A Delaware corporation
|
101 Oakley Street, Evansville, Indiana, 47710
(812) 424-2904
|
IRS employer identification number
20-5234618
|
Class
|
|
Outstanding at May 3, 2018
|
Common Stock, $.01 par value per share
|
|
131.7 million shares
|
Part I.
|
Financial Information
|
Page No.
|
|
|
Item 1.
|
Financial Statements:
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
Item 2.
|
||
|
Item 3.
|
||
|
Item 4.
|
||
Part II.
|
Other Information
|
|
|
|
Item 1.
|
||
|
Item 1A.
|
||
|
Item 6.
|
||
|
Item 1. |
Financial Statements
|
|
Quarterly Period Ended
|
Two Quarterly Periods Ended
|
||||||||||||||
|
March 31, 2018
|
April 1, 2017
|
March 31, 2018
|
April 1, 2017
|
||||||||||||
Net sales
|
$
|
1,967
|
$
|
1,806
|
$
|
3,743
|
$
|
3,308
|
||||||||
Costs and expenses:
|
||||||||||||||||
Cost of goods sold
|
1,596
|
1,453
|
3,043
|
2,659
|
||||||||||||
Selling, general and administrative
|
130
|
132
|
247
|
245
|
||||||||||||
Amortization of intangibles
|
38
|
40
|
76
|
73
|
||||||||||||
Restructuring and impairment charges
|
15
|
6
|
26
|
10
|
||||||||||||
Operating income
|
188
|
175
|
351
|
321
|
||||||||||||
Other expense, net
|
5
|
20
|
14
|
19
|
||||||||||||
Interest expense, net
|
66
|
67
|
128
|
135
|
||||||||||||
Income before income taxes
|
117
|
88
|
209
|
167
|
||||||||||||
Income tax expense (benefit)
|
27
|
16
|
(44
|
)
|
44
|
|||||||||||
Net income
|
$
|
90
|
$
|
72
|
$
|
253
|
$
|
123
|
||||||||
|
||||||||||||||||
Net income per share:
|
||||||||||||||||
Basic
|
$
|
0.69
|
$
|
0.56
|
$
|
1.93
|
$
|
0.98
|
||||||||
Diluted
|
0.66
|
0.54
|
1.86
|
0.94
|
||||||||||||
Outstanding weighted-average shares:
|
||||||||||||||||
Basic
|
131.3
|
127.7
|
131.0
|
124.9
|
||||||||||||
Diluted
|
135.8
|
133.2
|
135.9
|
130.7
|
|
Quarterly Period Ended
|
Two Quarterly Periods Ended
|
||||||||||||||
|
March 31, 2018
|
April 1, 2017
|
March 31, 2018
|
April 1, 2017
|
||||||||||||
Net income
|
$
|
90
|
$
|
72
|
$
|
253
|
$
|
123
|
||||||||
Currency translation
|
7
|
21
|
(17
|
)
|
(24
|
)
|
||||||||||
Pension and other postretirement benefits
|
—
|
13
|
(1
|
)
|
13
|
|||||||||||
Interest rate hedges
|
23
|
15
|
41
|
33
|
||||||||||||
Provision for income taxes
|
(6
|
)
|
(6
|
)
|
(11
|
)
|
(13
|
)
|
||||||||
Other comprehensive income, net of tax
|
24
|
43
|
12
|
9
|
||||||||||||
Comprehensive income
|
$
|
114
|
$
|
115
|
$
|
265
|
$
|
132
|
|
March 31, 2018
|
September 30, 2017
|
||||||
Assets
|
(Unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
291
|
$
|
306
|
||||
Accounts receivable (less allowance of $13)
|
918
|
847
|
||||||
Inventories:
|
||||||||
Finished goods
|
562
|
428
|
||||||
Raw materials and supplies
|
389
|
334
|
||||||
|
951
|
762
|
||||||
Prepaid expenses and other current assets
|
101
|
89
|
||||||
Total current assets
|
2,261
|
2,004
|
||||||
Property, plant, and equipment, net
|
2,618
|
2,366
|
||||||
Goodwill and intangible assets, net
|
4,160
|
4,061
|
||||||
Other assets
|
68
|
45
|
||||||
Total assets
|
$
|
9,107
|
$
|
8,476
|
||||
Liabilities
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
718
|
$
|
638
|
||||
Accrued expenses and other current liabilities
|
410
|
463
|
||||||
Current portion of long-term debt
|
34
|
33
|
||||||
Total current liabilities
|
1,162
|
1,134
|
||||||
Long-term debt, less current portion
|
5,992
|
5,608
|
||||||
Deferred income taxes
|
325
|
419
|
||||||
Other long-term liabilities
|
322
|
300
|
||||||
Total liabilities
|
7,801
|
7,461
|
||||||
Stockholders' equity
|
||||||||
Common stock (131.6 and 130.9 million shares issued, respectively)
|
1
|
1
|
||||||
Additional paid-in capital
|
849
|
823
|
||||||
Non-controlling interest
|
3
|
3
|
||||||
Retained earnings
|
509
|
256
|
||||||
Accumulated other comprehensive loss
|
(56
|
)
|
(68
|
)
|
||||
Total stockholders' equity
|
1,306
|
1,015
|
||||||
Total liabilities and stockholders' equity
|
$
|
9,107
|
$
|
8,476
|
|
Two Quarterly Periods Ended
|
|||||||
|
March 31, 2018
|
April 1, 2017
|
||||||
Cash Flows from Operating Activities:
|
||||||||
Net income
|
$
|
253
|
$
|
123
|
||||
Adjustments to reconcile net cash provided by operating activities:
|
||||||||
Depreciation
|
185
|
178
|
||||||
Amortization of intangibles
|
76
|
73
|
||||||
Non-cash interest expense
|
4
|
4
|
||||||
