Pactiv Evergreen Inc. (“Pactiv Evergreen” or the “Company”), today
reported results for the fourth quarter 2020 ended December 31,
2020.
John McGrath, Chief Executive Officer of Pactiv
Evergreen, “I am pleased that our fourth quarter 2020 operating
performance ended near the prior year and where we were expecting
despite ongoing headwinds from the impacts of COVID-19.”
McGrath continued, “With the introduction and
distribution of COVID-19 vaccines in the U.S. and other of our key
markets, we believe that an economic recovery is on the horizon and
that we are the packaging company best positioned to benefit from
such a recovery. For this reason, we continue to focus on executing
our strategic initiatives while working closely with our customers
to prepare for a significant increase in consumer demand during the
expected economic recovery. I am very proud of and thankful for our
team members for all of the work they are doing to support our
customers during these unprecedented times.”
Fourth Quarter 2020 Financial
Highlights:
- Net Revenues of
$1,175 million for the fourth quarter of 2020 compared to $1,303
million in the prior year period
- Net Income from
continuing operations of $18 million for the fourth quarter of 2020
compared to a net loss of $140 million in the prior year period.
Net income (loss) from continuing operations included certain
significant and/or unusual items that are not necessarily
representative of underlying operational performance as discussed
in more detail below
- Adjusted
EBITDA¹ from continuing operations of $170 million
for the fourth quarter of 2020 compared to $173 million in the
prior year period
Fourth Quarter 2020 Results
Net revenues in the fourth quarter of 2020 were
$1,175 million compared to $1,303 million in the prior year period.
The decrease in net revenues was primarily driven by lower volume
largely due to the unfavorable impact from the COVID-19 pandemic,
as well as lower pricing mainly due to lower raw material costs
passed through to customers.
Net Income from continuing operations was $18
million in the fourth quarter of 2020 compared to a net loss of
$140 million in the fourth quarter of 2019. The change was
primarily driven by higher significant and/or unusual items
including an $85 million change in income taxes primarily
attributable to changes in the Company’s valuation allowance
associated with deferred interest deductions in the prior year
period, lower interest expense of $25 million driven by lower
average debt outstanding in the current year quarter, $24 million
of favorable non-cash pension income, lower foreign exchange losses
on cash of $24 million, favorable change of $9 million related to
unrealized gains on our commodity derivatives and lower operational
process engineering-related consultancy spend of $8 million,
partially offset by higher restructuring and impairment charges of
$9 million. Additionally, underlying operational performance was
impacted by lower volume primarily driven by the impact of
COVID-19, lower pricing and higher manufacturing costs, partially
offset by favorable raw material costs, net of lower costs passed
through to customers and lower corporate costs.
Adjusted EBITDA¹ was $170 million in the
fourth quarter of 2020 compared to $173 million in the fourth
quarter of 2019. The slight decline was primarily due to lower
volume driven by the COVID-19 pandemic, lower pricing and higher
manufacturing costs, partially offset by favorable raw material
costs, net of lower costs passed through to customers and lower
corporate costs.
Key Segment Results (compared to the
fourth quarter of 2019)
Foodservice
- Net revenues decreased $70 million,
or 13%
- Adjusted EBITDA decreased $3
million, or 4%
The decrease in net revenues was primarily
driven by lower sales volume due to market contraction from the
impact of the COVID-19 pandemic, as well as lower pricing primarily
due to lower raw material costs passed through to customers.
The decrease in Adjusted EBITDA was primarily
driven by lower sales volume due to the impact of the COVID-19
pandemic and higher manufacturing costs, partially offset by lower
raw material costs.
Food Merchandising
- Net revenues decreased $1
million
- Adjusted EBITDA increased $4
million, or 6%
The decrease in net revenues was primarily
driven by higher volume, partially offset by an unfavorable product
mix and lower costs passed through to customers.
