reyn-10q_20210331.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 30, 2021, the registrant had 209,758,602 shares of common stock, $0.001 par value per share, outstanding.

This Quarterly Report on Form 10-Q contains certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our 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 those risks and uncertainties discussed in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and as updated in our Quarterly Reports on Form 10-Q. You should specifically consider the numerous risks outlined in those “Risk Factors” sections. These risks and uncertainties include factors related to:

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We are under no duty to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q to conform our prior statements to actual results or revised expectations.

Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 which was filed on February 12, 2021, under Part I, Item 1A. “Risk Factors” and as updated in our Quarterly Reports on Form 10-Q.

	For the Three Months Ended
	March 31,
	2021			2020
Net revenues	$	732		$	691
Related party net revenues		25			39
Total net revenues		757			730
Cost of sales		(565	)		(541	)
Gross profit		192			189
Selling, general and administrative expenses		(78	)		(82	)
Other expense, net		(3	)		(15	)
Income from operations		111			92
Interest expense, net		(12	)		(27	)
Income before income taxes		99			65
Income tax expense		(25	)		(39	)
Net income	$	74		$	26

Earnings per share:
Basic	$	0.35		$	0.14
Diluted	$	0.35		$	0.14

Weighted average shares outstanding:
Basic		209.7			188.8
Effect of dilutive securities		0.1			0.2
Diluted		209.8			189.0

	(Unaudited) As of March 31, 2021		As of December 31, 2020
Assets
Cash and cash equivalents	$	144	$	312
Accounts receivable (net of allowance for doubtful accounts of $1 and $1)		283		292
Other receivables		5		9
Related party receivables		10		8
Inventories		507		419
Other current assets		22		13
Total current assets		971		1,053
Property, plant and equipment (net of accumulated depreciation of $710 and $692)		611		612
Operating lease right-of-use assets, net		62		61
Goodwill		1,879		1,879
Intangible assets, net		1,084		1,092
Other assets		32		25
Total assets	$	4,639	$	4,722
Liabilities
Accounts payable	$	203	$	185
Related party payables		36		41
Current portion of long-term debt		25		25
Income taxes payable		34		6
Accrued and other current liabilities		126		175
Total current liabilities		424		432
Long-term debt		2,102		2,208
Long-term operating lease liabilities		52		51
Deferred income taxes		322		326
Long-term postretirement benefit obligation		54		53
Other liabilities		42		37
Total liabilities	$	2,996	$	3,107
Commitments and contingencies (Note 6)
Stockholders’ equity
Common stock, $0.001 par value; 2,000 shares authorized; 210 shares issued and outstanding		—		—
Additional paid-in capital		1,380		1,381
Accumulated other comprehensive income		4		1
Retained earnings		259		233
Total stockholders' equity		1,643		1,615
Total liabilities and stockholders' equity	$	4,639	$	4,722

	Common Stock		Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)			Net Parent (Deficit)			Accumulated Other Comprehensive Income			Total Equity (Deficit)
Balance as of December 31, 2019	$	—	$	—		$	—		$	(823	)	$	5		$	(818	)
Net income		—		—			20			6			—			26
Other comprehensive loss, net of income taxes		—		—			—			—			(2	)		(2	)
Net transfers from Parent		—		—			—			855			—			855
Reclassification of net parent (deficit) in RCP		—		38			—			(38	)		—			—
Issuance of common stock, net of costs		—		1,339			—			—			—			1,339
Dividends ($0.15 per share declared)		—		—			(31	)		—			—			(31	)
Other		—		1			—			—			—			1
Balance as of March 31, 2020	$	—	$	1,378		$	(11	)	$	—		$	3		$	1,370

Balance as of December 31, 2020	$	—	$	1,381		$	233		$	—		$	1		$	1,615
Net income		—		—			74			—			—			74
Other comprehensive income, net of income taxes		—		—			—			—			3			3
Dividends ($0.23 per share declared and paid)		—		—			(48	)		—			—			(48	)
Other		—		(1	)		—			—			—			(1	)
Balance as of March 31, 2021	$	—	$	1,380		$	259		$	—		$	4		$	1,643

