PART I. FINANCIAL INFORMATION This section presents unaudited financial statements, notes, and management's discussion of financial condition and operations [Item 1. Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for Reynolds Consumer Products Inc., including statements of income, comprehensive income, balance sheets, stockholders' equity, and cash flows, along with detailed notes explaining the company's business, accounting policies, debt, financial instruments, segment information, and related party transactions for the periods ended June 30, 2023 and 2022 [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Unaudited condensed consolidated statements of income for the three and six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Income (in millions, except for per share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Net Revenues | $940 | $917 | $1,814 | $1,762 | | Cost of Sales | $(712) | $(733) | $(1,430) | $(1,410) | | Gross Profit | $228 | $184 | $384 | $352 | | Income from Operations | $120 | $86 | $171 | $166 | | Net Income | $66 | $52 | $83 | $104 | | Basic EPS | $0.32 | $0.25 | $0.40 | $0.50 | | Diluted EPS | $0.32 | $0.25 | $0.40 | $0.50 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Unaudited condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Comprehensive Income (in millions) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income | $66 | $52 | $83 | $104 | | Other Comprehensive Income, net of income taxes | $13 | $3 | $0 | $10 | | Comprehensive Income | $79 | $55 | $83 | $114 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Unaudited condensed consolidated balance sheets as of June 30, 2023, and December 31, 2022 Condensed Consolidated Balance Sheets (in millions) | Metric | As of June 30, 2023 | As of December 31, 2022 | | :--------------------------------- | :------------------ | :---------------------- | | Total Current Assets | $1,146 | $1,171 | | Total Assets | $4,882 | $4,929 | | Total Current Liabilities | $465 | $496 | | Total Liabilities | $3,023 | $3,061 | | Total Stockholders' Equity | $1,859 | $1,868 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Unaudited condensed consolidated statements of stockholders' equity for the six months ended June 30, 2023 Condensed Consolidated Statements of Stockholders' Equity (in millions) | Metric | Balance as of Dec 31, 2022 | Net Income (6 months) | Other Comprehensive Loss (6 months) | Dividends Paid (6 months) | Other (6 months) | Balance as of June 30, 2023 | | :--------------------------------- | :------------------------- | :-------------------- | :---------------------------------- | :------------------------ | :--------------- | :-------------------------- | | Total Equity | $1,868 | $83 | $0 | $(96) | $4 | $1,859 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Cash Flows (in millions) for the Six Months Ended June 30 | Metric | 2023 | 2022 | | :--------------------------------- | :--- | :--- | | Net Cash Provided by Operating Activities | $207 | $101 | | Net Cash Used in Investing Activities | $(51) | $(56) | | Net Cash Used in Financing Activities | $(111) | $(108) | | Net Increase (Decrease) in Cash and Cash Equivalents | $45 | $(63) | | Cash and Cash Equivalents at End of Period | $83 | $101 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes on business, accounting policies, debt, financial instruments, segment information, and related parties [Note 1 – Description of Business and Basis of Presentation](index=9&type=section&id=Note%201%20%E2%80%93%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This note describes Reynolds Consumer Products Inc.'s business segments and the basis of financial statement presentation - Reynolds Consumer Products Inc. produces and sells cooking, waste and storage, and tableware products under brands like Reynolds and Hefty, as well as store brands. The company operates through four segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products[25](index=25&type=chunk) - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information and SEC regulations, reflecting normal recurring adjustments. Operating results for interim periods are not necessarily indicative of annual results[26](index=26&type=chunk)[27](index=27&type=chunk) - In March 2023, the company initiated a voluntary Supply Chain Finance (SCF) program, allowing qualifying suppliers to sell their receivables to a financial institution. The company is not party to these agreements and its payment obligations are unaffected. Obligations outstanding under SCF were not material as of June 30, 2023[28](index=28&type=chunk) [Note 2 – New Accounting Standards](index=9&type=section&id=Note%202%20%E2%80%93%20New%20Accounting%20Standards) This note details the adoption of new accounting standards related to reference rate reform and supplier finance programs - The company adopted ASU 2020-04 and ASU 2021-01 (Reference Rate Reform) as of January 1, 2023, amending its Credit Agreement and interest rate swaps from LIBOR to SOFR. This adoption had **no material impact** on the financial statements[29](index=29&type=chunk) - ASU 2022-04 (Liabilities - Supplier Finance Programs) was adopted as of January 1, 2023, requiring disclosure of key terms and a rollforward of related obligations. This standard relates to disclosure only and does not impact the financial statements[30](index=30&type=chunk) [Note 3 – Inventories](index=10&type=section&id=Note%203%20%E2%80%93%20Inventories) This note provides a breakdown of inventory categories and their values as of June 30, 2023, and December 31, 2022 Inventories (in millions) | Category | June 30, 2023 | December 31, 2022 | | :----------------- | :------------ | :---------------- | | Raw materials | $180 | $215 | | Work in progress | $65 | $81 | | Finished goods | $321 | $383 | | Spare parts | $48 | $43 | | **Total Inventories** | **$614** | **$722** | [Note 4 – Debt](index=10&type=section&id=Note%204%20%E2%80%93%20Debt) This note details the company's long-term debt, including the Term Loan and Revolving Credit Facilities, and covenant compliance Long-term Debt (in millions) | Metric | June 30, 2023 | December 31, 2022 | | :--------------------------------- | :------------ | :---------------- | | Term loan facility | $2,095 | $2,107 | | Deferred financing transaction costs | $(13) | $(14) | | Original issue discounts | $(1) | $(2) | | Less: current portion | $(25) | $(25) | | **Long-term debt** | **$2,056** | **$2,066** | - The company's External Debt Facilities, consisting of a **$2,475 million Term Loan Facility** and a **$250 million Revolving Credit Facility**, were amended in February 2023 to replace LIBOR with SOFR as the interest rate benchmark. The Term Loan Facility matures in February 2027 and amortizes in quarterly installments of **$6 million**. The Revolving Facility matures in February 2025[33](index=33&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - As of June 30, 2023, the outstanding balance under the Term Loan Facility was **$2,095 million**, with no outstanding borrowings under the Revolving Facility, but **$6 million** in letters of credit. The company is in compliance with all debt covenants[35](index=35&type=chunk)[39](index=39&type=chunk) [Note 5 - Financial Instruments](index=12&type=section&id=Note%205%20-%20Financial%20Instruments) This note describes the company's use of interest rate swaps to hedge a portion of its Term Loan Facility's interest rate exposure - The company uses interest rate swaps to hedge a portion of its Term Loan Facility's interest rate exposure, fixing SOFR at an annual rate of **0.40% to 3.40%** (effective **2.15% to 5.15%** including margin) for an aggregate notional amount of **$1,150 million** as of June 30, 2023. These are classified as cash flow hedges[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [Note 6 – Stock-based Compensation](index=13&type=section&id=Note%206%20%E2%80%93%20Stock-based%20Compensation) This note outlines the company's equity incentive plan and stock-based compensation expense for the periods presented - The equity incentive plan, established in 2020, grants RSUs and PSUs to management, directors, and employees. As of June 30, 2023, **0.7 million shares** were outstanding under stock-based compensation awards, up from **0.4 million** at December 31, 2022[44](index=44&type=chunk)[45](index=45&type=chunk) Stock-based Compensation Expense (in millions) | Period | 2023 | 2022 | | :--------------------------------- | :--- | :--- | | Three Months Ended June 30 | $3 | $2 | | Six Months Ended June 30 | $6 | $3 | [Note 7 – Commitments and Contingencies](index=13&type=section&id=Note%207%20%E2%80%93%20Commitments%20and%20Contingencies) This note addresses legal proceedings and tax examinations, assessing their potential financial impact - The company is involved in various legal proceedings and tax examinations arising from operations. While outcomes are unpredictable, management believes these matters will not have a material adverse effect on financial position, results of operations, or cash flows as of June 30, 2023[46](index=46&type=chunk) [Note 8 – Accumulated Other Comprehensive Income](index=14&type=section&id=Note%208%20%E2%80%93%20Accumulated%20Other%20Comprehensive%20Income) This note details components of accumulated other comprehensive income, including currency, employee benefits, and derivatives Accumulated Other Comprehensive Income (in millions) | Component | Balance as of Dec 31, 2022 | Gain/Loss Arising During Q2 2023 | Reclassification to Earnings Q2 2023 | Effect of Deferred Taxes Q2 2023 | Balance as of June 30, 2023 | | :--------------------------------- | :------------------------- | :------------------------------- | :----------------------------------- | :------------------------------- | :-------------------------- | | Currency Translation Adjustments | $(7) | — | — | — | $(7) | | Employee Benefit Plans | $23 | — | $(1) | — | $21 | | Interest Rate Derivatives | $36 | $25 | $(7) | $(4) | $38 | | **Total Accumulated Other Comprehensive Income** | **$52** | **$25** | **$(8)** | **$(4)** | **$52** | [Note 9 – Segment Information](index=14&type=section&id=Note%209%20%E2%80%93%20Segment%20Information) This note provides financial data for the company's four reportable segments, including net revenues, Adjusted EBITDA, and assets - The company operates four reportable segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products. These segments are defined by internal operations and product nature, reflecting how the CEO monitors performance and allocates resources[50](index=50&type=chunk) Segment Net Revenues (in millions) for the Three Months Ended June 30 | Segment | 2023 | 2022 | | :--------------------------------- | :--- | :--- | | Reynolds Cooking & Baking | $321 | $294 | | Hefty Waste & Storage | $229 | $238 | | Hefty Tableware | $251 | $240 | | Presto Products | $145 | $150 | | Unallocated | $(6) | $(5) | | **Total Net Revenues** | **$940** | **$917** | Segment Adjusted EBITDA (in millions) for the Three Months Ended June 30 | Segment | 2023 | 2022 | | :--------------------------------- | :--- | :--- | | Reynolds Cooking & Baking | $40 | $36 | | Hefty Waste & Storage | $62 | $46 | | Hefty Tableware | $45 | $25 | | Presto Products | $28 | $25 | | Unallocated | $(25) | $(14) | | **Total Adjusted EBITDA** | **$150** | **$118** | Segment Net Revenues (in millions) for the Six Months Ended June 30 | Segment | 2023 | 2022 | | :--------------------------------- | :--- | :--- | | Reynolds Cooking & Baking | $604 | $562 | | Hefty Waste & Storage | $463 | $466 | | Hefty Tableware | $475 | $450 | | Presto Products | $288 | $292 | | Unallocated | $(16) | $(8) | | **Total Net Revenues** | **$1,814** | **$1,762** | Segment Adjusted EBITDA (in millions) for the Six Months Ended June 30 | Segment | 2023 | 2022 | | :--------------------------------- | :--- | :--- | | Reynolds Cooking & Baking | $43 | $64 | | Hefty Waste & Storage | $117 | $91 | | Hefty Tableware | $76 | $48 | | Presto Products | $47 | $44 | | Unallocated | $(51) | $(17) | | **Total Adjusted EBITDA** | **$232** | **$230** | Segment Assets (in millions) | Segment | As of June 30, 2023 | As of December 31, 2022 | | :--------------------------------- | :------------------ | :---------------------- | | Reynolds Cooking & Baking | $609 | $646 | | Hefty Waste & Storage | $278 | $314 | | Hefty Tableware | $217 | $226 | | Presto Products | $247 | $274 | | Segment Total | $1,351 | $1,460 | | Unallocated | $3,531 | $3,469 | | **Total Assets** | **$4,882** | **$4,929** | [Note 10 – Related Party Transactions](index=18&type=section&id=Note%2010%20%E2%80%93%20Related%20Party%20Transactions) This note describes the company's transactions with Pactiv Evergreen Inc., including sales, purchases, and dividends - PFL, the majority owner of