, Tranche One | Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percent | 33.33% | |||||
Share-based Payment Arrangement, Tranche Two | Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percent | 33.33% | |||||
Share-based Payment Arrangement, Tranche Three | Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percent | 33.33% |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net (loss) income attributable to Pactiv Evergreen Inc. common stockholders | ||||
From continuing operations | $ (143) | $ (35) | $ (29) | $ (101) |
From discontinued operations | (216) | 91 | (234) | 270 |
Net (loss) income attributable to Pactiv Evergreen Inc. common stockholders | $ (359) | $ 56 | $ (263) | $ 169 |
Weighted average number of shares outstanding | ||||
Basic (in shares) | 138.9 | 134.4 | 135.9 | 134.4 |
Effect of dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Diluted (in shares) | 138.9 | 134.4 | 135.9 | 134.4 |
From continuing operations | ||||
Basic (USD per share) | $ (1.03) | $ (0.26) | $ (0.22) | $ (0.75) |
Diluted (USD per share) | (1.03) | (0.26) | (0.22) | (0.75) |
From discontinued operations | ||||
Basic (USD per share) | (1.56) | 0.67 | (1.72) | 2.01 |
Diluted (USD per share) | (1.56) | 0.67 | (1.72) | 2.01 |
Basic (USD per share) | (2.59) | 0.41 | (1.94) | 1.26 |
Diluted (USD per share) | $ (2.59) | $ 0.41 | $ (1.94) | $ 1.26 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Weighted average number of shares outstanding (in shares) | 138.9 | 134.4 | 135.9 | 134.4 |