	Three Months Ended
	March 31,
	2021			2020
Cash provided by (used in) operating activities
Net income	$	74		$	26
Adjustments to reconcile net income to operating cash flows:
Depreciation and amortization		26			24
Deferred income taxes		(6	)		28
Unrealized losses on derivatives		—			4
Stock compensation expense		2			1
Change in assets and liabilities:
Accounts receivable, net		9			(303	)
Other receivables		4			(1	)
Related party receivables		(2	)		9
Inventories		(88	)		(16	)
Accounts payable		23			10
Related party payables		(4	)		(20	)
Related party accrued interest payable		—			(18	)
Income taxes payable		29			11
Accrued and other current liabilities		(50	)		(7	)
Other assets and liabilities		(8	)		(3	)
Net cash provided by (used in) operating activities		9			(255	)
Cash used in investing activities
Acquisition of property, plant and equipment		(23	)		(23	)
Net cash used in investing activities		(23	)		(23	)
Cash (used in) provided by financing activities
Repayment of long-term debt		(106	)		—
Dividends paid		(48	)		—
Proceeds from long-term debt, net of discounts		—			2,472
Repayments of PEI Group Credit Agreement		—			(8	)
Advances from related parties		—			240
Repayments to related parties		—			(3,627	)
Deferred debt transaction costs		—			(28	)
Proceeds from IPO settlement facility		—			1,168
Repayment of IPO settlement facility		—			(1,168	)
Issuance of common stock		—			1,410
Equity issuance costs		—			(69	)
Net transfers to Parent		—			(14	)
Net cash (used in) provided by financing activities		(154	)		376
Effect of exchange rate on cash and cash equivalents		—			—
Net (decrease) increase in cash and cash equivalents		(168	)		98
Cash and cash equivalents at beginning of period		312			102
Cash and cash equivalents at end of period	$	144		$	200

Refer to Note 1 – Summary of Significant Accounting Policies and Note 10 – Related Party Transactions for details of significant non-cash investing and financing activities.

Reynolds Consumer Products Inc. and its subsidiaries (“we”, “us” or “our”) produce and sell products across three broad categories: cooking products, waste & storage products and tableware. We sell our products under brands such as Reynolds and Hefty, and also under store brands. Our product portfolio includes aluminum foil, wraps, disposable bakeware, trash bags, food storage bags and disposable tableware. We report four business segments: Reynolds Cooking & Baking; Hefty Waste & Storage; Hefty Tableware; and Presto Products.

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with United States generally accepted accounting principles ("GAAP") for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and notes required by GAAP for comprehensive annual financial statements.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2020, and should be read in conjunction with the disclosures therein. In our opinion, these interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to state fairly the financial condition, results of operations and cash flows for the periods presented. Operating results for interim periods are not necessarily indicative of annual operating results.

Prior to the completion of our Corporate Reorganization, as defined in our Registration Statement on Form S-1 (File No. 333-234731), and initial public offering (“IPO”) on February 4, 2020, we operated as part of Pactiv Evergreen Inc. (“PEI”) and not as a stand-alone entity. We represented the business that was previously reported as the Reynolds Consumer Products segment in the consolidated financial statements of PEI and its subsidiaries (collectively, “PEI Group” or the “Parent”). As part of our Corporate Reorganization, we reorganized the legal structure of our entities so they are all under a single parent entity, Reynolds Consumer Products Inc. In conjunction with our Corporate Reorganization and IPO, we separated from PEI Group on February 4, 2020.

Net Parent deficit represented the former Parent’s interest in our net assets. As a direct ownership relationship did not exist between the various entities of our previously combined group, a Net Parent deficit account was shown in our previously combined financial statements. The majority of transactions between us and PEI Group have a history of settlement or were settled for cash in conjunction with our separation from PEI Group and IPO. These transactions have been reflected in our condensed consolidated balance sheets as related party receivables and payables. Transactions that did not have a history of settlement were reflected in equity (deficit) in our previously combined balance sheets as Net Parent deficit and, when cash was utilized (contributed), in our condensed consolidated statements of cash flows as a financing activity in net transfers from (to) Parent.

On February 4, 2020, we completed our separation from PEI Group and the IPO of our common stock pursuant to a Registration Statement on Form S-1. In the IPO, we sold an aggregate of 54,245,500 shares of common stock, including 7,075,500 shares of common stock purchased by the underwriters on February 7, 2020 pursuant to their option to purchase additional shares, under the Registration Statement at a public offering price of $26.00 per share.

In conjunction with our separation from PEI Group and IPO, we reclassified PEI Group’s historical net investment in us to additional paid-in capital. Each share of our outstanding common stock, immediately prior to our IPO, was exchanged into 155,455 shares of common stock. In addition, certain related party borrowings owed to PEI Group were contributed as additional paid-in capital without the issuance of any additional shares.

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We adopted the standard as of January 1, 2021 with no material impact on our condensed consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We adopted the standard as of January 1, 2021 with no material impact on our condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to applying the guidance on contract modifications, hedge accounting, and other transactions, to simplify the accounting for transitioning from the London Interbank Offered Rate, and other interbank offered rates expected to be discontinued, to alternative reference rates. This ASU was effective upon its issuance and can be applied prospectively through December 31, 2022. We are currently assessing the impact of this standard on our consolidated financial statements.

