Berry Global Group Annual Report 2020

Plain-text annual report

ANNUAL REPORT2020Always advancing toprotect what’s important.FINANCIAL HIGHLIGHTS*FISCAL YEARS ENDEDSEPTEMBER 26, 2020SEPTEMBER 28, 2019% CHANGE5 Year Total Return DJUSCP = 144%S&P 500 = 178% Dow Jones US Containers & Packaging IndexBerry Global Group, Inc.S&P 500 Index'15'16'17'18'19'20$100$150$200172%$581$732$761$974$1,179$500$700$900$1,100FY '16FY '17FY '18FY '19FY '20**Total cumulative return based on $100 invested at beginning of the period vs. the S&P 500 and DJ US Containers & Packaging. Assumes reinvestment of dividends.NET SALES$517$601$634$764$974$400$600$800$1,000FY '16FY '17FY '18FY '19FY '20FREE CASH FLOWOPERATING INCOMEOPERATING EBITDA*In millions of dollars, except stock performance data. Operating EBITDA and adjusted free cash flow are non-GAAP financial measures. See reconciliation located within this document.STOCK PERFORMANCE**$6,489$7,095$7,869$8,878$11,709$6,000$8,000$10,000$12,000FY '16FY '17FY '18FY '19FY '20$1,210$1,327$1,380$1,530$2,157$1,000$1,300$1,600$1,900$2,200FY '16FY '17FY '18FY '19FY '20Net Sales $11,709$8,87832%Operating Income 1,179 974 21%Operating EBITDA 2,157 1,530 41%Free Cash Flow 947 764 24%Sustainability, Environmental, and Social ResponsibilityAt Berry Global, we create innovative packaging products and solutions that 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 advance what’s important across the value chain. As industry leaders in sustainability, our commitment to the environment goes beyond a corporate responsibility – it is a part of our company DNA and represented in our company mission, Always advancing to protect what’s important. The Board of Directors and its committees align to our strategic priorities, including our Impact 2025 strategy, and oversee the execution of our environmental, social, and governance strategies and initiatives as an integrated part of our overall strategy and risk management. At Berry, the Board is actively engaged with management on related topics such as sustainability goals; analysis of alternative pathways to achieve those goals; customer, investor, and other stakeholder expectations; and the environmental impact of our Company.We develop and design new products and materials across the globe with an eye toward the circular economy. From our products to our operations, we are innovating for the world, providing solutions for the world’s leading and emerging brands. Our team of 47,000 employees have the expertise needed to innovate and lead our peers into a more sustainable future. Only at Berry will you find the deep expertise in material science, manufacturing, and design for recyclability, providing transformational products which make a positive impact for our customers.We stand behind the power of plastics and its ability to not only meet, but exceed sustainability goals for our customers. At Berry, our global footprint and leading purchasing scale offers unique access to uninterrupted raw material supply and high quality sustainable polymers. These strong vendor partnerships, paired with our internal expertise, prove instrumental to our success. With 295 manufacturing facilities, extensive product lines, and robust conversion processes, we provide partnership to customers as they prioritize and fulfill their sustainability initiatives, achieving the greatest impact for our customer’s investment. Continued partnerships with innovators in the industry and like-minded brand owners will fuel the potential for a more circular economy. And our continued industry-leading investments help ensure recycling and reuse of product packaging. As we reflect on 2020, we see an era of undeniable change. In the fight against COVID-19, plastics was, and continues to be, a critical component of protecting the health of people around the world. Although this year presented unprecedented change, the challenges we solved and the innovation(s) we delivered never sat idle or become siloed – they were harnessed and unleashed across the value chain to benefit people all around the world. The plastics industry is one that is constantly innovating, creating products which make our lives better through the products we use every day. At Berry, we remain steadfast in our promise to our customers:Innovation for the World. Solutions for You.Our ValuesWe recognize the importance of strong, sustainable partnerships throughout all aspects of our business; we view our employees, customers, suppliers, and communities as our partners.We pursue excellence in all that we do by optimizing our processes, enhancing our sustainability initiatives, and by providing the highest quality products and services to our customers. We believe in continuous training and development for our employees so that we can deliver excellence to our customers. Strategic growth is imperative for our business. Growth comes in many forms: financial growth, customer growth, employee growth and development, product growth and innovation, and the global growth of our Company.Our number one value, we relentlessly pursue safety in all we do. We maintain high standards to ensure our facilities are safe and environmentally conscious.PartnershipsExcellenceGrowthSafetySustainability StrategyProductsPerformancePartnersOptimize Design• Lightweight products• Design 100% of packaging to be reusable, recyclable, or compostableSustainable Sourcing• Achieve 10% recycled content across fast-moving consumer goods packaging• Encourage the development of renewable materialsIncrease our offer of widely recyclable packaging, items with high levels of recycled material, and an abundance of items optimized to be lightweight Set a new record for annual usage of post-consumer plastic of 70,000 metric tons driven by our acquisition of RPCAdvance initiatives focused on reducing our impact on the environment in emissions, waste, energy, and water Continued long-term reduction in Scope 1+2 GHG emissions intensity; reduced 3% year-over-year and 46% since 2008Partnered with key organizations to meet our sustainability goals and engaged employees to build stronger communities around the worldJoined the Alliance to End Plastic Waste as founding member and signed the New Plastics Economy Global CommitmentClimate Change• Reduce greenhouse gas emissions 25% by 2025 versus our 2016 baselineContinuous Improvement• Reduce landfill waste 5% per year• Reduce energy and water consumption 1% per yearOperation Clean Sweep®• Prevent resin loss through OCS• Implement OCS at acquisition sites within the first yearEnd Plastic Waste• Expand and modernize waste infrastructure to increase recovery and prevent loss of plastic to the environment• Engage the plastics industry on OCSLimit Global Warming to 1.5°C• Increase renewable energy• Expand the use of plastic in place of alternative materials• Promote science-based targets We are proud to have introduced a number of products designed for sustainability. In line with our strategy, we are working towards 100% of our fast-moving consumer packaging to be reusable, recyclable, or compostable by 2025. In response to this goal, we offer widely recyclable packaging, items with high levels of recycled material, and an abundance of items optimized to be lightweight.Minimize product impacts through design and innovationContinuously improving in order to minimize our operational impacts Maximize positive impacts by engaging partners on key issuesOur sustainability plan: ‘IMPACT 2025’Recent AccomplishmentsSustainability ProgressHuman Capital Management We believe that it is the cumulative success of our thousands of employees around the globe that fosters excellence within our organization.1 Calendar Year 2019. 2 Environment, Health and Safety. 3 FY 2020.Partnership to improve the quantity and quality of plastic recycled through digital watermarkingAnnounced off-take agreement for recycled plastic produced via advanced recyclingEmbracing Employee DevelopmentStriving for an Inclusive WorkplacePursuing Safety in All That We DoAnnounced supply agreement to produce Philadelphia cream cheese packaging using recycled content produced via advanced recyclingLaunched first moisture absorber with post-consumer recycled plasticFormalized partnership to create a closed loop system for plastic film recyclingBerry received ISCC+ certification at 9 facilities, ensuring traceability of recycled and bio-based polymers through the supply chainFocused on advancing careers of employees from shop floor to executive level through employee development programs including:Leadership Development Program growing key leadership competencies for mid-level employeesFront Leadership Program training manufacturing plant employees to drive a safe work environmentInternship Program focused on talent retention through leadership development, senior-level exposure, and education Executive Development Program to provide global exposure and enterprise thinkingemployees participated in our skill and competency building eLearning platform1employee resource groups celebrating diversitytotal recordable incident rate, below industry average of 3.83Fostering the development of a thoughtful, diverse workplace through our pluglN Diversity and Inclusion Network and its initiatives:Diversity Council provides global oversight of the plugIN mission in partnership with Berry’s executive leadership and includes a cross-section of senior employeesEmployees Resource Groups celebrate diversity and encourage unique perspectives to help fuel innovation Opportunities to create connections at all levels and drive a positive global culture through Peer Groups, Coffee and Conversation, and Talks with CEOSafety of our employees and contractors is our number one priority and we introduced an updated EHS2 Vision comprised of six components (CIRCLE):Compliance with applicable laws, regulations, and standardsIncident Prevention – consistently working towards zero incidents Risk Management – driven by accurate identification and robust mitigationCulture of engagement and mutual supportLeading by example to achieve excellenceEHS Management System that is global, integrated, and drives continuous improvement24,500 51.0Environmental PartnersOur partners representing the environmental sustainability area are critical to our success in ending plastic waste, promoting a circular economy, and advocating for the power of plastics. Each partner performs a specific role relative to our sustainability goals. Although every partner is important, we believe our impact is greatest with the Alliance to End Plastic Waste, Ellen MacArthur Foundation, and Operation Clean Sweep. Our significant global scope and scale allow us to make a positive impact through providing sustainable, value-added packaging around the world, including a focus on worldwide efforts in recycling innovation, lightweighting, and design for sustainability.In January 2019, we joined the Alliance to End Plastic Waste as a founding member. The Alliance is a new organization, now comprised of 42 companies and has made an initial multi-billion dollar commitment to invest in solutions to eliminate plastic waste in the environment. The focus of the alliance is narrowed to four main areas: infrastructure development, innovations, education and engagement, and clean-up.Announced in June 2019, we are a proud signatory of the New Plastics Economy Global Commitment to eliminate plastic pollution at its source. By signing the Global Commitment, we have pledged to:• Take action to eliminate problematic or unnecessary plastic packaging• 100% of plastic packaging to be reusable, recyclable, or compostable• A target of 10% post-consumer recycled content across all plastic packaging used• Take action to increase reusable packaging Operation Clean Sweep (OCS) is an international program designed to prevent and help keep plastic litter materials out of the marine environment. As an active member since 2012, we have pledged to prevent resin pellet, flake, and powder loss. The organization is a critical component to our Impact 2025 strategy, and is an important guide in many of our manufacturing facilities.The Company will soon publish its 2020 Impact Report, which will be prepared in accordance with the Global Reporting Initiative (GRI) Standards: Core option and Sustainability Accounting Standards Board (SASB) Containers and Packaging Sustainability Accounting Standard version 2018-10. The Company’s 2019 report is currently available at sustainability.berryglobal.com/resources.Flexible FilmRecycling GroupTMUNITEDSTATESSECURITIESANDEXCHANGECOMMISSIONWashington,D.C.20549FORM10-K☒ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934FortheFiscalYearEndedSeptember26,2020OR☐TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFSECURITIESEXCHANGEACTOF1934ForthetransitionperiodfromtoCommissionFileNumber001-35672BERRYGLOBALGROUP,INC.ADelawarecorporation101OakleyStreet,Evansville,Indiana,47710(812)424-2904IRSemployeridentificationnumber20-5234618SecuritiesregisteredpursuanttoSection12(b)oftheAct:TitleofEachClassTradingSymbol(s)NameofEachExchangeonWhichRegisteredCommonStock,$0.01parvaluepershareBERYNewYorkStockExchangeLLCIndicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.Yes☒No☐IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.Yes☐No☒Indicatebycheckmarkwhethertheregistrant:(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.Yes☒No☐IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405ofRegulationS-T(§232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).Yes☒No☐Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany,”and“emerginggrowthcompany”inRule12b-2oftheExchangeActLargeAcceleratedFiler☒Acceleratedfiler☐Non-acceleratedfiler☐Smallreportingcompany☐Emerginggrowthcompany☐Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.☐Indicatebycheckmarkwhethertheregistranthasfiledareportonandattestationtoitsmanagement’sassessmentoftheeffectivenessofinternalcontroloverfinancialreportingunderSection404(b)oftheSarbanes-OxleyAct(15U.S.C.7262(b))bytheregisteredpublicaccountingfirmthatpreparedorissueditsauditreport.☒Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheSecuritiesExchangeActof1934).Yes☐No☒Theaggregatemarketvalueofthecommonstockoftheregistrantheldbynon-affiliateswasapproximately$4.6billionasofMarch27,2020,thelastbusinessdayoftheregistrant’smostrecentlycompletedsecondfiscalquarter.TheaggregatemarketvaluewascomputedusingtheclosingsalepriceasreportedontheNewYorkStockExchange.AsofNovember23,2020,therewere133.5millionsharesofcommonstockoutstanding.DOCUMENTSINCORPORATEDBYREFERENCEPortionsofBerryGlobalGroup,Inc.’sProxyStatementforits2021AnnualMeetingofStockholdersareincorporatedbyreferenceintoPartIIIofthisreport.CAUTIONARYSTATEMENTCONCERNINGFORWARD-LOOKINGSTATEMENTSInformationincludedinorincorporatedbyreferenceinfilingswiththeU.S.SecuritiesandExchangeCommission(the“SEC”)andtheCompany’spressreleasesorotherpublicstatements,containormaycontainforward-lookingstatements.Thisreportincludes“forward-looking’statementswithrespecttoourfinancialcondition,resultsofoperationsandbusinessandourexpectationsorbeliefsconcerningfutureevents.Thesestatementscontainwordssuchas“believes,”“expects,”“may,”“will,”“should,”“would,”“could,”“seeks,”“approximately,”“intends,”“plans,”“estimates,”“project”,“outlook,”“anticipates”or“lookingforward”orsimilarexpressionsthatrelatetoourstrategy,plans,intentions,orexpectations.Allstatementswemakerelatingtoourestimatedandprojectedearnings,margins,costs,expenditures,cashflows,growthrates,andfinancialresultsortoourexpectationsregardingfutureindustrytrendsareforward-lookingstatements.Inaddition,we,throughourseniormanagement,fromtimetotimemakeforward-lookingpublicstatementsconcerningourexpectedfutureoperationsandperformanceandotherdevelopments.Theseforward-lookingstatementsaresubjecttorisksanduncertaintiesthatmaychangeatanytime,and,therefore,ouractualresultsmaydiffermateriallyfromthosethatweexpected.Allforward-lookingstatementsaremadeonlyasofthedatehereof,andweundertakenoobligationtopubliclyupdateorreviseanyforward-lookingstatementasaresultofnewinformation,futureeventsorotherwise,exceptasotherwiserequiredbylaw.Additionally,wecautionreadersthatthelistofimportantfactorsdiscussedinthesectiontitled“RiskFactors”maynotcontainallofthematerialfactorsthatareimportanttoyou.Inaddition,inlightoftheserisksanduncertainties,themattersreferredtointheforward-lookingstatementscontainedinthisreportmaynotinfactoccur.Accordingly,readersshouldnotplaceunduerelianceonthosestatements.1TABLEOFCONTENTSFORM10-KFORTHEFISCALYEARENDEDSEPTEMBER26,2020PagePARTIItem1BUSINESS............................................................3Item1A.RISKFACTORS........................................................6Item1B.UNRESOLVEDSTAFFCOMMENTS........................................9Item2.PROPERTIES..........................................................9Item3.LEGALPROCEEDINGS..................................................9Item4.MINESAFETYDISCLOSURES............................................9PARTIIItem5.MARKETFORREGISTRANT’SCOMMONEQUITY,RELATEDSTOCKHOLDERMATTERS,ANDISSUERPURCHASESOFEQUITYSECURITIES.................10Item6.SELECTEDFINANCIALDATA............................................10Item7.MANAGEMENT’SDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOFOPERATIONS...............................................10Item7A.QUANTITATIVEANDQUALITATIVEDISCLOSURESABOUTMARKETRISK.......20Item8.FINANCIALSTATEMENTSANDSUPPLEMENTARYDATA.....................21Item9.CHANGESINANDDISAGREEMENTSWITHACCOUNTANTSONACCOUNTINGANDFINANCIALDISCLOSURE...........................................21Item9A.CONTROLSANDPROCEDURES...........................................21Item9B.OTHERINFORMATION.................................................21PARTIIIItem10.DIRECTORS,EXECUTIVEOFFICERSANDCORPORATEGOVERNANCE..........22Item11.EXECUTIVECOMPENSATION............................................22Item12.SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENTANDRELATEDSTOCKHOLDERMATTERS.................................22Item13.CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONSANDDIRECTORINDEPENDENCE......................................................22Item14.PRINCIPALACCOUNTANTFEESANDSERVICES.............................22PARTIVItem15.EXHIBITSANDFINANCIALSTATEMENTSCHEDULES........................23Item16.FORM10-KSUMMARY..................................................232Item1.BUSINESS(Inmillionsofdollars,exceptasotherwisenoted)GeneralBerryGlobalGroup,Inc.(“Berry,”“we,”orthe“Company”)isaleadingglobalsupplierofabroadrangeofinnovativerigid,flexibleandnon-wovenproductsusedeverydaywithinconsumerandindustrialendmarkets.Wesellourproductspredominantlyintostable,consumer-orientedendmarkets,suchashealthcare,personalcare,andfoodandbeverage.Ourcustomersconsistofadiversemixofleadingglobal,national,mid-sizedregionalandlocalspecialtybusinesses.Thesizeandscopeofourcustomernetworkallowsustointroducenewproductswedeveloporacquiretoavastaudiencethatisfamiliarwithourbusiness.ForthefiscalyearendedSeptember26,2020(“fiscal2020”),nosinglecustomerrepresentedmorethan5%ofnetsalesandourtoptencustomersrepresentedapproximately15%ofnetsales.Webelieveourmanufacturingprocesses,manufacturingfootprintandourabilitytoleverageourscaletoreducecosts,positionsusasalow-costmanufacturerrelativetoourcompetitors.Additionalfinancialinformationaboutoursegmentsisprovidedin“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”andthe“NotestoConsolidatedFinancialStatements,”whichareincludedelsewhereinthisForm10-K.SegmentOverviewConsumerPackagingInternationalTheConsumerPackagingInternationalsegmentprimarilyconsistsofthefollowingproductgroups:ClosuresandDispensingSystems.Wemanufactureawiderangeofclosures,dispensingsystemsandapplicatorsforavarietyofendmarketsspecializinginconvenience,safety,securityande-commerceformats.PharmaceuticalDevicesandPackaging.Wemanufactureinhalersanddosecountersinadditiontobottlesandvialsforover-the-counterandprescriptionmedicines.BottlesandCanisters.Wemanufactureacollectionpackagingsolutionsforconsumerandindustrialapplicationsacrosspersonalcare,beverage,andfoodmarkets.Polythenefilms.Wemanufacturepolythenefilmsforadiverserangeofendmarkets,includingagricultureandhorticulture,construction,industrial,healthcareandwasteservices.Recycling.Wehavecapabilitiestorecyclebothrigidandflexibleendoflifematerialsfromindustrialandconsumersourceswithawiderangeofre-useapplicationsacrosspackagingandnon-packagingformats.Containers.Wemanufactureinjectionmoldedandthermoformedcontainersandlidsacrossconsumerandindustrialpackagingendmarkets.TechnicalComponents.Wemanufacturecomplexhigh-precisionmoldsandmoldedcomponentsincludingtemporarywastestoragesolutionsandproductsmanufacturedusingrotationalmoldingtechnologyformaterialshandlingandspecialtyvehiclesmarkets.ConsumerPackagingNorthAmericaTheConsumerPackagingNorthAmericasegmentprimarilyconsistsofthefollowingproductgroups:ContainersandPails.Wemanufactureacollectionofcontainersandpailsfornationallybrandedandprivatelabelcustomers.Theseareofferedinvariousstyleswithaccompanyinglids,bailsandhandles.Containersandlidsareavailabledecoratedwithin-mold-labeling,indirectflexographicprint,digitalprinting,directprint,andotherdecorationtechnologies.Foodservice.Wemanufacturelightweightpolypropylenecupsandlidsforhotandcoldbeverages.Utilizingthermoformingandinjection-molding,weoffermono-materialcupandlidpackagingsolutionsforsimplificationinpost-consumercollectionandcompatibilitywithrecyclingsystems.Ourmarketsincludequickservicerestaurants,fastcasualdining,foodservicedelivery,conveniencestores,stadiums,andretailstores.3ClosuresandOvercaps.Wemanufacturechild-resistant,continuous-thread,andtamperevidentclosures,aswellasaerosolovercaps.Wesellourclosuresandovercapsintonumerousendmarkets,includinghouseholdchemical,healthcare,foodandbeverage,andpersonalcare.BottlesandPrescriptionVials.Wemanufacturebottlesandprescriptionvialsutilizingwidelyrecyclablematerialswhichservicevariousspirits,foodandbeverage,vitaminandnutritional,andpersonalcaremarkets.Tubes.Wemanufactureacompletelineofextrudedandlaminatetubesinawidevarietyofsizesandmaterialblendsincludingblendsupto70%post-consumerresin.Themajorityofourtubesaresoldinthepersonalcaremarket,butwealsosellourtubesinthepharmaceuticalandhouseholdchemicalmarkets.EngineeredMaterialsTheEngineeredMaterialssegmentprimarilyincludesthefollowingproductgroups:StretchandShrinkFilms.Wemanufacturebothhandandmachine-wrapstretchfilmsandcustomshrinkfilms,whichareusedtoprepareproductsandpackagesforstorageandshipping.Wesellstretchfilmproductsprimarilythroughdistributionandshrinkfilmdirectlytoadiversemixofendusers.ConverterFilms.Wemanufacturesealantandbarrierfilmsforvariousflexiblepackagingconverterscompanies.Inaddition,certainofourproductsareusedforindustrialapplications,whereconvertersuseourfilmsinfinishedproductsforvariousendmarketapplications.InstitutionalCanLiners.Wemanufacturetrash-canlinersandfoodbagsforoffices,restaurants,schools,hospitals,hotels,municipalities,andmanufacturingfacilities.TapeProducts.Wemanufactureclothandfoiltapeproducts.Othertapeproductsincludehigh-quality