10-Q 1 form10q.htm BERRY GLOBAL GROUP 10Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 001-35672
graphic

BERRY GLOBAL GROUP, INC.

A Delaware corporation
 101 Oakley Street, Evansville, Indiana, 47710
(812) 424-2904
 IRS employer identification number
20-5234618

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value per share
BERY
New York Stock Exchange LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer 
Accelerated Filer
Non-Accelerated Filer
Smaller Reporting Company
Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No 

There were 114.4 million shares of common stock outstanding at May 9, 2024.




CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Information included or incorporated by reference in Berry Global Group, Inc.’s filings with the U.S. Securities and Exchange Commission (the “SEC”) and press releases or other public statements contains or may contain forward-looking statements.  This report includes “forward-looking” statements with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events.  These statements contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “project,” “outlook,” “anticipates” or “looking forward” or similar expressions that relate to our strategy, plans, intentions, or expectations.  All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates, and financial results or to our expectations regarding future industry trends are forward-looking statements.  In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments.  These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected.  All forward-looking statements are made only as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Additionally, we caution readers that the list of important factors discussed in our most recent Form 10-K in the section titled “Risk Factors” and subsequent periodic reports filed with the SEC may not contain all of the material factors that are important to you.  In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur.  Accordingly, readers should not place undue reliance on those statements.

2


Berry Global Group, Inc.
Form 10-Q Index
For Quarterly Period Ended March 30, 2024

Part I.
Financial Information
Page No.
 
Item 1.
Financial Statements:
 
   
4
   
5
   
6
   
7
   
8
 
Item 2.
15
 
Item 3.
20
 
Item 4.
20
Part II.
Other Information
 
 
Item 1.
21
 
Item 1A.
21
 
Item 2.
21
 
Item 5.
21
 
Item 6.
22
 
23


3


Part I. Financial Information

Item 1.
Financial Statements
Berry Global Group, Inc.
Consolidated Statements of Income
(Unaudited)
(in millions of dollars, except per share amounts)

   
Quarterly Period Ended
   
Two Quarterly Periods Ended
 
   
March 30, 2024
   
April 1, 2023
   
March 30, 2024
   
April 1, 2023
 
Net sales
 
$
3,076
   
$
3,288
   
$
5,929
   
$
6,348
 
Costs and expenses:
                               
Cost of goods sold
   
2,509
     
2,682
     
4,888
     
5,224
 
Selling, general and administrative
   
213
     
220
     
448
     
456
 
Amortization of intangibles
   
59
     
60
     
119
     
120
 
Restructuring and transaction activities
   
87
     
25
     
109
     
37
 
Operating income
   
208
     
301
     
365
     
511
 
Other expense
   
1
     
1
     
13
     
2
 
Interest expense
   
76
     
79
     
148
     
150
 
Income before income taxes
   
131
     
221
     
204
     
359
 
Income tax expense
   
15
     
47
     
29
     
79
 
Net income
 
$
116
   
$
174
   
$
175
   
$
280
 
                                 
Net income per share:
                               
Basic
 
$
1.00
   
$
1.44
   
$
1.51
   
$
2.29
 
Diluted
   
0.98
     
1.42
     
1.48
     
2.27
 






Consolidated Statements of Comprehensive Income
(Unaudited)
(in millions of dollars)

   
Quarterly Period Ended
   
Two Quarterly Periods Ended
 
   
March 30, 2024
   
April 1, 2023
   
March 30, 2024
   
April 1, 2023
 
Net income
 
$
116
   
$
174
   
$
175
   
$
280
 
Other comprehensive income (loss), net of tax:
                               
Currency translation
   
(70
)
   
60
     
69
     
201
 
Derivative instruments
   
18
     
(31
)
   
(59
)
   
(32
)
Other comprehensive income
   
(52
)
   
29
     
10
     
169
 
Comprehensive income (loss)
 
$
64
   
$
203
   
$
185
   
$
449
 

See notes to consolidated financial statements.