Deferred income tax
|
(102
|
)
|
12
|
|||||
Stock compensation expense
|
14
|
11
|
||||||
Other non-cash operating activities, net
|
12
|
24
|
||||||
Changes in working capital
|
(191
|
)
|
(90
|
)
|
||||
Changes in other assets and liabilities
|
34
|
(2
|
)
|
|||||
Net cash from operating activities
|
285
|
333
|
||||||
Cash Flows from Investing Activities:
|
||||||||
Additions to property, plant and equipment
|
(184
|
)
|
(135
|
)
|
||||
Proceeds from sale of assets
|
3
|
4
|
||||||
Acquisition of business, net of cash acquired
|
(474
|
)
|
(458
|
)
|
||||
Other investing activities, net
|
—
|
(1
|
)
|
|||||
Net cash from investing activities
|
(655
|
)
|
(590
|
)
|
||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from long-term borrowings
|
497
|
595
|
||||||
Repayments on long-term borrowings
|
(117
|
)
|
(317
|
)
|
||||
Proceeds from issuance of common stock
|
12
|
15
|
||||||
Payment of tax receivable agreement
|
(37
|
)
|
(60
|
)
|
||||
Debt financing costs
|
(1
|
)
|
(4
|
)
|
||||
Net cash from financing activities
|
354
|
229
|
||||||
Effect of exchange rate changes on cash
|
1
|
(2
|
)
|
|||||
Net change in cash
|
(15
|
)
|
(30
|
)
|
||||
Cash and cash equivalents at beginning of period
|
306
|
323
|
||||||
Cash and cash equivalents at end of period
|
$
|
291
|
$
|
293
|
1. |
Basis of Presentation
|
2. |
Recently Issued Accounting Pronouncements
|
3. |
Acquisitions
|
Working capital (a)
|
$
|
70
|
||
Property and equipment
|
239
|
|||
Intangible assets
|
91
|
|||
Goodwill
|
76
|
|||
Other assets and long-term liabilities
|
(2
|
)
|
||
(a) Includes a $3 million step up of inventory to fair value
|
4. |
Accounts Receivable Factoring Agreements
|
5. |
Restructuring and Impairment Charges
|
|
Quarterly Period Ended
|
Two Quarterly Periods Ended
|
||||||||||||||
March 31, 2018
|
April 1, 2017
|
March 31, 2018
|
April 1, 2017
|
|||||||||||||
Engineered Materials
|
$
|
2
|
$
|
2
|
$
|
2
|
$
|
2
|
||||||||
Health, Hygiene & Specialties
|
12
|
2
|
22
|
4
|
||||||||||||
Consumer Packaging
|
1
|
2
|
2
|
4
|
||||||||||||
Consolidated
|
$
|
15
|
$
|
6
|
$
|
26
|
$
|
10
|
|
Employee Severance and Benefits
|
Facility Exit
Costs
|
Total
|
|||||||||
Balance at September 30, 2017
|
$
|
14
|
$
|
5
|
$
|
19
|
||||||
Charges
|
25
|
1
|
26
|
|||||||||
Cash payments
|
(17
|
)
|
(2
|
)
|
(19
|
)
|
||||||
Balance at March 31, 2018
|
$
|
22
|
$
|
4
|
$
|
26
|
6. |
Accrued Expenses, Other Current Liabilities and Other Long-Term Liabilities
|
|
March 31, 2018
|
September 30, 2017
|
||||||
Employee compensation
|
$
|
121
|
$
|
147
|
||||
Accrued taxes
|
72
|
90
|
||||||
Rebates
|
43
|
58
|
||||||
Interest
|
39
|
36
|
||||||
Restructuring
|
26
|
19
|
||||||
Tax receivable agreement obligation
|
24
|
35
|
||||||
Accrued operating expenses
|
85
|
78
|
||||||
$
|
410
|
$
|
463
|
|
March 31, 2018
|
September 30, 2017
|
||||||
Pension liability
|
$
|
53
|
$
|
56
|
||||
Deferred purchase price
|
46
|
46
|
||||||
Lease retirement obligation
|
42
|
37
|
||||||
Transition tax
|
36
|
—
|
||||||
Derivative instruments
|
33
|
27
|
||||||
Sale-lease back deferred gain
|
23
|
24
|
||||||
Tax receivable agreement obligation
|
13
|
34
|
||||||
Other
|
76
|
76
|
||||||
|
$
|
322
|
$
|
300
|
|
Maturity Date
|
March 31, 2018
|
September 30, 2017
|
||||||
Term loan
|
February 2020
|
$
|
900
|
$
|
1,000
|
||||
Term loan
|
January 2021
|
814
|
814
|
||||||
Term loan
|
October 2022
|
1,645
|
1,645
|
||||||
Term loan
|
January 2024
|
495
|
498
|
||||||
Revolving line of credit
|
May 2020
|
—
|
—
|
||||||
5
1
/
2
% Second Priority Senior Secured Notes
|
May 2022
|
500
|
500
|
||||||
6% Second Priority Senior Secured Notes
|
October 2022
|
400
|
400
|
||||||
5
1
/
8
% Second Priority Senior Secured Notes
|
July 2023
|
700
|
700
|
||||||
4
1
/
2
% Second Priority Senior Secured Notes
|
February 2026
|
500
|
—
|
||||||
Debt discounts and deferred fees
|
(48
|
)
|
(48
|
)
|
|||||
Capital leases and other
|
Various
|
120
|
132
|
||||||
Total long-term debt
|
|
6,026
|
5,641
|
||||||
Current portion of long-term debt
|
|
(34
|
)
|
(33
|
)
|
||||
Long-term debt, less current portion
|
|
$
|
5,992
|
$
|
5,608
|
8. |
Financial Instruments and Fair Value Measurements
|
Derivative Instruments
|
Hedge Designation
|
Balance Sheet Location
|
March 31, 2018
