EDGAR 10-K Filing

Company CIK: 1378992
Filing Year: 2024
Filename: 1378992_10-K_2024_0001140361-24-047881.json

---

ITEM 1. BUSINESS
Item 1. BUSINESS
(In millions of dollars, except as otherwise noted)
General
At Berry Global Group, Inc. (“Berry,” “we,” or the “Company”), we create innovative packaging solutions that we believe make life better for people and the planet. We do this every day by leveraging our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the world. Harnessing the strength in our diversity and industry-leading talent of over 34,000 global employees across more than 200 locations, we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy. The challenges we solve and the innovations we pioneer benefit our customers at every stage of their journey. We sell our products predominantly into stable, consumer-oriented end markets, such as healthcare, personal care, and food and beverage. Our customers consist of a diverse mix of global, national, regional and local specialty businesses. For the fiscal year ended September 28, 2024 (“fiscal 2024”), no single customer represented more than 5% of net sales and our top ten customers represented 14% of net sales. We believe our manufacturing processes, manufacturing footprint and our ability to leverage our scale to reduce costs, positions us as a low-cost manufacturer relative to our competitors.
Additional financial information about our segments is provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Notes to Consolidated Financial Statements” sections of this report.
Segment Overview
The Company’s operations are organized into four reporting segments: Consumer Packaging International, Consumer Packaging North America, Flexibles, and Health, Hygiene & Specialties. The structure is designed to align us with our customers, provide optimal service, drive future growth, and to facilitate synergy realization.
Consumer Packaging International
The Consumer Packaging International segment is a manufacturer of rigid products that primarily services non-North American markets. Product groups within the segment include Closures and Dispensing Systems, Pharmaceutical Devices and Packaging, Bottles and Canisters, Containers, and Technical Components. In fiscal 2024, Consumer Packaging International accounted for 32% of our consolidated net sales.
Consumer Packaging North America
The Consumer Packaging North America segment is a manufacturer of rigid products that primarily services North American markets. Product groups within the segment include Containers and Pails, Foodservice, Closures, Bottles and Prescription Vials, and Tubes. In fiscal 2024, Consumer Packaging North America accounted for 24% of our consolidated net sales.
Flexibles
The Flexibles segment is a manufacturer of flexible products that services primarily North American and European markets. Product groups within the segment include Stretch and Shrink Films, Converter Films, Institutional Can Liners, Food and Consumer Films, Retail Bags, and Agriculture Films. In fiscal 2024, Flexibles accounted for 23% of our consolidated net sales.
Health, Hygiene & Specialties
The Health, Hygiene & Specialties segment is a manufacturer of non-woven and related products that services global markets. Product groups within the segment include Healthcare, Hygiene, Specialties, and Tapes. In fiscal 2024, Health, Hygiene & Specialties accounted for 21% of our consolidated net sales.
In February 2024, the Company announced plans for a spin-off and merger of our Health, Hygiene and Specialties Nonwovens and Films business with Glatfelter Corporation. The spin-off occurred on November 4, 2024 and the historical business will be presented as a Discontinued Operation in future filings.
Marketing, Sales, and Competition
We reach our large and diversified customer base through a direct sales force of dedicated professionals and the strategic use of distributors. Our scale enables us to dedicate certain sales and marketing efforts to particular products or customers, when applicable, which enables us to develop expertise that we believe is valued by our customers.
The major markets in which the Company sells its products are highly competitive. Areas of competition include service, innovation, quality, and price. This competition is significant as to both the size and the number of competing firms. Competitors include but are not limited to Amcor, Silgan, Aptar, 3M, and Sigma.
Raw Materials
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.
Intellectual Property
While important to our business in the aggregate, the loss of any single patent or license alone would not have a material adverse effect on our results of operations as a whole or those of our reportable segments.
Environmental and Sustainability
We believe there will always be a leading role for Berry’s product offerings due to our ability to promote customer brands by providing superior clarity, protection, design versatility, consumer safety, convenience, cost efficiency, barrier properties, and environmental performance. We collaborate with customers, suppliers, and innovators to create industry-leading solutions which offer lighter weight products, enable longer shelf-life, and protect products throughout supply chains.
Sustainability is comprehensively embedded across our business, from how we run our manufacturing operations more efficiently to the investments we are making in sustainable packaging. We believe responsible packaging is the answer to achieving less waste and that responsible packaging requires four things - innovative design, continued development of renewable and advanced raw materials, waste management infrastructure, and consumer participation. Berry is committed to responsible packaging and has (1) targeted 100% reusable, recyclable, or compostable packaging by 2025, (2) significantly increased our use of circular materials in order to meet our targeted 30% circular content by 2030, and (3) worked to drive greater recycling rates around the world. With our global scale, deep industry experience, and strong capabilities, we are uniquely positioned to assist our customer in the design and development of more sustainable packaging.
We also work globally on continuous improvement of employee safety, energy usage, water efficiency, waste reduction, recycling and reducing our Green house Gas (GHG) emissions. Our teams focus on improving the circularity and reducing the carbon footprint of our products. We anticipate higher demand for products with lower emissions intensity where polymer resin based products are inherently well positioned since they typically have lower GHG emissions per functional unit compared to heavier alternatives such as paper, metal and glass. Additionally, there is also significant work being done on the use of recycled and bio-based content, which typically has lower associated GHG emissions compared to other virgin materials.
Human Capital and Employees
Overview
Berry’s mission of ‘Always Advancing to Protect What’s Important’ has never been more critical as we are proud to work alongside our customers to supply products that are essential to everyday life. We continue to prioritize the health and well-being of the communities we serve as well as our employees and their families. We employ approximately 42,000 employees, and approximately 19% of those employees are covered by collective bargaining agreements. The majority of these agreements are due for renegotiation annually.
Health and Safety
Employee safety is our number one core value. We believe when it comes to employee safety, our best should always be our standard. It is through the adherence to our global Environment, Health, and Safety principles we have been able to identify and mitigate operational risks and drive continuous improvement, resulting in an OSHA incident rate below 1.0 which is significantly lower than the industry average.
Talent and Development
We seek to attract, develop and retain talent throughout the company. Our succession management strategy focuses on a structured succession framework and multiple years of performance. Our holistic approach to developing key managers and identifying future leaders includes challenging assignments, formal development plans and professional coaching. Resources to support employee development include operational programs, university partnerships, internal e-learning requirements, tuition reimbursement programs, and apprenticeships.
Employee Engagement
We seek to ensure that everyone is motivated to perform every day. To further that objective, our engagement approach focuses on clear communication and recognition. We communicate through regular employee meetings, at both the corporate and operating division levels, with business and market updates and information on production, safety, quality and other operating metrics. We have many recognition-oriented awards throughout our company and conduct company-wide engagement surveys which have generally indicated high levels of engagement and trust in Berry’s leadership.
Inclusion and Diversity
We strive to build a safe and inclusive culture where employees feel valued and treated with respect. We believe inclusion helps drive engagement, innovation and organizational growth. We provide annual training to our diversified global workforce on the importance of having a culture of inclusion.
Ethics
Our employees are expected to act with integrity and we maintain a Global Code of Business Ethics which is attested by every Berry employee and provides the Company's framework for ethical business. We provide targeted annual training across the globe to reinforce our commitment to ethics and drive adherence to the laws in each jurisdiction in which we operate.
Available Information
We make available, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments, if any, to those reports through our internet website as soon as reasonably practicable after they have been electronically filed with the SEC. Our internet address is www.berryglobal.com. The information contained on our website is not being incorporated herein.

