Segment Reporting

3 Months Ended

Mar. 31, 2020

Note 10 – Segment Reporting

We have four reportable segments - Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware and Presto Products. The key factors used to identify these reportable segments are the organization and alignment of our internal operations and the nature of our products. This reflects how our Chief Operating Decision Maker (“CODM”) monitors performance, allocates capital and makes strategic and operational decisions. We present segment adjusted EBITDA ("Adjusted EBITDA") as this is the financial measure by which management and our CODM allocate resources and analyze the performance of our reportable segments. Adjusted EBITDA represents each segment's earnings before interest, tax, depreciation and amortization and is further adjusted to exclude unrealized gains and losses on derivatives, costs associated with rationalizing operations and administrative functions, factoring discounts (pre-IPO), amortization of actuarial gains, the allocated related party management fee (pre-IPO) and IPO transaction-related costs.

	Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Segment Total		Unallocated⁽¹⁾			Total
Three Months Ended March 31, 2020	(in millions)
Net revenues	$	243	$	189	$	178	$	127	$	737		(7	)	$	730
Intersegment revenues		—		3		—		—		3		(3	)		—
Total segment net revenues		243		192		178		127		740		(10	)		730
Adjusted EBITDA		40		55		35		23		153
Depreciation and amortization		6		4		3		4		17		7			24

	Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Segment Total		Unallocated⁽¹⁾			Total
Three Months Ended March 31, 2019	(in millions)
Net revenues	$	213	$	161	$	164	$	127	$	665		—		$	665
Intersegment revenues		—		4		—		—		4		(4	)		—
Total segment net revenues		213		165		164		127		669		(4	)		665
Adjusted EBITDA		18		39		35		20		112
Depreciation and amortization		4		3		3		6		16		5			21

Segment assets consisted of the following:

	Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Segment Total		Unallocated⁽¹⁾		Total
	(in millions)
As of March 31, 2020	$	421	$	241	$	148	$	181	$	991	$	3,596	$	4,587
As of December 31, 2019		395		251		137		182		965		3,195		4,160

(1)

Unallocated includes the elimination of intersegment revenues, other revenue adjustments and certain corporate costs, depreciation and amortization and assets not allocated to segments. Unallocated assets are comprised of cash, accounts receivable, other receivables, entity-wide property, plant and equipment, entity-wide operating lease right-of-use assets, goodwill, intangible assets, related party receivables and other assets.

The following table presents a reconciliation of segment Adjusted EBITDA to GAAP income before income taxes:

	Three Months Ended March 31,
	2020			2019
	(in millions)
Segment Adjusted EBITDA	$	153		$	112
Corporate / unallocated expenses		(18	)		(2	)
		135			110
Adjustments to reconcile to GAAP income before income taxes
Depreciation and amortization		(24	)		(21	)
Interest expense, net		(27	)		(68	)
Factoring discount		—			(5	)
Allocated related party management fee		—			(2	)
IPO transaction-related costs		(14	)		—
Unrealized gains (losses) on derivatives		(4	)		7
Other		(1	)		1
Consolidated GAAP income before income taxes	$	65		$	22

Information in Relation to Products

Net revenues by product line are as follows:

	Three Months Ended March 31,
	2020			2019
	(in millions)
Waste and storage products ⁽¹⁾	$	316		$	288
Cooking products		243			213
Tableware		178			164
Other		(7	)		—
Net revenues	$	730		$	665

(1)	Waste and storage products are comprised of our Hefty Waste & Storage and Presto Products segments.

Our different product lines are generally sold to a common group of customers. 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.