|
September 30, 2017
|
||||||
Cross-currency swaps
|
Designated
|
Other long-term liabilities
|
$
|
28
|
$
|
—
|
||||
Interest rate swaps
|
Designated
|
Other assets
|
30
|
1
|
||||||
Interest rate swaps
|
Not designated
|
Other assets
|
3
|
13
|
||||||
Interest rate swaps
|
Designated
|
Other long-term liabilities
|
—
|
15
|
||||||
Interest rate swaps
|
Not designated
|
Other long-term liabilities
|
5
|
13
|
|
|
Quarterly Period Ended
|
Two Quarterly Periods Ended
|
||||||||||||||
Derivative Instruments
|
Statements of Income Location
|
March 31, 2018
|
April 1, 2017
|
March 31, 2018
|
April 1, 2017
|
||||||||||||
Cross-currency swaps
|
Interest expense, net
|
$
|
(1
|
)
|
$
|
—
|
$
|
(2
|
)
|
$
|
—
|
||||||
Foreign currency swaps
|
Other expense, net
|
—
|
1
|
—
|
2
|
||||||||||||
Interest rate swaps
|
Interest expense, net
|
1
|
3
|
3
|
8
|
|
As of March 31, 2018
|
|||||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Impairment
|
|||||||||||||||
Indefinite-lived trademarks
|
$
|
—
|
$
|
—
|
$
|
248
|
$
|
248
|
$
|
—
|
||||||||||
Goodwill
|
—
|
—
|
2,857
|
2,857
|
—
|
|||||||||||||||
Definite lived intangible assets
|
—
|
—
|
1,055
|
1,055
|
—
|
|||||||||||||||
Property, plant, and equipment
|
—
|
—
|
2,618
|
2,618
|
—
|
|||||||||||||||
Total
|
$
|
—
|
$
|
—
|
$
|
6,778
|
$
|
6,778
|
$
|
—
|
|
As of September 30, 2017
|
|||||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Impairment
|
|||||||||||||||
Indefinite-lived trademarks
|
$
|
—
|
$
|
—
|
$
|
248
|
$
|
248
|
$
|
—
|
||||||||||
Goodwill
|
—
|
—
|
2,775
|
2,775
|
—
|
|||||||||||||||
Definite lived intangible assets
|
—
|
—
|
1,038
|
1,038
|
—
|
|||||||||||||||
Property, plant, and equipment
|
—
|
—
|
2,366
|
2,366
|
2
|
|||||||||||||||
Total
|
$
|
—
|
$
|
—
|
$
|
6,427
|
$
|
6,427
|
$
|
2
|
9. |
Income Taxes
|
Quarterly Period Ended
|
Two Quarterly Periods Ended
|
|||||||||||||||
|
March 31, 2018
|
April 1, 2017
|
March 31, 2018
|
April 1, 2017
|
||||||||||||
Net sales:
|
||||||||||||||||
Engineered Materials
|
$
|
655
|
$
|
620
|
$
|
1,303
|
$
|
1,003
|
||||||||
Health, Hygiene & Specialties
|
706
|
597
|
1,283
|
1,167
|
||||||||||||
Consumer Packaging
|
606
|
589
|
1,157
|
1,138
|
||||||||||||
Total net sales
|
$
|
1,967
|
$
|
1,806
|
$
|
3,743
|
$
|
3,308
|
||||||||
Operating income:
|
||||||||||||||||
Engineered Materials
|
$
|
94
|
$
|
67
|
$
|
182
|
$
|
120
|
||||||||
Health, Hygiene & Specialties
|
41
|
52
|
78
|
111
|
||||||||||||
Consumer Packaging
|
53
|
56
|
91
|
90
|
||||||||||||
Total operating income
|
$
|
188
|
$
|
175
|
$
|
351
|
$
|
321
|
||||||||
Depreciation and amortization:
|
||||||||||||||||
Engineered Materials
|
$
|
27
|
$
|
26
|
$
|
56
|
$
|
43
|
||||||||
Health, Hygiene & Specialties
|
49
|
46
|
95
|
90
|
||||||||||||
Consumer Packaging
|
56
|
59
|
110
|
118
|
||||||||||||
Total depreciation and amortization
|
$
|
132
|
$
|
131
|
$
|
261
|
$
|
251
|
|
March 31, 2018
|
September 30, 2017
|
||||||
Total assets:
|
||||||||
Engineered Materials
|
$
|
1,773
|
$
|
1,803
|
||||
Health, Hygiene & Specialties
|
4,068
|
3,496
|
||||||
Consumer Packaging
|
3,266
|
3,177
|
||||||
Total assets
|
$
|
9,107
|
$
|
8,476
|
||||
Total goodwill:
|
||||||||
Engineered Materials
|
$
|
550
|
$
|
545
|
||||
Health, Hygiene & Specialties
|
897
|
819
|
||||||
Consumer Packaging
|
1,410
|
1,411
|
||||||
Total goodwill
|
$
|
2,857
|
$
|
2,775
|
|
Quarterly Period Ended
|
Two Quarterly Periods Ended
|
||||||||||||||
|
March 31, 2018
|
April 1, 2017
|
March 31, 2018
|
April 1, 2017
|
||||||||||||
Net sales:
|
||||||||||||||||
North America
|
$
|
1,601
|
$
|
1,500
|
$
|
3,067
|
$
|
2,704
|
||||||||
South America
|
80
|
81
|
154
|
161
|
||||||||||||
Europe
|
226
|
162
|
396
|
311
|
||||||||||||
Asia
|
60
|
63
|
126
|
132
|
||||||||||||
Total net sales
|
$
|
1,967
|
$
|
1,806
|
$
|
3,743
|
$
|
3,308
|
|
March 31, 2018
|
September 30, 2017
|
||||||
Long-lived assets:
|
||||||||
North America
|
$
|
5,647
|
$
|
5,350
|
||||
South America
|
389
|
371
|
||||||
Europe
|
516
|
467
|
||||||
Asia
|
294
|
284
|
||||||
Total Long-lived assets
|
$
|
6,846
|
$
|
6,472
|
|
Quarterly Period Ended
|
Two Quarterly Periods Ended
|
||||||||||||||
(in percentages)
|
March 31, 2018
|
April 1, 2017
|
March 31, 2018
|
April 1, 2017
|
||||||||||||