---

ITEM 1A. RISK FACTORS
Item 1A. RISK FACTORS
Operational Risks
Global economic conditions may negatively impact our business operations and financial results.
Challenging global conditions, including inflation or military conflicts, may negatively impact our business operations and financial results. When challenging economic conditions exist, our customers may delay, decrease or cancel purchases from us, and may also delay payment or fail to pay us altogether. Suppliers may have difficulty filling our orders and distributors may have difficulty getting our products to customers, which may affect our ability to meet customer demands, and result in a loss of business. Weakened global economic conditions may also result in unfavorable changes in our product prices, product mix and profit margins. Although we take measures to mitigate the impact of inflation, including through pricing actions and productivity programs, if these actions are not effective our cash flow, financial condition, and results of operations could be adversely impacted. In addition, there could be a time lag between recognizing the benefit of our mitigating actions versus when the challenge occurs and there is no assurance that our mitigating measures will be able to fully mitigate the negative impacts.
Political volatility may also contribute to the general economic conditions and regulatory uncertainty in regions in which we operate. Future unrest and changing policies could result in an adverse impact to our financial condition. Political developments can also disrupt the markets we serve and the tax jurisdictions in which we operate and may affect our business, financial condition and results of operations.
Raw material inflation or shortage of available materials could harm our financial condition and results of operations.
Raw materials are subject to price fluctuations and availability, due to external factors, which are beyond our control. Temporary industry-wide shortages of raw materials have occurred in the past, which can lead to increased raw material price volatility. Additionally, our suppliers could experience cost increases to produce raw material due to increases in carbon pricing. Historically we have been able to manage the impact of higher costs by increasing our selling prices. We have generally been well positioned to capture additional market share as our primary raw material, polymer resin, is typically a lower cost and more versatile substrate compared to alternatives. However, raw material shortages or our inability to timely pass-through increased costs to our customers may adversely affect our business,
financial condition and results of operations.
Weather related events could negatively impact our results of operations.
Weather related events could adversely impact our business and those of our customers, suppliers, and partners. Such events may have a physical impact on our facilities, inventory, suppliers, and equipment and any unplanned downtime at any of our facilities could result in unabsorbed costs that could negatively impact our results of operations for the period in which it experienced the downtime. Longer-term changes in climate patterns could alter future customer demand, impact supply chains and increase operating costs. However, any such changes are uncertain and we cannot predict the net impact from such events.
We may not be able to compete successfully and our customers may not continue to purchase our products.
We compete with multiple companies in each of our product lines on the basis of a number of considerations, including price, service, quality, product characteristics and the ability to supply products to customers in a timely manner. Our products also compete with various other substrates. Some of these competitive products are not subject to the impact of changes in resin prices, which may have a significant and negative impact on our competitive position versus substitute products. Additionally, consumer views on environmental considerations could potentially impact demand for our products that utilize fossil fuel based materials in their manufacturing. Our competitors may have financial and other resources that are substantially greater than ours and may be better able than us to withstand higher costs. Competition and product preference changes could result in our products losing market share or our having to reduce our prices, either of which could have a material adverse effect on our business, financial condition and results of operations. In addition, since we do not have long-term arrangements with many of our customers, these competitive factors could cause our customers to shift suppliers and/or packaging material quickly.
We may pursue and execute acquisitions or divestitures, which could adversely affect our business.
Transactions involve special risks, including the potential assumption of unanticipated liabilities and contingencies as well as difficulties in integrating acquired businesses or carving-out divested businesses, which may result in substantial costs, delays or other problems that could adversely affect our business, financial condition and results of operations. Furthermore, we may not realize all of the synergies we expect to achieve from our current strategic initiatives due to a variety of risks. If we are unable to achieve the benefits that we expect to achieve from our strategic initiatives, it could adversely affect our business, financial condition and results of operations.
In the event of a catastrophic loss of one of our key manufacturing facilities, our business would be adversely affected.
While we manufacture our products in a large number of diversified facilities and maintain insurance covering our facilities, including business interruption insurance, a catastrophic loss of the use of all or a portion of one of our key manufacturing facilities due to accident, labor issues, weather conditions, natural disaster, pandemic or otherwise, whether short or long-term, could result in future losses.
Employee retention, labor cost inflation or the failure to renew collective bargaining agreements could disrupt our business.
Our relations with employees under collective bargaining agreements remain satisfactory and there have been no significant work stoppages or other labor disputes during the past four years. However, we may not be able to maintain constructive relationships with labor unions or trade councils and may not be able to successfully negotiate new collective bargaining agreements on satisfactory terms in the future.
Labor is subject to cost inflation, availability and workforce participation rates, all of which could be impacted by factors beyond our control. As a result, there can be no assurance we will be able to recruit, train, assimilate, motivate and retain employees in the future. The loss of a substantial number of these employees or a prolonged labor dispute could disrupt our business and result in future losses.
We depend on information technology systems and infrastructure to operate our business, and increased cybersecurity threats, system inadequacies, and failures could disrupt our operations, compromise customer, employee, vendor and other data which could negatively affect our business.
We rely on the efficient and uninterrupted operation of information technology systems and networks. These systems and networks are vulnerable to increased threats and more sophisticated computer crime, energy interruptions, telecommunications failures, breakdowns, natural disasters, terrorism, war, computer malware or other malicious intrusions.
We also maintain and have access to data and information that is subject to privacy and security laws, regulations, and customer controls. Despite our efforts to protect such information, breaches, misplaced or lost data and programming damages could result in a negative impact on the business. While we have not had material system interruptions historically associated with these risks, there can be no assurance from future interruptions that could result in future losses.
Financial and Legal Risks
Our substantial indebtedness could affect our ability to meet our obligations and may otherwise restrict our activities.
We have a significant amount of indebtedness, which requires significant interest payments. The amount of interest charges could increase materially due to rising interest rates as indebtedness is refinanced, interest rate swaps expire, or accounts receivable factoring grows. Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance our obligations on commercially reasonable terms, would have a material adverse effect on our business, financial condition and results of operations. Additionally, servicing the interest obligations of our existing indebtedness could limit our ability to respond to business opportunities, including growing our business through acquisitions or increased levels of capital expenditures.
Goodwill and other intangibles represent a significant amount of our net worth, and a future write-off could result in lower reported net income and a reduction of our net worth.
We have a substantial amount of goodwill. Future changes in market multiples, cost of capital, expected cash flows, or other external factors, may adversely affect our business and cause our goodwill to be impaired, resulting in a non-cash charge against results of operations to write off goodwill or indefinite lived intangible assets for the amount of impairment. If a future write-off is required, the charge could result in significant losses.
Our international operations pose risks to our business that may not be present with our domestic operations.
We are subject to foreign exchange rate risk, both transactional and translational, which may negatively affect our financial performance. Exchange rates between transactional currencies may change rapidly due to a variety of factors. In particular, our translational exposure may be impacted by movements in the exchange rate of the euro or the British pound sterling against the U.S. dollar.
Foreign operations are also subject to certain risks that are unique to doing business in foreign countries including supply chain challenges, disruption of energy, changes in applicable laws, including assessments of income and non-income related taxes, inability to readily repatriate cash to the U.S. effectively, and regulatory policies and various trade restrictions including potential changes to taxes or duties. We are also subject to the Foreign Corrupt Practices Act and other anti-bribery and anti-corruption laws that generally bar bribes or unreasonable gifts to foreign governments or officials. We have implemented safeguards, training and policies to discourage these practices by our employees and agents. However, if employees violate our policies, we may be subject to regulatory sanctions. Any of these risks could disrupt our business and result in significant losses.
Current and future environmental and other governmental requirements could adversely affect our financial condition and our ability to conduct our business.
While we have not been required historically to make significant capital expenditures in order to comply with applicable environmental laws and regulations, we cannot predict our future capital expenditure requirements because of continually changing compliance standards and environmental technology. Furthermore, violations or contaminated sites that we do not know about (including contamination caused by prior owners and operators of such sites or newly discovered information) could result in additional compliance or remediation costs or other liabilities. In addition, federal, state, local, and foreign governments could enact laws or regulations concerning environmental matters, such as greenhouse gas (carbon) emissions, that increase the cost of producing, or otherwise adversely affect the demand for our products. Additionally, several governmental bodies in jurisdictions where we operate have introduced, or are contemplating introducing, regulatory change to address the potential impacts of changes in climate and global warming, which may have adverse impacts on our operations or financial results. We believe that any such laws promulgated to date have not had a material adverse effect on us, as we have historically been able to manage the impact of higher costs by increasing our selling prices. However, there can be no assurance that future legislation or regulation would not have a material adverse effect on us.
Changes in tax laws or changes in our geographic mix of earnings could have a material impact on our financial condition and results of operation.
We are subject to income and other taxes in the many jurisdictions in which we operate. Tax laws and regulations are complex and the determination of our global provision for income taxes and current and deferred tax assets and liabilities requires judgment and estimation. We are subject to routine examinations of our income tax returns, and tax authorities may disagree with our tax positions and assess additional tax. Our future income taxes could also be negatively impacted by our mix of earnings in the jurisdictions in which we operate being different than anticipated given differences in statutory tax rates in the countries in which we operate. In addition, tax policy efforts to raise global corporate tax rates could adversely impact our tax rate and subsequent tax expense.
We may not be successful in protecting our intellectual property rights, including our unpatented proprietary know-how and trade secrets, or in avoiding claims that we infringed on the intellectual property rights of others.
In addition to relying on patent and trademark rights, we rely on unpatented proprietary know-how and trade secrets, and employ various methods, including confidentiality agreements with employees and consultants, customers and suppliers to protect our know-how and trade secrets. However, these methods and our patents and trademarks may not afford complete protection and there can be no assurance that others will not independently develop the know-how and trade secrets or develop better production methods than us. Further, we may not be able to deter current and former employees, contractors and other parties from breaching agreements and misappropriating proprietary information and it is possible that third parties may copy or otherwise obtain and use our information and proprietary technology without authorization or otherwise infringe on our intellectual property rights. Furthermore, no assurance can be given that we will not be subject to claims asserting the infringement of the intellectual property rights of third parties seeking damages, the payment of royalties or licensing fees and/or injunctions against the sale of our products. Any such litigation could be protracted and costly and could result in significant losses.
We may be subject to litigation and regulatory investigations and proceedings, including product liability claims, that could adversely affect our business operations and financial performance.
In the ordinary course of our business, we are involved in legal proceedings, including product liability claims, which may lead to financial or reputational damages. See Note 5. Commitments, Leases and Contingencies. We may also be subject to inquiries, inspections, investigations and proceedings by relevant regulatory and other governmental agencies. Given our global footprint, we are exposed to more uncertainty regarding the regulatory environment. The timing of the final resolutions to lawsuits, regulatory inquiries, and governmental and other legal proceedings is typically uncertain, and any such proceedings or claims, regardless of merit, could be time consuming and expensive to defend and could divert management’s attention and resources. The possible outcomes of these proceedings could include adverse judgments, settlements, injunctions, fines, penalties or other results adverse to us that could harm our business, financial condition, results of operations and reputation and result in significant losses. Even if we are successful in defending ourselves against these actions, the costs of such defense may be significant to us.

---

ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. UNRESOLVED STAFF COMMENTS
None.

---

ITEM 2. PROPERTIES
Item 2. PROPERTIES
Our primary manufacturing facilities by geographic area are as follows:
Geographic Region
Total Facilities
Leased Facilities
US and Canada
Europe
Rest of world

---

ITEM 3. LEGAL PROCEEDINGS
Item 3. LEGAL PROCEEDINGS
For information see Note 5. Commitments, Leases and Contingencies

---

ITEM 4. MINE SAFETY DISCLOSURE
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II

---

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock “BERY” is listed on the New York Stock Exchange. As of the date of this filing there were fewer than 550 active record holders of the common stock, but we estimate the number of beneficial stockholders to be much higher as a number of our shares are held by brokers or dealers for their customers in street name. During fiscal 2024 the Company declared and paid cash dividends of $0.275 per share for each quarter, and during fiscal 2023 the Company declared and paid cash dividends of $0.25 per share for each quarter.
Issuer Purchases of Equity Securities
The following table summarizes the Company's repurchases of its common stock during the Quarterly Period ended September 28, 2024.
Fiscal Period
Total Number of
Shares Purchased
Average Price
Paid Per Share
Total Number of Shares
Purchased as Part of Publicly
Announced Programs
Dollar Value of Shares that
May Yet be Purchased Under
the Program (in millions) (a)
July
53,794
$
58.51
53,794
$
August
-
-
-
September
-
-
-
Total
53,794
$
58.51
53,794
$
(a)
All open market purchases during the quarter were made under the fiscal 2023 authorization from our board of directors to purchase up to $1 billion of shares of common stock. See Note 9. Stockholders' Equity.

