What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-04 compared with 2025-02-05 · 88 added, 89 removed, 349 unchanged (34% of the section changed)

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Our mix of branded and store brand products is a key competitive advantage that aligns our goal of growing the overall product categories where we have offerings.

Our retail partners also measure their success in category growth, which positions us as a trusted strategic partner.

Our retail partners also generally measure their success in category growth, which positions us as a trusted strategic partner.

Our Reynolds and Hefty brands have preeminent positions in their categories and carry strong brand recognition in household aisles.

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Through our Reynolds Cooking & Baking segment, we sell both branded and store brand aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags and slow cooker liners.

Our branded products are sold under the Reynolds Wrap, Reynolds KITCHENS and EZ Foil brands in the United States and selected international markets, under the ALCAN brand in Canada and under the Diamond brand outside of North America.

Our branded products are sold under the Reynolds Wrap, Reynolds Kitchens and EZ Foil brands in the United States and select international markets, under the ALCAN brand in Canada and under the Diamond brand outside of North America.

With our flagship Reynolds Wrap products, we hold the #1 market position in the U.S.

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Hefty is a well-recognized leader in the trash bag and food storage bag categories and our private label products offer value to our retail partners.

Our branded products are sold under the Hefty Ultra Strong and Hefty Strong brands for trash bags, and as the Hefty and Baggies brands for our food storage bags.

Our branded products are sold under the Hefty Ultra Strong and Hefty Strong brands for trash bags in the U.S.

and select international markets, and as the Hefty brand for our food storage bags in the U.S.

Our food storage bags are sold internationally as Reynolds, Diamond, or Hefty Basics brands based on the region.

Hefty has 98% brand awareness and is most commonly identified with the Brand’s famous “Hefty!

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We have the #1 branded market share in the U.S.

large black trash bag segment, and the #2 branded market share in the slider bag and tall kitchen trash bag segments.

Our robust product portfolio in this segment includes a full suite of products, including sustainable solutions such as blue and clear recycling bags, compostable bags, bags made from recycled materials and orange bags through the Hefty ReNew Program.

large black trash bag segment, and the #2 branded market share in the food storage bag and tall kitchen trash bag segments.

Our robust product portfolio includes a full suite of products, including sustainable solutions such as compostable bags and bags made from recycled materials.

• Hefty Tableware:

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We sell across a broad range of materials and price points in all retail channels, allowing our consumers to select the product that best suits their price, function and aesthetic needs.

These materials include sustainable solutions, such as Hefty ECOSAVE and Hefty Compostable Printed Paper Plates.

In 2024, we increased the post-consumer recycled content in some of our cups and we added compostable party cups to our assortment.

In 2025, we launched the line of Hefty ECOSAVE Cutlery, a high quality compostable offering.

• Presto Products:

Through our Presto Products segment, we primarily sell store brand products in four main categories:

food storage bags, trash bags, reusable storage containers and plastic wrap.

Through our Presto Products segment, we primarily sell store brand products in three main consumer categories:

food storage bags, trash bags, and plastic wrap.

Presto Products is a market leader in food storage bags and differentiates itself by providing access to category management, consumer insights, marketing, merchandising and research and development (“R&D”) resources.

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Our products are household staples with a presence in 95% of households across the United States.

We also expect that consumers’ desire for convenience will continue to sustain demand for our products.

Today’s consumers are focused on convenience, which extends into household products that improve ease of use and provide time savings, and they are willing to pay a higher price for innovative features and functionality.

While advanced features are already prevalent in many of our products, we intend to continue investing in product development to accommodate the convenience-oriented lifestyles of today’s consumers.

Consumer demand is also impacted by changes in consumer lifestyle, environmental concerns and other considerations.

In addition, customers’ sensitivity to price points contributes to fluctuations in demand in portions of our business.

Consumer demand for our products is influenced by changes in household needs, economic conditions and evolving lifestyle preferences.

While convenience remains an important consideration, particularly among younger consumers, ongoing inflationary pressures and broader economic uncertainty have contributed to increased price sensitivity and shifting purchasing behaviors.

These dynamics vary across income groups, with some households placing greater emphasis on affordability.

