What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-05 compared with 2024-02-07 · 104 added, 97 removed, 827 unchanged (20% of the section changed)

12 unchanged sentences

We have audited the accompanying consolidated balance sheets of Reynolds Consumer Products Inc.

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of income, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

29 unchanged sentences

The transaction price is estimated based on the amount of consideration to which management believes the Company will be entitled, using an expected value method.

The principal consideration for our determination that performing procedures relating to revenue recognition for certain contracts with customers is a critical audit matter is a high degree of auditor effort in performing procedures related to revenue recognition for certain contracts with customers, recorded net of sales incentives recognized throughout the year.

The principal considerations for our determination that performing procedures relating to revenue recognition for certain contracts with customers is a critical audit matter is a high degree of auditor effort in performing procedures related to revenue recognition for certain contracts with customers, recorded net of sales incentives recognized throughout the year.

Addressin g the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

37 unchanged sentences

Net income $ 352 $ 298 $ 258

Other comprehensive income (loss), net of income taxes:

Other comprehensive (loss) income, net of income taxes:

Currency translation adjustment ( 3 ) — ( 1 )

Employee benefit plans ( 3 ) 11 11

Interest rate derivatives ( 13 ) 32 5

Other comprehensive income (loss), net of income taxes ( 2 ) 42 9

Derivative instruments ( 9 ) ( 13 ) 32

Other comprehensive (loss) income, net of income taxes ( 15 ) ( 2 ) 42

Comprehensive income $ 337 $ 296 $ 300

19 unchanged sentences

Related party payables 34 34

Current portion of long-term debt — 25

Current operating lease liabilities 20 16

31 unchanged sentences

— — ( 192 ) — ( 192 )

Other — 4 — — $ 4

Balance as of December 31, 2022 $ — $ 1,385 $ 431 $ 52 $ 1,868

43 unchanged sentences

Net cash used in financing activities ( 346 ) ( 457 ) ( 217 )

Effect of exchange rate changes on cash and cash equivalents ( 1 ) — —

Cash and cash equivalents:

12 unchanged sentences

Reynolds Consumer Products Inc.

and its subsidiaries (“we”, “us” or “our”) produce and sell products across three broad categories:

cooking products, waste and storage products and tableware.

and its subsidiaries (“we”, “us” or “our”) produce and sell products that people use in their homes for cooking, serving, cleanup and storage.

We sell our products under brands such as Reynolds and Hefty, and also under store brands.

35 unchanged sentences

to sell certain accounts receivable up to $ 95 million.

We had no outstanding balance owed under the factoring arrangement as of December 31, 2023.

We had no outstanding balance owed under the factoring arrangement as of December 31, 2024 and 2023.

Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the consolidated balance sheet at the time of the sales transaction.

31 unchanged sentences

Our lease agreements do not include significant restrictions, covenants or residual value guarantees.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Goodwill and Indefinite-Lived Intangible Assets:

8 unchanged sentences

If the carrying value of a reporting unit’s net assets exceeds its fair value, we would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Our indefinite-lived intangible assets consist of certain trade names.

14 unchanged sentences

All outstanding amounts related to suppliers participating in the SCF are recorded within accounts payable in the consolidated balance sheet and associated payments are included as an operating cash flow in the consolidated statement of cash flows.

As of December 31, 2023, the amount of obligations outstanding that we have confirmed as valid under the SCF was $ 19 million.

Our outstanding obligations confirmed as valid under our SCF for the year ended December 31, 2024 is as follows:

As of December 31,

(in millions)

Confirmed obligations outstanding at the beginning of the year $ 19

Invoices confirmed during the year 60

Confirmed invoices paid during the year ( 67 )

Confirmed obligations outstanding at the end of the year $ 12

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Revenue Recognition:

22 unchanged sentences

We record marketing and advertising as well as research and development expenses in selling, general and administrative expenses.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Stock-based Compensation:

Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the period in which the awards vest in accordance with applicable guidance under Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation.

In contemplation of us issuing shares to the public, we granted restricted stock units (“RSUs”) in July 2019 to certain members of management, pursuant to retention agreements entered into with these employees.

These RSUs vest upon satisfaction of both a performance-based vesting condition, which was satisfied when we completed our IPO on February 4, 2020, and a service-based vesting condition, which was satisfied with respect to one-third of an employee’s RSUs on each anniversary from the date of our IPO for three consecutive years, subject to the employee’s continued employment through the applicable vesting date.

