Item 1. Financial Statements
Item 1. Financial Statements.
Reynolds Consumer Products Inc.
Condensed Consolidated Statements of Income
(in millions, except for per share data)
(Unaudited)
For the Three Months Ended
March 31,
2026 2025
Net revenues $ 877 $ 801
Related party net revenues — 17
Total net revenues 877 818
Cost of sales ( 670 ) ( 629 )
Gross profit 207 189
Selling, general and administrative expenses ( 109 ) ( 104 )
Other expense, net — ( 9 )
Income from operations 98 76
Interest expense, net ( 21 ) ( 21 )
Debt refinancing expense — ( 13 )
Income before income taxes 77 42
Income tax expense ( 18 ) ( 11 )
Net income $ 59 $ 31
Earnings per share:
Basic $ 0.28 $ 0.15
Diluted $ 0.28 $ 0.15
Weighted average shares outstanding:
Basic 210.6 210.3
Diluted 211.8 210.3
See accompanying notes to the condensed consolidated financial statements.
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Table of Contents
Reynolds Consumer Products Inc.
Condensed Consolidated Statements of Comprehensive Income
(in millions)
(Unaudited)
For the Three Months Ended
March 31,
2026 2025
Net income $ 59 $ 31
Other comprehensive (loss) income, net of income taxes:
Currency translation adjustment ( 1 ) —
Employee benefit plans ( 1 ) ( 1 )
Derivative instruments 4 ( 5 )
Other comprehensive income (loss), net of income taxes 2 ( 6 )
Comprehensive income $ 61 $ 25
See accompanying notes to the condensed consolidated financial statements.
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Table of Contents
Reynolds Consumer Products Inc.
Condensed Consolidated Balance Sheets
(in millions, except for per share data)
(Unaudited)
As of March 31,
2026
As of December 31,
2025
Assets
Cash and cash equivalents $ 71 $ 147
Accounts receivable (net of allowance for doubtful accounts of $ 1 and $ 2 )
368 355
Other receivables 9 10
Inventories 637 584
Other current assets 20 20
Total current assets 1,105 1,116
Property, plant and equipment (net of accumulated depreciation of $ 1,059 and $ 1,034 )
838 823
Operating lease right-of-use assets, net 96 98
Goodwill 1,895 1,895
Intangible assets, net 937 943
Other assets 59 61
Total assets $ 4,930 $ 4,936
Liabilities
Accounts payable $ 418 $ 387
Current operating lease liabilities 25 23
Income taxes payable 30 14
Accrued and other current liabilities 143 153
Total current liabilities 616 577
Long-term debt 1,530 1,580
Long-term operating lease liabilities 78 81
Deferred income taxes 352 350
Long-term postretirement benefit obligation 13 13
Other liabilities 76 82
Total liabilities $ 2,665 $ 2,683
Commitments and contingencies (Note 7)
Stockholders’ equity
Common stock, $ 0.001 par value; 2,000 shares authorized; 210.7 shares issued and outstanding
— —
Additional paid-in capital 1,430 1,431
Accumulated other comprehensive income 22 20
Retained earnings 813 802
Total stockholders’ equity 2,265 2,253
Total liabilities and stockholders’ equity $ 4,930 $ 4,936
See accompanying notes to the condensed consolidated financial statements.
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Table of Contents
Reynolds Consumer Products Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in millions, except for per share data)
(Unaudited)
Common
Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income Total
Equity
Balance as of December 31, 2024 $ — $ 1,413 $ 694 $ 35 $ 2,142
Net income — — 31 — 31
Other comprehensive loss, net of income taxes — — — ( 6 ) ( 6 )
Dividends ($ 0.23 per share declared and paid)
— — ( 48 ) — ( 48 )
Other — 4 ( 1 ) — 3
Balance as of March 31, 2025 $ — $ 1,417 $ 676 $ 29 $ 2,122
Balance as of December 31, 2025 $ — $ 1,431 $ 802 $ 20 $ 2,253
Net income — — 59 — 59
Other comprehensive income, net of income taxes — — — 2 2
Dividends ($ 0.23 per share declared and paid)
— — ( 48 ) — ( 48 )
Other — ( 1 ) — — ( 1 )
Balance as of March 31, 2026 $ — $ 1,430 $ 813 $ 22 $ 2,265
See accompanying notes to the condensed consolidated financial statements.
