Reynolds Consumer Products(REYN) - 2025 Q2 - Quarterly Report

Forward-Looking Statements This section outlines the company's forward-looking statements, which are subject to various risks and uncertainties, cautioning investors against undue reliance - This report contains forward-looking statements regarding future financial performance, growth, profitability, cost management, and business trends, which are subject to risks, uncertainties, and assumptions[8] - Key risk factors include changes in consumer preferences, relationships with major customers, competition, supply chain disruptions, raw material costs, labor issues, economic downturns, and interest rate fluctuations[8][11] - Investors are cautioned not to place undue reliance on these statements, as actual results may differ materially, and the company is not obligated to update them[9] Part I. Financial Information This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Reynolds Consumer Products Inc., including income, comprehensive income, balance sheets, equity, and cash flows, with detailed explanatory notes Condensed Consolidated Statements of Income This statement provides a summary of the company's revenues, costs, and net income for the three and six months ended June 30, 2025 and 2024 | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Net Revenues | $938 | $930 | $1,756 | $1,764 | | Cost of Sales | $(712) | $(674) | $(1,341) | $(1,306) | | Gross Profit | $226 | $256 | $415 | $458 | | Income from Operations | $118 | $140 | $193 | $231 | | Net Income | $73 | $97 | $105 | $145 | | Basic EPS | $0.35 | $0.46 | $0.50 | $0.69 | | Diluted EPS | $0.35 | $0.46 | $0.50 | $0.69 | - Net income decreased by 25% for the three months ended June 30, 2025, and by 28% for the six months ended June 30, 2025, compared to the prior year periods[13] Condensed Consolidated Statements of Comprehensive Income This statement details the components of comprehensive income, including net income and other comprehensive income/loss, for the three and six months ended June 30, 2025 and 2024 | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income | $73 | $97 | $105 | $145 | | Other Comprehensive (Loss) Income, net of income taxes | | | | | | Currency translation adjustment | $2 | $— | $2 | $(1) | | Employee benefit plans | $(2) | $(2) | $(3) | $(3) | | Derivative instruments | $(5) | $— | $(10) | $5 | | Total Other Comprehensive (Loss) Income | $(5) | $(2) | $(11) | $1 | | Comprehensive Income | $68 | $95 | $94 | $146 | - Comprehensive income decreased by $27 million (28%) for the three months and $52 million (36%) for the six months ended June 30, 2025, primarily due to net income decline and derivative instrument losses[15] Condensed Consolidated Balance Sheets This statement presents the company's financial position, including assets, liabilities, and stockholders' equity, as of June 30, 2025, and December 31, 2024 | Metric (in millions) | As of June 30, 2025 | As of December 31, 2024 | | :------------------- | :------------------ | :---------------------- | | Total Current Assets | $1,063 | $1,101 | | Total Assets | $4,861 | $4,873 | | Total Current Liabilities | $575 | $539 | | Total Liabilities | $2,713 | $2,731 | | Total Stockholders' Equity | $2,148 | $2,142 | - Total assets slightly decreased from $4,873 million at December 31, 2024, to $4,861 million at June 30, 2025, while total stockholders' equity increased from $2,142 million to $2,148 million[18] Condensed Consolidated Statements of Stockholders' Equity This statement outlines changes in stockholders' equity components, including net income, comprehensive loss, and dividends, from December 31, 2024, to June 30, 2025 | Equity Component (in millions) | Balance as of Dec 31, 2024 | Net Income (Q2 2025) | Other Comprehensive Loss (Q2 2025) | Dividends Paid (Q2 2025) | Other (Q2 2025) | Balance as of Jun 30, 2025 | | :----------------------------- | :------------------------- | :------------------- | :--------------------------------- | :----------------------- | :-------------- | :------------------------- | | Common Stock | $— | $— | $— | $— | $— | $— | | Additional Paid-in Capital | $1,413 | $— | $— | $— | $5 | $1,422 | | Retained Earnings | $694 | $73 | $— | $(48) | $1 | $702 | | Accumulated Other Comprehensive Income | $35 | $— | $(5) | $— | $— | $24 | | Total Equity | $2,142 | $73 | $(5) | $(48) | $6 | $2,148 | - Total stockholders' equity increased by $6 million from December 31, 2024, to June 30, 2025, driven by net income partially offset by dividends paid and other comprehensive losses[20] Condensed Consolidated Statements of Cash Flows This statement details the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity (in millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $147 | $183 | | Net cash used in investing activities | $(79) | $(48) | | Net cash used in financing activities | $(148) | $(149) | | Net decrease in cash and cash equivalents | $(80) | $(14) | | Cash and cash equivalents at end of period | $57 | $101 | - Net cash provided by operating activities decreased by $36 million, while net cash used in investing activities increased by $31 million for the six months ended June 30, 2025, compared to the prior year[22] Notes to Unaudited Condensed Consolidated Financial Statements These notes provide essential details and context for the financial statements, covering business operations, accounting policies, debt, segment information, and related party transactions Note 1 – Description of Business and Basis of Presentation This note describes Reynolds Consumer Products Inc.'s business, its segments, and the basis for preparing the interim financial statements - Reynolds Consumer Products Inc. produces and sells household products under brands like Reynolds and Hefty, across four segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products[25] - The financial statements are prepared in accordance with GAAP for interim financial information and SEC regulations, reflecting normal recurring adjustments[26][27] - The company recorded $20 million in new operating lease right-of-use assets for the six months ended June 30, 2025, and had $9 million in obligations outstanding under its Supply Chain Finance program as of June 30, 2025[28][29] - Factored receivables amounted to $50 million as of June 30, 2025, under an agreement to sell certain accounts receivable up to $95 million[30] Note 2 – New Accounting Standards This note discusses the adoption of new accounting standards and the assessment of their potential impact on the company's financial statements - The company adopted ASU 2023-07, Segment Reporting, effective for fiscal years beginning after December 15, 2023, enhancing disclosures about significant segment expenses[31] - ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures) are issued but not yet adopted, with the company currently assessing their impact[32][33] - The U.S. government enacted the One Big Beautiful Bill Act (OBBBA) of 2025 on July 4, 2025, which includes changes to corporate income tax, and the company is evaluating its impact[34] Note 3 – Inventories This note provides a breakdown of the company's inventory components, including raw materials, work in progress, finished goods, and spare parts | Inventory Component (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Raw materials | $130 | $129 | | Work in progress | $72 | $60 | | Finished goods | $366 | $318 | | Spare parts | $62 | $60 | | Total Inventories | $630 | $567 | - Total inventories increased by $63 million from December 31, 2024, to June 30, 2025, primarily driven by an increase in finished goods[35] Note 4 – Debt This note details the company's debt structure, including the Term Loan Facility, its refinancing, and outstanding borrowings under the Revolving Facility | Debt Component (in millions) | June 30, 2025 | December 31, 2024 | | :--------------------------- | :------------ | :---------------- | | Term loan facility | $1,640 | $1,695 | | Deferred financing costs | $(7) | $(8) | | Original issue discounts | $— | $(1) | | Less: current portion | $(16) | $— | | Long-term debt | $1,617 | $1,686 | - In March 2025, the company amended its Term Loan Facility, replacing the existing facility with a new $1,645 million facility maturing in March 2032, and recognized a $13 million debt refinancing expense[37][38] - The Term Loan Facility amortizes in equal quarterly installments of $4 million, commencing in June 2025. Voluntary principal payments of $50 million were made prior to Amendment No. 4 during the six months ended June 30, 2025[43] - As of June 30, 2025, there were no outstanding borrowings under the $700 million Revolving Facility, with $7 million in letters of credit outstanding[44] Note 5 – Financial Instruments This note describes the company's use of interest rate swaps to manage interest rate risk and presents their fair values - The company uses interest rate swaps to fix the SOFR of its External Debt Facilities, with an aggregate notional amount of $1,150 million as of June 30, 2025, at an annual effective interest rate of 2.15% to 5.15%[46][47] - Additional interest rate swaps with a notional value of $900 million were entered into during Q2 2025, with forward start dates in February 2026 and maturity dates between March 2028 and March 2031, fixing SOFR at 3.33% to 3.41%[48] Fair Value of Interest Rate Swaps (in millions) | Fair Value of Interest Rate Swaps (in millions) | As of June 30, 2025 | As of December 31, 2024 | | :---------------------------------------------- | :------------------ | :---------------------- | | Assets: Other current assets | $8 | $15 | | Assets: Other assets | $— | $1 | | Liabilities: Other liabilities | $2 | $— | Note 6 – Stock-based Compensation This note details the company's equity incentive plan, including outstanding shares and stock-based compensation expense - The equity incentive