We have also granted RSUs to certain members of management and to certain members of our Board of Directors that have a service-based vesting condition.

Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the period in which the award vests in accordance with applicable guidance under Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation.

We have granted restricted stock units (“RSUs”) to certain members of management and to certain members of our Board of Directors that have a service-based vesting condition.

In addition, we have granted performance stock units (“PSUs”) to certain members of management that have a performance-based vesting condition.

10 unchanged sentences

We terminate derivative instruments if the underlying asset or liability matures or is repaid, or if we determine the underlying forecasted transaction is no longer probable of occurring.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Income Taxes:

8 unchanged sentences

Future changes related to the expected resolution of uncertain tax positions could affect tax expense in the period when the change occurs.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Fair Value Measurements and Disclosures:

9 unchanged sentences

The carrying values of cash equivalents, accounts receivables, other receivables, related party receivables, accounts payable, related party payables and accrued and other current liabilities are reasonable estimates of their fair values as of December 31, 2024 and 2023 due to the short-term nature of these instruments.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Recently Adopted Accounting Guidance:

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20):

Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans .

This ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

This ASU was effective for fiscal years beginning after December 15, 2020, with early adoption permitted.

We adopted the standard as of January 1, 2021 with no material impact on our consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASC 740”), which is intended to simplify various aspects related to accounting for income taxes.

This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This ASU was effective for fiscal years beginning after December 15, 2020, with early adoption permitted.

We adopted the standard as of January 1, 2021 with no material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , and subsequently in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848):

10 unchanged sentences

These amendments were effective for fiscal years beginning after December 31, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 31, 2023.

We adopted the standard, other than the amendment on rollforward information, as of January 1, 2023.

We adopted the standard as of January 1, 2023.

The adoption relates to disclosure only and does not have an impact on the amounts recognized in our consolidated financial statements.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Recently Issued Accounting Guidance:

In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280) , which enhances disclosures about significant segment expenses by requiring disclosure of incremental segment information on an annual and interim basis.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently assessing the impact of this standard on our consolidated financial statements.

We adopted the standard as of January 1, 2024, with no material impact on our consolidated financial statements.

Recently Issued Accounting Guidance:

In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740) , which enhances disclosures within the income tax rate reconciliation and information disclosed related to income taxes paid, and requires disaggregation of certain financial statement captions between domestic, foreign, federal and state.

1 unchanged sentence

We are currently assessing the impact of this standard on our consolidated financial statements.

In March 2024, the SEC adopted final rules under SEC Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors , which will require public companies to include climate-related disclosures in their annual reports and registration statements.

The final rules will require, among other matters, information about climate-related risks that have materially impacted, or are reasonably likely to have a material impact on, a registrant, including on its strategy, results of operations, or financial condition.

In addition, under the final rules, certain disclosures related to severe weather events and other natural conditions will be required in the audited financial statements.

The disclosure requirements related to financial statements are expected to be effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

We are currently assessing the impact of these rules on our consolidated financial statements and related disclosures.

In November 2024, FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) , which will require additional disclosure about specific expense categories included in the income statement.

Annual disclosure requirements will be effective for us in our Annual Report on Form 10-K for the fiscal year ending December 31, 2026, and quarterly disclosure requirements will be effective for us in the first quarter of 2027, with early adoption permitted.

We are currently assessing the impact of this standard on our consolidated financial statements and related disclosures.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Note 3 – Inventories

19 unchanged sentences

Depreciation expense was $ 98 million, $ 93 million and $ 86 million for the years ended December 31, 2024, 2023 and 2022, respectively, of which $ 89 million, $ 82 million and $ 76 million, respectively, was recognized in cost of sales and $ 9 million, $ 11 million and $ 10 million, respectively, was recognized in selling, general and administrative expenses.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Note 5 – Goodwill and Intangible Assets

2 unchanged sentences

Balance as of December 31, 2022 $ 794 $ 505 $ 282 $ 298 $ 1,879

Movements — — — — —

Balance as of December 31, 2022 794 505 282 298 1,879

Acquisition of business (1)

Balance as of December 31, 2023 794 505 298 298 1,895

(1) During the year ended December 31, 2023, we recognized $ 16 million of provisional goodwill associated with the acquisition of Atacama Manufacturing Inc.

Movements — — — — —

Balance as of December 31, 2024 $ 794 $ 505 $ 298 $ 298 $ 1,895

(1) During the year ended December 31, 2023, we recognized $ 16 million of goodwill associated with the acquisition of Atacama Manufacturing Inc.