4


Berry Global Group, Inc.
Consolidated Balance Sheets
(in millions of dollars)

   
March 30, 2024
   
September 30, 2023
 
   
(Unaudited)
       
Assets
           
Current assets:
           
Cash and cash equivalents
 
$
494
   
$
1,203
 
Accounts receivable
   
1,590
     
1,568
 
Finished goods
   
1,070
     
933
 
Raw materials and supplies
   
624
     
624
 
Prepaid expenses and other current assets
   
286
     
205
 
Total current assets
   
4,064
     
4,533
 
Noncurrent assets:
               
Property, plant and equipment
   
4,576
     
4,576
 
Goodwill and intangible assets
   
6,589
     
6,684
 
Right-of-use assets
   
627
     
625
 
Other assets
   
125
     
169
 
Total assets
 
$
15,981
   
$
16,587
 
                 
                 
Liabilities and stockholders’ equity
               
Current liabilities:
               
Accounts payable
 
$
1,332
   
$
1,528
 
Accrued employee costs
   
224
     
273
 
Other current liabilities
   
761
     
902
 
Current portion of long-term debt
   
24
     
10
 
Total current liabilities
   
2,341
     
2,713
 
Noncurrent liabilities:
               
Long-term debt
   
8,690
     
8,970
 
Deferred income taxes
   
495
     
573
 
Employee benefit obligations
   
193
     
193
 
Operating lease liabilities
   
521
     
525
 
Other long-term liabilities
   
447
     
397
 
Total liabilities
   
12,687
     
13,371
 
                 
Stockholders’ equity:
               
Common stock (114.9 and 115.5 million shares issued, respectively)
   
1
     
1
 
Additional paid-in capital
   
1,279
     
1,231
 
Retained earnings
   
2,340
     
2,320
 
Accumulated other comprehensive loss
   
(326
)
   
(336
)
Total stockholders’ equity
   
3,294
     
3,216
 
Total liabilities and stockholders’ equity
 
$
15,981
   
$
16,587
 

See notes to consolidated financial statements.

5


Berry Global Group, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in millions of dollars)

   
Two Quarterly Periods Ended
 
   
March 30, 2024
   
April 1, 2023
 
Cash Flows from Operating Activities:
           
Net income
 
$
175
   
$
280
 
Adjustments to reconcile net cash from operating activities:
               
Depreciation
   
309
     
279
 
Amortization of intangibles
   
119
     
120
 
Non-cash interest (income) expense, net
   
(41
)
   
(27
)
Settlement of derivatives
   
23
     
36
 
Deferred income tax
   
(51
)
   
(51
)
Debt extinguishment
   
3
     
 
Share-based compensation expense
   
30
     
30
 
Loss on divestitures
   
57
     
 
Other non-cash operating activities, net
   
17
     
8
 
Changes in working capital
   
(653
)
   
(495
)
Changes in other assets and liabilities
   
12
     
(12
)
Net cash from operating activities
   
     
168
 
                 
Cash Flows from Investing Activities:
               
Additions to property, plant and equipment, net
   
(333
)
   
(385
)
Divestitures, acquisitions and other activities
   
47
     
(88
)
Net cash from investing activities
   
(286
)
   
(473
)
                 
Cash Flows from Financing Activities:
               
Proceeds from long-term borrowings
   
2,350
     
500
 
Repayments on long-term borrowings
   
(2,640
)
   
(583
)
Proceeds from issuance of common stock
   
24
     
18
 
Repurchase of common stock
   
(88
)
   
(333
)
Dividends paid
   
(70
)
   
(65
)
Other, net
   
(12
)
   
11
 
Net cash from financing activities
   
(436
)
   
(452
)
Effect of currency translation on cash
   
13
     
43
 
Net change in cash and cash equivalents
   
(709
)
   
(714
)
Cash and cash equivalents at beginning of period
   
1,203
     
1,410
 
Cash and cash equivalents at end of period
 
$
494
   
$
696
 

See notes to consolidated financial statements.

6


Berry Global Group, Inc.
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
(in millions of dollars)

 
Quarterly Period Ended
 
Common
Stock
   
Additional
Paid-in Capital
   
Accumulated Other
Comprehensive Loss
   
Retained
Earnings
   
Total
 
Balance at December 30, 2023
 
$
1
   
$
1,265
   
$
(274
)
 
$
2,336
   
$
3,328
 
Net income
   
     
     
     
116
     
116
 
Other comprehensive income
   
     
     
(52
)
   
     
(52
)
Share-based compensation
   
     
9
     
     
     
9
 
Proceeds from issuance of common stock
   
     
8
     
     
     
