BERY Berry Global Group Inc

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

For the quarterly period ended December 28, 2024

OR

For the transition period from __________ to __________

Commission File Number 001-35672

Securities registered pursuant to Section 12(b) of the Exchange Act:

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  ☒

There were 115.8 million shares of common stock outstanding at February 5, 2025.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Information included or incorporated by reference in Berry Global Group, Inc.’s filings with the U.S. Securities and Exchange Commission (the “SEC”) and press releases or other public statements contains or may contain forward-looking statements.  This report includes “forward-looking” statements with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events.  These statements contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “project,” “outlook,” “anticipates” or “looking forward” or similar expressions that relate to our strategy, plans, intentions, or expectations.  All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates, and financial results or to our expectations regarding future industry trends are forward-looking statements.  In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments.  These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected.  All forward-looking statements are made only as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Additionally, we caution readers that the list of important factors discussed in our most recent Form 10-K in the section titled “Risk Factors” and subsequent periodic reports filed with the SEC may not contain all of the material factors that are important to you.  In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur.  Accordingly, readers should not place undue reliance on those statements.

Berry Global Group, Inc.

Form 10-Q Index

For Quarterly Period Ended December 28, 2024

Berry Global Group, Inc.

Consolidated Statements of Income

(Unaudited)

(in millions of dollars, except per share amounts)

Consolidated Statements of Comprehensive Income

(Unaudited)

(in millions of dollars)

See notes to consolidated financial statements.

Berry Global Group, Inc.

Consolidated Balance Sheets

(in millions of dollars)

See notes to consolidated financial statements.

Berry Global Group, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in millions of dollars)

See notes to consolidated financial statements.

Berry Global Group, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

(in millions of dollars)

See notes to consolidated financial statements.

Berry Global Group, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

(tables in millions of dollars, except per share data)

1.  Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of Berry Global Group, Inc. (“the Company,” “we,” or “Berry”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim reporting.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts and disclosures at the date of the financial statements and during the reporting period.  Actual results could differ from those estimates.  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included, and all subsequent events up to the time of the filing have been evaluated.  For further information, refer to the Company’s most recent Form 10-K filed with the SEC.

The Condensed Consolidated Balance Sheet at September 28, 2024 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP for complete financial statements.

On November 4, 2024 (the “Distribution Date”), Berry completed the spin-off and merger (the “spin-off”) of its former Health, Hygiene & Specialties Global Nonwovens and Films business ("HHNF") with Glatfelter Corporation ("GLT"), to create Magnera Corporation ("Magnera"). To effect the spin-off, each Berry stockholder received 0.276305 shares of Magnera's common stock for every one share of Berry common stock (which also reflects the 1-13 reverse stock split effected by Magnera on November 4, 2024), held by each such Berry stockholder on the spin-off record date. On November 5, 2024, Magnera's common stock began trading on the New York Stock Exchange under the symbol “MAGN”. The Company did not retain any equity interest in Magnera.

In accordance with U.S. GAAP, the financial position and results of operations of the HHNF business are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented. The restated historical financial statements reflecting the spin-off are unaudited but have been derived from Berry’s historical audited annual reports. With the exception of Note 2, the Notes to the Unaudited Condensed Consolidated Financial Statements reflect the continuing operations of Berry. See Note 2 - Discontinued Operations below for additional information regarding discontinued operations.

Certain amounts in the prior year’s condensed consolidated financial statements and related footnotes thereto have been reclassified to conform with the current year presentation as a result of the spin-off of HHNF.

Upon completion of the spin-off, Berry has concluded at November 4, 2024 that it has three reportable segments, based on the way the Company evaluates its financial performance and manages its operations. Prior to the completion of the spin-off, the Company had four reportable segments, Consumer Packaging North America, Consumer Packaging International, Flexibles, and the former Health, Hygiene & Specialties. The Company’s former Health, Hygiene & Specialties reportable segment included the Company’s HHNF business.

Statements in this report that are not of historical fact are forward-looking statements that involve risks and uncertainties that could affect the actual results of the Company. A description of the important factors that could cause Berry’s actual results to differ materially from the forward looking statements contained in this report may be found in this report and Berry’s other reports filed with the Securities and Exchange Commission (the “SEC”). For further information, refer to the consolidated financial statements, footnotes and definitions thereto included in the Company’s Annual Report on Form 10-K for the year ended September 28, 2024, filed with the SEC on November 26, 2024.