Our broad product portfolio, which includes both branded offerings and value oriented private label products, allows us to address these diverse consumer needs and mitigate demand fluctuations across economic environments.

This multi-tiered approach positions us to serve consumers seeking convenience features as well as prioritizing lower cost alternatives, while maintaining product quality across our offerings.

Consumer demand may continue to be affected by future changes in economic conditions, consumer preferences and other external factors.

Branded products and store brand products accounted for 61% and 39% of our revenue, excluding business-to-business revenue, respectively, in the year ended December 31, 2025.

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Non-GAAP Measures

In this Annual Report on Form 10-K we use the non-GAAP financial measures “Adjusted EBITDA”, “Adjusted Net Income” and “Adjusted Diluted Earnings Per Share” (“Adjusted EPS”), which are measures adjusted for the impact of specified items and are not in accordance with GAAP.

We define Adjusted EBITDA as net income calculated in accordance with GAAP, plus the sum of income tax expense, net interest expense, depreciation and amortization and as may be further adjusted to exclude IPO and separation-related costs, as well as other non-recurring items, if applicable.

We define Adjusted Net Income and Adjusted EPS as Net Income and Earnings Per Share (“EPS”) calculated in accordance with GAAP, plus IPO and separation-related costs and other non-recurring costs.

In this Annual Report on Form 10-K we use the non-GAAP financial measures “Adjusted EBITDA”, “Adjusted Net Income” and “Adjusted EPS”, which are measures adjusted for the impact of specified items and are not in accordance with GAAP.

We define Adjusted EBITDA as net income calculated in accordance with GAAP, plus income tax expense, net interest expense, debt refinancing expense, depreciation and amortization, costs to execute strategic initiatives and CEO transition costs.

We define Adjusted Net Income and Adjusted EPS as Net Income and Diluted Earnings Per Share calculated in accordance with GAAP, plus debt refinancing expense, costs to execute strategic initiatives and CEO transition costs.

We present Adjusted EBITDA because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans and make strategic decisions.

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Interest expense, net 86 98 119

Debt refinancing expense (1)

Depreciation and amortization 135 129 124

IPO and separation-related costs (1)

Costs to execute strategic initiatives (2)

CEO transition costs (3)

Adjusted EBITDA (Non-GAAP) $ 667 $ 678 $ 636

(1) Reflects costs during the year ended December 31, 2022 related to our separation to operate as a stand-alone public company as well as costs related to the IPO process.

No such costs were incurred during the years ended December 31, 2024 and 2023.

(1) Reflects the expense recorded related to our March 2025 Term Loan Facility refinancing.

(2) Reflects costs related to the execution of cost savings and revenue growth strategic initiatives.

(3) Reflects compensation and other costs related to the CEO transition effective January 1, 2025.

The following table presents a reconciliation of our net income and diluted EPS, the most directly comparable GAAP financial measures, to Adjusted Net Income and Adjusted EPS:

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As Reported - GAAP $ 301 210.4 $ 1.43 $ 352 210.4 $ 1.67 $ 298 210.0 $ 1.42

IPO and separation-related costs (1)

Debt refinancing expense (1)

10 210.4 0.05 — — — — — —

Costs to execute strategic initiatives (1)

19 210.4 0.09 — — — — — —

CEO transition costs (1)

15 210.4 0.07 — — — — — —

Adjusted (Non-GAAP) $ 345 210.4 $ 1.64 $ 352 210.4 $ 1.67 $ 298 210.0 $ 1.42

(1) Amounts are after tax, calculated using a tax rate of 23.6% for the year ended December 31, 2022, which is our effective tax rate for that period.

(1) Amounts are after tax, calculated based on the applicable tax treatment of each adjustment, using a normalized effective tax rate of 23.3% for deductible items and 0% for non-deductible items.

Results of Operations

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Our retail business net revenues consist of sales to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets and eCommerce retailers.

Our non-retail business net revenues consist of aluminum sales to food service customers, which are classified as related party revenues, and industrial customers.

Our non-retail business net revenues consist of aluminum sales to food service customers, which were classified as related party revenues during the three months ended March 31, 2025, and industrial customers.

