Exhibit 99.2
NON-GAAP FINANCIAL MEASURES
Operating EBITDA, Adjusted EBITDA, Adjusted Free Cash Flow, and Net Debt, each as presented
in this offering memorandum, are supplemental financial measures that are not required by, or presented in accordance with, accounting
principles generally accepted in the United States (“GAAP”). These measures are not measurements of financial performance
under GAAP and should not be considered as (i) alternatives to operating or net income or cash flows from operating activities,
(ii) an indicator of cash flow or (iii) a measure of liquidity.
Adjusted EBITDA is used by our lenders for debt covenant compliance purposes. We also
use Adjusted EBITDA and Operating EBITDA among other measures to evaluate management performance and in determining performance-based
compensation. Adjusted EBITDA and Operating EBITDA and similar measures are widely used by investors, securities analysts, and
other interested parties in our industry to measure a company’s performance.
The presentation of non-GAAP financial measures in this offering memorandum may not
comply with all of the rules of the Securities and Exchange Commission (the “SEC”) for non-GAAP measures presented
in filings with the SEC. We may modify or omit such measures in our filings with the SEC, including the registration statement
we have agreeed to file. Any such change could result in differences between the information included in this offering memorandum
and the information included in any such SEC filing, including the registration statement we have agreeed to file, and any such
change could be material or such information may be omitted.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This offering memorandum contains forward-looking statements that are based on current
expectations, estimates, forecasts and projections about us, our future performance, our liquidity, our beliefs and management’s
assumptions. Such forward-looking statements include statements regarding expected financial results and other planned events,
including, but not limited to, anticipated liquidity, Adjusted EBITDA and capital expenditures. Words such as “anticipate,”
“assume,” “believe,” “estimate,” “expect,” “intend,” “plan,”
“seek,” “project,” “target,” “goal,” “likely,” “will,”
“would,” “could,” and variations of such words and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions
that are difficult to predict. The occurrence of the events described and the achievement of the expected results depend on many
events, some or all of which are not predictable or within our control. Therefore, actual future events or results may differ materially
from these statements.
The following is a list of factors, among others, that could cause actual results to
differ materially from the forward-looking statements:
| • | potential impacts arising out of the ongoing novel coronavirus
(COVID-19) pandemic; |
| • | risks associated with our substantial indebtedness and
debt service; |
| • | changes in prices and availability of resin and other
raw materials and our ability to pass on changes in raw material prices to our customers on a timely basis; |
| • | risks related to acquisitions or divestitures and integration
of acquired businesses and their operations, and realization of anticipated cost savings and synergies (including with respect
to the RPC Acquisition); |
| • | performance of our business and future operating results; |
| • | risks related to international business, including foreign
currency exchange rate risk and the risks of compliance with applicable export controls, sanctions, anti-corruption laws and regulations; |
| • | uncertainty regarding the United Kingdom’s withdrawal
from the European Union and the outcome of future arrangements between the United Kingdom and the European Union; |
| • | reliance on unpatented proprietary know-how and trade
secrets; |
| • | the phase-out of the London Interbank Offered Rate (LIBOR),
or the replacement of LIBOR with a different reference rate or modification of the method used to calculate LIBOR, which may adversely
affect interest rates; |
| • | increases in the cost of compliance with laws and regulations,
including environmental, safety, anti-plastic legislation, production and product laws and regulations; |
| • | employee shutdowns or strikes or the failure to renew
effective bargaining agreements; |
| • | risks related to disruptions in the overall economy and
the financial markets that may adversely impact our business, including as a result of the COVID-19 pandemic; |
| • | risks of catastrophic loss of one of our key manufacturing
facilities, natural disasters, and other unplanned business interruptions; |
| • | risks related to the failure of, inadequacy of or attacks
on our information technology systems and infrastructure; |
| • | risks related to market acceptance of our developing
technologies and products; |
| • | general business and economic conditions, particularly
an economic downturn; |
| • | ability of our insurance to fully cover potential exposures; |
| • | risks that our restructuring programs may entail greater
implementation costs or result in lower savings than anticipated; |
| • | risks related to future write-offs of substantial goodwill; |
| • | risks of competition, including foreign competition,
in our existing and future markets; |
| • | new legislation or new regulations and our corresponding
interpretations of the same may affect our business and consolidated financial condition and results of operations; |
| • | risks related to the impact of travel and safety restrictions
related to the COVID-19 pandemic, including on our internal controls over financial reporting and the ongoing process of implementing
standardized internal control procedures within the recently acquired RPC business; and |
| • | the other factors discussed in the section of this offering
memorandum titled “Risk Factors.” |
These forward-looking statements involve a number of risks and uncertainties that could cause actual
results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should, therefore,
be considered in light of various factors, including those set forth in this offering memorandum under “Risk Factors”
and elsewhere in this offering memorandum, and under “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” in the documents incorporated by reference into this offering memorandum.