Net sales:
|
||||||||||||||||
Performance Materials
|
45
|
%
|
47
|
%
|
46
|
%
|
46
|
%
|
||||||||
Engineered Products
|
55
|
53
|
54
|
54
|
||||||||||||
Engineered Materials
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
||||||||
Health
|
18
|
%
|
22
|
%
|
19
|
%
|
21
|
%
|
||||||||
Hygiene
|
43
|
43
|
43
|
44
|
||||||||||||
Specialties
|
39
|
35
|
38
|
35
|
||||||||||||
Health, Hygiene & Specialties
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
||||||||
Rigid Open Top
|
41
|
%
|
40
|
%
|
42
|
%
|
41
|
%
|
||||||||
Rigid Closed Top
|
59
|
60
|
58
|
59
|
||||||||||||
Consumer Packaging
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
11. |
Contingencies and Commitments
|
12. |
Basic and Diluted Net Income Per Share
|
|
Quarterly Period Ended
|
Two Quarterly Periods Ended
|
||||||||||||||
(in millions, except per share amounts)
|
March 31, 2018
|
April 1, 2017
|
March 31, 2018
|
April 1, 2017
|
||||||||||||
Numerator
|
||||||||||||||||
Net income
|
$
|
90
|
$
|
72
|
$
|
253
|
$
|
123
|
||||||||
Denominator
|
||||||||||||||||
Weighted average common shares outstanding - basic
|
131.3
|
127.7
|
131.0
|
124.9
|
||||||||||||
Dilutive shares
|
4.5
|
5.5
|
4.9
|
5.8
|
||||||||||||
Weighted average common and common equivalent shares outstanding - diluted
|
135.8
|
133.2
|
135.9
|
130.7
|
||||||||||||
Per common share income
|
||||||||||||||||
Basic
|
$
|
0.69
|
$
|
0.56
|
$
|
1.93
|
$
|
0.98
|
||||||||
Diluted
|
$
|
0.66
|
$
|
0.54
|
$
|
1.86
|
$
|
0.94
|
Currency Translation
|
Defined Benefit Pension and Retiree Health Benefit Plans
|
Interest Rate Swaps
|
Accumulated Other
Comprehensive
Loss
|
|||||||||||||
Balance at September 30, 2017
|
$
|
(48
|
)
|
$
|
(16
|
)
|
$
|
(4
|
)
|
$
|
(68
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
(17
|
)
|
(1
|
)
|
35
|
17
|
||||||||||
Net amount reclassified from accumulated other comprehensive income (loss)
|
—
|
—
|
6
|
6
|
||||||||||||
Provision for income taxes
|
—
|
—
|
(11
|
)
|
(11
|
)
|
||||||||||
Balance at March 31, 2018
|
$
|
(65
|
)
|
$
|
(17
|
)
|
$
|
26
|
$
|
(56
|
)
|
Currency Translation
|
Defined Benefit Pension and Retiree Health Benefit Plans
|
Interest Rate Swaps
|
Accumulated Other
Comprehensive
Loss
|
|||||||||||||
Balance at October 1, 2016
|
$
|
(82
|
)
|
$
|
(44
|
)
|
$
|
(22
|
)
|
$
|
(148
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
(24
|
)
|
13
|
25
|
14
|
|||||||||||
Net amount reclassified from accumulated other comprehensive income (loss)
|
—
|
—
|
8
|
8
|
||||||||||||
Provision for income taxes
|
—
|
—
|
(13
|
)
|
(13
|
)
|
||||||||||
Balance at April 1, 2017
|
$
|
(106
|
)
|
$
|
(31
|
)
|
$
|
(2
|
)
|
$
|
(139
|
)
|
14. |
Guarantor and Non-Guarantor Financial Information
|
|
March 31, 2018
|
|||||||||||||||||||||||
|
Parent
|
Issuer
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||||
Current assets
|
$
|
—
|
$
|
198
|
$
|
1,260
|
$
|
803
|
$
|
—
|
$
|
2,261
|
||||||||||||
Intercompany receivable
|
422
|
2,177
|
—
|
—
|
(2,599
|
)
|
—
|
|||||||||||||||||
Property, plant, and equipment, net
|
—
|
74
|
1,733
|
811
|
—
|
2,618
|
||||||||||||||||||
Other assets
|
1,246
|
5,997
|
4,699
|
521
|
(8,235
|
)
|
4,228
|
|||||||||||||||||
Total assets
|
$
|
1,668
|
$
|
8,446
|
$
|
7,692
|
$
|
2,135
|
$
|
(10,834
|
)
|
$
|
9,107
|
|||||||||||
|
||||||||||||||||||||||||
Current liabilities
|
$
|
24
|
$
|
252
|
$
|
544
|
$
|
342
|
$
|
—
|
$
|
1,162
|
||||||||||||
Intercompany payable
|
—
|
—
|
2,549
|
50
|
(2,599
|
)
|
—
|
|||||||||||||||||
Other long-term liabilities
|
338
|
6,142
|
93
|
66
|
—
|
6,639
|
||||||||||||||||||
Stockholders' equity
|
1,306
|
2,052
|
4,506
|
1,677
|
(8,235
|
)
|
1,306
|
|||||||||||||||||
Total liabilities and stockholders' equity
|
$
|
1,668
|
$
|
8,446
|
$
|
7,692
|
$
|
2,135
|
$
|
(10,834
|
)
|
$
|
9,107
|
|
September 30, 2017
|
|||||||||||||||||||||||
|
Parent
|
Issuer
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||||
Current assets
|
$
|
—
|
$
|
116
|
$
|
1,113
|
$
|
775
|
$
|
—
|
$
|
2,004
|
||||||||||||
Intercompany receivable
|
512
|
2,217
|
—
|
—
|
(2,729
|
)
|
—
|
|||||||||||||||||
Property, plant and equipment, net
|
—
|
80
|
1,564
|
722
|
—
|
2,366
|
||||||||||||||||||
Other assets
|
992
|
5,335
|
4,583
|
533
|
(7,337
|
)
|
4,106
|
|||||||||||||||||
Total assets