Reynolds Consumer Products Inc., also owns the majority of Pactiv Evergreen Inc. (PEI Group). The company engages in sales and purchases of goods and services with PEI Group under contractual arrangements, some of which were amended in H1 2023 to extend expiration dates[62](index=62&type=chunk) Related Party Transactions (in millions) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues from products sold to PEI Group | $18 | $21 | $40 | $48 | | Products purchased from PEI Group | $93 | $100 | $199 | $194 | | Freight and warehousing costs charged by PEI Group | $9 | $15 | $18 | $29 | | Dividends paid to PFL | $36 | $36 | $71 | $71 | [Note 11 – Subsequent Events](index=18&type=section&id=Note%2011%20%E2%80%93%20Subsequent%20Events) This note reports on significant events after the reporting period, including a cash dividend and a voluntary debt payment - On July 27, 2023, the Board of Directors approved a cash dividend of **$0.23 per common share**, payable on August 31, 2023. Subsequent to June 30, 2023, the company made a voluntary principal payment of **$100 million** on its Term Loan Facility[65](index=65&type=chunk)[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, including an overview of business segments, consolidated results for the three and six months ended June 30, 2023, and a detailed discussion of liquidity and capital resources. It highlights key drivers of revenue and profit changes, segment-specific performance, and the impact of non-GAAP measures [Description of the Company and its Business Segments](index=19&type=section&id=Description%20of%20the%20Company%20and%20its%20Business%20Segments) This section provides an overview of Reynolds Consumer Products' market position and its four core business segments - Reynolds Consumer Products is a market-leading consumer products company present in **95% of U.S. households**, holding **1 or 2 market share** in most product categories, with over **65% of revenue** from 1 ranked products. The company's portfolio includes cooking, waste and storage, and tableware products under brands like Reynolds and Hefty, as well as store brands[69](index=69&type=chunk)[70](index=70&type=chunk) - The company manages four segments: Reynolds Cooking & Baking (aluminum foil, wraps, bakeware), Hefty Waste & Storage (trash and food storage bags), Hefty Tableware (disposable plates, cups, cutlery), and Presto Products (store brand food storage, trash bags, and resealable closure systems). Each segment holds strong market positions and offers sustainable solutions[71](index=71&type=chunk) [Overview](index=20&type=section&id=Overview) This section summarizes the company's overall financial performance, highlighting changes in net revenues and net income - Total net revenues increased by **3%** for both the three and six months ended June 30, 2023, primarily due to the timing of pricing actions to offset increased costs. Higher volume in Reynolds Cooking & Baking was offset by lower volume in other segments[73](index=73&type=chunk) - Net income improved by **27%** in the three months ended June 30, 2023, driven by higher pricing and decreased material/logistics costs, partially offset by increased manufacturing costs, SG&A, interest, and tax expenses[74](index=74&type=chunk) - Net income declined by **20%** in the six months ended June 30, 2023, primarily due to higher material and manufacturing costs, SG&A, and interest expense, partially offset by higher pricing and decreased logistics costs[75](index=75&type=chunk) [Non-GAAP Measures](index=20&type=section&id=Non-GAAP%20Measures) This section explains the company's use of non-GAAP financial measures like Adjusted EBITDA and Adjusted EPS for performance evaluation - The company uses non-GAAP financial measures such as "Adjusted EBITDA," "Adjusted Net Income," and "Adjusted Diluted Earnings Per Share" (Adjusted EPS) to evaluate operating performance and make strategic decisions. These measures exclude the impact of specified items like IPO and separation-related costs[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) (in millions) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income – GAAP | $66 | $52 | $83 | $104 | | Income tax expense | $23 | $18 | $28 | $34 | | Interest expense, net | $31 | $16 | $60 | $28 | | Depreciation and amortization | $30 | $29 | $61 | $57 | | IPO and separation-related costs | $0 | $3 | $0 | $7 | | **Adjusted EBITDA (Non-GAAP)** | **$150** | **$118** | **$232** | **$230** | Reconciliation of Net Income and Diluted EPS (GAAP) to Adjusted (Non-GAAP) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income – GAAP | $66 | $52 | $83 | $104 | | IPO and separation-related costs (after tax) | $0 | $2 | $0 | $5 | | **Adjusted Net Income (Non-GAAP)** | **$66** | **$54** | **$83** | **$109** | | Diluted EPS – GAAP | $0.32 | $0.25 | $0.40 | $0.50 | | IPO and separation-related costs (per share) | $0.00 | $0.01 | $0.00 | $0.02 | | **Adjusted EPS (Non-GAAP)** | **$0.32** | **$0.26** | **$0.40** | **$0.52** | [Results of Operations – Three Months Ended June 30, 2023](index=22&type=section&id=Results%20of%20Operations%20%E2%80%93%20Three%20Months%20Ended%20June%2030%2C%202023) For the three months ended June 30, 2023, total net revenues increased by 3% to $940 million, driven by pricing actions. Gross profit rose 24% to $228 million due to lower material and logistics costs. Net income increased 27% to $66 million, and Adjusted EBITDA grew 27% to $150 million. Segment performance varied, with Reynolds Cooking & Baking showing volume growth, while other segments experienced volume declines [Total Reynolds Consumer Products (3 months)](index=24&type=section&id=Total%20Reynolds%20Consumer%20Products%20%283%20months%29) This section details consolidated financial performance for Q2 2023, including revenue, gross profit, and net income changes Total Reynolds Consumer Products Financial Performance (in millions, except for %) | Metric | Q2 2023 | Q2 2022 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Total Net Revenues | $940 | $917 | $23 | 3% | | Cost of Sales | $(712) | $(733) | $21 | 3% | | Gross Profit | $228 | $184 | $44 | 24% | | Selling, General and Administrative Expenses | $(107) | $(91) | $(16) | (18)% | | Income from Operations | $120 | $86 | $34 | 40% | | Interest Expense, Net | $(31) | $(16) | $(15) | (94)% | | Income Before Income Taxes | $89 | $70 | $19 | 27% | | Net Income | $66 | $52 | $14 | 27% | | Adjusted EBITDA | $150 | $118 | $32 | 27% | Components of Change in Net Revenues (Q2 2023 vs. Q2 2022) | Segment | Price | Volume/Mix | Total | | :--------------------------------- | :---- | :--------- | :---- | | Reynolds Cooking & Baking | (3)% | 12% | 9% | | Hefty Waste & Storage | 4% | (8)% | (4)% | | Hefty Tableware | 12% | (7)% | 5% | | Presto Products | 0% | (3)% | (3)% | | **Total RCP** | **3%** | **0%** | **3%** | - Cost of sales decreased by **$21 million (3%)** due to lower material and logistics costs, partially offset by higher manufacturing costs. SG&A expenses increased by **$16 million (18%)** primarily due to higher personnel costs, advertising, and professional fees. Interest expense, net, increased by **$15 million (94%)** due to higher interest rates[92](index=92&type=chunk)[93](index=93&type=chunk) [Segment Information (3 months)](index=26&type=section&id=Segment%20Information%20%283%20months%29) This section provides a detailed breakdown of financial performance for each operating segment for Q2 2023 [Reynolds Cooking & Baking (3 months)](index=26&type=section&id=Reynolds%20Cooking%20%26%20Baking%20%283%20months%29) This section details the Reynolds Cooking & Baking segment's revenue and Adjusted EBITDA performance for Q2 2023 Reynolds Cooking & Baking Performance (in millions, except for %) | Metric | Q2 2023 | Q2 2022 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Total Segment Net Revenues | $321 | $294 | $27 | 9% | | Segment Adjusted EBITDA | $40 | $36 | $4 | 11% | | Segment Adjusted EBITDA Margin | 12% | 12% | | | - Revenue increase was primarily due to higher volume (retail sales up **15%**), partially offset by lower pricing from trade and promotional investments. Adjusted EBITDA increased due to higher volume, partially offset by lower pricing[99](index=99&type=chunk)[100](index=100&type=chunk) [Hefty Waste & Storage (3 months)](index=26&type=section&id=Hefty%20Waste%20%26%20Storage%20%283%20months%29) This section details the Hefty Waste & Storage segment's revenue and Adjusted EBITDA performance for Q2 2023 Hefty Waste & Storage Performance (in millions, except for %) | Metric | Q2 2023 | Q2 2022 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Total Segment Net Revenues | $229 | $238 | $(9) | (4)% | | Segment Adjusted EBITDA | $62 | $46 | $16 | 35% | | Segment Adjusted EBITDA Margin | 27% | 19% | | | - Revenue decrease was primarily due to lower volume, partially offset by higher pricing. Adjusted EBITDA increased significantly due to lower material costs and higher pricing, partially offset by lower volume and higher manufacturing costs[101](index=101&type=chunk)[102](index=102&type=chunk) [Hefty Tableware (3 months)](index=26&type=section&id=Hefty%20Tableware%20%283%20months%29) This section details the Hefty Tableware segment's revenue and Adjusted EBITDA performance for Q2 2023 Hefty Tableware Performance (in millions, except for %) | Metric | Q2 2023 | Q2 2022 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Total Segment Net Revenues | $251 | $240 | $11 | 5% | | Segment Adjusted EBITDA | $45 | $25 | $20 | 80% | | Segment Adjusted EBITDA Margin | 18% | 10% | | | - Revenue increase was primarily due to the timing of pricing actions, partially offset by lower volume. Adjusted EBITDA saw a substantial increase, driven by pricing actions and lower logistics costs, partially offset by higher material/manufacturing costs and lower volume[103](index=103&type=chunk)[104](index=104&type=chunk) [Presto Products (3 months)](index=28&type=section&id=Presto%20Products%20%283%20months%29) This section details the Presto Products segment's revenue and Adjusted EBITDA performance for Q2 2023 Presto Products Performance (in millions, except for %) | Metric | Q2 2023 | Q2 2022 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Total Segment Net Revenues | $145 | $150 | $(5) | (3)% | | Segment Adjusted EBITDA | $28 | $25 | $3 | 12% | | Segment Adjusted EBITDA Margin | 19% | 17% | | | - Revenue decrease was primarily due to lower volume. Adjusted EBITDA increased due to lower material and logistics costs, partially offset by higher manufacturing costs and lower volume[105](index=105&type=chunk)[106](index=106&type=chunk) [Results of Operations – Six Months Ended June 30, 2023](index=28&type=section&id=Results%20of%20Operations%20%E2%80%93%20Six%20Months%20Ended%20June%2030%2C%202023) For the six months ended June 30, 2023, total net revenues increased by 3% to $1,814 million, driven by pricing actions. Gross profit increased 9% to $384 million. However, net income decreased 20% to $83 million, and Adjusted EBITDA saw a modest 1% increase to $232 million. Segment performance showed mixed results, with Reynolds Cooking & Baking experiencing a decline in Adjusted EBITDA despite revenue growth [Total Reynolds Consumer Products (6 months)](index=29&type=section&id=Total%20Reynolds%20Consumer%20Products%20%286%20months%29) This section details consolidated financial performance for H1 2023, including revenue, gross profit, and net income changes Total Reynolds Consumer Products Financial Performance (in millions, except for %) | Metric | H1 2023 | H1 2022 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Total Net Revenues | $1,814 | $1,762 | $52 | 3% | | Cost of Sales | $(1,430) | $(1,410) | $(20) | (1)% | | Gross Profit | $384 | $352 | $32 | 9% | | Selling, General and Administrative Expenses | $(212) | $(174) | $(38) | (22)% | | Income from Operations | $171 | $166 | $5 | 3% | | Interest Expense, Net | $(60) | $(28) | $(32) | (114)% |\ | Income Before Income Taxes | $111 | $138 | $(27) | (20)% | | Net Income | $83 | $104 | $(21) | (20)% | | Adjusted EBITDA | $232 | $230 | $2 | 1% | Components of Change in Net Revenues (H1 2023 vs. H1 2022) | Segment | Price | Volume/Mix | Total | | :--------------------------------- | :---- | :--------- | :---- | | Reynolds Cooking & Baking | 0% | 7% | 7% | | Hefty Waste & Storage | 5% | (6)% | (1)% | | Hefty Tableware | 13% | (7)% | 6% | | Presto Products | 0% | (1)% | (1)% | | **Total RCP** | **4%** | **(1)%** | **3%** | - Cost of sales increased by **$20 million (1%)** due to higher material and manufacturing costs, partially offset by lower volume and logistics costs. SG&A expenses increased by **$38 million (22%)** due to higher personnel, professional fees, and advertising costs. Interest expense, net, increased by **$32 