Moreover, we caution you not to place undue reliance on these forward-looking statements, which speak only as of the date they
were made. We do not undertake any obligation to update or publicly release any revisions to these forward-looking statements
to reflect changes in underlying assumptions, new information, future events or other changes after the date of this offering
memorandum or to reflect the occurrence of unanticipated events.
BASIS OF PRESENTATION
As used in this offering memorandum, unless otherwise noted or the context otherwise requires:
| • | references to the “Issuer” are to BGI; |
| • | references to “we,” “us,” “our,”
“Berry,” and “the Company” are to Berry Global Group, Inc. and its subsidiaries (including RPC and its
subsidiaries); |
| • | references to the “initial purchasers” are
to the firms listed on the cover page of this offering memorandum; |
| • | references to “RPC” are to RPC Group Plc,
previously a public limited company incorporated in England and Wales and its subsidiaries and now known as RPC Group Ltd.; |
| • | references to the “RPC Acquisition” are to
the acquisition by Berry of all of the issued and outstanding share capital of RPC; |
| • | references to our market positions or rank, are except
as otherwise indicated, based on net sales of Berry; |
| • | references to the “Issue Date” are to the
issue date of the Notes offered hereby; |
| • | references to the “Transactions” are to the
completion of the Financings and the payment of related fees and expenses; and |
| • | references to the “Financings” are to this
offering of Notes and the proceeds therefrom. |
Our
fiscal year is the 52- or 53-week period ending generally on the Saturday closest to September 30.
Certain figures included in this offering memorandum have been rounded for ease of
presentation. Percentage figures included in this offering memorandum have not in all cases been calculated on the basis of such
rounded figures but on the basis of such amounts prior to rounding. For this reason, certain percentage amounts in this offering
memorandum may vary from those obtained by performing the same calculations using the figures in our consolidated financial statements.
Certain other amounts that appear in this offering memorandum may not sum due to rounding.
SUMMARY
The following summary contains information about our Company and the offering
and highlights information contained elsewhere in this offering memorandum, and is qualified in its entirety by the more detailed
information and consolidated financial statements included elsewhere in this offering memorandum or incorporated by reference
herein. This summary is not complete and may not contain all of the information that may be important to you. You should carefully
read the entire offering memorandum, including the “Risk Factors” section and our consolidated financial statements
and notes to those statements incorporated by reference herein, before making an investment decision.
Our Company
Berry is a leading global supplier of a broad range of innovative rigid, flexible and
non-woven products used every day within consumer and industrial end markets. We sell our products predominantly into stable, consumer-oriented
end markets, such as healthcare, personal care, and food and beverage.
Our customers consist of a diverse mix of leading global, national, mid-sized regional
and local specialty businesses. The size and scope of our customer network allows us to introduce new products we develop or acquire
to a vast audience that is familiar with our business. For the fiscal year ended September 26, 2020 (“fiscal 2020”),
no single customer represented more than 5% of net sales and our top ten customers represented approximately 15% of net sales.
We believe our manufacturing processes, manufacturing footprint and our ability to leverage our scale to reduce costs positions
us as a low-cost manufacturer relative to our competitors.