plan, established in 2020, grants RSUs and PSUs to management and directors, with 2.0 million shares outstanding as of June 30, 2025, up from 1.3 million at December 31, 2024[51][52] Stock-based Compensation Expense (in millions) | Stock-based Compensation Expense (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Expense | $5 | $5 | $11 | $9 | Note 7 – Commitments and Contingencies This note addresses the company's involvement in legal proceedings and management's assessment of their potential financial impact - The company is periodically involved in litigation and legal proceedings, but management does not believe any current matters will have a material adverse effect on its financial position, results of operations, or cash flows as of June 30, 2025[53] Note 8 – Accumulated Other Comprehensive Income This note provides a detailed breakdown of changes in accumulated other comprehensive income, including currency translation adjustments, employee benefit plans, and derivative instruments | AOCI Component (in millions) | Balance as of Dec 31, 2024 | Gain (loss) arising during Q2 2025 | Reclassification to earnings (Q2 2025) | Effect of deferred taxes (Q2 2025) | Balance as of Jun 30, 2025 | | :--------------------------- | :------------------------- | :--------------------------------- | :------------------------------------- | :--------------------------------- | :------------------------- | | Currency Translation Adjustments | $(10) | $2 | $— | $— | $(8) | | Employee Benefit Plans | $31 | $— | $(2) | $— | $28 | | Derivative Instruments | $14 | $(1) | $(6) | $2 | $4 | | Total AOCI | $35 | $1 | $(8) | $2 | $24 | - Accumulated other comprehensive income decreased from $35 million at December 31, 2024, to $24 million at June 30, 2025, primarily due to reclassifications to earnings and losses on derivative instruments[55] Note 9 – Segment Information This note provides financial information by reportable segment, including net revenues and Adjusted EBITDA, and describes the company's operational structure - The company operates in four reportable segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products, with international business now aligned by product category[56][57] - Adjusted EBITDA is the primary financial measure used by the Chief Operating Decision Maker (CODM) to evaluate segment performance and allocate resources[62] Segment Net Revenues and Adjusted EBITDA (Three Months Ended June 30) | Segment (in millions) | Net Revenues 2025 | Net Revenues 2024 | Adjusted EBITDA 2025 | Adjusted EBITDA 2024 | | :-------------------- | :---------------- | :---------------- | :------------------- | :------------------- | | Reynolds Cooking & Baking | $295 | $291 | $49 | $54 | | Hefty Waste & Storage | $255 | $244 | $71 | $71 | | Hefty Tableware | $242 | $251 | $35 | $39 | | Presto Products | $153 | $151 | $33 | $37 | | Total Segment | $945 | $937 | $188 | $201 | Segment Net Revenues and Adjusted EBITDA (Six Months Ended June 30) | Segment (in millions) | Net Revenues 2025 | Net Revenues 2024 | Adjusted EBITDA 2025 | Adjusted EBITDA 2024 | | :-------------------- | :---------------- | :---------------- | :------------------- | :------------------- | | Reynolds Cooking & Baking | $554 | $547 | $87 | $86 | | Hefty Waste & Storage | $496 | $479 | $129 | $138 | | Hefty Tableware | $421 | $459 | $52 | $69 | | Presto Products | $296 | $294 | $59 | $66 | | Total Segment | $1,767 | $1,779 | $327 | $359 | Note 10 – Related Party Transactions This note details transactions with related parties, including the sale of PEI Group by PFL and dividend payments - PFL, the majority owner, sold PEI Group (a related party) to an unrelated party on April 1, 2025, reclassifying subsequent transactions[70][71] | Related Party Transactions (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenues from PEI Group | $0 | $16 | $17 | $38 | | Products purchased from PEI Group | $0 | $83 | $51 | $163 | | Freight and warehousing costs from PEI Group | $0 | $7 | $4 | $15 | - Dividends of $36 million were paid to PFL during each of the three and six months ended June 30, 2025 and 2024[73] Note 11 – Subsequent Events This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - On July 24, 2025, the Board of Directors approved a cash dividend of $0.23 per common share, payable on August 29, 2025[74] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, condition, and operational results, including business segments, key trends, and non-GAAP reconciliations Description of the Company and its Business Segments This section describes Reynolds Consumer Products' market position, its four core business segments, and its commitment to sustainable solutions - Reynolds Consumer Products is a market-leading consumer products company with a presence in 95% of U.S. households, holding 1 or 2 market share in most product categories[77] - The company manages four segments: Reynolds Cooking & Baking (e.g., Reynolds