The acquisition did not have a material impact on our financial statements.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Intangible assets, net consisted of the following:

10 unchanged sentences

Total intangible assets $ 1,455 $ ( 483 ) $ 972 $ 1,455 $ ( 454 ) $ 1,001

Amortization expense for intangible assets was $ 30 million for the year ended December 31, 2023, and $ 31 million for each of the years ended December 31, 2022 and 2021, and has been recognized in selling, general and administrative expenses.

Amortization expense for intangible assets was $ 29 million, $ 30 million and $ 31 million for the years ended December 31, 2024, 2023 and 2022, respectively, and has been recognized in selling, general and administrative expenses.

Estimated annual amortization for intangible assets over the next five calendar years are as follows:

11 unchanged sentences

Original issue discounts ( 1 ) ( 1 )

current portion — ( 25 )

Long-term debt $ 1,686 $ 1,832

External Debt Facilities

In February 2020, we entered into new external debt facilities (“External Debt Facilities”), which consist of (i) a $ 2,475 million senior secured term loan facility (“Term Loan Facility”);

In February 2020, we entered into new external debt facilities (“External Debt Facilities”), which consisted of (i) a $ 2,475 million senior secured term loan facility (“Term Loan Facility”);

and (ii) a $ 250 million senior secured revolving credit facility (“Revolving Facility”).

3 unchanged sentences

2”) to extend the maturity of the Revolving Facility by one year.

In October 2024, we further amended our External Debt Facilities (“Amendment No.

3”) to replace the undrawn $ 250 million revolving facility maturing in February 2026 with an undrawn $ 700 million revolving facility maturing in October 2029.

Other than the foregoing, the material terms of the External Debt Facilities, as amended by Amendment No.

1, Amendment No.

2 and Amendment No.

2 (“Amended External Debt Facilities”) remained unchanged, and our election to use practical expedients under ASU 2020-04 and ASU 2021-01, as described in Note 2 - Summary of Significant Accounting Policies, resulted in no material impacts on our condensed consolidated financial statements.

3 (“Amended External Debt Facilities”) remained unchanged, and our election to use practical expedients under ASU 2020-04 and ASU 2021-01, as described in Note 2 - Summary of Significant Accounting Policies, resulted in no material impacts on our consolidated financial statements.

Borrowings under the Amended External Debt Facilities bear interest at a rate per annum equal to, at our option, either a base rate plus an applicable margin of 0.75 % or a SOFR plus an applicable margin of 1.75 %.

7 unchanged sentences

The Term Loan Facility matures in February 2027.

The Term Loan Facility amortizes in equal quarterly installments of $ 6 million, which commenced in June 2020, with the balance payable on maturity.

During the year ended December 31, 2023, we made voluntary principal payments of $ 250 million on our Term Loan Facility, which were first applied to pay the remaining quarterly amortization payments in full, with the residual balance applied to the outstanding principal balance due at maturity.

During the year ended December 31, 2021, we made voluntary principal payments of $ 100 million on our Term Loan Facility, which were applied to the outstanding principal balance.

As a result of voluntary principal repayments, the Term Loan Facility has no remaining quarterly amortization payments due.

During the years ended December 31, 2024 and 2023, we made voluntary principal repayments of $ 150 million and $ 250 million, respectively.

Revolving Facility

In November 2023, we amended the External Debt Facilities to extend the maturity date of the Revolving Facility by one year.

The Revolving Facility matures in February 2026 and includes a sub-facility for letters of credit.

In October 2024, we further amended the External Debt Facilities to replace the undrawn $ 250 million revolving facility maturing in February 2026 with an undrawn $ 700 million revolving facility maturing in October 2029.

The Revolving Facility includes a sub-facility for letters of credit.

As of December 31, 2024, we had no outstanding borrowings under the Revolving Facility, and we had $ 6 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility.

11 unchanged sentences

Interest rate swaps (benefit) expense ( 31 ) ( 29 ) ( 6 )

Other ( 2 ) 2 4

Interest expense, net $ 98 $ 119 $ 76

3 unchanged sentences

Total long-term debt $ 1,695

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Note 7 – Leases

17 unchanged sentences

Total operating lease costs $ 27 $ 23 $ 22

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Lease costs related to the amortization of finance lease assets and interest on finance lease liabilities were not material for the years ended December 31, 2024, 2023 and 2022.