---

ITEM 6. SELECTED FINANCIAL DATA
Item 6. RESERVED

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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.”
Discussion of Results of Operations for Fiscal 2024 Compared to Fiscal 2023
The Company's U.S. based results for fiscal 2024 and fiscal 2023 are based on fifty-two week periods. Business integration expenses consist of restructuring and impairment charges, divestiture related costs, and other business optimization costs. Tables present dollars in millions. A discussion and analysis regarding our results of operations for fiscal year 2023 compared to fiscal year 2022 can be found on Form 10-K, filed with the SEC in November 2023.
Consolidated Overview
Fiscal Year
$ Change
% Change
Net sales
$
12,258
$
12,664
$
(406
)
(3
)%
Cost of goods sold
10,005
10,354
(349
)
(3
)%
Other operating expenses
1,316
1,231
%
Operating income
$
$
1,079
$
(142
)
(13
)%
Net sales: The net sales decline is primarily attributed to decreased selling prices of $375 million due to the pass-through of lower resin costs, a 1% volume decline, and fiscal 2024 divestiture sales of $77 million. The declines are partially offset by an $82 million favorable impact from foreign currency changes and acquisition sales of $42 million.
Cost of goods sold: The cost of goods sold decrease is primarily attributed to raw material price declines, and the fiscal 2024 divestitures. The declines are partially offset by cost of goods sold from acquired entities, an increase in depreciation expense, and an unfavorable impact from foreign currency changes.
Other operating expenses: The other operating expenses increase is primarily attributed to a $57 million loss from divestitures and costs associated with the announced spin-off and merger of our HHNF business with GLT.
Operating Income: The operating income decrease is primarily attributed to a $20 million unfavorable impact from price cost spread, a $14 million unfavorable impact from volume declines, an $88 million unfavorable impact from increased business consolidation costs, and a $39 million increase in depreciation and amortization expense. These declines are partially offset by a $6 million decrease in SG&A expenses.
Consumer Packaging International
Fiscal Year
$ Change
% Change
Net sales
$
3,843
$
4,031
$
(188
)
(5
)%
Operating income
$
$
$
(87
)
(32
)%
Net sales: The net sales decline is primarily attributed to decreased selling prices of $153 million, a 1% volume decline, and fiscal 2024 divestiture sales of $77 million, partially offset by a $61 million favorable impact from foreign currency changes.
Operating Income: The operating income decrease is primarily attributed to a $74 million unfavorable impact from increased business consolidation costs, fiscal 2024 divestitures of $12 million, and a $12 million unfavorable impact from increased depreciation and amortization expense. These declines were partially offset by a $10 million favorable impact from foreign currency changes.
Consumer Packaging North America
Fiscal Year
$ Change
% Change
Net sales
$
3,122
$
3,122
$
-
%
Operating income
$
$
$
%
Net sales: Net sales in the Consumer Packaging North America division were flat year over year primarily due to revenue from acquisitions, partially offset by decreased selling prices of $29 million and a 1% volume decline.
Operating Income: The operating income increase is primarily attributed to $18 million in earnings from acquisitions, a decline in business consolidation expenses of $17 million, and a favorable impact from lower selling, general, and administrative expenses. The increases were partially offset by a $3
million unfavorable impact from price cost spread and a $10 million unfavorable impact from increased depreciation and amortization expense.
Flexibles
Fiscal Year
$ Change
% Change
Net sales
$
2,756
$
2,884
$
(128
)
(4
)%
Operating income
$
$
$
(23
)
(7
)%
Net sales: The net sales decline is primarily attributed to decreased selling prices of $109 million and a 1% volume decline, partially offset by a $12 million favorable impact from foreign currency changes.
Operating Income: The operating income decrease is primarily attributed a $7 million unfavorable impact from the volume decline, an unfavorable impact from increased depreciation and amortization expense of $11 million, and an unfavorable impact from increased selling, general, and administrative expenses. The decrease is partially offset by an $8 million favorable impact from price cost spread.
Health, Hygiene & Specialties
Fiscal Year
$ Change
% Change
Net sales
$
2,537
$
2,627
$
(90
)
(3
)%
Operating income
$
$
$
(52
)
(41
)%
Net sales: The net sales decline is primarily attributed to decreased selling prices of $84 million and a 1% volume decline, partially offset by a $9 million favorable impact from foreign currency changes.
Operating Income: The operating income decrease is primarily attributed to a $22 million unfavorable impact from price cost spread, partially offset by a $5 million favorable impact from foreign currency changes.
Other expense
Fiscal Year
$ Change
% Change
Other expense
$
$
$
(16
)
(52
)%
The Other expense decrease is primarily attributed to the adverse impact from our hyperinflationary Argentina subsidiary in the prior year.
Interest expense
Fiscal Year
$ Change
% Change
Interest expense
$
$
$
%
The interest expense increase is primarily the result of higher interest rates from current year debt refinancing, partially offset by debt repayments.
Comprehensive Income
Fiscal Year
$ Change
% Change
Comprehensive Income
$
$
$
(119
)
(18
)%
The decrease in comprehensive income is attributed to a $4 million favorable change in currency translation, partially offset by a $93 million decrease in net income, a $114 million unfavorable change in the fair value of interest rate hedges, and an $92 million favorable change from unrealized losses on the Company's pension plans. Currency translation changes are primarily related to non-U.S. subsidiaries with a functional currency other than the U.S. dollar whereby assets and liabilities are translated from the respective functional currency into U.S. dollars using period-end exchange rates. The change in currency translation was primarily attributed to locations utilizing the euro and British pound sterling as their functional currency. As part of the overall risk management, the Company uses derivative instruments to (i) reduce our exposure to changes in interest rates attributed to the Company’s borrowings and (ii) reduce foreign currency exposure to translation of certain foreign operations. The Company records changes to the fair value of these instruments in Accumulated other comprehensive income (loss). The change in fair value of these instruments in fiscal 2024 versus fiscal 2023 is primarily attributed to a change in the forward interest and foreign exchange curves between measurement dates.
Liquidity and Capital Resources
Senior Secured Credit Facility
We manage our global cash requirements considering (i) available funds among the many subsidiaries through which we conduct our business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances. At the end of fiscal 2024, the Company had no outstanding balance on its $1.0 billion asset-based revolving line of credit that matures in June 2028. The Company was in compliance with all covenants at the end of fiscal 2024. See Note 3. Long-Term Debt.
Cash Flows from Operating Activities
Net cash provided by operating activities decreased $210 million from fiscal 2023 primarily attributed to changes in working capital.
Cash Flows from Investing Activities
Net cash used in investing activities decreased $204 million from fiscal 2023 primarily attributed to proceeds from business divestitures and a decline in capital spend.
Cash Flows from Financing Activities
Net cash used in financing activities decreased $105 million from fiscal 2023 primarily attributed to higher net repayments on long-term borrowings, partially offset by lower share repurchases.
Dividends
The Company declared and paid cash dividends of $139 million during fiscal 2024.
Share Repurchases
The Company repurchased approximately 2.0 million shares for $120 million and approximately 9.8 million shares for $607 million in fiscal 2024 and fiscal 2023, respectively. See Note 9. Stockholders' Equity.
Free Cash Flow
We define "free cash flow" as cash flow from operating activities less net additions to property, plant and equipment. Based on our definition, our consolidated free cash flow is summarized as follows:
Fiscal years ended
September 28,
September 30,
Cash flow from operating activities
$
1,405
$
1,615
Additions to property, plant and equipment, net
(551
)
(689
)
Free cash flow
$
$
We use free cash flow as a supplemental measure of liquidity as it assists us in assessing our ability to fund growth through generation of cash. Free cash flow may be calculated differently by other companies, including other companies in our industry or peer group, limiting its usefulness. Free cash flow is not a generally accepted accounting principles (“GAAP’) financial measure and should not be considered as an alternative to any other measure determined in accordance with GAAP.
Liquidity Outlook
At the end of fiscal 2024, our cash balance was $1,095 million, of which approximately 53% was located outside the U.S. We believe our existing U.S. based cash and cash flow from U.S. operations, together with available borrowings under our senior secured credit facilities, will be adequate to meet our short-term and long-term liquidity needs with the exception of funds needed to cover all long-term debt obligations which we intend to refinance prior to maturity. The Company has the ability to repatriate the cash located outside the U.S. to the extent not needed to meet operational and capital needs without significant restrictions. Our unremitted foreign earnings were $1.9 billion at the end of fiscal 2024. The computation of the deferred tax liability associated with unremitted earnings is not practicable.
Summarized 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 section, “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 summarized financial information for the Parent, Issuer and guarantor subsidiaries on a combined basis, after intercompany transactions have been eliminated.
Year Ended
September 28, 2024
Net sales
$
6,531
Gross profit
1,621
Earnings from continuing operations
Net income (a)
$
(a) Includes $36 million of income associated with intercompany activity with non-guarantor subsidiaries.
September 28, 2024
September 30, 2023
Assets
Current assets
$
1,775
$
1,975
Noncurrent assets
5,553
5,997
Liabilities
Current liabilities
$
2,081
$
1,363
Intercompany payable
1,115
Noncurrent liabilities
8,843
10,271
Critical Accounting Estimates
We disclose those accounting policies that we consider to be significant in determining the amounts to be utilized for communicating our consolidated financial position, results of operations and cash flows in the first note to our consolidated financial statements included elsewhere herein. Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with these principles requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results may differ from these estimates under different assumptions or conditions.
Pensions. The accounting for our pension plans requires us to recognize the overfunded or underfunded status of the pension plans on our balance sheet. We believe that the accounting estimates related to our pension plans are critical accounting estimates because they are highly susceptible to change from period to period based on the performance of plan assets, actuarial valuations, market conditions and contracted benefit changes. See Note 1. Basis of Presentation and Summary of Significant Accounting Policies and Note 7. Retirement Plans.
Deferred Taxes and Effective Tax Rates. We estimate the effective tax rate (“ETR”) and associated liabilities or assets for each of our legal entities in accordance with authoritative guidance. We utilize tax planning to minimize or defer tax liabilities to future periods. In recording ETRs and related liabilities and assets, we rely upon estimates, which are based upon our interpretation of U.S. and local tax laws as they apply to our legal entities and our overall tax structure. Audits by local tax jurisdictions, including the U.S. Government, could yield different interpretations from our own and cause the Company to owe more taxes than originally recorded. See Note 1. Basis of Presentation and Summary of Significant Accounting Policies and Note 6. Income Taxes.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
We are exposed to market risk from changes in interest rates primarily through our senior secured credit facilities and accounts receivable factoring programs. As of September 28, 2024, our senior secured credit facilities are comprised of (i) $1.5 billion term loans and (ii) a $1.0 billion revolving credit facility with no borrowings outstanding. Borrowings under our senior secured credit facilities bear interest at a rate equal to an applicable margin plus SOFR. The applicable margin for SOFR rate borrowings under the revolving credit facility ranges from 1.25% to 1.50%, and the margin for the term loans is 1.75% per annum. As of September 28, 2024, the SOFR rate of approximately 4.84% was applicable to the term loans. A change of 0.25% on these floating interest rate exposures would increase interest expense by approximately $2 million.
We seek to minimize interest rate volatility risk through regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. These financial instruments are not used for trading or other speculative purposes. See Note 4. Financial Instruments and Fair Value Measurements.
Foreign Currency Risk
As a global company, we face foreign currency risk exposure from fluctuating currency exchange rates, primarily the U.S. dollar against the euro, British pound sterling, Chinese renminbi, Canadian dollar and Mexican peso. Significant fluctuations in currency rates can have a substantial impact, either positive or negative, on our revenue, cost of sales, and operating expenses. Currency translation gains and losses are primarily related to non-U.S. subsidiaries with a functional currency other than U.S. dollars whereby assets and liabilities are translated from the respective functional currency into U.S. dollars using period-end exchange rates and impact our Comprehensive income. A 10% decline in foreign currency exchange rates would have had a $11 million unfavorable impact on fiscal 2024 Net income. See Note 4. Financial Instruments and Fair Value Measurements.