2.  Discontinued Operations

As discussed in Note 1 above, on November 4, 2024, the Company completed the spin-off of HHNF and the requirements for the presentation of HHNF as a discontinued operation were met on that date. Accordingly, HHNF’s historical financial results are reflected in the Company’s unaudited condensed consolidated financial statements as discontinued operations. The Company did not allocate any general corporate overhead or interest expense to discontinued operations.

The financial results of HHNF are presented as loss from discontinued operations, net of income taxes in the unaudited Condensed Consolidated Statements of Income. The following table presents the financial results of HHNF (dollars in millions).

		Quarterly Period Ended
		December 28, 2024				December 30, 2023
Net sales		$	204			$	520
Cost of sales			179				476
Selling, general and administrative expenses			9				29
Amortization of intangibles			4				13
Business consolidation and other activities			79				10
Operating loss			(67	)			(8	)
Interest expense			1				1
Other expense (income)			2				(3	)
Income (loss) before income taxes			(70	)			(6	)
Income tax (expense) benefit			3				—
Net income (loss) from discontinued operations			(67	)			(6	)

The Company has incurred $77 million during fiscal 2025 in separation costs related to the spin-off of HHNF, and is reported in Business consolidation and other activities. These costs are primarily related to professional fees associated with planning the spin-off, as well as spin-off activities within finance, tax, legal and information system functions and certain investment banking fees incurred upon the completion of the spin-off.

The following table summarizes the carrying value of major classes of assets and liabilities of HHNF, reclassified as assets and liabilities of discontinued operations at September 28, 2024 (dollars in millions).

		September 28, 2024
Assets
Cash and cash equivalents		$	230
Receivables, net			335
Inventories, net			260
Other current assets			60
Total current assets, discontinued operations		$	885
Property, plant and equipment, net		$	948
Goodwill and intangibles, net			1,036
Right of use asset			50
Other assets			16
Total non-current assets, discontinued operations		$	2,050
Liabilities
Accounts payable		$	296
Other current liabilities			115
Total current liabilities, discontinued operations		$	411
Deferred income taxes		$	17
Operating lease liability			39
Other non-current liabilities			89
Total non-current liabilities, discontinued operations		$	145

In connection with the spin-off, the Company entered into definitive agreements with Magnera that, among other matters, set forth the terms and conditions of the spin-off and provide a framework for Berry’s relationship with Magnera after the spin-off, including the following:

Transition Services Agreement

Pursuant to the Transition Services Agreement (TSA), Berry or one of its subsidiaries will provide various services to Magnera and its subsidiaries and Magnera or one of its subsidiaries agreed to provide various services to Berry for a limited time to help ensure an orderly transition following the spin-off. The services will terminate no later than November 4, 2026. Income from the TSA is not material to the Consolidated Statements of Income.

Tax Matters Agreement

Pursuant to the Tax Matters Agreement, Berry and Magnera allocated the liability for taxes and certain tax assets between the two companies. The Tax Matters Agreement also governs the parties’ respective rights, responsibilities, and obligations with respect to U.S. federal, state, local and foreign taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the spin-off and certain related transactions to qualify as tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, and assistance and cooperation in respect of tax matters.

Pursuant to the Tax Matters Agreement, Berry is the primary obligor on all taxes which relate to any period prior to November 4, 2024.

Financing Activities

In connection with the close of the spin-off, Treasure Holdco, Inc. (Treasure), at the time a fully consolidated subsidiary of Berry, entered into $1.59 billion of new debt obligations. The debt was ultimately transferred to HHNF in connection with the spin-off and is a non-cash transaction. Cash transferred to the HHNF business related to the spin-off was $624 million.

