Pactiv Evergreen Inc. [PTVE] Filings

10-Q 1 ptve-20240630.htm 10-Q 10-Q

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 June 30, 2024


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

For the transition period from __________to __________

Commission File Number: 001-39528

PACTIV EVERGREEN INC.

(Exact Name of Registrant as Specified in Its Charter)

    Delaware

    88-0927268

    (State or Other Jurisdiction of 
Incorporation or Organization)

    (I.R.S. Employer
Identification Number)

1900 W. Field Court

Lake Forest, Illinois 60045

(Address of principal executive offices) (Zip Code)

Telephone: (847) 482-2000

(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value	PTVE	The Nasdaq Stock Market 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 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 by Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The registrant had 179,254,637 shares of common stock, $0.001 par value per share, outstanding as of July 26, 2024.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Statements of Income (Loss)	3
	Condensed Consolidated Statements of Comprehensive Income (Loss)	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 4.	Controls and Procedures	36
PART II.	OTHER INFORMATION	37
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
	Signatures	40

FORWARD-LOOKING STATEMENTS

This report contains certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies, anticipated trends in our business and anticipated growth in the markets served by our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the caption entitled “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2023. You should specifically consider these numerous risks. These risks include, among others, those related to:

•

fluctuations in raw material, energy and freight costs;

•

failure to maintain satisfactory relationships with our major customers;

•

the global macroeconomic environment, including inflation, consumer demand, global supply chain challenges and other macroeconomic and geopolitical issues;

•

our dependence on suppliers of raw materials and any interruption to our supply of raw materials;

•

labor shortages and increased labor costs;

•

the impact of natural disasters, public health crises and catastrophic events outside of our control;

•

our ability to successfully complete acquisitions, divestitures, investments and other similar transactions that we pursue from time to time;

•

our ability to realize the benefits of our capital investment, acquisitions, restructuring and other cost savings programs;

•

changes in consumer lifestyle, eating habits, nutritional preferences and health-related, environmental and sustainability concerns;

•

our safety performance;

•

competition in the markets in which we operate;

•

the impact of our significant debt on our financial condition and ability to operate our business;

•

compliance with, and liabilities related to, applicable laws and regulations;

•

our aspirations and disclosures related to ESG matters; and

•

the ownership of a majority of the voting power of our common stock by our parent company Packaging Finance Limited, which we refer to as PFL, an entity beneficially owned by Mr. Graeme Hart.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this report to conform our prior statements to actual results or revised expectations.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Pactiv Evergreen Inc.

Condensed Consolidated Statements of Income (Loss)

(In millions, except per share amounts)

(Unaudited)


	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net revenues	$	1,255		$	1,331		$	2,427		$	2,654
Related party net revenues		83			95			163			203
Total net revenues		1,338			1,426			2,590			2,857
Cost of sales		(1,115	)		(1,342	)		(2,146	)		(2,658	)
Gross profit		223			84			444			199
Selling, general and administrative expenses		(122	)		(136	)		(255	)		(266	)
Restructuring, asset impairment and other related charges		(6	)		(32	)		(23	)		(105	)
Other income, net		2			4			5			4
Operating income (loss)		97			(80	)		171			(168	)
Non-operating expense, net		—			(3	)		—			(4	)
Interest expense, net		(66	)		(64	)		(125	)		(127	)
Income (loss) before tax		31			(147	)		46			(299	)
Income tax (expense) benefit		(11	)		8			(16	)		27
Net income (loss)		20			(139	)		30			(272	)
Income attributable to non-controlling interests		(1	)		—			(2	)		(1	)
Net income (loss) attributable to Pactiv Evergreen Inc. common shareholders	$	19		$	(139	)	$	28		$	(273	)
Earnings (loss) per share attributable to Pactiv Evergreen Inc. common shareholders
Basic	$	0.11		$	(0.78	)	$	0.14		$	(1.54	)
Diluted	$	0.10		$	(0.78	)	$	0.14		$	(1.54	)

See accompanying notes to the condensed consolidated financial statements.