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Berry Global Group, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Berry Global Group, Inc. (the Company) as of September 28, 2024 and September 30, 2023, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended September 28, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 28, 2024 and September 30, 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 28, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 28, 2024, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November 26, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.
United Kingdom Defined Benefit Pension Obligation
Description of the Matter
At September 28, 2024 the aggregate United Kingdom (UK) defined benefit pension obligation was $543 million. As disclosed in Notes 1 and 7 to the consolidated financial statements, the obligation for these plans are actuarially determined and affected by assumptions, including discount rates and mortality rates.
Auditing the UK defined benefit pension obligation is complex and required the involvement of our actuarial specialists due to the highly judgmental nature of actuarial assumptions (e.g., discount rates and mortality rates) used in the measurement process. These assumptions have a significant effect on the projected benefit obligation.
How We Addressed the Matter in Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the measurement and valuation of the UK defined benefit pension obligation. This included management’s review of the UK defined benefit pension obligation calculations and the significant actuarial assumptions used by management.
To test the UK defined benefit pension obligation, we performed audit procedures that included, among others, evaluating the methodology used and the significant actuarial assumptions described above. We involved our actuarial specialists to assist with our audit procedures. We compared the actuarial assumptions used by management to historical trends and assessed the individual impact that changes in the key assumptions (discount rate and mortality rate) at year end has on the total benefit pension obligation. As part of this evaluation, we compared management’s selected discount rate to an independently developed range of reasonable discount rates. To evaluate the mortality rate assumption, we assessed whether the information is consistent with recent publicly available information and trends, and whether a consistent approach to developing the mortality assumption was applied.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1991.
Indianapolis, Indiana
November 26, 2024
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Berry Global Group, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Berry Global Group, Inc.’s internal control over financial reporting as of September 28, 2024, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Berry Global Group, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 28, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of September 28, 2024 and September 30, 2023, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended September 28, 2024, and the related notes and our report dated November 26, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Indianapolis, Indiana
November 26, 2024
Berry Global Group, Inc.
Consolidated Statements of Income
(in millions of dollars)
Fiscal years ended
September 28,
September 30,
October 1,
Net sales
$
12,258
$
12,664
$
14,495
Costs and expenses:
Cost of goods sold
10,005
10,354
12,123
Selling, general and administrative
Amortization of intangibles
Business consolidation and other activities
Operating income
1,079
1,242
Other expense
Interest expense
Income before income taxes
Income tax expense
Net income
$
$
$
Net income per share (see Note 11):
Basic
$
4.48
$
5.07
$
5.87
Diluted
$
4.38
$
4.95
$
5.77
Berry Global Group, Inc.
Consolidated Statements of Comprehensive Income
(in millions of dollars)
Fiscal years ended
September 28,
September 30,
October 1,
Net income
$
$
$
Currency translation
(301
)
Pension and postretirement benefits
(52
)
Derivative instruments
(110
)
Other comprehensive (loss) income
(107
)
Comprehensive income
$
$
$
See notes to consolidated financial statements.
Berry Global Group, Inc.
Consolidated Balance Sheets
(in millions of dollars)
September 28,
September 30,
Assets
Current assets:
Cash and cash equivalents
$
1,095
$
1,203
Accounts receivable
1,604
1,568
Inventories
1,631
1,557
Prepaid expenses and other current assets
Total current assets
4,574
4,533
Property, plant and equipment
4,575
4,576
Goodwill and intangible assets
6,624
6,684
Right-of-use assets
Other assets
Total assets
$
16,613
$
16,587
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
1,766
$
1,528
Accrued employee costs
Other current liabilities
Current portion of long-term debt
Total current liabilities
3,672
2,713
Long-term debt
7,505
8,970
Deferred income taxes
Employee benefit obligations
Operating lease liabilities
Other long-term liabilities
Total liabilities
13,005
13,371
Stockholders’ equity:
Common stock (115.0 and 115.5 shares issued, respectively)
Additional paid-in capital
1,321
1,231
Retained earnings
2,581
2,320
Accumulated other comprehensive loss
(295
)
(336
)
Total stockholders’ equity
3,608
3,216
Total liabilities and stockholders’ equity
$
16,613
$
16,587
See notes to consolidated financial statements.
Berry Global Group, Inc.
Consolidated Statements of Cash Flows
(in millions of dollars)
Fiscal years ended
September 28,
September 30,
October 1,
Cash Flows from Operating Activities:
Net income
$
$
$
Adjustments to reconcile net cash from operating activities:
Depreciation
Amortization of intangibles
Non-cash interest (income) expense
(79
)
(61
)
Share-based compensation expense
Deferred income tax
(96
)
(117
)
(48
)
Other non-cash operating activities, net
(22
)
Loss on divestitures
-
-
Settlement of derivatives
Changes in operating assets and liabilities:
Accounts receivable
(18
)
(86
)
Inventories
(31
)
(3
)
Prepaid expenses and other assets
(18
)
Accounts payable and other liabilities
(372
)
(120
)
Net cash from operating activities
1,405
1,615
1,563
Cash Flows from Investing Activities:
Additions to property, plant and equipment, net
(551
)
(689
)
(687
)
Acquisition of businesses
(68
)
(87
)
-
Divestiture of businesses
-
Settlement of net investment hedges
-
-
Net cash from investing activities
(572
)
(776
)
(483
)
Cash Flows from Financing Activities:
Proceeds from long-term borrowings
3,150
-
Repayment of long-term borrowings
(3,884
)
(869
)
(22
)
Proceeds from issuance of common stock
Repurchase of common stock
(120
)
(601
)
(709
)
Dividends paid
(139
)
(127
)
-
Debt financing costs
(21
)
(6
)
-
Net cash from financing activities
(966
)
(1,071
)
(704
)
Effect of currency translation on cash
(57
)
Net change in cash and cash equivalents
(108
)
(207
)
Cash and cash equivalents at beginning of period
1,203
1,410
1,091
Cash and cash equivalents at end of period
$
1,095
$
1,203
$
1,410
See notes to consolidated financial statements.
Berry Global Group, Inc.
Consolidated Statements of Changes in Stockholders’ Equity
(in millions of dollars)
Common Stock
Additional
Paid-in Capital
Accumulated Other
Comprehensive Loss
Retained
Earnings
Total
Balance at October 2, 2021
$
$
1,134
$
(296
)
$
2,341
$
3,180
Net income
-
-
-
Other comprehensive loss
-
-
(107
)
-
(107
)
Share-based compensation
-
-
-
Proceeds from issuance of common stock
-
-
-
Common stock repurchased and retired
-
(23
)
-
(686
)
(709
)
Balance at October 1, 2022
$
$
1,177
$
(403
)
$
2,421
$
3,196
Net income
-
-
-
Other comprehensive income
-
-
-
Share-based compensation
-
-
-
Proceeds from issuance of common stock
-
-
-
Common stock repurchased and retired
-
(24
)
-
(583
)
(607
)
Dividends paid
-
-
-
(127
)
(127
)
Balance at September 30, 2023
$
$
1,231
$
(336
)
$
2,320
$
3,216
Net income
-
-
-
Other comprehensive income
-
-
-
Share-based compensation
-
-
-
Proceeds from issuance of common stock
-
-
-
Common stock repurchased and retired
-
(4
)
-
(116
)
(120
)
Dividends paid
-
-
-
(139
)
(139
)
Balance at September 28, 2024
$
$
1,321
$
(295
)
$
2,581
$
3,608
See notes to consolidated financial statements.
Berry Global Group, Inc.
Notes to Consolidated Financial Statements
(in millions of dollars, except as otherwise noted)
1. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
Berry Global Group, Inc.’s (“Berry,” “we,” or the “Company”) consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commissions. Periods presented in these financial statements include fiscal periods ending September 28, 2024 (“fiscal 2024”), September 30, 2023 (“fiscal 2023”), and October 1, 2022 (“fiscal 2022”). The Company’s U.S. based results for fiscal 2024 and fiscal 2023 are based on a fifty-two week period. Fiscal 2022 was based on a fifty-three week period. The Company has evaluated subsequent events through the date the financial statements were issued.
The consolidated financial statements include the accounts of Berry and its subsidiaries, all of which includes our wholly owned and majority owned subsidiaries. The Company has certain foreign subsidiaries that report on a calendar period basis which we consolidate into our respective fiscal period. Intercompany accounts and transactions have been eliminated in consolidation.
In February 2024, the Company announced plans for a spin-off and merger of our Health, Hygiene & Specialties Global Nonwovens and Films business ("HHNF") with Glatfelter Corporation ("GLT"). See Note 12. Subsequent Events.
Revenue Recognition and Accounts Receivable
Our revenues are primarily derived from the sale of non-woven, 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 $106 million and $106 million at September 28, 2024 and September 30, 2023, 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. See Note 10. Segment and Geographic Data.
Accounts receivable are presented net of allowance for credit losses of $19 million and $19 million at September 28, 2024 and September 30, 2023, respectively. 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 on the consolidated balance sheets and the proceeds are included in the cash flows from operating activities in the consolidated statements of cash flows.
Research and Development
Research and development costs are expensed when incurred. The Company incurred research and development expenditures of $72 million, $82 million, and $81 million in fiscal 2024, 2023, and 2022, respectively.
Share-Based Compensation
The Company recognized total share-based compensation expense of $46 million, $42 million, and $39 million for fiscal 2024, 2023, and 2022, respectively. The share-based compensation plan is more fully described in Note 9. Stockholders’ Equity.
Foreign Currency
For the non-U.S. subsidiaries that account in a functional currency other than U.S. dollars, assets and liabilities are translated into U.S. dollars using period-end exchange rates. Sales and expenses are translated at the average exchange rates in effect during the period. Foreign currency translation gains and losses are included as a component of Accumulated other comprehensive loss within Stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in the Consolidated Statements of Income.
Cash and Cash Equivalents
All highly liquid investments purchased with a maturity of three months or less from the time of purchase are considered to be cash equivalents.
Inventories
Inventories are stated at the lower of cost or net realizable value and are valued using the first-in, first-out method. Management periodically reviews inventory balances, using recent and future expected sales to identify slow-moving and/or obsolete items. The cost of spare parts is charged to cost of goods sold when purchased. We evaluate our reserve for inventory obsolescence on a quarterly basis and review inventory on-hand to determine future salability. We base our determinations on the age of the inventory and the experience of our personnel. We reserve inventory that we deem to be not salable in the quarter in which we make the determination. We believe, based on past history and our policies and procedures, that our net inventory is salable. Inventory as of fiscal 2024 and 2023 was:
Inventories:
Finished goods
$
$
Raw materials
$
1,631
$
1,557
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is computed primarily by the straight-line method over the estimated useful lives of the assets ranging from 15 to 40 years for buildings and improvements, 2 to 20 years for machinery, equipment, and tooling, and over the term of the agreement for capital leases. Leasehold improvements are depreciated over the shorter of the useful life of the improvement or the lease term. Repairs and maintenance costs are charged to expense as incurred. Property, plant and equipment as of fiscal 2024 and 2023 was:
Property, plant and equipment:
Land, buildings and improvements
$
1,738
$
1,693
Equipment and construction in progress
8,062
7,570
9,800
9,263
Less accumulated depreciation
(5,225
)
(4,687
)
$
4,575
$
4,576
Long-lived Assets