Additional financial information about Berry’s business segments is provided
in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Notes
to Consolidated Financial Statements” in Berry’s Annual Report on Form 10-K for the fiscal year ended September 26,
2020, and Quarterly Report on Form 10-Q for the fiscal quarter ended January 2, 2021, each of which is incorporated by reference
herein.
Berry was incorporated in Delaware on November 18, 2005. BGI, a wholly owned subsidiary
of Berry, was incorporated in Delaware on December 11, 1990. The principal executive offices of Berry and BGI are located
at 101 Oakley Street, Evansville, Indiana 47710, and the telephone number is (812) 424-2904. Berry also maintains an Internet site
at http://www.berryglobal.com. The website and the information contained therein or connected thereto shall not be deemed to be
incorporated into this offering memorandum and you should not rely on any such information in making your investment decision.
Our Businesses
Our business has been organized into four reporting segments: Consumer Packaging International,
Consumer Packaging North America, Engineered Materials and Health, Hygiene & Specialties.
Consumer Packaging International
The Consumer Packaging International segment primarily consists of the following product
groups:
| • | Closures
and Dispensing Systems. We manufacture a wide range of closures,
dispensing systems and applicators for a variety of end markets specializing in convenience,
safety, security and e-commerce formats. |
| • | Pharmaceutical
Devices and Packaging. We manufacture inhalers and dose counters
in addition to containers and closures for over-the-counter and prescription medicines. |
| • | Bottles
and Canisters. We manufacture a collection of packaging solutions
for consumer and industrial applications across personal care, beverage, and food markets. |
| • | Polythene
films. We manufacture polythene films for a diverse range of end
markets, including agriculture and horticulture, construction, industrial, healthcare
and waste services. |
| • | Recycling. We
have capabilities to recycle both rigid and flexible end of life materials from industrial
and consumer sources with a wide range of re-use applications across packaging and non-packaging
formats. |
| • | Containers. We
manufacture injection molded and thermoformed containers and lids across consumer and
industrial packaging end markets. |
| • | Technical
Components. We manufacture complex high-precision molds and molded
components including temporary waste storage solutions and products manufactured using
rotational molding technology for materials handling and specialty vehicles markets. |
Consumer Packaging North America
The Consumer Packaging North America segment primarily consists of the following product
groups:
| • | Containers
and Pails. We manufacture a collection of containers and pails for
nationally branded and private label customers. These are offered in various styles with
accompanying lids, bails and handles. Containers and lids are available decorated with
in-mold-labeling, indirect flexographic print, digital printing, direct print, and other
decoration technologies. |
| • | Foodservice. We
manufacture lightweight polypropylene cups and lids for hot and cold beverages. Utilizing
thermoforming and injection-molding, we offer mono-material cup and lid packaging solutions
for simplification in post-consumer collection and compatibility with recycling systems.
