Reynolds Consumer Products Inc. 10-K

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Principal Market Our common stock is listed on the Nasdaq Global Select Market under the “REYN” symbol and began “regular way” trading on the Nasdaq Global Select Market on January 31, 2020. Prior to that date, there was no public trading market for our common stock. Stockholders As of January 29, 2021, there were four holders of record of our common stock. The actual number of our stockholders is greater than this number, and includes beneficial owners whose shares are held in “street name” by banks, brokers and other nominees. Dividends We expect that our practice of paying quarterly cash dividends on our common stock will continue, although the payment of future dividends is at the discretion of our Board of Directors and will depend upon our earnings, capital requirements, financial condition, contractual restrictions (including under our Term Loan Facility) and other factors. Equity Compensation Plan Information The information required by this Item concerning our equity compensation plan is incorporated herein by reference to Part III, Item 12 of this report. Use of Proceeds from Sale of Registered Securities On February 4, 2020, we completed our IPO, in which we sold 54,245,500 shares of common stock, including the exercise of the underwriters’ option to purchase 7,075,500 additional shares, at a public offering price of $26.00 per share for an aggregate price of $1,410 million. We received net proceeds of $1,336 million in the IPO, after deducting underwriting discounts and commissions of $67 million and other expenses of $5 million. The offer and sale of the shares in the IPO were registered under the Securities Act of 1933 pursuant to a Registration Statement on Form S-1 (File No. 333- 234731 ), which was declared effective by the SEC on January 30, 2020. Upon completion of the sale of the shares of our common stock, the IPO terminated. There has been no material change in the use of proceeds from our IPO as described in our final prospectus filed with the Securities and Exchange Commission on January 31, 2020 pursuant to Rule 424(b)(4) of the Securities Act of 1933. Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC acted as representatives of the several underwriters for the offering. 25 Performance Graph The following graph compares our cumulative total stockholder return from January 31, 2020 to December 31, 2020 to that of the S&P 500 Index, the Russell MidCap Index and a peer group. The graph assumes that the value for the investment in our common stock, each index and the peer group was $100 on January 31, 2020, and that all dividends were reinvested. The complete list of our peer group comprises: Church & Dwight Co. Inc., The Clorox Company, Colgate-Palmolive Company, Energizer Holdings, Inc., Kimberly-Clark Corporation., Newell Brands Inc., The Procter & Gamble Company, Reckitt Benckiser Group PLC, The Scotts Miracle-Gro Company, Spectrum Brands Holdings, Inc. and WD-40 Company. Stockholder returns over the indicated period should not be considered indicative of future stockholder returns. 26 ITEM 6. SELECTED FINANCIAL DATA The following table presents our selected financial data. As detailed in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, prior to our Corporate Reorganization and IPO on February 4, 2020, our operations were not structured under a single consolidating parent entity. We historically operated as part of Pactiv Evergreen Inc. (“PEI”, previously known as Reynolds Group Holdings Limited) and its subsidiaries (“PEI Group”) and not as a stand-alone entity. Refer to Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations”, and our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K for additional information, including matters that might cause this data not to be indicative of our future financial condition or results of operations. Year ended December 31, 2020 2019 2018 2017 2016 (in millions, except per share data) Total net revenues (1) $ 3,263 $ 3,032 $ 3,142 $ 2,957 $ 2,935 Net income 363 225 176 302 79 Related party receivables - non-current (2) — — 2,401 1,929 1,784 Total assets (2)(4) 4,722 4,160 6,421 5,911 5,738 Long-term debt, including current portion (3) 2,233 2,011 2,030 2,049 2,067 Related party borrowings, including current portion (2) — 2,214 3,950 3,927 3,957 Earnings per share Basic $ 1.78 $ 1.45 $ 1.13 $ 1.94 $ 0.51 Diluted $ 1.77 $ 1.45 $ 1.13 $ 1.94 $ 0.51 Cash dividends per share $ 0.59 $ — $ — $ — $ — (1) On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09, "Revenue from Contracts with Customers" (“ASC 606”), using the modified retrospective method for all contracts not completed as of the date of adoption, resulting in a $5 million adjustment to Net Parent deficit. There was no other material financial impact from adopting the new revenue recognition standard. Results as of and for the year ended December 31, 2018 and periods thereafter are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under Revenue Recognition (“ASC 605”), the accounting standard in effect for those periods. (2) Historically, we have reported significant interest bearing related party receivables and interest bearing long-term related party borrowings. These balances arose as part of wider PEI Group cash management activities. In June 2019, the outstanding related party receivables were used to reduce the balances outstanding under various related party borrowings and accrued interest payable. As part of the Corporate Reorganization, our related party borrowings were settled on February 4, 2020. (3 ) As part of our Corporate Reorganization, our borrowings under the PEI Group Credit Agreement were reallocated to PEI Group on January 30, 2020 and we were legally released from the PEI Group Credit Agreement and from the guarantees of all the senior notes issued by entities of PEI Group. Amounts as of December 31, 2020 represent borrowings outstanding under our Term Loan Facility. (4 ) On January 1, 2019, we adopted ASU No. 2016-02, “Leases” (“ASC 842”), using the modified retrospective method without the recasting of comparative periods’ financial information, as permitted by the transition guidance. Results as of and for the year ended December 31, 2019 and periods thereafter are presented under ASC 842, while prior period amounts are not adjusted and continue to be reported under ASC 840, Leases, the accounting standard in effect for those periods. 27