million (114%)** due to higher interest rates[115](index=115&type=chunk)[117](index=117&type=chunk) [Segment Information (6 months)](index=31&type=section&id=Segment%20Information%20%286%20months%29) This section provides a detailed breakdown of financial performance for each operating segment for H1 2023 [Reynolds Cooking & Baking (6 months)](index=31&type=section&id=Reynolds%20Cooking%20%26%20Baking%20%286%20months%29) This section details the Reynolds Cooking & Baking segment's revenue and Adjusted EBITDA performance for H1 2023 Reynolds Cooking & Baking Performance (in millions, except for %) | Metric | H1 2023 | H1 2022 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Total Segment Net Revenues | $604 | $562 | $42 | 7% | | Segment Adjusted EBITDA | $43 | $64 | $(21) | (33)% | | Segment Adjusted EBITDA Margin | 7% | 11% | | | - Revenue increase was primarily driven by higher volume (retail sales up **10%**). Adjusted EBITDA decreased significantly due to higher material and manufacturing costs, partially offset by higher volume[121](index=121&type=chunk)[122](index=122&type=chunk) [Hefty Waste & Storage (6 months)](index=31&type=section&id=Hefty%20Waste%20%26%20Storage%20%286%20months%29) This section details the Hefty Waste & Storage segment's revenue and Adjusted EBITDA performance for H1 2023 Hefty Waste & Storage Performance (in millions, except for %) | Metric | H1 2023 | H1 2022 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Total Segment Net Revenues | $463 | $466 | $(3) | (1)% | | Segment Adjusted EBITDA | $117 | $91 | $26 | 29% | | Segment Adjusted EBITDA Margin | 25% | 20% | | | - Revenue decrease was primarily driven by lower volume, partially offset by pricing actions. Adjusted EBITDA increased due to lower material costs and pricing actions, partially offset by higher manufacturing costs, lower volume, and higher advertising costs[123](index=123&type=chunk)[124](index=124&type=chunk) [Hefty Tableware (6 months)](index=31&type=section&id=Hefty%20Tableware%20%286%20months%29) This section details the Hefty Tableware segment's revenue and Adjusted EBITDA performance for H1 2023 Hefty Tableware Performance (in millions, except for %) | Metric | H1 2023 | H1 2022 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Total Segment Net Revenues | $475 | $450 | $25 | 6% | | Segment Adjusted EBITDA | $76 | $48 | $28 | 58% | | Segment Adjusted EBITDA Margin | 16% | 11% | | | - Revenue increase was primarily driven by pricing actions, partially offset by lower volume. Adjusted EBITDA increased significantly due to pricing actions and lower logistics costs, partially offset by higher material/manufacturing costs and lower volume[125](index=125&type=chunk)[126](index=126&type=chunk) [Presto Products (6 months)](index=32&type=section&id=Presto%20Products%20%286%20months%29) This section details the Presto Products segment's revenue and Adjusted EBITDA performance for H1 2023 Presto Products Performance (in millions, except for %) | Metric | H1 2023 | H1 2022 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Total Segment Net Revenues | $288 | $292 | $(4) | (1)% | | Segment Adjusted EBITDA | $47 | $44 | $3 | 7% | | Segment Adjusted EBITDA Margin | 16% | 15% | | | - Revenue decrease was primarily due to lower volume. Adjusted EBITDA increased due to lower material and logistics costs, partially offset by higher manufacturing costs and lower volume[127](index=127&type=chunk)[128](index=128&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash flow, debt facilities, and other capital management activities for the periods presented [Cash Flow Summary](index=32&type=section&id=Cash%20Flow%20Summary) This section summarizes the company's cash flows from operating, investing, and financing activities for H1 Cash Flows (in millions) for the Six Months Ended June 30 | Metric | 2023 | 2022 | | :--------------------------------- | :--- | :--- | | Net Cash Provided by Operating Activities | $207 | $101 | | Net Cash Used in Investing Activities | $(51) | $(56) | | Net Cash Used in Financing Activities | $(111) | $(108) | | Increase (Decrease) in Cash and Cash Equivalents | $45 | $(63) | - Net cash from operating activities increased by **$106 million** to **$207 million**, primarily driven by reductions in working capital. Net cash used in investing activities decreased by **$5 million** to **$51 million** due to decreased capital expenditures. Net cash used in financing activities remained relatively flat[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) [External Debt Facilities](index=33&type=section&id=External%20Debt%20Facilities) This section details the company's Term Loan and Revolving Credit Facilities, including interest rates, maturities, and covenants - The company's External Debt Facilities, including a **$2,475 million Term Loan Facility** and a **$250 million Revolving Facility**, were amended in February 2023 to transition from LIBOR to SOFR. As of June 30, 2023, the Term Loan Facility had an outstanding balance of **$2,095 million**, and the Revolving Facility had no outstanding borrowings but **$6 million** in letters of credit[135](index=135&type=chunk)[136](index=136&type=chunk) - Borrowings bear interest at a base rate plus **0.75%** or SOFR plus **1.75%**. Interest rate swaps hedge **$1,150 million** of the Term Loan Facility, fixing SOFR at **0.40% to 3.40%**. The Term Loan Facility matures in February 2027 with quarterly **$6 million** amortizations, and the Revolving Facility matures in February 2025[138](index=138&type=chunk)[139](index=139&type=chunk)[142](index=142&type=chunk) - Subsequent to June 30, 2023, a voluntary principal payment of **$100 million** was made on the Term Loan Facility. The facilities contain customary mandatory prepayments and covenants, with the company currently in compliance[141](index=141&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk) [Accounts Receivable Factoring](index=35&type=section&id=Accounts%20Receivable%20Factoring) This section describes the company's accounts receivable factoring agreement and its impact on cash flow - The company has an accounts receivable factoring agreement with JP Morgan Chase Bank, N.A., allowing the sale of certain receivables up to **$190 million**. As of June 30, 2023, there was no outstanding balance under this arrangement. Transactions are accounted for as sales, with proceeds classified as operating cash