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 ...

Financial Performance & Outlook - For Q1 2023, the company anticipates net income between $12 million and $20 million and adjusted EBITDA between $75 million and $85 million[67] - For fiscal year 2023, the company projects net income between $274 million and $296 million and adjusted EBITDA between $605 million and $635 million[2, 67] - Fiscal Year 2022 net revenues increased by 7%, driven by pricing actions offsetting volume decline[19] - Q4 2022 net revenues were $398 million for Reynolds Cooking & Baking, $297 million for Hefty Waste & Storage, and $156 million for Presto Products[25, 30, 32] - Adjusted EBITDA margin for Q4 2022 was 11% for Reynolds Cooking & Baking, 21% for Hefty Waste & Storage, and 19% for Presto Products[25, 30, 32] Segment Performance - Hefty Waste & Storage Q4 2022 adjusted EBITDA increased 57%, driven by pricing and cost savings, despite a 5% volume decrease[28] - Hefty Tableware Q4 2022 net revenues increased 28%, and adjusted EBITDA increased 88% due to pricing and cost savings initiatives[56] - Presto Products Q4 2022 net revenues increased 8%, and adjusted EBITDA increased 76% due to pricing, volume, and cost reduction initiatives[59] Market Share & Category Trends - Reynolds Consumer Products holds 59% category share in Aluminum Foil, 62% in Convenience Cooking, and 51% in Trash Bags[34, 37, 66] - Reynolds Consumer Products holds 37% category share in Food Storage Bags[36] Debt - As of December 31, 2022, the company's net debt was $2053 million[11]

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]

Financial Performance - Total net revenues increased by 7% and 8% for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021, primarily due to higher pricing[76] - Total net revenues increased by $62 million, or 7%, to $967 million for the three months ended September 30, 2022, driven primarily by higher pricing[92] - Total net revenues for the nine months ended September 30, 2022, increased by $195 million, or 8%, to $2,729 million, primarily due to higher pricing[113] - Net income for the three months ended September 30, 2022, was $48 million, compared to $66 million in the same period of 2021[86] - Adjusted Net Income for the nine months ended September 30, 2022, was $160 million, compared to $228 million in the same period of 2021[86] - Net income fell by $18 million, or 27%, to $48 million, reflecting a decrease in income before income taxes[92] Segment Performance - The Reynolds Cooking & Baking segment holds the 1 market position in the U.S. consumer foil market with over 50% market share in virtually all categories[74] - Hefty Waste & Storage segment has the 1 branded market share in the U.S. large black trash bag and slider bag segments[74] - The Hefty Tableware segment includes the 1 party cup brand in America, emphasizing quality and value[74] - Presto Products segment is a market leader in food storage bags, providing category management and consumer insights[74] - Hefty Tableware segment net revenues increased by $119 million, or 20%, to $701 million, driven by higher pricing and volume[123] - Hefty Waste & Storage segment net revenues increased by $53 million, or 8%, to $704 million, primarily due to higher pricing[121] - Reynolds Cooking & Baking segment net revenues decreased by $13 million, or 1%, to $889 million, driven by lower household foil and non-retail volumes[119] - Presto Products segment net revenues increased by $27 million, or 6%, to $447 million, primarily due to pricing actions[125] Cost and Expenses - The company experienced significant increases in material costs, manufacturing, logistics, and advertising costs, impacting profitability[77] - Cost of sales rose by $66 million, or 9%, to $789 million, mainly due to an $81 million increase in material costs[94] - Selling, general and administrative expenses increased by $20 million, or 8%, to $264 million, mainly due to higher advertising and personnel costs[114] - Interest expense increased by $12 million, or 33%, to $48 million, primarily due to higher interest rates[116] EBITDA Analysis - Adjusted EBITDA for the three months ended September 30, 2022, was $116 million, down from $132 million in the same period of 2021[90] - Adjusted EBITDA decreased by $16 million, or 12%, to $116 million, attributed to lower volume and higher personnel and advertising costs[97] - Adjusted EBITDA decreased by $74 million, or 18%, to $346 million, primarily due to lower volume and increased costs[117] - Hefty Waste & Storage segment Adjusted EBITDA increased by $7 million, or 19%, to $44 million, primarily due to the timing of price increases[102] - Presto Products segment Adjusted EBITDA rose by $9 million, or 64%, to $23 million, driven by price increases to recover higher costs[107] Cash Flow and Financing - Net cash provided by operating activities decreased by $4 million to $118 million for the nine months ended September 30, 2022[130] - Net cash used in investing activities decreased by $15 million to $86 million, primarily due to a prior year purchase that did not repeat[131] - Net cash used in financing activities decreased by $100 million to $163 million, attributable to a prior year voluntary debt payment[132] - As of September 30, 2022, the outstanding balance under the Term Loan Facility was $2,113 million, with no borrowings under the Revolving Facility[134] - Cash dividends of $0.23 and $0.69 per share were declared and paid for the three and nine months ended September 30, 2022, respectively[149] Operational Changes - The company is implementing operational changes to address unplanned equipment downtime in the Reynolds Cooking & Baking segment[78]

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, ...