Wrap), Hefty Waste & Storage (e.g., Hefty trash bags), Hefty Tableware (e.g., Hefty party cups), and Presto Products (primarily store brand food storage and trash bags, plus specialty closure systems)[79][80] - The company emphasizes sustainable solutions across its product portfolio, such as recycled aluminum foil, compostable bags, and plant-based food storage bags[79][80] Overview This section provides a high-level summary of the company's total net revenues and net income performance for the three and six months ended June 30, 2025 - Total net revenues increased by 1% for the three months ended June 30, 2025, driven by higher pricing offsetting lower volume, and were relatively flat for the six months[82] - Net income decreased by 25% for the three months and 28% for the six months ended June 30, 2025, primarily due to timing of pricing actions relative to input cost increases, strategic initiative costs, CEO transition costs, and a prior-year tax benefit[83][84] Non-GAAP Measures This section defines and reconciles the company's non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS, used for performance evaluation - The company uses non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS, to evaluate operating performance and make strategic decisions[86][88] - Adjusted EBITDA is defined as net income plus income tax expense, net interest expense, debt refinancing expense, depreciation and amortization, costs to execute strategic initiatives, and CEO transition costs[87] Reconciliation of Net Income to Adjusted EBITDA (in millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income – GAAP | $73 | $97 | $105 | $145 | | Income tax expense | $23 | $18 | $33 | $35 | | Interest expense, net | $22 | $25 | $42 | $51 | | Debt refinancing expense | $— | $— | $13 | $— | | Depreciation & amortization | $33 | $32 | $65 | $63 | | Costs to execute strategic initiatives | $8 | $— | $13 | $— | | CEO transition costs | $4 | $— | $8 | $— | | Adjusted EBITDA (Non-GAAP) | $163 | $172 | $279 | $294 | Reconciliation of Net Income and Diluted EPS to Adjusted (Non-GAAP) | Metric (in millions, except per share) | 3 Months Ended June 30, 2025 (Net Income) | 3 Months Ended June 30, 2025 (Diluted EPS) | 3 Months Ended June 30, 2024 (Net Income) | 3 Months Ended June 30, 2024 (Diluted EPS) | | :------------------------------------- | :---------------------------------------- | :----------------------------------------- | :---------------------------------------- | :----------------------------------------- | | As Reported - GAAP | $73 | $0.35 | $97 | $0.46 | | Adjustments: Costs to execute strategic initiatives | $6 | $0.03 | $— | $— | | Adjustments: CEO transition costs | $4 | $0.02 | $— | $— | | Adjusted (Non-GAAP) | $83 | $0.39 | $97 | $0.46 | | Metric (in millions, except per share) | 6 Months Ended June 30, 2025 (Net Income) | 6 Months Ended June 30, 2025 (Diluted EPS) | 6 Months Ended June 30, 2024 (Net Income) | 6 Months Ended June 30, 2024 (Diluted EPS) | | :------------------------------------- | :---------------------------------------- | :----------------------------------------- | :---------------------------------------- | :----------------------------------------- | | As Reported - GAAP | $105 | $0.50 | $145 | $0.69 | | Adjustments: Debt refinancing expense | $10 | $0.05 | $— | $— | | Adjustments: Costs to execute strategic initiatives | $10 | $0.05 | $— | $— | | Adjustments: CEO transition costs | $7 | $0.03 | $— | $— | | Adjusted (Non-GAAP) | $132 | $0.63 | $145 | $0.69 | Results of Operations – Three Months Ended June 30, 2025 This section details the consolidated and segment-level financial performance for the three months ended June 30, 2025, highlighting revenue increase, but gross profit and net income decreases Total Reynolds Consumer Products (Three Months) This section provides a consolidated overview of the company's financial results for the three months ended June 30, 2025, detailing revenues, costs, and profitability metrics | Metric (in millions) | 2025 | 2024 | Change | % Change | | :------------------- | :------- | :------- | :------- | :------- | | Total Net Revenues | $938 | $930 | $8 | 1% | | Cost of Sales | $(712) | $(674) | $(38) | (6)% | | Gross Profit | $226 | $256 | $(30) | (12)% | | SG&A Expenses | $(96) | $(116) | $20 | 17% | | Other Expense, net | $(12) | $— | $(12) | NM | | Income from Operations | $118 | $140 | $(22) | (16)% | | Interest Expense, net | $(22) | $(25) | $3 | 12% | | Income before Income Taxes | $96 | $115 | $(19) | (17)% | | Income Tax Expense | $(23) | $(18) | $(5) | (28)% | | Net Income | $73 | $97 | $(24) | (25)% | | Adjusted EBITDA | $163 | $172 | $(9) | (5)% | - Total net revenues increased by 1% due to higher pricing, while cost of sales increased by 6% due to higher material, manufacturing, and logistics costs[102][103] - Selling, general and administrative expenses decreased by 17% due to lower personnel and advertising