Discussions of the year ended December 31, 2024 items and comparisons between the year ended December 31, 2024 and the year ended December 31, 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed on February 5, 2025.

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Selling, general and administrative expenses (382) (10) % (429) (12) % 47 11 %

Other expense, net — — % — — % — — %

Other expense, net (40) (1) % — — % (40) NM %

Income from operations 492 13 % 549 15 % (57) (10) %

Interest expense, net (86) (2) % (98) (3) % 12 12 %

Debt refinancing expense (13) — % — — % (13) NM %

Income before income taxes 393 11 % 451 12 % (58) (13) %

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Total Net Revenues .

Total net revenues decreased by $61 million, or 2%, to $3,695 million.

The 2% decrease was driven by lower volume and lower pricing.

Total net revenues increased by $26 million, or 1%, to $3,721 million.

The 1% increase was primarily driven by higher pricing related to the pass through of higher input costs, partially offset by lower retail volume.

Cost of Sales .

Cost of sales decreased by $97 million, or 3%, to $2,717 million.

The decrease was primarily driven by lower material and manufacturing costs, as well as lower volume, partially offset by higher logistics costs.

Cost of sales increased by $90 million, or 3%, to $2,807 million.

The increase was primarily driven by higher input, manufacturing and logistics costs, partially offset by lower sales volume.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses (“SG&A”) decreased by $1 million to $429 million.

Selling, general and administrative expenses decreased by $47 million to $382 million due to lower personnel and advertising costs.

Other Expense, Net.

Other expense, net was zero in each of the twelve months ended December 31, 2024 and 2023.

Other expense, net was $40 million, reflecting costs to execute strategic initiatives and costs associated with our CEO transition.

Interest Expense , Net .

Interest expense, net decreased by $12 million, or 12%, to $86 million.

The decrease was primarily due to a lower outstanding principal balance on our external debt facilities as a result of voluntary principal payments made on our term loan facility.

The decrease was primarily due to a lower outstanding principal balance as a result of principal payments made on our term loan facility.

Debt refinancing expense.

In connection with the refinancing of our senior secured term loan facility in March 2025, we recorded debt refinancing expense of $13 million for the year ended December 31, 2025.

Income Tax Expense.

Our effective tax rate declined by 2.2%, from 24.1% for the year ended December 31, 2023, to 21.9% for the year ended December 31, 2024.

The decrease was primarily due to the recognition of a discrete tax benefit for the remeasurement of deferred tax liabilities.

Our effective tax rate increased by 1.4%, from 21.9% for the year ended December 31, 2024, to 23.3% for the year ended December 31, 2025.

The increase was primarily due to the recognition of a discrete tax benefit for the remeasurement of deferred tax liabilities in 2024.

Adjusted EBITDA.

Adjusted EBITDA increased by $42 million, or 7%, to $678 million.

The increase in Adjusted EBITDA was primarily due to lower material and manufacturing costs, partially offset by higher logistics costs and the impact of lower net revenues.

Adjusted EBITDA decreased by $11 million, or 2%, to $667 million.

The decrease in Adjusted EBITDA was primarily due to lower retail volume and higher material, manufacturing and logistics costs, partially offset by higher pricing and lower selling, general and administrative expenses.

Segment Information

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Total Segment Net Revenues .

Reynolds Cooking & Baking total segment net revenues decreased by $26 million, or 2%, to $1,247 million.

The decrease in net revenues was primarily due to lower non-retail volume.

Reynolds Cooking & Baking total segment net revenues increased by $53 million, or 4%, to $1,259 million.

The increase in net revenues was primarily due to higher pricing driven by the pass through of higher input costs and higher non-retail volume, partially offset by lower retail volume.

Adjusted EBITDA .

Reynolds Cooking & Baking Adjusted EBITDA increased by $3 million, or 1%, to $219 million.

The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs.

The increase in Adjusted EBITDA was primarily driven by the timing of pricing actions to recover higher input costs and lower selling, general and administrative expenses, partially offset by lower retail volume.

Hefty Waste & Storage

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Total Segment Net Revenues .

Hefty Waste & Storage total segment net revenues increased by $17 million, to $959 million.

The increase in net revenues was primarily due to higher volume and timing of promotional activities.