Long-lived assets, including property, plant and equipment and definite lived intangible assets are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment,” whenever facts and circumstances indicate that the carrying amount may not be recoverable. Specifically, this process involves comparing an asset’s carrying value to the estimated undiscounted future cash flows the asset is expected to generate over its remaining life. If this process were to result in the conclusion that the carrying value of a long-lived asset would not be recoverable, a write-down of the asset to fair value would be recorded through a charge to operations.
Goodwill
The changes in the carrying amount of goodwill by reportable segment are as follows:
Consumer Packaging
International
Consumer
Packaging
North America
Flexibles
Health,
Hygiene
& Specialties
Total
Balance as of fiscal 2022
$
1,712
$
1,540
$
$
$
4,832
Foreign currency translation adjustment
Acquisitions
-
-
-
Balance as of fiscal 2023
$
1,793
$
1,579
$
$
$
4,981
Foreign currency translation adjustment
(1
)
Acquistions
-
-
-
Dispositions
(49
)
-
-
-
(49
)
Balance as of fiscal 2024
$
1,851
$
1,613
$
$
$
5,090
In fiscal year 2024, the Company completed a qualitative analysis to evaluate impairment of goodwill and concluded that it was more likely than not that the fair value for each reporting unit exceeded the carrying amount. We reached this conclusion based on the stable valuations within the packaging industry and operating results of our reporting units. As a result of our annual impairment evaluations the Company concluded that no impairment existed in fiscal 2024.
Deferred Financing Fees
Deferred financing fees are amortized to interest expense using the effective interest method over the lives of the respective debt agreements. Pursuant to ASC 835-30, the Company presents $31 million and $34 million as of fiscal 2024 and fiscal 2023, respectively, of debt issuance and deferred financing costs on the balance sheet as a deduction from the carrying amount of the related debt liability, instead of a deferred charge.
Intangible Assets
The changes in the carrying amount of intangible assets are as follows:
Customer
Relationships
Trademarks
Other
Intangibles
Accumulated
Amortization
Total
Balance as of fiscal 2022
$
3,157
$
$
$
(1,925
)
$
1,853
Foreign currency translation adjustment
(27
)
Amortization expense
-
-
-
(243
)
(243
)
Acquisitions
-
-
Balance as of fiscal 2023
$
3,261
$
$
$
(2,195
)
$
1,703
Foreign currency translation adjustment
-
(39
)
Amortization expense
-
-
-
(234
)
(234
)
Acquisitions
-
Balance as of fiscal 2024
$
3,348
$
$
$
(2,468
)
$
1,534
Customer relationships are being amortized using an accelerated amortization method which corresponds with the customer attrition rates used in the initial valuation of the intangibles over the estimated life of the relationships which range from 5 to 17 years. Definite lived trademarks are being amortized using the straight-line method over the estimated life of the assets which are not more than 15 years. Other intangibles, which include technology and licenses, are being amortized using the straight-line method over the estimated life of the assets which range from 5 to 14 years. The Company has trademarks that total $248 million that are indefinite lived and we test annually for impairment on the first day of the fourth quarter. We completed the annual impairment test of our indefinite lived trade names utilizing the qualitative method in each year and noted no impairment.
Future amortization expense for definite lived intangibles as of fiscal 2024 for the next five fiscal years is $225 million, $210 million, $176 million, $153 million, and $133 million each year for fiscal years ending 2025, 2026, 2027, 2028, and 2029, respectively.
Insurable Liabilities
The Company records liabilities for the self-insured portion of workers’ compensation, health, product, general and auto liabilities. The determination of these liabilities and related expenses is dependent on claims experience. For most of these liabilities, claims incurred but not yet reported are estimated based upon historical claims experience.
Leases
The Company leases certain manufacturing facilities, warehouses, office space, manufacturing equipment, office equipment, and automobiles. We recognize right-of-use assets and lease liabilities for leases with original lease terms greater than one year based on the present value of lease payments over the lease term using our incremental borrowing rate on a collateralized basis. Short-term leases, with original lease terms of less than one year, are not recognized on the balance sheet. We are party to certain leases, namely for manufacturing facilities, which offer renewal options to extend the original lease term. Renewal options are included in the right-of-use asset and lease liability based on our assessment of the probability that the options will be exercised. See Note 5. Commitments, Leases and Contingencies.
At September 28, 2024, annual lease commitments were as follows:
Fiscal Year
Operating Leases
Finance Leases
$
$
Thereafter
Total lease payments
Less: Interest
(143
)
(5
)
Present value of lease liabilities
$
$
Income Taxes
The Company accounts for income taxes under the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequence of events that have been recognized in the Company’s financial statements or income tax returns. Income taxes are recognized during the period in which the underlying transactions are recorded. Deferred taxes, with the exception of non-deductible goodwill, are provided for temporary differences between amounts of assets and liabilities as recorded for financial reporting purposes and such amounts as measured by tax laws. If the Company determines that a deferred tax asset arising from temporary differences is not likely to be utilized, the Company will establish a valuation allowance against that asset to record it at its expected realizable value. The Company recognizes uncertain tax positions when it is more likely than not that the tax position will be sustained upon examination by relevant taxing authorities, based on the technical merits of the position. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company’s effective tax rate is dependent on many factors including: the impact of enacted tax laws in jurisdictions in which the Company operates; the amount of earnings by jurisdiction, due to varying tax rates in each country; and the Company’s ability to utilize foreign tax credits related to foreign taxes paid on foreign earnings that will be remitted to the U.S.
Comprehensive Income (Loss)
Comprehensive income (loss) is comprised of net income and other comprehensive income (loss). Other comprehensive income (loss) includes net unrealized gains or losses resulting from currency translations of foreign subsidiaries, changes in the value of our derivative instruments and adjustments to the pension liability.
The accumulated balances related to each component of other comprehensive income (loss), net of tax before reclassifications were as follows:
Currency
Translation
Defined Benefit
Pension and Retiree
Health Benefit Plans
Derivative
Instruments
Accumulated Other
Comprehensive Loss
Balance as of fiscal 2021
$
(154
)
$
(67
)
$
(75
)
$
(296
)
Other comprehensive income (loss)
(301
)
(111
)
Net amount reclassified from accumulated other comprehensive income (loss)
-
Balance as of fiscal 2022
$
(455
)
$
(32
)
$
$
(403
)
Other comprehensive income (loss)
(53
)
Net amount reclassified from accumulated other comprehensive income (loss)
-
(35
)
(34
)
Balance as of fiscal 2023
$
(340
)
$
(84
)
$
$
(336
)
Other comprehensive income (loss)
(70
)
Net amount reclassified from accumulated other comprehensive income (loss)
-
-
(40
)
(40
)
Balance as of fiscal 2024
$
(229
)
$
(44
)
$
(22
)
$
(295
)
Pension
The accounting for our pension plans requires us to recognize the overfunded or underfunded status of the pension plans on our balance sheet. The selection of assumptions is based on historical trends and known economic and market conditions at the time of valuation, as well as independent studies of trends performed by our actuaries. Pension benefit costs include assumptions for the discount rate, mortality rate, retirement age, and expected return on plan assets. Retiree medical plan costs include assumptions for the discount rate, retirement age, and health-care-cost trend rates. We review annually the discount rate used to calculate the present value of pension plan liabilities. The discount rate used at each measurement date is set based on a high-quality corporate bond yield curve, derived based on bond universe information sourced from reputable third-party indices, data providers, and rating agencies. In countries where there is no deep market in corporate bonds, we have used a government bond approach to set the discount rate. In evaluating other assumptions, the Company considers many factors, including an evaluation of expected return on plan assets and the health-care-cost trend rates of other companies; historical assumptions compared with actual results; an analysis of current market conditions and asset allocations; and the views of advisers.
Net Income Per Share
The Company calculates basic net income per share based on the weighted-average number of outstanding common shares. The Company calculates diluted net income per share based on the weighted-average number of outstanding common shares plus the effect of dilutive securities.
Use of Estimates
The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make extensive use of estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of sales and expenses. Actual results could differ materially from these estimates. Changes in estimates are recorded in results of operations in the period that the event or circumstances giving rise to such changes occur.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU No. 2023-07 "Segment Reporting (Topic 280): Improvements to Reporting Segment Disclosures." The ASU was issued to improve reportable segment disclosure requirements, primarily through enhanced disclosures of significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this guidance.
In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The ASU was issued to improve transparency and disclosure requirements for the rate reconciliation, income taxes paid and other tax disclosures. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the impact of adopting this guidance.
2. Acquisitions and Dispositions
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 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.
Divestitures
During fiscal 2024, the Company completed the sale of its Promens Vehicles and Strata businesses, which were operated in the Consumer Packaging International segment for net proceeds of $25 million and $22 million, respectively. In fiscal 2023, the Promens Vehicles business recorded net sales of $111 million and Strata recorded $56 million.
3. Long-Term Debt
Long-term
debt consists of the following:
Facility
Maturity Date
Term loan
July 2029
$
1,538
$
-
Term loan
July 2026
-
3,090
Revolving line of credit
June 2028
-
-
0.95% First Priority Senior Secured Notes
February 2024
-
1.00% First Priority Senior Secured Notes (a)
January 2025
1.57% First Priority Senior Secured Notes
January 2026
1,525
1,525
4.875% First Priority Senior Secured Notes
July 2026
1,250
1.65% First Priority Senior Secured Notes
January 2027
1.50% First Priority Senior Secured Notes (a)
January 2027
5.50% First Priority Senior Secured Notes
April 2028
5.80% First Priority Senior Secured Notes
June 2031
-
5.65% First Priority Senior Secured Notes
January 2034
-
4.50% Second Priority Senior Secured Notes
February 2026
5.625% Second Priority Senior Secured Notes
July 2027
Debt discounts and deferred fees
(31
)
(34
)
Finance leases and other
Various
Total long-term debt
8,315
8,980
Current portion of long-term debt
(810
)
(10
)
Long-term debt, less current portion
$
7,505
$
8,970
(a)
Euro denominated
During fiscal 2024, the Company extended the maturity date of $1,550 million of its outstanding term loans to July 2029. In addition, the Company issued $800 million aggregate principal amount of 5.65% First Priority Senior Secured Notes due 2034, and another $800 million aggregate principal amount of 5.80% First Priority Senior Secured Notes due 2031. The proceeds from the 5.65% First Priority Notes were used to prepay the 0.95% First Priority Senior Secured Notes due in February 2024 and a portion of the existing term loan due in July 2026. The proceeds from the 5.80% First Priority Notes were used to repurchase a portion of the 4.875% First Priority Senior Secured Notes due in July 2026 and to prepay a portion of the existing term loan due in July 2026
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 on the Consolidated Statements of Income through maturity.
Berry Global, Inc. Senior Secured Credit Facility
Our wholly owned subsidiary Berry Global, Inc.’s senior secured credit facilities consist of $1.5 billion of term loans and a $1.0 billion asset-based revolving line of credit. The availability under the revolving line of credit is the lesser of $1.0 billion or based on a defined borrowing base which is calculated based on available accounts receivable and inventory. At the end of the fiscal year, the Company had unused borrowing capacity of $802 million under the revolving line of credit.