Financial Data and Key Metrics Changes - Net revenues for Q2 2022 were $917 million, a 5% increase from $873 million in Q2 2021, primarily driven by price increases despite a decline in volume [24] - Adjusted EBITDA for Q2 2022 was $118 million, down 20% from $148 million in Q2 2021, due to lower volume and higher costs [25] - Adjusted earnings per share for the quarter was $0.26 [26] Business Segment Data and Key Metrics Changes - The 5% increase in net revenues was driven by low to mid-teen pricing increases across business segments, partially offset by a 9% volume decline [27] - Reynolds Cooking & Baking experienced a 19% volume decline, while Hefty Waste & Storage saw a 3% decline, and Hefty Tableware volume was flat [28] Market Data and Key Metrics Changes - The foil category showed a significant decline in consumption, with Reynolds Wrap volume down 15.6% in Q2, but recent weeks showed improvement with a decline of only 4.4% [44] - Private label products gained share in the foil category, increasing by 2.5 points over 12 weeks, but this trend has stabilized recently [63] Company Strategy and Development Direction - The company is focusing on promotions, pack sizes, and advertising to meet changing consumer needs and drive demand [11][20] - Plans to increase pricing for tableware products and Hefty brand waste bags to offset rising costs [13] - The company aims for margin expansion and earnings growth in Q4 2022 and 2023, with expectations of achieving pre-pandemic profitability levels [36][79] Management's Comments on Operating Environment and Future Outlook - Management noted a dynamic environment with increased consumer elasticity impacting volume expectations [43] - The company anticipates a narrowing gap between pricing and cost increases, leading to improved margins [35] - Management expressed confidence in regaining volume share through promotional activities and addressing consumer needs [44][45] Other Important Information - The company expects net revenues for Q3 2022 to grow by 8% to 12%, with adjusted EBITDA projected between $110 million to $120 million [29] - For the fiscal year 2022, net revenues are expected to increase by 8% to 11%, with adjusted EBITDA projected between $560 million to $590 million [31] Q&A Session Summary Question: What gives confidence in the new volume outlook? - Management indicated that the previous expectation was a low-single-digit decline, and confidence stems from moderating category declines and effective promotional actions [43] Question: What are the sources of the lowered EBITDA and earnings outlook? - The main driver is lower volume expectations due to inflationary pressures, with an estimated 3 points less volume than previously expected [48] Question: Can you discuss the competitive environment for trash bags? - Management noted a constructive environment with pricing dynamics improving, and they are recovering costs through price increases [61] Question: How do you see the aluminum foil category playing out? - Management observed that private label pricing has increased, leading to a stabilization in market share dynamics between branded and private label products [63] Question: How do you expect to retain pricing if input costs come down? - Management expressed confidence in maintaining and improving margins as commodity costs decrease, leveraging significant price increases taken over the past two years [78]

Second Quarter 2022 Performance - Net revenues for the second quarter ended June 30, 2022, reached $917 million[15] - Adjusted EBITDA for the same period was $118 million, with a 13% margin[15] - Reynolds Cooking & Baking segment net revenues were $294 million with Adjusted EBITDA of $36 million and a 12% margin[11, 12, 13] - Hefty Waste & Storage segment net revenues were $238 million with Adjusted EBITDA of $46 million and a 19% margin[11, 12, 13] - Presto Products segment net revenues were $150 million with Adjusted EBITDA of $25 million and a 17% margin[11, 12, 13] - Hefty Tableware segment net revenues were $240 million with Adjusted EBITDA of $25 million and a 10% margin[11, 12, 13] Fiscal Year 2022 Guidance - The company projects net revenue growth of 8% to 11% for fiscal year 2022 (based on $3556 million in FY21)[21] - Adjusted EBITDA is expected to be between $560 million and $590 million[21] - Net income is projected to be between $269 million and $292 million, with adjusted net income between $278 million and $301 million[21] - The company anticipates EPS of $1.28 to $1.39 and adjusted EPS of $1.32 to $1.43[21] - Net debt is expected to be between $1.9 billion and $2 billion[21] Third Quarter 2022 Guidance - The company projects net revenue growth of 8% to 12% for the third quarter of 2022 (based on $905 million in Q3 2021)[24] - Net income is expected to be between $43 million and $51 million, with adjusted net income between $45 million and $53 million[24] - Adjusted EBITDA is projected to be between $110 million and $120 million[24] - The company anticipates EPS of $0.20 to $0.24 and adjusted EPS of $0.21 to $0.25[24] Fourth Quarter 2022 Guidance - The company projects net revenue growth of 9% to 17% for the fourth quarter of 2022 (based on $1021 million in Q4 2021)[26] - Net income is expected to be between $122 million and $137 million, with adjusted net income between $124 million and $139 million[26] - Adjusted EBITDA is projected to be between $220 million and $240 million[26] - The company anticipates EPS of $0.58 to $0.65 and adjusted EPS of $0.59 to $0.66[26]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 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 June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-39205 REYNOLDS CONSUMER PRODUCTS INC. (Exact name of Registrant as specified in its charter) Delaware 45-346 ...