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Table of Contents
Reynolds Consumer Products Inc.
Condensed Consolidated Statements of Cash Flows
(in millions)
(Unaudited)
Three Months Ended
March 31,
2026 2025
Cash provided by operating activities
Net income $ 59 $ 31
Adjustments to reconcile net income to operating cash flows:
Depreciation and amortization 33 32
Deferred income taxes — ( 8 )
Stock compensation expense 4 6
Change in assets and liabilities:
Accounts receivable, net ( 13 ) 27
Other receivables 2 ( 2 )
Related party receivables — ( 1 )
Inventories ( 53 ) ( 66 )
Accounts payable 34 50
Related party payables — ( 9 )
Income taxes payable / receivable 16 17
Accrued and other current liabilities ( 10 ) ( 30 )
Other assets and liabilities ( 1 ) 9
Net cash provided by operating activities 71 56
Cash used in investing activities
Acquisition of property, plant and equipment ( 44 ) ( 39 )
Net cash used in investing activities ( 44 ) ( 39 )
Cash used in financing activities
Repayment of long-term debt ( 50 ) ( 50 )
Dividends paid ( 48 ) ( 48 )
Proceeds from term loan refinancing (1)
— 743
Repayments of existing term loan (1)
— ( 743 )
Other financing activities ( 5 ) 2
Net cash used in financing activities ( 103 ) ( 96 )
Net decrease in cash and cash equivalents ( 76 ) ( 79 )
Cash and cash equivalents at beginning of period 147 137
Cash and cash equivalents at end of period $ 71 $ 58
Cash paid:
Interest - long-term debt, net of interest rate swaps 20 21
Income taxes 1 1
(1) Represents cash inflows and outflows due to changes in term loan lender composition.
See accompanying notes to the condensed consolidated financial statements.
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Reynolds Consumer Products Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1 – Description of Business and Basis of Presentation
Description of Business:
Reynolds Consumer Products Inc. and its subsidiaries (“we”, “us” or “our”) produce and sell products that people use in their homes for cooking, serving, clean-up and storage. We sell our products under brands such as Reynolds and Hefty, and also under store brands. Our product portfolio includes aluminum foil, wraps, disposable bakeware, trash bags, food storage bags and disposable tableware. We report four business segments: Reynolds Cooking & Kitchen Essentials; Hefty Waste & Clean-Up; Hefty Home & Tableware; and Hefty Storage & Organization. Refer to Note 9 - Segment Information for details of a segment reorganization that took place during the three months ended March 31, 2026.
Basis of Presentation:
We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for comprehensive annual financial statements.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2025, and should be read in conjunction with the disclosures therein. In our opinion, these interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to state fairly the financial condition, results of operations and cash flows for the periods presented. Operating results for interim periods are not necessarily indicative of annual operating results.
Non-Cash Lease Transactions:
We recorded $ 4 million and $ 15 million in new operating lease right-of-use assets obtained in exchange for lease liabilities during the three months ended March 31, 2026 and March 31, 2025, respectively.
Supply Chain Financing:
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. These participating suppliers negotiate their receivables sales arrangements directly with the SCF Bank. We are not party to those agreements, nor do we provide any security or other forms of guarantees to the SCF Bank. The participation in the program is at the sole discretion of the supplier, we have no economic interest in a supplier’s decision to enter into the agreement and have no direct financial relationship with the SCF Bank, as it relates to the SCF. Once a qualifying supplier elects to participate in the SCF and reaches an agreement with the SCF Bank, they elect which individual invoices they sell to the SCF Bank.