10 unchanged sentences

The leases are expected to commence during 2025.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Lease liabilities and ROU assets included in our consolidated balance sheets were as follows:

12 unchanged sentences

During the years ended December 31, 2024 and 2023, new leases and lease modifications resulted in the recognition of operating ROU assets and corresponding operating lease liabilities totaling $ 53 million and $ 6 million, respectively.

During the years ended December 31, 2023 and 2022, new leases resulted in the recognition of finance lease ROU assets and corresponding finance lease liabilities totaling $ 6 million and $ 12 million, respectively.

During the year ended December 31, 2023, new leases resulted in the recognition of finance lease ROU assets and corresponding finance lease liabilities totaling $ 6 million.

New leases and lease modifications resulting in the recognition of finance lease ROU assets and corresponding finance lease liabilities were not material during the year ended December 31, 2024.

During the years ended December 31, 2024, 2023 and 2022, cash flows from operating activities in the consolidated statements of cash flows reflected $ 21 million, $ 18 million and $ 17 million, respectively, of payments for operating lease liabilities.

Payments for finance lease liabilities in the years ended December 31, 2024, 2023 and 2022 were not material.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

The weighted average remaining lease term and weighted average discount rates were as follows:

7 unchanged sentences

In February 2023, we amended our interest rate swaps to replace the interest rate benchmark from LIBOR to SOFR.

Other than the foregoing, the material terms of the interest rate swap agreements remain unchanged, and our election to use practical expedients under ASUs 2020-04 and 2021-01, as described in Note 2 - Summary of Significant Accounting Policies, resulted in no material impacts on our condensed consolidated financial statements.

The aggregate notional amount of the interest rate swaps still in effect as of December 31, 2024 was $ 1,150 million, and the SOFR is fixed at an annual rate of 0.40 % to 3.40 % (for an annual effective interest rate of 2.15 % to 5.15 %, including margin).

The interest rate swaps outstanding as of December 31, 2023 hedge a portion of the interest rate exposure resulting from our Term Loan Facility for periods ranging from two to three years .

The interest rate swaps outstanding as of December 31, 2024 hedge a portion of the interest rate exposure resulting from our Term Loan Facility for periods ranging from one to two years .

We classified these instruments as cash flow hedges.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

The following table provides the notional amounts, the annual rates, the weighted average annual effective rates, and the fair value of our interest rate derivatives:

2 unchanged sentences

4.38 % $ 15 $ 1

As of December 31, 2022 (1)

$ 1,150 2.19 % to 5.19 %

As of December 31, 2023 $ 1,150 2.15 % to 5.15 %

4.38 % $ 23 $ 7

(1) Based on the interest rate swaps prior to the amendments entered into in February 2023, which was based on the LIBOR as of December 31, 2022.

Note 9 – Benefit Plans

5 unchanged sentences

Our expense relating to defined contribution plans was $ 32 million, $ 29 million and $ 27 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Postretirement Benefit Plan

15 unchanged sentences

Long-term postretirement benefit obligation 13 14

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

A portion of our accrued benefit obligation has been recorded in accumulated other comprehensive income as follows:

16 unchanged sentences

We also review our participation rates based on historical actual and expected trends on an annual basis.

An update to the participation rate assumption was the primary driver of the actuarial gain in the year ended December 31, 2023.

Components of Net Periodic Postretirement Costs:

Our total net periodic pension and postretirement benefit cost for each of the years ended December 31, 2024, 2023 and 2022 was not material.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

We used the following weighted-average assumptions to determine our net periodic postretirement health care cost:

9 unchanged sentences

(in millions)

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Note 10 – Stock-based Compensation

We granted restricted stock units (“RSUs”) in July 2019 to certain members of management, pursuant to retention agreements entered into with these employees (the “IPO Grants”).

These RSUs vested upon satisfaction of both a performance-based vesting condition, which was satisfied when we completed our IPO on February 4, 2020, and a service-based vesting condition, which was satisfied with respect to one-third of an employee’s RSUs on each anniversary from the date of our IPO for three consecutive years, subject to the employee’s continued employment through the applicable vesting date.

In addition, in conjunction with our Corporate Reorganization and IPO in February 2020, we established an equity incentive plan for purposes of granting stock-based compensation awards to certain of our senior management, our non-executive directors and to certain employees, to incentivize their performance and align their interests with ours.

Our equity incentive plan was established in 2020 for purposes of granting stock-based compensation awards to certain members of our senior management, our non-executive directors and to certain employees, to incentivize their performance and align their interests with ours.

We have granted RSUs to certain employees and non-employee directors that have a service-based vesting condition.