3.  Revenue and Accounts Receivable

Our revenues are primarily derived from the sale of flexible and rigid products.  Revenue is recognized when performance obligations are satisfied, in an amount reflecting the consideration to which the Company expects to be entitled.  We consider the promise to transfer products to be our sole performance obligation.  If the consideration agreed to in a contract includes a variable amount, we estimate the amount of consideration we expect to be entitled to in exchange for transferring the promised goods to the customer using the most likely amount method.  Our main sources of variable consideration are customer rebates.  There are no material instances where variable consideration is constrained and not recorded at the initial time of sale.  Generally, our revenue is recognized at a point in time for standard promised goods at the time of shipment, when title and risk of loss pass to the customer.  The accrual for customer rebates was $111 million and $99 million at December 28, 2024 and September 28, 2024, respectively, and is included in Other current liabilities on the Consolidated Balance Sheets.  The Company disaggregates revenue based on reportable business segment, geography, and significant product line.  Refer to Note 10. Segment and Geographic Data for further information.

Accounts receivable are presented net of allowance for credit losses of $17 million at December 28, 2024 and September 28, 2024.  The Company records current expected credit losses based on a variety of factors including historical loss experience and current customer financial condition.  The changes to our current expected credit losses, write-off activity, and recoveries were not material for any of the periods presented.

The Company has entered into various factoring agreements, to sell certain receivables to third-party financial institutions. Agreements which result in true sales of the transferred receivables, which occur when receivables are transferred without recourse to the Company, are reflected as a reduction of trade receivables, net on the consolidated balance sheets and the proceeds are included in the cash flows from operating activities in the consolidated statements of cash flows.

4.  Acquisitions and Dispositions

CMG Plastics

In October 2024, the Company acquired CMG Plastics, a leading plastics injection molding company, for a purchase price of $48 million.  The acquired business is operated within the Consumer Packaging North America segment.  To finance the purchase, the Company used existing liquidity.  The acquisition has been accounted for under the purchase method of accounting and accordingly, the purchase price has been allocated to the identifiable assets and liabilities based on preliminary values at the acquisition date.  The Company has recognized $29 million of goodwill on this transaction primarily as a result of expected cost synergies and does not expect goodwill to be deductible for tax purposes.

F&S Tool Inc.

In April 2024, the Company acquired F&S Tool Inc. (“F&S”), a leading manufacturer of high output, high efficiency injection molding applications, for a purchase price of $68 million. The Company used existing liquidity to finance the acquisition, and the business is operated within the Consumer Packaging North America segment. The F&S acquisition has been accounted for under the purchase method of accounting, and the Company has not finalized the allocation of the purchase price to the fair value of the assets and liabilities assumed. The preliminary estimated fair value of assets acquired and liabilities assumed consisted of working capital of $3 million, property and equipment of $19 million, intangible assets of $22 million, goodwill of $35 million, and net other long-term liabilities of $11 million. The Company has recognized goodwill on this transaction primarily as a result of expected cost synergies and does not expect goodwill to be deductible for tax purposes.

Tapes

On November 24, 2024, the Company entered into a definitive agreement to sell its Specialty Tapes business (“Tapes”) for a purchase price of $443 million after closing adjustments. The Tapes business is currently operated within the Flexibles segment, and had annual revenues of $340 million in fiscal 2024 and $331 million in fiscal 2023. The transaction was completed in February 2025. The Company estimates a book gain of $190 million will be recorded based on the preliminary purchase price allocation. The current balance sheet consists of working capital of $47 million, property and equipment of $45 million, and intangible assets and goodwill of $161 million.

Amcor

On November 19, 2024, the Company announced that it has entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Amcor plc, a Jersey public company (“Amcor”) and Aurora Spirit, Inc., a Delaware corporation and wholly-owned subsidiary of Amcor (“Merger Sub”). The Merger Agreement provides for, among other things and subject to the satisfaction or waiver of specified conditions set forth therein, the merger of Merger Sub with and into Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Amcor. Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of the Company’s common stock issued and outstanding (excluding shares held by the Company as treasury stock immediately prior to the Effective Time) will be converted into the right to receive 7.25 fully paid and nonassessable Amcor ordinary shares (and, if applicable, cash in lieu of fractional shares), less any applicable withholding taxes.

