Guarantor and Non-Guarantor Financial Information

3 Months Ended

Dec. 28, 2019

Guarantor and Non-Guarantor Financial Information [Abstract]

Guarantor and Non-Guarantor Financial Information

15.  Guarantor and Non-Guarantor Financial Information

Berry Global, Inc. (“Issuer”) has notes outstanding which are fully, jointly, severally, and unconditionally guaranteed by its parent, Berry Global Group, Inc. (for purposes of this Note, “Parent”) and substantially all of Issuer’s domestic subsidiaries.  Separate narrative information or financial statements of the guarantor subsidiaries have not been included because they are 100% owned by Parent and the guarantor subsidiaries unconditionally guarantee such debt on a joint and several basis.  A guarantee of a guarantor subsidiary of the securities will terminate upon the following customary circumstances:  the sale of the capital stock of such guarantor if such sale complies with the indentures, the designation of such guarantor as an unrestricted subsidiary, the defeasance or discharge of the indenture or in the case of a restricted subsidiary that is required to guarantee after the relevant issuance date, if such guarantor no longer guarantees certain other indebtedness of the issuer.  The guarantees of the guarantor subsidiaries are also limited as necessary to prevent them from constituting a fraudulent conveyance under applicable law and any guarantees guaranteeing subordinated debt are subordinated to certain other of the Company’s debts.  Parent also guarantees the Issuer’s term loans and revolving credit facilities.  The guarantor subsidiaries guarantee our term loans and are co-borrowers under our revolving credit facility.  Presented below is condensed consolidating financial information for the Parent, Issuer, guarantor subsidiaries and non-guarantor subsidiaries.  The Issuer and guarantor financial information includes all of our domestic operating subsidiaries; our non-guarantor subsidiaries include our foreign subsidiaries, certain immaterial domestic subsidiaries and the unrestricted subsidiaries under the Issuer’s indentures.  The Parent uses the equity method to account for its ownership in the Issuer in the Condensed Consolidating Supplemental Financial Statements.  The Issuer uses the equity method to account for its ownership in the guarantor and non-guarantor subsidiaries.  All consolidating entries are included in the eliminations column along with the elimination of intercompany balances.

Condensed Supplemental Consolidated Statements of Income

	Quarterly Period Ended December 28, 2019
	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Total
Net sales	$	—		$	129		$	1,238		$	1,449	$	—		$	2,816
Cost of goods sold		—			78			1,025			1,193		—			2,296
Selling, general and administrative		—			28			88			113		—			229
Amortization of intangibles		—			—			32			43		—			75
Restructuring and transaction activities		—			4			2			11		—			17
Operating income		—			19			91			89		—			199
Other expense (income), net		—			5			(1	)		9		—			13
Interest expense, net		—			9			84			25		—			118
Equity in net income of subsidiaries		(68	)		(24	)		—			—		92			—
Income before income taxes		68			29			8			55		(92	)		68
Income tax expense		21			(18	)		—			39		(21	)		21
Net income	$	47		$	47		$	8		$	16	$	(71	)	$	47
Comprehensive net income	$	47		$	(41	)	$	8		$	209	$	(71	)	$	152

	Quarterly Period Ended December 29, 2018
	Parent			Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	—		$	141		$	1,377	$	454		$	—		$	1,972
Cost of goods sold		—			85			1,141		390			—			1,616
Selling, general and administrative		—			13			87		24			—			124
Amortization of intangibles		—			—			36		6			—			42
Restructuring and transaction activities		—			—			8		6			—			14
Operating income (loss)		—			43			105		28			—			176
Other income, net		—			1			1		(2	)		—			—
Interest expense, net		—			5			45		14			—			64
Equity in net income of subsidiaries		(112	)		(67	)		—		—			179			—
Income before income taxes		112			104			59		16			(179	)		112
Income tax expense		24			16			—		8			(24	)		24
Net income	$	88		$	88		$	59	$	8		$	(155	)	$	88
Comprehensive net income	$	88		$	79		$	59	$	(4	)	$	(155	)	$	67