The terms of our payment obligations are not impacted by a supplier’s participation in the SCF and as such, the SCF has no impact on our balance sheets, cash flows or liquidity. Our payment terms with our suppliers for similar services and materials within individual markets are consistent between suppliers that elect to participate in the SCF and those that do not participate.
All outstanding amounts related to suppliers participating in the SCF are recorded within accounts payable in the condensed consolidated balance sheet and associated payments are included as an operating cash flow in the condensed consolidated statement of cash flows. The amount of obligations outstanding that we have confirmed as valid under the SCF was $ 9 million as of each of March 31, 2026 and December 31, 2025.
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Accounts Receivable Factoring:
We are party to a factoring agreement with a global financial institution to sell certain accounts receivable up to $ 95 million. We had no factored receivables as of March 31, 2026 . Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the condensed consolidated balance sheet at the time of the sales transaction. We classify proceeds received from sales of accounts receivable as an operating cash flow in the condensed consolidated statement of cash flows. We record the discount as other expense, net in the condensed consolidated statement of income.
Note 2 – New Accounting Standards
Accounting Guidance Issued But Not Yet Adopted:
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 condensed consolidated financial statements and related disclosures.
In September 2025, FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), which updates the accounting for internal-use software costs by increasing the operability of the recognition guidance considering different methods of software development. This ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently assessing the impact of this standard on our condensed consolidated financial statements.
In November 2025, FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements , which updates hedge accounting requirements. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently assessing the impact of this standard on our condensed consolidated financial statements.
In December 2025, FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements, which clarifies interim disclosure requirements. This ASU is effective for interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently assessing the impact of this standard on our condensed consolidated financial statements and related disclosures.
Note 3 – Inventories
Inventories consisted of the following:
March 31,
2026 December 31,
2025
(in millions)
Raw materials $ 172 $ 133
Work in progress 84 76
Finished goods 315 309
Spare parts 66 66
Inventories $ 637 $ 584
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Note 4 – Debt
Long-term debt consisted of the following:
March 31,
2026 December 31,
2025
(in millions)
Term loan facility $ 1,536 $ 1,586
Deferred financing transaction costs ( 6 ) ( 6 )
1,530 1,580
Less: current portion — —
Long-term debt $ 1,530 $ 1,580
External Debt Facilities
Our external debt facilities (“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. 4”). Other than the new maturity date and the recommencement of quarterly amortization payments, the material terms of our External Debt Facilities as a result of Amendment No. 4 remain unchanged.
In connection with Amendment No. 4 to our syndicated loan arrangement, we evaluated the accounting treatment of deferred and new debt transaction costs on a creditor-by-creditor basis in accordance with GAAP. This analysis resulted in the recognition of a debt refinancing expense of $ 13 million during the three months ended March 31, 2025, comprised of $ 12 million of new fees allocated to modified loans and $ 1 million of deferred financing transaction costs and original issue discount expensed related to extinguished loans. This expense is presented separately in our condensed consolidated statements of income.
Additionally, during the three months ended March 31, 2025, we capitalized $ 1 million of qualifying financing-related costs associated with Amendment No. 4. These costs, along with $ 7 million of remaining deferred financing transaction costs, will be amortized over the remaining term of the Term Loan Facility, subject to acceleration for early term loan principal payments.
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 plus an applicable margin of 1.75 %. We have entered into a series of interest rate swaps to hedge a portion of the interest rate exposure resulting from these borrowings. Refer to Note 5 – Financial Instruments for further details.
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. We are currently in compliance with the covenants contained in our 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.
Term Loan Facility
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. During the three months ended March 31, 2026, we made a voluntary principal repayment of $ 50 million. As a result of voluntary principal repayments made, the Term Loan Facility has no quarterly amortization payments due until December 2031, when the quarterly amortization payments will recommence.