The completion of the Merger is subject to certain conditions, including: (i) the adoption of the Merger Agreement by the Company’s stockholders, (ii) the approval of the issuance of Amcor ordinary shares in the Merger by Amcor’s shareholders, (iii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the absence of any agreement with either the Federal Trade Commission or Antitrust Division of the Department of Justice not to complete the Merger, (iv) the receipt of other required regulatory approvals, (v) the absence of any order or law that has the effect of enjoining or otherwise prohibiting the completion of the Merger, (vi) the approval for listing of the Amcor ordinary shares to be issued in connection with the Merger on the New York Stock Exchange and the effectiveness of a registration statement on Form S-4 with respect to such ordinary shares, which was declared effective on January 23, 2025, (vii) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (viii) performance in all material respects by each party of its respective obligations under the Merger Agreement and (ix) the absence of certain changes that have had, or would reasonably be expected to have, a material adverse effect with respect to each of the Company and Amcor.

Amcor will be required to pay the Company a termination fee equal to $260 million in specified circumstances, including if Amcor terminates the Merger Agreement to enter into a superior proposal or if the Company terminates the Merger Agreement following a change of recommendation by Amcor’s Board of Directors, in each case, subject to the terms and conditions of the Merger Agreement. The Company will be required to pay Amcor a termination fee equal to $260 million in specified circumstances, including if the Company terminates the Merger Agreement to enter into a superior proposal or if Amcor terminates the Merger Agreement following a change of recommendation by the Company’s Board of Directors, in each case, subject to the terms and conditions of the Merger Agreement. The foregoing description of the Merger Agreement and the Merger does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is attached as Exhibit 2.1 to the Current Report on Form 8-K/A filed by the Company on November 19, 2024 and which is incorporated herein by reference.

5. Business Consolidation and Other Activities

In fiscal 2023, the Company initiated cost savings initiatives including plant rationalization in all segments as part of the 2023 restructuring plan.  The Company expects total cash and non-cash expense of the plan to be approximately $250 million, with the operations savings intended to counter general economic softness.  All initiatives are expected to be fully implemented by the end of fiscal 2025.

The table below includes the significant components of business consolidation and other activities, by reporting segment:

		Quarterly Period Ended								Restructuring Plan
		December 28, 2024				December 30, 2023				Life to Date
Consumer Packaging International		$	17			$	5			$	130
Consumer Packaging North America			9				5				32
Flexibles			9				2				25
Consolidated		$	35			$	12			$	187

Other activities consist of acquisition, divestiture and other business optimization related costs. During the Quarter, $18 million of the transaction activities related to the proposed merger with Amcor. The table below sets forth the activity with respect to the charges and the impact on our accrued reserves at December 28, 2024:

		Business Consolidation
		Employee Severance and Benefits				Facility Exit Costs				Transaction Activities				Total
Balance at September 28, 2024		$	29			$	—			$	—			$	29
Charges			1				8				26				35
Cash payments			(7	)			(8	)			(26	)			(41	)
Balance at December 28, 2024		$	23			$	—			$	—			$	23

6.  Leases

The Company leases certain manufacturing facilities, warehouses, office space, manufacturing equipment, office equipment, and automobiles.

Supplemental lease information is as follows:

Leases	Classification		December 28, 2024				September 28, 2024
Operating leases:
Operating lease right-of-use assets	Right-of-use asset		$	581			$	602
Current operating lease liabilities	Other current liabilities			118				122
Noncurrent operating lease liabilities	Operating lease liability			479				496
Finance leases:
Finance lease right-of-use assets	Property, plant, and equipment, net		$	25			$	27
Current finance lease liabilities	Current portion of long-term debt			9				6
Noncurrent finance lease liabilities	Long-term debt, less current portion			18				23

7.  Long-Term Debt

Long-term debt consists of the following:

Facility	Maturity Date		December 28, 2024				September 28, 2024
Term loan	July 2029		$	1,434			$	1,538
Revolving line of credit	June 2028			—				—
1.00% First Priority Senior Secured Notes (a)	January 2025			730				783
1.57% First Priority Senior Secured Notes	January 2026			1,525				1,525
4.875% First Priority Senior Secured Notes	July 2026			750				750
1.65% First Priority Senior Secured Notes	January 2027			400				400
1.50% First Priority Senior Secured Notes (a)	January 2027			391				419
5.50% First Priority Senior Secured Notes	April 2028			500				500
5.80% First Priority Senior Secured Notes	June 2031			800				800
5.65% First Priority Senior Secured Notes	January 2034			800				800
4.50% Second Priority Senior Secured Notes	February 2026			291				291
5.625% Second Priority Senior Secured Notes	July 2027			500				500
Debt discounts and deferred fees				(29	)			(31	)
Finance leases and other	Various			37				40
Total long-term debt				8,129				8,315
Current portion of long-term debt				(740	)			(810	)
Long-term debt, less current portion			$	7,389			$	7,505