Hefty Waste & Storage total segment net revenues increased by $30 million, or 3%, to $1,011 million.

The increase in net revenues was primarily driven by higher volume.

Adjusted EBITDA.

Hefty Waste & Storage Adjusted EBITDA increased by $2 million, or 1%, to $279 million.

The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs and the benefit of higher net revenues, partially offset by higher logistics costs.

The increase in Adjusted EBITDA was primarily driven by higher revenue and lower selling, general and administrative expenses, partially offset by higher input, manufacturing and logistics costs.

Hefty Tableware

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Hefty Tableware total segment net revenues decreased by $86 million, or 9%, to $850 million.

The decrease in net revenues was primarily due to lower foam volume driven by foam-related consumer behavior and regulatory pressure, as well as lower pricing.

The decrease in net revenues was primarily due to lower foam volume, partially offset by higher pricing, including lower promotional spending.

Adjusted EBITDA.

Hefty Tableware Adjusted EBITDA decreased by $15 million, or 10%, to $133 million.

The decrease in Adjusted EBITDA was primarily driven by the impact of lower net revenues.

The decrease in Adjusted EBITDA was primarily driven by lower foam volume and higher related costs, partially offset by higher pricing and lower selling, general and administrative expenses.

Presto Products

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Presto Products total segment net revenues increased by $31 million, or 5%, to $628 million.

The increase in net revenues was primarily due to the timing of the pass through of higher commodity costs.

The increase in net revenues was primarily due to higher volume.

Adjusted EBITDA .

Presto Products Adjusted EBITDA increased by $18 million, or 16%, to $130 million.

The increase in Adjusted EBITDA was primarily driven by lower material and manufacturing costs and the benefit of product portfolio optimization.

Presto Products Adjusted EBITDA was $130 million in both years.

Higher volume was fully offset by higher operational costs associated with scaling new distribution.

Portions of our business historically have been moderately seasonal.

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Net cash from operating activities decreased by $12 million, or 2%, to $477 million.

The decrease was primarily driven by the normalization of inventory levels following significant reductions implemented in the year ended December 31, 2023.

This was partially offset by other working capital optimization initiatives and improved earnings.

The decrease was primarily driven by lower net income.

Cash used in investing activities

Net cash used in investing activities increased by $10 million, or 9%, to $120 million due to an increase in capital spend.

Net cash used in investing activities increased by $41 million, or 34%, to $161 million.

The increase was driven by an increase in cash outlays for capital expenditures.

Cash used in financing activities

Net cash used in financing activities decreased by $40 million, or 12%, to $306 million.

We made voluntarily principal payments of $150 million during the year ended December 31, 2024 compared to voluntary principal payments of $250 million during the year ended December 31, 2023.

We made principal payments of $108 million during the year ended December 31, 2025 compared to principal payments of $150 million during the year ended December 31, 2024.

External Debt Facilities

In February 2020, we entered into the External Debt Facilities which consists of a $2,475 million Term Loan Facility and a Revolving Facility that provided for additional borrowing capacity of up to $250 million, reduced by amounts used for letters of credit.

In February 2023, we amended the External Debt Facilities (“Amendment No.

1”) which replaced the benchmark from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”).

Additionally, in November 2023, we further amended the External Debt Facilities (“Amendment No.

2”) to extend the maturity date 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.

3 (“Amended External Debt Facilities”) remain unchanged.

Our External Debt Facilities consist of a senior secured term loan facility (“Term Loan Facility”) and a $700 million senior secured revolving credit facility (“Revolving Facility”) in a syndicated loan arrangement.

During March 2025, we amended the Term Loan Facility, replacing the then-existing facility, which was originally set to mature in February 2027, with a new $1,645 million facility maturing in March 2032 (“Amendment No.

Other than the new maturity date and the recommencement of quarterly amortization payments, the material terms of our External Debt Facilities remain unchanged as a result of Amendment No.

As of December 31, 2025, the outstanding balance under the Term Loan Facility was $1,586 million.

As of December 31, 2025, we had no outstanding borrowings under the Revolving Facility, and we had $7 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility.

The borrower under the Amended External Debt Facilities is Reynolds Consumer Products LLC (the “Borrower”).