8
 
Common stock repurchased and other
   
     
(3
)
   
     
(78
)
   
(81
)
Dividends paid
   
     
     
     
(34
)
   
(34
)
Balance at March 30, 2024
 
$
1
   
$
1,279
   
$
(326
)
 
$
2,340
   
$
3,294
 
                                         
Balance at December 31, 2022
 
$
1
   
$
1,199
   
$
(263
)
 
$
2,322
   
$
3,259
 
Net income
   
     
     
     
174
     
174
 
Other comprehensive income
   
     
     
29
     
     
29
 
Share-based compensation
   
     
7
     
     
     
7
 
Proceeds from issuance of common stock
   
     
13
     
     
     
13
 
Common stock repurchased and other
   
     
(5
)
   
     
(150
)
   
(155
)
Dividends paid
   
     
     
     
(32
)
   
(32
)
Balance at April 1, 2023
 
$
1
   
$
1,214
   
$
(234
)
 
$
2,314
   
$
3,295
 

 
Two Quarterly Periods Ended
 
Common
Stock
   
Additional
Paid-in Capital
   
Accumulated Other
Comprehensive Loss
   
Retained
Earnings
   
Total
 
Balance at September 30, 2023
 
$
1
   
$
1,231
   
$
(336
)
 
$
2,320
   
$
3,216
 
Net income
   
     
     
     
175
     
175
 
Other comprehensive income
   
     
     
10
     
     
10
 
Share-based compensation
   
     
30
     
     
     
30
 
Proceeds from issuance of common stock
   
     
21
     
     
     
21
 
Common stock repurchased and other
   
     
(3
)
   
     
(85
)
   
(88
)
Dividends paid
   
     
     
     
(70
)
   
(70
)
Balance at March 30, 2024
 
$
1
   
$
1,279
   
$
(326
)
 
$
2,340
   
$
3,294
 
                                         
Balance at October 1, 2022
 
$
1
   
$
1,177
   
$
(403
)
 
$
2,421
   
$
3,196
 
Net income
   
     
     
     
280
     
280
 
Other comprehensive income
   
     
     
169
     
     
169
 
Share-based compensation
   
     
30
     
     
     
30
 
Proceeds from issuance of common stock
   
     
18
     
     
     
18
 
Common stock repurchased and other
   
     
(11
)
   
     
(322
)
   
(333
)
Dividends paid
   
     
     
     
(65
)
   
(65
)
Balance at April 1, 2023
 
$
1
   
$
1,214
   
$
(234
)
 
$
2,314
   
$
3,295
 


See notes to consolidated financial statements.

7


Berry Global Group, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
(tables in millions of dollars, except per share data)


1.  Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of Berry Global Group, Inc. (“the Company,” “we,” or “Berry”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim reporting.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts and disclosures at the date of the financial statements and during the reporting period.  Actual results could differ from those estimates.  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included, and all subsequent events up to the time of the filing have been evaluated.  For further information, refer to the Company’s most recent Form 10-K filed with the SEC.

2.  Revenue and Accounts Receivable


Our revenues are primarily derived from the sale of non-woven, flexible and rigid products to customers.  Revenue is recognized when performance obligations are satisfied, in an amount reflecting the consideration to which the Company expects to be entitled.  We consider the promise to transfer products to be our sole performance obligation.  If the consideration agreed to in a contract includes a variable amount, we estimate the amount of consideration we expect to be entitled to in exchange for transferring the promised goods to the customer using the most likely amount method.  Our main source of variable consideration is customer rebates.  There are no material instances where variable consideration is constrained and not recorded at the initial time of sale.  Generally, our revenue is recognized at a point in time for standard promised goods at the time of shipment, when title and risk of loss pass to the customer.  The accrual for customer rebates was $96 million and $106 million at March 30, 2024 and September 30, 2023, respectively, and is included in Other current liabilities on the Consolidated Balance Sheets.  The Company disaggregates revenue based on reportable business segment, geography, and significant product line.  Refer to Note 8. Income Taxes for further information.


Accounts receivable are presented net of allowance for credit losses of $19 million at March 30, 2024 and September 30, 2023.  The Company records its current expected credit losses based on a variety of factors including historical loss experience and current customer financial condition.  The changes to our current expected credit losses, write-off activity, and recoveries were not material for any of the periods presented.