Our markets include quick service restaurants, fast casual dining, food service delivery,
convenience stores, stadiums, and retail stores. |
| • | Closures
and Overcaps. We manufacture child-resistant, continuous-thread,
and tamper evident closures, as well as aerosol overcaps. We sell our closures and overcaps
into numerous end markets, including household chemical, healthcare, food and beverage,
and personal care. |
| • | Bottles
and Prescription Vials. We manufacture bottles and prescription
vials utilizing widely recyclable materials which service various spirits, food and beverage,
vitamin and nutritional, and personal care markets. |
| • | Tubes. We
manufacture a complete line of extruded and laminate tubes in a wide variety of sizes
and material blends including blends up to 70% post-consumer resin. The majority of our
tubes are sold in the personal care market, but we also sell our tubes in the pharmaceutical
and household chemical markets. |
Engineered Materials
The Engineered Materials segment primarily includes the following product groups:
| • | Stretch
and Shrink Films. We manufacture both hand and machine-wrap stretch
films and custom shrink films, which are used to prepare products and packages for storage
and shipping. We sell stretch film products primarily through distribution and shrink
film directly to a diverse mix of end users. |
| • | Converter
Films. We manufacture sealant and barrier films for various flexible
packaging converters companies. In addition, certain of our products are used for industrial
applications, where converters use our films in finished products for various end market
applications. |
| • | Institutional
Can Liners. We manufacture trash-can liners and food bags for offices,
restaurants, schools, hospitals, hotels, municipalities, and manufacturing facilities. |
| • | Tape
Products. We manufacture cloth and foil tape products. Other tape
products include high-quality, high-performance liners of splicing and laminating tapes,
flame-retardant tapes, flashing and seaming tapes, double-faced cloth, masking, mounting,
and medical and specialty tapes. Tape products are sold primarily through distributors
and directly to end users for industrial, building and construction, and retail market
applications. |
| • | Food
and Consumer Films. We manufacture printed film products for the
fresh bakery, tortilla, deli, and frozen vegetable markets. We also manufacture barrier
films used for cereal, cookie, cracker and dry mix packages that are sold directly to
food manufacturers. |
| • | Retail
Bags. We manufacture a diversified portfolio of polyethylene-based
film products to end users in the retail markets. Our products include drop cloths and
retail trash bags. These products are sold primarily through grocery stores, hardware
stores, home improvement centers, paint stores, and mass merchandiser outlets. |
| • | Agriculture
Films. We manufacture agriculture films primarily used in the silage,
green house and mulch applications. |
Health, Hygiene & Specialties
The Health, Hygiene & Specialties segment primarily includes the following product groups:
| • | Health
Products. We manufacture medical garment materials, surgical drapes,
household cleaning wipes, and face masks. The key end markets and application for these
products is infection prevention. |
| • | Hygiene
Products. We manufacture a broad collection of components for baby
diapers, adult incontinence and other absorbent hygiene products, elastic films and laminates,
and substrates for dryer sheets. The primary end market for these products is personal
care. |
| • | Specialties
Products. We manufacture a broad array of products and components
for geosynthetics and filtration products servicing the specialty industrial markets. |
Our Strengths
We believe our consistent financial performance is the direct result of the following
competitive strengths:
Industry leader with significant scale and relevance in the supply chain. One
of our key business strategies is to be a market leader in each of our product lines. Through quality manufacturing, innovation
in product design, a focus on customer service and a skilled and dedicated workforce, we have achieved strong competitive positions
in many major product lines. We believe our combination with RPC created a global leader in plastic packaging and has advantageous
long-term implications for us going forward, including improving customer relationships, supply chain dynamics, and competitive
positioning. Our company has achieved differentiated global scale with approximately $11.7 billion in net sales for fiscal
2020. This increased scale allows us to seek savings in procurement, capex, and overall operations, driving significant cash flow
going forward. The level of fragmentation in the plastics and packaging industry remains high, and consolidation will likely continue
over time, as seen in other substrates like metal, glass and containerboard. As such, we believe the strategic combination of
Berry and RPC has placed our company in a favorable long-term position from an industry and competitive perspective.
Enhanced, diversified platform to serve global and emerging customers. We
are a North American leader in plastic packaging, with a focus on Health and Hygiene, Food and Beverage, and Industrial end markets.
The acquisition of RPC added a leading European platform, creating a more balanced global enterprise. Our combined company has
a strong presence in North America and Europe, the Middle East and Africa. Additionally, the acquisition increased exposure to
attractive, higher growth markets, such as those in Eastern Europe in RPC’s regional organized model. Our end market revenue
presence remains balanced with moderate increases to food, beverage and industrial markets. Finally, RPC’s expertise in
rigid plastics complements our leading flexible and non-woven platform, while we are both capable of manufacturing flexible and
rigid plastic products. We believe we are one of the world’s leading, global resin buyers and our manufacturing footprint
includes approximately 303 facilities across the world.
Large, stable, blue-chip customer base. Our customers
consist of a diverse mix of leading global, national, mid-sized regional and local specialty businesses. The size and scope of
our customer network allow us to introduce new products we develop (or acquire) to the vast audience that is familiar with our
business. In fiscal year 2020, no single customer represented more than 5% of Berry’s net sales and our top ten customers
represented approximately 15% of net sales.