,high-performancelinersofsplicingandlaminatingtapes,flame-retardanttapes,flashingandseamingtapes,double-facedcloth,masking,mounting,andmedicalandspecialtytapes.Tapeproductsaresoldprimarilythroughdistributorsanddirectlytoendusersforindustrial,buildingandconstruction,andretailmarketapplications.FoodandConsumerFilms.Wemanufactureprintedfilmproductsforthefreshbakery,tortilla,deli,andfrozenvegetablemarkets.Wealsomanufacturebarrierfilmsusedforcereal,cookie,crackeranddrymixpackagesthataresolddirectlytofoodmanufacturers.RetailBags.Wemanufactureadiversifiedportfolioofpolyethylene-basedfilmproductstoendusersintheretailmarkets.Ourproductsincludedropclothsandretailtrashbags.Theseproductsaresoldprimarilythroughgrocerystores,hardwarestores,homeimprovementcenters,paintstores,andmassmerchandiseroutlets.AgricultureFilms.Wemanufactureagriculturefilmsprimarilyusedinthesilage,greenhouseandmulchapplications.Health,Hygiene&SpecialtiesTheHealth,Hygiene&Specialtiessegmentprimarilyincludesthefollowingproductgroups:HealthProducts.Wemanufacturemedicalgarmentmaterials,surgicaldrapes,householdcleaningwipes,andfacemasks.Thekeyendmarketsandapplicationfortheseproductsisinfectionprevention.HygieneProducts.Wemanufactureabroadcollectionofcomponentsforbabydiapers,adultincontinenceandotherabsorbenthygieneproducts,elasticfilmsandlaminates,andsubstratesfordryersheets.Theprimaryendmarketfortheseproductsispersonalcare.SpecialtiesProducts.Wemanufactureabroadarrayofproductsandcomponentsforgeosyntheticsandfiltrationproductsservicingthespecialtyindustrialmarkets.Marketing,Sales,andCompetitionWereachourlargeanddiversifiedcustomerbasethroughadirectsalesforceofdedicatedprofessionalsandthestrategicuseofdistributors.Ourscaleenablesustodedicatecertainsalesandmarketingeffortstoparticularproductsorcustomers,whenapplicable,whichenablesustodevelopexpertisethatwebelieveisvaluedbyourcustomers.4ThemajormarketsinwhichtheCompanysellsitsproductsarehighlycompetitive.Areasofcompetitionincludeservice,innovation,quality,andprice.Thiscompetitionissignificantastoboththesizeandthenumberofcompetingfirms.CompetitorsincludebutarenotlimitedtoAmcor,Silgan,Aptar,Reynolds,Intertape,3M,Tredegar,Avgol,andFitesa.RawMaterialsOurprimaryrawmaterialisplasticresin.Inaddition,weuseothermaterialssuchasbutylrubber,adhesives,paperandpackagingmaterials,linerboard,rayon,polyesterfiber,andfoil,invariousmanufacturingprocesses.Theserawmaterialsareavailablefrommultiplesourcesandingeneralwepurchasefromavarietyofglobalsuppliers.Whiletemporaryshortagesofrawmaterialscanoccur,weexpecttocontinuetosuccessfullymanagerawmaterialsupplieswithoutsignificantsupplyinterruptions.EmployeesOurcommitmenttothehealthandsafetyofouremployeesremainsournumberonepriorityasevidencedbyourOSHAincidentrateofapproximately1.0beingsignificantlylowerthantheindustryaverage.SpecificallyrelatedtotheCOVID-19pandemic,ourrigorousprecautionarymeasureshaveincludedtheformationofglobalandregionalresponseteamsthatmaintaincontactwithauthoritiesandexperts,restrictionsoncompanytravel,quarantineprotocols,disinfectionmeasuresandotheractionsdesignedtohelpprotectemployees.Weexpecttocontinuethesemeasuresuntilthepandemicisadequatelycontained.Asoftheendoffiscal2020,weemployedapproximately47,000employeeswithapproximately20%ofthoseemployeesbeingcoveredbycollectivebargainingagreements.Thecollectivebargainingagreementscoveringamajorityoftheseemployeesexpireannuallyandasaresult,aredueforrenegotiationinfiscalyearending2021(“fiscal2021”).Ourrelationswithemployeesundercollectivebargainingagreementsremainsatisfactoryandtherehavebeennosignificantworkstoppagesorotherlabordisputesduringthepastthreeyears.Patents,TrademarksandOtherIntellectualPropertyWecustomarilyseekpatentandtrademarkprotectionforourproductsandbrandswhileseekingtoprotectourproprietaryknow-how.Whileimportanttoourbusinessintheaggregate,salesofanyoneindividuallypatentedproductisnotconsideredmaterialtoanyspecificsegmentortheconsolidatedresults.EnvironmentalandSustainabilityPlasticcontinuestogainshareasthepreferredsubstrateacrossmanyoftheapplicationsinwhichweparticipate.Thisisdrivenbyitssuperiorcapabilities—clarity,protection,designversatility,consumersafety,convenienceandbarrierproperties,aswellasitssuperiorenvironmentalperformance.Asthemostresource-efficientsubstrate,theuseofplasticsreducesgreenhousegasemissions,energyconsumption,wateruse,andwastegenerationcomparedtoalternatives.Inadditiontoreducingwastethroughlighterweightproducts,plasticsalsopreventsignificantwastegenerationbybothprotectingproductsthroughthesupplychainandextendingtheshelf-lifeoffood.Forthesereasons,webelieveplasticsisandwillcontinuetobethemostsustainablematerial.Manyofourcustomershaveaggressivesustainabilitygoals.Customersareincreasinglyinterestedinproductsthatcanhelpthemachievetheirgoalsandwanttopartnerwithcompaniesthathavesimilarambitions.Wearetakingascience-basedapproach,usinglifecycleassessmenttoinformourdecisionmakingprocess.Wehaveteamsdedicatedtoimprovingthecircularityofourproducts—optimizingdesignforreuse,recyclingorcomposting.Wearealsoreducingouruseofvirgin,fossilfuelsbyincreasinguseofbothrecycledplasticsandbioplastics,lightweightingourproducts,andincreasingtheuseofrenewableenergyinouroperations.WecontinuetolaunchnewproductsandcomponentsinNorthAmericaandEuropemadewithpost-consumerresin.Tomeetgrowingdemandforrecycledcontent,wehaveenteredintoofftakeagreementsforbothmechanicallyrecycledandadvancedrecycledresinsaswellasexpandedourownrecyclingoperationsinNorthAmericaandEurope.WearealsopartneringwiththeEllenMacArthurFoundation,AlliancetoEndPlasticWasteandotherleadingcompaniesinoureffortstocreateamorecirculareconomyforplastics.AvailableInformationWemakeavailable,freeofcharge,ourannualreportsonForm10-K,quarterlyreportsonForm10-Q,currentreportsonForm8-Kandamendments,ifany,tothosereportsthroughourinternetwebsiteassoonasreasonablypracticableaftertheyhavebeenelectronicallyfiledwiththeSEC.Ourinternetaddressiswww.berryglobal.com.Theinformationcontainedonourwebsiteisnotbeingincorporatedherein.5Item1A.RISKFACTORSOperationalRisksEffectivelymanagingchangeandgrowth.Ourfuturerevenueandoperatingresultswilldependonourabilitytoeffectivelymanagetheanticipatedgrowthandmanagingcustomertimelines.Wearecontinuouslyinvestingingrowthareasandexpandingouroperations,increasingourheadcountandexpandingintonewproductofferings.Thisgrowthhasplacedsignificantdemandsonourmanagementaswellasourfinancialandoperationalresources,andcontinuedgrowthpresentsseveralchallenges,including:•expandingmanufacturingcapacity,maintainingqualityandincreasingproduction;•identifying,attractingandretainingqualifiedpersonnel;•increasingourregulatorycompliancecapabilities,particularlyinnewlinesofbusinessorproductofferings;Increasesinresinpricesorashortageofavailableresincouldharmourfinancialconditionandresultsofoperations.Plasticresinsaresubjecttopricefluctuationsandavailability,duetoexternalfactors,suchastheCOVID-19pandemic,thatarebeyondourcontrol.Materialshortagesorourinabilitytotimelypassthroughpriceincreasestoourcustomersmayadverselyaffectourbusiness,financialconditionandresultsofoperations.Wemaynotbeabletocompetesuccessfullyandourcustomersmaynotcontinuetopurchaseourproducts.Wecompetewithmultiplecompaniesineachofourproductlinesonthebasisofanumberofconsiderations,includingprice,service,quality,productcharacteristicsandtheabilitytosupplyproductstocustomersinatimelymanner.Ourproductsalsocompetewithvariousothersubstrates.Someofthesecompetitiveproductsarenotsubjecttotheimpactofchangesinresinprices,whichmayhaveasignificantandnegativeimpactonourcompetitivepositionversussubstituteproducts.Ourcompetitorsmayhavefinancialandotherresourcesthataresubstantiallygreaterthanoursandmaybebetterablethanustowithstandhighercosts.Competitioncouldresultinourproductslosingmarketshareorourhavingtoreduceourprices,eitherofwhichcouldhaveamaterialadverseeffectonourbusiness,financialconditionandresultsofoperations.Inaddition,sincewedonothavelong-termarrangementswithmanyofourcustomers,thesecompetitivefactorscouldcauseourcustomerstoshiftsuppliersand/orpackagingmaterialquickly.Oursuccessdepends,inpart,onourabilitytorespondtimelytocustomerandmarketchanges.Wemaypursueandexecuteacquisitionsordivestitures,whichcouldadverselyaffectourbusiness.Aspartofourgrowthstrategy,weconsidertransactionsthateithercomplementorexpandourexistingbusinessandcreateeconomicvalue.Transactionsinvolvespecialrisks,includingthepotentialassumptionofunanticipatedliabilitiesandcontingenciesaswellasdifficultiesinintegratingacquiredbusinessesorcarving-outdivestedbusinesses,whichmayresultinsubstantialcosts,delaysorotherproblemsthatcouldadverselyaffectourbusiness,financialconditionandresultsofoperations.Furthermore,wemaynotrealizeallofthesynergiesweexpecttoachievefromourcurrentstrategicinitiativesduetoavarietyofrisks.Ifweareunabletoachievethebenefitsthatweexpecttoachievefromourstrategicinitiatives,itcouldadverselyaffectourbusiness,financialconditionandresultsofoperations.Additionally,theimpactoftravelandsafetyrestrictionrelatedtoexternalfactors,suchastheCOVID-19pandemic,couldcontinuetonegativelyimpactvariousintegrationactivitiesandbackofficefunctions,whichmayadverselyaffectourbusiness.Intheeventofacatastrophiclossofoneofourkeymanufacturingfacilities,ourbusinesswouldbeadverselyaffected.Whilewemanufactureourproductsinalargenumberofdiversifiedfacilitiesandmaintaininsurancecoveringourfacilities,includingbusinessinterruptioninsurance,acatastrophiclossoftheuseofalloraportionofoneofourkeymanufacturingfacilitiesduetoaccident,laborissues,weatherconditions,naturaldisaster,pandemicorotherwise,whethershortorlong-term,couldresultinsignificantlosses.Employeeretentionorthefailuretorenewcollectivebargainingagreementscoulddisruptourbusiness.Whilewehavenothadmaterialissueshistoricallywithemployeeretentionofqualifiedpersonnel,therecanbenoassurancewewillbeabletorecruit,train,assimilate,motivateandretainemployeesinthefuture.Additionally,wemaynotbeabletomaintainconstructiverelationshipswithlaborunionsortradecouncils.Wemaynotbeableto6successfullynegotiatenewcollectivebargainingagreementsonsatisfactorytermsinthefuture.Thelossofasubstantialnumberoftheseemployeesoraprolongedlabordisputecoulddisruptourbusinessandresultinsignificantlosses.Wedependoninformationtechnologysystemsandinfrastructuretooperateourbusiness,andincreasedcybersecuritythreats,systeminadequacies,andfailurescoulddisruptouroperations,compromisecustomer,employee,vendorandotherdatawhichcouldnegativelyaffectourbusiness.Werelyontheefficientanduninterruptedoperationofinformationtechnologysystemsandnetworks.Thesesystemsandnetworksarevulnerabletoincreasedcybersecuritythreatsandmoresophisticatedcomputercrime,energyinterruptions,telecommunicationsfailures,breakdowns,naturaldisasters,terrorism,war,computermalwareorothermaliciousintrusions.Wealsomaintainandhaveaccesstosensitive,confidentialorpersonaldataorinformationthatissubjecttoprivacyandsecuritylaws,regulations,andcustomercontrols.Despiteoureffortstoprotectsuchinformation,securitybreaches,misplacedorlostdataandprogrammingdamagescouldresultinproductiondowntimes,operationaldisruptions,transactionerrors,lossofbusinessopportunities,violationofprivacylawsandlegalliability,fines,penaltiesornegativepublicitycouldresultinanegativeimpactonthebusiness.Whilewehavenothadmaterialsysteminterruptionshistoricallyassociatedwiththeserisks,therecanbenoassurancethattheseadvancedandpersistentthreatswillpreventfutureinterruptionsthatcouldresultinsignificantlosses.FinancialandLegalRisksOursubstantialindebtednesscouldaffectourabilitytomeetourobligationsandmayotherwiserestrictouractivities.Wehaveasignificantamountofindebtedness,whichrequiressignificantinterestpayments.Ourinabilitytogeneratesufficientcashflowtosatisfyourdebtobligations,ortorefinanceourobligationsoncommerciallyreasonableterms,wouldhaveamaterialadverseeffectonourbusiness,financialconditionandresultsofoperations.Oursubstantialindebtednesscouldhaveimportantconsequences.Forexample,itcould:•makeitmoredifficultforustosatisfyourobligationsunderourindebtedness;•limitourabilitytoborrowmoneyforourworkingcapital,capitalexpenditures,productdevelopment,debtservicerequirementsorothercorporatepurposes;•requireustodedicateasubstantialportionofourcashflowtopaymentsonourindebtedness,whichwouldreducetheamountofcashflowavailabletofundworkingcapital,capitalexpenditures,productdevelopmentandothercorporaterequirements;•increaseourvulnerabilitytogeneraladverseeconomicandindustryconditions;and•limitourabilitytorespondtobusinessopportunities,includinggrowingourbusinessthroughacquisitions.UncertaintyregardingtheUnitedKingdom’s(“UK”)withdrawalfromtheEuropeanUnion(“EU”)andtheoutcomeoffuturearrangementsbetweentheUKandtheEUcouldhaveamaterialadverseimpactonus.FollowingtheUK’sreferendumvotetoleavetheEUinJune2016(commonlyreferredtoas“Brexit”),theUKgovernmentformallynotifiedtheEuropeanCouncilofitsdecisiontoleavetheEU.TheUKwillremainamemberoftheEUuntilthedateonwhichawithdrawalagreementcomesintoforce.WhileitisdifficulttopredicttheeffectofBrexitontheEuropeanandglobaleconomy,uncertaintyregardingnewormodifiedarrangementsbetweentheUKandtheEUcouldhaveamaterialadverseeffectonbusinessactivity(includingthebuyingbehaviorofcommercialandindividualcustomers),thepoliticalstabilityandeconomicconditionsintheUK,theEUandelsewhere.Anyofthesedevelopments,ortheperceptionthatanyofthesedevelopmentsarelikelytooccur,couldhaveamaterialadverseeffectoneconomicgrowthorbusinessactivityintheUK,theEurozone,ortheEU,andcouldresultintherelocationofbusinesses,causebusinessinterruptions,leadtoeconomicrecessionordepression,andimpactthestabilityofthefinancialmarkets,availabilityofcredit,politicalsystemsorfinancialinstitutionsandthefinancialandmonetarysystem.7Goodwillandotherintangiblesrepresentasignificantamountofournetworth,andafuturewrite-offcouldresultinlowerreportednetincomeandareductionofournetworth.Wehaveasubstantialamountofgoodwill.Futurechangesinmarketmultiples,costofcapital,expectedcashflows,orotherexternalfactors,suchastheCOVID-19pandemicmayadverselyaffectourbusinessandcauseourgoodwilltobeimpaired,resultinginanon-cashchargeagainstresultsofoperationstowriteoffgoodwillorindefinitelivedintangibleassetsfortheamountofimpairment.Ifafuturewrite-offisrequired,thechargecouldresultinsignificantlosses.Ourinternationaloperationsposeriskstoourbusinessthatmaynotbepresentwithourdomesticoperations.Foreignoperationsaresubjecttocertainrisksthatareuniquetodoingbusinessinforeigncountries.Theserisksincludefluctuationsinforeigncurrencyexchangerates,inflation,economicorpoliticalinstability,shippingdelaysinourproductsandreceivingdelaysofrawmaterials,changesinapplicablelaws,includingassessmentsofincomeandnon-incomerelatedtaxes,reducedprotectionofintellectualproperty,inabilitytoreadilyrepatriatecashtotheU.S.effectively,andregulatorypoliciesandvarioustraderestrictionsincludingpotentialchangestoexporttaxesorcountervailingandanti-dumpingdutiesforexportedproductsfromthesecountries.Anyoftheseriskscoulddisruptourbusinessandresultinsignificantlosses.WearealsosubjecttotheForeignCorruptPracticesActandotheranti-briberyandanti-corruptionlawsthatgenerallybarbribesorunreasonablegiftstoforeigngovernmentsorofficials.Wehaveimplementedsafeguards,trainingandpoliciestodiscouragethesepracticesbyouremployeesandagents.However,ourexistingsafeguards,trainingandpoliciestoassurecomplianceandanyfutureimprovementsmayprovetobelessthaneffectiveandouremployeesoragentsmayengageinconductforwhichwemightbeheldresponsible.Ifemployeesviolateourpolicies,wemaybesubjecttoregulatorysanctions.Violationsoftheselawsorregulationscouldresultinsanctionsincludingfines,debarmentfromexportprivilegesandpenaltiesandcouldadverselyaffectourbusiness,financialconditionandresultsofoperations.Currentandfutureenvironmentalandothergovernmentalrequirementscouldadverselyaffectourfinancialconditionandourabilitytoconductourbusiness.Whilewehavenotbeenrequiredhistoricallytomakesignificantcapitalexpendituresinordertocomplywithapplicableenvironmentallawsandregulations,wecannotpredictourfuturecapitalexpenditurerequirementsbecauseofcontinuallychangingcompliancestandardsandenvironmentaltechnology.Furthermore,violationsorcontaminatedsitesthatwedonotknowabout(includingcontaminationcausedbypriorownersandoperatorsofsuchsitesornewlydiscoveredinformation)couldresultinadditionalcomplianceorremediationcostsorotherliabilities,whichcouldbematerial.Inaddition,federal,state,local,andforeigngovernmentscouldenactlawsorregulationsconcerningenvironmentalmatters,suchasgreenhousegasemissions,thatincreasethecostofproducing,orotherwiseadverselyaffectthedemandfor,plasticproducts.Legislationthatwouldprohibit,taxorrestrictthesaleoruseofcertaintypesofplasticandothercontainers,andwouldrequirediversionofsolidwastesuchaspackagingmaterialsfromdisposalinlandfills,hasbeenormaybeintroduced.Althoughwebelievethatanysuchlawspromulgatedtodatehavenothadamaterialadverseeffectonus,therecanbenoassurancethatfuturelegislationorregulationwouldnothaveamaterialadverseeffectonus.Furthermore,adeclineinconsumerpreferenceforplasticproductsduetoenvironmentalconsiderationscouldresultinsignificantlosses.Wemaynotbesuccessfulinprotectingourintellectualpropertyrights,includingourunpatentedproprietaryknow-howandtradesecrets,orinavoidingclaimsthatweinfringedontheintellectualpropertyrightsofothers.Inadditiontorelyingonpatentandtrademarkrights,werelyonunpatentedproprietaryknow-howandtradesecrets,andemployvariousmethods,includingconfidentialityagreementswithemployeesandconsultants,customersandsupplierstoprotectourknow-howandtradesecrets.However,thesemethodsandourpatentsandtrademarksmaynotaffordcompleteprotectionandtherecanbenoassurancethatotherswillnotindependentlydeveloptheknow-howandtradesecretsordevelopbetterproductionmethodsthanus.Further,wemaynotbeabletodetercurrentandformeremployees,contractorsandotherpartiesfrombreachingagreementsandmisappropriatingproprietaryinformationanditispossiblethatthirdpartiesmaycopyorotherwiseobtainanduseourinformationandproprietarytechnologywithoutauthorizationorotherwiseinfringeonourintellectualpropertyrights.Furthermore,noassurancecanbegiventhatwewillnotbesubjecttoclaimsassertingtheinfringementoftheintellectualpropertyrightsofthirdpartiesseekingdamages,thepaymentofroyaltiesorlicensingfeesand/orinjunctionsagainstthesaleofourproducts.Anysuchlitigationcouldbeprotractedandcostlyandcouldresultinsignificantlosses.8Item1B.UNRESOLVEDSTAFFCOMMENTSNone.Item2.PROPERTIESOurprimarymanufacturingfacilitiesbygeographicareawereasfollows:GeographicRegionTotalFacilitiesLeasedFacilitiesUSandCanada...........................11829Europe.................................13733Restofworld............................4828Item3.LEGALPROCEEDINGSBerryispartytovariouslegalproceedingsinvolvingroutineclaimswhichareincidentaltoourbusiness.Althoughourlegalandfinancialliabilitywithrespecttosuchproceedingscannotbeestimatedwithcertainty,webelievethatanyultimateliabilitywouldnotbematerialtothebusiness,financialcondition,resultsofoperationsorcashflows.Item4.MINESAFETYDISCLOSURESNotapplicable.9PARTIIItem5.MARKETFORREGISTRANT’SCOMMONEQUITY,RELATEDSTOCKHOLDERMATTERS,ANDISSUERPURCHASESOFEQUITYSECURITIESOurcommonstock“BERY”islistedontheNewYorkStockExchange.Asofthedateofthisfilingtherewerefewerthan500activerecordholdersofthecommonstock,butweestimatethenumberofbeneficialstockholderstobemuchhigherasanumberofoursharesareheldbybrokersordealersfortheircustomersinstreetname.Duringfiscal2019and2020,wedidnotdeclareorpayanycashdividendsonourcommonstock.IssuerPurchasesofEquitySecuritiesDuringthefourthquarteroffiscal2020,theCompanydidnotrepurchaseshares.AsofSeptember26,2020,$393millionofauthorizedsharesremainedavailableforpurchaseunderthecurrentrepurchaseprogram.Item6.SELECTEDFINANCIALDATAThefollowingtablepresentsselectedhistoricalconsolidatedfinancialdataderivedfromtheconsolidatedfinancialstatementsofBerryGlobalGroup,Inc.fortheperiodsindicated.Thefinancialdataforourfiscal2016throughfiscal2020shouldbereadinconjunctionwiththoseconsolidatedfinancialstatements,relatednotestheretoandManagement’sDiscussionandAnalysisofFinancialConditionandResultsofOperations.Thetablepresentedbelowisunaudited.Fiscal2020Fiscal2019Fiscal2018Fiscal2017Fiscal2016StatementofOperationsData:Netsales............................$11,709$8,878$7,869$7,095$6,489Operatingincome......................1,179974761732581Netincome..........................559404496340236NetIncomePerShareData:Basic,netincomepershare...............$4.22$3.08$3.77$2.66$1.95Diluted,netincomepershare.............4.143.003.672.561.89BalanceSheetData:Totalassets..........................$16,701$16,469$9,131$8,476$7,653Long-termdebtobligations...............10,23711,3655,8445,6415,755StatementofCashFlowData:Netcashfromoperatingactivities..........$1,530$1,201$1,004$975$857Netcashfrominvestingactivities...........(316)(6,251)(1,035)(774)(2,579)Netcashfromfinancingactivities...........(1,220)5,426113(226)1,817Item7.MANAGEMENT’SDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOFOPERATIONSOverviewBerryGlobalGroup,Inc.