|
$
|
1,504
|
$
|
7,748
|
$
|
7,260
|
$
|
2,030
|
$
|
(10,066
|
)
|
$
|
8,476
|
|||||||||||
|
||||||||||||||||||||||||
Current liabilities
|
$
|
36
|
$
|
243
|
$
|
537
|
$
|
318
|
$
|
—
|
$
|
1,134
|
||||||||||||
Intercompany payable
|
—
|
—
|
2,667
|
62
|
(2,729
|
)
|
—
|
|||||||||||||||||
Other long-term liabilities
|
453
|
5,707
|
99
|
68
|
—
|
6,327
|
||||||||||||||||||
Stockholders' equity
|
1,015
|
1,798
|
3,957
|
1,582
|
(7,337
|
)
|
1,015
|
|||||||||||||||||
Total liabilities and stockholders' equity
|
$
|
1,504
|
$
|
7,748
|
$
|
7,260
|
$
|
2,030
|
$
|
(10,066
|
)
|
$
|
8,476
|
|
Quarterly Period Ended March 31, 2018
|
|||||||||||||||||||||||
|
Parent
|
Issuer
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||||
Net sales
|
$
|
—
|
$
|
139
|
$
|
1,349
|
$
|
479
|
$
|
—
|
$
|
1,967
|
||||||||||||
Cost of goods sold
|
—
|
95
|
1,103
|
398
|
—
|
1,596
|
||||||||||||||||||
Selling, general and administrative
|
—
|
18
|
83
|
29
|
—
|
130
|
||||||||||||||||||
Amortization of intangibles
|
—
|
—
|
31
|
7
|
—
|
38
|
||||||||||||||||||
Restructuring and impairment charges
|
—
|
—
|
9
|
6
|
—
|
15
|
||||||||||||||||||
Operating income
|
—
|
26
|
123
|
39
|
—
|
188
|
||||||||||||||||||
Other expense (income), net
|
—
|
—
|
—
|
5
|
—
|
5
|
||||||||||||||||||
Interest expense, net
|
—
|
4
|
45
|
17
|
—
|
66
|
||||||||||||||||||
Equity in net income of subsidiaries
|
(117
|
)
|
(87
|
)
|
—
|
—
|
204
|
—
|
||||||||||||||||
Income before income taxes
|
117
|
109
|
78
|
17
|
(204
|
)
|
117
|
|||||||||||||||||
Income tax expense
|
27
|
19
|
1
|
7
|
(27
|
)
|
27
|
|||||||||||||||||
Net income
|
$
|
90
|
$
|
90
|
$
|
77
|
$
|
10
|
$
|
(177
|
)
|
$
|
90
|
|||||||||||
Comprehensive net income
|
$
|
90
|
$
|
94
|
$
|
77
|
$
|
30
|
$
|
(177
|
)
|
$
|
114
|
|
Quarterly Period Ended April 1, 2017
|
|||||||||||||||||||||||
|
Parent
|
Issuer
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||||
Net sales
|
$
|
—
|
$
|
146
|
$
|
1,252
|
$
|
408
|
$
|
—
|
$
|
1,806
|
||||||||||||
Cost of goods sold
|
—
|
117
|
1,012
|
324
|
—
|
1,453
|
||||||||||||||||||
Selling, general and administrative
|
—
|
(11
|
)
|
87
|
56
|
—
|
132
|
|||||||||||||||||
Amortization of intangibles
|
—
|
1
|
31
|
8
|
—
|
40
|
||||||||||||||||||
Restructuring and impairment charges
|
—
|
—
|
6
|
—
|
—
|
6
|
||||||||||||||||||
Operating income
|
—
|
39
|
116
|
20
|
—
|
175
|
||||||||||||||||||
Other expense (income), net
|
—
|
10
|
2
|
8
|
—
|
20
|
||||||||||||||||||
Interest expense, net
|
—
|
6
|
46
|
15
|
—
|
67
|
||||||||||||||||||
Equity in net income of subsidiaries
|
(88
|
)
|
(51
|
)
|
—
|
—
|
139
|
—
|
||||||||||||||||
Income before income taxes
|
88
|
74
|
68
|
(3
|
)
|
(139
|
)
|
88
|
||||||||||||||||
Income tax expense
|
16
|
2
|
—
|
14
|
(16
|
)
|
16
|
|||||||||||||||||
Net income
|
$
|
72
|
$
|
72
|
$
|
68
|
$
|
(17
|
)
|
$
|
(123
|
)
|
$
|
72
|
||||||||||
Comprehensive net income
|
$
|
72
|
$
|
81
|
$
|
68
|
$
|
17
|
$
|
(123
|
)
|
$
|
115
|
|
Two Quarterly Periods Ended March 31, 2018
|
|||||||||||||||||||||||
|
Parent
|
Issuer
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||||
Net sales
|
$
|
—
|
$
|
277
|
$
|
2,574
|
$
|
892
|
$
|
—
|
$
|
3,743
|
||||||||||||
Cost of goods sold
|
—
|
201
|
2,092
|
750
|
—
|
3,043
|
||||||||||||||||||
Selling, general and administrative
|
—
|
30
|
163
|
54
|
—
|
247
|
||||||||||||||||||
Amortization of intangibles
|
—
|
—
|
62
|
14
|
—
|
76
|
||||||||||||||||||
Restructuring and impairment charges
|
—
|
—
|
16
|
10
|
—
|
26
|
||||||||||||||||||
Operating income
|
—
|
46
|
241
|
64
|
—
|
351
|
||||||||||||||||||
Other expense (income), net
|
—
|
5
|
7
|
2
|
—
|
14
|
||||||||||||||||||
Interest expense, net
|
—
|
9
|
88
|
31
|
—
|
128
|
||||||||||||||||||
Equity in net income of subsidiaries
|
(209
|
)
|
(159
|
)
|
—
|
—
|
368
|
—
|
||||||||||||||||
Income before income taxes
|
209
|
191
|
146
|
31
|
(368
|
)
|
209
|
|||||||||||||||||
Income tax expense
|
(44
|
)
|
(62
|
)
|
1
|
17
|
44
|
(44
|
)
|
|||||||||||||||
Net income
|
$
|
253
|
$
|
253
|
$
|
145
|
$
|
14
|
$
|
(412
|
)
|
$
|
253
|
|||||||||||
Comprehensive net income
|
$
|
253
|
$
|
254
|
$
|
145
|
$
|
25
|
$
|
(412
|
)
|
$
|
265
|
|||||||||||
Consolidating Statement of Cash Flows
|
||||||||||||||||||||||||