Aligned, complimentary core competencies and best-in-class technology and innovation. We
believe that our technology base and research and development support are among the best in the industries we serve. Many of our
customers work in partnership with our technical representatives to develop new, more competitive products. Our design professionals
work directly with our customers to develop new styles and use computer-generated graphics to enable our customers to visualize
the finished product. Furthermore, RPC considers technology and innovation as a key differentiator of its business, and its core
competencies are highly aligned with and complementary to our legacy competencies. Our combined company has a strong foothold
in knowledge of material science, supply chain, product development and manufacturing technologies across resin-based applications
and a similarly strong commitment to sustainability in plastics.
Track record of strong and stable cash flows with ability to de-lever. Our
strong earnings, combined with our modest capital expenditure profile and limited working capital requirements, have historically
resulted in the generation of significant cash flow. We have a consistent track record of generating strong cash flow as a percentage
of net sales relative to our plastic packaging peers. Our combined company’s greater scale, improved supply chain positioning,
and commitment to quality and service should provide us a path to significantly increase adjusted free cash flow and position
us to quickly de-lever post-acquisition.
History of successful integrations and synergy achievement. Our
team has been responsible for developing and executing our strategy that has generated a track record of earnings growth and strong
cash flow. Further, mergers and acquisitions are a core component of Berry’s overall strategy, and, as a result, we have
completed 47 acquisitions over the past 30 years. Our management has a strong track record of identifying, executing and
integrating acquisitions. The proven acquisition strategy is underpinned by a thorough, conservative, and disciplined approach
that drives significant value creation for Berry’s shareholders. We have an international management team with over 350 years’
collective experience in the plastics conversion industry. Our company possesses a unique culture with strong commitments to the
safety and protection of employees, as well as a developed platform for further growth through mergers and acquisitions.
Manufacturing capabilities and low-cost operations drive profitability. We
believe that our large, high volume equipment and flexible, cross-facility manufacturing capabilities result in lower unit-production
costs than many of our competitors as we can leverage fixed costs, capacity utilization and longer production runs. We also expect
to capitalize on our purchasing power to lower the cost of raw materials such as resin, a raw material where we believe we are
one of the largest global buyers in the market.
Recent Developments
Term Loan Repricing
Prior to this offering, BGI launched a term loan refinancing for certain of its
term loans maturing in 2024 (Term X Loan) and 2026 (Term Y Loan). The refinancing term loans will rank pari passu in right of
payment with all of BGI’s other senior indebtedness and will be secured on a ratable basis with BGI’s existing
term loans as well as the notes offered hereby. The terms of the refinancing term loans, other than interest rates and
prepayment premiums, are substantially identical to those of BGI’s existing Term Y Loan. BGI
plans to use some combination of proceeds from the issuance of the Notes offered hereby, together with the refinancing term
loans, to prepay the entire outstanding amounts of the Term X Loan and the Term Y Loan. However, the term loan refinancing is
not conditioned upon the consummation of the offering of the notes hereby and the offering of the notes hereby is not
conditioned upon the completion of the term loan refinancing. See “Description of Other Indebtedness.”
Summary Historical Financial Information
The following table sets forth certain historical financial data for Berry. Our fiscal
year is the 52- or 53-week period ending generally on the Saturday closest to September 30. The summary historical financial
data for the fiscal year ended September 26, 2020, September 28, 2019 and September 29, 2018 has been derived from
our audited consolidated financial statements and related notes thereto incorporated by reference in this offering memorandum.
The summary Berry historical financial data as of and for the quarterly periods ended January 2, 2021 and December 28, 2019 is
derived from our unaudited condensed consolidated financial statements incorporated by reference in this offering memorandum. The
operating results for the quarterly period ended January 2, 2021 are not necessarily indicative of the results that may be expected
for the year ended October 2, 2021 or any other interim periods or any future year or period.
