Pactiv Evergreen Inc. [PTVE] Filings

10-Q 1 ptve-20230930.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 September 30, 2023


☐	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 178,455,556 shares of common stock, $0.001 par value per share, outstanding as of October 25, 2023.

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	38
Item 4.	Controls and Procedures	38
PART II.	OTHER INFORMATION	39
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
	Signatures	41

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, 2022. You should specifically consider these numerous risks. These risks include, among others, those related to:

•

fluctuations in raw material, energy and freight costs;

•

labor shortages and increased labor costs;

•

failure to maintain satisfactory relationships with our major customers;

•

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

•

the macroeconomic environment globally and in North America, including higher rates of inflation and the risk of recession;

•

the restructuring of our Beverage Merchandising operations;

•

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;

•

our safety performance;

•

competition in the markets in which we operate;

•

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

•

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; 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 September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022
Net revenues	$	1,379		$	1,609		$	4,236		$	4,744
Cost of sales		(1,098	)		(1,377	)		(3,756	)		(3,972	)
Gross profit		281			232			480			772
Selling, general and administrative expenses		(137	)		(145	)		(403	)		(435	)
Restructuring, asset impairment and other related charges		(28	)		(57	)		(133	)		(58	)
Other (expense) income, net		(3	)		239			1			279
Operating income (loss) from continuing operations		113			269			(55	)		558
Non-operating (expense) income, net		(2	)		44			(6	)		52
Interest expense, net		(61	)		(59	)		(188	)		(158	)
Income (loss) from continuing operations before tax		50			254			(249	)		452
Income tax (expense) benefit		(22	)		(79	)		5			(160	)
Income (loss) from continuing operations		28			175			(244	)		292
Income from discontinued operations, net of income taxes		2			1			2			1
Net income (loss)		30			176			(242	)		293
Income attributable to non-controlling interests		(1	)		—			(2	)		(1	)
Net income (loss) attributable to Pactiv Evergreen Inc. common shareholders	$	29		$	176		$	(244	)	$	292
Earnings (loss) per share attributable to Pactiv Evergreen Inc. common shareholders
From continuing operations
Basic	$	0.15		$	0.98		$	(1.39	)	$	1.63
Diluted	$	0.15		$	0.98		$	(1.39	)	$	1.63
From discontinued operations
Basic	$	0.01		$	0.01		$	0.01		$	0.01
Diluted	$	0.01		$	—		$	0.01		$	—
Total
Basic	$	0.16		$	0.99		$	(1.38	)	$	1.64
Diluted	$	0.16		$	0.98		$	(1.38	)	$	1.63

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 September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022
Net income (loss)	$	30		$	176		$	(242	)	$	293
Other comprehensive (loss) income, net of income taxes:
Currency translation adjustments		(5	)		(6	)		19			(12	)
Defined benefit plans		(1	)		41			(2	)		(62	)
Interest rate derivatives		4			—			12			—
Other comprehensive (loss) income		(2	)		35			29			(74	)
Comprehensive income (loss)		28			211			(213	)		219
Comprehensive income attributable to non-controlling interests		(1	)		—			(2	)		(1	)
Comprehensive income (loss) attributable to Pactiv Evergreen Inc. common shareholders	$	27		$	211		$	(215	)	$	218

See accompanying notes to the condensed consolidated financial statements.

Pactiv Evergreen Inc.

Condensed Consolidated Balance Sheets

(In millions, except share amounts)

(Unaudited)


	As of September 30, 2023			As of December 31, 2022
Assets
Cash and cash equivalents	$	233		$	531
Accounts receivable, net of allowances of $2 and $3		470			448
Related party receivables		38			46
Inventories		846			1,062
Other current assets		109			126
Assets held for sale		7			6
Total current assets		1,703			2,219
Property, plant and equipment, net		1,469			1,773
Operating lease right-of-use assets, net		276			262
Goodwill		1,815			1,815
Intangible assets, net		1,019			1,064
Other noncurrent assets		164			173
Total assets	$	6,446		$	7,306
Liabilities
Accounts payable	$	329		$	388
Related party payables		10			6
Current portion of long-term debt		18			31
Current portion of operating lease liabilities		63			65
Income taxes payable		5			6
Accrued and other current liabilities		447			415
Liabilities held for sale		—			3
Total current liabilities		872			914
Long-term debt		3,593			4,105
Long-term operating lease liabilities		225			209
Deferred income taxes		255			319
Long-term employee benefit obligations		59			60
Other noncurrent liabilities		138			146
Total liabilities	$	5,142		$	5,753
Commitments and contingencies (Note 12)
Equity
Common stock, $0.001 par value; 2,000,000,000 shares authorized; 178,452,889 and 177,926,081 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	$	—		$	—
Preferred stock, $0.001 par value; 200,000,000 shares authorized; no shares issued or outstanding		—			—
Additional paid in capital		669			647
Accumulated other comprehensive loss		(73	)		(102	)
Retained earnings		704			1,003
Total equity attributable to Pactiv Evergreen Inc. common shareholders		1,300			1,548
Non-controlling interests		4			5
Total equity		1,304			1,553
Total liabilities and equity	$	6,446		$	7,306

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			Loss			Earnings			Interests		Equity
For the Three Months Ended September 30, 2022
Balance as of June 30, 2022		177.7	$	—	$	634		$	(208	)	$	838		$	5	$	1,269
Net income		—		—		—			—			176			—		176
Other comprehensive income, net of income taxes		—		—		—			35			—			—		35
Equity based compensation		—		—		6			—			—			—		6
Vesting of restricted stock units, net of tax withholdings		0.1		—		(1	)		—			—			—		(1	)
Dividends declared - common shareholders ($0.10 per share)		—		—		—			—			(18	)		—		(18	)
Balance as of September 30, 2022		177.8	$	—	$	639		$	(173	)	$	996		$	5	$	1,467

For the Three Months Ended September 30, 2023
Balance as of June 30, 2023		178.4	$	—	$	660		$	(71	)	$	693		$	3	$	1,285
Net income		—		—		—			—			29			1		30
Other comprehensive loss, net of income taxes		—		—		—			(2	)		—			—		(2	)
Equity based compensation		—		—		9			—			—			—		9
Vesting of restricted stock units, net of tax withholdings		0.1		—		—			—			—			—		—
Dividends declared - common shareholders ($0.10 per share)		—		—		—			—			(18	)		—		(18	)
Balance as of September 30, 2023		178.5	$	—	$	669		$	(73	)	$	704		$	4	$	1,304

For the Nine Months Ended September 30, 2022
Balance as of December 31, 2021		177.3	$	—	$	625		$	(99	)	$	758		$	4	$

Pactiv Evergreen Inc. [PTVE] Filings
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]