The term loan facility is payable upon maturity. The Company may voluntarily repay outstanding loans under the senior secured credit facilities at any time without premium or penalty, other than customary “breakage” costs with respect to eurodollar loans. All obligations under the senior secured credit facilities are unconditionally guaranteed by the Company and, subject to certain exceptions, each of the Company’s existing and future direct and indirect domestic subsidiaries. The guarantees of those obligations are secured by substantially all of the Company’s assets as well as those of each domestic subsidiary guarantor.
Despite not having financial maintenance covenants, our debt agreements contain certain negative covenants. We are in compliance with all covenants as of September 28, 2024. The failure to comply with these negative covenants could restrict our ability to incur additional indebtedness, effect acquisitions, enter into certain significant business combinations, make distributions or redeem indebtedness.
Future maturities of long-term debt as of fiscal year end 2024 are as follows:
Fiscal Year
Maturities
$
2,593
1,344
1,489
Thereafter
1,606
$
8,346
Net cash interest was $425 million, $377 million, and $281 million in fiscal 2024, 2023, and 2022, respectively.
4. 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 exposure to fluctuations in interest rates and foreign currencies. These financial instruments are not used for trading or other speculative purposes. For those derivative instruments that are designated and qualify as hedging instruments, the Company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.
To the extent hedging relationships are found to be effective, changes in the fair value of the derivatives are offset by changes in the fair value of the related hedged item and recorded to Accumulated other comprehensive loss. Changes in the fair value of a derivative not designated as a hedge, are recorded to the Consolidated Statements of Income.
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 the pound sterling (£700 million) swap agreements mature in June 2026. In addition to 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 September 28, 2024, we had outstanding long-term debt of €379 million that was designated as a hedge of our net investment in certain euro-denominated foreign subsidiaries. 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 fluctuations associated with our outstanding variable rate term loan debt. When valuing interest rate swaps the Company utilizes Level 2 inputs (substantially observable).
During fiscal 2024, the Company elected to cash settle existing interest rate swaps and received net proceeds of $26 million. The offset is included in Accumulated other comprehensive loss and is being amortized to Interest expense through the term of the original swaps. Following the settlement, the Company entered into interest rate swaps with matching notional amounts with expiration in June 2029.
As of September 28, 2024, the Company effectively had (i) a $450 million interest rate swap transaction that swaps a one-month variable SOFR contract for a fixed annual rate of 4.553%, (ii) a $400 million interest rate swap transaction that swaps a one-month variable SOFR contract for a fixed annual rate of 4.008%, (iii) 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.
Balances of our derivative instruments on a gross basis are as follows:
Derivative Instruments
Hedge Designation
Balance Sheet Location
Cross-currency swaps
Designated
Other current liabilities
-
Cross-currency swaps
Designated
Other long-term liabilities
Interest rate swaps
Designated
Other assets
-
Interest rate swaps
Not designated
Other assets
-
Interest rate swaps
Designated
Other long-term liabilities
-
Interest rate swaps
Not designated
Other long-term liabilities
The effect of the Company’s derivative instruments on the Consolidated Statements of Income is as follows:
Derivative instruments
Statements of Income Location
Cross-currency swaps
Interest expense
$
(32
)
$
(41
)
$
(21
)
Interest rate swaps
Interest expense
(77
)
(59
)
The amortization related to unrealized losses in Accumulated other comprehensive loss is expected to be $19 million in the next 12 months. The Company’s financial instruments consist primarily of cash and cash equivalents, long-term debt, interest rate swap agreements, cross-currency swap agreements and capital lease obligations. The book value of our long-term indebtedness exceeded fair value by $35 million as of fiscal 2024 and by $381 million as of fiscal 2023. The Company’s long-term debt fair values were determined using Level 2 inputs as other significant observable inputs were not available.
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.
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 fiscal years then ended:
Level 1
Level 2
Level 3
Total
Impairment
Indefinite lived trademarks
$
-
$
-
$
$
$
-
Goodwill
-
-
5,090
5,090
-
Definite lived intangible assets
-
-
1,286
1,286
-
Property, plant and equipment
-
-
4,575
4,575
Total
$
-
$
-
$
11,199
$
11,199
$
Level 1
Level 2
Level 3
Total
Impairment
Indefinite lived trademarks
$
-
$
-
$
$
$
-
Goodwill
-
-
4,981
4,981
-
Definite lived intangible assets
-
-
1,455
1,455
-
Property, plant and equipment
-
-
4,576
4,576
Total
$
-
$
-
$
11,260
$
11,260
$
5. Commitments, Leases and Contingencies
The Company has various purchase commitments for raw materials, supplies and property and equipment incidental to the ordinary conduct of business.
Collective Bargaining Agreements
At the end of fiscal 2024, we employed approximately 42,000 employees, and approximately 19% of those employees were covered by collective bargaining agreements. The majority of these agreements are due for renegotiation annually.
Leases
Supplemental lease information is as follows:
Leases
Classification
Operating leases:
Operating lease right-of-use assets
Right-of-use asset
$
$
Current operating lease liabilities
Other current liabilities
Noncurrent operating lease liabilities
Operating lease liability
Finance leases:
Finance lease right-of-use assets
Property, plant, and equipment, net
$
$
Current finance lease liabilities
Current portion of long-term debt
Noncurrent finance lease liabilities
Long-term debt, less current portion
Lease Type
Cash Flow Classification
Lease Expense Category
Operating leases
Operating cash flows
Lease cost
$
$
Finance leases
Operating cash flows
Interest expense
Finance leases
Financing cash flows
-
Finance leases
-
Amortization of right-of-use assets
Weighted-average remaining lease term - operating leases
9 years
9 years
Weighted-average remaining lease term - finance leases
6 years
2 years
Weighted-average discount rate - operating leases
5.3
%
5.0
%
Weighted-average discount rate - finance leases
5.8
%
4.5
%
Right-of-use assets obtained in exchange for new operating lease liabilities were $106 million for fiscal 2024.
Litigation
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, the Company believes that any ultimate liability would not be material to its financial position, results of operations or cash flows.
6. Income Taxes
The Company is being taxed at the U.S. corporate level as a C-Corporation and has provided U.S. Federal, State and foreign income taxes. Significant components of income tax expense for the fiscal years ended are as follows:
Current
U.S.
Federal
$
$
$
State
Non-U.S.
Total current
Deferred:
U.S.
Federal
(2
)
(26
)
State
(8
)
(26
)
(7
)
Non-U.S.
(86
)
(65
)
(45
)
Total deferred
(96
)
(117
)
(48
)
Expense for income taxes
$
$
$
U.S. income from continuing operations before income taxes was $363 million, $375 million, and $449 million for fiscal 2024, 2023, and 2022, respectively. Non-U.S. income from continuing operations before income taxes was $248 million, $367 million, and $485 million for fiscal 2024, 2023, and 2022, respectively. The Company paid cash taxes of $274 million, $240 million, and $186 million in fiscal 2024, 2023, and 2022, respectively.
The reconciliation between U.S. Federal income taxes at the statutory rate and the Company’s benefit for income taxes on continuing operations for fiscal years ended are as follows:
U.S. Federal income tax expense at the statutory rate
$
$
$
Adjustments to reconcile to the income tax provision:
U.S. state income tax expense
Federal and state credits
(15
)
(18
)
(15
)
Share-based compensation
(3
)
-
(3
)
Tax law changes
-
-
(17
)
Withholding taxes
Changes in foreign valuation allowance
(5
)
Foreign income taxed in the U.S.
Rate differences between U.S. and foreign
(28
)
(22
)
(8
)
Uncertain tax positions, net
(15
)
(20
)
(19
)
Other
(9
)
(2
)
Expense for income taxes
$
$
$
Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax liability as of fiscal years ended are as follows:
Deferred tax assets:
Accrued liabilities and reserves
$
$
Inventories
Net operating loss carryforward
Interest expense carryforward
Derivatives
-
Lease liability
Research and development credit carryforward
Federal and state tax credits
Capitalization research and development expenditures
Other
Total deferred tax assets
Valuation allowance
(133
)
(114
)
Total deferred tax assets, net of valuation allowance
Deferred tax liabilities:
Property, plant and equipment
Intangible assets
Derivatives
-
Leased asset
Other
Total deferred tax liabilities
1,061
1,107
Net deferred tax liability
$
(306
)
$
(481
)
The Company had $169 million of net deferred tax assets recorded in Other assets, and $475 million of net deferred tax liabilities recorded in Deferred income taxes on the Consolidated Balance Sheets.
As of September 28, 2024, the Company has recorded deferred tax assets related to federal, state, and foreign net operating losses, interest expense, and tax credits. These attributes are spread across multiple jurisdictions and generally have expiration periods beginning in 2025 while a portion remains available indefinitely. Each attribute has been assessed for realization and a valuation allowance is recorded against the deferred tax assets to bring the net amount recorded to the amount more likely than not to be realized. The valuation allowance against deferred tax assets was $133 million and $114 million as of the fiscal years ended 2024 and 2023, respectively, related to the foreign and U.S. federal and state operations.
The Company is permanently reinvested except to the extent the foreign earnings are previously taxed or to the extent that we have sufficient basis in our non-U.S. subsidiaries to repatriate earnings on an income tax free basis.
Uncertain Tax Positions
The following table summarizes the activity related to our gross unrecognized tax benefits for fiscal years ended:
Beginning unrecognized tax benefits
$
$
Gross increases - tax positions in prior periods
Gross decreases - tax positions in prior periods
(2
)
(11
)
Gross increases - current period tax positions
Gross increases - from acquisition
-
Settlements
(4
)
-
Lapse of statute of limitations
(22
)
(32
)
Ending unrecognized tax benefits
$
$
As of fiscal year end 2024, the amount of unrecognized tax benefit that, if recognized, would affect our effective tax rate was $97 million and we had $30 million accrued for payment of interest and penalties related to our uncertain tax positions. Our penalties and interest related to uncertain tax positions are included in income tax expense.
As a result of global operations, we file income tax returns in the U.S. federal, various state and local, and foreign jurisdictions and are routinely subject to examination by taxing authorities throughout the world. Excluding potential adjustments to net operating losses, the U.S. federal and state income tax returns are no longer subject to income tax assessments for years before 2019. With few exceptions, the major foreign jurisdictions are no longer subject to income tax assessments for year before 2016.
7. Retirement Plans
The Company sponsors defined contribution retirement plans covering substantially all employees. Contributions are based upon a fixed dollar amount for employees who participate and percentages of employee contributions at specified thresholds. Contribution expense for these plans was $40 million, $40 million, and $42 million for fiscal 2024, 2023, and 2022, respectively.
The majority of the North American and UK defined benefit pension plans, which cover certain manufacturing facilities, are closed to future entrants. The assets of all the plans are held in a separate trustee administered fund to meet long-term liabilities for past and present employees. The majority, $68 million, of Mainland Europe’s total underfunded status relates to non-contributory pension plans within our German operations. There is no external funding for these plans although they are secured by insolvency insurance required under German law. In general, the plans provide a fixed retirement benefit not related to salaries and are closed to new entrants.
The net amount of liability recognized is included in Employee Benefit Obligations on the Consolidated Balance Sheets. The Company uses fiscal year end as a measurement date for the retirement plans.
Change in Projected
Benefit Obligations (PBO)
North
America
UK
Mainland
Europe
Total
North
America
UK
Mainland
Europe
Total
Beginning of period
$
$
$
$
$
$
$
$
Service cost
-
-
-
-
Interest cost
Currency
-
-
Actuarial loss (gain)
(1
)
(10
)