The following financial information should be read in conjunction with and is qualified
in its entirety by reference to Berry’s audited consolidated financial statements and the related notes incorporated by reference
in this offering memorandum, our management’s discussion and analysis of financial condition and results of operations for
the historical periods presented incorporated by reference in this offering memorandum and “Risk Factors” included
elsewhere in this offering memorandum.
| | |
Fiscal
Quarter ended | | |
Fiscal
Year ended | |
| ($
in millions) | |
January
2,
2021 | | |
December
28,
2019 | | |
September 26,
2020 | | |
September 28,
2019 | | |
September 29,
2018 | |
| Statement of Operations
Data: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net
sales | |
$ | 3,136 | | |
$ | 2,816 | | |
$ | 11,709 | | |
$ | 8,878 | | |
$ | 7,869 | |
| Operating
costs | |
| 2,832 | | |
| 2,617 | | |
| 10,530 | | |
| 7,904 | | |
| 7,108 | |
| Operating
income | |
| 304 | | |
| 199 | | |
| 1,179 | | |
| 974 | | |
| 761 | |
| Other
expenses (income), net | |
| 25 | | |
| 13 | | |
| 31 | | |
| 155 | | |
| 25 | |
| Interest
expense, net | |
| 97 | | |
| 118 | | |
| 435 | | |
| 329 | | |
| 259 | |
| Income
before income taxes | |
| 182 | | |
| 68 | | |
| 713 | | |
| 490 | | |
| 477 | |
| Income
tax expense (benefit) | |
| 52 | | |
| 21 | | |
| 154 | | |
| 86 | | |
| (19 | ) |
| Net
income from continuing operations | |
| 130 | | |
| 47 | | |
| 559 | | |
| 404 | | |
| 496 | |
| Balance Sheet Data
(at period end): | |
| | | |
| | | |
| | | |
| | | |
| | |
| Working capital(1) | |
$ | 1,688 | | |
$ | 1,596 | | |
$ | 1,634 | | |
$ | 1,718 | | |
$ | 1,048 | |
| Total
assets | |
| 17,176 | | |
| 17,024 | | |
| 16,701 | | |
| 16,469 | | |
| 9,131 | |
| Long-term
debt | |
| 10,081 | | |
| 11,236 | | |
| 10,237 | | |
| 11,365 | | |
| 5,844 | |
| Stockholders’
equity | |
| 2,445 | | |
| 1,786 | | |
| 2,092 | | |
| 1,618 | | |
| 1,434 | |
| Other Financial Data: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Capital
expenditures, net | |
$ | 162 | | |
$ | 148 | | |
$ | 583 | | |
$ | 399 | | |
$ | 333 | |
| Depreciation
and amortization | |
| 215 | | |
| 216 | | |
| 845 | | |
| 613 | | |
| 538 | |
______________________
| (1) | Represents total current assets less total current liabilities. |
Adjusted Free Cash Flow, Adjusted EBITDA, Operating EBITDA and Net Debt as presented
in this document, are supplemental financial measures that are not required by, or presented in accordance with, generally accepted
accounting principles in the United States (“GAAP”). The following table reconciles these non-GAAP financial measures
to comparable measures determined in accordance with GAAP.