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Revolving Facility
The Revolving Facility matures in October 2029 and includes a sub-facility for letters of credit. As of March 31, 2026, 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.
Fair Value of Our Long-Term Debt
The fair value of our long-term debt as of March 31, 2026, which is a Level 2 fair value measurement, approximates the carrying value due to the variable market interest rate and the stability of our credit profile.
Note 5 - Financial Instruments
Interest Rate Derivatives
We have entered into a series of interest rate swaps to fix the SOFR of our External Debt Facilities. During the year ended December 31, 2025, we entered into additional forward-starting interest rate swaps with start dates beginning in February 2026 that had an aggregate notional value of $ 900 million. These swaps fix the SOFR at annual rates ranging from 3.33 % to 3.41 % (resulting in annual effective interest rates of 5.08 % to 5.16 %, including margin), have maturity dates between March 2028 and March 2031, and carry a weighted average effective rate of 5.12 %. As of March 31, 2026 and December 31, 2025, the aggregate notional amount of interest rate swaps outstanding was $ 900 million and $ 1,000 million, respectively.
The interest rate swaps outstanding as of March 31, 2026 hedge a portion of the interest rate exposure resulting from borrowings under our Term Loan Facility. We have classified these instruments as cash flow hedges. The effective portion of the gain or loss on the open hedging instrument is recorded in accumulated other comprehensive income and is reclassified into earnings as interest expense, net when settled. The associated asset or liability on the open hedges is recorded at its fair value in other assets or other liabilities, as applicable. The fair value of the interest rate swaps was determined using a discounted cash flow method based on market-based swap yield curves, taking into account current interest rates, and is classified as Level 2 within the fair value hierarchy.
The fair value of the assets and liabilities associated with our interest rate swaps, as reflected gross in the condensed consolidated balance sheets, were as follows:
As of March 31,
2026 As of December 31,
2025
(in millions)
Assets:
Other current assets $ 2 $ 1
Other assets 3 1
Total assets $ 5 $ 2
Liabilities:
Other liabilities — 1
Total liabilities $ — $ 1
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Note 6 – Stock-based Compensation
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 restricted stock units (“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. We account for forfeitures of outstanding but unvested grants in the period they occur. A maximum of 10.5 million shares of common stock were initially available for issuance under equity incentive awards granted pursuant to the plan. In the three months ended March 31, 2026, 0.4 million RSUs and 0.4 million PSUs were granted.
As of March 31, 2026, there were stock-based compensation awards representing 2.3 million shares outstanding compared to 2.0 million shares outstanding as of December 31, 2025. Stock-based compensation expense was $ 4 million for the three months ended March 31, 2026, compared to $ 6 million for the three months ended March 31, 2025.
Note 7 – Commitments and Contingencies
Legal Proceedings:
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 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. While it is not possible to predict the outcome of any of these matters, based on our assessment of the facts and circumstances as of March 31, 2026, we do not believe any of these matters, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations or cash flows. 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.
Note 8 – Accumulated Other Comprehensive Income
The following table summarizes the changes in our balances of each component of accumulated other comprehensive income.
(In millions) Currency Translation Adjustments Employee Benefit Plans Derivative Instruments Accumulated Other Comprehensive Income
Balance as of December 31, 2024 $ ( 10 ) $ 31 $ 14 $ 35
Gain (loss) arising during the period — — — —
Reclassification to earnings — ( 1 ) ( 7 ) ( 8 )
Effect of deferred taxes — — 2 2
Balance as of March 31, 2025 $ ( 10 ) $ 30 $ 9 $ 29
Balance as of December 31, 2025 $ ( 8 ) $ 28 $ — $ 20
Gain (loss) arising during the period ( 1 ) — 6 5
Reclassification to earnings — ( 1 ) ( 1 ) ( 2 )
Effect of deferred taxes — — ( 1 ) ( 1 )
Balance as of March 31, 2026 $ ( 9 ) $ 27 $ 4 $ 22
Note 9 – Segment Information
In January 2026, we reorganized the previous Hefty Waste & Storage and Presto Products segments by consolidating waste bags into the new Hefty Waste & Clean-Up segment and food bags and storage products into the new Hefty Storage & Organization segment in an effort to increase efficiencies, sharpen focus on innovation and establish a structure that can better facilitate entry into adjacent categories. Comparative segment disclosures have been recast to reflect this realignment. Prior periods will be similarly recast in each quarterly update during 2026. These changes had no effect on our previously reported condensed consolidated results of operations. In addition to the segment realignment, we have renamed our existing Reynolds Cooking & Baking segment and Hefty Tableware segment to Reynolds Cooking & Kitchen Essentials and Hefty Home & Tableware, respectively.