(“Berry,”“we,”orthe“Company”)isaleadingglobalsupplierofabroadrangeofinnovativerigid,flexibleandnon-wovenproductsusedeverydaywithinconsumerandindustrialendmarkets.Wesellourproductspredominantlyintostable,consumer-orientedendmarkets,suchashealthcare,personalcare,andfoodandbeverage.Ourcustomersconsistofadiversemixofleadingglobal,national,mid-sizedregionalandlocalspecialtybusinesses.Thesizeandscopeofourcustomernetworkallowsustointroducenewproductswedeveloporacquiretoavastaudiencethatisfamiliarwithourbusiness.Forfiscalyear2020,nosinglecustomerrepresentedmorethan5%ofnetsalesandourtoptencustomersrepresentedapproximately15%ofnetsales.Webelieveourmanufacturingprocesses,manufacturingfootprintandourabilitytoleverageourscaletoreducecosts,positionsusasalow-costmanufacturerrelativetoourcompetitors.10ExecutiveSummaryCOVID-19.Theongoingpandemichasimpactedvariousbusinessesandsupplychains,includingtravelrestrictionsandtheextendedshutdownofcertainindustriesinvariouscountries.Duetothenatureofthemajorityofourproducts,geographicfootprintandendmarketdiversity,onaconsolidatednetsalesbasiswehavebeenmodestlyimpactedwithlowercustomerdemandinfoodserviceandindustrialsbeingoffsetbyhigherconsumerdemandinourhealthcare,hygieneandfoodproductcategories.TheCompanywillcontinuetoevaluatethepotentialimpactsandcloselymonitordevelopmentsastheyarise.Business.TheCompany’soperationsareorganizedintofourreportingsegments:ConsumerPackagingInternational,ConsumerPackagingNorthAmerica,EngineeredMaterialsandHealth,Hygiene&Specialties.Thestructureisdesignedtoalignuswithourcustomers,provideimprovedservice,drivefuturegrowth,andtofacilitatesynergiesrealization.TheConsumerPackagingInternationalsegmentprimarilyconsistsofcontainers,closures,dispensingsystems,pharmaceuticaldevices,polythenefilms,andtechnicalcomponentsandincludestheinternationalportionoftheacquiredbusinessofRPCGroupPlc(“RPC”).TheConsumerPackagingNorthAmericasegmentprimarilyconsistsofcontainers,foodserviceitems,closures,overcaps,bottles,prescriptionvials,andtubes.TheEngineeredMaterialssegmentprimarilyconsistsoftapesandadhesives,polyethylene-basedfilmproducts,canliners,andspecialtycoatedandlaminatedproducts.TheHealth,Hygiene&Specialtiessegmentprimarilyconsistsofnonwovenspecialtymaterialsandfilmsusedinhygiene,infectionprevention,personalcare,industrial,construction,andfiltrationapplications.Outlook.TheCompanyisaffectedbygeneraleconomicandindustrialgrowth,plasticresinavailabilityandaffordability,andgeneralindustrialproduction.Ourbusinesshasbothgeographicandendmarketdiversity,whichreducestheeffectofanyoneofthesefactorsonouroverallperformance.Ourresultsareaffectedbyourabilitytopassthroughrawmaterialandothercostchangestoourcustomers,improvemanufacturingproductivityandadapttovolumechangesofourcustomers.Byprovidingadvantagedproductsintargetedmarkets,wecontinuetobelieveourunderlyinglong-termdemandfundamentalinalldivisionswillremainstrongaswefocusondeliveringprotectivesolutionsthatenhanceconsumersafetyandexecuteontheCompany’smissionstatementof“AlwaysAdvancingtoProtectWhat’sImportant.”Forfiscal2021,weprojectcashflowfromoperationsbetween$1,625to$1,525millionandfreecashflowbetween$975to$875million.Projectedfiscal2021freecashflowassumes$650millionofcapitalspending.Forthedefinitionoffreecashflowandfurtherinformationrelatedtofreecashflowasanon-GAAPfinancialmeasure,see“LiquidityandCapitalResources.”RecentAcquisitionsandDispositionsOuracquisitionstrategyisfocusedonimprovingourlong-termfinancialperformance,enhancingourmarketpositions,andexpandingourexistingandcomplementaryproductlines.Weseektoobtainbusinessesforattractivepost-synergymultiples,creatingvalueforourstockholdersfromsynergyrealization,leveragingtheacquiredproductsacrossourcustomerbase,creatingnewplatformsforfuturegrowth,andassumingbestpracticesfromthebusinessesweacquire.Whiletheexpectedbenefitsonearningsareestimatedatthecommencementofeachtransaction,oncetheexecutionoftheplanandintegrationoccur,wearegenerallyunabletoaccuratelyestimateortrackwhattheultimateeffectshavebeenduetosystemintegrationsandmovementsofactivitiestomultiplefacilities.Ashistoricalbusinesscombinationsandrestructuringplanshavenotallowedustoaccuratelyseparaterealizedsynergiescomparedtowhatwasinitiallyidentified,weestimatethesynergyrealizationbasedontheoverallsegmentprofitabilitypost-integration.RPCGroupPlcAcquisitionInJuly2019,theCompanycompletedtheacquisitionofRPCforaggregateconsiderationof$6.1billion.RPCisaleadingplasticproductdesignandengineeringcompanyforpackagingandselectnon-packagingmarkets,with189sitesin34countries.RPCdevelopsandmanufacturesadiverserangeofproductsforawidevarietyofcustomers,includingmanyhouseholdnames,andenjoysstrongmarketpositionsinmanyoftheendmarketsitservesandthegeographicalareasinwhichitoperates.ItusesawiderangeofpolymerconversiontechniquesandisalsooneofthelargestplasticrecyclersinEurope.TheinternationalbasedfacilitiesareoperatedwithintheConsumerPackagingInternationalsegmentwiththeremainingU.S.basedfacilitiesoperatedwithintheConsumerPackagingNorthAmericasegment.TheCompanyexpectstorealizeannualcostsynergiesof$150millionofwhichanestimated$50millionisexpectedtoberealizedinfiscal2021.RefertoNote2.AcquisitionsandDispositionsforfurtherinformation.11SealForLifeDispositionInJuly2019,theCompanycompletedthesaleofitsSealForLife(“SFL”)businesswhichwasoperatedinourHealth,Hygiene&Specialtiessegmentfornetproceedsof$326million.Apretaxgainof$214milliononthesalewasrecordedinRestructuringandtransactionactivitiesontheConsolidatedStatementsofIncome.U.S.FlexiblePackagingConvertingDispositionInOctober2020,theCompanyreachedaninitialagreementtosellitsU.S.flexiblepackagingconvertingbusinesswhichwasprimarilyoperatedintheEngineeredMaterialssegmentfor$140million,whichispreliminaryandsubjecttoadjustmentatclosing.TheCompanyreportedfiscal2020netsalesofapproximately$200millionrelatedtothebusiness.DiscussionofResultsofOperationsforFiscal2020ComparedtoFiscal2019Acquisitionsalesandoperatingincomedisclosedwithinthissectionrepresenttheresultsfromacquisitionsforthecurrentperiod.Businessintegrationexpensesconsistofrestructuringandimpairmentcharges,acquisitionrelatedcosts,andotherbusinessoptimizationcosts.Tablespresentdollarsinmillions.ConsolidatedOverviewFiscalYear20202019$Change%ChangeNetsales.......................................$11,709$8,878$2,83132%Operatingincome.................................$1,179$974$20521%Operatingincomepercentageofnetsales................10%11%Thenetsalesgrowthisprimarilyattributedtoacquisitionnetsalesof$3,346millionandanorganicvolumeincreaseof2%,partiallyoffsetbylowersellingpricesof$581millionduetothepassthroughoflowerresincostsandPriorYTDdivestituresalesof$96million.Theoperatingincomeincreaseisprimarilyattributedtoacquisitionoperatingincomeof$245million,an$87millionfavorableimpactfromcostproductivityandproductmix,a$47millionfavorableimpactfromthe2%organicvolumeincrease,a$39millioninventoryfairvaluestep-uprelatedtotheRPCacquisitioninthePriorYTD,a$35milliondecreaseinbusinessintegrationexpenses,anda$31milliondecreaseindepreciationandamortization.Theseimprovementswerepartiallyoffsetbya$214millionunfavorablechangefromthePriorYTDgainonthesaleofourSFLbusiness,a$32millionincreaseinselling,generalandadministrativeexpenseprimarilyrelatedtohigheraccruedperformance-basedcompensation,andPriorYTDdivestitureoperatingincomeof$28million.ConsumerPackagingInternationalFiscalYear20202019$Change%ChangeNetsales........................................$4,195$1,229$2,966241%Operatingincome.................................$299$12$2872,392%Operatingincomepercentageofnetsales.................7%1%ThenetsalesgrowthintheConsumerPackagingInternationalsegmentisprimarilyattributedtonetsalesof$2,971fromtheRPCacquisition,a$39millionfavorableimpactfromforeigncurrencychanges,andanorganicvolumeincreaseof1%,partiallyoffsetbylowersellingpricesof$56millionduetothepassthroughoflowerresincosts.Theoperatingincomeincreaseisprimarilyattributedtoacquisitionoperatingincomeof$196million,a$39millioninventoryfairvaluestep-uprelatedtotheRPCacquisitioninthePriorYTD,a$21milliondecreaseinbusinessintegrationcosts,anda$21millionfavorableimpactfromcostproductivityandproductmix.ConsumerPackagingNorthAmericaFiscalYear20202019$Change%ChangeNetsales........................................$2,850$2,636$2148%Operatingincome.................................$320$234$8637%Operatingincomepercentageofnetsales.................11%9%12ThenetsalesgrowthintheConsumerPackagingNorthAmericasegmentisprimarilyattributedtoacquisitionnetsalesof$356millionrelatedtotheU.S.portionoftheacquiredRPCbusinessanda2%basevolumeimprovement,partiallyoffsetbylowersellingpricesof$205millionduetothepassthroughoflowerresincosts.Theoperatingincomeincreaseisprimarilyattributedtoacquisitionoperatingincomeof$47million,a$27millionfavorableimpactfromcostproductivityandproductmix,anda$16millionfavorableimpactfromthebasevolumeincrease.Theseincreaseswerepartiallyoffsetbya$12millionincreaseinselling,generalandadministrativeexpenses.EngineeredMaterialsFiscalYear20202019$Change%ChangeNetsales........................................$2,334$2,538$(204)(8)%Operatingincome.................................$317$318$(1)0%Operatingincomepercentageofnetsales.................14%13%ThenetsalesdecreaseintheEngineeredMaterialssegmentisprimarilyattributedtolowersellingpricesof$159millionduetothepassthroughoflowerresincostsanda2%organicvolumedeclineprimarilywithinourindustrialsbusinessasaresultoftheimpactoftheCOVID-19pandemic.Theoperatingincomedecreasewasmodestlyimpactedbytheorganicvolumedeclineandanincreaseinselling,generalandadministrativeexpenses.Theseincreaseswerepartiallyoffsetbya$12milliondecreaseindepreciationandamortizationexpense.Health,Hygiene&SpecialtiesFiscalYear20202019$Change%ChangeNetsales........................................$2,330$2,475$(145)(6)%Operatingincome.................................$243$410$(167)(41)%Operatingincomepercentageofnetsales.................10%17%ThenetsalesdecreaseintheHealth,Hygiene&Specialtiessegmentisprimarilyattributedtolowersellingpricesof$164millionduetothepassthroughoflowerresincosts,PriorYTDsalesof$96millionrelatedtothedivestedSFLbusiness,anda$37millionunfavorableimpactfromforeigncurrencychanges,partiallyoffsetbya7%organicvolumeimprovement.Theoperatingincomedecreaseisprimarilyattributedtoa$214millionunfavorablechangefromthePriorYTDgainonthesaleofourSFLbusiness,PriorYTDdivestitureoperatingincomeof$28million,andan$11millionincreaseinselling,generalandadministrativeexpenses.Thesedecreaseswerepartiallyoffsetbya$43millionfavorableimpactfromcostproductivityandproductmix,a$36millionfavorableimpactfromtheorganicvolumeimprovement,anda$13milliondecreaseindepreciationandamortizationexpense.Otherexpense,netFiscalYear20202019$Change%ChangeOtherexpense,net....................................$31$155$(124)(80)%TheOtherexpensedecreaseisprimarilyattributedtoPriorYTDchargesforforeignexchangeforwardcontractsof$99millionandcrosscurrencyswapsof$41millionrelatedtotheclosingoftheRPCacquisition.Interestexpense,netFiscalYear20202019$Change%ChangeInterestexpense,net..................................$435$329$10632%TheinterestexpenseincreaseisprimarilyattributedtotheincrementaldebtfacilitiesenteredintoaspartoftheRPCacquisition.IncometaxexpenseFiscalYear20202019$Change%ChangeIncometaxexpense...................................$154$86$6879%13Theincometaxexpenseincreaseisprimarilyattributedtohigherpre-taxbookincome.Oureffectivetaxrateforfiscal2020was22%andwaspositivelyimpactedby2%fromgenerationoffederalandstatecreditsand1%fromchangeinforeignvaluationallowance.Thesefavorableitemswerepartiallyoffsetby2%fromwithholdingtaxes,1%fromforeignincometaxedintheU.S.andfromotherdiscreteitems.RefertoNote7.IncomeTaxesforfurtherinformation.ComprehensiveIncomeFiscalYear20202019$Change%ChangeComprehensiveIncome................................$394$174$220126%Theincreaseincomprehensiveincomeisprimarilyattributedtoa$155millionincreaseinnetincomeanda$105millionfavorablechangeincurrencytranslation,partiallyoffsetbya$23millionunfavorablechangeinthefairvalueofinterestratehedgesanda$17milliondecreaseinunrealizedgainsontheCompany’spensionplans.Currencytranslationgainsareprimarilyrelatedtonon-U.S.subsidiarieswithafunctionalcurrencyotherthantheU.S.dollarwherebyassetsandliabilitiesaretranslatedfromtherespectivefunctionalcurrencyintoU.S.dollarsusingperiod-endexchangerates.Thechangeincurrencytranslationwasprimarilyattributedtolocationsutilizingtheeuro,Britishpoundsterling,BrazilianrealandChineserenminbiastheirfunctionalcurrency.Aspartoftheoverallriskmanagement,theCompanyusesderivativeinstrumentstoreduceexposuretochangesininterestratesattributedtotheCompany’sfloating-rateborrowingsandrecordschangestothefairvalueoftheseinstrumentsinAccumulatedothercomprehensiveincome(loss).Thechangeinfairvalueoftheseinstrumentsinfiscal2020versusfiscal2019isprimarilyattributedtoachangeintheforwardinterestcurvebetweenmeasurementdates.DiscussionofResultsofOperationsforFiscal2019ComparedtoFiscal2018Acquisitionsalesandoperatingincomedisclosedwithinthissectionrepresenttheresultsfromacquisitionsforthecurrentperiod.Businessintegrationexpensesconsistofrestructuringandimpairmentcharges,acquisitionrelatedcosts,andotherbusinessoptimizationcosts.Tablespresentdollarsinmillions.ConsolidatedOverviewFiscalYear20192018$Change%ChangeNetsales........................................$8,878$7,869$1,00913%Operatingincome.................................$974$761$21328%Operatingincomepercentageofnetsales.................11%10%Thenetsalesgrowthisprimarilyattributedtoacquisitionnetsalesof$1,479millionpartiallyoffsetbypriorperioddivestituresalesof$20million,a$48millionunfavorableimpactfromforeigncurrencychanges,lowersellingpricesof$175millionduetothepassthroughoflowerresincosts,a1%declineastheresultofacustomerproducttransitionanda2%basevolumedecline.Theoperatingincomeincreaseisprimarilyattributedtoa$214milliongainonthesaleofourSFLbusiness,acquisitionoperatingincomeof$114million,anda$37milliondecreaseindepreciationandamortization.Theseimprovementswerepartiallyoffsetbyanincreaseinbusinessintegrationcostsof$28million,a$25millionnegativeimpactfrompricecostspread,an$18millionunfavorableimpactfromforeigncurrencychanges,a$39millioninventoryfairvaluestep-up,anda$26millionimpactfromlowerbasevolumes.ConsumerPackagingInternationalFiscalYear20192018$Change%ChangeNetsales.........................................$1,229$215$1,014472%Operatingincome...................................$12$17$(5)(29)%Operatingincomepercentageofnetsales..................1%8%ThenetsalesgrowthintheConsumerPackagingInternationalsegmentisprimarilyattributedtoacquisitionnetsalesfromtheRPCacquisitionof$1,031million.Theoperatingincomedecreaseisprimarilyattributedtoanincreaseinbusinessintegrationcostsof$52millionanda$36millioninventoryfairvaluestep-uprelatedtotheRPCacquisitionpartiallyoffsetbyacquisitionoperatingincomeof$82million.14ConsumerPackagingNorthAmericaFiscalYear20192018$Change%ChangeNetsales........................................$2,636$2,463$1737%Operatingincome.................................$234$190$4423%Operatingincomepercentageofnetsales.................9%8%ThenetsalesgrowthintheConsumerPackagingNorthAmericasegmentisprimarilyattributedtoacquisitionnetsalesof$133millionrelatedtotheU.S.portionoftheacquiredRPCbusinessanda2%basevolumeimprovementpartiallyoffsetbylowersellingpricesduetothepassthroughoflowerresincosts.Theoperatingincomeincreaseisprimarilyattributedtoacquisitionoperatingincomeof$15million,a$23milliondecreaseindepreciationandamortization,anda$13millionincreasefromthehigherbasevolumes.Theseincreaseswerepartiallyoffsetbya$13millionincreaseinbusinessintegrationcostsprimarilyrelatedtotheRPCacquisition.EngineeredMaterialsFiscalYear20192018$Change%ChangeNetsales........................................$2,538$2,633$(95)(4)%Operatingincome.................................$318$365$(47)(13)%Operatingincomepercentageofnetsales.................13%14%ThenetsalesdeclineintheEngineeredMaterialssegmentisprimarilyattributedtolowersellingpricesof$117millionduetothepassthroughoflowerresincostsanda5%basevolumedeclineduetosoftnessinindustrialmarketsandsupplychaindisruptionrelatedtomaterialqualifications.Thesedecreaseswerepartiallyoffsetbyacquisitionnetsalesof$151millionrelatedmainlytotheLaddawnacquisition.Theoperatingincomedecreaseisprimarilyattributedtoa$33millionunfavorableimpactfrompricecostspreadanda$23millionimpactfromthebasevolumedeclinepartiallyoffsetbyacquisitionoperatingincomeof$6million.Health,Hygiene&SpecialtiesFiscalYear20192018$Change%ChangeNetsales........................................$2,475$2,558$(83)(3)%Operatingincome.................................$410$189$221117%Operatingincomepercentageofnetsales.................17%7%ThenetsalesdeclineintheHealth,Hygiene&Specialtiessegmentisprimarilyattributedtolowersellingpricesof$40millionduetothepassthroughoflowerresincosts,a2%declineastheresultofacustomerproducttransition,a3%basevolumedeclineasaresultofweaknessintheNorthAmericanbabycaremarket,prioryearsalesof$20millionrelatedtothedivestedSFLbusinessanda$46millionunfavorableimpactfromforeigncurrencychanges.Thesedeclineswerepartiallyoffsetbyacquisitionnetsalesof$164millionrelatedtotheClopayacquisition.Theoperatingincomeincreaseisprimarilyattributedtoa$214milliongainonthesaleofourSFLbusinessandadecreaseinbusinessintegrationcostsof$30million.Theseimprovementswerepartiallyoffsetbya$15millionunfavorableimpactfromforeigncurrencychangesanda$15millionimpactfromlowerbasevolumes.Otherexpense,netFiscalYear20192018$Change%ChangeOtherexpense,net....................................$155$25$130520%Theotherexpenseincreaseisprimarilyattributedtolossesrelatedtotheforeignexchangeforwardcontractsof$99millionandcross-currencyswapsof$41millionenteredintofortheclosingoftheRPCacquisition.Interestexpense,netFiscalYear20192018$Change%ChangeInterestexpense,net..................................$329$259$7027%TheinterestexpenseincreaseisprimarilyattributedtotheincrementaldebtfacilitiesenteredintoaspartoftheRPCacquisition.15Incometax(benefit)expenseFiscalYear20192018$Change%ChangeIncometax(benefit)expense............................$86$(19)$105(553)%Theincometaxexpenseincreaseisprimarilyattributedtothe$124millionprovisionaltransitionbenefitrecordedinfiscal2018asaresultoftherecentU.S.taxlegislation.Oureffectivetaxrateforfiscal2019was18%andwaspositivelyimpactedby6%fromthesaleofsubsidiaries,2%fromshare-basedcompensationand2%fromresearchanddevelopmentcredits.Thesefavorableitemswerepartiallyoffset2%fromU.S.statetaxes,3%fromforeignvaluationallowances,2%fromforeignratedifferentialandotherdiscreteitems.ComprehensiveIncomeFiscalYear20192018$Change%ChangeComprehensiveIncome................................$174$408$(234)(57)%Thedecreaseincomprehensiveincomeisprimarilyattributedtoa$92milliondecreaseinnetincome,a$160millionunfavorablechangeinthefairvalueofinterestratehedges,a$58milliondecreaseinunrealizedgainsontheCompany’spensionplans,partiallyoffsetbya$56millionfavorablechangeincurrencytranslation.Currencytranslationgainsareprimarilyrelatedtonon-U.S.subsidiarieswithafunctionalcurrencyotherthantheU.S.dollarwherebyassetsandliabilitiesaretranslatedfromtherespectivefunctionalcurrencyintoU.S.dollarsusingperiod-endexchangerates.Thechangeincurrencytranslationwasprimarilyattributedtolocationsutilizingtheeuro,Britishpoundsterling,BrazilianrealandChineserenminbiastheirfunctionalcurrency.Aspartoftheoverallriskmanagement,theCompanyusesderivativeinstrumentstoreduceexposuretochangesininterestratesattributedtotheCompany’sfloating-rateborrowingsandrecordschangestothefairvalueoftheseinstrumentsinAccumulatedothercomprehensiveincome(loss).Thechangeinfairvalueoftheseinstrumentsinfiscal2019versusfiscal2018isprimarilyattributedtoachangeintheforwardinterestcurvebetweenmeasurementdates.LiquidityandCapitalResourcesSeniorSecuredCreditFacilityWemanageourglobalcashrequirementsconsidering(i)availablefundsamongthemanysubsidiariesthroughwhichweconductbusiness,(ii)thegeographiclocationofourliquidityneeds,and(iii)thecosttoaccessinternationalcashbalances.Wehavean$850millionasset-basedrevolvinglineofcreditthatmaturesinMay2024.Attheendoffiscal2020,theCompanyhadnooutstandingbalanceontherevolvingcreditfacility.TheCompanywasincompliancewithallcovenantsattheendoffiscal2020.RefertoNote3.Long-TermDebtforfurtherinformation.ContractualObligationsandOffBalanceSheetTransactionsOurcontractualcashobligationsattheendoffiscal2020aresummarizedinthefollowingtablewhichdoesnotgiveanyeffecttoretirementplans,RefertoNote8.RetirementPlans,ortaxesaswecannotreasonablyestimatethetimingoffuturecashoutflows.Paymentsduebyperiodasoftheendoffiscal2020Total<1year1–3years4–5years>5yearsLong-termdebt,excludingcapitalleases.............$10,246$59$1,851$1,638$6,698Capitalleases................................8620401313Fixedinterestratepayments.....................781140269257115Variableinterestratepayments(a)..................88119134525788Operatingleases..............................703118190139256Totalcontractualcashobligations.................$12,697$528$2,695$2,304$7,170(a)Basedonapplicableinterestratesineffectendoffiscal2020.CashFlowsfromOperatingActivitiesNetcashprovidedbyoperatingactivitiesincreased$329millionfromfiscal2019primarilyattributedtoimprovednetincomepriortonon-cashactivities,partiallyoffsetbyareductionintheworkingcapitalbenefitcomparedtofiscal2019.16Netcashprovidedbyoperatingactivitiesincreased$197millionfromfiscal2018primarilyattributedtodecreasesinworkingcapitalduetolowerrawmaterialcostspartiallyoffsetbyprofessionalfeesrelatedtotheRPCacquisition.CashFlowsfromInvestingActivitiesNetcashusedininvestingactivitiesdecreased$5,935millionfromfiscal2019primarilyattributedtoloweracquisitionanddivestiturerelatedactivities,partiallyoffsetbyincreasedcapitalexpenditures.Netcashusedininvestingactivitiesincreased$5,216millionfromfiscal2018primarilyattributedtoincreasedcapitalexpenditures,settlementofacquisitionrelatedderivatives,andhigheracquisitionspendingpartiallyoffsetbythesaleofourSFLbusiness.CashFlowsfromFinancingActivitiesNetcashusedinfinancingactivitieschanged$6,646millionfromfiscal2019primarilyattributedto$1.2billionnetrepaymentsonlong-termborrowingsduringfiscal2020comparedto$5.6billionnetproceedsfromlong-termborrowingsusedtofinancetheRPCacquisitioninfiscal2019.Netcashfromfinancingactivitiesincreased$5,313millionfromfiscal2018primarilyattributedtoproceedsfromlong-termborrowingstofinancetheRPCacquisition,partiallyoffsetbyhigherrepaymentsonlong-termborrowings.ShareRepurchasesTheCompanydidnothaveanysharerepurchasesinfiscal2020.TheCompany’ssharerepurchasestotaled$74millioninfiscal2019.FreeCashFlowWedefine“freecashflow”ascashflowfromoperatingactivitieslessnetadditionstoproperty,plantandequipmentandpaymentsofthetaxreceivableagreementwhichwasterminatedinfiscal2019.Basedonourdefinition,ourconsolidatedfreecashflowissummarizedasfollows:YearsEndedSeptember26,2020September28,2019September29,2018Cashflowfromoperatingactivities.................$1,530$1,201$1,004Additionstoproperty,plantandequipment,net.......(583)(399)(333)Paymentsoftaxreceivableagreement...............—(38)(37)Freecashflow...............................$947$764$634Freecashflow,aspresentedinthisdocument,isasupplementalfinancialmeasurethatisnotrequiredby,orpresentedinaccordancewith,generallyacceptedaccountingprinciplesintheU.S.(“GAAP”).FreecashflowisnotaGAAPfinancialmeasureandshouldnotbeconsideredasanalternativetocashflowfromoperatingactivitiesoranyothermeasuredeterminedinaccordancewithGAAP.Weusefreecashflowasameasureofliquiditybecauseitassistsusinassessingourcompany’sabilitytofunditsgrowththroughitsgenerationofcash,andbelieveitisusefultoinvestorsforsuchpurpose.Inaddition,freecashflowandsimilarmeasuresarewidelyusedbyinvestors,securitiesanalystsandotherinterestedpartiesinourindustrytomeasureacompany’sliquidity.Freecashflowmaybecalculateddifferentlybyothercompanies,includingothercompaniesinourindustryorpeergroup,limitingitsusefulnessasacomparativemeasure.LiquidityOutlookAttheendoffiscal2020,ourcashbalancewas$750million,whichwasprimarilylocatedoutsidetheU.S.WebelieveourexistingU.S.basedcashandcashflowfromU.S.operations,togetherwithavailableborrowingsunderourseniorsecuredcreditfacilities,willbeadequatetomeetourliquidityneedsoverthenexttwelvemonths.TheCompanyhastheabilitytorepatriatethecashlocatedoutsidetheU.S.totheextentnotneededtomeetoperationalandcapitalneedswithoutsignificantrestrictions.Wedonotexpectourfreecashflowtobesufficienttocoveralllong-termdebtobligationsandintendtorefinancetheseobligationspriortomaturity.17SummarizedGuarantorFinancialInformationBerryGlobal,Inc.(“Issuer”)hasnotesoutstandingwhicharefully,jointly,severally,andunconditionallyguaranteedbyitsparent,BerryGlobalGroup,Inc.(forpurposesofthissection,“Parent”)andsubstantiallyallofIssuer’sdomesticsubsidiaries.Separatenarrativeinformationorfinancialstatementsoftheguarantorsubsidiarieshavenotbeenincludedbecausetheyare100%ownedbyParentandtheguarantorsubsidiariesunconditionallyguaranteesuchdebtonajointandseveralbasis.Aguaranteeofaguarantorsubsidiaryofthesecuritieswillterminateuponthefollowingcustomarycircumstances:thesaleofthecapitalstockofsuchguarantorifsuchsalecomplieswiththeindentures,thedesignationofsuchguarantorasanunrestrictedsubsidiary,thedefeasanceordischargeoftheindentureorinthecaseofarestrictedsubsidiarythatisrequiredtoguaranteeaftertherelevantissuancedate,ifsuchguarantornolongerguaranteescertainotherindebtednessoftheissuer.TheguaranteesoftheguarantorsubsidiariesarealsolimitedasnecessarytopreventthemfromconstitutingafraudulentconveyanceunderapplicablelawandanyguaranteesguaranteeingsubordinateddebtaresubordinatedtocertainotheroftheCompany’sdebts.ParentalsoguaranteestheIssuer’stermloansandrevolvingcreditfacilities.Theguarantorsubsidiariesguaranteeourtermloansandareco-borrowersunderourrevolvingcreditfacility.PresentedbelowissummarizedfinancialinformationfortheParent,Issuerandguarantorsubsidiariesonacombinedbasis,afterintercompanytransactionshavebeeneliminated.YearEndedSeptember26,2020Netsales.......................................................