Cash Flow from Operating Activities
|
$
|
—
|
$
|
14
|
$
|
258
|
$
|
13
|
$
|
—
|
$
|
285
|
||||||||||||
Cash Flow from Investing Activities
|
||||||||||||||||||||||||
Additions to property, plant, and equipment
|
—
|
(5
|
)
|
(137
|
)
|
(42
|
)
|
—
|
(184
|
)
|
||||||||||||||
Proceeds from sale of assets
|
—
|
—
|
—
|
3
|
—
|
3
|
||||||||||||||||||
Contributions (to)/from subsidiaries
|
(12
|
)
|
(462
|
)
|
—
|
—
|
474
|
—
|
||||||||||||||||
Intercompany
|
—
|
137
|
—
|
—
|
(137
|
)
|
—
|
|||||||||||||||||
Acquisition of business, net of cash acquired
|
—
|
—
|
(404
|
)
|
(70
|
)
|
—
|
(474
|
)
|
|||||||||||||||
Other investing activities, net
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Net cash from investing activities
|
(12
|
)
|
(330
|
)
|
(541
|
)
|
(109
|
)
|
337
|
(655
|
)
|
|||||||||||||
|
||||||||||||||||||||||||
Cash Flow from Financing Activities
|
||||||||||||||||||||||||
Proceeds from long-term debt
|
—
|
497
|
—
|
—
|
—
|
497
|
||||||||||||||||||
Repayments on long-term borrowings
|
—
|
(113
|
)
|
(4
|
)
|
—
|
—
|
(117
|
)
|
|||||||||||||||
Proceeds from issuance of common stock
|
12
|
—
|
—
|
—
|
—
|
12
|
||||||||||||||||||
Payment of tax receivable agreement
|
(37
|
)
|
—
|
—
|
—
|
—
|
(37
|
)
|
||||||||||||||||
Contribution from Parent
|
—
|
—
|
404
|
70
|
(474
|
)
|
—
|
|||||||||||||||||
Debt financing costs
|
—
|
(1
|
)
|
—
|
—
|
—
|
(1
|
)
|
||||||||||||||||
Changes in intercompany balances
|
37
|
—
|
(116
|
)
|
(58
|
)
|
137
|
—
|
||||||||||||||||
Net cash from financing activities
|
12
|
383
|
284
|
12
|
(337
|
)
|
354
|
|||||||||||||||||
|
||||||||||||||||||||||||
Effect of exchange rate changes on cash
|
—
|
—
|
—
|
1
|
—
|
1
|
||||||||||||||||||
|
||||||||||||||||||||||||
Net change in cash
|
—
|
67
|
1
|
(83
|
)
|
—
|
(15
|
)
|
||||||||||||||||
Cash and cash equivalents at beginning of period
|
—
|
18
|
12
|
276
|
—
|
306
|
||||||||||||||||||
Cash and cash equivalents at end of period
|
$
|
—
|
$
|
85
|
$
|
13
|
$
|
193
|
$
|
—
|
$
|
291
|
|
Two Quarterly Periods Ended April 1, 2017
|
|||||||||||||||||||||||
|
Parent
|
Issuer
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||||
Net sales
|
$
|
—
|
$
|
289
|
$
|
2,231
|
$
|
788
|
$
|
—
|
$
|
3,308
|
||||||||||||
Cost of goods sold
|
—
|
233
|
1,801
|
625
|
—
|
2,659
|
||||||||||||||||||
Selling, general and administrative
|
—
|
31
|
162
|
52
|
—
|
245
|
||||||||||||||||||
Amortization of intangibles
|
—
|
3
|
56
|
14
|
—
|
73
|
||||||||||||||||||
Restructuring and impairment charges
|
—
|
—
|
10
|
—
|
—
|
10
|
||||||||||||||||||
Operating income
|
—
|
22
|
202
|
97
|
—
|
321
|
||||||||||||||||||
Other expense (income), net
|
—
|
14
|
2
|
3
|
—
|
19
|
||||||||||||||||||
Interest expense, net
|
—
|
12
|
91
|
32
|
—
|
135
|
||||||||||||||||||
Equity in net income of subsidiaries
|
(167
|
)
|
(143
|
)
|
—
|
—
|
310
|
—
|
||||||||||||||||
Income before income taxes
|
167
|
139
|
109
|
62
|
(310
|
)
|
167
|
|||||||||||||||||
Income tax expense
|
44
|
16
|
—
|
28
|
(44
|
)
|
44
|
|||||||||||||||||
Net income
|
$
|
123
|
$
|
123
|
$
|
109
|
$
|
34
|
$
|
(266
|
)
|
$
|
123
|
|||||||||||
Comprehensive net income
|
$
|
123
|
$
|
143
|
$
|
109
|
$
|
23
|
$
|
(266
|
)
|
$
|
132
|
|||||||||||
Consolidating Statement of Cash Flows
|
||||||||||||||||||||||||
Cash Flow from Operating Activities
|
$
|
—
|
$
|
24
|
$
|
212
|
$
|
97
|
$
|
—
|
$
|
333
|
||||||||||||
Cash Flow from Investing Activities
|
||||||||||||||||||||||||
Additions to property, plant, and equipment
|
—
|
(8
|
)
|
(97
|
)
|
(30
|
)
|
—
|
(135
|
)
|
||||||||||||||
Proceeds from sale of assets
|
—
|
1
|
3
|
—
|
—
|
4
|
||||||||||||||||||
Contributions (to)/from subsidiaries
|
(15
|
)
|
(443
|
)
|
—
|
—
|
458
|
—
|
||||||||||||||||
Intercompany
|
—
|
94
|
—
|
—
|
(94
|
)
|
—
|
|||||||||||||||||
Acquisition of business, net of cash acquired
|
—
|
—
|
(458
|
)
|
—
|
—
|
(458
|
)
|
||||||||||||||||
Other investing activities, net
|
—
|
(1
|
)
|
—
|
—
|
—
|
(1
|
)
|
||||||||||||||||
Net cash from investing activities
|
(15
|
)
|
(357
|
)
|
(552
|
)
|
(30
|
)
|
364
|
(590
|
)
|
|||||||||||||
|
||||||||||||||||||||||||
Cash Flow from Financing Activities
|
||||||||||||||||||||||||
Proceeds from long-term debt
|
—
|
595
|
—
|
—
|
—
|
595
|
||||||||||||||||||
Repayments on long-term borrowings