costs, partially offsetting the decline in gross profit[103] - Adjusted EBITDA decreased by 5% to $163 million, driven by lower retail volume and the timing of pricing actions relative to input cost increases[107] Segment Information (Three Months) This section analyzes the net revenues and Adjusted EBITDA performance of each operating segment for the three months ended June 30, 2025 Segment Performance (Three Months Ended June 30) | Segment | Total Net Revenues 2025 (in millions) | Total Net Revenues 2024 (in millions) | Adjusted EBITDA 2025 (in millions) | Adjusted EBITDA 2024 (in millions) | | :------------------------ | :------------------------------------ | :------------------------------------ | :--------------------------------- | :--------------------------------- | | Reynolds Cooking & Baking | $295 (1% increase) | $291 | $49 (9% decrease) | $54 | | Hefty Waste & Storage | $255 (5% increase) | $244 | $71 (0% change) | $71 | | Hefty Tableware | $242 (4% decrease) | $251 | $35 (10% decrease) | $39 | | Presto Products | $153 (1% increase) | $151 | $33 (11% decrease) | $37 | - Reynolds Cooking & Baking net revenues increased due to higher pricing and non-retail volume, but Adjusted EBITDA decreased due to lower retail volumes and input cost timing[109][110] - Hefty Waste & Storage net revenues increased by 5% due to increased volume, with Adjusted EBITDA remaining flat as higher volume and lower SG&A were offset by increased material, manufacturing, and logistics costs[111][112] - Hefty Tableware net revenues and Adjusted EBITDA both decreased by 4% and 10% respectively, primarily due to foam declines[113][114] - Presto Products net revenues increased by 1% due to increased volume, but Adjusted EBITDA decreased by 11% due to higher operational costs from scaling new distribution[115][116] Results of Operations – Six Months Ended June 30, 2025 This section analyzes the company's consolidated and segment-level financial performance for the six months ended June 30, 2025, noting slight revenue decrease, gross profit decline, and significant net income reduction Total Reynolds Consumer Products (Six Months) This section provides a consolidated overview of the company's financial results for the six months ended June 30, 2025, detailing revenues, costs, and profitability metrics | Metric (in millions) | 2025 | 2024 | Change | % Change | | :------------------- | :------- | :------- | :------- | :------- | | Total Net Revenues | $1,756 | $1,764 | $(8) | 0% | | Cost of Sales | $(1,341) | $(1,306) | $(35) | (3)% | | Gross Profit | $415 | $458 | $(43) | (9)% | | SG&A Expenses | $(201) | $(227) | $26 | 11% | | Other Expense, net | $(21) | $— | $(21) | NM | | Income from Operations | $193 | $231 | $(38) | (16)% | | Interest Expense, net | $(42) | $(51) | $9 | 18% | | Debt Refinancing Expense | $(13) | $— | $(13) | NM | | Income before Income Taxes | $138 | $180 | $(42) | (23)% | | Income Tax Expense | $(33) | $(35) | $2 | 6% | | Net Income | $105 | $145 | $(40) | (28)% | | Adjusted EBITDA | $279 | $294 | $(15) | (5)% | - Total net revenues decreased slightly by $8 million, or 0%, for the six months, as lower volume was mostly offset by higher pricing[125] - Cost of sales increased by 3% to $1,341 million, driven by higher material, manufacturing, and logistics costs, leading to a 9% decrease in gross profit[126] - Selling, general and administrative expenses decreased by 11% due to lower personnel and advertising costs, while interest expense, net, decreased by 18% due to a lower outstanding principal balance[126][127] - A $13 million debt refinancing expense was recorded in connection with the March 2025 term loan facility refinancing[129] - Adjusted EBITDA decreased by 5% to $279 million, primarily due to the timing of pricing actions relative to input cost increases and lower retail volume[131] Segment Information (Six Months) This section analyzes the net revenues and Adjusted EBITDA performance of each operating segment for the six months ended June 30, 2025 Segment Performance (Six Months Ended June 30) | Segment | Total Net Revenues 2025 (in millions) | Total Net Revenues 2024 (in millions) | Adjusted EBITDA 2025 (in millions) | Adjusted EBITDA 2024 (in millions) | | :------------------------ | :------------------------------------ | :------------------------------------ | :--------------------------------- | :--------------------------------- | | Reynolds Cooking & Baking | $554 (1% increase) | $547 | $87 (1% increase) | $86 | | Hefty Waste & Storage | $496 (4% increase) | $479 | $129 (7% decrease) | $138 | | Hefty Tableware | $421 (8% decrease) | $459 | $52 (25% decrease) | $69 | | Presto Products | $296 (1% increase) | $294 | $59 (11% decrease) | $66 | - Reynolds Cooking & Baking net revenues increased by 1% due to higher pricing and non-retail volume, leading to a 1% increase in Adjusted EBITDA[133][134] - Hefty Waste & Storage net revenues increased by 4% due to increased