$5,903Grossprofit.....................................................1,246Earningsfromcontinuingoperations...................................243Netincome.....................................................$243Includes$23millionofincomeassociatedwithintercompanyactivitywithnon-guarantorsubsidiaries.September26,2020September28,2019AssetsCurrentassets...........................................$1,417$1,237Noncurrentassets........................................6,1535,088LiabilitiesCurrentliabilities.........................................$841$862Noncurrentliabilities......................................11,93611,915Includes$572millionofintercompanypayablesduetonon-guarantorsubsidiariesasofSeptember26,2020and$45millionofintercompanyreceivablesduefromnon-guarantorsubsidiariesasofSeptember28,2019.CriticalAccountingPoliciesandEstimatesWedisclosethoseaccountingpoliciesthatweconsidertobesignificantindeterminingtheamountstobeutilizedforcommunicatingourconsolidatedfinancialposition,resultsofoperationsandcashflowsinthefirstnotetoourconsolidatedfinancialstatementsincludedelsewhereherein.Ourdiscussionandanalysisofourfinancialconditionandresultsofoperationsarebasedonourconsolidatedfinancialstatements,whichhavebeenpreparedinaccordancewithGAAP.Thepreparationoffinancialstatementsinconformitywiththeseprinciplesrequiresmanagementtomakeestimatesandassumptionsthataffectamountsreportedinthefinancialstatementsandaccompanyingnotes.Actualresultsmaydifferfromtheseestimatesunderdifferentassumptionsorconditions.Acquisitions.Werecordacquisitionsresultingintheconsolidationofanenterpriseusingthepurchasemethodofaccounting.Underthismethod,theCompanyrecordstheassetsacquired,includingintangibleassetsthatcanbeidentifiedandnamed,andliabilitiesassumedbasedontheirestimatedfairvaluesatthedateofacquisition.Thepurchasepriceinexcessofthefairvalueoftheassetsacquiredandliabilitiesassumedisrecordedasgoodwill.Amongothersourcesofrelevantinformation,theCompanyusesindependentappraisalsandactuarialorothervaluationstoassistindeterminingtheestimatedfairvaluesoftheassetsandliabilities.Variousassumptionsareusedinthe18determinationoftheseestimatedfairvaluesincludingdiscountrates,marketandvolumegrowthrates,andotherprospectivefinancialinformation.Transactioncostsassociatedwithacquisitionsareexpensedasincurred.RefertoNote2.AcquisitionsandDispositionsforfurtherinformation.Pensions.Theaccountingforourpensionplansrequiresustorecognizetheoverfundedorunderfundedstatusofthepensionplansonourbalancesheet.Forthesesponsoredplans,therelevantaccountingguidancerequiresthatmanagementmakecertainassumptionsrelatingtothelong-termrateofreturnonplanassets,discountratesusedtodeterminethepresentvalueoffutureobligationsandexpenses,salaryinflationrates,mortalityratesandotherassumptions.Webelievethattheaccountingestimatesrelatedtoourpensionplansarecriticalaccountingestimatesbecausetheyarehighlysusceptibletochangefromperiodtoperiodbasedontheperformanceofplanassets,actuarialvaluations,marketconditionsandcontractedbenefitchanges.Theselectionofassumptionsisbasedonhistoricaltrendsandknowneconomicandmarketconditionsatthetimeofvaluation,aswellasindependentstudiesoftrendsperformedbyouractuaries.Wereviewannuallythediscountrateusedtocalculatethepresentvalueofpensionplanliabilities.Thediscountrateusedateachmeasurementdateissetbasedonahigh-qualitycorporatebondyieldcurve,derivedbasedonbonduniverseinformationsourcedfromreputablethird-partyindices,dataproviders,andratingagencies.Incountrieswherethereisnodeepmarketincorporatebonds,wehaveusedagovernmentbondapproachtosetthediscountrate.Additionally,theexpectedlongtermrateofreturnonplanassetsisderivedforeachbenefitplanbyconsideringtheexpectedfuturelong-termreturnassumptionforeachindividualassetclass.Asinglelong-termreturnassumptionisthenderivedforeachplanbasedupontheplan’stargetassetallocation.RefertoNote8.RetirementPlansforfurtherinformation.GoodwillandOtherIndefiniteLivedIntangibleAssets.Onanannualbasisandatinterimperiodswhencircumstancesrequire,wetesttherecoverabilityofgoodwillandindefinite-livedintangibleassets.Weelectedtocompleteastep1quantitativetesttoevaluateimpairmentofgoodwillinorderto(1)resetthevaluesofournewreportingunitsforfuturequalitativeassessmentsand(2)determineifthecarryingvalueofanyreportingunitexceededitsfairvalue.Thiswascompletedonthefirstdayofthefourthfiscalquarteroffiscal2020.Weutilizedadiscountedcashflowanalysisincombinationwithacomparablecompanymarketapproachtodeterminethefairvalueofeachreportingunit.Therewerenoindicatorsofimpairmentinthefourthquarterthatrequiredustoperformanadditionaltestfortherecoverabilityofgoodwill.Afterthecompletionofthestep1quantitativetestwedeterminedthatthefairvalueofeachofourreportingunitswasgreaterthanthecarryingvalue.Futuredeclinesinourpeercompanyandourmarketcapitalizationsandtotalenterprisevaluealongwithlowervaluationmarketmultiplesorsignificantdeclinesinoperatingperformancecouldimpactfutureimpairmenttestsormayrequireamorefrequentassessment.TheCompany’sgoodwill,fairvalueandcarryingvalueofourreportingunitsareasfollows:FairValueJune28,2020CarryingValueJune28,2020GoodwillSeptember26,2020ConsumerPackagingNorthAmerica...........$5,440$3,596$1,757EngineeredMaterials......................3,8801,458605Health,Hygiene&Specialties................3,8802,538798ConsumerPackagingInternational:Rigid........5,3804,5311782ConsumerPackagingInternational:Non-Rigid....710590231$19,290$12,713$5,173Indefinitelivedintangibleassetsaretestedforimpairmentannuallyusingbothqualitativescreensandquantitativeassessmentswhereappropriateandarewrittendowntofairvaluebasedoneitherdiscountedcashflowsorappraisedvalues.RefertoNote1.BasisofPresentationandSummaryofSignificantAccountingPoliciesforfurtherinformation.DeferredTaxesandEffectiveTaxRates.Weestimatetheeffectivetaxrate(“ETR”)andassociatedliabilitiesorassetsforeachofourlegalentitiesinaccordancewithauthoritativeguidance.Weutilizetaxplanningtominimizeordefertaxliabilitiestofutureperiods.InrecordingETRsandrelatedliabilitiesandassets,werelyuponestimates,whicharebaseduponourinterpretationofU.S.andlocaltaxlawsastheyapplytoourlegalentitiesandouroveralltaxstructure.Auditsbylocaltaxjurisdictions,includingtheU.S.Government,couldyielddifferentinterpretationsfromourown19andcausetheCompanytoowemoretaxesthanoriginallyrecorded.AspartoftheETR,ifwedeterminethatadeferredtaxassetarisingfromtemporarydifferencesisnotlikelytobeutilized,wewillestablishavaluationallowanceagainstthatassettorecorditatitsexpectedrealizablevalue.Inmultipleforeignjurisdictions,theCompanybelievesthatitwillnotgeneratesufficientfuturetaxableincometorealizetherelatedtaxbenefits.TheCompanyhasprovidedafullvaluationallowanceagainstitsforeignnetoperatinglossesincludedwithinthedeferredtaxassetsinmultipleforeignjurisdictions.TheCompanyhasnotprovidedavaluationallowanceonitsfederalnetoperatinglossesintheU.S.becauseithasdeterminedthatfuturereversalsofitstemporarytaxabledifferenceswilloccurinthesameperiodsandareofthesamenatureasthetemporarydifferencesgivingrisetothedeferredtaxassets.RefertoNote7.IncomeTaxesforfurtherinformation.Basedonacriticalassessmentofouraccountingpoliciesandtheunderlyingjudgmentsanduncertaintiesaffectingtheapplicationofthosepolicies,webelievethatourconsolidatedfinancialstatementsprovideameaningfulandfairperspectiveoftheCompanyanditsconsolidatedsubsidiaries.Thisisnottosuggestthatotherriskfactorssuchaschangesineconomicconditions,changesinmaterialcosts,ourabilitytopassthroughchangesinmaterialcosts,andotherscouldnotmateriallyadverselyimpactourconsolidatedfinancialposition,resultsofoperationsandcashflowsinfutureperiods.Item7A.QUANTITATIVEANDQUALITATIVEDISCLOSURESABOUTMARKETRISKInterestRateRiskWeareexposedtomarketriskfromchangesininterestratesprimarilythroughourseniorsecuredcreditfacilities.AsofSeptember26,2020,ourseniorsecuredcreditfacilitiesarecomprisedof(i)$6.2billiontermloansand(ii)an$850millionrevolvingcreditfacilitywithnoborrowingsoutstanding.BorrowingsunderourseniorsecuredcreditfacilitiesbearinterestatarateequaltoanapplicablemarginplusLIBOR.TheapplicablemarginforLIBORrateborrowingsundertherevolvingcreditfacilityrangesfrom1.25%to1.50%,andthemarginforthetermloansis2.00%perannum.AsofSeptember26,2020,theLIBORrateofapproximately0.18%wasapplicabletothetermloans.A0.25%changeinLIBORwouldincreaseourannualinterestexpenseby$8milliononvariableratetermloans.Weseektominimizeinterestratevolatilityriskthroughregularoperatingandfinancingactivitiesand,whendeemedappropriate,throughtheuseofderivativefinancialinstruments.Thesefinancialinstrumentsarenotusedfortradingorotherspeculativepurposes.AsofSeptember26,2020,theCompanyeffectivelyhad(i)a$450millioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof1.398%,withanexpirationinJune2026,(ii)a$1billioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof1.835%withanexpirationinJune2026,(iii)a$400millioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof1.916%withanexpirationinJune2026,(iv)a$884millioninterestrateswaptransactionthatswapsaonemonthvariableLIBORcontractforafixedannualrateof1.857%,withanexpirationinJune2024,and(v)a$473millioninterestrateswaptransactionthatswapsaonemonthvariableLIBORcontractforafixedannualrateof2.050%,withanexpirationinJune2024.ForeignCurrencyRiskAsaglobalcompany,wefaceforeigncurrencyriskexposurefromfluctuatingcurrencyexchangerates,primarilytheU.S.dollaragainsttheeuro,Britishpoundsterling,Brazilianreal,Chineserenminbi,CanadiandollarandMexicanpeso.Significantfluctuationsincurrencyratescanhaveasubstantialimpact,eitherpositiveornegative,onourrevenue,costofsales,andoperatingexpenses.Currencytranslationgainsandlossesareprimarilyrelatedtonon-U.S.subsidiarieswithafunctionalcurrencyotherthanU.S.dollarswherebyassetsandliabilitiesaretranslatedfromtherespectivefunctionalcurrencyintoU.S.dollarsusingperiod-endexchangeratesandimpactourComprehensiveincome.A10%declineinforeigncurrencyexchangerateswouldhavehada$32millionunfavorableimpactonfiscal2020Netincome.TheCompanyispartytocertaincross-currencyswapstohedgeaportionofourforeigncurrencyrisk.TheswapagreementsmatureMay2022(€250million)andJune2024(€1,625million)andJuly2027(£700million).Inadditiontothecross-currencyswaps,wehedgeaportionofourforeigncurrencyriskbydesignatingforeigncurrencydenominatedlong-termdebtasnetinvestmenthedgesofcertainforeignoperations.AsofSeptember26,2020,wehadoutstandinglong-termdebtof€785millionthatwasdesignatedasahedgeofournetinvestmentincertaineuro-denominatedforeignsubsidiaries.20Item8.FINANCIALSTATEMENTSANDSUPPLEMENTARYDATAIndextoFinancialStatementsPageReportsofIndependentRegisteredPublicAccountingFirm..................................24ConsolidatedStatementsofIncomeandComprehensiveIncomeforfiscal2020,2019and2018..........28ConsolidatedBalanceSheetsasoffiscal2020and2019......................................29ConsolidatedStatementsofChangesinStockholders’Equityforfiscal2020,2019and2018............30ConsolidatedStatementsofCashFlowsforfiscal2020,2019and2018...........................31NotestoConsolidatedFinancialStatements.............................................32IndextoFinancialStatementSchedulesAllscheduleshavebeenomittedbecausetheyarenotapplicableornotrequiredorbecausetherequiredinformationisincludedintheconsolidatedfinancialstatementsornotesthereto.Item9.CHANGESINANDDISAGREEMENTSWITHACCOUNTANTSONACCOUNTINGANDFINANCIALDISCLOSURENone.Item9A.CONTROLSANDPROCEDURESEvaluationofdisclosurecontrolsandproceduresWemaintain“disclosurecontrolsandprocedures,”assuchtermisdefinedinRule13a-15(e)undertheExchangeAct,thataredesignedtoensurethatinformationrequiredtobedisclosedbyusinreportsthatwefileorsubmitundertheExchangeActisrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedinSECrulesandforms,andthatsuchinformationisaccumulatedandcommunicatedtoourmanagement,includingourChiefExecutiveOfficerandChiefFinancialOfficer,asappropriate,toallowtimelydecisionsregardingrequireddisclosure.InconnectionwiththepreparationofthisForm10-K,managementevaluatedtheeffectivenessofthedesignandoperationofourdisclosurecontrolsandproceduresasofSeptember26,2020.Basedonthisevaluation,ourChiefExecutiveOfficerandChiefFinancialOfficerhaveconcludedthattheCompany’sdisclosurecontrolsandprocedureswereeffectiveasofSeptember26,2020.Management’sReportonInternalControlsoverFinancialReportingManagementisresponsibleforestablishingandmaintainingadequateinternalcontroloverfinancialreporting.Underthesupervisionandwiththeparticipationofourmanagement,theCompanyconductedanevaluationoftheeffectivenessofourinternalcontroloverfinancialreportingusingthecriteriasetforthbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(2013framework).Basedonthisevaluation,ourChiefExecutiveOfficerandChiefFinancialOfficerhaveconcludedthattheCompany’sinternalcontrolsoverfinancialreportingwereeffectiveasofSeptember26,2020.TheeffectivenessofourinternalcontroloverfinancialreportingasofSeptember26,2020,hasbeenauditedbytheCompany’sindependentregisteredpublicaccountingfirm,asstatedintheirreport,whichisincludedhereinChangesinInternalControlsoverFinancialReportingTherewerenochangesinourinternalcontroloverfinancialreportingthatoccurredduringthequarterendedSeptember26,2020thathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.Item9B.OTHERINFORMATIONNone.21PARTIIIItem10.DIRECTORS,EXECUTIVEOFFICERSANDCORPORATEGOVERNANCEExceptassetforthbelow,theinformationrequiredbythisItemisincorporatedhereinbyreferencetoourdefinitiveProxyStatementtobefiledinconnectionwiththe2021AnnualMeetingofStockholders.CodeofEthicsWehaveaCodeofBusinessEthicsthatappliestoalldirectorsandemployees,includingourChiefExecutiveOfficerandseniorfinancialofficers.Thesestandardsaredesignedtodeterwrongdoingandtopromotethehighestethical,moral,andlegalconductofallemployees.WealsohaveadoptedaSupplementalCodeofEthics,whichisinadditiontothestandardssetbyourCodeofBusinessEthics,inordertoestablishahigherlevelofexpectationforthemostseniorleadersoftheCompany.TheSupplementalCodeofEthicssetstheexpectationsastohowourseniorleadersconductthemselvesindealingswiththeCompany,customers,suppliersandcoworkersanditfurtherdefinesourcommitmenttocompliancewiththeCompany’spolicies,proceduresandgovernmentregulations.OurCodeofBusinessEthicsandSupplementalCodeofEthicscanbeobtained,freeofcharge,bycontactingourcorporateheadquartersorcanbeobtainedfromtheCorporateGovernancesectionoftheInvestorspageontheCompany’sinternetsite.Intheeventthatwemakechangesin,orprovidewaiversfrom,theprovisionsoftheCodeofBusinessEthicsorSupplementalCodeofEthicsthattheSECrequiresustodisclose,wewilldisclosetheseeventsinthecorporategovernancesectionofourwebsitewithinfourbusinessdaysfollowingthedateofsuchamendmentorwaiver.Item11.EXECUTIVECOMPENSATIONTheinformationrequiredbythisItemisincorporatedhereinbyreferencetoourdefinitiveProxyStatementtobefiledinconnectionwiththe2021AnnualMeetingofStockholders.Item12.SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENTANDRELATEDSTOCKHOLDERMATTERSTheinformationrequiredbythisItem,isincorporatedhereinbyreferencetoourdefinitiveProxyStatementtobefiledinconnectionwiththe2021AnnualMeetingofStockholders.Item13.CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONSANDDIRECTORINDEPENDENCETheinformationrequiredbythisItemisincorporatedhereinbyreferencetoourdefinitiveProxyStatementtobefiledinconnectionwiththe2021AnnualMeetingofStockholders.Item14.PRINCIPALACCOUNTANTFEESANDSERVICESTheinformationrequiredbythisItemisincorporatedhereinbyreferencetoourdefinitiveProxyStatementtobefiledinconnectionwiththe2021AnnualMeetingofStockholders.22PARTIVItem15.EXHIBITSANDFINANCIALSTATEMENTSCHEDULES1.FinancialStatementsThefinancialstatementslistedunderItem8arefiledaspartofthisreport.2.FinancialStatementSchedulesScheduleshavebeenomittedbecausetheyareeithernotapplicableortherequiredinformationhasbeendisclosedinthefinancialstatementsornotesthereto.3.ExhibitsTheexhibitslistedontheExhibitIndeximmediatelyfollowingthesignaturepageofthisannualreportarefiledaspartofthisreport.Item16.FORM10-KSUMMARYNone.23ReportofIndependentRegisteredPublicAccountingFirmTotheStockholdersandtheBoardofDirectorsofBerryGlobalGroup,Inc.OpinionontheFinancialStatementsWehaveauditedtheaccompanyingconsolidatedbalancesheetsofBerryGlobalGroup,Inc.(theCompany)asofSeptember26,2020andSeptember28,2019,therelatedconsolidatedstatementsofincome,comprehensiveincome,changesinstockholders’equityandcashflowsforeachofthethreeyearsintheperiodendedSeptember26,2020,andtherelatednotes(collectivelyreferredtoasthe“consolidatedfinancialstatements”).Inouropinion,theconsolidatedfinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionoftheCompanyatSeptember26,2020andSeptember28,2019,andtheresultsofitsoperationsanditscashflowsforeachofthethreeyearsintheperiodendedSeptember26,2020,inconformitywithU.S.generallyacceptedaccountingprinciples.Wealsohaveaudited,inaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates)(PCAOB),theCompany’sinternalcontroloverfinancialreportingasofSeptember26,2020,basedoncriteriaestablishedinInternalControlIntegratedFrameworkissuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(2013framework)andourreportdatedNovember23,2020expressedanunqualifiedopinionthereon.BasisforOpinionThesefinancialstatementsaretheresponsibilityoftheCompany’smanagement.OurresponsibilityistoexpressanopinionontheCompany’sfinancialstatementsbasedonouraudits.WeareapublicaccountingfirmregisteredwiththePCAOBandarerequiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.WeconductedourauditsinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement,whetherduetoerrororfraud.Ourauditsincludedperformingprocedurestoassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetoerrororfraud,andperformingproceduresthatrespondtothoserisks.Suchproceduresincludedexamining,onatestbasis,evidenceregardingtheamountsanddisclosuresinthefinancialstatements.Ourauditsalsoincludedevaluatingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethatourauditsprovideareasonablebasisforouropinion.CriticalAuditMattersThecriticalauditmatterscommunicatedbelowaremattersarisingfromthecurrentperiodauditofthefinancialstatementsthatwerecommunicatedorrequiredtobecommunicatedtotheauditcommitteeandthat:(1)relatetoaccountsordisclosuresthatarematerialtothefinancialstatementsand(2)involvedourespeciallychallenging,subjectiveorcomplexjudgments.Thecommunicationofcriticalauditmattersdoesnotalterinanywayouropinionontheconsolidatedfinancialstatements,takenasawhole,andwearenot,bycommunicatingthecriticalauditmattersbelow,providingseparateopinionsonthecriticalauditmattersorontheaccountsordisclosurestowhichtheyrelate.AccountingforRPCGroupPlcBusinessCombinationDescriptionoftheMatterAsdiscussedinNote2totheconsolidatedfinancialstatements,inJuly2019,theCompanycompletedtheacquisitionoftheentireoutstandingsharecapitalofRPCGroupPlc(“RPC”),foraggregateconsiderationof$6.1billion.Theacquisitionwasaccountedforunderthepurchasemethodofaccountingandtheassetsacquiredandliabilitiesassumedhavebeenrecordedbasedonestimatesoffairvalue.ThepurchasepriceallocationforRPCwasfinalizedduringfiscalyear2020.AuditingtheCompany’saccountingfortheallocationofthepurchasepriceforitsacquisitionofRPCwascomplexduetotheoverallsignificanceoftheRPCacquisitionandtheestimationuncertaintyindeterminingthefairvalueofcertainassets.Themostcomplexfairvaluedeterminationrelatedtothecustomerrelationshipsintangibleassets.The24estimationuncertaintywasprimarilyduetothesensitivityoftherespectivefairvaluestounderlyingassumptions.Inparticular,thesignificantinputsandassumptionsusedbytheCompanytoestimatethefairvalueofthecustomerrelationshipsintangibleassetsincludedprospectivefinancialinformationthatincorporatedassumptionsastorevenuegrowthrates,EarningsBeforeInterest,Tax,DepreciationandAmortization(“EBITDA”)marginsandtheexpectedcustomerretentionrate.HowWeAddressedtheMatterinOurAuditWeobtainedanunderstanding,evaluatedthedesignandtestedtheoperatingeffectivenessofcontrolsthataddresstherisksofmaterialmisstatementrelatingtotheestimationofthefairvalueofthecustomerrelationshipsintangibleassets.Forexample,wetestedcontrolsovermanagement’sreviewoftheprojectedrevenuegrowthratesandEBITDAmargins,andwetestedcontrolsovermanagement’sreviewofthecustomerretentionrateincludingmanagement’stestingofthecompletenessandaccuracyofthesourceinformationusedtocalculatethecustomerretentionrates.Totesttheestimateofthefairvalueofthecustomerrelationshipsintangibleassets,weperformedauditproceduresthatincluded,amongothers,assessingmethodologiesandtestingthesignificantassumptionsdiscussedaboveandtheunderlyingdatausedbytheCompanyinitsanalysis.Weinvolvedaspecialisttoassistintheauditingofkeyvaluationassumptions.Wecomparedthesignificantassumptionsusedbymanagementtocurrentindustryandeconomictrends,historicalresultsoftheacquiredbusinessandtohistoricalexperiencerelatedtopreviousacquisitionsofsimilarbusinessesandassessedeconomicfactorsthatcouldaffectthesignificantassumptions.Wealsoperformedsensitivityanalysesofsignificantassumptionstoevaluatethechangesinthefairvalueofthecustomerrelationshipsintangibleassetsthatwouldresultfromchangesintheassumptions.ValuationofGoodwillDescriptionoftheMatterAtSeptember26,2020,theCompanyhadagoodwillbalanceof$5.1billion.AsdiscussedinNote1totheconsolidatedfinancialstatements,goodwillistestedforimpairmentatleastannuallyatthereportingunitlevel.TheCompany’sgoodwillisinitiallyassignedtoitsreportingunitsasoftheacquisitiondate.Infiscal2020,theCompanyperformedaquantitativegoodwillimpairmenttestforallofitsreportingunits.ThefairvalueforeachreportingunitisestimatedbasedonamarketapproachandadiscountedcashflowanalysisandisreconciledtotheCompany’scurrentmarketcapitalization.Auditingmanagement’sannualgoodwillimpairmenttestforcertainofthereportingunitswascomplexandhighlyjudgmentalduetothesignificantestimationrequiredtodeterminethefairvalueofthereportingunit.Thesignificantestimationuncertaintywasprimarilyduetothesensitivityoftherespectivefairvaluetounderlyingassumptionsaboutthefutureoperatingperformanceofthereportingunit.Inparticular,thefairvalueestimatewassensitivetosignificantassumptionsintheprospectivefinancialinformationsuchastherevenuegrowthrate,EBITDAmargin,andterminalyeargrowthrate,whichareaffectedbyexpectationsaboutfuturemarketoreconomicconditions.HowWeAddressedtheMatterinOurAuditWeobtainedanunderstanding,evaluatedthedesignandtestedtheoperatingeffectivenessofcontrolsthataddresstherisksofmaterialmisstatementovertheCompany’sgoodwillimpairmentreviewprocess,includingcontrolsovermanagement’sreviewofthesignificantassumptionsdescribedabove.Totesttheestimatedfairvalue,we,alongwithourvaluationspecialists,performedauditproceduresthatincluded,amongothers,assessingmethodologiesandtestingthesignificantassumptionsdiscussedaboveandtheunderlyingdatausedbytheCompanyinitsanalysis.Wecomparedthesignificantassumptionsusedbymanagementtocurrentindustryand25economictrends,changesintheCompany’sbusinessmodel,customerbaseorproductmix,historicaloperatingresultsandotherrelevantfactorsthatwouldaffectthesignificantassumptions.Weassessedthehistoricalaccuracyofmanagement’sestimatesandperformedsensitivityanalysesofsignificantassumptionstoevaluatethechangesinthefairvaluethatwouldresultfromchangesintheassumptions.Inaddition,wetestedmanagement’sreconciliationofthefairvalueofthereportingunitstothemarketcapitalizationoftheCompany./s/Ernst&YoungLLPWehaveservedastheCompany’sauditorsince1991.Indianapolis,IndianaNovember23,202026ReportofIndependentRegisteredPublicAccountingFirmTotheStockholdersandtheBoardofDirectorsofBerryGlobalGroup,Inc.OpiniononInternalControloverFinancialReportingWehaveauditedBerryGlobalGroup,Inc.’sinternalcontroloverfinancialreportingasofSeptember26,2020,basedoncriteriaestablishedinInternalControl—IntegratedFrameworkissuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(2013framework)(theCOSOcriteria).Inouropinion,BerryGlobalGroup,Inc.