(26
)
(5
)
(41
)
Benefit settlements
-
-
(3
)
(3
)
(20
)
-
(1
)
(21
)
Benefits paid
(15
)
(29
)
(7
)
(51
)
(16
)
(29
)
(7
)
(52
)
End of period
$
$
$
$
$
$
$
$
Change in Fair
Value of Plan Assets
North
America
UK
Mainland
Europe
Total
North
America
UK
Mainland
Europe
Total
Beginning of period
$
$
$
$
$
$
$
$
Currency
-
-
Return on assets
(73
)
(43
)
Contributions
-
-
Benefit settlements
-
-
(3
)
(3
)
(20
)
-
(1
)
(21
)
Benefits paid
(15
)
(29
)
(7
)
(51
)
(16
)
(29
)
(7
)
(52
)
End of period
$
$
$
$
$
$
$
$
Underfunded status
$
$
(58
)
$
(96
)
$
(132
)
$
$
(91
)
$
(88
)
$
(176
)
At the end of fiscal 2024, the Company had $59 million of net unrealized losses recorded in Accumulated other comprehensive loss on the Consolidated Balance Sheets. The Company expects less than $1 million to be realized in fiscal 2025.
The following table presents key weighted-average assumptions used to determine benefit obligation and benefit cost for the fiscal years ended:
(Percentages)
North America
UK
Mainland Europe
Weighted-average assumptions:
Discount rate for benefit obligation
4.7
5.0
3.3
Discount rate for net benefit cost
5.6
5.0
4.2
Expected return on plan assets for net benefit costs
6.1
6.8
2.7
(Percentages)
North America
UK
Mainland Europe
Weighted-average assumptions:
Discount rate for benefit obligation
5.6
5.5
4.1
Discount rate for net benefit cost
5.1
5.2
3.7
Expected return on plan assets for net benefit costs
6.1
5.7
2.6
In evaluating the expected return on plan assets, Berry considered its historical assumptions compared with actual results, an analysis of current market conditions, asset allocations, and the views of advisors. The return on plan assets is derived from target allocations and historical yield by asset type. A one quarter of a percentage point reduction of expected return on pension assets, mortality rate or discount rate applied to the pension liability would result in an immaterial change to the Company’s pension expense.
In accordance with the guidance from the FASB for employers’ disclosure about postretirement benefit plan assets the table below discloses fair values of each pension plan asset category and level within the fair value hierarchy in which it falls. There were no material changes or transfers between level 3 assets and the other levels.
Fiscal 2024 Asset Category
Level 1
Level 2
Level 3
Total
Cash and cash equivalents
$
$
-
$
-
$
U.S. large cap comingled equity funds
-
-
U.S. mid cap equity mutual funds
-
-
U.S. small cap equity & Corporate bond mutual funds
-
-
International equity mutual funds
-
Real estate equity investment funds
-
-
Corporate bonds
International fixed income funds
-
-
International insurance policies
-
-
Total
$
$
$
$
Fiscal 2023 Asset Category
Level 1
Level 2
Level 3
Total
Cash and cash equivalents
$
$
-
$
-
$
U.S. large cap comingled equity funds
-
-
U.S. mid cap equity mutual funds
-
-
U.S. small cap equity & Corporate bond mutual funds
-
-
International equity mutual funds
-
Real estate equity investment funds
-
Corporate bonds
-
International fixed income funds
-
International insurance policies
-
-
Total
$
$
$
$
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid for the fiscal year end:
North America
UK
Mainland Europe
Total
$
$
$
$
2030-2034
Net pension expense is recorded in Cost of goods sold and included the following components as of fiscal years ended:
Service cost
$
$
$
Interest cost
Amortization of net actuarial loss
-
Expected return on plan assets
(42
)
(46
)
(51
)
Net periodic benefit expense (income)
$
$
$
(15
)
Our defined benefit pension plan asset allocations as of fiscal years ended are as follows:
Asset Category
Equity securities and equity-like instruments
%
%
Debt securities and debt-like
International insurance policies
Other
Total
%
%
The Company’s retirement plan assets are invested with the objective of providing the plans the ability to fund current and future benefit payment requirements while minimizing annual Company contributions. The retirement plans held $15 million of the Company’s stock at the end of fiscal 2024. The Company re-addresses the allocation of its investments on a regular basis.
8. Business Consolidation and Other Activities
In fiscal 2023, the Company initiated business consolidation cost savings initiatives including plant rationalization, in all four segments as part a 2023 cost savings initiative plan. The Company currently expects total business consolidation cash and non-cash expense to be approximately $250 million, with the operations savings intended to counter general economic softness. The initiatives are expected to be fully implemented by the end of fiscal 2025. During
fiscal 2024, 2023, and 2022 the Company did not shut down any facilities with significant net sales.
The table below includes the significant components of our business consolidation and other activities recognized for the fiscal years ended, by reporting segment:
Consumer Packaging International
$
$
$
Consumer Packaging North America
Flexibles
Health, Hygiene & Specialties
Total
$
$
$
Other activities consist of acquisition, divestiture and other business optimization related costs. The table below sets forth the activity with respect to the charges and the impact on our accrued reserves:
Business Consolidation (a)
Employee Severance
and Benefits
Facility
Exit Costs
Non-cash
Impairment Charges
Other
Activities
Total
Balance as of fiscal 2022
$
$
$
-
$
-
$
Charges
Non-cash items
-
-
(8
)
-
(8
)
Cash
(31
)
(25
)
-
(32
)
(88
)
Balance as of fiscal 2023
$
$
$
-
$
-
$
Charges
Non-cash items
-
-
(17
)
(63
)
(80
)
Cash
(25
)
(25
)
-
(26
)
(76
)
Balance as of fiscal 2024
$
$
$
-
$
$
(a)
Since 2022, cumulative costs attributed to business consolidation programs total $184 million.
9. Stockholders’ Equity
Share Repurchases
During fiscal 2024, the Company repurchased approximately 2.0 million shares for $120 million, at an average price of $59.39. During fiscal 2023, the Company repurchased approximately 9.8 million shares for $607 million, at an average price of $61.00. During fiscal 2022, the Company repurchased approximately 12.2 million shares for $709 million, at an average price of $58.30.
All share repurchases were immediately retired. Common stock was reduced by the number of shares retired at $0.01 par value per share. The Company allocates the excess purchase price over par value between additional paid-in capital and retained earnings. As of fiscal 2024, authorized repurchases of $321 million remain available to the Company.
Equity Incentive Plans
The Company has shareholder-approved stock plans under which options and restricted stock units have been granted to employees at the market value of the Company's stock on the date of grant. In fiscal 2021, the Company amended the 2015 Berry Global Group, Inc. Long-Term Incentive Plan to authorize the issuance of 20.8 million shares, an increase of 8.3 million shares from the previous authorization. The intrinsic value of options exercised in fiscal 2024 was $34 million.
Information related to the equity incentive plans as of the fiscal years ended are as follows:
Number
of Shares
(in thousands)
Weighted
Average
Exercise Price
Number
of Shares
(in thousands)
Weighted
Average
Exercise Price
Options outstanding, beginning of period
11,836
$
49.36
11,656
$
47.33
Options granted
1,086
64.62
1,343
56.93
Options exercised
(1,411
)
37.78
(1,041
)
35.85
Options forfeited or cancelled
(110
)
53.63
(122
)
53.96
Options outstanding, end of period
11,401
$
52.21
11,836
$
49.36
Option price range at end of period
$
21.00-66.47
$
21.00-66.47
Options exercisable at end of period
7,898
7,349
Weighted average fair value of options granted during period
$
21.25
$
17.53
Generally, options vest annually in equal installments commencing one year from the date of grant and have a vesting term of either four or five years, depending on the grant date, and an expiration term of 10 years from the date of grant. The fair value for options granted has been estimated at the date of grant using a Black-Scholes model using the following key assumptions:
Risk-free interest rate
4.5
%
3.8
%
1.3
%
Dividend yield
1.7
%
1.7
%
0.0
%
Volatility factor
30.6
%
31.0
%
29.7
%
The following table summarizes information about the options outstanding as of fiscal 2024:
Intrinsic Value
of Outstanding
(in millions)
Weighted
Remaining
Contractual Life
Number
Exercisable
(in thousands)
Intrinsic Value
of Exercisable
(in millions)
Unrecognized
Compensation
(in millions)
Weighted
Recognition
Period
$
5.4 years
7,898
$
$
1.1 years
The Company's issued restricted stock units generally vest in equal installments over four years. Compensation cost is recorded based upon the fair value of the shares at the grant date.
Number
of Shares
(in thousands)
Weighted
Average
Grant Price
Number
of Shares
(in thousands)
Weighted
Average
Grant Price
Awards outstanding, beginning of period
$
58.82
$
61.99
Awards granted
61.95
56.93
Awards vested
(215
)
58.74
(105
)
61.46
Awards forfeited or cancelled
(25
)
60.93
(23
)
59.75
Awards outstanding, end of period
$
60.52
$
58.82
The Company had equity incentive shares available for grant of 2.9 million and 5.0 million as of September 28, 2024 and September 30, 2023, respectively.
10. Segment and Geographic Data
Berry’s operations are organized into four reporting 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.
Selected information by reportable segment is presented in the following tables:
Net sales
Consumer Packaging International
$
3,843
$
4,031
$
4,293
Consumer Packaging North America
3,122
3,122
3,548
Flexibles
2,756
2,884
3,488
Health, Hygiene & Specialties
2,537
2,627
3,166
Total
$
12,258
$
12,664
$
14,495
Operating income
Consumer Packaging International
$
$
$
Consumer Packaging North America
Flexibles
Health, Hygiene & Specialties
Total
$
$
1,079
$
1,242
Depreciation and amortization
Consumer Packaging International
$
$
$
Consumer Packaging North America
Flexibles
Health, Hygiene & Specialties
Total
$
$
$
Total assets:
Consumer Packaging International
$
6,554
$
6,217
Consumer Packaging North America
4,321
4,312
Flexibles
2,262
2,476
Health, Hygiene & Specialties
3,476
3,582
Total assets
$
16,613
$
16,587
Selected information by geographical region is presented in the following tables:
Net sales:
United States and Canada
$
6,781
$
6,893
$
7,907
Europe
4,321
4,559
5,065
Rest of world
1,156
1,212
1,523
Total net sales
$
12,258
$
12,664
$
14,495
Long-lived assets:
United States and Canada
$
6,798
$
6,893
Europe
3,859
3,800
Rest of world
1,382
1,361
Total long-lived assets
$
12,039
$
12,054
Selected information by product line is presented in the following tables:
(in percentages)
Net sales:
Packaging
%
%
%
Non-packaging
Consumer Packaging International
%
%
%
Containers & Food Service
%
%
%
Closures, Bottles & Specialties
Consumer Packaging North America
%
%
%
Core Films
%
%
%
Retail & Industrial
Flexibles
%
%
%
Health
%
%
%
Hygiene
Specialties
Health, Hygiene & Specialties
%
%
%
11. Net Income 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:
(in millions, except per share amounts)
Numerator
Consolidated net income
$
$
$
Denominator
Weighted average common shares outstanding - basic
115.1
120.1
130.6
Dilutive shares
2.6
2.9
2.2
Weighted average common and common equivalent shares outstanding - diluted
117.7
123.0
132.8
Per common share earnings
Basic
$
4.48
$
5.07
$
5.87
Diluted
$
4.38
$
4.95
$
5.77
2 million, 1 million and 1 million shares were excluded from the fiscal 2024, 2023 and 2022 diluted EPS calculation, respectively, as their effect would be anti-dilutive.
12. Subsequent Events
Closing of Spin-Off
In February 2024, the Company announced plans for a spin-off and merger of our Health, Hygiene & Specialties Global Nonwovens and Films business (HHNF) with Glatfelter Corporation (GLT). The spin-off occurred on November 4, 2024 and the historical business will be presented as a Discontinued Operation in future filings.
Tapes
On November 24, 2024, the Company entered into a definitive agreement to sell its Specialty Tapes business (“Tapes”) for a headline purchase price of $540 million, which will be subject to a number of 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 is expected to be completed by early 2025, subject to customary closing conditions. The Company anticipates a book gain will be recorded at the time of disposition, but is not calculable until the closing adjustments have been finalized.
Entry into Merger Agreement
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, (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.
As a result of the Merger, the distribution by the Company of the wholly-owned subsidiary that owned the HHNF business at the time of the spin-off (“Spinco”) that occurred on November 4, 2024 (the “Distribution”) may be a taxable transaction to the Company for U.S. federal income tax purposes. If the Distribution were determined to be taxable to the Company, the taxable gain recognized by the Company, if any, would be immaterial based on the Company’s adjusted tax basis in Spinco immediately prior to the Distribution.
Other
In November 2024, the Company's Board of Directors authorized a quarterly cash dividend of $0.31 per share. The first fiscal quarter payment will be paid on December 16, 2024 to shareholders of record as of December 2, 2024.