The borrower under the External Debt Facilities is Reynolds Consumer Products LLC (the “Borrower”).

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

In addition, the Amended External Debt Facilities provide that the Borrower has the right at any time, subject to customary conditions, to request incremental term loans or incremental revolving credit commitments in amounts and on terms set forth therein.

The lenders under the Amended External Debt Facilities are not under any obligation to provide any such incremental loans or commitments, and any such addition of or increase in loans is subject to certain customary conditions precedent and other provisions.

In addition, the External Debt Facilities provide that the Borrower has the right at any time, subject to customary conditions, to request incremental term loans or incremental revolving credit commitments in amounts and on terms set forth therein.

The lenders under the External Debt Facilities are not under any obligation to provide any such incremental loans or commitments, and any such addition of or increase in loans is subject to certain customary conditions precedent and other provisions.

Interest rate and fees

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 rate plus an applicable margin of 1.75%.

During 2020 and 2022, we entered into a series of interest rate swaps to fix the LIBOR of our External Debt Facilities.

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 remained unchanged, and our election to use practical expedients under Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848):

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

Scope , resulted in no material impacts on the consolidated financial statements.

The aggregate notional amount of our 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).

These interest rate swaps hedge a portion of the interest rate exposure resulting from our Term Loan Facility for periods ranging from one to two years.

Borrowings under the 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 rate plus an applicable margin of 1.75%.

We have entered into a series of interest rate swaps to fix the SOFR of our External Debt Facilities.

The aggregate notional amount of the interest rate swaps in effect as of December 31, 2025 and 2024 was $1,000 million and $1,150 million, respectively.

The SOFR of the swaps in effect is fixed at an annual rate of 2.66% to 3.40% (for an annual effective interest rate of 4.41% to 5.15%, including margin).

These interest rate swaps that are in effect have maturity dates of less than one year, and a weighted average effective rate of 4.71%.

Additionally, during the year ended December 31, 2025, we entered into additional interest rate swaps with forward start dates beginning in February 2026, that had an aggregate notional value of $900 million, which fixes the SOFR to an annual rate of 3.33% to 3.41% (for an annual effective interest rate of 5.08% to 5.16%, including margin).

These interest rate swaps with forward start dates have maturity dates between March 2028 and March 2031, and a weighted average effective rate of 5.12%.

The Term Loan Facility contains customary mandatory prepayments, including with respect to excess cash flow, asset sale proceeds and proceeds from certain incurrences of indebtedness.

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During the years ended December 31, 2025 and 2024, we made voluntary principal payments of $100 million and $150 million, respectively, related to the Term Loan Facility, which were not subject to a prepayment premium.

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

Amortization and maturity

The Term Loan Facility matures in February 2027.

As a result of previous voluntary principal repayments, we have no further quarterly amortization payments due on the Term Loan Facility.

As amended, the Revolving Facility matures in October 2029.

The Term Loan Facility matures in March 2032.

The Term Loan Facility amortizes in equal quarterly installments of $4 million, which commenced in June 2025, with the balance payable on maturity.

As a result of voluntary principal repayments made after amending our External Debt Facilities, the Term Loan Facility has no quarterly amortization payments due until December 2028, when the quarterly amortization payments will recommence.

The Revolving Facility matures in October 2029.

Guarantee and security

All obligations under the Amended External Debt Facilities and certain hedge agreements and cash management arrangements provided by any lender party to the Amended External Debt Facilities or any of its affiliates and certain other persons are unconditionally guaranteed by Reynolds Consumer Products Inc.

All obligations under the External Debt Facilities and certain hedge agreements and cash management arrangements provided by any lender party to the External Debt Facilities or any of its affiliates and certain other persons are unconditionally guaranteed by Reynolds Consumer Products Inc.

(“RCPI”), the Borrower (with respect to hedge agreements and cash management arrangements not entered into by the Borrower) and certain of RCPI’s existing and subsequently acquired or organized direct or indirect material wholly-owned U.S.

restricted subsidiaries, with customary exceptions including, among other things, where providing such guarantees is not permitted by law, regulation or contract or would result in material adverse tax consequences.

