Segment Information

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Information

Note 18. Segment Information

In the second quarter of 2023, in conjunction with the Beverage Merchandising Restructuring, we implemented a new operating and reporting structure resulting in the combination of our legacy Food Merchandising and Beverage Merchandising segments, creating our Food and Beverage Merchandising segment. Refer to Note 3, Restructuring, Asset Impairment and Other Related Charges, for additional details. We also reorganized the management of certain product lines from our Foodservice segment to our Food and Beverage Merchandising segment.

As of the end of the second quarter of 2023, we analyze the results of our business through our Foodservice and Food and Beverage Merchandising segments. All prior periods have been recast to reflect the current reportable segment structure and the change in the management of certain product lines. These reportable segments reflect our operating structure and the manner in which our Chief Operating Decision Maker (“CODM”), who is our President and Chief Executive Officer, assesses information for decision-making purposes. The key factors used to identify these reportable segments are the organization of our internal operations and the nature of our products. This reflects how our CODM monitors performance, allocates capital and makes strategic and operational decisions. Our reportable segments are described as follows:

Foodservice - Manufactures a broad range of products that enable consumers to eat and drink where they want and when they want with convenience. Foodservice manufactures food containers, drinkware (hot and cold cups and lids), tableware, serviceware and other products which make eating on-the-go more enjoyable and easy to do.

Food and Beverage Merchandising - Manufactures products that protect and attractively display food and beverages while preserving freshness. Food and Beverage Merchandising products include cartons for fresh refrigerated beverage products, primarily serving dairy (including plant-based, organic and specialties), juice and other specialty beverage end-markets, clear rigid-display containers, containers for prepared and ready-to-eat food, trays for meat and poultry and egg cartons. It also produces fiber-based liquid packaging board for its

internal requirements and to sell to other fresh beverage carton manufacturers. Prior to June 2023, it also produced a range of paper-based products which it sold to paper and packaging converters.

Other/Unallocated - In addition to our reportable segments, we had other operating segments that did not meet the threshold for presentation as a reportable segment. These operating segments comprised the remaining components of our former closures business, which generated revenue from the sale of caps and closures, and are presented as “Other.” As of March 31, 2023, we had disposed of all of the remaining components of our former closures business. Unallocated includes corporate costs, primarily relating to general and administrative functions such as finance, tax and legal and the effects of the PPPE.

Information by Segment

We present reportable segment Adjusted EBITDA as this is the financial measure by which management and our CODM allocate resources and analyze the performance of our reportable segments.

A segment’s Adjusted EBITDA represents its earnings before interest, tax, depreciation and amortization and is further adjusted to exclude certain items, including but not limited to, restructuring, asset impairment and other related charges, gains or losses on the sale of businesses and noncurrent assets, non-cash pension income or expense, operational process engineering-related consultancy costs, business acquisition and integration costs and purchase accounting adjustments, unrealized gains or losses on derivatives, foreign exchange gains or losses on cash and gains or losses on certain legal settlements.

	Foodservice		Food and Beverage Merchandising		Reportable Segment Total
For the Three Months Ended June 30, 2023
Net revenues	$	656	$	770	$	1,426
Intersegment revenues		—		35		35
Total reportable segment net revenues		656		805		1,461
Adjusted EBITDA		128		109		237
For the Three Months Ended June 30, 2022
Net revenues	$	749	$	864	$	1,613
Intersegment revenues		—		42		42
Total reportable segment net revenues		749		906		1,655
Adjusted EBITDA		161		111		272
For the Six Months Ended June 30, 2023
Net revenues	$	1,270	$	1,585	$	2,855
Intersegment revenues		—		70		70
Total reportable segment net revenues		1,270		1,655		2,925
Adjusted EBITDA		234		210		444
For the Six Months Ended June 30, 2022
Net revenues	$	1,402	$	1,684	$	3,086
Intersegment revenues		—		73		73
Total reportable segment net revenues		1,402		1,757		3,159
Adjusted EBITDA		271		201		472

Reportable segment assets consisted of the following:

	Foodservice		Food and Beverage Merchandising		Reportable Segment Total
As of June 30, 2023	$	1,332	$	1,537	$	2,869
As of December 31, 2022		1,385		1,884		3,269

The following table presents a reconciliation of reportable segment Adjusted EBITDA to consolidated (loss) income before income taxes:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Reportable segment Adjusted EBITDA	$	237		$	272		$	444		$	472
Other		—			2			—			2
Unallocated		(20	)		(25	)		(38	)		(43	)
		217			249			406			431
Adjustments to reconcile to (loss) income before income taxes
Interest expense, net		(64	)		(50	)		(127	)		(99	)
Depreciation and amortization (excluding restructuring-related charges)		(82	)		(86	)		(166	)		(170	)
Beverage Merchandising Restructuring charges		(216	)		—			(403	)		—
Other restructuring and asset impairment charges (reversals)		(1	)		(1	)		—			(1	)
(Loss) gain on sale of businesses and noncurrent assets		(1	)		—			(1	)		27
Non-cash pension (expense) income		(3	)		(2	)		(4	)		8
Operational process engineering-related consultancy costs		—			(1	)		—			(4	)
Business integration costs		—			(2	)		—			(6	)
Unrealized gains (losses) on commodity derivatives		1			1			(1	)		6
Foreign exchange gains (losses) on cash		2			—			(2	)		(2	)
Executive transition charges		—			(2	)		—			(2	)
Gains (losses) on legal settlements		—			15			(1	)		15
Costs associated with legacy facility		—			(3	)		—			(6	)
Other		—			1			—			1
(Loss) income before tax	$	(147	)	$	119		$	(299	)	$	198

Information in Relation to Products

Net revenues by product line are as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Foodservice
Drinkware	$	304		$	348		$	568		$	612
Containers		238			275			467			542
Tableware		68			73			143			138
Serviceware and other		46			53			92			110
Food and Beverage Merchandising
Cartons for fresh beverage products		182			230			377			447
Bakery/snack/produce/fruit containers		139			152			266			287
Liquid packaging board		121			121			249			236
Meat trays		109			91			215			175
Tableware		103			111			206			213
Paper products		27			69			74			140
Prepared food trays		36			40			72			82
Egg cartons		32			29			70			57
Other		56			63			126			120
Reportable segment net revenues		1,461			1,655			2,925			3,159
Other / Unallocated
Other		—			27			2			49
Intersegment eliminations		(35	)		(42	)		(70	)		(73	)
Net revenues	$	1,426		$	1,640		$	2,857		$	3,135

For all product lines, there is a relatively short time period between the receipt of the order and the transfer of control over the goods to the customer.