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As part of the segment reorganization, $ 803 million of goodwill was reallocated on a relative fair value basis from the previous Hefty Waste & Storage and Presto Products segments to the new Hefty Waste & Clean-Up and Hefty Storage & Organization segments. We performed a goodwill impairment analysis immediately before and after the segment reorganization, and concluded that goodwill was not impaired. The goodwill balances as of March 31, 2026, for Reynolds Cooking & Kitchen Essentials, Hefty Waste & Clean-Up, Hefty Home & Tableware, and Hefty Storage & Organization were $ 794 million, $ 520 million, $ 298 million and $ 283 million, respectively.
Our Chief Executive Officer, who has been identified as our Chief Operating Decision Maker (“CODM”), has evaluated how he views and measures our performance. In applying the criteria set forth in the standards for reporting information about segments in financial statements, we have determined that we have four reportable segments - Reynolds Cooking & Kitchen Essentials, Hefty Waste & Clean-Up, Hefty Home & Tableware, and Hefty Storage & Organization. The key factors used to identify these reportable segments are the organization and alignment of our internal operations and the nature of our products. This reflects how our CODM monitors performance, allocates capital and makes strategic and operational decisions.
Our segments are described as follows:
Reynolds Cooking & Kitchen Essentials
Our Reynolds Cooking & Kitchen Essentials segment produces 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.
Hefty Waste & Clean-Up
Through our new focused Hefty Waste & Clean-Up segment, we produce both branded and store brand trash bags. Our branded products are sold under the Hefty Ultra Strong, Hefty Strong, Hefty Essentials, and Brute brands in the U.S. and select international markets.
Hefty Home & Tableware
Our Hefty Home & Tableware segment sells both branded and store brand disposable and compostable plates, bowls, platters, containers, cups and cutlery. Our Hefty branded products include dishes, party cups, cutlery and containers.
Hefty Storage & Organization
Our Hefty Storage & Organization segment produces both branded and store brand food storage bags. Our branded products are sold under 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 region. Our Hefty Storage & Organization segment also includes our specialty business, which serves other consumer products companies by providing Fresh-Lock and Slide-Rite resealable closure systems.
Information by Segment
We present segment 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, as well as performance versus the prior year, 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 certain 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. Other assets, such as cash, accounts receivable and intangible assets, are monitored on an entity-wide basis and not included in segment information that is regularly reviewed by our CODM.