flow[149](index=149&type=chunk) [Supply Chain Financing](index=35&type=section&id=Supply%20Chain%20Financing) This section explains the voluntary Supply Chain Finance program and its non-material impact on financial statements - A voluntary Supply Chain Finance (SCF) program was initiated in March 2023, enabling qualifying suppliers to sell receivables to a financial institution. The company is not a party to these agreements, and its payment terms and financial statements are not directly impacted. Obligations outstanding under SCF were not material as of June 30, 2023[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) [Dividends](index=35&type=section&id=Dividends) This section reports on cash dividends declared and paid, and the Board of Directors' discretion for future payments - Cash dividends of **$0.23** and **$0.46 per share** were declared and paid during the three and six months ended June 30, 2023, respectively. A quarterly cash dividend of **$0.23 per share** was approved on July 27, 2023, for payment on August 31, 2023. Future dividends are at the discretion of the Board of Directors[153](index=153&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights critical accounting policies and estimates that materially impact financial statements - Critical accounting policies and estimates involve subjective judgments and assumptions that materially impact financial statements. For a detailed description, refer to the Annual Report on Form 10-K for the fiscal year ended December 31, 2022[155](index=155&type=chunk)[156](index=156&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the company's Annual Report on Form 10-K for detailed disclosures on market risk. It states that there have been no material changes in the company's exposure to market risk during the six months ended June 30, 2023 - No material changes in market risk exposure occurred during the six months ended June 30, 2023, as referenced from the Annual Report on Form 10-K for December 31, 2022[158](index=158&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and reports on changes in internal control over financial reporting. As of June 30, 2023, management, including the CEO and CFO, concluded that disclosure controls and procedures were effective, and no material changes to internal control over financial reporting occurred during the quarter - As of June 30, 2023, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[161](index=161&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2023, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[161](index=161&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the information regarding legal proceedings from Note 7 – Commitments and Contingencies in the condensed consolidated financial statements - Information on legal proceedings is incorporated by reference from Note 7 – Commitments and Contingencies in the condensed consolidated financial statements[164](index=164&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes have occurred from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[166](index=166&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates that there were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities or use of proceeds to report[169](index=169&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report for the period - There were no defaults upon senior securities to report[171](index=171&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the registrant[173](index=173&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or officers adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2023 - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2023[175](index=175&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including organizational documents, certifications of principal executive and financial officers, and Inline XBRL documents - Exhibits include Amended and Restated Certificate of Incorporation, Amended and Restated By-Laws, Certifications of Principal Executive Officer and Principal Financial Officer (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and various Inline XBRL documents[178](index=178&type=chunk) [Signatures](index=40&type=section&id=Signatures) This section contains the required signatures for the Quarterly Report on Form 10-Q, confirming its submission on behalf of Reynolds Consumer Products Inc. by its Principal Accounting Officer - The report is signed by Chris Mayrhofer, Senior Vice President and Controller (Principal Accounting Officer) of Reynolds Consumer Products Inc., on August 9, 2023[181](index=181&type=chunk)

Financial Data and Key Metrics Changes - For Q1 2023, net revenues increased by 3% compared to the prior year, driven by price increases that offset a 2% volume decline [16] - Adjusted EBITDA for Q1 2023 is expected to be in the range of $135 million to $145 million, up from $118 million in the prior year [1] - For the full year 2023, net revenues are expected to be flat, plus or minus 1%, with adjusted EBITDA projected between $605 million and $635 million [3] Business Line Data and Key Metrics Changes - Reynolds Cooking & Baking segment is stabilizing with operational improvements, but still faces headwinds from higher material costs [19] - Hefty Waste & Storage and Hefty Tableware segments are operating at restored levels of profitability, with Hefty Waste Bags gaining market share [56][117] - Foil consumption is up 3% compared to pre-pandemic levels, and Hefty is gaining share across all generational groups, especially millennials [8][16] Market Data and Key Metrics Changes - Higher-income consumers are purchasing larger sizes, while lower-income households are opting for smaller sizes due to price sensitivity [25] - Disposable dish consumption is slightly above pre-pandemic levels, with Hefty dishes gaining share [26] - The competitive environment is described as rational, with some increases in promotional activities across categories [28] Company Strategy and Development Direction - The company is focused on returning Reynolds Cooking & Baking to historical profitability levels through operational efficiencies and cost management [55][58] - Investment in innovation and advertising is expected to drive growth, with plans to increase trade investment and promotional activities [60][61] - The company is developing a long-term strategic plan, with an Investor Day expected to provide more details