| | |
Fiscal
Quarter ended | | |
Fiscal
Year ended | |
| ($
in millions) | |
January
2,
2021 | | |
December
28,
2019 | | |
September 26,
2020 | | |
September 28,
2019 | | |
September 29,
2018 | |
| Adjusted EBITDA: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net income from continuing operations | |
$ | 130 | | |
$ | 47 | | |
$ | 559 | | |
$ | 404 | | |
$ | 496 | |
| Income tax expense (benefit) | |
| 52 | | |
| 21 | | |
| 154 | | |
| 86 | | |
| (19 | ) |
| Income before income taxes | |
| 182 | | |
| 68 | | |
| 713 | | |
| 490 | | |
| 477 | |
| Interest expense, net | |
| 97 | | |
| 118 | | |
| 435 | | |
| 329 | | |
| 259 | |
| Other expenses (income), net | |
| 25 | | |
| 13 | | |
| 31 | | |
| 155 | | |
| 25 | |
| Operating Income | |
| 304 | | |
| 199 | | |
$ | 1,179 | | |
$ | 974 | | |
$ | 761 | |
| Plus: Depreciation and amortization | |
| 215 | | |
| 216 | | |
| 845 | | |
| 613 | | |
| 538 | |
| Plus:
Business optimization, non-cash & other expenses(1) | |
| 20 | | |
| 36 | | |
| 133 | | |
| (57 | ) | |
| 81 | |
| Operating EBITDA | |
$ | 539 | | |
$ | 451 | | |
$ | 2,157 | | |
$ | 1,530 | | |
$ | 1,380 | |
| Plus: Unrealized cost
savings(2) | |
| 11 | | |
| | | |
| 62 | | |
| | | |
| | |
| Adjusted EBITDA | |
$ | 550 | | |
| | | |
$ | 2,219 | | |
| | | |
| | |
| Long-term debt | |
| 10,081 | | |
| | | |
| 10,237 | | |
| | | |
| | |
| Less: Unrestricted cash | |
| 847 | | |
| | | |
| 750 | | |
| | | |
| | |
| Net Debt(3) | |
$ | 9,234 | | |
| | | |
$ | 9,487 | | |
| | | |
| | |
| Leverage ratio(4) | |
| 4.1 | x | |
| | | |
| 4.3 | x | |
| | | |
| | |
______________________
| (1) | Includes stock compensation and other non-cash charges,
integration expenses and other business optimization charges. |
| (2) | Includes $62 million of cost synergies from RPC
Acquisition. |
| (3) | Represents Long-term debt plus debt discount less unrestricted
cash and cash equivalents. |
| (4) | For the fiscal year ended September 26, 2020, represents Net Debt divided by Adjusted EBITDA. For the fiscal quarter ended January 2,
2021, represents Net Debt divided by Adjusted EBITDA for the four quarter ended January 2, 2021 ($2,256 million). |
| | |
Fiscal Quarter ended | | |
Fiscal Year ended | |
| ($ in millions) | |
January 2,
2021 | | |
December 28,
2019 | | |
September 26,
2020(1) | | |
September 28,
2019(2) | | |
September 29,
2018 | |
| Adjusted Free Cash Flow: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cash from operations | |
$ | 315 | | |
$ | 218 | | |
$ | 1,530 | | |
$ | 1,201 | | |
$ | 1,004 | |
| Less: Capital expenditures, net | |
| 162 | | |
| 148 | | |
| 583 | | |
| 399 | | |
| 333 | |
| Less: Tax Receivable Payments | |
| — | | |
| — | | |
| — | | |
| 38 | | |
| 37 | |
| Adjusted Free Cash Flow | |
$ | 153 | | |
$ | 70 | | |
$ | 947 | | |
$ | 764 | | |
$ | 634 | |
______________________
| (1) | Adjusted Free Cash Flow for this period excludes $62
million of unrealized RPC synergies and includes RPC integration expenses. |
| (2) | Adjusted Free Cash Flow for this period excludes $150 million
of expected RPC synergies and includes RPC Acquisition-related expenses. |
RISK FACTORS
You should carefully consider the risk factors described below as well as the risk
factors described in Berry’s Annual Report on Form 10-K for the fiscal year ended September 26, 2020 and any risk factors
set forth in the documents that are incorporated in this offering memorandum. Before making an investment decision, you should
carefully consider these risks as well as other information we include or incorporate by reference in this offering memorandum,
including our financial statements and the related notes. Any of these risks could materially and adversely affect our business,
financial condition, results of operations or cash flows. The risk and uncertainties we face are not limited to those described
in these documents. Additional risks and uncertainties that we are unaware of or that we believe are less significant than those
set forth in the risk factors described in these documents at the time of the applicable document could also materially adversely
affect our business, financial condition, results of operations or cash flows and/or the value of your investment. In any case,
the value of our securities could decline, and you could lose all or part of your investment. See also the information contained
under the heading “Disclosure Regarding Forward-Looking Statements.”