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

---

ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
In connection with the preparation of this Form 10-K, management evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 28, 2024. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of September 28, 2024.
Management’s Report on Internal Controls over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s internal controls over financial reporting were effective as of September 28, 2024.
The effectiveness of our internal control over financial reporting as of September 28, 2024, has been audited by the Company’s independent registered public accounting firm, as stated in their report, which is included herein.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended September 28, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

---

ITEM 9B. OTHER INFORMATION
Item 9B. OTHER INFORMATION
Rule 10b5-1 Trading Plans
No officers or directors, as defined in Rule 16a-1(f), adopted, modified and/or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as defined in Regulation S-K Item 408, during the fourth quarter of fiscal 2024.

---

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Except as set forth below, the information required by this Item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with the 2025 Annual Meeting of Stockholders.
We have a Global Code of Business Ethics that applies to all directors and employees, including our Chief Executive Officer and senior financial officers. We also have adopted a Supplemental Code of Ethics, which is in addition to the standards set by our Global Code of Business Ethics, in order to establish a higher level of expectation for the most senior leaders of the Company. Our Global Code of Business Ethics and Supplemental Code of Ethics can be obtained, free of charge, by contacting our corporate headquarters or can be obtained from the Corporate Governance section of the Investors page on the Company’s internet site. In the event that we make changes in, or provide waivers from, the provision of the Code of Business Ethics that the SEC requires us to disclose, we will disclose these events in the corporate governance section of our website within four business days following the date of such amendment or waiver.
We have also adopted an insider trading policy that governs the purchase, sale, and/or other dispositions of the Company’s securities by directors, officers, and colleagues that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations and listing standards applicable to the Company. A copy of the Company’s insider trading policy has been filed as Exhibit 19 to this Annual Report on Form 10-K.

---

ITEM 11. EXECUTIVE COMPENSATION
Item 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with the 2025 Annual Meeting of Stockholders.

---

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item, is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with the 2025 Annual Meeting of Stockholders.

---

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information required by this Item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with the 2025 Annual Meeting of Stockholders.

---

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with the 2025 Annual Meeting of Stockholders.
PART IV

---

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
1.
Financial Statements
The financial statements listed under Item 8 are filed as part of this report.
2.
Financial Statement Schedules
Schedules have been omitted because they are either not applicable or the required information has been disclosed in the financial statements or notes thereto.
3.
Exhibits
The exhibits listed on the Exhibit Index immediately following the signature page of this annual report are filed as part of this report.