In addition, we have granted performance stock units (“PSUs”) to certain members of management that have a performance-based vesting condition.

In addition, we have granted PSUs to certain members of management that have a performance-based vesting condition.

We account for forfeitures of outstanding but unvested grants in the period they occur.

10 unchanged sentences

Unrecognized compensation expense relating to unvested RSUs as of December 31, 2024, was $ 5 million, which is expected to be recognized over a weighted average period of 1.23 years.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Unrecognized compensation expense relating to unvested PSUs as of December 31, 2024, was $ 6 million, which is expected to be recognized over a weighted average period of 1.63 years.

8 unchanged sentences

Accrued and other current liabilities $ 161 $ 187

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Note 12 – Other Expense, Net

4 unchanged sentences

IPO and separation-related costs (1)

$ — $ 12 $ 14

Other — 10 ( 1 )

Other expense, net $ — $ — $ 22

3 unchanged sentences

We are from time to time party to litigation, legal proceedings and tax examinations arising from our operations.

Most of these matters involve allegations of damages against us relating to employment matters, consumer complaints, advertising/labelling claims, personal injury and commercial or contractual disputes.

Most of these matters involve allegations of damages against us related to employment matters, consumer complaints, advertising/labeling claims, personal injury claims and commercial or contractual disputes.

We record estimates for claims and proceedings that constitute a present obligation when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of such obligation can be made.

1 unchanged sentence

However, actual outcomes may differ from those expected and could have a material effect on our financial position, results of operations or cash flows in a future period.

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Note 14 – Accumulated Other Comprehensive Income

The following table summarizes the changes in our balances of each component of accumulated other comprehensive income.

Currency Translation Adjustments Employee Benefit Plans Interest Rate Derivatives Accumulated Other Comprehensive Income

Currency Translation Adjustments Employee Benefit Plans Derivative Instruments Accumulated Other Comprehensive Income

(in millions)

Balance as of December 31, 2021 $ ( 6 ) $ 12 $ 4 $ 10

Gain arising during the period — 6 4 10

(Loss) gain arising during the period ( 1 ) 16 48 63

Reclassification to earnings — ( 2 ) ( 6 ) ( 8 )

1 unchanged sentence

Balance as of December 31, 2022 $ ( 7 ) $ 23 $ 36 $ 52

Gain (loss) arising during the period ( 1 ) 16 48 63

Gain arising during the period — 18 12 30

Reclassification to earnings — ( 3 ) ( 29 ) ( 32 )

1 unchanged sentence

Balance as of December 31, 2023 $ ( 7 ) $ 34 $ 23 $ 50

Gain arising during the period — 18 12 30

(Loss) gain arising during the period ( 3 ) 2 20 19

Reclassification to earnings — ( 6 ) ( 32 ) ( 38 )

1 unchanged sentence

Balance as of December 31, 2024 $ ( 10 ) $ 31 $ 14 $ 35

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Note 15 – Income Taxes

7 unchanged sentences

Total income before income taxes $ 451 $ 393 $ 338

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Significant components of income tax expense were as follows:

20 unchanged sentences

State income tax expense 12 10 9

Change in tax rates (1)

Non-deductible expenses 2 3 1

1 unchanged sentence

Total income tax expense $ 99 $ 95 $ 80

(1) Primarily due to a discrete tax benefit for the remeasurement of deferred tax liabilities due to a change in our state tax rates after apportionment.

Reynolds Consumer Products Inc.

17 unchanged sentences

Lease right-of-use assets ( 23 ) ( 17 )

Prepaid expense ( 12 ) —

Financial instruments ( 4 ) ( 7 )

11 unchanged sentences

Increase associated with tax positions taken during the current year 1 2 2

Increase associated with tax positions taken in prior years 1 1 —

(Decrease) increase associated with tax positions taken in prior years ( 1 ) 1 1

Ending unrecognized tax benefits $ 11 $ 11 $ 8

25 unchanged sentences

Information by Segment

We present segment adjusted EBITDA (“Adjusted EBITDA”) as this is the financial measure by which management and our CODM allocate resources and analyze the performance of our reportable segments.

Adjusted EBITDA represents each segment’s earnings before interest, tax, depreciation and amortization and is further adjusted to exclude IPO and separation-related costs, as well as other non-recurring costs.

We present segment adjusted EBITDA (“Adjusted EBITDA”) as this is the financial measure by which management and our CODM evaluates the performance of each segment and allocates resources (including employees, property and financial or capital resources) for each segment, predominantly in the annual budgeting and forecasting process.