volume, but Adjusted EBITDA decreased by 7% due to higher material, manufacturing, and logistics costs[135][136] - Hefty Tableware experienced an 8% decrease in net revenues and a 25% decrease in Adjusted EBITDA, both attributed to foam declines and related costs[137][138] - Presto Products net revenues increased by 1% due to higher pricing, but Adjusted EBITDA decreased by 11% due to higher operational costs associated with scaling new distribution[139][140] Liquidity and Capital Resources This section discusses the company's sources of liquidity, cash flow activities, debt structure, and compliance with financial covenants - Principal liquidity sources include existing cash, cash from operations, and available borrowings under the $700 million Revolving Facility[142][147] | Cash Flow Activity (in millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $147 | $183 | | Net cash used in investing activities | $(79) | $(48) | | Net cash used in financing activities | $(148) | $(149) | | Decrease in cash and cash equivalents | $(80) | $(14) | - Net cash from operating activities decreased by $36 million, and net cash used in investing activities increased by $31 million due to higher capital expenditures[144][145] - The Term Loan Facility was refinanced in March 2025 with a new $1,645 million facility maturing in March 2032, with an outstanding balance of $1,640 million as of June 30, 2025[147][148] - The company is in compliance with all covenants under its External Debt Facilities and expects sufficient liquidity to meet future needs, though actual results depend on various factors[161][166] - Factored receivables were $50 million as of June 30, 2025, and obligations under the Supply Chain Finance program were $9 million[162][163] Critical Accounting Policies and Estimates This section highlights critical accounting policies and estimates that involve subjective judgments and can materially impact the financial statements - Critical accounting policies and estimates involve subjective judgments and assumptions with a material impact on financial statements, detailed in the Annual Report on Form 10-K for December 31, 2024[168] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section confirms no material changes in the company's exposure to market risk during the six months ended June 30, 2025, compared to prior disclosures - No material changes in exposure to market risk occurred during the six months ended June 30, 2025[170] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures This section confirms the effectiveness of the company's disclosure controls and procedures as assessed by the CEO and CFO - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[173] Changes in Internal Control over Financial Reporting This section reports that no material changes occurred in internal control over financial reporting during the quarter ended June 30, 2025 - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect it[173] Part II. Other Information This part includes information on legal proceedings, risk factors, equity sales, defaults, mine safety, other disclosures, and a list of exhibits Item 1. Legal Proceedings This section incorporates legal proceedings information from Note 7, indicating no material adverse effect is expected from current matters - Information on legal proceedings is incorporated by reference from Note 7 – Commitments and Contingencies[176] Item 1A. Risk Factors This section confirms no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for December 31, 2024 - No material changes from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[178] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports no unregistered sales of equity securities or use of proceeds for the period - None[180] Item 3. Defaults Upon Senior Securities This section reports no defaults upon senior securities during the period - None[182] Item 4. Mine Safety Disclosures This section clarifies that mine safety disclosures are not applicable to the company's operations - Not applicable[184] Item 5. Other Information This section confirms no directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[186] Item 6. Exhibits This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including organizational documents, agreements, certifications, and XBRL files - The report includes various exhibits such as Amended and Restated Certificate of Incorporation, By-Laws, Separation Agreement, and certifications from principal executive and financial officers[188] - XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, Presentation Linkbase, and Cover Page Interactive Data File are also filed as exhibits[188] Signatures This section contains the official signatures certifying the accuracy and completeness of the report - The report was signed on behalf of Reynolds Consumer Products Inc. by Chris Mayrhofer, Senior Vice President and Controller (Principal Accounting Officer), on July 30, 2025[191]