The increase in Adjusted EBITDA was primarily
driven by favorable material costs, net of lower costs passed
through to customers, partially offset by an unfavorable product
mix.
Beverage Merchandising
- Net revenues decreased $55 million,
or 13%
- Adjusted EBITDA decreased $18
million, or 33%
The decrease in net revenues was primarily due
to lower sales volume and lower pricing due to the impact of the
COVID-19 pandemic.
The decrease in Adjusted EBITDA was primarily
driven by lower pricing and lower sales volume due to the impact of
the COVID-19 pandemic, as well as increased manufacturing costs.
These items were partially offset by lower raw material costs, as
wood supply markets have returned to historical normalized levels
from prior year weather-related increases.
Financial Results for the Year Ended
December 31, 2020
- Net Revenues of
$4,689 million for the year ended December 31, 2020 compared to
$5,191 million in the prior year period
- Net Loss from
continuing operations of $10 million for the year ended December
31, 2020 compared to a net loss of $240 million in the prior year
period. Net loss from continuing operations included certain
significant and/or unusual items that are not necessarily
representative of underlying operational performance as discussed
in more detail below
- Adjusted
EBITDA¹ of $615 million for the year ended December
31, 2020 compared to $691 million in the prior year period
Net revenues for the year ended December 31,
2020 were $4,689 million compared to $5,191 million in the prior
year period. The decrease was primarily due to lower sales volume
across Foodservice and Beverage Merchandising, largely due to the
unfavorable impact from the COVID-19 pandemic, as well as lower
pricing, mainly due to lower raw material costs passed through to
customers and an unfavorable impact from foreign currency.
Net loss from continuing operations favorably
changed by $230 million to $10 million for the year ended December
31, 2020 compared to a net loss of $240 million in the prior year
period. The change was primarily driven by higher significant
and/or unusual items including a $196 million change in income
taxes driven by a favorable impact from the CARES Act and a
favorable change in the Company’s valuation allowance, $77 million
of favorable non-cash pension income, lower interest expense of $62
million driven by lower average debt outstanding in the current
year partially offset by higher debt extinguishment costs, lower
restructuring and impairment charges of $28 million, and lower
operational process engineering-related consultancy spend of $14
million, partially offset by higher strategic review and
transaction-related costs of $40 million, higher related party
management fees of $39 million and higher foreign exchange losses
on cash of $7 million. Additionally, underlying operational
performance was impacted by lower sales volume due to the impact of
the COVID-19 pandemic, higher manufacturing costs and lower
pricing, partially offset by favorable material costs, net of lower
costs passed through to customers and lower corporate costs.
Adjusted EBITDA¹ was $615 million for the
year ended December 31, 2020 compared to $691 million in the prior
year period. The decrease was primarily due to lower sales volume
due to the impact of the COVID-19 pandemic, higher manufacturing
costs and lower pricing. These items were partially offset by
favorable material costs, net of lower costs passed through to
customers and lower corporate costs.
Balance Sheet and Cash Flow
Highlights
- Cash and cash equivalents was $458
million as of December 31, 2020
- Total outstanding debt was $4,004
million at December 31, 2020
- For the year to date year ended
December 31, 2020, capital expenditures related to the Company’s
Strategic Investment Program (“SIP”) totaled $110 million
- In October 2020, the Company
contributed $121 million to its largest pension plan, the Pactiv
Evergreen Pension Plan (“PEPP”). The net pension liability of the
PEPP decreased from $654 million as of December 31, 2019 to $439
million as of December 31, 2020
- The Company declared a quarterly
dividend of $0.10 per share of common stock on February 4, 2021,
which was paid on February 24, 2021 to stockholders of record at
the close of business on February 14, 2021
- The Company repaid the remaining
$59 million of aggregate principal of its 5.125% notes on February
16, 2021
Outlook
The Company expects ongoing impacts from the
COVID-19 pandemic including continued softened demand in its
Foodservice and Beverage Merchandising segments, as well as
continued elevated operating costs to maintain and improve service
to customers. Winter Storm Uri damaged buildings and equipment in,
interfered with the operations of, and sharply increased the energy
costs for, Pactiv Evergreen’s facilities in the Southern half of
the U.S. Pactiv Evergreen had to suspend its operations in eight of
its facilities in Arkansas and Texas last week. While Pactiv
Evergreen is beginning to recover from the winter storm, the
financial impact of this event is still being assessed.