(a)	Euro denominated

Debt discounts and deferred financing fees are presented net of Long-term debt, less the current portion on the Consolidated Balance Sheets and are amortized to Interest expense, net on the Consolidated Statements of Income through maturity. 

8.  Financial Instruments and Fair Value Measurements

In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors.  The Company may use derivative financial instruments to help manage market risk and reduce the exposure to fluctuations in interest rates and foreign currencies.  These financial instruments are not used for trading or other speculative purposes.

Cross-Currency Swaps

The Company is party to certain cross-currency swaps to hedge a portion of our foreign currency risk. Both the euro (€1,625 million) and pound sterling (£700 million) swap agreements mature June 2026. In addition to the cross-currency swaps, we hedge a portion of our foreign currency risk by designating foreign currency denominated long-term debt as net investment hedges of certain foreign operations. As of December 28, 2024, we had outstanding long-term debt of €375 million that was designated as a hedge of our net investment in certain euro-denominated foreign subsidiaries. Changes in the fair value of not designated derivatives and non-designated instruments are recorded in Other income (expense) on the Consolidated Statements of Income. When valuing cross-currency swaps the Company utilizes Level 2 inputs (substantially observable).

Interest Rate Swaps

The primary purpose of the Company’s interest rate swap activities is to manage interest expense variability associated with our outstanding variable rate term loan debt. When valuing interest rate swaps the Company utilizes Level 2 inputs (substantially observable).

As of December 28, 2024, the Company effectively had (i) a $400 million interest rate swap transaction that swaps a one-month variable SOFR contract for a fixed annual rate of 4.008%, (ii) a $450 million interest rate swap transaction that swaps a one-month variable SOFR contract for a fixed annual rate of 4.553%, (iii) and a $500 million interest rate swap transaction that swaps a one-month variable SOFR contract for a fixed annual rate of 4.648%. The Company's interest rate swap transactions all expire in June 2029.

The Company records the fair value positions of all derivative financial instruments on a net basis by counterparty for which a master netting arrangement is utilized. Balances on a gross basis are as follows:

Derivative Instruments	Hedge Designation	Balance Sheet Location		December 28, 2024				September 28, 2024
Cross-currency swaps	Not designated	Other long-term liabilities			28				—
Cross-currency swaps	Designated	Other long-term liabilities			95				271
Interest rate swaps	Designated	Other long-term assets			1				—
Interest rate swaps	Designated	Other long-term liabilities			22				75
Interest rate swaps	Not designated	Other long-term assets			—				—
Interest rate swaps	Not designated	Other long-term liabilities			53				62

The effect of the Company’s derivative instruments, including the amortization of previously settled swaps, on the Consolidated Statements of Income is as follows:

			Quarterly Period Ended
Derivative Instruments	Statements of Income Location		December 28, 2024				December 30, 2023
Cross-currency swaps	Interest expense		$	(4	)		$	(10	)
Interest rate swaps	Interest expense			(6	)			(21	)
Cross-currency swaps	Other expense (income)			(26	)			—

Non-recurring Fair Value Measurements

The Company has certain assets that are measured at fair value on a non-recurring basis when impairment indicators are present or when the Company completes an acquisition.  The Company adjusts certain long-lived assets to fair value only when the carrying values exceed the fair values.  The categorization of the framework used to value the assets is considered Level 3, due to the subjective nature of the unobservable inputs used to determine the fair value.  These assets that are subject to our annual impairment analysis primarily include our definite lived and indefinite lived intangible assets, including Goodwill and our property, plant and equipment.  The Company reviews Goodwill and other indefinite lived assets for impairment as of the first day of the fourth fiscal quarter each year and more frequently if impairment indicators exist.  The Company determined Goodwill and other indefinite lived assets were not impaired in our annual fiscal 2024 assessment.  No impairment indicators were identified in the current quarter.