(theCompany)maintained,inallmaterialrespects,effectiveinternalcontroloverfinancialreportingasofSeptember26,2020,basedontheCOSOcriteria.Wealsohaveaudited,inaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates)(PCAOB),theconsolidatedbalancesheetsoftheCompanyasofSeptember26,2020andSeptember28,2019,therelatedconsolidatedstatementsofincome,comprehensiveincome,changesinstockholders’equityandcashflowsforeachofthethreeyearsintheperiodendedSeptember26,2020,andtherelatednotesandourreportdatedNovember23,2020expressedanunqualifiedopinionthereon.BasisforOpinionTheCompany’smanagementisresponsibleformaintainingeffectiveinternalcontroloverfinancialreportingandforitsassessmentoftheeffectivenessofinternalcontroloverfinancialreportingincludedintheaccompanyingManagement’sReportonInternalControlOverFinancialReporting.OurresponsibilityistoexpressanopinionontheCompany’sinternalcontroloverfinancialreportingbasedonouraudit.WeareapublicaccountingfirmregisteredwiththePCAOBandarerequiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.WeconductedourauditinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhethereffectiveinternalcontroloverfinancialreportingwasmaintainedinallmaterialrespects.Ourauditincludedobtaininganunderstandingofinternalcontroloverfinancialreporting,assessingtheriskthatamaterialweaknessexists,testingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk,andperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatourauditprovidesareasonablebasisforouropinion.DefinitionandLimitationsofInternalControlOverFinancialReportingAcompany’sinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany’sinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate./s/Ernst&YoungLLPIndianapolis,IndianaNovember23,202027BerryGlobalGroup,Inc.ConsolidatedStatementsofIncome(inmillionsofdollars)FiscalyearsendedSeptember26,2020September28,2019September29,2018Netsales..........................................$11,709$8,878$7,869Costsandexpenses:Costofgoodssold.................................9,3017,2596,438Selling,generalandadministrative......................850583480Amortizationofintangibles...........................300194154Restructuringandtransactionactivities..................79(132)36Operatingincome...................................1,179974761Otherexpense,net...................................3115525Interestexpense,net..................................435329259Incomebeforeincometaxes............................713490477Incometaxexpense..................................15486(19)Netincome........................................$559$404$496Netincomepershare(refertoNote13):Basic...........................................$4.22$3.08$3.77Diluted.........................................$4.14$3.00$3.67BerryGlobalGroup,Inc.ConsolidatedStatementsofComprehensiveIncome(inmillionsofdollars)FiscalyearsendedSeptember26,2020September28,2019September29,2018Netincome........................................$559$404$496Currencytranslation................................1(104)(127)Pensionandpostretirementbenefits.....................(60)(43)3Derivativeinstruments..............................(106)(83)36Othercomprehensiveloss,netoftax......................(165)(230)(88)Comprehensiveincome................................$394$174$408Seenotestoconsolidatedfinancialstatements.28BerryGlobalGroup,Inc.ConsolidatedBalanceSheets(inmillionsofdollars)September26,2020September28,2019AssetsCurrentassets:Cashandcashequivalents........................................$750$750Accountsreceivable............................................1,4691,526Inventories..................................................1,2681,324Prepaidexpensesandothercurrentassets.............................168157Assetsheldforsale.............................................162—Totalcurrentassets..............................................3,8173,757Property,plantandequipment......................................4,5614,714Goodwillandintangibleassets......................................7,6707,831Right-of-useassets..............................................562—Otherassets...................................................91167Totalassets....................................................$16,701$16,469LiabilitiesandStockholders’EquityCurrentliabilities:Accountspayable..............................................$1,115$1,159Accruedemployeecosts.........................................324214Othercurrentliabilities..........................................644562Currentportionoflong-termdebt..................................75104Liabilitiesheldforsale..........................................25—Totalcurrentliabilities............................................2,1832,039Long-termdebt.................................................10,16211,261Deferredincometaxes............................................601803Employeebenefitobligations.......................................368327Operatingleaseliabilities..........................................464—Otherlong-termliabilities..........................................831421Totalliabilities..................................................14,60914,851Stockholders’equity:Commonstock(133.6and132.3sharesissued,respectively)................11Additionalpaid-incapital........................................1,034949Retainedearnings.............................................1,6081,054Accumulatedothercomprehensiveloss...............................(551)(386)Totalstockholders’equity..........................................2,0921,618Totalliabilitiesandstockholders’equity................................$16,701$16,469Seenotestoconsolidatedfinancialstatements.29BerryGlobalGroup,Inc.ConsolidatedStatementsofChangesinStockholders’Equity(inmillionsofdollars)CommonStockAdditionalPaid-inCapitalAccumulatedOtherComprehensiveLossRetainedEarningsTotalBalanceatSeptember30,2017.................$1$826$(68)$256$1,015NetincomeattributabletotheCompany.........———496496Othercomprehensiveloss....................——(88)—(88)Share-basedcompensation...................—23——23Proceedsfromissuanceofcommonstock.........—23——23Commonstockrepurchasedandretired..........—(2)—(33)(35)BalanceatSeptember29,2018.................$1$870$(156)$719$1,434NetincomeattributabletotheCompany.........———404404Othercomprehensiveloss....................——(230)—(230)Share-basedcompensation...................—27——27Proceedsfromissuanceofcommonstock.........—55——55Commonstockrepurchasedandretired..........—(3)—(69)(72)BalanceatSeptember28,2019.................$1$949$(386)$1,054$1,618NetincomeattributabletotheCompany.........———559559Othercomprehensiveloss....................——(165)—(165)Share-basedcompensation...................—33——33Proceedsfromissuanceofcommonstock.........—30——30Acquisition(a)............................—22——22AdoptionofASC842......................———(5)(5)BalanceatSeptember26,2020.................$1$1,034$(551)$1,608$2,092(a)Representsnoncontrollinginterest(refertoNote2)Seenotestoconsolidatedfinancialstatements.30BerryGlobalGroup,Inc.ConsolidatedStatementsofCashFlows(inmillionsofdollars)FiscalyearsendedSeptember26,2020September28,2019September29,2018CashFlowsfromOperatingActivities:Netincome........................................$559$404$496Adjustmentstoreconcilenetcashfromoperatingactivities:Depreciation.....................................545419384Amortizationofintangibles...........................300194154Non-cashinterestexpense............................2714Share-basedcompensationexpense......................332723Deferredincometax................................(96)(52)(86)Settlementofderivatives.............................111930Transactionactivities...............................—(38)—Othernon-cashoperatingactivities,net...................42(1)16Changesinoperatingassetsandliabilities:Accountsreceivable...............................49150(53)Inventories.....................................4899(79)Prepaidexpensesandotherassets.....................(12)1418Accountspayableandotherliabilities..................24(35)97Netcashfromoperatingactivities........................1,5301,2011,004CashFlowsfromInvestingActivities:Additionstoproperty,plantandequipment,net..............(583)(399)(333)Divestitureofbusiness................................—326—Acquisitionofbusinessandpurchasepricederivatives..........(14)(6,178)(702)Settlementofnetinvestmenthedges.......................281——Netcashfrominvestingactivities.........................(316)(6,251)(1,035)CashFlowsfromFinancingActivities:Proceedsfromlong-termborrowings......................1,2026,784498Repaymentoflong-termborrowings......................(2,436)(1,214)(335)Proceedsfromissuanceofcommonstock...................305523Repurchaseofcommonstock...........................—(74)(33)Paymentoftaxreceivableagreement......................—(38)(37)Debtfinancingcosts.................................(16)(87)(3)Netcashfromfinancingactivities........................(1,220)5,426113Effectofcurrencytranslationoncash.....................6(7)(7)Netchangeincashandcashequivalents....................—36975Cashandcashequivalentsatbeginningofperiod.............750381306Cashandcashequivalentsatendofperiod..................$750$750$381Seenotestoconsolidatedfinancialstatements.31BerryGlobalGroup,Inc.NotestoConsolidatedFinancialStatements(inmillionsofdollars,exceptasotherwisenoted)1.BasisofPresentationandSummaryofSignificantAccountingPoliciesBackgroundBerryGlobalGroup,Inc.(“Berry,”“we,”orthe“Company”)isaleadingglobalsupplierofabroadrangeofinnovativenon-woven,flexible,andrigidproductsusedeverydaywithinconsumerandindustrialendmarkets.BasisofPresentationTheCompany’sconsolidatedfinancialstatementshavebeenpreparedinaccordancewithaccountingprinciplesgenerallyacceptedintheU.S.(“GAAP”)pursuanttotherulesandregulationsoftheSecuritiesandExchangeCommissions.PeriodspresentedinthesefinancialstatementsincludefiscalperiodsendingSeptember26,2020(“fiscal2020”),September28,2019(“fiscal2019”),andSeptember29,2018(“fiscal2018”).TheCompanyhasrecastcertainpriorperiodamountstoconformtocurrentreporting.Fiscal2020,fiscal2019,andfiscal2018werefifty-twoweekperiods.TheCompanyhasevaluatedsubsequenteventsthroughthedatethefinancialstatementswereissued.TheconsolidatedfinancialstatementsincludetheaccountsofBerryanditssubsidiaries,allofwhichincludesourwhollyownedandmajorityownedsubsidiaries.TheCompanyhascertainforeignsubsidiariesthatreportonacalendarperiodbasiswhichweconsolidateintoourrespectivefiscalperiod.Intercompanyaccountsandtransactionshavebeeneliminatedinconsolidation.RevenueRecognitionandAccountsReceivableOurrevenuesareprimarilyderivedfromthesaleofnon-woven,flexibleandrigidproductstocustomers.Revenueisrecognizedwhenperformanceobligationsaresatisfied,inanamountreflectingtheconsiderationtowhichtheCompanyexpectstobeentitled.Weconsiderthepromisetotransferproductstobeoursoleperformanceobligation.Iftheconsiderationagreedtoinacontractincludesavariableamount,weestimatetheamountofconsiderationweexpecttobeentitledtoinexchangefortransferringthepromisedgoodstothecustomerusingthemostlikelyamountmethod.Ourmainsourcesofvariableconsiderationarecustomerrebates.Theaccrualforcustomerrebateswas$104millionand$114millionatSeptember26,2020andSeptember28,2019,respectively,andisincludedinOthercurrentliabilitiesontheConsolidatedBalanceSheets.TheCompanydisaggregatesrevenuebasedonreportablebusinesssegment,geography,andsignificantproductline.RefertoNote12.SegmentandGeographicDataforfurtherinformation.TheCompanyhasenteredintovariousfactoringagreementstosellcertainreceivablestothird-partyfinancialinstitutions.Thetransferofreceivablesisaccountedforasasale,withoutrecourse.NetsalesavailableunderqualifyingU.S.basedprogramswere$931millionand$940millionfortheyearendedSeptember26,2020andSeptember28,2019,respectively.Therewerenoamountsoutstandingfromfinancialinstitutionsrelatedtotheseprograms.Thefeesassociatedwithtransferofreceivablesforallprogramswerenotmaterialforanyoftheperiodspresented.PurchasesofRawMaterialsandConcentrationofRiskTheCompany’smostsignificantrawmaterialusedintheproductionofitsproductsisplasticresin.ThelargestsupplieroftheCompany’stotalresinmaterialrequirementsrepresentedapproximately13%ofpurchasesinfiscal2020.TheCompanyusesavarietyofsupplierstomeetitsresinrequirements.ResearchandDevelopmentResearchanddevelopmentcostsareexpensedwhenincurred.TheCompanyincurredresearchanddevelopmentexpendituresof$79million,$50million,and$45millioninfiscal2020,2019,and2018,respectively.Share-BasedCompensationTheCompanyutilizestheBlack-Scholesoptionvaluationmodelforestimatingthefairvalueofstockoptionsandamortizestheestimatedfairvalueonastraight-linebasisovertherequisiteserviceperiod.Theshare-basedcompensationplanismorefullydescribedinNote11.Stockholders’Equity.32ForeignCurrencyForthenon-U.S.subsidiariesthataccountinafunctionalcurrencyotherthanU.S.Dollars,assetsandliabilitiesaretranslatedintoU.S.Dollarsusingperiod-endexchangerates.Salesandexpensesaretranslatedattheaverageexchangeratesineffectduringtheperiod.ForeigncurrencytranslationgainsandlossesareincludedasacomponentofAccumulatedothercomprehensiveincome(loss)withinStockholders’equity.GainsandlossesresultingfromforeigncurrencytransactionsareincludedintheConsolidatedStatementsofIncome.CashandCashEquivalentsAllhighlyliquidinvestmentspurchasedwithamaturityofthreemonthsorlessfromthetimeofpurchaseareconsideredtobecashequivalents.AllowanceforDoubtfulAccountsTheCompany’scustomersarelocatedprincipallythroughouttheU.S.andEurope,withoutsignificantconcentrationwithanyonecustomer.TheCompanyperformsperiodiccreditevaluationsofitscustomers’financialconditionandgenerallydoesnotrequirecollateral.TheCompany’saccountsreceivableandrelatedallowancefordoubtfulaccountsareanalyzedindetailonaquarterlybasisandallsignificantcustomerswithdelinquentbalancesarereviewedtodeterminefuturecollectability.Theallowancefordoubtfulaccountswas$25millionand$28millionatSeptember26,2020andSeptember28,2019,respectively.InventoriesInventoriesarestatedatthelowerofcostornetrealizablevalueandarevaluedusingthefirst-in,first-outmethod.Managementperiodicallyreviewsinventorybalances,usingrecentandfutureexpectedsalestoidentifyslow-movingand/orobsoleteitems.Thecostofsparepartsischargedtocostofgoodssoldwhenpurchased.Weevaluateourreserveforinventoryobsolescenceonaquarterlybasisandreviewinventoryon-handtodeterminefuturesalability.Webaseourdeterminationsontheageoftheinventoryandtheexperienceofourpersonnel.Wereserveinventorythatwedeemtobenotsalableinthequarterinwhichwemakethedetermination.Webelieve,basedonpasthistoryandourpoliciesandprocedures,thatournetinventoryissalable.Inventoryasoffiscal2020and2019was:20202019Inventories:Finishedgoods........................................$708$743Rawmaterials........................................560581$1,268$1,324Property,PlantandEquipmentProperty,plantandequipmentarestatedatcost.Depreciationiscomputedprimarilybythestraight-linemethodovertheestimatedusefullivesoftheassetsrangingfrom15to40yearsforbuildingsandimprovements,2to20yearsformachinery,equipment,andtooling,andoverthetermoftheagreementforcapitalleases.Leaseholdimprovementsaredepreciatedovertheshorteroftheusefullifeoftheimprovementortheleaseterm.Repairsandmaintenancecostsarechargedtoexpenseasincurred.Property,plantandequipmentasoffiscal2020and2019was:20202019Property,plantandequipment:Land,buildingsandimprovements..........................$1,669$1,549Equipmentandconstructioninprogress......................6,2136,0907,8827,639Lessaccumulateddepreciation.............................(3,321)(2,925)$4,561$4,714Long-livedAssetsLong-livedassets,includingproperty,plantandequipmentanddefinitelivedintangibleassetsarereviewedforimpairmentinaccordancewithASC360,“Property,PlantandEquipment,”wheneverfactsandcircumstancesindicate33thatthecarryingamountmaynotberecoverable.Specifically,thisprocessinvolvescomparinganasset’scarryingvaluetotheestimatedundiscountedfuturecashflowstheassetisexpectedtogenerateoveritsremaininglife.Ifthisprocessweretoresultintheconclusionthatthecarryingvalueofalong-livedassetwouldnotberecoverable,awrite-downoftheassettofairvaluewouldberecordedthroughachargetooperations.GoodwillThechangesinthecarryingamountofgoodwillbyreportablesegmentareasfollows:ConsumerPackagingInternationalConsumerPackagingNorthAmericaEngineeredMaterialsHealth,Hygiene&SpecialtiesTotalBalanceasoffiscal2018....................$46$1,409$629$860$2,944Foreigncurrencytranslationadjustment.........(73)(1)—7(67)Acquisitions.............................1,705500922,216Dispositions.............................———(42)(42)Balanceasoffiscal2019....................$1,678$1,908$638$827$5,051Foreigncurrencytranslationadjustment.........32——(16)16FinalRPCpurchasepricevaluation............303(151)7—159Heldforsale.............................——(40)(13)(53)Balanceasoffiscal2020....................$2,013$1,757$605$798$5,173Infiscalyear2020,theCompanycompletedastep1quantitativetesttoevaluateimpairmentofgoodwill.ThefairvalueforeachreportingunitisestimatedbasedonamarketapproachandadiscountedcashflowanalysisandisreconciledbacktothecurrentmarketcapitalizationforBerrytoensurethattheimpliedcontrolpremiumisreasonable.Ourforecastsincludedlong-termgrowthof3%andmodestmarginexpansionattributedtocapitalinvestments,anddiscountratesrangingfrom9.0%to11.5%beingappliedtotheforecastedcashflows.AsaresultofourannualimpairmentevaluationstheCompanyconcludedthatnoimpairmentexistedinfiscal2020.However,futuredeclinesinvaluationmarketmultiples,sustainedlowerearnings,ormacroeconomicchallengescouldimpactfutureimpairmenttests.TheCompanyhasrecognizedcumulativegoodwillimpairmentchargesof$165million,whichoccurredinfiscal2011.DeferredFinancingFeesDeferredfinancingfeesareamortizedtointerestexpenseusingtheeffectiveinterestmethodoverthelivesoftherespectivedebtagreements.PursuanttoASC835-30,theCompanypresents$85millionand$112millionasoffiscal2020andfiscal2019,respectively,ofdebtissuanceanddeferredfinancingcostsonthebalancesheetasadeductionfromthecarryingamountoftherelateddebtliabilityinsteadofadeferredcharge.IntangibleAssetsCustomerrelationshipsarebeingamortizedusinganacceleratedamortizationmethodwhichcorrespondswiththecustomerattritionratesusedintheinitialvaluationoftheintangiblesovertheestimatedlifeoftherelationshipswhichrangefrom5to17years.Definitelivedtrademarksarebeingamortizedusingthestraight-linemethodovertheestimatedlifeoftheassetswhicharenotmorethan15years.Otherintangibles,whichincludetechnologyandlicenses,arebeingamortizedusingthestraight-linemethodovertheestimatedlifeoftheassetswhichrangefrom5to14years.TheCompanyhastrademarksthattotal$248millionthatareindefinitelivedandwetestannuallyforimpairmentonthefirstdayofthefourthquarter.Wecompletedtheannualimpairmenttestofourindefinitelivedtradenamesutilizingtherelieffromroyaltymethodandnotednoimpairmentinfiscal2020,2019and2018.34CustomerRelationshipsTrademarksOtherIntangiblesAccumulatedAmortizationTotalBalanceasoffiscal2018.................$1,882$293$185$(1,020)$1,340Foreigncurrencytranslationadjustment......(56)(4)(2)4(58)Amortizationexpense...................———(194)(194)Acquisitionintangibles..................1,590108(22)161,692Nettingoffullyamortizedintangibles........(9)——9—Balanceasoffiscal2019.................$3,407$397$161$(1,185)$2,780Foreigncurrencytranslationadjustment......5373(2)61Amortizationexpense...................———(300)(300)FinalRPCpurchasepricevaluation.........(137)118(25)—(44)Nettingoffullyamortizedintangibles........——(10)10—Balanceasoffiscal2020.................$3,323$522$129$(1,477)$2,497InsurableLiabilitiesTheCompanyrecordsliabilitiesfortheself-insuredportionofworkers’compensation,health,product,generalandautoliabilities.Thedeterminationoftheseliabilitiesandrelatedexpensesisdependentonclaimsexperience.Formostoftheseliabilities,claimsincurredbutnotyetreportedareestimatedbaseduponhistoricalclaimsexperience.IncomeTaxesTheCompanyaccountsforincometaxesundertheassetandliabilityapproach,whichrequirestherecognitionofdeferredtaxassetsandliabilitiesfortheexpectedfuturetaxconsequenceofeventsthathavebeenrecognizedintheCompany’sfinancialstatementsorincometaxreturns.Incometaxesarerecognizedduringtheperiodinwhichtheunderlyingtransactionsarerecorded.Deferredtaxes,withtheexceptionofnon-deductiblegoodwill,areprovidedfortemporarydifferencesbetweenamountsofassetsandliabilitiesasrecordedforfinancialreportingpurposesandsuchamountsasmeasuredbytaxlaws.IftheCompanydeterminesthatadeferredtaxassetarisingfromtemporarydifferencesisnotlikelytobeutilized,theCompanywillestablishavaluationallowanceagainstthatassettorecorditatitsexpectedrealizablevalue.TheCompanyrecognizesuncertaintaxpositionswhenitismorelikelythannotthatthetaxpositionwillbesustaineduponexaminationbyrelevanttaxingauthorities,basedonthetechnicalmeritsoftheposition.Theamountrecognizedismeasuredasthelargestamountofbenefitthatisgreaterthan50%likelyofbeingrealizeduponultimatesettlement.TheCompany’seffectivetaxrateisdependentonmanyfactorsincluding:theimpactofenactedtaxlawsinjurisdictionsinwhichtheCompanyoperates;theamountofearningsbyjurisdiction,duetovaryingtaxratesineachcountry;andtheCompany’sabilitytoutilizeforeigntaxcreditsrelatedtoforeigntaxespaidonforeignearningsthatwillberemittedtotheU.S.ComprehensiveIncome(Loss)Comprehensiveincome(loss)iscomprisedofnetincomeandothercomprehensiveincome(loss).Othercomprehensiveincome(losses)includenetunrealizedgainsorlossesresultingfromcurrencytranslationsofforeignsubsidiaries,changesinthevalueofourderivativeinstrumentsandadjustmentstothepensionliability.Theaccumulatedbalancesrelatedtoeachcomponentofothercomprehensiveincome(loss),netoftaxbeforereclassificationswereasfollows:35CurrencyTranslationDefinedBenefitPensionandRetireeHealthBenefitPlansDerivativeInstrumentsAccumulatedOtherComprehensiveLossBalanceasoffiscal2017..............$(48)$(16)$(4)$(68)Othercomprehensiveincome(loss)......(127)933(85)Netamountreclassifiedfromaccumulatedothercomprehensiveincome(loss).....—(6)3(3)Balanceasoffiscal2018..............$(175)$(13)$32$(156)Othercomprehensiveincome(loss)......(104)9(107)(202)Netamountreclassifiedfromaccumulatedothercomprehensiveincome(loss)(a)....