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Reynolds
Cooking
& Kitchen Essentials Hefty
Waste & Clean-Up Hefty Home &
Tableware Hefty
Storage & Organization Segment
Total Unallocated (1)
Total
Three Months Ended March 31, 2026 (in millions)
Total segment net revenues $ 314 $ 224 $ 180 $ 159 $ 877 $ — $ 877
Other segment items (2)
( 270 ) ( 162 ) ( 152 ) ( 132 ) ( 716 )
Adjusted EBITDA 44 62 28 27 161
Depreciation and amortization 10 4 6 5 25 8 33
Reynolds
Cooking
& Kitchen Essentials Hefty
Waste & Clean-Up Hefty Home &
Tableware Hefty
Storage & Organization Segment
Total Unallocated (1)
Total
Three Months Ended March 31, 2025 (in millions)
Total segment net revenues $ 259 $ 226 $ 179 $ 153 $ 817 $ 1 $ 818
Other segment items (2)
( 221 ) ( 164 ) ( 162 ) ( 132 ) ( 679 )
Adjusted EBITDA 38 62 17 21 138
Depreciation and amortization 9 5 5 5 24 8 32
Segment assets consisted of the following:
Reynolds
Cooking
& Kitchen Essentials Hefty
Waste & Clean-Up Hefty Home &
Tableware Hefty
Storage & Organization Segment
Total Unallocated (1)
Total
(in millions)
As of March 31, 2026 $ 657 $ 262 $ 252 $ 315 $ 1,486 $ 3,444 $ 4,930
As of December 31, 2025 612 264 242 305 1,423 3,513 4,936
(1) Unallocated includes other revenue adjustments and certain corporate costs, depreciation and amortization and assets not allocated to segments. Unallocated assets are comprised of cash, accounts receivable, other receivables, entity-wide property, plant and equipment, entity-wide operating lease right-of-use assets, goodwill, intangible assets, related party receivables and other assets.
(2) Other segment items reflected in Segment Adjusted EBITDA primarily include cost of sales (including input, manufacturing and logistics costs), salaries and benefits, advertising expenses and professional fees. These items are monitored on an entity-wide basis and are not included in segment information that is regularly reviewed by our CODM.
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The following table presents a reconciliation of total segment Adjusted EBITDA to GAAP income before income taxes:
Three Months Ended March 31,
2026 2025
(in millions)
Segment Adjusted EBITDA $ 161 $ 138
Corporate / unallocated expenses ( 30 ) ( 21 )
131 117
Adjustments to reconcile to GAAP income before income taxes
Depreciation and amortization ( 33 ) ( 32 )
Interest expense, net ( 21 ) ( 21 )
Debt refinancing expense (1)
— ( 13 )
Costs to execute strategic initiatives (2)
— ( 5 )
CEO transition costs (3)
— ( 4 )
Consolidated GAAP income before income taxes $ 77 $ 42
(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.
Information in Relation to Products
Our different product lines are generally sold to a common group of customers. For all product lines, there is a relatively short time period between the receipt of the order and the transfer of control over the goods to the customer.
Note 10 – Related Party Transactions
Packaging Finance Limited (“PFL”) owns the majority of our outstanding common stock and, until April 1, 2025, owned the majority of the outstanding common stock of Pactiv Evergreen Inc. and its subsidiaries (“PEI Group”). 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, 2024, 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.
On April 1, 2025, PFL completed the sale of PEI Group, which was a related party through March 31, 2025, to an unrelated party. Accordingly, transactions and balances with PEI Group from April 1, 2025 are no longer classified as related party items. The related party cash flow amounts presented reflect only activity through March 31, 2025. This change does not affect the presentation of historical related party disclosures.
Revenues from products sold to PEI Group as a related party were $ 17 million for the three months ended March 31, 2025. Products purchased from PEI Group as a related party were $ 51 million for the three months ended March 31, 2025. PEI Group as a related party charged us freight and warehousing costs of $ 4 million for the three months ended March 31, 2025, which were included in cost of sales. The resulting related party receivables and payables were settled regularly in the normal course of business. Because PEI Group ceased to be a related party after March 31, 2025, there were no transactions with PEI Group as a related party in the three months ended March 31, 2026.
Furthermore, $ 36 million of the dividends paid during each of the three months ended March 31, 2026 and March 31, 2025 were paid to PFL.
Note 11 – Subsequent Events
Quarterly Cash Dividend
On April 30, 2026, our Board of Directors approved a cash dividend of $ 0.23 per common share to be paid on May 29, 2026 to shareholders of record on May 15, 2026.
Except as described above, there have been no events subsequent to March 31, 2026 which would require recognition or disclosure in these condensed consolidated financial statements.
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