Included in the following tables are the major categories of assets and their current carrying values, along with the impairment loss recognized on the fair value measurement for the period then ended:

		December 28, 2024
		Level 1				Level 2				Level 3				Total				Impairment
Indefinite-lived trademarks		$	—			$	—			$	207			$	207			$	—
Goodwill			—				—				4,103				4,103				—
Definite lived intangible assets			—				—				997				997				—
Property, plant, and equipment			—				—				3,483				3,483				—
Total		$	—			$	—			$	8,790			$	8,790			$	—

		September 28, 2024
		Level 1				Level 2				Level 3				Total				Impairment
Indefinite-lived trademarks		$	—			$	—			$	207			$	207			$	—
Goodwill			—				—				4,295				4,295				—
Definite lived intangible assets			—				—				1,086				1,086				—
Property, plant, and equipment			—				—				3,627				3,627				8
Total		$	—			$	—			$	9,215			$	9,215			$	8

The Company’s financial instruments consist primarily of cash and cash equivalents, long-term debt, interest rate and cross-currency swap agreements, and finance lease obligations.  The book value of our marketable long-term indebtedness exceeded fair value by $83 million as of December 28, 2024.  The Company’s long-term debt fair values were determined using Level 2 inputs (substantially observable).

9.  Income Taxes

In comparison to the statutory rate, the lower effective tax rate for the quarter was positively impacted by share-based stock compensation.

10.  Segment and Geographic Data

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker (“CODM”), which is our Chief Executive Officer. The Company’s operations historically included four reportable segments: Consumer Packaging International, Consumer Packaging North America, Flexibles, and Health, Hygiene & Specialties. The structure is designed to align us with our customers, provide improved service, and drive future growth in a cost- efficient manner.

Berry's reportable segments were impacted in the current period by the divestiture of the HHNF business. As a result of classifying the HHNF business as discontinued operations, Berry is now comprised of three reportable segments: Consumer Packaging International, Consumer Packaging North America, and Flexibles. The financial information reported for Consumer Packaging International, Consumer Packaging North America, and Flexibles are presented in the following tables:

		Quarterly Period Ended
		December 28, 2024				December 30, 2023
Net sales:
Consumer Packaging International		$	885			$	916
Consumer Packaging North America			769				699
Flexibles			731				718
Total net sales		$	2,385			$	2,333
Operating income:
Consumer Packaging International		$	28			$	29
Consumer Packaging North America			59				60
Flexibles			65				76
Total operating income		$	152			$	165
Depreciation and amortization:
Consumer Packaging International		$	78			$	80
Consumer Packaging North America			58				57
Flexibles			34				33
Total depreciation and amortization		$	170			$	170

Selected information by geographical region is presented in the following tables:

		Quarterly Period Ended
		December 28, 2024				December 30, 2023
Net sales:
United States and Canada		$	1,416			$	1,337
Europe			840				880
Rest of world			129				116
Total net sales		$	2,385			$	2,333

11.  Contingencies and Commitments

The Company is party to various legal proceedings involving routine claims which are incidental to its business.  Although the Company’s legal and financial liability with respect to such proceedings cannot be estimated with certainty, we believe that any ultimate liability would not be material to our financial position, results of operations or cash flows.

The Company has various purchase commitments for raw materials, supplies, and property and equipment incidental to the ordinary conduct of business.

12.  Basic and Diluted Earnings Per Share

Basic net income or earnings per share ("EPS") is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents.  Diluted EPS includes the effects of options and restricted stock units, if dilutive.