CAPITALIZATION
The following table sets forth cash and cash equivalents and capitalization of Berry
Global Group, Inc. as of January 2, 2021—both on an actual basis and on an as adjusted basis, as adjusted to give effect
to (i) the issuance of the 0.95% First Priority Senior Secured Notes due 2024 and the application of the proceeds therefrom
including the prepayment of the Term Loan maturing 2022, and (ii) this offering and the intended use of the proceeds therefrom
including the prepayment of the entire outstanding amounts of the Term Loan maturing 2024 and the Term Loan maturing 2026.
You should read this table in conjunction with the consolidated financial statements
and the related notes included in or incorporated by reference into this offering memorandum and “Summary,” “Use
of Proceeds.”
| | |
As of January 2, 2021 | |
| ($ in millions) | |
Actual | | |
As Adjusted | |
| Cash and cash equivalents(1) | |
$ | 847 | | |
$ | | |
| Term loan maturing 2022(2) | |
| 800 | | |
| — | |
| Term loan maturing 2024(3) | |
| 446 | | |
| — | |
| Term loan maturing 2026(3) | |
| 4,186 | | |
| — | |
| Term loan maturing 2026 | |
| — | | |
| | |
| Revolving line of credit(4) | |
| — | | |
| — | |
| 0.95% First Priority Senior Secured Notes due 2024(5) | |
| — | | |
| 800 | |
| 1% First Priority Senior Secured Notes due 2025 | |
| 860 | | |
| 860 | |
| 1.57% First Priority Senior Secured Notes due 2026 | |
| 750 | | |
| | |
| 4 7∕8% First Priority Senior Secured Notes due 2026 | |
| 1,250 | | |
| 1,250 | |
| 1 1∕2% First Priority Senior Secured Notes due 2027 | |
| 461 | | |
| 461 | |
| 5 1∕8% Second Priority Senior Secured Notes due 2023(1) | |
| 300 | | |
| 200 | |
| 4 1∕2% Second Priority Senior Secured Notes due 2026 | |
| 500 | | |
| 500 | |
| 5 5∕8% Second Priority Senior Secured Notes due 2027 | |
| 500 | | |
| 500 | |
| Debt discounts and deferred fees | |
| (81 | ) | |
| (81 | ) |
| Capital leases and other | |
| 109 | | |
| 109 | |
| Total long-term debt | |
| 10,081 | | |
| | |
| Total stockholders’ equity | |
| 2,445 | | |
| 2,445 | |
| Total Capitalization | |
$ | 12,526 | | |
$ | | |
______________________
| (1) | $100 million of the 5⅛% Second Priority Senior
Secured Notes due 2023 were redeemed on January 23, 2021. |
| (2) | The outstanding principal amount under the term loan
maturing 2022 was prepaid in full on January 15, 2021. |
| (3) | Prior to this offering, BGI launched a term loan refinancing for certain of its term loans
maturing in 2024 (Term X Loan) and 2026 (Term Y Loan). The refinancing term loans will rank pari passu in right of payment
with all of BGI’s other senior indebtedness and will be secured on a ratable basis with BGI’s existing term loans
as well as the notes offered hereby. The terms of the refinancing term loans, other than interest rates and prepayment
premiums, are substantially identical to those of BGI’s existing Term Y Loan. BGI plans to use some combination of
proceeds from the issuance of the Notes offered hereby, together with the refinancing term loans, to prepay the entire
outstanding amounts of the Term X Loan and the Term Y Loan. However, the term loan refinancing is not conditioned upon
the consummation of the offering of the notes hereby and the offering of the notes hereby is not conditioned upon the
completion of the term loan refinancing. See “Description of Other Indebtedness.” |
| (4) | As of January 2, 2021, we had $850 million available
under our revolving line of credit. |
| (5) | The 0.95% First Priority Senior Secured Notes due 2024
were issued on January 15, 2021. |