Additionally the timing of the Pine Bluff mill outage and the
aforementioned inclement weather conditions being experienced in
Texas and Arkansas will most likely result in significant added
costs during the first quarter of 2021.
The Company expects a strong second half of 2021
as the vaccine roll-out is forecasted to reach critical mass
leading to revenue recovery in the Foodservice and Beverage
Merchandising segments, commodity cost increases recovered through
price and hedge coverage, benefits from the SIP and other strategic
initiatives and steady mill operational improvements.
Conference Call and Webcast
Presentation
The Company will host a conference call and
webcast presentation to discuss these results on February 25, 2021
at 8:00 a.m. U.S. Eastern Time. Investors interested in
participating in the live call may dial 877-407-0789 from the U.S.
and 201-689-8562 internationally, and enter confirmation code
13716230. Participants may also access the live webcast and
supplemental presentation on the Pactiv Evergreen Investor
Relations website at https://www.pactivevergreen.com under
“Events.”
About Pactiv Evergreen Inc. (NASDAQ:
PTVE)
Pactiv Evergreen Inc. is a manufacturer and
distributor of fresh foodservice and food merchandising products
and fresh beverage cartons in North America and certain
international markets. It supplies its products to a broad and
diversified mix of companies, including full service and quick
service restaurants, foodservice distributors, supermarkets,
grocery and healthy eating retailers, other food stores, food and
beverage producers, food packers and food processors.
Note to Investors Regarding Forward
Looking Statements
This press release contains statements
reflecting our views about the Company’s future performance that
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, including the
Company’s fiscal year 2021 guidance. 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 the Company, may include
projections of the Company’s future financial performance, its
anticipated growth strategies and anticipated trends in its
business. These statements are only predictions based on the
Company’s current expectations and projections about future events.
There are important factors that could cause the Company’s 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 but not limited to the risk factors set forth
in the Company’s most recent filing, its final prospectus, filed
with the Securities and Exchange Commission on September 18,
2020 pursuant to Rule 424(b)(4).
For additional information on these and other
factors that could cause the Company’s actual results to materially
differ from those set forth herein, please see the Company’s
filings with the Securities and Exchange Commission, including
its final prospectus filed with the Securities and Exchange
Commission on September 18, 2020 pursuant to Rule 424(b)(4).
Investors are cautioned not to place undue reliance on any such
forward-looking statements, which speak only as of the date they
are made. The Company undertakes no obligation to update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Contact
Investors ICRAshley
DeSimoneAshley.DeSimone@icrinc.com646.677.1827
Pactiv Evergreen
Inc.Consolidated Statements of Income