The following tables provide a reconciliation of the numerator and denominator of the basic and diluted EPS calculations:

		Quarterly Period Ended
(in millions, except per share amounts)		December 28, 2024				December 30, 2023
Numerator
Income from continuing operations		$	81			$	65
Loss from discontinued operations			(67	)			(6	)
Consolidated net income		$	14			$	59
Denominator
Weighted average common shares outstanding - basic			115.3				115.6
Dilutive shares			2.9				2.7
Weighted average common and common equivalent shares outstanding - diluted			118.2				118.3
Per common share earnings (loss)
Basic - Continuing operations		$	0.70			$	0.56
Basic - Discontinued operations			(0.58	)			(0.05	)
Basic		$	0.12			$	0.51
Diluted - Continuing operations		$	0.69			$	0.55
Diluted - Discontinued operations			(0.57	)			(0.05	)
Diluted		$	0.12			$	0.50

For the three months ended December 28, 2024 and December 30, 2023, 2.3 million and 2.4 million shares, respectively, were excluded from the diluted EPS calculation as their effect would be anti-dilutive.

13.  Accumulated Other Comprehensive Loss

The components and activity of Accumulated other comprehensive loss are as follows:

Quarterly Period Ended		Currency Translation				Defined Benefit Pension and Retiree Health Benefit Plans				Derivative Instruments				Accumulated Other Comprehensive Loss
Balance at September 28, 2024		$	(229	)		$	(44	)		$	(22	)		$	(295	)
Other comprehensive income (loss) before reclassifications			(185	)			(2	)			36				(151	)
Net amount reclassified from accumulated other comprehensive loss			—				—				—				—
Spin-off of HHNF business			171				—				—				171
Balance at December 28, 2024		$	(243	)		$	(46	)		$	14			$	(275	)

		Currency Translation				Defined Benefit Pension and Retiree Health Benefit Plans				Derivative Instruments				Accumulated Other Comprehensive Loss
Balance at September 30, 2023		$	(340	)		$	(84	)		$	88			$	(336	)
Other comprehensive income (loss) before reclassifications			139				—				(65	)			74
Net amount reclassified from accumulated other comprehensive loss			—				—				(12	)			(12	)
Balance at December 30, 2023		$	(201	)		$	(84	)		$	11			$	(274	)

14.  Subsequent Events

On January 15, 2025, the Company fully repaid the 1.00% First Priority Senior Secured Notes due January 2025 utilizing cash on hand.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

Business.  The Company’s operations are organized into three operating segments: Consumer Packaging International, Consumer Packaging North America, and Flexibles.  The structure is designed to align us with our customers, provide optimal service, drive future growth, and to facilitate synergy realization.  The Consumer Packaging International segment primarily consists of closures and dispensing systems, pharmaceutical devices and packaging, bottles and canisters, containers, and technical components.  The Consumer Packaging North America segment primarily consists of containers and pails, food service, closures, bottles and prescription vials, and tubes.  The Flexibles segment primarily consists of stretch and shrink films, converter films, institutional can liners, food and consumer films, retail bags, agriculture films, and tapes.

Raw Material Trends.  Our primary raw material is polymer resin.  In addition, we use other materials such as butyl rubber, adhesives, paper and packaging materials, linerboard, rayon, polyester fiber, and foil, in various manufacturing processes.  While temporary industry-wide shortages of raw materials have occurred, we have historically been able to manage the supply chain disruption by working closely with our suppliers and customers.  Changes in the price of raw materials are generally passed on to customers through contractual price mechanisms over time, during contract renewals and other means.

Outlook.  The Company is affected by general economic and industrial growth, raw material availability, cost inflation, supply chain disruptions, and general consumption levels.  Our business has both geographic and end market diversity, which reduces the effect of any one of these factors on our overall performance.  Our results are affected by our ability to pass through raw material and other cost changes to our customers, improve manufacturing productivity, and adapt to volume changes of our customers.  Despite global macro-economic challenges in the short-term attributed to continued rising inflation and general market softness, we continue to believe our underlying long-term fundamentals in all divisions remain strong.  For fiscal 2025, we project cash flow from operations between $1.125 to $1.225 billion and free cash flow between $600 to $700 million.  Projected fiscal 2025 free cash flow assumes $525 million of capital spending.  For the definition of free cash flow and further information related to free cash flow as a non-GAAP financial measure, see “Liquidity and Capital Resources.”

Results of Operations

Comparison of the Quarterly Period Ended December 28, 2024 (the “Quarter”) and the Quarterly Period Ended December 30, 2023 (the “Prior Quarter”)

Business integration expenses consist of restructuring and impairment charges, divestiture related costs, and other business optimization costs.  Tables present dollars in millions.