—(52)24(28)Balanceasoffiscal2019..............$(279)$(56)$(51)$(386)Othercomprehensiveincome(loss)......13(137)(133)Netamountreclassifiedfromaccumulatedothercomprehensiveincome(loss).....—(63)31(32)Balanceasoffiscal2020..............$(278)$(116)$(157)$(551)(a)RefertoNote4.FinancialInstrumentsandFairValueMeasurementsandNote8.RetirementPlansforfurtherinformation.PensionPensionbenefitcostsincludeassumptionsforthediscountrate,retirementage,andexpectedreturnonplanassets.Retireemedicalplancostsincludeassumptionsforthediscountrate,retirementage,andhealth-care-costtrendrates.Periodically,theCompanyevaluatesthediscountrateandtheexpectedreturnonplanassetsinitsdefinedbenefitpensionandretireehealthbenefitplans.Inevaluatingtheseassumptions,theCompanyconsidersmanyfactors,includinganevaluationofthediscountrates,expectedreturnonplanassetsandthehealth-care-costtrendratesofothercompanies;historicalassumptionscomparedwithactualresults;ananalysisofcurrentmarketconditionsandassetallocations;andtheviewsofadvisers.NetIncomePerShareTheCompanycalculatesbasicnetincomepersharebasedontheweighted-averagenumberofoutstandingcommonshares.TheCompanycalculatesdilutednetincomepersharebasedontheweighted-averagenumberofoutstandingcommonsharesplustheeffectofdilutivesecurities.UseofEstimatesThepreparationofthefinancialstatementsinconformitywithU.S.generallyacceptedaccountingprinciplesrequiresmanagementtomakeextensiveuseofestimatesandassumptionsthataffectthereportedamountofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesandthereportedamountsofsalesandexpenses.Actualresultscoulddiffermateriallyfromtheseestimates.Changesinestimatesarerecordedinresultsofoperationsintheperiodthattheeventorcircumstancesgivingrisetosuchchangesoccur.RecentlyIssuedAccountingPronouncementsLeasesEffectiveSeptember29,2019,theCompanyadoptedASU2016-02,Leases(Topic842),includingallrelatedamendments,usingthemodifiedretrospectiveapproachandrecognizedthecumulativeeffectofadoptiontoretainedearnings.Underthenewstandard,thelesseeofanoperatingleaseisrequiredtodothefollowing:1)recognizearight-of-useassetandaleaseliabilityinthestatementoffinancialposition,2)recognizeasingleleasecostallocatedovertheleasetermgenerallyonastraight-linebasis,and3)classifyallcashpaymentswithinoperatingactivitiesonthestatementofcashflows.RefertoNote6.Commitments,LeasesandContingenciesforfurtherinformation.36CreditLossesInJune2016,theFASBissuedASU2016-13,FinancialInstruments—CreditLosses(Topic326)andissuedsubsequentamendmentstotheinitialguidance.Thenewstandardrequiresentitiestomeasureallexpectedcreditlossesformostfinancialassetsheldatthereportingdatebasedonanexpectedlossmodel,whichincludeshistoricalexperience,currentconditions,andreasonableandsupportableforecasts.Thenewstandardalsorequiresenhanceddisclosure.ThenewstandardwillbeeffectivefortheCompanybeginninginfiscal2021.TheCompanyhascompleteditsevaluationofthisnewstandardandhasdeterminedthatitwillnothaveamaterialimpactonourconsolidatedfinancialstatements.DefinedBenefitPlansInAugust2018,theFASBissuedASU2018-14,ChangestotheDisclosureRequirementsforDefinedBenefitPlans.Thenewstandardremovesrequirementstodisclosetheamountsinaccumulatedothercomprehensiveincomeexpectedtoberecognizedascomponentsofnetperiodicbenefitcostoverthenextfiscalyearandtheeffectsofaone-percentage-pointchangesinassumedhealthcarecosttrendrates.Thestandardalsoaddsrequirementstodisclosethereasonsforsignificantgainsandlossesrelatedtochangesinthebenefitobligationsfortheperiodandtheaccumulatedbenefitobligation(ABO)forplanswithABOsinexcessofplanassets.ThenewstandardwillbeeffectivefortheCompanybeginninginfiscal2022.TheCompanyiscurrentlyevaluatingtheimpactoftheadoptionofthisstandardtoourdisclosures.IncomeTaxesInDecember2019,theFASBissuedASU2019-12,IncomeTaxes—SimplifyingtheAccountingforIncomeTaxes(Topic740).Thenewguidanceeliminatescertainexceptionsrelatedtotheapproachforintraperiodtaxallocation,themethodologyforcalculatingincometaxesinaninterimperiodandtherecognitionofdeferredtaxliabilitiesforoutsidebasisdifferences.Italsoclarifiesandsimplifiesotheraspectsoftheaccountingforincometaxes.ThenewstandardwillbeeffectivefortheCompanybeginningfiscal2022.TheCompanyiscurrentlyevaluatingtheimpactoftheadoptionofthisnewstandard.ReferenceRateReformInMarch2020,theFASBissuedASU2020-04,ReferenceRateReform—FacilitationoftheEffectsofReferenceRateReformonFinancialReporting(Topic848).ThisstandardprovidestemporaryoptionalexpedientsandexceptionstotheGAAPguidanceoncontractmodificationsandhedgeaccountingtoeasethefinancialreportingburdensoftheexpectedmarkettransitionfromLIBORandotherinterbankofferedratestoalternativereferencerates,suchasSOFR.ASU2020-04iseffectiveuponissuanceandgenerallycanbeappliedthroughtheendofcalendaryear2022.TheCompanyiscurrentlyevaluatingtheimpactandwhetheritplanstoadopttheoptionalexpedientsandexceptionsprovidedunderthisnewstandard.2.AcquisitionsandDispositionsRPCGroupPlcInJuly2019,theCompanycompletedtheacquisitionoftheentireoutstandingsharecapitalofRPCGroupPlc(“RPC”),foraggregateconsiderationof$6.1billion.RPCisaleadingplasticproductdesignandengineeringcompanyforpackagingandselectnon-packagingmarkets,with189sitesin34countries.RPCdevelopsandmanufacturesadiverserangeofproductsforawidevarietyofcustomers,includingmanyhouseholdnames,andenjoysstrongmarketpositionsinmanyoftheendmarketsitservesandthegeographicalareasinwhichitoperates.Itusesawiderangeofpolymerconversiontechniquesinbothrigidandflexibleplasticsmanufacturing,andisoneofthelargestplasticconvertersinEurope.TheConsumerPackagingInternationalsegmentprimarilyconsistsoftheinternationalbasedfacilities,withtheremainingU.S.basedfacilitiesoperatedwithintheConsumerPackagingNorthAmericasegment.TheresultsofRPChavebeenincludedintheconsolidatedresultsoftheCompanysincethedateoftheacquisition.Theacquisitionhasbeenaccountedforunderthepurchasemethodofaccounting.Underthismethod,theassetsacquiredandliabilitiesassumedhavebeenrecordedbasedonfairvaluesasoftheacquisitiondate.TheCompanyhasrecognizedgoodwillonthistransactionprimarilyasaresultofexpectedcostsynergies,andexpectsgoodwilltobepartiallydeductiblefortaxpurposes.37Thepreliminarypurchasepriceallocationhasbeenupdatedforcertainmeasurementperiodadjustmentsbasedonthefinalvaluationresultingina$70millionincreaseinworkingcapital,a$201milliondecreaseinproperty,plantandequipment,a$135milliondecreaseincustomerrelationships,a$93millionnetincreaseintradenamesandotherintangibles,a$51milliondecreaseindeferredtaxliabilities,anda$22millionincreaseinnoncontrollinginterest.Theseadjustmentsresultedincorrespondingadjustmentstogoodwill.Thefollowingtablesummarizesthefinalpurchasepriceallocation(inmillions):ConsiderationCash...................................................................$6,084Totalconsiderationtransferred.................................................6,084IdentifiableassetsacquiredandliabilitiesassumedWorkingcapital(a)..........................................................770Property,plantandequipment.................................................2,174Identifiableintangibleassets..................................................1,670Otherassets..............................................................2Otherlong-termliabilities....................................................(875)Goodwill................................................................2,365Netassetsacquiredandliabilitiesassumed.........................................6,106Noncontrollinginterest......................................................(22)Totalconsiderationtransferred.................................................$6,084(a)Includesa$58millionstepupofinventorytofairvalueTofinancethepurchase,theCompanyissued$1,250millionaggregateprincipalamountoffirstpriorityseniorsecurednotesdue2026,$500millionaggregateprincipalamountofsecondpriorityseniorsecurednotesdue2027,andenteredintoincrementaltermloansdueJuly2026,tofundtheremainderofthepurchaseprice.WhenincludingRPCresultsfortheperiodspriortotheacquisitiondate,unauditedproformanetsalesandnetincomewere$12.6billionand$465million,respectively,forfiscal2019.TheunauditedproformanetsalesandnetincomeassumethattheRPCacquisitionhadoccurredasofthebeginningoftheperiod.SealForLifeInJuly2019,theCompanycompletedthesaleofitsSealForLife(“SFL”)businesswhichwasoperatedinourHealth,Hygiene&Specialtiesreportingsegmentfornetproceedsof$325million.Apretaxgainonsaleof$214millionwasrecordedinfiscal2019,withinRestructuringandtransactionactivitiesontheConsolidatedStatementsofIncome.SFLrecorded$96millioninnetsalesduringfiscal2019.3.Long-TermDebtLong-termdebtconsistsofthefollowing:FacilityMaturityDateSeptember26,2020September28,2019Termloan.................................October2022$1,545$1,545Termloan.................................January2024448489Termloan.................................July20264,2084,250Revolvinglineofcredit........................May2024——6.00%SecondPrioritySeniorSecuredNotes.........October20222004005.125%SecondPrioritySeniorSecuredNotes........July20233007001.00%FirstPrioritySeniorSecuredNotes(a).........July31,2025814—4.50%SecondPrioritySeniorSecuredNotes.........February202650050038FacilityMaturityDateSeptember26,2020September28,20194.875%FirstPrioritySeniorSecuredNotes..........July20261,2501,2505.625%SecondPrioritySeniorSecuredNotes........July20275005001.50%FirstPrioritySeniorSecuredNotes(a).........July31,2027436—Debtdiscountsanddeferredfees.................(85)(112)Financeleasesandother.......................Various121167Retireddebt...............................Various—1,676Totallong-termdebt..........................10,23711,365Currentportionoflong-termdebt................(75)(104)Long-termdebt,lesscurrentportion..............$10,162$11,261(a)EurodenominatedFiscal2020ActivityInJanuary2020,theCompany(i)issued€700millionaggregateprincipalamountof1.00%firstpriorityseniorsecurednotesdue2025and€375millionaggregateprincipalamountof1.50%firstpriorityseniorsecurednotesdue2027(the“Euronotes”)and(ii)refinanceditsexisting$4.25billionTermloanmaturinginJuly2026,resultingina50basispointinterestratereduction.TheproceedsoftheEuronoteswereusedtoprepaytheentireoutstandingamountofourexistingeurodenominatedTermloan.Debtextinguishmentcostsof$18million,primarilycompromisedofdeferreddebtdiscountandfinancingfees,wererecordedinOtherexpense,netontheConsolidatedStatementsofIncomeupontheextinguishmentoftheeuroTermloan.BerryGlobal,Inc.SeniorSecuredCreditFacilityOurwhollyownedsubsidiaryBerryGlobal,Inc.’sseniorsecuredcreditfacilitiesconsistof$6.2billionoftermloansandan$850millionasset-basedrevolvinglineofcredit.Theavailabilityundertherevolvinglineofcreditisthelesserof$850millionorbasedonadefinedborrowingbasewhichiscalculatedbasedonavailableaccountsreceivableandinventory.Thetermloanfacilityrequiresminimumquarterlyprincipalpayments,withtheremainingamountpayableuponmaturity.TheCompanymayvoluntarilyrepayoutstandingloansundertheseniorsecuredcreditfacilitiesatanytimewithoutpremiumorpenalty,otherthancustomary“breakage”costswithrespecttoeurodollarloans.AllobligationsundertheseniorsecuredcreditfacilitiesareunconditionallyguaranteedbytheCompanyand,subjecttocertainexceptions,eachoftheCompany’sexistingandfuturedirectandindirectdomesticsubsidiaries.TheguaranteesofthoseobligationsaresecuredbysubstantiallyalloftheCompany’sassetsaswellasthoseofeachdomesticsubsidiaryguarantor.Despitenothavingfinancialmaintenancecovenants,ourdebtagreementscontaincertainnegativecovenants.WeareincompliancewithallcovenantsasofSeptember26,2020.Thefailuretocomplywiththesenegativecovenantscouldrestrictourabilitytoincuradditionalindebtedness,effectacquisitions,enterintocertainsignificantbusinesscombinations,makedistributionsorredeemindebtedness.Futurematuritiesoflong-termdebtasoffiscalyearend2020areasfollows:FiscalYearMaturities2021......................................................$752022......................................................752023......................................................1,8112024......................................................7852025......................................................864Thereafter..................................................6,712$10,32239Interestpaidwas$430million,$330million,and$253millioninfiscal2020,2019,and2018,respectively.DebtdiscountsanddeferredfinancingfeesarepresentednetofLong-termdebt,lessthecurrentportionintheConsolidatedBalanceSheetandareamortizedtoInterestexpensethroughmaturity.4.FinancialInstrumentsandFairValueMeasurementsInthenormalcourseofbusiness,theCompanyisexposedtocertainrisksarisingfrombusinessoperationsandeconomicfactors.TheCompanymayusederivativefinancialinstrumentstohelpmanagemarketriskandreducetheexposuretofluctuationsininterestratesandforeigncurrencies.Thesefinancialinstrumentsarenotusedfortradingorotherspeculativepurposes.Forthosederivativeinstrumentsthataredesignatedandqualifyashedginginstruments,theCompanymustdesignatethehedginginstrument,basedupontheexposurebeinghedged,asafairvaluehedge,cashflowhedge,orahedgeofanetinvestmentinaforeignoperation.Totheextenthedgingrelationshipsarefoundtobeeffective,changesinthefairvalueofthederivativesareoffsetbychangesinthefairvalueoftherelatedhedgeditemandrecordedtoAccumulatedothercomprehensiveloss.Anyidentifiedineffectiveness,orchangesinthefairvalueofaderivativenotdesignatedasahedge,arerecordedtotheConsolidatedStatementsofIncome.Cross-CurrencySwapsTheCompanyispartytocertaincross-currencyswapstohedgeaportionofourforeigncurrencyrisk.TheswapagreementsmatureMay2022(€250million),June2024(€1,625million)andJuly2027(£700million).Inadditiontothecross-currencyswaps,wehedgeaportionofourforeigncurrencyriskbydesignatingforeigncurrencydenominatedlong-termdebtasnetinvestmenthedgesofcertainforeignoperations.AsofSeptember26,2020,wehadoutstandinglong-termdebtof€785millionthatwasdesignatedasahedgeofournetinvestmentincertaineuro-denominatedforeignsubsidiaries.Whenvaluingcross-currencyswaps,theCompanyutilizesLevel2inputs(substantiallyobservable).Duringfiscal2020,theCompanyenteredintotransactionstocashsettleexistingcross-currencyswapsandreceivedproceedsof$281million.TheswapsettlementimpacthasbeenincludedasacomponentofCurrencytranslationwithinAccumulatedothercomprehensiveloss.Followingthesettlementoftheexistingcross-currencyswaps,weenteredintonewcross-currencyswapswithmatchingnotionalamountsandmaturitydatesoftheoriginalswaps.InterestRateSwapsTheprimarypurposeoftheCompany’sinterestrateswapactivitiesistomanageinterestexpensevariabilityassociatedwithouroutstandingvariableratetermloandebt.WhenvaluinginterestrateswapstheCompanyutilizesLevel2inputs(substantiallyobservable).Duringfiscal2019,theCompanyenteredinto(i)a$400millioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof2.533%withaneffectivedateofFebruary2019andexpirationinJuly2023;(ii)a$884millioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof1.857%,withaneffectivedateinJuly2019andexpirationinJune2024,and(iii)a$473millioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof2.050%,withaneffectivedateinJuly2019andexpirationinJune2024.Duringfiscal2020,theCompanyenteredintotransactionstoextendandrecouponitsexistinginterestrateswaps.AsofSeptember26,2020,theCompanyeffectivelyhad(i)a$450millioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof1.398%,withanexpirationdateinJune2026,(ii)a$1billioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof1.835%withanexpirationdateinJune2026,(iii)a$400millioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof1.916%withanexpirationdateinJune2026,(iv)an$884millioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof1.857%,withanexpirationinJune2024,and(v)a$473millioninterestrateswaptransactionthatswapsaone-monthvariableLIBORcontractforafixedannualrateof2.050%,withanexpirationinJune2024.TheCompanyrecordsthefairvaluepositionsofallderivativefinancialinstrumentsonanetbasisbycounterpartyforwhichamasternettingarrangementisutilized.Balancesonagrossbasisareasfollows:40DerivativesInstrumentsHedgeDesignationBalanceSheetLocation20202019Cross-currencyswaps......................DesignatedOtherassets$—$88Cross-currencyswaps......................DesignatedOtherlong-termliabilities270—Interestrateswaps........................DesignatedOtherlong-termliabilities22681TheeffectoftheCompany’sderivativeinstrumentsontheConsolidatedStatementsofIncomeisasfollows:FiscalyearsendedDerivativesinstrumentsStatementsofIncomeLocationSeptember26,2020September28,2019September29,2018Cross-currencyswaps(a)........Interestexpense,net$(25)$(19)$(5)Cross-currencyswaps(b)........Otherexpense,net—41—Foreignexchangeforwardcontracts................Otherexpense,net—99—Interestrateswaps...........Interestexpense,net322(1)(a)Designated(b)NotdesignatedTheamortizationrelatedtounrealizedlossesinAccumulatedothercomprehensivelossisexpectedtobe$5millioninthenext12months.TheCompany’sfinancialinstrumentsconsistprimarilyofcashandcashequivalents,long-termdebt,interestrateswapagreements,cross-currencyswapagreementsandcapitalleaseobligations.Thefairvalueofourlong-termindebtednessexceededbookvalueby$26millionasoffiscal2020,and$77millionasoffiscal2019.TheCompany’slong-termdebtfairvaluesweredeterminedusingLevel2inputsasothersignificantobservableinputswerenotavailable.Non-recurringFairValueMeasurementsTheCompanyhascertainassetsthataremeasuredatfairvalueonanon-recurringbasiswhenimpairmentindicatorsarepresentorwhentheCompanycompletesanacquisition.TheCompanyadjustscertainlong-livedassetstofairvalueonlywhenthecarryingvaluesexceedthefairvalues.ThecategorizationoftheframeworkusedtovaluetheassetsisconsideredLevel3,duetothesubjectivenatureoftheunobservableinputsusedtodeterminethefairvalue.Theseassetsthataresubjecttoourannualimpairmentanalysisprimarilyincludeourdefinitelivedandindefinitelivedintangibleassets,includingGoodwillandourproperty,plantandequipment.TheCompanyreviewsGoodwillandotherindefinitelivedassetsforimpairmentasofthefirstdayofthefourthfiscalquartereachyear,andmorefrequentlyifimpairmentindicatorsexist.TheCompanydeterminedGoodwillandotherindefinitelivedassetswerenotimpairedinourannualfiscal2020,2019,and2018assessments.Includedinthefollowingtablesarethemajorcategoriesofassetsandtheircurrentcarryingvaluesthatweremeasuredatfairvalueonanon-recurringbasisinthecurrentyear,alongwiththeimpairmentlossrecognizedonthefairvaluemeasurementforthefiscalyearsthenended:Asoftheendoffiscal2020Level1Level2Level3TotalImpairmentIndefinitelivedtrademarks..............$—$—$248$248$—Goodwill..........................——5,1735,173—Definitelivedintangibleassets...........——2,2492,249—Property,plantandequipment...........——4,5614,5612Total.............................$—$—$12,231$12,231$241Asoftheendoffiscal2019Level1Level2Level3TotalImpairmentIndefinitelivedtrademarks..............$—$—$248$248$—Goodwill..........................——5,0515,051—Definitelivedintangibleassets...........——2,5322,532—Property,plantandequipment...........——4,7144,7148Total.............................$—$—$12,545$12,545$8Asoftheendoffiscal2018Level1Level2Level3TotalImpairmentIndefinitelivedtrademarks..............$—$—$248$248$—Goodwill..........................——2,9442,944—Definitelivedintangibleassets...........——1,0921,092—Property,plantandequipment...........——2,4882,488—Total.............................$—$—$6,772$6,772$—5.GoodwillandIntangibleAssetsThefollowingtablesetsforththegrosscarryingamountandaccumulatedamortizationoftheCompany’sgoodwillandintangibleassetsasofthefiscalyearsended:20202019AmortizationPeriodGoodwill....................................$5,173$5,051IndefinitelivedCustomerrelationships...........................3,3233,4075–17yearsTrademarks(indefinitelived)......................248248IndefinitelivedTrademarks(definitelived)........................274149Notmorethan15yearsOtherintangibles...............................1291615–14yearsAccumulatedamortization........................(1,477)(1,185)Intangibleassets,net............................2,4972,780Totalgoodwillandintangibleassets,net...............$7,670$7,831Futureamortizationexpensefordefinitelivedintangiblesasoffiscal2020forthenextfivefiscalyearsis$280million,$258million,$244million,$231million,and$219millioneachyearforfiscalyearsending2021,2022,2023,2024,and2025,respectively.6.Commitments,LeasesandContingenciesTheCompanyhasvariouspurchasecommitmentsforrawmaterials,suppliesandpropertyandequipmentincidentaltotheordinaryconductofbusiness.CollectiveBargainingAgreementsAttheendoffiscal2020,weemployedapproximately47,000employees,andapproximately20%ofthoseemployeeswerecoveredbycollectivebargainingagreements.Themajorityoftheseagreementsaredueforrenegotiationinfiscal2021.Ourrelationswithemployeesundercollectivebargainingagreementsremainsatisfactoryandtherehavebeennosignificantworkstoppagesorotherlabordisputesduringthepastthreeyears.LeasesDuringthefirstquarteroffiscal2020,theCompanyadoptedASU2016-02,Leases(Topic842).TheCompanyleasescertainmanufacturingfacilities,warehouses,officespace,manufacturingequipment,officeequipment,andautomobiles.42Underthenewstandard,werecognizeright-of-useassetsandleaseliabilitiesforleaseswithoriginalleasetermsgreaterthanoneyearbasedonthepresentvalueofleasepaymentsovertheleasetermusingourincrementalborrowingrateonacollateralizedbasis.Short-termleases,withoriginalleasetermsoflessthanoneyear,arenotrecognizedonthebalancesheet.Wearepartytocertainleases,namelyformanufacturingfacilities,whichofferrenewaloptionstoextendtheoriginalleaseterm.Renewaloptionsareincludedintheright-of-useassetandleaseliabilitybasedonourassessmentoftheprobabilitythattheoptionswillbeexercised.WehaveelectedthepackageofpracticalexpedientswhichallowstheCompanytonotreassess:(i)whetheranyexpiredorexistingcontractsareorcontainleases,(ii)leaseclassificationforanyexpiredorexistingleases,and(iii)initialdirectcostsforanyexistingleases.Additionally,wehaveelectedthepracticalexpedienttonotseparateleaseandnon-leasecomponentsforallassetclasses.Supplementalleaseinformationisasfollows:LeasesClassification2020AssetsOperatingleaseright-of-useassets..............Right-of-useasset$562Financeleaseright-of-useassets................Property,plant,andequipment,net78CurrentliabilitiesOperatingleaseliabilities.....................Othercurrentliabilities$115Financeleaseliabilities......................Currentportionoflong-termdebt17Non-currentliabilitiesOperatingleaseliabilities.....................Operatingleaseliability$464Financeleaseliabilities......................Long-termdebt,lesscurrentportion59Leasecost2020Operatingleasecost..................................................$120Financeleasecost:Amortizationofright-of-useassets......................................24Interestonleaseliabilities............................................3Totalfinanceleasecost................................................27Short-termleasecost.................................................27Totalleasecost.....................................................$174Cashpaidforamountsincludedinleaseliabilities2020Operatingcashflowsfromoperatingleases..................................