(Loss) (in millions, except per share
amounts)
|
|
For the Three MonthsEnded December 31, |
|
For the Year EndedDecember 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net revenues |
|
$ |
1,175 |
|
|
$ |
1,303 |
|
|
$ |
4,689 |
|
|
$ |
5,191 |
|
Cost of sales |
|
(987 |
) |
|
(1,095 |
) |
|
(3,969 |
) |
|
(4,344 |
) |
Gross
profit |
|
188 |
|
|
208 |
|
|
720 |
|
|
847 |
|
Selling, general and
administrative expenses |
|
(112 |
) |
|
(125 |
) |
|
(470 |
) |
|
(466 |
) |
Goodwill impairment
charges |
|
— |
|
|
— |
|
|
(6 |
) |
|
(16 |
) |
Restructuring, asset
impairment and other related charges |
|
(10 |
) |
|
(1 |
) |
|
(28 |
) |
|
(46 |
) |
Other income (expense),
net |
|
15 |
|
|
(22 |
) |
|
(33 |
) |
|
(29 |
) |
Operating income from
continuing operations |
|
81 |
|
|
60 |
|
|
183 |
|
|
290 |
|
Non-operating income
(expense), net |
|
16 |
|
|
(11 |
) |
|
66 |
|
|
(13 |
) |
Interest expense, net |
|
(96 |
) |
|
(121 |
) |
|
(371 |
) |
|
(433 |
) |
Income (loss) from
continuing operations before tax |
|
1 |
|
|
(72 |
) |
|
(122 |
) |
|
(156 |
) |
Income tax benefit
(expense) |
|
17 |
|
|
(68 |
) |
|
112 |
|
|
(84 |
) |
Net income (loss) from
continuing operations |
|
18 |
|
|
(140 |
) |
|
(10 |
) |
|
(240 |
) |
Income (loss) from
discontinued operations, net of income taxes |
|
219 |
|
|
60 |
|
|
(15 |
) |
|
330 |
|
Net income
(loss) |
|
237 |
|
|
(80 |
) |
|
(25 |
) |
|
90 |
|
Net (income) loss attributable
to non-controlling interests |
|
(1 |
) |
|
2 |
|
|
(2 |
) |
|
1 |
|
Net income (loss)
attributable to Pactiv Evergreen Inc. common
stockholders |
|
$ |
236 |
|
|
$ |
(78 |
) |
|
$ |
(27 |
) |
|
$ |
91 |
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to Pactiv Evergreen Inc. common
stockholders |
|
|
|
|
|
|
|
|
From continuing operations – basic & diluted |
|
$ |
0.10 |
|
|
$ |
(1.03 |
) |
|
$ |
(0.08 |
) |
|
$ |
(1.78 |
) |
From discontinued operations – basic & diluted |
|
|
1.23 |
|
|
|
0.45 |
|
|
|
(0.10 |
) |
|
|
2.46 |
|
Total – basic & diluted |
|
$ |
1.33 |
|
|
$ |
(0.58 |
) |
|
$ |
(0.18 |
) |
|
$ |
0.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding – basic |
|
|
176.8 |
|
|
|
134.4 |
|
|
|
146.2 |
|
|
|
134.4 |
|
Weighted-average shares outstanding – diluted |
|
|
176.9 |
|
|
|
134.4 |
|
|
|
146.2 |
|
|
|
134.4 |
|
Pactiv Evergreen
Inc.Consolidated Balance
Sheets(in millions)
|
|
As of December 31,2020 |
|
As of December 31,2019 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
458 |
|
|
$ |
1,155 |
|
Accounts receivable, net |
|
375 |
|
|
445 |
|
Related party receivables |
|
55 |
|
|
— |
|
Inventories |
|
784 |
|
|
753 |
|
Other current assets |
|
175 |
|
|
119 |
|
Assets held for sale or distribution |
|
26 |
|
|
1,232 |
|
Total current
assets |
|
1,873 |
|
|
3,704 |
|
Property, plant and equipment, net |
|
1,685 |
|
|
1,703 |
|
Operating lease right-of-use assets, net |
|
260 |
|
|
191 |
|
Goodwill |
|
1,760 |
|
|
1,766 |
|
Intangible assets, net |
|
1,092 |
|
|
1,147 |
|
Deferred income taxes |
|
7 |
|
|
21 |
|
Related party receivables |
|
— |
|
|
339 |
|
Other noncurrent assets |
|
166 |
|
|
161 |
|
Noncurrent assets held for sale or distribution |
|
— |
|
|
7,143 |
|
Total
assets |
|
$ |
6,843 |
|
|
$ |