|
—
|
(314
|
)
|
(2
|
)
|
(1
|
)
|
—
|
(317
|
)
|
||||||||||||||
Proceeds from issuance of common stock
|
15
|
—
|
—
|
—
|
—
|
15
|
||||||||||||||||||
Payment of tax receivable agreement
|
(60
|
)
|
—
|
—
|
—
|
—
|
(60
|
)
|
||||||||||||||||
Debt financing costs
|
—
|
(4
|
)
|
—
|
—
|
—
|
(4
|
)
|
||||||||||||||||
Contribution from parent
|
—
|
—
|
458
|
—
|
(458
|
)
|
—
|
|||||||||||||||||
Changes in intercompany balances
|
60
|
—
|
(114
|
)
|
(40
|
)
|
94
|
—
|
||||||||||||||||
Net cash from financing activities
|
15
|
277
|
342
|
(41
|
)
|
(364
|
)
|
229
|
||||||||||||||||
|
||||||||||||||||||||||||
Effect of exchange rate changes on cash
|
—
|
—
|
—
|
(2
|
)
|
—
|
(2
|
)
|
||||||||||||||||
|
||||||||||||||||||||||||
Net change in cash
|
—
|
(56
|
)
|
2
|
24
|
—
|
(30
|
)
|
||||||||||||||||
Cash and cash equivalents at beginning of period
|
—
|
102
|
5
|
216
|
—
|
323
|
||||||||||||||||||
Cash and cash equivalents at end of period
|
$
|
—
|
$
|
46
|
$
|
7
|
$
|
240
|
$
|
—
|
$
|
293
|
|
Polyethylene Butene Film
|
Polypropylene
|
||||||||||||||
Fiscal quarter
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
1st quarter
|
$
|
.68
|
$
|
.56
|
$
|
.71
|
$
|
.56
|
||||||||
2nd quarter
|
.69
|
.58
|
.75
|
.67
|
||||||||||||
3rd quarter
|
—
|
.60
|
—
|
.61
|
||||||||||||
4th quarter
|
—
|
.62
|
—
|
.62
|
Consolidated Overview
|
||||||||||||||||
|
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
||||||||||||
Net sales
|
$
|
1,967
|
$
|
1,806
|
$
|
161
|
9
|
%
|
||||||||
Operating income
|
$
|
188
|
$
|
175
|
$
|
13
|
7
|
%
|
||||||||
Operating income percentage of net sales
|
10
|
%
|
10
|
%
|
Engineered Materials
|
||||||||||||||||
|
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
||||||||||||
Net sales
|
$
|
655
|
$
|
620
|
$
|
35
|
6
|
%
|
||||||||
Operating income
|
$
|
94
|
$
|
67
|
$
|
27
|
40
|
%
|
||||||||
Percentage of net sales
|
14
|
%
|
11
|
%
|
Health, Hygiene & Specialties
|
||||||||||||||||
|
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
||||||||||||
Net sales
|
$
|
706
|
$
|
597
|
$
|
109
|
18
|
%
|
||||||||
Operating income
|
$
|
41
|
$
|
52
|
$
|
(11
|
)
|
(21
|
%)
|
|||||||
Percentage of net sales
|
6
|
%
|
9
|
%
|
Consumer Packaging
|
||||||||||||||||
|
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
||||||||||||
Net sales
|
$
|
606
|
$
|
589
|
$
|
17
|
3
|
%
|
||||||||
Operating income
|
$
|
53
|
$
|
56
|
$
|
(3
|
)
|
(5
|
)%
|
|||||||
Percentage of net sales
|
9
|
%
|
10
|
%
|
Other expense, net
|
||||||||||||||||
|
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
||||||||||||
Other expense, net
|
$
|
5
|
$
|
20
|
$
|
(15
|
)
|
75
|
%
|
Interest expense, net
|
||||||||||||||||
|
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
||||||||||||
Interest expense, net
|
$
|
66
|
$
|
67
|
$
|
(1
|
)
|
(1
|
%)
|
Income tax expense
|
||||||||||||||||
|
Quarter
|
Prior Quarter
|
$ Change
|
% Change
|
||||||||||||
Income tax expense
|
$
|
27
|
$
|
16
|
$
|
11
|
69
|
%
|
Consolidated Overview
|
||||||||||||||||
|
YTD
|
Prior YTD
|
$ Change
|
% Change
|
||||||||||||
Net sales
|
$
|
3,743
|
$
|
3,308
|
$
|
435
|
13
|
%
|
||||||||
Operating income
|
$
|
351
|
$
|
321
|
$
|
30
|
9
|
%
|
||||||||
Operating income percentage of net sales
|
9
|
%
|
10
|
%
|
Engineered Materials
|
||||||||||||||||
|
YTD
|
Prior YTD
|
$ Change
|
% Change
|
||||||||||||
Net sales
|
$
|
1,303
|
$
|
1,003
|
$
|
300
|
30
|
%
|
||||||||
Operating income
|
$
|
182
|
$
|
120
|
$
|
62
|
52
|
%
|
||||||||
Operating income percentage of net sales
|
14
|
%
|
12
|
%
|
Health, Hygiene & Specialties
|
||||||||||||||||
|
YTD
|
Prior YTD
|
$ Change
|
% Change
|
||||||||||||
Net sales
|
$
|
1,283
|
$
|
1,167
|
$
|
116
|
10
|
%
|
||||||||
Operating income
|
$
|
78
|
$
|
111
|
$
|
(33
|
)
|
(30
|
%)
|
|||||||
Operating income percentage of net sales
|
6
|
%
|
10
|
%
|
Consumer Packaging
|
||||||||||||||||
|
YTD
|
Prior YTD
|
$ Change
|
% Change
|
||||||||||||
Net sales
|
$
|
1,157
|
$
|
1,138
|
$
|
19
|
2
|
%
|
||||||||
Operating income
|
$
|
91
|
$
|
90
|
$
|
1
|
1
|
%
|
||||||||
Operating income percentage of net sales
|
8
|
%
|
8
|
%
|
Other expense, net
|
||||||||||||||||
|
YTD
|
Prior YTD
|
$ Change
|
% Change
|
||||||||||||
Other expense, net
|
$
|
14
|
$
|
19
|
$
|
(5
|
)
|
26