later in the year [97][107] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving earnings growth for 2023, supported by a recovery plan for Reynolds Cooking & Baking [14][58] - The company is monitoring consumer behavior closely due to inflationary pressures and is prepared to adjust pricing strategies as necessary [62][119] - Management anticipates that the recovery plan is on track and expects to see improvements in margins and profitability in the second half of 2023 [19][90] Other Important Information - The search for a new CFO is progressing well, with an announcement expected before the fourth quarter results [4][11] - Cash conversion has improved compared to the previous year, and the company plans to remain disciplined in capital spending [10][127] Q&A Session Summary Question: What drove the higher unallocated costs in the quarter? - Higher professional fees were part of the costs, which were expected and included in the overall guidance [125] Question: How is the competitive environment affecting pricing and promotions? - The competitive environment is rational, with some increases in promotional activities, but the company has planned for this [28] Question: What are the expectations for volume growth during normal times? - The company expects low single-digit volume growth across most categories during normal conditions [109] Question: How is the company addressing consumer behavior changes? - The company is monitoring consumer behavior closely and adjusting pricing strategies as necessary to maintain market share [62][119]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _______________________________________________________________________________________ _______________________________________________________________________________________ FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 19 ...

Three Months Ended March 31, 2023 Year Ended December 31, 2023 | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------------------------------|-------|------------|----------|-------|-------|-------------|-------|------------| | Net income (GAAP) | $ | Low \n12 | High \n$ | \n20 | $ | Low \n274 | $ | High \n296 | | Income tax expense | | 4 | | 6 | | 91 | | 99 | | Interest expense, net | | 30 | | 30 | | 120 | | 120 | | Depreciation and amortization | | 29 | | 29 | | 120 | | 120 | | Adjusted EBITDA | ...

Reynolds Consumer Products Inc. (NASDAQ:REYN) Q4 2022 Earnings Conference Call February 8, 2023 8:00 AM ET Company Participants Mark Swartzberg - Investor Relations Lance Mitchell - President and Chief Executive Officer Michael Graham - Chief Financial Officer Conference Call Participants Lauren Lieberman - Barclays Jason English - Goldman Sachs Kaumil Gajrawala - Credit Suisse Tristen Chau - Stifel Peter Grom - UBS Rob Ottenstein - Evercore ISI Operator Ladies and gentlemen, thank you for standing by and w ...

Revenue Concentration and Customer Dependence - In 2022, sales to the top ten customers accounted for 74% of total revenue, with Walmart and Sam's Club contributing 30% and 18% respectively[68]. - The company relies on a relatively small number of customers for a significant portion of revenue, making it vulnerable to customer consolidation and loss[67]. Cost Pressures and Economic Factors - The company experienced significant increases in raw material costs in both 2021 and 2022, particularly in resin and aluminum prices, negatively impacting results[72]. - Labor costs in the United States continue to rise, and the company increased prices in 2022 to pass these costs onto customers[77]. - Fluctuations in raw material and energy costs, including tariffs, have introduced greater uncertainty and could adversely affect financial results[73]. - Economic downturns and changes in consumer demand could lead to decreased sales and profitability[80]. - Supply chain disruptions and labor shortages continue to impact operations and could lead to increased costs[81]. Financial Performance and Results - Total net revenues for the year ended December 31, 2022, were $3,817 million, an increase from $3,556 million in 2021, representing a growth of 7.3%[288]. - Gross profit for 2022 was $776 million, down from $811 million in 2021, indicating a decrease of 4.3%[288]. - Net income for 2022 was $258 million, compared to $324 million in 2021, reflecting a decline of 20.4%[288]. - Earnings per share (EPS) for 2022 were $1.23, down from $1.54 in 2021, a decrease of 20.1%[288]. - The company reported interest expense of $76 million in 2022, an increase from $48 million in 2021, representing a rise of 58.3%[288]. Debt and Financing - As of December 31, 2022, the company had $2,107 million in outstanding indebtedness under its Term Loan Facility and $243 million borrowing capacity under its Revolving Facility[101]. - The unhedged portion of the Term Loan Facility was approximately $957 million as of December 31, 2022, exposing the company to interest rate risk[104]. - The company may need additional financing for growth strategies, including acquisitions, which may not be available on favorable terms[103]. Ownership and Governance - PFL controls approximately 74% of the voting power of the company's outstanding common stock, allowing it to determine the outcome of corporate actions requiring stockholder approval[116]. - The company is classified as a "controlled company" under Nasdaq rules, which allows it to rely on exemptions from certain corporate governance requirements[125]. - The concentration of PFL's ownership may discourage other parties from making tender offers, potentially preventing stockholders from receiving a premium for their shares[118]. Risks and Compliance - The company faces risks related to product quality and potential recalls, which could harm reputation and financial performance[85]. - The company may incur material liabilities under existing or future laws and regulations, which could adversely affect its business and financial condition[132]. - The company is subject to various environmental, health, and safety laws, which impose strict liability for costs related to hazardous substances[134]. - The company may face increased compliance costs due to evolving ESG regulations and stakeholder expectations[136]. Seasonal Trends - The company experiences seasonality, with the strongest sales in Q4 and weakest in Q1, influenced by major U.S. holidays[87]. Investments and Assets - Total