$120Operatingcashflowsfromfinanceleases...................................3Financingcashflowsfromfinanceleases...................................382020Weighted-averageremainingleaseterm–operatingleases........................8yearsWeighted-averageremainingleaseterm–financeleases.........................4yearsWeighted-averagediscountrate–operatingleases.............................4.6%Weighted-averagediscountrate–financeleases...............................3.8%Right-of-useassetsobtainedinexchangefornewoperatingleaseliabilitieswere$44millionforfiscal2020.AtSeptember26,2020,annualleasecommitmentswereasfollows:43FiscalYearOperatingLeasesFinanceLeases2021.................................................$118$202022.................................................103232023.................................................87172024.................................................7272025.................................................676Thereafter.............................................25613Totalleasepayments......................................70386Less:Interest...........................................(124)(10)Presentvalueofleaseliabilities..............................$579$76LitigationTheCompanyispartytovariouslegalproceedingsinvolvingroutineclaimswhichareincidentaltoitsbusiness.AlthoughtheCompany’slegalandfinancialliabilitywithrespecttosuchproceedingscannotbeestimatedwithcertainty,theCompanybelievesthatanyultimateliabilitywouldnotbematerialtoitsfinancialposition,resultsofoperationsorcashflows.7.IncomeTaxesTheCompanyisbeingtaxedattheU.S.corporatelevelasaC-CorporationandhasprovidedU.S.Federal,Stateandforeignincometaxes.Significantcomponentsofincometaxexpenseforthefiscalyearsendedareasfollows:202020192018CurrentU.S.Federal..................................$84$60$19State....................................12118Non-U.S....................................1546740Totalcurrent..................................25013867Deferred:U.S.Federal..................................(29)(47)(72)State....................................(13)(3)12Non-U.S....................................(54)(2)(26)Totaldeferred.................................(96)(52)(86)Expenseforincometaxes.........................$154$86$(19)U.S.incomefromcontinuingoperationsbeforeincometaxeswas$206million,$229million,and$373millionforfiscal2020,2019,and2018,respectively.Non-U.S.incomefromcontinuingoperationsbeforeincometaxeswas$507million,$261million,and$104millionforfiscal2020,2019,and2018,respectively.TheCompanypaidcashtaxesof$243million,$115million,and$60millioninfiscal2020,2019,and2018,respectively.ThereconciliationbetweenU.S.FederalincometaxesatthestatutoryrateandtheCompany’sbenefitforincometaxesoncontinuingoperationsforfiscalyearsendedareasfollows:44202020192018U.S.Federalincometaxexpenseatthestatutoryrate......$150$103$117Adjustmentstoreconciletotheincometaxprovision:U.S.stateincometaxexpense.....................6912Federalandstatecredits........................(14)(8)(7)Share-basedcompensation......................(4)(12)(8)TaxCutsandJobsAct.........................——(124)Withholdingtaxes............................15——Changesinforeignvaluationallowance..............(8)13(10)ForeignincometaxedintheU.S...................93—Manufacturingtaxbenefits......................——(6)RatedifferencesbetweenU.S.andforeign............(6)73Saleofsubsidiary.............................—(38)—Other.....................................694Expenseforincometaxes.........................$154$86$(19)Deferredincometaxesresultfromtemporarydifferencesbetweentheamountofassetsandliabilitiesrecognizedforfinancialreportingandtaxpurposes.Thecomponentsofthenetdeferredincometaxliabilityasoffiscalyearsendedareasfollows:20202019Deferredtaxassets:Allowancefordoubtfulaccounts...........................$3$3Deferredgainonsale-leaseback............................55Accruedliabilitiesandreserves.............................10464Inventories..........................................109Netoperatinglosscarryforward............................291348Interestexpensecarryforward.............................2835Derivatives..........................................127—Leaseliability.........................................147—Researchanddevelopmentcreditcarryforward.................1112Federalandstatetaxcredits...............................1411Other..............................................3340Totaldeferredtaxassets.................................773527Valuationallowance....................................(150)(141)Totaldeferredtaxassets,netofvaluationallowance..............623386Deferredtaxliabilities:Property,plantandequipment.............................429487Intangibleassets.......................................588597Leasedasset..........................................142—Includedinheldforsale.................................(4)—Other..............................................1563Totaldeferredtaxliabilities.............................1,1701,147Netdeferredtaxliability.................................$(547)$(761)TheCompanyhad$54millionofnetdeferredtaxassetsrecordedinOtherassets,and$601millionofnetdeferredtaxliabilitiesrecordedinDeferredincometaxesontheConsolidatedBalanceSheets.45AsofSeptember26,2020,theCompanyhasrecordeddeferredtaxassetsrelatedtofederal,state,andforeignnetoperatinglosses,interestexpense,andtaxcredits.Theseattributesarespreadacrossmultiplejurisdictionsandgenerallyhaveexpirationperiodsbeginningin2020whileaportionremainsavailableindefinitely.Eachattributehasbeenassessedforrealizationandavaluationallowanceisrecordedagainstthedeferredtaxassetstobringthenetamountrecordedtotheamountmorelikelythannottoberealized.Thevaluationallowanceagainstdeferredtaxassetswas$150millionand$141millionasofthefiscalyearsended2020and2019,respectively,relatedtotheforeignandU.S.federalandstateoperations.TheCompanyispermanentlyreinvestedexcepttotheextenttheforeignearningsarepreviouslytaxedortotheextentthatwehavesufficientbasisinournon-U.S.subsidiariestorepatriateearningsonanincometaxfreebasis.UncertainTaxPositionsThefollowingtablesummarizestheactivityrelatedtoourgrossunrecognizedtaxbenefitsforfiscalyearsended:20202019Beginningunrecognizedtaxbenefits..........................$165$74Grossincreases–taxpositionsinpriorperiods.................132Grossdecreases–taxpositionsinpriorperiods.................(12)—Grossincreases–currentperiodtaxpositions..................—6Grossincreases–fromRPCacquisition......................788Settlements..........................................(1)(1)Lapseofstatuteoflimitations.............................(4)(4)Endingunrecognizedtaxbenefits............................$168$165Asoffiscalyearend2020,theamountofunrecognizedtaxbenefitthat,ifrecognized,wouldaffectoureffectivetaxratewas$161millionandwehad$40millionaccruedforpaymentofinterestandpenaltiesrelatedtoouruncertaintaxpositions.Ourpenaltiesandinterestrelatedtouncertaintaxpositionsareincludedinincometaxexpense.Asaresultofglobaloperations,wefileincometaxreturnsintheU.S.federal,variousstateandlocal,andforeignjurisdictionsandareroutinelysubjecttoexaminationbytaxingauthoritiesthroughouttheworld.Excludingpotentialadjustmentstonetoperatinglosses,theU.S.federalandstateincometaxreturnsarenolongersubjecttoincometaxassessmentsforyearsbefore2016.Withfewexceptions,themajorforeignjurisdictionsarenolongersubjecttoincometaxassessmentsforyearbefore2014.8.RetirementPlansTheCompanysponsorsdefinedcontribution401(k)retirementplanscoveringsubstantiallyallemployees.Contributionsarebaseduponafixeddollaramountforemployeeswhoparticipateandpercentagesofemployeecontributionsatspecifiedthresholds.Contributionexpensefortheseplanswas$40million,$26million,and$20millionforfiscal2020,2019,and2018,respectively.TheNorthAmericandefinedbenefitpensionplans,whichcovercertainmanufacturingfacilities,areclosedtofutureentrants.ThemajorityoftheretirementbenefitobligationsintheUnitedKingdom(“UK”)aredefinedbenefitpensionplans,andareclosedtofutureentrants.Theassetsofalltheplansareheldinaseparatetrusteeadministeredfundtomeetlong-termliabilitiesforpastandpresentemployees.MostoftheCompany’sGermanoperationsprovidenon-contributorypensionplans.ThereisnoexternalfundingfortheseplansalthoughtheyaresecuredbyinsolvencyinsurancerequiredunderGermanlaw.Ingeneral,theplansprovideafixedretirementbenefitnotrelatedtosalariesandareclosedtonewentrants.Germanyrepresents$97millionofMainlandEurope’stotalunderfundedstatus.ThenetamountofliabilityrecognizedisincludedinEmployeeBenefitObligationsontheConsolidatedBalanceSheets.TheCompanyusesfiscalyearendasameasurementdatefortheretirementplans.46Fiscal2020Fiscal2019ChangeinProjectedBenefitObligations(PBO)NorthAmericaUKMainlandEuropeTotalNorthAmericaUKMainlandEuropeTotalBeginningofperiod....................$344$827$206$1,377$307$—$—$307Acquisition..........................—————8102091,019Servicecost..........................——11——22Interestcost..........................1015126124117Currency............................—311344—(24)(10)(34)Actuarialloss(gain)....................3041(7)644244894Benefitsettlements.....................(6)—(16)(22)————Benefitspaid.........................(17)(26)(6)(49)(17)(7)(4)(28)Endofperiod.........................$361$888$192$1,441$344$827$206$1,377Fiscal2020Fiscal2019ChangeinFairValueofPlanAssetsNorthAmericaUKMainlandEuropeTotalNorthAmericaUKMainlandEuropeTotalBeginningofperiod....................$269$729$67$1,065$277$—$—$277Acquisition..........................—————70270772Currency...........................—27431—(22)(3)(25)Returnonassets......................2221(2)41951262Contributions........................—18725—527Benefitsettlements.....................(6)—(16)(22)————Benefitspaid.........................(17)(26)(6)(49)(17)(7)(4)(28)Endofperiod........................$268$769$54$1,091$269$729$67$1,065Underfundedstatus....................$(93)$(119)$(138)$(350)$(75)$(98)$(139)$(312)Attheendoffiscal2020,theCompanyhad$180millionofnetunrealizedlossesrecordedinAccumulatedothercomprehensivelossontheConsolidatedBalanceSheets.TheCompanyexpects$8milliontoberealizedinfiscal2021.Thefollowingtablepresentssignificantweighted-averageassumptionsusedtodeterminebenefitobligationandbenefitcostforthefiscalyearsended:Fiscal2020(Percentages)NorthAmericaUKMainlandEuropeWeighted-averageassumptions:Discountrateforbenefitobligation...............................2.21.60.8Discountratefornetbenefitcost.................................2.91.80.7Expectedreturnonplanassetsfornetbenefitcosts....................6.13.82.2Fiscal2019(Percentages)NorthAmericaUKMainlandEuropeWeighted-averageassumptions:Discountrateforbenefitobligation...............................2.91.80.7Discountratefornetbenefitcost.................................4.02.31.0Expectedreturnonplanassetsfornetbenefitcosts....................6.14.31.747Inevaluatingtheexpectedreturnonplanassets,Berryconsidereditshistoricalassumptionscomparedwithactualresults,ananalysisofcurrentmarketconditions,assetallocations,andtheviewsofadvisors.Thereturnonplanassetsisderivedfromtargetallocationsandhistoricalyieldbyassettype.AonequarterofapercentagepointreductionofexpectedreturnonpensionassetsordiscountrateappliedtothepensionliabilitywouldresultinanimmaterialchangetotheCompany’spensionexpense.InaccordancewiththeguidancefromtheFASBforemployers’disclosureaboutpostretirementbenefitplanassetsthetablebelowdisclosesfairvaluesofeachpensionplanassetcategoryandlevelwithinthefairvaluehierarchyinwhichitfalls.Therewerenomaterialchangesortransfersbetweenlevel3assetsandtheotherlevels.Fiscal2020AssetCategoryLevel1Level2Level3TotalCashandcashequivalents....................$18$18$—$36U.S.largecapcomingledequityfunds............7227—99U.S.midcapequitymutualfunds...............4916—65U.S.smallcapequitymutualfunds..............316—19Internationalequitymutualfunds...............1299—111Realestateequityinvestmentfunds..............315891252Corporatebondmutualfunds..................10—2737Corporatebonds...........................—146—146Internationalfixedincomefunds................66209—275Internationalinsurancepolicies................——5151Total...................................$233$689$169$1,091Fiscal2019AssetCategoryLevel1Level2Level3TotalCashandcashequivalents....................$15$89$—$104U.S.largecapcomingledequityfunds............—124—124U.S.midcapequitymutualfunds...............42——42U.S.smallcapequitymutualfunds..............3——3Internationalequitymutualfunds...............1894—112Realestateequityinvestmentfunds..............317975257Corporatebondmutualfunds..................12——12Corporatebonds...........................—16414178Guaranteedinvestmentaccount................——88Internationalfixedincomefunds................7393—166Internationalinsurancepolicies................——5959Total...................................$166$743$156$1,065Thefollowingbenefitpayments,whichreflectexpectedfutureservice,asappropriate,areexpectedtobepaidforthefiscalyearend:NorthAmericaUKMainlandEuropeTotal2021...................................$19$27$6$522022...................................19267522023...................................19276522024...................................19299572025...................................19307562026–2030..............................9415951304Netpensionexpenseincludedthefollowingcomponentsasoffiscalyearsended:48202020192018Servicecost.........................................$1$2$—Interestcost.........................................261711Amortizationofnetactuarialloss..........................512Expectedreturnonplanassets............................(46)(24)(17)Netperiodicbenefitexpense(income).......................$(14)$(4)$(4)Ourdefinedbenefitpensionplanassetallocationsasoffiscalyearsendedareasfollows:AssetCategory20202019Equitysecuritiesandequity-likeinstruments...................................50%50%Debtsecuritiesanddebt-like..............................................4233Internationalinsurancepolicies............................................56Other..............................................................311Total...............................................................100%100%TheCompany’sretirementplanassetsareinvestedwiththeobjectiveofprovidingtheplanstheabilitytofundcurrentandfuturebenefitpaymentrequirementswhileminimizingannualCompanycontributions.Theretirementplansheld$42millionoftheCompany’sstockattheendoffiscal2020.TheCompanyre-addressestheallocationofitsinvestmentsonaregularbasis.9.RestructuringandTransactionActivitiesTheCompanyhasannouncedvariousrestructuringplansinthelastthreefiscalyearswhichincludedshuttingdownfacilities.Inallinstances,themajorityoftheoperationsfromrationalizedfacilitieswastransferredtootherfacilitieswithintherespectivesegment.Duringfiscal2018,theCompanyshutdownonefacilityineachoftheEngineeredMaterials,Health,Hygiene&Specialties,andConsumerPackagingNorthAmericasegment,whichaccountedforapproximately$10million,$30million,and$15millionofannualnetsales,respectively.Duringfiscal2019and2020,theCompanydidnotshutdownanyfacilitieswithsignificantnetsales.Since2018,totalexpectedcostsattributedtorestructuringprogramstotal$106millionwith$3millionremainingtoberecognizedinthefuture.ExpectedTotalCostsCumulativeChargesthroughFiscal2020TobeRecognizedinFutureSeveranceandterminationbenefits.........................$78$78$—Facilityexitcosts.....................................18153Assetimpairment.....................................1010—Total..............................................$106$103$3Thetablebelowsetsforththesignificantcomponentsoftherestructuringandtransactionactivitychargesrecognizedforthefiscalyearsended,bysegment:202020192018ConsumerPackagingInternational.........................$58$54$—ConsumerPackagingNorthAmerica.......................10123EngineeredMaterials...................................626Health,Hygiene&Specialties.............................5(200)27Consolidated........................................$79$(132)$3649Thetablebelowsetsforththeactivitywithrespecttotherestructuringchargesandtheimpactonouraccruedrestructuringreserves:EmployeeSeveranceandBenefitsFacilityExitCostsNon-cashImpairmentChargesTransactionActivitiesTotalBalanceasoffiscal2018...............$9$4$—$—$13Charges(a).........................1048(146)(124)Non-cashassetimpairment.............——(8)—(8)Cash.............................(17)(3)—146126Balanceasoffiscal2019...............$2$5$—$—$7Charges...........................34923479Non-cashassetimpairment.............——(2)—(2)Cash.............................(26)(7)—(34)(67)Balanceasoffiscal2020...............$10$7$—$—$17(a)Consistsof$214milliongainonthesaleofourSFLbusinessin2019offsetbyprofessionalfeesandothercostsrelatedtotheRPCacquisition.10.RelatedPartyTransactionsTheCompanymadepaymentsrelatedtotheincometaxreceivableagreementof$38millioninfiscal2019.ApolloGlobalManagement,LLC(“Apollo”)received$29millionofthefiscal2019payment.Mr.EvanBayh,amemberoftheCompany’sBoardofDirectors,hasbeenemployedbyApollosince2011.Theagreementwasterminatedinfiscal2019.11.Stockholders’EquityShareRepurchasesInAugust2018,theCompanyannouncedthatitsBoardauthorizeda$500millionsharerepurchaseprogram.Sharerepurchaseswillbemadethroughopenmarketpurchases,privatelynegotiatedtransactions,Rule10b5-1plans,orothertransactionsinaccordancewithapplicablesecuritieslawsandinsuchamountsatsuchtimesaswedeemappropriatebaseduponprevailingmarketandbusinessconditionsandotherfactors.Thesharerepurchaseprogramhasnoexpirationdateandmaybesuspendedatanytime.Noshareswererepurchasedduringfiscal2020.Duringfiscal2019,theCompanyrepurchasedapproximately1,512thousandsharesfor$72million,atanaveragepriceof$47.64.Allsharerepurchaseswereimmediatelyretired.Commonstockwasreducedbythenumberofsharesretiredat$0.01parvaluepershare.TheCompanyallocatestheexcesspurchasepriceoverparvaluebetweenadditionalpaid-incapitalandretainedearnings.EquityIncentivePlansInfiscal2018,theCompanyamendedthe2015BerryGlobalGroup,Inc.Long-TermIncentivePlantoauthorizetheissuanceof12.5millionshares,anincreaseof5millionsharesfromthepreviousauthorization.TheCompanyrecognizedtotalshare-basedcompensationexpenseof$33million,$27million,and$23millionforfiscal2020,2019,and2018,respectively.Theintrinsicvalueofoptionsexercisedinfiscal2020was$28million.Informationrelatedtotheequityincentiveplansasofthefiscalyearsendedareasfollows:5020202019NumberofShares(inthousands)WeightedAverageExercisePriceNumberofShares(inthousands)WeightedAverageExercisePriceOptionsoutstanding,beginningofperiod.......10,263$37.8210,744$32.40Optionsgranted.........................2,56245.602,25947.66Optionsexercised........................(1,223)24.96(2,476)22.41Optionsforfeitedorcancelled...............(142)45.05(264)46.07Optionsoutstanding,endofperiod...........11,460$40.8410,263$37.82Optionpricerangeatendofperiod...........$3.04–54.33$3.04–54.33Optionsexercisableatendofperiod...........5,5994,720Optionsavailableforgrantatperiodend........2,6785,099Weightedaveragefairvalueofoptionsgrantedduringperiod.........................$14.26$15.34ThefairvalueforoptionsgrantedhasbeenestimatedatthedateofgrantusingaBlack-Scholesmodel,generallywiththefollowingweightedaverageassumptions:202020192018Risk-freeinterestrate..................................1.7%2.5%2.7%Dividendyield.......................................0.0%0.0%0.0%Volatilityfactor.......................................27.2%26.3%26.1%Expectedoptionlife...................................6.5years6.5years6.5yearsForpurposesofthevaluationmodelinfiscalyears2020,2019,and2018,theCompanyusedthesimplifiedmethodduetothelackofhistoricaldatauponwhichtoestimatetheexpectedterm.Thefollowingtablesummarizesinformationabouttheoptionsoutstandingasoffiscal2020:RangeofExercisePricesNumberOutstandingIntrinsicValueofOutstandingWeightedRemainingContractualLifeWeightedExercisePriceNumberExercisableIntrinsicValueofExercisableUnrecognizedCompensationWeightedRecognitionPeriod(inthousands)(inmillions)(inthousands)(inmillions)(inmillions)$3.04–54.33........11,460$926.8years$40.845,599$77$42.1years12.SegmentandGeographicDataBerry’soperationsareorganizedintofourreportingsegments:ConsumerPackagingInternational,ConsumerPackagingNorthAmerica,EngineeredMaterials,andHealth,Hygiene&Specialties.Thestructureisdesignedtoalignuswithourcustomers,provideimprovedservice,anddrivefuturegrowthinacostefficientmanner.Selectedinformationbyreportablesegmentispresentedinthefollowingtables:51202020192018NetsalesConsumerPackagingInternational.................$4,195$1,229$215ConsumerPackagingNorthAmerica...............2,8502,6362,463EngineeredMaterials..........................2,3342,5382,633Health,Hygiene&Specialties....................2,3302,4752,558Total......................................$11,709$8,878$7,869OperatingincomeConsumerPackagingInternational...............$299$12$17ConsumerPackagingNorthAmerica.............320234190EngineeredMaterials.........................317$318365Health,Hygiene&Specialties...................243410189Total......................................$1,179$974$761DepreciationandamortizationConsumerPackagingInternational...............$318$93$15ConsumerPackagingNorthAmerica.............250216229EngineeredMaterials.........................105116108Health,Hygiene&Specialties...................172188186Total......................................$845$613$53820202019Totalassets:ConsumerPackagingInternational..........................$7,575$7,085ConsumerPackagingNorthAmerica........................3,7164,243EngineeredMaterials...................................2,0061,862Health,Hygiene&Specialties.............................3,4043,279Totalassets.........................................$16,701$16,469Selectedinformationbygeographicalregionispresentedinthefollowingtables:202020192018Netsales:UnitedStatesandCanada.......................$6,250$6,293$6,266Europe....................................4,2231,637759Restofworld................................1,236948844Totalnetsales..............................$11,709$8,878$7,86920202019Long-livedassets:UnitedStatesandCanada................................$6,753$7,021Europe.............................................3,8133,654Restofworld.........................................2,3182,037Totallong-livedassets.................................$12,884$12,712Selectedinformationbyproductlineispresentedinthefollowingtables:52(inpercentages)202020192018Netsales:Packaging..................................82%84%100%Non-packaging..............................1816—ConsumerPackagingInternational...............100%100%100%RigidOpenTop..............................45%45%44%RigidClosedTop.............................555556ConsumerPackagingNorthAmerica.............100%100%100%CoreFilms.................................38%40%41%Retail&Industrial............................626059EngineeredMaterials.........................100%100%100%Health.....................................20%15%18%Hygiene....................................525351Specialties..................................283231Health,Hygiene&Specialties...................100%100%100%13.NetIncomeperShareBasicnetincomepershareiscalculatedbydividingthenetincomeattributabletocommonstockholdersbytheweighted-averagenumberofcommonsharesoutstandingduringtheperiod,withoutconsiderationforcommonstockequivalents.Dilutednetincomepershareiscomputedbydividingthenetincomeattributabletocommonstockholdersbytheweighted-averagenumberofcommonshareequivalentsoutstandingfortheperioddeterminedusingthetreasury-stockmethodandtheif-convertedmethod.Forpurposesofthiscalculation,stockoptionsareconsideredtobecommonstockequivalentsandareonlyincludedinthecalculationofdilutednetincomepersharewhentheireffectisdilutive.Therewere7millionand5millionsharesexcludedfromthefiscal2020and2019dilutednetincomepersharecalculation,respectively,astheireffectwouldbeanti-dilutive.Therewerenosharesexcludedfromthefiscal2018calculation.Thefollowingtablesanddiscussionprovideareconciliationofthenumeratoranddenominatorofthebasicanddilutednetincomepersharecomputations.