The CODM considers budget-to-actual variances on a monthly basis when making decisions about allocating capital and personnel to the segments.

Adjusted EBITDA represents each segment’s earnings before interest, tax, depreciation and amortization and may be further adjusted to exclude IPO and separation-related costs, as well as certain other non-recurring items, if applicable.

Total assets by segment are those assets directly associated with the respective operating activities, comprising inventory, property, plant and equipment and operating lease right-of-use assets.

13 unchanged sentences

Total segment net revenues 1,247 959 918 596 3,720 ( 25 ) 3,695

Other segment items (2)

( 1,025 ) ( 687 ) ( 771 ) ( 466 ) ( 2,949 )

Adjusted EBITDA 222 272 147 130 771

7 unchanged sentences

Total segment net revenues 1,273 942 967 593 3,775 ( 19 ) 3,756

Other segment items (2)

( 1,089 ) ( 681 ) ( 793 ) ( 481 ) ( 3,044 )

Adjusted EBITDA 184 261 174 112 731

11 unchanged sentences

Total segment net revenues 1,287 946 1,000 604 3,837 ( 20 ) 3,817

Other segment items (2)

( 1,145 ) ( 739 ) ( 866 ) ( 508 ) ( 3,258 )

Adjusted EBITDA 142 207 134 96 579

3 unchanged sentences

Unallocated assets are comprised of cash, accounts receivable, other receivables, entity-wide property, plant and equipment, entity-wide operating lease ROU assets, goodwill, intangible assets, related party receivables and other assets.

(2) Other segment items included in Segment Adjusted EBITDA primarily include cost of sales (including material, manufacturing and logistics costs), salaries and benefits, advertising expenses and professional fees.

The CODM allocates resources and assesses performance on a consolidated level for these other segment items.

Reynolds Consumer Products Inc.

35 unchanged sentences

Net revenues $ 3,695 $ 3,756 $ 3,817

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

As of December 31,

3 unchanged sentences

Long-lived assets $ 758 $ 732

Reynolds Consumer Products Inc.

Notes to the Consolidated Financial Statements

Entity-wide Disclosures

Net revenues from our largest customer and its affiliates were 48 %, 48 % and 44 % of total net revenues for the years ended December 31, 2023, 2022 and 2021, respectively.

Net revenues from our largest customer and its affiliates were 48 % of total net revenues for each of the years ended December 31, 2024, 2023 and 2022.

The net revenues from our largest customer were recognized across all of our segments.

4 unchanged sentences

We sell and purchase various goods and services with PEI Group under contractual arrangements that expire over a variety of periods through December 31, 2027.

During the year ended December 31, 2023, we amended these contractual arrangements with PEI Group, which, among other things, extended the expiration date for certain arrangements.

During the years ended December 31, 2024 and 2023, we amended these contractual arrangements with PEI Group, which, among other things, extended the expiration date for certain arrangements.

Transactions between us and PEI Group are described below.

5 unchanged sentences

Furthermore, $ 143 million of dividends were paid to PFL during the years ended December 31, 2024, 2023 and 2022, respectively.

Transactions Related to our Separation from PEI Group

On February 4, 2020, we entered into a transition services agreement with a subsidiary of PEI Group, whereby PEI Group continued to provide certain administrative services to us, including information technology services;

accounting, treasury, financial reporting and transaction support;

human resources;

tax, legal and compliance related services;

and other corporate services for up to 24 months.

In addition, we entered into a transition services agreement with Rank Group Limited (an affiliate of PEI Group) whereby, upon our request, Rank Group Limited provided certain administrative services to us, including financial reporting, consulting and compliance services, insurance procurement and human resources support, legal and corporate secretarial support, and related services for up to 24 months.

For the year ended December 31, 2021, we incurred $ 6 million related to transition services which was included in selling, general and administrative expenses in our consolidated statements of income.

There was no expense for the years ended December 31, 2023 and 2022 related to transition services.

Note 18 – Subsequent Events

1 unchanged sentence

On January 30, 2025, our Board of Directors approved a cash dividend of $ 0.23 per common share to be paid on February 28, 2025 to shareholders of record on February 14, 2025.

Term Loan Facility

Subsequent to December 31, 2024, we made a voluntary principal payment of $ 50 million related to our Term Loan Facility.

Except as described above, there have been no events subsequent to December 31, 2024 which would require accrual or disclosure in these consolidated financial statements.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data