|
%
|
Interest expense, net
|
||||||||||||||||
|
YTD
|
Prior YTD
|
$ Change
|
% Change
|
||||||||||||
Interest expense, net
|
$
|
128
|
$
|
135
|
$
|
(7
|
)
|
(5
|
%)
|
Income tax expense
|
||||||||||||||||
|
YTD
|
Prior YTD
|
$ Change
|
% Change
|
||||||||||||
Income tax expense
|
$
|
(44
|
)
|
$
|
44
|
$
|
(88
|
)
|
(200
|
%)
|
March 31, 2018
|
April 1, 2017
|
|||||||
Cash flow from operating activities
|
$
|
285
|
$
|
333
|
||||
Additions to property, plant and equipment, net
|
(181
|
)
|
(131
|
)
|
||||
Payments of tax receivable agreement
|
(37
|
)
|
(60
|
)
|
||||
Adjusted free cash flow
|
$
|
67
|
$
|
142
|
(a) |
Evaluation of disclosure controls and procedures.
|
(b) |
Changes in internal controls.
|
● |
risks associated with our substantial indebtedness and debt service;
|
● |
changes in prices and availability of resin and other raw materials and our ability to pass on changes in raw material prices on a timely basis;
|
● |
performance of our business and future operating results;
|
● |
risks related to our acquisition strategy and integration of acquired businesses;
|
● |
reliance on unpatented know-how and trade secrets;
|
● |
increases in the cost of compliance with laws and regulations, including environmental, safety, and production and product laws and regulations;
|
● |
risks related to disruptions in the overall economy and the financial markets that may adversely impact our business;
|
● |
catastrophic loss of one of our key manufacturing facilities, natural disasters, and other unplanned business interruptions;
|
● |
risks of competition, including foreign competition, in our existing and future markets;
|
● |
risks related to the market acceptance of our developing technologies and products;
|
● |
general business and economic conditions, particularly an economic downturn;
|
● |
risks that our restructuring program may entail greater implementation costs or result in lower cost savings than anticipated;
|
● |
the ability of our insurance to cover fully our potential exposures;
|
●
|
new legislation or new regulations and the Company's corresponding interpretations of either may affect our business and consolidated financial condition and results of operations; and
|
● |
the other factors discussed in our most recent Form 10-K and in this Form 10-Q in the section titled "Risk Factors."
|
*
|
Filed herewith.
|
|
Berry Global Group, Inc.
|
|
|
|
|
|
|
May 3, 2018
|
By:
|
/s/ Mark W. Miles
|
|
|
|
Mark W. Miles
|
|
|
|
Chief Financial Officer
|
|
|
By:
|
/s/ Thomas E. Salmon
|
|
Date: May 3, 2018
|
|
Thomas E. Salmon
|
|
|
|
Chief Executive Officer
|
|
By:
|
/s/ Mark W. Miles
|
|
Date: May 3, 2018
|
|
Mark W. Miles
|
|
|
|
Chief Financial Officer
|
|
Initial Term Q Lender
|
Term Q Loan Commitment
|
Citibank, N.A.
|
$1,644,750,000.00
|
Initial Term R Lender
|
Term R Loan Commitment
|
Citibank, N.A.
|
$496,250,000
|
1.
|
111 Excellence Lane, Mooresville, NC 28115
|
2.
|
1020 Shenandoah Village Dr., Waynesboro, VA 22980
|
3.
|
1203 Chicopee Road, Benson, NC 27504
|
4.
|
20 Elmwood Ave., Mountain Top, PA 18707
|
5.
|
70 Old Hickory Blvd., Old Hickory, TN 37138
|
(a)
|
the fair value of the property of the Borrower and its Subsidiaries (taken as a whole) is greater than the total amount of liabilities, including contingent liabilities, of the Borrower and its Subsidiaries (taken as a whole) (it being understood that the amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability);
|
(b)
|
the present fair salable value of the assets of the Borrower and its Subsidiaries (taken as a whole) is not less than the amount that will be required to pay the probable liability of the Borrower and its Subsidiaries (taken as a whole) on their debts as they become absolute and matured;
|
(c)
|
the Borrower and its Subsidiaries do not intend to, and do not believe that they will, incur debts or liabilities beyond their ability to pay such debts and liabilities as they become absolute and matured; and
|
(d)
|
the Borrower and its Subsidiaries are not engaged in any business, as conducted on the Effective Date and as proposed to be conducted following the Effective Date, for which the property of the Borrower and its Subsidiaries (taken as a whole) would constitute an unreasonably small capital.
|