In February 2020, we entered into new external debt facilities (“External Debt Facilities”), which consist of (i) a $2,475 million senior secured term loan facility (“Term Loan Facility”); and (ii) a $250 million senior secured revolving credit facility (“Revolving Facility”). In addition, on February 4, 2020 we entered into, and extinguished, a $1,168 million facility (“IPO Settlement Facility”). The proceeds from the Term Loan Facility and IPO Settlement Facility, net of transaction costs and original issue discounts, together with available cash, were used to repay accrued related party interest and a portion of the related party loans payable.

Borrowings under the External Debt Facilities bear interest at a rate per annum equal to, at our option, either a base rate or a LIBO rate plus an applicable margin of 1.75%. During September 2020, we entered into a series of interest rate swaps to hedge a portion of the interest rate exposure resulting from these borrowings.

The External Debt Facilities contain a springing financial covenant requiring compliance with a ratio of first lien net indebtedness to consolidated EBITDA, applicable solely to the Revolving Facility. The financial covenant is tested on the last day of any fiscal quarter only if the aggregate principal amount of borrowings under the Revolving Facility and drawn but unreimbursed letters of credit exceed 35% of the total amount of commitments under the Revolving Facility on such day.

We are currently in compliance with the covenants contained in our External Debt Facilities.

If an event of default occurs, the lenders under the External Debt Facilities are entitled to take various actions, including the acceleration of amounts due under the External Debt Facilities and all actions permitted to be taken by secured creditors.

The Term Loan Facility matures in February 2027. The Term Loan Facility amortizes in equal quarterly installments of $6 million, which commenced in June 2020, with the balance payable on maturity. During the first quarter of 2021, we made a voluntary principal payment of $100 million related to our Term Loan Facility.

The Revolving Facility matures in February 2025 and includes a sub-facility for letters of credit. As of March 31, 2021, we had no outstanding borrowings under the Revolving Facility, and we had $7 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility.

The fair value of our long-term debt as of March 31, 2021, which is a Level 2 fair value measurement, approximates the carrying value due to the variable market interest rate and the stability of our credit profile.

We granted restricted stock units (“RSUs”) in July 2019 to certain members of management, pursuant to retention agreements entered into with these employees (the “IPO Grants”). These RSUs vest upon satisfaction of both a performance-based vesting condition (the “IPO Condition”) and a service-based vesting condition (the “Service Condition”). The IPO Condition was satisfied when we completed our IPO on February 4, 2020. The Service Condition will be satisfied with respect to one-third of an employee’s RSUs on each anniversary from the date of our IPO for three consecutive years, subject to the employee’s continued employment through the applicable vesting date.

In addition, in conjunction with our Corporate Reorganization and IPO, we established an equity incentive plan for purposes of granting stock-based compensation awards to certain of our senior management, our non-executive directors and to certain employees, to incentivize their performance and align their interests with ours. We have granted RSUs to certain employees and non-employee directors that have a service-based vesting condition. In addition, we granted performance stock units (“PSUs”) to certain members of management that have a performance-based vesting condition. We account for forfeitures of outstanding but unvested grants in the period they occur. A maximum of 10.5 million shares of common stock were initially available for issuance under equity incentive awards granted pursuant to the plan. In the three months ended March 31, 2021, 0.2 million RSUs and 0.2 million PSUs were granted.

As of March 31, 2021, there were stock-based compensation awards representing approximately 0.6 million shares outstanding compared to 0.4 million shares outstanding as of December 31, 2020. For the three months ended March 31, 2021 and 2020, stock-based compensation expense was $2 million and $1 million, respectively.

We are from time to time party to litigation, legal proceedings and tax examinations arising from our operations. Most of these matters involve allegations of damages against us relating to employment matters, personal injury and commercial or contractual disputes. We record estimates for claims and proceedings that constitute a present obligation when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of such obligation can be made. While it is not possible to predict the outcome of any of these matters, based on our assessment of the facts and circumstances, we do not believe any of these matters, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations or cash flows. However, actual outcomes may differ from those expected and could have a material effect on our financial position, results of operations or cash flows in a future period.

As of March 31, 2021, there were no legal proceedings pending other than those for which we have determined that the possibility of a material outflow is remote.

The following table summarizes the changes in our balances of each component of accumulated other comprehensive income.

