Reynolds Consumer Products Inc.

05/06/2026 | Press release | Distributed by Public on 05/06/2026 07:26

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
Our management's discussion and analysis is intended to help the reader understand our results of operations and financial condition and is provided as an addition to, and should be read in connection with, our condensed consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and the accompanying notes contained in our Annual Report on Form 10-K for the year ended December 31, 2025.
Description of the Company and its Business Segments
We are a market-leading consumer products company with a presence in 95% of households across the United States. We produce and sell products that people use in their homes for cooking, serving, clean-up and storage. We sell our products under iconic brands such as Reynolds and Hefty and also under store brands that are strategically important to our retail partners. Overall, across both our branded and store brand offerings, we hold the #1 or #2 U.S. market share position in the majority of product categories in which we participate. Over 50% of our revenue comes from products that are #1 in their respective categories. We have developed our market-leading position by investing in our product categories and consistently developing innovative products that meet the evolving needs and preferences of the modern consumer.
Our mix of branded and store brand products is a key competitive advantage that aligns our goal of growing the overall product categories where we have offerings. Our retail partners also measure their success in category growth, which positions us as a trusted strategic partner. Our Reynolds and Hefty brands have preeminent positions in their categories and carry strong brand recognition in household aisles.
In January 2026, we reorganized the previous Hefty Waste & Storage and Presto Products segments by consolidating waste bags into the new Hefty Waste & Clean-Up segment and food bags and storage products into the new Hefty Storage & Organization segment in an effort to increase efficiencies, sharpen focus on innovation and establish a structure that can better facilitate entry into adjacent categories. Comparative segment disclosures have been recast to reflect this realignment. Prior periods will be similarly recast in each quarterly update during 2026. These changes had no effect on our previously reported condensed consolidated results of operations. In addition to the segment realignment, we have renamed our existing Reynolds Cooking & Baking segment and Hefty Tableware segment to Reynolds Cooking & Kitchen Essentials and Hefty Home & Tableware, respectively.
We manage our operations in four operating and reportable segments: Reynolds Cooking & Kitchen Essentials, Hefty Waste & Clean-Up, Hefty Home & Tableware, and Hefty Storage & Organization:
•Reynolds Cooking & Kitchen Essentials: Through our Reynolds Cooking & Kitchen Essentials segment, we sell both branded and store brand aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags and slow cooker liners. Our branded products are sold under the Reynolds Wrap, Reynolds Kitchens and EZ Foil brands in the United States and select international markets, under the ALCAN brand in Canada and under the Diamond brand outside of North America. With our flagship Reynolds Wrap products, we hold the #1 market position in the U.S. consumer foil market measured by retail sales and volume. We also hold the #1 market position in the Canadian branded foil market under the ALCAN brand. We have no significant branded competitor in this market. Reynolds is one of the most recognized household brands in the United States and has been the top trusted brand in the consumer foil market for over 75 years, with greater than 50% market share in most of its categories. We also offer more sustainable solutions, such as Reynolds Wrap 100% recycled aluminum, unbleached parchment paper made with a chlorine-free process and coreless wax paper, which uses less packaging material than traditional wax paper rolls.
•Hefty Waste & Clean-Up: Through our newly focused Hefty Waste & Clean-Up segment, we produce both branded and store brand trash bags. Hefty is a well-recognized leader in the trash bag category and our private label products offer brand equivalent quality and value to our retail partners. Reynolds Consumer Products is the largest U.S. trash bag manufacturer by dollar share across MULO+ retail channels1. Our branded products are sold under the Hefty Ultra Strong, Hefty Strong, Hefty Essentials, and Brute brands in the U.S. and select international markets. Hefty has the #1 branded market share in the U.S. large black trash bag segment, and the #2 branded market share in the tall kitchen trash bag segment. Our waste bag portfolio includes a full suite of products across varying size, strength, scent, color and closure. We also offer sustainable solutions such as compostable bags and bags made from recycled materials. We are proud to have partnered with John Cena as our Hefty brand
1 Based on internal estimates derived from Circana MULO+ point-of-sale data and company analysis, including attribution of branded and private label sales by manufacturer.
spokesperson for over ten years and originating with our key waste bag business. We also greatly value our partnership with both Arm & Hammer and Fabuloso brands that drive consumer confidence in our Hefty brand odor control and scent.
•Hefty Home & Tableware: Through our Hefty Home & Tableware segment, we sell both branded and store brand disposable and compostable plates, bowls, platters, containers, cups and cutlery. Our Hefty branded products include dishes, party cups, cutlery and containers. Hefty branded party cups are the #1 party cup in America measured by market share. Our branded products use our Hefty brand to represent both quality and value, and we bring this same quality and value promise to all of our store brands as well. We sell across a broad range of materials and price points in all retail channels, allowing our consumers to select the product that best suits their price, function and aesthetic needs. In 2025, we launched the line of Hefty ECOSAVE Cutlery, a high quality compostable offering. We are also proud to have partnered with John Cena as our Hefty spokesperson.
•Hefty Storage & Organization: Through our newly focused Hefty Storage & Organization segment, we have consolidated our food bag business to increase efficiencies, sharpen our focus on innovation and unlock incremental growth opportunities. The Hefty Storage & Organization segment produces both branded and store brand food bags and business-to-business closures. Hefty is a well-recognized supplier in the food bag category and our private label products offer brand-equivalent quality and value to our retail partners. Our branded products are sold under the Hefty Slider, Hefty Press to Close and Hefty Compostable brands in the U.S. and select international markets. Our food storage bag portfolio includes a full suite of products across varying size, type of closure and in freezer and storage. We also offer sustainable solutions such as compostable bags and bags made from recycled materials. We are proud to have partnered with John Cena as our Hefty Food Brand Spokesperson.