assets as of December 31, 2022, were $4,929 million, up from $4,812 million in 2021, showing an increase of 2.4%[294]. - Total equity as of December 31, 2022, increased to $1,868 million, up from $1,756 million in 2021, representing a growth of 6.4%[298]. - The company’s inventories decreased by $139 million in 2022, compared to a decrease of $165 million in 2021[301]. - Property, plant, and equipment, net rose to $722 million in 2022 from $677 million in 2021, reflecting a 7% increase[349]. Interest Rate Management - The company has significant variable rate debt commitments outstanding as of December 31, 2022, accruing interest at the LIBO rate plus an applicable margin of 1.75%[266]. - The company entered into interest rate swaps fixing the LIBO rate to an annual rate of 2.70% to 3.44% for an aggregate notional amount of $1,000 million[267]. - A 100-basis point increase in interest rates would result in a $10 million increase in annual interest expense on borrowings[269]. Dividends and Shareholder Returns - The company intends to continue paying quarterly cash dividends, but its ability to do so may be limited by operational results and debt restrictions[114]. - The company declared and paid dividends of $0.92 per share in both 2021 and 2022, totaling $192 million each year[301]. Related Party Transactions - The company has entered into various related party transactions with PEI Group, which may limit its operational flexibility and could involve conflicts of interest[120]. - Conflicts of interest may arise as certain directors hold positions with PEI Group entities, potentially impacting decision-making[128].

Financial Data and Key Metrics Changes - Net revenues for Q3 2022 were $967 million, a 7% increase from $905 million in Q3 2021, driven by price increases, partially offset by a decline in volume [19] - Adjusted EBITDA for the quarter was $116 million, down 12% from $132 million in the previous year, due to lower volume and higher SG&A costs [19] - Adjusted earnings per share for the quarter was $0.24 [19] Business Line Data and Key Metrics Changes - Pricing increased by 14%, offsetting all material, manufacturing, and logistics cost increases, while volume declined by 7% [20] - Hefty Tableware volume increased by 7%, while Reynolds Cooking and Baking volume declined by 14% [20][22] - Hefty waste and storage volume declined by 9%, and Presto volume decreased by 8% [20][22] Market Data and Key Metrics Changes - The waste bag category grew by 7% compared to 2019, reflecting increased consumer spending time at home [11][56] - Disposable tableware, particularly plastic party cups, saw a 9% increase compared to 2019 levels [56] - The foil category, including Reynolds Wrap, experienced a 4.5% increase in equivalent volume compared to the same period in 2019 [55] Company Strategy and Development Direction - The company aims for margin expansion and profit growth in Q4 2022 and 2023, leveraging pricing actions and operational improvements [16][24] - The integrated brand and store brand model is viewed as a competitive advantage, with a focus on innovation and consumer demand [11][12] - The company is committed to returning to pre-pandemic profitability levels in 2023 [37] Management's Comments on Operating Environment and Future Outlook - The economic environment remains dynamic with inflationary pressures and uncertain price elasticity impacting revenue expectations [10][16] - Management expressed confidence in adapting to market conditions and highlighted the importance of promotional activities in driving consumer demand [10][11] - The company anticipates a return to earnings growth and increased flexibility for future investments [16][28] Other Important Information - The company is implementing operational changes to improve reliability and efficiency in the Cooking and Baking segment due to recent manufacturing challenges [15][23] - Capital spending is projected to be approximately $135 million to $140 million, with a focus on improving balance sheet efficiency [25][27] Q&A Session Summary Question: Follow-up on cooking and baking profitability issues - Management acknowledged that recent operational performance has fallen short of standards due to unplanned equipment downtime, impacting manufacturing costs and production volume [33][34] Question: Return to pre-pandemic profitability levels - Management confirmed that the goal is to return to pre-pandemic profitability within 2023 [36][37] Question: Sales performance and elasticity - Management indicated that September volume met expectations, and promotional strategies are focused on quality and features rather than just price [42][43] Question: Trends in foil category and consumer behavior - Management noted that cooking at home has increased, benefiting the foil category, and younger consumers are cooking more often [49][50] Question: Impact of inflation and price elasticity on margins - Management stated that closing the pricing gap and easing commodity costs will improve margins going into 2023 [59][60] Question: Volume expectations for 2023 - Management is still finalizing plans for 2023 and will have a clearer outlook after the holiday season [72]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR WASHINGTON, DC 20549 REYNOLDS CONSUMER PRODUCTS INC. (Exact name of Registrant as specified in its charter) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Incorporation or Organization) For the transition period from __________ to __________ Delaware 45-3 ...

Third Quarter 2022 Earnings Presentation November 8, 2022 Disclaimer Forward-Looking Statements and Other Information This presentation contains statements reflecting our views about our future performance that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including our fourth quarter and fiscal year 2022 guidance. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects, ...

Reynolds Consumer Products Inc. (NASDAQ:REYN) Q2 2022 Earnings Conference Call August 9, 2022 8:00 AM ET Company Participants Mark Swartzberg - Investor Relations Lance Mitchell - President and Chief Executive Officer Michael Graham - Chief Financial Officer Conference Call Participants Theo Brito - Credit Suisse Lauren Lieberman - Barclays Robert Ottenstein - Evercore Andrea Teixeira - JPMorgan Mark Astrachan - Stifel Bill Chappell - Truist Securities Jason English - Goldman Sachs Peter Grom - UBS Operator ...