	Three Months Ended March 31,
	2021			2020
	(in millions)
Currency translation adjustments:
Balance as of beginning of period	$	(6	)	$	(6	)
Currency translation adjustments		—			(2	)
Other comprehensive income (loss)		—			(2	)
Balance as of end of period	$	(6	)	$	(8	)
Employee benefit plans:
Balance as of beginning of period	$	8		$	11
Other comprehensive income		—			—
Balance as of end of period	$	8		$	11
Interest rate derivatives:
Balance as of beginning of period	$	(1	)	$	—
Income arising during period		3			—
Other comprehensive income		3			—
Balance as of end of period	$	2		$	—
Accumulated other comprehensive income
Balance as of beginning of period	$	1		$	5
Other comprehensive income (loss)		3			(2	)
Balance as of end of period	$	4		$	3

Prior to our separation from PEI Group and IPO, our U.S. operations were included in the U.S. federal consolidated and certain state and local tax returns filed by PEI Group. We also file certain separate U.S. state and local and foreign income tax returns. For the periods prior to separation, income tax (expense) benefit and deferred tax balances are presented in these condensed consolidated financial statements as if we filed tax returns on a stand-alone basis. Upon separation from PEI Group, becoming a separate taxable entity and the change from carve-out financial statements to consolidated financial statements, we have remeasured certain deferred taxes. These adjustments have been recognized directly in equity.

Our income tax expense for the three months ended March 31, 2021 incorporated an expected annualized effective tax rate of approximately 24.5%, excluding the impact of discrete items, compared to 24.7% in the comparable prior year period. Our income tax expense for the three months ended March 31, 2020 included an incremental discrete expense of $23 million due to the remeasurement of our deferred tax asset associated with the deductibility of interest expense as a result of the enactment, subsequent to our separation from PEI Group, of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act on March 27, 2020. As a result of our inclusion in PEI Group’s U.S. federal consolidated and certain state and local tax returns prior to our IPO, the completion of PEI Group’s tax returns for the year ended December 31, 2020 may result in changes to deferred taxes we recognized as of February 4, 2020. Any future changes in these deferred taxes may impact our reported tax expense in a future period.

Our Chief Executive Officer, who has been identified as our Chief Operating Decision Maker ("CODM"), has evaluated how he views and measures our performance. In applying the criteria set forth in the standards for reporting information about segments in financial statements, we have determined that 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 CODM monitors performance, allocates capital and makes strategic and operational decisions. Our segments are described as follows:

Our Reynolds Cooking & Baking segment produces branded and store brand foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, plastic wrap, baking cups, oven bags and slow cooker liners. Our branded products are sold under the Reynolds Wrap, Reynolds KITCHENS and E-Z Foil brands in the United States and selected international markets, under the ALCAN brand in Canada and under the Diamond brand outside of North America.

Our Hefty Waste & Storage segment produces both branded and store brand trash and food storage bags. Our branded products are sold under the Hefty Ultra Strong, Hefty Strong Trash Bags, Hefty Renew and Hefty Slider Bags brands.

Our Hefty Tableware segment sells both branded and store brand disposable and compostable plates, bowls, platters, cups and cutlery. Our Hefty branded products include dishes and party cups.

Our Presto Products segment primarily sells store brand products in four main categories: food storage bags, trash bags, reusable storage containers and plastic wrap. Our Presto Products segment also includes our specialty business, which serves other consumer products companies by providing Fresh-Lock and Slide-Rite resealable closure systems.

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 commodity derivatives and IPO and separation-related costs.

Total assets by segment are those assets directly associated with the respective operating activities, comprising inventory, property, plant and equipment and operating lease right-of-use assets. Other assets, such as cash, accounts receivable and intangible assets, are monitored on an entity-wide basis and not included in segment information that is regularly reviewed by our CODM.

	Reynolds Cooking & Baking		Hefty Waste & Storage		Hefty Tableware		Presto Products		Segment Total		Unallocated⁽¹⁾			Total
Three Months Ended March 31, 2021	(in millions)
Net revenues	$	272	$	192	$	170	$	126	$	760	$	(3	)	$	757
Intersegment revenues		—		2		—		—		2		(2	)		—
Total segment net revenues		272		194		170		126		762		(5	)		757
Adjusted EBITDA		53		44		34		18		149
Depreciation and amortization		5		4		4		5		18		8			26

	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
	(in millions)
As of March 31, 2021	$	475	$	268	$	167	$	217	$	1,127	$	3,512	$	4,639
As of December 31, 2020		433		248		157		204		1,042		3,680		4,722

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

	Three Months Ended March 31,
	2021			2020
	(in millions)
Segment Adjusted EBITDA	$	149		$	153
Corporate / unallocated expenses		(9	)		(18	)
		140			135
Adjustments to reconcile to GAAP income before income taxes
Depreciation and amortization		(26	)		(24	)
Interest expense, net		(12	)		(27	)
IPO and separation-related costs		(3	)		(14	)
Unrealized losses on derivatives		—			(4	)
Other		—			(1	)
Consolidated GAAP income before income taxes	$	99		$	65

		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Statements of Income for the three months ended March 31, 2021 and 2020	2
	Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and 2020	3
	Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II.	OTHER INFORMATION	24
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26
	Signatures	27

	March 31, 2021		December 31, 2020
	(in millions)
Raw materials	$	152	$	138
Work in progress		51		54
Finished goods		270		194
Spare parts		34		33
Inventories	$	507	$	419