16,175 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Accounts payable |
|
$ |
313 |
|
|
$ |
316 |
|
Related party payables |
|
10 |
|
|
30 |
|
Current portion of long-term debt |
|
15 |
|
|
3,587 |
|
Current portion of operating lease liabilities |
|
57 |
|
|
47 |
|
Income taxes payable |
|
10 |
|
|
14 |
|
Accrued and other current liabilities |
|
322 |
|
|
418 |
|
Liabilities held for sale or distribution |
|
12 |
|
|
485 |
|
Total current
liabilities |
|
739 |
|
|
4,897 |
|
Long-term debt |
|
3,965 |
|
|
7,043 |
|
Long-term operating lease liabilities |
|
217 |
|
|
157 |
|
Deferred income taxes |
|
193 |
|
|
150 |
|
Long-term employee benefit obligations |
|
519 |
|
|
730 |
|
Other noncurrent liabilities |
|
136 |
|
|
124 |
|
Noncurrent liabilities held for sale or distribution |
|
— |
|
|
992 |
|
Total
liabilities |
|
$ |
5,769 |
|
|
$ |
14,093 |
|
Total equity
attributable to Pactiv Evergreen Inc. common
stockholders |
|
1,071 |
|
|
2,079 |
|
Non-controlling interests |
|
3 |
|
|
3 |
|
Total
equity |
|
$ |
1,074 |
|
|
$ |
2,082 |
|
Total liabilities and
equity |
|
$ |
6,843 |
|
|
$ |
16,175 |
|
Pactiv Evergreen
Inc.Consolidated Statements of Cash
Flows(in millions)
|
|
For the Year Ended December 31, |
|
|
2020 |
|
2019 |
Cash provided by (used
in) operating activities |
|
|
|
|
Net (loss) income |
|
$ |
(25 |
) |
|
$ |
90 |
|
Adjustments to reconcile net
(loss) income to operating cash flows: |
|
|
|
|
Depreciation and amortization |
|
467 |
|
|
643 |
|
Deferred income taxes |
|
18 |
|
|
98 |
|
Unrealized gains (losses) on derivatives |
|
(10 |
) |
|
(13 |
) |
Goodwill impairment charges |
|
6 |
|
|
25 |
|
Other asset impairment charges |
|
18 |
|
|
106 |
|
(Gain) loss on disposal of businesses and other assets |
|
(10 |
) |
|
42 |
|
Non-cash portion of employee benefit obligations |
|
(59 |
) |
|
27 |
|
Non-cash portion of operating lease expense |
|
96 |
|
|
108 |
|
Amortization of OID and DIC |
|
17 |
|
|
20 |
|
Loss on extinguishment of debt |
|
68 |
|
|
1 |
|
Other non-cash items, net |
|
21 |
|
|
(3 |
) |
Change in assets and liabilities: |
|
|
|
|
Accounts receivable, net |
|
33 |
|
|
19 |
|
Inventories |
|
(64 |
) |
|
19 |
|
Other current assets |
|
(2 |
) |
|
29 |
|
Accounts payable |
|
32 |
|
|
(118 |
) |
Operating lease payments |
|
(93 |
) |
|
(106 |
) |
Income taxes payable |
|
(58 |
) |
|
(53 |
) |
Accrued and other current liabilities |
|
(80 |
) |
|
(37 |
) |
Other assets and liabilities |
|
6 |
|
|
4 |
|
Employee benefit obligations |
|
(128 |
) |
|
(5 |
) |
Net cash provided by
operating activities |
|
253 |
|
|
896 |
|
Cash provided by (used
in) investing activities |
|
|
|
|
Acquisition of property, plant and equipment and intangible
assets |
|
(410 |
) |
|
(629 |
) |
Proceeds from sale of property, plant and equipment |
|
48 |
|
|
23 |
|
Disposal of businesses, net of cash disposed |
|
8 |
|
|
597 |
|
Proceeds from related party loan repayment |
|
— |
|
|
5 |
|
Net cash used in
investing activities |
|
(354 |
) |
|
(4 |
) |
Cash provided by (used
in) financing activities |
|
|
|
|
Long-term debt proceeds |
|
7,861 |
|
|
— |
|
Long-term debt repayments |
|
(8,944 |
) |
|
(381 |
) |
Financing transaction costs on long-term debt |
|
(49 |
) |
|
— |
|
Premium on redemption of long-term debt |
|
569 |
|
|
— |