Condensed Supplemental Consolidated Balance Sheets

	December 28, 2019
	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
Current assets	$	—	$	269	$	1,153	$	2,251	$	—		$	3,673
Intercompany receivable		549		1,078		—		332		(1,959	)		—
Property, plant, and equipment		—		77		1,696		3,026		—			4,799
Other assets		1,968		13,415		4,671		4,420		(15,922	)		8,552
Total assets	$	2,517	$	14,839	$	7,520	$	10,029	$	(17,881	)	$	17,024
Current liabilities	$	—	$	460	$	514	$	1,103	$	—		$	2,077
Intercompany payable		—		—		1,959		—		(1,959	)		—
Other long-term liabilities		731		11,715		68		647		—			13,161
Stockholders' equity		1,786		2,664		4,979		8,279		(15,922	)		1,786
Total liabilities and stockholders' equity	$	2,517	$	14,839	$	7,520	$	10,029	$	(17,881	)	$	17,024

	September 28, 2019
	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
Current assets	$	—	$	172	$	1,065	$	2,520	$	—		$	3,757
Intercompany receivable		503		1,401		—		381		(2,285	)		—
Property, plant and equipment		—		78		1,645		2,991		—			4,714
Other assets		1,918		12,873		4,706		4,252		(15,751	)		7,998
Total assets	$	2,421	$	14,524	$	7,416	$	10,144	$	(18,036	)	$	16,469
Current liabilities	$	—	$	349	$	513	$	1,177	$	—		$	2,039
Intercompany payable		—		—		1,859		426		(2,285	)		—
Other long-term liabilities		803		11,465		73		471		—			12,812
Stockholders' equity		1,618		2,710		4,971		8,070		(15,751	)		1,618
Total liabilities and stockholders' equity	$	2,421	$	14,524	$	7,416	$	10,144	$	(18,036	)	$	16,469

Condensed Supplemental Consolidated Statements of Cash Flows

	Quarterly Period Ended December 28, 2019
	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Cash Flow from Operating Activities	$	—		$	42		$	97		$	79		$	—		$	218
Cash Flow from Investing Activities
Additions to  property, plant, and equipment		—			—			(66	)		(82	)		—			(148	)
(Contributions) distributions to/from subsidiaries		(2	)		2			—			—			—			—
Acquisition of business		—			—			—			1			—			1
Divestiture of business		—			(1	)		—			—			—			(1	)
Intercompany advances (repayments)		—			191			—			—			(191	)		—
Net cash from investing activities		(2	)		192			(66	)		(81	)		(191	)		(148	)
Cash Flow from Financing Activities
Repayments on long-term borrowings		—			(161	)		(1	)		(2	)		—			(164	)
Proceeds from issuance of common stock		2			—			—			—			—			2
Debt financing costs		—			(2	)		—			—			—			(2	)
Changes in intercompany balances		—			—			(6	)		(185	)		191			—
Net cash from financing activities		2			(163	)		(7	)		(187	)		191			(164	)
Effect of exchange rate changes on cash		—			—			—			17			—			17
Net change in cash		—			71			24			(172	)		—			(77	)
Cash and cash equivalents at beginning of period		—			42			2			706			—			750
Cash and cash equivalents at end of period	$	—		$	113		$	26		$	534		$	—		$	673

	Quarterly Period Ended December 29, 2018
	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Cash Flow from Operating Activities	$	—		$	55		$	155		$	(49	)	$	—		$	161
Cash Flow from Investing Activities
Additions to property, plant, and equipment		—			—			(59	)		(16	)		—			(75	)
(Contributions) distributions to/from subsidiaries		47			(47	)		—			—			—			—
Intercompany advances (repayments)		—			38			—			—			(38	)		—
Net cash from investing activities		47			(9	)		(59	)		(16	)		(38	)		(75	)
Cash Flow from Financing Activities
Repayments on long-term borrowings		—			(108	)		(2	)		—			—			(110	)
Proceeds from issuance of common stock		5			—			—			—			—			5
Repurchase of common stock		(52	)		—			—			—			—			(52	)
Payment of tax receivable agreement		(16	)		—			—			—			—			(16	)
Changes in intercompany balances		16			—			(93	)		39			38			—
Net cash from financing activities		(47	)		(108	)		(95	)		39			38			(173	)
Effect of exchange rate changes on cash		—			—			—			(1	)		—			(1	)
Net change in cash		—			(62	)		1			(27	)		—			(88	)
Cash and cash equivalents at beginning of period		—			133			4			244			—			381
Cash and cash equivalents at end of period	$	—		$	71		$	5		$	217		$	—		$	293