The Company has entered into various factoring agreements, including customer-based supply chain financing programs, to sell certain receivables to third-party financial institutions.  Agreements which result in true sales of the transferred receivables, which occur when receivables are transferred without recourse to the Company, are reflected as a reduction of accounts receivable on the Consolidated Balance Sheets and the proceeds are included in the Cash Flows from Operating Activities in the Consolidated Statements of Cash Flows.  The fees associated with the transfer of receivables for all programs were not material for any of the periods presented.

3.  Divestitures and Spin-off

During fiscal 2024, the Company completed the sale of its Strata and Promens Vehicles businesses, which were operated in the Consumer Packaging International segment for net proceeds of $25 million and $22 million, respectively.  In fiscal 2023, the Strata business recorded net sales of $56 million and Promens Vehicles recorded $111 million.

In February 2024, the Company announced plans for a spin-off and merger of our Health, Hygiene & Specialties Global Nonwovens and Films business (“HHNF”) with Glatfelter Corporation (“GLT”).  Upon the completion of the transaction, shareholders of Berry will own approximately ninety percent of the new combined company in addition to their continuing interest in Berry.  The transaction is expected to be tax-free to Berry and its shareholders.  The transaction is subject to certain customary closing conditions including, but not limited to, approval by GLT shareholders, the effective filing of related registration statements, completion of a tax-free spin-off and receipt of certain required foreign anti-trust approvals.

8


4.  Restructuring and Transaction Activities

During fiscal 2023, the Company announced several plant rationalizations in all four segments in order to deliver cost savings and optimize equipment utilization. Over the duration of the plan, these plant rationalizations and other cost reduction actions are projected to cost approximately $250 million with the operations savings intended to counter general economic softness.  The plant rationalizations are expected to be fully implemented by the end of fiscal 2025.

The table below includes the significant components of our restructuring and transaction activities, by reporting segment:

 
Quarterly Period Ended
   
Two Quarterly Periods Ended
   
Restructuring Plans
 
   
March 30, 2024
   
April 1, 2023
   
March 30, 2024
   
April 1, 2023
   
Life to date (a)
 
Consumer Packaging International
 
$
76
   
$
12
   
$
78
   
$
15
     
71
 
Consumer Packaging North America
   
7
     
7
     
12
     
8
     
35
 
Health, Hygiene & Specialties
   
5
     
5
     
18
     
8
     
25
 
Flexibles
   
(1
)
   
1
     
1
     
6
     
23
 
Consolidated
 
$
87
   
$
25
   
$
109
   
$
37
     
154
 

(a) Excludes $57 million loss on divestitures (See Note 3)

The table below sets forth the activity with respect to the restructuring and transaction activities accrual at March 30, 2024:

 
Restructuring
             
   
Employee
Severance
and Benefits
   
Facility
Exit Costs
   
Non-cash
Impairment
Charges
   
Transaction
Activities
   
Total
 
Balance as of September 30, 2023
 
$
10
   
$
1
   
$
   
$
   
$
11
 
Charges
   
19
     
13
     
4
     
73
     
109
 
Non-cash items
   
     
     
(4
)
   
(57
)
   
(61
)
Cash
   
(16
)
   
(14
)
   
     
(16
)
   
(46
)
Balance as of March 30, 2024
 
$
13
   
$
   
$
   
$
   
$
13
 

5.  Leases

The Company leases certain manufacturing facilities, warehouses, office space, manufacturing equipment, office equipment, and automobiles.

Supplemental lease information is as follows:

Leases
Classification
 
March 30, 2024
   
September 30, 2023
 
Operating leases:
             
Operating lease right-of-use assets
Right-of-use assets
 
$
627
   
$
625
 
Current operating lease liabilities
Other current liabilities
   
123
     
116
 
Noncurrent operating lease liabilities
Operating lease liability
   
521
     
525
 
Finance leases:
                 
Finance lease right-of-use assets
Property, plant, and equipment, net
 
$
29
   
$
32
 
Current finance lease liability
Current portion of long-term debt
   
7
     
9
 
Noncurrent finance lease liabilities
Long-term debt, less current portion
   
17
     
19
 

9


6.  Long-Term Debt

Long-term debt consists of the following:

Facility
Maturity Date
 
March 30, 2024
   
September 30, 2023
 
Term loan (a)
July 2026
 
$
740
   
$
3,090
 
Term loan (a)
July 2029
   
1,546
     
 
Revolving line of credit
June 2028
   
     
 
1.00% First Priority Senior Secured Notes (b)(c)
January 2025
   
756
     
741
 
1.57% First Priority Senior Secured Notes
January 2026
   
1,525
     
1,525
 
4.875% First Priority Senior Secured Notes
July 2026
   
1,250
     
1,250
 
1.65% First Priority Senior Secured Notes
January 2027
   
400
     
400
 
1.50% First Priority Senior Secured Notes (b)
January 2027
   
405
     
397
 
5.50% First Priority Senior Secured Notes
April 2028
   
500
     
500
 
5.65% First Priority Senior Secured Notes
January 2034
   
800
     
 
4.50% Second Priority Senior Secured Notes
February 2026
   
291
     
291
 
5.625% Second Priority Senior Secured Notes
July 2027
   
500
     
500
 
Debt discounts and deferred fees
     
(36
)
   
(34
)
Finance leases and other
Various
   
37
     
41
 
Retired debt
     
     
279
 
Total long-term debt
     
8,714
     
8,980
 
Current portion of long-term debt
     
(24
)
   
(10
)
Long-term debt, less current portion
   
$
8,690
   
$
8,970
 
(a)
Effectively 98% fixed interest rate with interest rate swaps (see Note 7).
(b)
Euro denominated
(c)
Indicates debt which has been classified as long-term debt in accordance with the Company’s ability and intention to refinance such obligations on a long-term basis..


During fiscal 2024, the Company extended the maturity date of $1,550 million of its outstanding term loans to July 2029, and subsequently issued $800 million aggregate principal amount of 5.65% first priority senior secured notes due 2034.  The proceeds were used to prepay the 0.95% First Priority Senior Secured Notes due in February 2024 and a portion of the existing term loan due in July 2026.

Debt discounts and deferred financing fees are presented net of Long-term debt, less the current portion on the Consolidated Balance Sheets and are amortized to Interest expense, net on the Consolidated Statements of Income through maturity. 


7.  Financial Instruments and Fair Value Measurements

In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors.  The Company may use derivative financial instruments to help manage market risk and reduce the exposure to fluctuations in interest rates and foreign currencies.  These financial instruments are not used for trading or other speculative purposes.

Cross-Currency Swaps

The Company is party to certain cross-currency swaps to hedge a portion of our foreign currency risk.  The swap agreements mature June 2024 (€1,625 million) and July 2027 (£700 million).  In addition to cross-currency swaps, we hedge a portion of our foreign currency risk by designating foreign currency denominated long-term debt as net investment hedges of certain foreign operations.  As of March 30, 2024, we had outstanding long-term debt of €379 million that was designated as a hedge of our net investment in certain euro-denominated foreign subsidiaries.  When valuing cross-currency swaps the Company utilizes Level 2 inputs (substantially observable).

Interest Rate Swaps

The primary purpose of the Company’s interest rate swap activities is to manage interest expense variability associated with our outstanding variable rate term loan debt.  When valuing interest rate swaps the Company utilizes Level 2 inputs (substantially observable).

During fiscal 2024, the Company received net proceeds of $23 million related to the settlement of existing interest rate swaps.  The offset is included in Accumulated other comprehensive loss and is being amortized to Interest expense through the term of the original swaps.  Following the transactions, the Company entered into a $450 million interest rate swap transaction, a $500 million interest rate swap transaction and extended an existing $400 million agreement all with expirations in June 2029.

10


As of March 30, 2024, the Company effectively had (i) an $884 million interest rate swap transaction that swaps a one-month variable SOFR contract for a fixed annual rate of 4.452%, with an expiration in June 2026 (ii) a $400 million interest rate swap transaction that swaps a one-month variable SOFR contract for a fixed annual rate of 4.008%, with an expiration in June 2029 (iii) a $450 million interest rate swap transaction that swaps a one-month variable SOFR contract for a fixed annual rate of 4.553%, with an expiration in June 2029, and (iv) a $500 million interest rate swap transaction that swaps a one-month variable SOFR contract for a fixed annual rate of 4.648%, with an expiration in June 2029.