|
Net proceeds from issue of share capital |
|
(34 |
) |
|
— |
|
Cash held by RPC & GPC at the time of distribution |
|
(110 |
) |
|
— |
|
Other financing activities |
|
(4 |
) |
|
(3 |
) |
Net cash used in
financing activities |
|
(711 |
) |
|
(384 |
) |
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
(14 |
) |
|
— |
|
(Decrease) increase in cash,
cash equivalents and restricted cash |
|
(826 |
) |
|
508 |
|
Cash, cash equivalents and
restricted cash as of beginning of the period1 |
|
1,294 |
|
|
786 |
|
Cash, cash equivalents
and restricted cash as of end of the
period1 |
|
$ |
468 |
|
|
$ |
1,294 |
|
1 – includes $10
million, $139 million and $127 million of cash and cash equivalents
and restricted cash classified as current assets held for sale or
distribution as of December 31, 2020, December 31, 2019, and
December 31, 2018, respectively.
Pactiv Evergreen
Inc.Segment Results(in
millions)
|
|
Foodservice |
|
FoodMerchandising |
|
BeverageMerchandising |
Reportable segment net revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2020 |
|
$ |
460 |
|
|
$ |
350 |
|
|
$ |
363 |
|
Three months ended December 31, 2019 |
|
|
530 |
|
|
|
351 |
|
|
|
418 |
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2020 |
|
$ |
71 |
|
|
$ |
66 |
|
|
$ |
36 |
|
Three months ended December 31, 2019 |
|
|
74 |
|
|
|
62 |
|
|
|
54 |
|
|
|
Foodservice |
|
FoodMerchandising |
|
BeverageMerchandising |
Reportable segment net
revenues |
|
|
|
|
|
|
Year ended December 31, 2020 |
|
$ |
1,811 |
|
|
$ |
1,396 |
|
|
$ |
1,469 |
|
Year ended December 31, 2019 |
|
|
2,160 |
|
|
|
1,388 |
|
|
|
1,606 |
|
Adjusted EBITDA |
|
|
|
|
|
|
Year ended December 31, 2020 |
|
$ |
241 |
|
|
$ |
252 |
|
|
$ |
148 |
|
Year ended December 31, 2019 |
|
|
336 |
|
|
|
223 |
|
|
|
196 |
|
Use of Non-GAAP Financial Measures
The Company uses the non-GAAP financial measure
“Adjusted EBITDA” in evaluating its past results and future
prospects. The Company defines Adjusted EBITDA as net income from
continuing operations calculated in accordance with GAAP, plus the
sum of income tax expense (benefit), net interest expense,
depreciation and amortization and further adjusted to exclude
certain items of a significant or unusual nature, including but not
limited to foreign exchange gains or losses on cash, goodwill
impairment charges, related party management fees, unrealized gains
or losses on derivatives, gains or losses on the sale of businesses
and non-current assets, restructuring, asset impairment and other
related charges, operational process engineering-related
consultancy costs, non-cash pension income or expense and strategic
review and transaction-related costs.
The Company presents Adjusted EBITDA because it
is a key measure used by its management team to evaluate its
operating performance, generate future operating plans and make
strategic decisions. In addition, the Company’s chief operating
decision maker uses Adjusted EBITDA of each reportable segment to
evaluate the operating performance of such segments. Accordingly,
the Company believes presenting this metric provides useful
information to investors and others in understanding and evaluating
its operating results in the same manner as the management team and
board of directors.