Pactiv Evergreen Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In millions)

(Unaudited)


	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net income (loss)	$	20		$	(139	)	$	30		$	(272	)
Other comprehensive (loss) income, net of income taxes:
Currency translation adjustments		(19	)		10			(18	)		24
Defined benefit plans		(1	)		—			(2	)		(1	)
Foreign exchange derivatives		2			—			1			—
Interest rate derivatives		—			14			6			8
Other comprehensive (loss) income		(18	)		24			(13	)		31
Comprehensive income (loss)		2			(115	)		17			(241	)
Comprehensive income attributable to non-controlling interests		(1	)		—			(2	)		(1	)
Comprehensive income (loss) attributable to Pactiv Evergreen Inc. common shareholders	$	1		$	(115	)	$	15		$	(242	)

See accompanying notes to the condensed consolidated financial statements.

Pactiv Evergreen Inc.

Condensed Consolidated Balance Sheets

(In millions, except share amounts)

(Unaudited)


	As of			As of
	June 30, 2024			December 31, 2023
Assets
Cash and cash equivalents	$	95		$	164
Accounts receivable, net of allowances of $2 and $3		486			426
Related party receivables		37			35
Inventories		881			852
Other current assets		116			112
Total current assets		1,615			1,589
Property, plant and equipment, net		1,473			1,511
Operating lease right-of-use assets, net		272			263
Goodwill		1,815			1,815
Intangible assets, net		974			1,004
Other noncurrent assets		213			213
Total assets	$	6,362		$	6,395
Liabilities
Accounts payable	$	367		$	300
Related party payables		7			7
Current portion of long-term debt		20			15
Current portion of operating lease liabilities		66			64
Income taxes payable		12			11
Accrued and other current liabilities		321			399
Total current liabilities		793			796
Long-term debt		3,572			3,571
Long-term operating lease liabilities		223			217
Deferred income taxes		226			244
Long-term employee benefit obligations		57			57
Other noncurrent liabilities		155			161
Total liabilities	$	5,026		$	5,046
Commitments and contingencies (Note 11)
Equity
Common stock, $0.001 par value; 2,000,000,000 shares authorized; 179,254,637 and 178,557,086 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	$	—		$	—
Preferred stock, $0.001 par value; 200,000,000 shares authorized; no shares issued or outstanding		—			—
Additional paid in capital		685			676
Accumulated other comprehensive loss		(50	)		(37	)
Retained earnings		697			706
Total equity attributable to Pactiv Evergreen Inc. common shareholders		1,332			1,345
Non-controlling interests		4			4
Total equity		1,336			1,349
Total liabilities and equity	$	6,362		$	6,395

See accompanying notes to the condensed consolidated financial statements.

Pactiv Evergreen Inc.

Condensed Consolidated Statements of Equity

(In millions, except per share amounts)

(Unaudited)


								Accumulated
					Additional			Other						Non-
	Common Stock				Paid in			Comprehensive			Retained			Controlling			Total
	Shares		Amount		Capital			Income (Loss)			Earnings			Interests			Equity
For the Three Months Ended June 30, 2023
Balance as of March 31, 2023		178.3	$	—	$	650		$	(95	)	$	851		$	4			1,410
Net loss		—		—		—			—			(139	)		—			(139	)
Other comprehensive income, net of income taxes		—		—		—			24			—			—			24
Equity based compensation		—		—		10			—			—			—			10
Vesting of restricted stock units, net of tax withholdings		0.1		—		—			—			—			—			—
Dividends declared - common shareholders ($0.10 per share)		—		—		—			—			(19	)		—			(19	)
Dividends declared - non-controlling interests		—		—		—			—			—			(1	)		(1	)
Balance as of June 30, 2023		178.4	$	—	$	660		$	(71	)	$	693		$	3		$	1,285