The Company records the fair value positions of all derivative financial instruments on a net basis by counterparty for which a master netting arrangement is utilized. Balances on a gross basis are as follows:

Derivative Instruments
Hedge Designation
Balance Sheet Location
 
March 30, 2024
   
September 30, 2023
 
Cross-currency swaps
Designated
Other current liabilities
   
104
     
66
 
Cross-currency swaps
Designated
Other long-term liabilities
   
58
     
19
 
Interest rate swaps
Designated
Other assets
   
2
     
36
 
Interest rate swaps
Designated
Other long-term liabilities
   
34
     
 
Interest rate swaps
Not designated
Other assets
   
     
8
 
Interest rate swaps
Not designated
Other long-term liabilities
   
81
     
104
 

The effect of the Company’s derivative instruments on the Consolidated Statements of Income is as follows:

   
Quarterly Period Ended
   
Two Quarterly Periods Ended
 
Derivative Instruments
 Statements of Income Location
 
March 30, 2024
   
April 1, 2023
   
March 30, 2024
   
April 1, 2023
 
Cross-currency swaps
Interest expense
 
$
(10
)
 
$
(10
)
 
$
(20
)
 
$
(21
)
Interest rate swaps
Interest expense
   
(21
)
   
(11
)
   
(42
)
   
(17
)

Non-recurring Fair Value Measurements

The Company has certain assets that are measured at fair value on a non-recurring basis when impairment indicators are present or when the Company completes an acquisition.  The Company adjusts certain long-lived assets to fair value only when the carrying values exceed the fair values.  The categorization of the framework used to value the assets is considered Level 3, due to the subjective nature of the unobservable inputs used to determine the fair value.  These assets that are subject to our annual impairment analysis primarily include our definite lived and indefinite lived intangible assets, including Goodwill and our property, plant and equipment.  The Company reviews Goodwill and other indefinite lived assets for impairment as of the first day of the fourth fiscal quarter each year and more frequently if impairment indicators exist.  The Company determined Goodwill and other indefinite lived assets were not impaired in our annual fiscal 2023 assessment.  No impairment indicators were identified in the current quarter.

Included in the following table are the major categories of assets measured at fair value on a non-recurring basis as of March 30, 2024 and September 30, 2023, along with the impairment loss recognized on the fair value measurement during the period:

 
As of March 30, 2024
 
   
Level 1
   
Level 2
   
Level 3
   
Total
   
Impairment
 
Indefinite-lived trademarks
 
$
   
$
   
$
248
   
$
248
   
$
 
Goodwill
   
     
     
4,988
     
4,988
     
 
Definite lived intangible assets
   
     
     
1,353
     
1,353
     
 
Property, plant, and equipment
   
     
     
4,576
     
4,576
     
4
 
Total
 
$
   
$
   
$
11,165
   
$
11,165
   
$
4
 

 
As of September 30, 2023
 
   
Level 1
   
Level 2
   
Level 3
   
Total
   
Impairment
 
Indefinite-lived trademarks
 
$
   
$
   
$
248
   
$
248
   
$
 
Goodwill
   
     
     
4,981
     
4,981
     
 
Definite lived intangible assets
   
     
     
1,455
     
1,455
     
 
Property, plant, and equipment
   
     
     
4,576
     
4,576
     
8
 
Total
 
$
   
$
   
$
11,260
   
$
11,260
   
$
8
 
11


The Company’s financial instruments consist primarily of cash and cash equivalents, long-term debt, interest rate and cross-currency swap agreements, and finance lease obligations.  The book value of our marketable long-term indebtedness exceeded fair value by $221 million as of March 30, 2024.  The Company’s long-term debt fair values were determined using Level 2 inputs (substantially observable). 

8.  Income Taxes

 On a year-to-date comparison to the statutory rate, the lower effective tax rate was positively impacted by share-based stock compensation, foreign rate differential, and other discrete items.

9.  Segment and Geographic Data

The Company’s operations are organized into four reporting segments: Consumer Packaging International, Consumer Packaging North America, Health, Hygiene & Specialties, and Flexibles.  The structure is designed to align us with our customers, provide optimal service, drive future growth, and to facilitate synergies realization.