All obligations under the Amended External Debt Facilities and certain hedge agreements and cash management arrangements provided by any lender party to the Amended External Debt Facilities or any of its affiliates and certain other persons, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by:

All obligations under the External Debt Facilities and certain hedge agreements and cash management arrangements provided by any lender party to the External Debt Facilities or any of its affiliates and certain other persons, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by:

(i) a perfected first-priority pledge of all the equity interests of each wholly-owned material restricted subsidiary of RCPI, the Borrower or a subsidiary guarantor, including the equity interests of the Borrower (limited to 65% of voting stock in the case of first-tier non-U.S.

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Certain covenants and events of default

The Amended External Debt Facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of the restricted subsidiaries of RCPI to:

The External Debt Facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of the restricted subsidiaries of RCPI to:

• incur additional indebtedness and guarantee indebtedness;

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• enter into amendments to certain indebtedness in a manner materially adverse to the lenders.

The Amended External Debt Facilities contain a springing financial covenant requiring compliance with a ratio of first lien net indebtedness to consolidated EBITDA, applicable solely to the Revolving Facility.

The External Debt Facilities contain a springing financial covenant requiring compliance with a ratio of first lien net indebtedness to consolidated EBITDA, applicable solely to the Revolving Facility.

The financial covenant is tested on the last day of any fiscal quarter only if the aggregate principal amount of borrowings under the Revolving Facility and drawn but unreimbursed letters of credit exceed 35% of the total amount of commitments under the Revolving Facility on such day.

If an event of default occurs, the lenders under the Amended External Debt Facilities are entitled to take various actions, including the acceleration of amounts due under the Amended External Debt Facilities and all actions permitted to be taken by secured creditors.

We are currently in compliance with the covenants contained in our Amended External Debt Facilities.

If an event of default occurs, the lenders under the External Debt Facilities are entitled to take various actions, including the acceleration of amounts due under the External Debt Facilities and all actions permitted to be taken by secured creditors.

We are currently in compliance with the covenants contained in our External Debt Facilities.

Accounts Receivable Factoring

We are party to a factoring agreement with JP Morgan Chase Bank, N.A.

to sell certain accounts receivable up to $95 million.

We are party to a factoring agreement with a financial institution to sell certain accounts receivable up to $95 million.

We had no outstanding balance owed under the factoring arrangement as of December 31, 2025 and 2024.

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Supply Chain Financing

During the year ended December 31, 2023, we initiated a voluntary Supply Chain Finance program (the “SCF”) with a global financial institution (the “SCF Bank”).

We have an ongoing Supply Chain Finance program (the “SCF”) with a global financial institution (the “SCF Bank”).

Under the SCF, qualifying suppliers may elect to sell their receivables from us to the SCF Bank.

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We expect to continue paying cash dividends on a quarterly basis;

however, future dividends are at the discretion of our Board of Directors and will depend upon our earnings, capital requirements, financial condition, contractual limitations (including under the Amended External Debt Facilities) and other factors.

We believe that our projected cash position, cash flows from operations, including proceeds from factored receivables, and available borrowings under the Revolving Facility are sufficient to meet debt service, capital expenditures and working capital needs for the foreseeable future.

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Operating lease liabilities 117 28 46 32 11

123 27 47 32 17

Finance lease liabilities 18 2 4 4 8

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The interest rate on the floating rate debt balances has been assumed to be the same as the rate in effect as of December 31, 2025.

(2) Total operating lease liabilities include $17 million in commitments related to operating leases executed that have not yet commenced.

As of December 31, 2025, our liabilities for uncertain tax positions and defined benefit pension obligations totaled $13 million.

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This process of analyzing and settling trade-promotion programs with customers could impact our results of operations and trade promotion accruals depending on how actual results of the programs compare to original estimates.

Sales incentives represented 5%, 5%, and 4% of total net revenues for the years ended December 31, 2024, 2023 and 2022, respectively.

Sales incentives represented 5% of total net revenues for each of the years ended December 31, 2025, 2024 and 2023.

As of December 31, 2025 and 2024, we had accruals of $33 million and $36 million, respectively, reflected on our consolidated balance sheets in Accrued and other current liabilities related to sales incentive programs.

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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 7. Management’s Discussion and Analysis