For the Three Months Ended June 30, 2024
Balance as of March 31, 2024		179.1	$	—	$	679		$	(32	)	$	697		$	4		$	1,348
Net income		—		—		—			—			19			1			20
Other comprehensive loss, net of income taxes		—		—		—			(18	)		—			—			(18	)
Equity based compensation		—		—		6			—			—			—			6
Vesting of restricted stock units, net of tax withholdings		0.2		—		—			—			—			—			—
Dividends declared - common shareholders ($0.10 per share)		—		—		—			—			(19	)		—			(19	)
Dividends declared - non-controlling interests		—		—		—			—			—			(1	)		(1	)
Balance as of June 30, 2024		179.3	$	—	$	685		$	(50	)	$	697		$	4		$	1,336

For the Six Months Ended June 30, 2023
Balance as of December 31, 2022		177.9	$	—	$	647		$	(102	)	$	1,003		$	5			1,553
Net (loss) income		—		—		—			—			(273	)		1			(272	)
Other comprehensive income, net of income taxes		—		—		—			31			—			—			31
Equity based compensation		—		—		15			—			—			—			15
Vesting of restricted stock units, net of tax withholdings		0.5		—		(2	)		—			—			—			(2	)
Dividends declared - common shareholders ($0.20 per share)		—		—		—			—			(37	)		—			(37	)
Dividends declared - non-controlling interests		—		—		—			—			—			(2	)		(2	)
Disposal of subsidiary		—		—		—			—			—			(1	)		(1	)
Balance as of June 30, 2023		178.4	$	—	$	660		$	(71	)	$	693		$	3		$	1,285

For the Six Months Ended June 30, 2024
Balance as of December 31, 2023		178.6	$	—	$	676		$	(37	)	$	706		$	4		$	1,349
Net income		—		—		—			—			28			2			30
Other comprehensive loss, net of income taxes		—		—		—			(13	)		—			—			(13	)
Equity based compensation		—		—		13			—			—			—			13
Vesting of restricted stock units, net of tax withholdings		0.7		—		(4	)		—			—			—			(4	)
Dividends declared - common shareholders ($0.20 per share)		—		—		—			—			(37	)		—			(37	)
Dividends declared - non-controlling interests		—		—		—			—			—			(2	)		(2	)
Balance as of June 30, 2024		179.3	$	—	$	685		$	(50	)	$	697		$	4		$	1,336

See accompanying notes to the condensed consolidated financial statements.

Pactiv Evergreen Inc.

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	For the Six Months Ended June 30,
	2024			2023
Operating Activities:
Net income (loss)	$	30		$	(272	)
Adjustments to reconcile net income (loss) to operating cash flows:
Depreciation and amortization		159			433
Deferred income taxes		(16	)		(67	)
Asset impairment and restructuring related non-cash charges (net of reversals)		2			41
Non-cash portion of operating lease expense		42			40
Equity based compensation		13			15
Other non-cash items, net		—			7
Change in assets and liabilities:
Accounts receivable, net		(68	)		(7	)
Inventories		(30	)		108
Accounts payable		74			(27	)
Operating lease payments		(42	)		(41	)
Accrued and other current liabilities		(90	)		(18	)
Other assets and liabilities		(13	)		3
Net cash provided by operating activities		61			215
Investing Activities:
Acquisition of property, plant and equipment		(98	)		(116	)
Purchase of investments		(23	)		—
Receipt of refundable exclusivity payment		10			—
Other investing activities		11			2
Net cash used in investing activities

Pactiv Evergreen Inc. [PTVE] Filings
10-Q	[2024-08-01]
10-Q	[2024-05-03]
10-K	[2024-03-01]
10-Q	[2023-11-02]
10-Q	[2023-08-03]
10-Q	[2023-05-09]
10-K	[2023-03-07]
10-Q	[2022-11-08]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-02-24]
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-02-25]
10-Q	[2020-11-12]
S-1	[2020-08-24]
20-F	[2020-03-10]
20-F	[2019-02-14]
20-F	[2018-02-14]
20-F	[2017-02-15]
20-F	[2016-02-25]
20-F	[2015-02-25]
20-F	[2014-02-27]
20-F	[2013-03-13]