Non-GAAP information should be considered as
supplemental in nature and is not meant to be considered in
isolation or as a substitute for the related financial information
prepared in accordance with GAAP. In addition, the Company’s
non-GAAP financial measure may not be the same as or comparable to
similar non-GAAP financial measures presented by other
companies.
Please see the reconciliation of the Company’s
Non-GAAP measure used in this release to the most directly
comparable GAAP measure, beginning on the following page.
Pactiv Evergreen
Inc.Reconciliation of Net Income (Loss) from
Continuing Operations to Adjusted EBITDA from Continuing
Operations(in millions)
|
|
For the Three MonthsEnded December 31, |
|
For the Year EndedDecember 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations
(GAAP) |
|
$ |
18 |
|
|
$ |
(140 |
) |
|
$ |
(10 |
) |
|
$ |
(240 |
) |
Income tax (benefit)
expense |
|
(17 |
) |
|
68 |
|
|
(112 |
) |
|
84 |
|
Interest expense, net |
|
96 |
|
|
121 |
|
|
371 |
|
|
433 |
|
Depreciation and
amortization |
|
76 |
|
|
75 |
|
|
289 |
|
|
273 |
|
Goodwill impairment
charges(1) |
|
— |
|
|
— |
|
|
6 |
|
|
16 |
|
Restructuring, asset
impairment and other related charges(2) |
|
10 |
|
|
1 |
|
|
28 |
|
|
46 |
|
(Gain) loss on sale of
businesses and noncurrent assets(3) |
|
(2 |
) |
|
(2 |
) |
|
(1 |
) |
|
22 |
|
Non-cash pension (income)
expense(4) |
|
(16 |
) |
|
8 |
|
|
(71 |
) |
|
6 |
|
Operational process
engineering-related consultancy costs(5) |
|
1 |
|
|
9 |
|
|
13 |
|
|
27 |
|
Related party management
fee(6) |
|
— |
|
|
2 |
|
|
49 |
|
|
10 |
|
Strategic review and
transaction-related costs(7) |
|
8 |
|
|
5 |
|
|
47 |
|
|
7 |
|
Foreign exchange losses on
cash(8) |
|
1 |
|
|
25 |
|
|
15 |
|
|
8 |
|
Unrealized (gains) losses on
derivatives(9) |
|
(7 |
) |
|
2 |
|
|
(10 |
) |
|
(4 |
) |
Other |
|
2 |
|
|
(1 |
) |
|
1 |
|
|
3 |
|
Adjusted EBITDA from
continuing operations (Non-GAAP) |
|
$ |
170 |
|
|
$ |
173 |
|
|
$ |
615 |
|
|
$ |
691 |
|
(1) Reflects goodwill impairment charges in
respect of the Company’s remaining closures
operations.(2) Reflects asset impairment, restructuring and
other related charges primarily associated with the remaining
closures businesses that are not reported within discontinued
operations as well as corporate restructuring actions following our
IPO.(3) Reflects the (gain) loss from the sale of businesses
and noncurrent assets, primarily in our Other segment during
2019.(4) Reflects the non-cash pension (income) expense
related to the PEPP.(5) Reflects the costs incurred to
evaluate and improve the efficiencies of the Company’s
manufacturing and distribution operations.(6) Reflects the
related party management fee charged by the Rank Group Limited to
us and the fee to terminate this arrangement upon our IPO.
Following the Company’s IPO, they are no longer charged the related
party management fee.(7) Reflects costs incurred for strategic
reviews of the Company’s businesses, as well as costs related to
the Company’s IPO that cannot be offset against the proceeds of the
IPO.(8) Reflects foreign exchange losses on cash, primarily on
U.S. dollar amounts held in non-U.S. dollar functional currency
entities.(9) Reflects the mark-to-market movements in the
Company’s commodity derivatives.
__________________________________
¹ Adjusted EBITDA is a non-GAAP measure. Refer
to the discussion on non-GAAP financial measures and reconciliation
included in this press release.
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