Pactiv(US:PTVE)2023-03-07 13:04Business Strategy - In Q1 2023, the company announced a Beverage Merchandising Restructuring plan aimed at increasing production efficiency and reducing capital expenditures[20]. - The company's ten largest customers accounted for 40% of net revenues in 2022, with no single customer exceeding 10%[21]. - The company experienced moderate seasonality, with Foodservice and Food Merchandising operations peaking in summer and fall, while Beverage Merchandising saw increased sales during the academic year[22]. Operations and Manufacturing - The company operates 22 Foodservice and 24 Food Merchandising manufacturing plants, along with 6 U.S. beverage carton manufacturing plants[26]. - In 2022, approximately 50% of the company's annual energy consumption came from renewable sources, including biomass, hydropower, wind, and solar[49]. - The company reported that 97% of its water intake occurs at two mills located in low or low-medium baseline water risk areas[50]. Research and Development - In 2022, the company spent $33 million on research and development, focusing on product innovation and sustainability[36]. - The company launched over 100 new sustainable products since 2020, aligning with customer goals for sustainability[46]. - The company has over 300 patents related to product design and material formulations as of December 31, 2022[32]. Sustainability and Environmental Impact - Approximately 66% of the company's net revenues in 2022 came from products made from recycled, recyclable, or renewable materials, with a goal of reaching 100% by 2030[45]. - The company is subject to various environmental regulations, including the California Plastic Pollution Prevention and Packaging Producer Responsibility Act, which mandates a 25% reduction in plastics by 2032[39]. - The company committed to reducing greenhouse gas emissions and energy consumption as part of the Science Based Targets initiative, aiming for significant reductions in the near and long term[48]. Safety and Workforce - As of December 31, 2022, the company employed approximately 16,000 people globally, with about 30% represented by labor unions[56]. - The total recordable incidence rate for workplace safety was 1.10, significantly better than the industry average of 3.00 in 2022[57]. Waste Management and Recycling - In 2022, the company initiated a waste and recycling audit at each facility to identify areas for improvement and efficiency in waste management[51]. - The company established targets to ensure that by the end of 2025, 100% of its procured virgin fiber meets the SFI Fiber Sourcing standard and the FSC Controlled Wood Standard[53]. Financial Management - The company entered into interest rate swap agreements to hedge a portion of its interest rate exposure, fixing the LIBO rate to a weighted average annual rate of 4.12% for an aggregate notional amount of $1,000 million[308]. - A 100 basis point increase in interest rates would result in a $12 million increase in interest expense based on outstanding debt commitments as of December 31, 2022[309]. - The company utilizes futures and swaps to mitigate exposure to commodity price fluctuations[316]. - As of December 31, 2022, a 10% movement in the price curve for commodity derivatives would result in a change of less than $1 million in unrealized loss[317]. - Details of commodity derivative contracts are available in Note 12 of the consolidated financial statements for the years ending December 31, 2022, and 2021[316].