Selected information by reportable segment is presented in the following tables:

 
Quarterly Period Ended
   
Two Quarterly Periods Ended
 
   
March 30, 2024
   
April 1, 2023
   
March 30, 2024
   
April 1, 2023
 
Net sales:
                       
Consumer Packaging International
 
$
968
   
$
1,059
   
$
1,885
   
$
1,995
 
Consumer Packaging North America
   
751
     
774
     
1,451
     
1,537
 
Health, Hygiene & Specialties
   
646
     
677
     
1,248
     
1,340
 
Flexibles
   
711
     
778
     
1,345
     
1,476
 
Total net sales
 
$
3,076
   
$
3,288
   
$
5,929
   
$
6,348
 
Operating income:
                               
Consumer Packaging International
 
$
3
   
$
75
   
$
34
   
$
121
 
Consumer Packaging North America
   
77
     
93
     
140
     
164
 
Health, Hygiene & Specialties
   
33
     
34
     
30
     
68
 
Flexibles
   
95
     
99
     
161
     
158
 
Total operating income
 
$
208
   
$
301
   
$
365
   
$
511
 
Depreciation and amortization:
                               
Consumer Packaging International
 
$
81
   
$
77
   
$
161
   
$
151
 
Consumer Packaging North America
   
57
     
54
     
114
     
105
 
Health, Hygiene & Specialties
   
45
     
44
     
91
     
88
 
Flexibles
   
31
     
25
     
62
     
55
 
 Total depreciation and amortization
 
$
214
   
$
200
   
$
428
   
$
399
 

Selected information by geographical region is presented in the following tables:

 
Quarterly Period Ended
   
Two Quarterly Periods Ended
 
   
March 30, 2024
   
April 1, 2023
   
March 30, 2024
   
April 1, 2023
 
Net sales:
                       
United States and Canada
 
$
1,672
   
$
1,751
   
$
3,233
   
$
3,447
 
Europe
   
1,125
     
1,237
     
2,136
     
2,286
 
Rest of world
   
279
     
300
     
560
     
615
 
Total net sales
 
$
3,076
   
$
3,288
   
$
5,929
   
$
6,348
 

12


10.  Contingencies and Commitments

The Company is party to various legal proceedings involving routine claims which are incidental to its business.  Although the Company’s legal and financial liability with respect to such proceedings cannot be estimated with certainty, we believe that any ultimate liability would not be material to our financial position, results of operations or cash flows.

The Company has various purchase commitments for raw materials, supplies, and property and equipment incidental to the ordinary conduct of business.


11.  Basic and Diluted Earnings Per Share

Basic net income or earnings per share ("EPS") is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents.

Diluted EPS includes the effects of options and restricted stock units, if dilutive.

The following tables provide a reconciliation of the numerator and denominator of the basic and diluted EPS calculations:

 
Quarterly Period Ended
   
Two Quarterly Periods Ended
 
(in millions, except per share amounts)
 
March 30, 2024
   
April 1, 2023
   
March 30, 2024
   
April 1, 2023
 
Numerator
                       
Consolidated net income
 
$
116
   
$
174
   
$
175
   
$
280
 
Denominator
                               
Weighted average common shares outstanding - basic
   
115.6
     
120.7
     
115.6
     
122.2
 
Dilutive shares
   
2.6
     
1.8
     
2.9
     
1.1
 
Weighted average common and common equivalent shares outstanding - diluted
   
118.2
     
122.5
     
118.5
     
123.3
 
                                 
Per common share earnings
                               
Basic
 
$
1.00
   
$
1.44
   
$
1.51
   
$
2.29
 
Diluted
 
$
0.98
   
$
1.42
   
$
1.48
   
$
2.27
 

2.2 million and 2.3 million shares were excluded from the diluted EPS calculation for the quarterly and two quarterly periods ended March 30, 2024 as their effect would be anti-dilutive.  1.2 million and 2.6 million shares were excluded for the quarterly and two quarterly periods ended April 1, 2023. 

13


12.  Accumulated Other Comprehensive Loss

The components and activity of Accumulated other comprehensive loss are as follows:

Quarterly Period Ended
 
Currency
Translation
   
Defined Benefit
Pension and Retiree
Health Benefit Plans
   
Derivative
Instruments
   
Accumulated Other
Comprehensive Loss
 
Balance at December 30, 2023
 
$
(201
)
 
$
(84
)
 
$
11
   
$
(274
)
Other comprehensive income (loss) before reclassifications
   
(70
)
   
     
27
     
(43
)
Net amount reclassified
   
     
     
(