(inmillions,exceptpershareamounts)202020192018NumeratorNetincomeattributabletotheCompany..............$559$404$496DenominatorWeightedaveragecommonsharesoutstanding–basic.....132.6131.3131.4Dilutiveshares................................2.53.33.8Weightedaveragecommonandcommonequivalentsharesoutstanding–diluted..........................135.1134.6135.2PercommonshareincomeBasic.......................................$4.22$3.08$3.77Diluted......................................$4.14$3.00$3.675314.QuarterlyFinancialData(Unaudited)Thefollowingtablecontainsselectedunauditedquarterlyfinancialdataforfiscalyearsended.20202019FirstSecondThirdFourthFirstSecondThirdFourthNetsales........................$2,816$2,975$2,910$3,008$1,972$1,950$1,937$3,019Costofgoodssold.................2,2962,3912,2722,3421,6191,5781,5512,511Grossprofit.....................520584638666353372386508Netincome......................$47$126$191$195$88$74$13$229Netincomepershare:Basic........................$0.36$0.95$1.44$1.47$0.67$0.57$0.10$1.74Diluted.......................$0.35$0.94$1.42$1.44$0.66$0.55$0.10$1.69Thefourthfiscalquarterfor2019includescertainunusual,nonrecurringitemsrelatedtotheacquisitionofRPCanddivestitureofourSFLbusiness.RefertoNote2.AcquisitionsandDispositionsforfurtherinformation.15.SubsequentEventsU.SFlexiblePackagingConvertingDispositionInOctober2020,theCompanyreachedaninitialagreementtosellitsU.S.flexiblepackagingconvertingbusinesswhichwasprimarilyoperatedintheEngineeredMaterialssegmentfor$140million,whichispreliminaryandsubjecttoadjustmentatclosing.TheCompanyreportedfiscal2020netsalesofapproximately$200millionrelatedtothesoldbusiness.FortheperiodendedSeptember26,2020,theCompanyhasclassifiedassetsof$162millionandliabilitiesof$25millionasheldforsale.BusinessReorganizationInOctober2020,theCompanyreorganizedportionsofitsfouroperatingsegmentsinordertobetteralignourvariousbusinessesforfuturegrowth.Thisreorganizationincludesthefollowingchanges:(1)theHealth,Hygiene&SpecialtiessegmentwillincludetheTapesbusinesshistoricallyreportedinourEngineeredMaterialssegment,(2)theConsumerPackagingInternationalsegmentwillincludetheNorthAmericanHealthcarebusinesshistoricallyoperatedinConsumerPackagingNorthAmericasegmentand(3)theEngineeredMaterialssegmentwillincludetheEuropeanfilmsbusinesswhichwashistoricallyoperatedintheConsumerPackagingInternationalsegment.Wewillreportresultsbasedonourreorganizedstructurebeginningwithourresultsforthefirstquarteroffiscal2021.54ExhibitNoDescriptionofExhibit2.1Rule2.7Announcement,datedasofMarch8,2019(incorporatedbyreferencetoExhibit2.1totheCompany’sCurrentReportonForm8-KfiledonMarch14,2019).2.2Co-OperationAgreement,datedasofMarch8,2019,byandamongBerryGlobalGroup,Inc.,BerryGlobalInternationalHoldingsLimitedandRPCGroupPlc(incorporatedbyreferencetoExhibit2.2totheCompany’sCurrentReportonForm8-KfiledonMarch14,2019).3.1AmendedandRestatedCertificateofIncorporationofBerryGlobalGroup,Inc.,asamendedthroughMarch6,2019(incorporatedbyreferencetoExhibit3.1totheCompany’sQuarterlyReportonForm10-QfiledonMay2,2019).3.2AmendedandRestatedBylawsofBerryGlobalGroup,Inc.,asamendedandrestatedeffectiveasofMarch6,2019(incorporatedbyreferencetoExhibit3.2totheCompany’sCurrentReportonForm8-KfiledonMarch8,2019).4.1Indenture,datedasofMay12,2014,byandamongBerryPlasticsCorporation,theguarantorspartytheretoandU.S.BankNationalAssociation,asTrustee,relatingtothe5.50%secondpriorityseniorsecurednotesdue2022(incorporatedbyreferencetoExhibit4.2oftheCompany’sCurrentReportonForm8-KfiledonMay13,2014).4.2Indenture,datedasofJune5,2015,byandamongBerryPlasticsCorporation,theguarantorspartytheretoandU.S.BankNationalAssociation,asTrustee,relatingtothe5.125%secondpriorityseniorsecurednotesdue2023(incorporatedbyreferencetoExhibit4.2totheCompany’sCurrentReportonForm8-KfiledonJune5,2015).4.3Indenture,datedasofOctober1,2015,byandbetweenBerryPlasticsEscrowCorporation,asIssuer,andU.S.BankNationalAssociation,asTrustee,relatingtothe6.00%secondpriorityseniorsecurednotesdue2022(incorporatedbyreferencetoExhibit4.1totheCompany’sCurrentReportonForm8-KfiledonOctober6,2015).4.4FirstSupplementalIndenture,datedasofOctober1,2015,byandbetweenBerryPlasticsCorporation,BerryPlasticsGroup,Inc.,thesubsidiariesofBerryPlasticsCorporationpartythereto,BerryPlasticsEscrowCorporation,andU.S.BankNationalAssociation,asTrustee,relatingtotheIndenture,byandbetweenBerryPlasticsEscrowCorporation,asIssuer,andU.S.Bank,NationalAssociation,asTrustee,relatingtothe6.00%secondpriorityseniorsecurednotesdue2022,datedOctober1,2015(incorporatedbyreferencetoExhibit4.1totheCompany’sCurrentReportonForm8-KfiledonOctober6,2015).4.5RegistrationRightsAgreement,datedasofOctober1,2015,byandbetweenBerryPlasticsCorporation,BerryPlasticsGroup,Inc.,eachsubsidiaryofBerryPlasticsCorporationidentifiedtherein,andGoldman,Sachs&Co.,andCreditSuisse,onbehalfofthemselvesandasrepresentativesoftheinitialpurchasers,relatingtothe6.00%secondpriorityseniorsecurednotesdue2022(incorporatedbyreferencetoExhibit4.1totheCompany’sCurrentReportonForm8-KfiledonOctober6,2015).4.6FormofcommonstockcertificateofBerryPlasticsGroup,Inc.(incorporatedbyreferencetoExhibit4.27ofAmendmentNo.5totheCompany’sRegistrationStatementonFormS-1filedonSeptember19,2012).4.7Indenture,byandbetweenBerryGlobalEscrowCorporationandU.S.BankNationalAssociation,asTrusteeandCollateralAgent,relatingtothe4.875%FirstPrioritySeniorSecuredNotesdue2026,datedJune5,2019(incorporatedbyreferencetoExhibit4.1totheCompany’sCurrentReportonForm8-KfiledonJune6,2019).4.7ASupplementalIndenture,amongBerryGlobalGroup,Inc.,BerryGlobal,Inc.,BerryGlobalEscrowCorporation,eachofthepartiesidentifiedasaSubsidiaryGuarantorthereon,andU.S.BankNationalAssociation,asTrustee,relatingtothe4.875%FirstPrioritySeniorSecuredNotesdue2026,datedJuly1,2019(incorporatedbyreferencetoExhibit4.1totheCompany’sCurrentReportonForm8-KfiledonJuly2,2019).55ExhibitNoDescriptionofExhibit4.8Indenture,byandbetweenBerryGlobalEscrowCorporationandU.S.BankNationalAssociation,asTrusteeandCollateralAgent,relatingtothe5.625%SecondPrioritySeniorSecuredNotesdue2027,datedJune5,2019(incorporatedbyreferencetoExhibit4.2totheCompany’sCurrentReportonForm8-KfiledonJune6,2019).4.8ASupplementalIndenture,amongBerryGlobalGroup,Inc.,BerryGlobal,Inc.,BerryGlobalEscrowCorporation,eachofthepartiesidentifiedasaSubsidiaryGuarantorthereon,andU.S.BankNationalAssociation,asTrustee,relatingtothe5.625%SecondPrioritySeniorSecuredNotesdue2027,datedJuly1,2019(incorporatedbyreferencetoExhibit4.2totheCompany’sCurrentReportonForm8-KfiledonJuly2,2019).4.9Indenture,amongBerryGlobal,Inc.,certainguarantorspartythereto,U.S.BankNationalAssociation,asTrusteeandCollateralAgent,andElavonFinancialServicesDAC,asPayingAgent,TransferAgentandRegistrar,relatingtothe1.00%FirstPrioritySeniorSecuredNotesdue2025and1.50%FirstPrioritySeniorSecuredNotesdue2027,datedJanuary2,2020(incorporatedbyreferencetoExhibit4.1totheCompany’sCurrentReportonForm8-KfiledonJanuary2,2020).4.10DescriptionofSecurities(incorporatedbyreferencetoExhibit4.9totheCompany’sAnnualReportonForm10-KfiledonNovember11,2019).10.1$850,000,000ThirdAmendedandRestatedRevolvingCreditAgreement,datedasofMay1,2019,byandamongBerryGlobal,Inc.,BerryGlobalGroup,Inc.,thelenderspartythereto,BankofAmerica,N.A.,ascollateralagentandadministrativeagent,andthefinancialinstitutionspartythereto(incorporatedbyreferencetoExhibit10.1totheCompany’sCurrentReportonForm8-KfiledonMay6,2019).10.2U.S.$1,200,000,000SecondAmendedandRestatedCreditAgreement,datedasofApril3,2007,byandamongBerryPlasticsCorporationformerlyknownasBerryPlasticsHoldingCorporation,BerryPlasticsGroup,Inc.,CreditSuisse,CaymanIslandsBranch,ascollateralandadministrativeagent,thelenderspartytheretofromtimetotime,andtheotherfinancialinstitutionspartythereto(incorporatedbyreferencetoExhibit10.1(b)toBerryPlasticsCorporation’sCurrentReportonForm8-KfiledonApril10,2007).10.3SecondAmendedandRestatedIntercreditorAgreement,datedasofFebruary5,2008,byandamongBerryPlasticsGroup,Inc.,BerryPlasticsCorporation,certainsubsidiariesidentifiedaspartiesthereto,BankofAmerica,N.A.andCreditSuisse,CaymanIslandsBranchasfirstlienagents,andU.S.BankNationalAssociation,assuccessorininteresttoWellsFargoBank,N.A.,astrustee(incorporatedbyreferencetoExhibit10.3totheCompany’sAnnualReportonForm10-KfiledonNovember23,2015).10.4U.S.$1,147,500,000and$814,375,000IncrementalAssumptionAgreement,datedasofFebruary10,2017byandamongBerryPlasticsGroup,Inc.,BerryPlasticsCorporationandcertainofitssubsidiariesreferencedtherein,CreditSuisseAG,CaymanIslandsBranch,asadministrativeagentforthelendersunderthetermloancreditagreementreferencedtherein,Citibank,N.A.,asinitialTermIlenderandCitibank,N.A.,asincrementaltermJlendertherein.(incorporatedbyreferencetoExhibit10.7totheCompany’sAnnualReportonForm10-KfiledonNovember21,2017).10.5U.S.$1,644,750,000and$498,750,000IncrementalAssumptionAgreement,datedasofAugust10,2017,byandamongBerryPlasticsGroup,Inc.,BerryPlasticsCorporationandcertainofitssubsidiariesreferencedtherein,CreditSuisseAG,CaymanIslandsBranch,asadministrativeagentforthelendersunderthetermloancreditagreementreferencedtherein,WellsFargoBank,NationalAssociation,asinitialTermMlenderandWellsFargoBank,NationalAssociation,asinitialTermNlendertherein(incorporatedbyreferencetoExhibit10.8totheCompany’sAnnualReportonForm10-KfiledonNovember21,2017).56ExhibitNoDescriptionofExhibit10.6U.S.$900,000,000and$814,375,000IncrementalAssumptionAgreement,datedasofNovember27,2017,byandamongBerryGlobalGroup,Inc.,BerryGlobal,Inc.andcertainofitssubsidiariesreferencedtherein,CreditSuisseAG,CaymanIslandsBranch,asadministrativeagentforthelendersunderthetermloancreditagreementreferencedtherein,Citibank,N.A.,asinitialTermOLender,andCitibank,N.A.,asinitialTermPLendertherein.(incorporatedbyreferencetoExhibit10.1totheCompany’sQuarterlyReportonForm10-QfiledonFebruary7,2018).10.7U.S.$1,644,750,000and$496,250,000IncrementalAssumptionAgreementandAmendment,datedasofFebruary12,2018,byandamongBerryGlobalGroup,Inc.,BerryGlobal,Inc.andcertainofitssubsidiariesreferencedtherein,CreditSuisseAG,CaymanIslandsBranch,asadministrativeagentforthelendersunderthetermloancreditagreementreferencedtherein,Citibank,N.A.,asinitialTermQlender,andCitibank,N.A.,asinitialTermRlendertherein(incorporatedbyreferencetoExhibit10.2totheCompany’sQuarterlyReportonForm10-QfiledonMay3,2018).10.8U.S.$800,000,000and$814,375,000IncrementalAssumptionAgreement,datedasofMay16,2018,byandamongBerryGlobalGroup,Inc.,BerryGlobal,Inc.andcertainofitssubsidiariesreferencedtherein,CreditSuisseAG,CaymanIslandsBranch,asadministrativeagentforthelendersunderthetermloancreditagreementreferencedtherein,Citibank,N.A.,asinitialTermSlender,andCitibank,N.A.,asinitialTermTlendertherein(incorporatedbyreferencetoExhibit10.1totheCompany’sQuarterlyReportonForm10-QfiledonAugust3,2018).10.9IncrementalAssumptionAgreementandAmendment,amongBerryGlobalGroup,Inc.,BerryGlobal,Inc.andcertainsubsidiariesofBerryGlobal,Inc.,asLoanParties,CreditSuisseAG,CaymanIslandsBranch,asAdministrativeAgent,GoldmanSachsBankUSA,asInitialTermULender,andGoldmanSachsBankUSA,asInitialTermVLender,datedasofJuly1,2019(incorporatedbyreferencetoExhibit10.1totheCompany’sCurrentReportonForm8-KfiledonJuly2,2019).10.10IncrementalAssumptionAgreementandAmendment,amongBerryGlobalGroup,Inc.,BerryGlobal,Inc.andcertainsubsidiariesofBerryGlobal,Inc.,asLoanParties,CreditSuisseAG,CaymanIslandsBranch,asAdministrativeAgent,GoldmanSachsBankUSA,asInitialTermULender,andGoldmanSachsBankUSA,asInitialTermVLender,datedasofJuly1,2019(incorporatedbyreferencetoExhibit10.1totheCompany’sCurrentReportonForm8-KfiledonJuly2,2019).10.11AmendmentandWaivertoEquipmentLeaseAgreement,datedasofJanuary19,2011,betweenChicopee,Inc.,asLesseeandGossamerHoldings,LLC,asLessor(incorporatedbyreferencetoExhibit10.16toAVINTIVSpecialtyMaterialsInc.’sRegistrationStatementFormS-4filedonOctober25,2011).10.12SecondAmendmenttoEquipmentLeaseAgreement,datedasofOctober7,2011,betweenChicopee,Inc.,asLesseeandGossamerHoldings,LLC,asLessor(incorporatedbyreferencetoExhibit10.17toAVINTIVSpecialtyMaterialsInc.’sRegistrationStatementFormS-4filedonOctober25,2011).10.13ThirdAmendmenttoEquipmentLeaseAgreement,datedasofFebruary28,2012,betweenChicopee,Inc.,asLesseeandGossamerHoldings,LLC,asLessor(incorporatedbyreferencetoExhibit10.1toAVINTIVSpecialtyMaterialsInc.’sQuarterlyReportonForm10-QfiledonMay15,2012).10.14FourthAmendmenttoEquipmentLeaseAgreement,datedasofMarch22,2013,betweenChicopee,Inc.,asLesseeandGossamerHoldings,LLC,asLessor(incorporatedbyreferencetoExhibit10.1toAVINTIVSpecialtyMaterialsInc.’sQuarterlyReportonForm10-QfiledonMay9,2013).10.15†2006EquityIncentivePlan(incorporatedbyreferencetoExhibit10.9toBerryPlasticsCorporation’sRegistrationStatementFormS-4filedonNovember2,2006).10.16†AmendmentNo.2totheBerryPlasticsGroup,Inc.,2006EquityIncentivePlan(incorporatedbyreferencetoExhibit10.9totheCompany’sAnnualReportonForm10-KfiledonDecember11,2013).57ExhibitNoDescriptionofExhibit10.17†AmendmentNo.3toBerryPlasticsGroup,Inc.2006EquityIncentivePlan(incorporatedbyreferencetoExhibit10.1totheCompany’sCurrentReportonForm8-KfiledonMarch10,2015).10.18†Formof2016OmnibusAmendmenttoAwardsGrantedUndertheBerryPlasticsGroup,Inc.2006EquityIncentivePlan(incorporatedbyreferencetoExhibit10.2totheCompany’sCurrentReportonForm8-KfiledonJuly22,2016).10.19†OmnibusamendmenttoawardsgrantedundertheBerryPlasticsGroup,Inc.,2006Long-TermIncentivePlan(incorporatedbyreferencetoExhibit10.10totheCompany’sAnnualReportonForm10-KfiledonDecember11,2013).10.20†FormofPerformance-BasedStockOptionAgreementofBerryPlasticsGroup,Inc.(incorporatedbyreferencetoExhibit10.9toBerryPlasticsCorporation’sRegistrationStatementFormS-4filedonNovember2,2006).10.21†FormofAccretingStockOptionAgreementofBerryPlasticsGroup,Inc.(incorporatedbyreferencetoExhibit10.10toBerryPlasticsCorporation’sRegistrationStatementFormS-4filedonNovember2,2006).10.22†FormofTime-BasedStockOptionAgreementofBerryPlasticsGroup,Inc.(incorporatedbyreferencetoExhibit10.11toBerryPlasticsCorporation’sRegistrationStatementFormS-4filedonNovember2,2006).10.23†FormofPerformance-BasedStockAppreciationRightsAgreementofBerryPlasticsGroup,Inc.(incorporatedbyreferencetoExhibit10.12toBerryPlasticsCorporation’sRegistrationStatementFormS-4filedonNovember2,2006).10.24†EmploymentAgreementofThomasE.Salmon(incorporatedbyreferencetoExhibit10.1totheCompany’sCurrentReportonForm8-KfiledonFebruary6,2017).10.25†BerryPlasticsGroup,Inc.ExecutiveBonusPlan,amendedandrestatedDecember22,2015,effectiveasofSeptember27,2015(incorporatedbyreferencetoExhibit10.1totheCompany’sCurrentReportonForm8-KfiledonDecember28,2015).10.26†BerryPlasticsGroup,Inc.2012Long-TermIncentivePlan(incorporatedbyreferencetoExhibit10.27totheCompany’sAnnualReportonForm10-KfiledonDecember17,2012).10.27†AmendmentNo.1totheBerryPlasticsGroup,Inc.,2012Long-TermIncentivePlan(incorporatedbyreferencetoExhibit10.31totheCompany’sAnnualReportonForm10-KfiledonDecember11,2013).10.28†OmnibusamendmenttoawardsgrantedundertheBerryPlasticsGroup,Inc.,2012Long-TermIncentivePlan(incorporatedbyreferencetoExhibit10.32totheCompany’sAnnualReportonForm10-KfiledonDecember11,2013).10.29†AmendmentNo.2totheBerryPlasticsGroup,Inc.2012Long-TermIncentivePlan(incorporatedbyreferencetoExhibit10.2totheCompany’sCurrentReportonForm8-KfiledonMarch10,2015).10.30†Formof2016OmnibusAmendmenttoAwardsGrantedUndertheBerryPlasticsGroup,Inc.2012Long-TermIncentivePlan(incorporatedbyreferencetoExhibit10.3totheCompany’sCurrentReportonForm8-KfiledonJuly22,2016).10.31†2015BerryPlasticsGroup,Inc.Long-TermIncentivePlan(incorporatedbyreferencetoExhibit10.3totheCompany’sCurrentReportonForm8-KfiledonMarch10,2015.10.32†FirstAmendmentto2015BerryPlasticsGroup,Inc.Long-TermIncentivePlan(incorporatedbyreferencetoExhibit10.1totheCompany’sCurrentReportonForm8-KfiledonMarch6,2018).58ExhibitNoDescriptionofExhibit10.33†Formof2016OmnibusAmendmenttoAwardsGrantedUndertheBerryPlasticsGroup,Inc.2015Long-TermIncentivePlan(incorporatedbyreferencetoExhibit10.4totheCompany’sCurrentReportonForm8-KfiledonJuly22,2016).10.34†FourthAmendedandRestatedStockholdersAgreement,byandamongBerryPlasticsGroup,Inc.,andthestockholdersoftheCorporationlistedonscheduleAthereto,datedasofJanuary15,2015(incorporatedbyreferencetoExhibit10.1totheCompany’sQuarterlyReportonForm10-QfiledonJanuary30,2015).10.35†EmploymentAgreement,datedJanuary1,2002,betweentheBerryPlasticsCorporationandCurtisBegle(incorporatedbyreferencetoExhibit10.1totheCompany’sQuarterlyReportonForm10-QfiledonJanuary31,2014).10.36†AmendmentNo.1toEmploymentAgreement,datedasofSeptember13,2006,byandbetweentheBerryPlasticsCorporationandCurtisBegle(incorporatedbyreferencetoExhibit10.3totheCompany’sQuarterlyReportonForm10-QfiledonJanuary31,2014).10.37†AmendmentNo.2toEmploymentAgreement,datedDecember31,2008,byandbetweentheBerryPlasticsCorporationandCurtisBegle(incorporatedbyreferencetoExhibit10.4totheCompany’sQuarterlyReportonForm10-QfiledonJanuary31,2014).10.38†AmendmentNo.3toEmploymentAgreement,datedAugust1,2010,byandbetweentheBerryPlasticsCorporationandCurtisL.Begle(incorporatedbyreferencetoExhibit10.5totheCompany’sQuarterlyReportonForm10-QfiledonJanuary31,2014).10.39†AmendmentNo.4toEmploymentAgreement,datedDecember16,2011,byandbetweentheBerryPlasticsCorporationandCurtisL.Begle(incorporatedbyreferencetoExhibit10.6totheCompany’sQuarterlyReportonForm10-QfiledonJanuary31,2014).10.40†EmploymentAgreement,datedFebruary28,1998,betweenBerryPlasticsCorporationandMarkMiles,togetherwithamendmentsdatedFebruary28,2003,September13,2006,December31,2008,andDecember31,2011(incorporatedbyreferencetoExhibit10.40totheCompany’sAnnualReportonForm10-KfiledonNovember30,2016).10.41†FormofAmendmenttoEmploymentAgreementbyandbetweenBerryPlasticsCorporationandeachofCurtisLBegle,MarkW.Miles,andThomasE.Salmon(incorporatedbyreferencetoExhibit10.1totheCompany’sCurrentReportonForm8-KfiledonJuly22,2016).10.42†SeniorExecutiveEmploymentContractdatedasofSeptember30,2015byandbetweenPGISpecialtyMaterialsInc.andJeanMarcGalvez,togetherwiththeInternationalAssignmentLetterdatedDecember18,2016fromBerryGlobal,Inc.(f/k/aBerryPlasticsCorporation)(incorporatedbyreferencetoExhibit10.2totheCompany’sQuarterlyReportonForm10-QfiledonFebruary7,2018).10.43†*EmploymentAgreement,datedDecember16,2010,betweenBerryPlasticsCorporationandJasonGreene,togetherwithamendmentsdatedDecember31,2011andJuly20,2016.21.1*SubsidiariesoftheRegistrant.23.1*ConsentofIndependentRegisteredPublicAccountingFirm.31.1*Rule13a-14(a)/15d-14(a)CertificationoftheChiefExecutiveOfficer.31.2*Rule13a-14(a)/15d-14(a)CertificationoftheChiefFinancialOfficer.32.1*Section1350CertificationoftheChiefExecutiveOfficer.32.2*Section1350CertificationoftheChiefFinancialOfficer.59ExhibitNoDescriptionofExhibit101.INSInlineXBRLInstanceDocument(theinstancedocumentdoesnotappearintheInteractiveDataFilebecauseitsXBRLtagsareembeddedwithintheInlineXBRLdocument).101.SCHInlineXBRLTaxonomyExtensionSchemaDocument.101.CALInlineXBRLTaxonomyExtensionCalculationLinkbaseDocument.101.DEFInlineXBRLTaxonomyExtensionDefinitionLinkbaseDocument.101.LABInlineXBRLTaxonomyExtensionLabelLinkbaseDocument.101.PREInlineXBRLTaxonomyExtensionPresentationLinkbaseDocument.104CoverPageInteractiveDateFile(formattedasInlineXBRLandcontainedinExhibit101.*Filedherewith.†Managementcontractorcompensatoryplanorarrangement.60SIGNATURESPursuanttotherequirementsofSection13or15(d)oftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized,onthe20thdayofNovember,2020.BERRYGLOBALGROUP,INC.By/s/ThomasE.SalmonThomasE.SalmonChiefExecutiveOfficerPursuanttotherequirementsoftheSecuritiesExchangeActof1934,thisreporthasbeensignedbythefollowingpersonsonbehalfoftheregistrantandinthecapacitiesandonthedatesindicated:SignatureTitleDate/s/ThomasE.SalmonThomasE.SalmonChiefExecutiveOfficerandChairmanoftheBoardofDirectorsandDirector(PrincipalExecutiveOfficer)November23,2020/s/MarkW.MilesMarkW.MilesChiefFinancialOfficer(PrincipalFinancialOfficer)November23,2020/s/JamesM.TillJamesM.TillExecutiveVicePresidentandController(PrincipalAccountingOfficer)November23,2020/s/B.EvanBayhB.EvanBayhDirectorNovember23,2020/s/JonathanF.FosterJonathanF.FosterDirectorNovember23,2020/s/IdaleneF.KesnerIdaleneF.KesnerDirectorNovember23,2020/s/CarlJ.RickertsenCarlJ.RickertsenDirectorNovember23,2020/s/RonaldS.RolfeRonaldS.RolfeDirectorNovember23,2020/s/PaulaSneedPaulaSneedDirectorNovember23,2020/s/RobertA.SteeleRobertA.SteeleDirectorNovember23,2020/s/StephenE.SterrettStephenE.SterrettDirectorNovember23,2020/s/ScottB.UllemScottB.UllemDirectorNovember23,202061NON-GAAP FINANCIAL MEASURES**Measurements are in millionsOperating EBITDA and adjusted free cash f low, as presented in this document, are supplemental financial measures that are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). Reconciliations of such measures to GAAP financial measures are provided below. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided. For further information, see the accompanying Form 10-K.FISCAL20162017201820192020U.S. GAAP Operating income$581 $732 $761 $974 $1,179 Add: depreciation and amortization525521538613845 Add: restructuring and impairment322436 (126) 79 Add: business optimization and other expense72504569 54 Operating EBITDA$1,210 $1,327 $1,380 $1,530 $2,157 FISCAL20162017201820192020Cash flow from operating activities$857 $975 $1,004 $1,201 $1,530 Additions to property, plant, and equipment, net(283)(263)(333)(399)(583)Tax receivable agreement payment(57)(111)(37)(38) -Free cash flow$517 $601 $634 $764 $947 STOCKHOLDER INFORMATIONCORPORATE HEADQUARTERSBerry Global Group, Inc. 101 Oakley Street Evansville, Indiana 47710 812.424.2904 berryglobal.comINVESTOR RELATIONS CONTACT Dustin Stilwell 812.306.2964 ir@berryglobal.comANNUAL MEETING OF SHAREHOLDERSFebruary 24, 2021, at 10:00 a.m. Central Time, Tropicana—Room Walnut D 450 NW Riverside Dr., Evansville, Indiana 47708REGISTRAR AND TRANSFER AGENTComputershare P.O. Box 505000 Louisville, KY 40233 800.962.4284INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMErnst & Young LLPADDITIONAL INFORMATIONYou can access financial and other information about Berry Global Group, Inc. at ir.berryglobal.com, including press releases, Forms 10-K, 10-Q, and 8-K as filed with the Securities and Exchange Commission; and information on Corporate Governance such as charters of Board Committees, our Code of Business Ethics and Corporate Governance Guidelines. You can also request that any of these materials be mailed to you at no charge by writing us at the address above.Please visit our website, berryglobal.com, to view our most recent Corporate Sustainability Report.1.877.662.3779 | berryglobal.com

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