Overview
Total net revenues increased 7% in the three months ended March 31, 2026 compared to the same period in 2025. The revenue increase was due to higher pricing and higher retail volume.
During the three months ended March 31, 2026, our net income increased by 90% compared to the same period in 2025, primarily driven by costs related to strategic initiatives and our CEO transition in the prior year period that did not repeat and higher revenue, partially offset by higher input costs.
Non-GAAP Measures
In this Quarterly Report on Form 10-Q we use the non-GAAP financial measures "Adjusted EBITDA", "Adjusted Net Income", and "Adjusted EPS", which are measures adjusted for the impact of specified items and are not in accordance with GAAP.
We define Adjusted EBITDA as net income calculated in accordance with GAAP, plus income tax expense, net interest expense, debt refinancing expense, depreciation and amortization, costs to execute strategic initiatives and CEO transition costs. We define Adjusted Net Income and Adjusted EPS as Net Income and Earnings Per Share calculated in accordance with GAAP, plus debt refinancing expense, costs to execute strategic initiatives and CEO transition costs.
We present Adjusted EBITDA because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans and make strategic decisions. In addition, our chief operating decision maker uses Adjusted EBITDA of each reportable segment to evaluate the operating performance of such segments. We use Adjusted Net Income and Adjusted EPS as supplemental measures to evaluate our business' performance in a way that also considers our ability to generate profit without the impact of certain items. Accordingly, we believe presenting these measures provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors.
Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP financial measures presented by other companies.
The following table presents a reconciliation of our net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA:
Three Months Ended March 31,
2026 2025
(in millions)
Net income - GAAP $ 59 $ 31
Income tax expense 18 11
Interest expense, net 21 21
Debt refinancing expense(1)
- 13
Depreciation and amortization 33 32
Costs to execute strategic initiatives(2)
- 5
CEO transition costs(3)
- 4
Adjusted EBITDA (Non-GAAP) $ 131 $ 117
(1) Reflects the expense recorded related to our March 2025 Term Loan Facility refinancing.
(2) Reflects costs related to the execution of cost savings and revenue growth strategic initiatives.
(3) Reflects compensation and other costs related to the CEO transition effective January 1, 2025.
The following table presents a reconciliation of our net income and diluted EPS, the most directly comparable GAAP financial measure, to Adjusted Net Income and Adjusted Diluted EPS:
Three Months Ended March 31, 2026 Three Months Ended March 31, 2025
(in millions, except for per share data) Net Income Diluted Shares Diluted EPS Net Income Diluted Shares Diluted EPS
As Reported - GAAP $ 59 211.8 $ 0.28 $ 31 210.3 $ 0.15
Adjustments:
Debt refinancing expense(1)
- 211.8 - 10 210.3 0.05
Costs to execute strategic initiatives(1)
- 211.8 - 4 210.3 0.02
CEO transition costs(1)
- 211.8 - 4 210.3 0.02
Adjusted (Non-GAAP) $ 59 211.8 $ 0.28 $ 49 210.3 $ 0.23
(1) Amounts are after tax, calculated based on the applicable tax treatment of each adjustment, using a normalized effective tax rate of 23.9% for deductible items and 0% for non-deductible items.
Results of Operations - Three Months Ended March 31, 2026
The following discussion should be read in conjunction with our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Detailed comparisons of revenue and results are presented in the discussions of the operating segments, which follow our consolidated results discussion.
Certain discussions in this section provide a breakdown of net revenues between our retail and non-retail businesses. Our retail business net revenues consist of sales to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets and eCommerce retailers. Our non-retail business net revenues consist of aluminum sales to food service customers, which were classified as related party revenues during the three months ended March 31, 2025, and industrial customers.
Aggregation of Segment Revenue and Adjusted EBITDA
(in millions) Reynolds
Cooking &
Kitchen Essentials 		Hefty
Waste & Clean-Up 		Hefty Home &
Tableware 		Hefty
Storage & Organization
Unallocated⁽1⁾
Total
Reynolds
Consumer
Products
Net revenues for the three months ended March 31:
2026 $ 314 $ 224 $ 180 $ 159 $ - $ 877
2025 259 226 179 153 1 818
Adjusted EBITDA⁽²⁾ for the three months ended March 31:
2026 $ 44 $ 62 $ 28 $ 27 $ (30) $ 131
2025 38 62 17 21 (21) 117
(1)The unallocated net revenues include other revenue adjustments. The unallocated Adjusted EBITDA represents the combination of corporate expenses which are not allocated to our segments and other unallocated revenue adjustments.
(2)Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Measures" for details, including a reconciliation between net income and Adjusted EBITDA.
Three Months Ended March 31, 2026 Compared with the Three Months Ended March 31, 2025
Total Reynolds Consumer Products
For the Three Months Ended March 31,
(in millions, except for %) 2026 % of
Revenue 		2025 % of
Revenue 		Change % Change
Net revenues $ 877 100 % $ 801 98 % $ 76 9 %
Related party net revenues - - % 17 2 % (17) (100) %
Total net revenues 877 100 % 818 100 % 59 7 %
Cost of sales (670) (76) % (629) (77) % (41) (7) %
Gross profit 207 24 % 189 23 % 18 10 %
Selling, general and administrative expenses (109) (12) % (104) (13) % (5) (5) %
Other expense, net - - % (9) (1) % 9 100 %
Income from operations 98 11 % 76 9 % 22 29 %
Interest expense, net (21) (2) % (21) (3) % - - %
Debt refinancing expense - - % (13) (2) % 13 100 %
Income before income taxes 77 9 % 42 5 % 35 83 %
Income tax expense (18) (2) % (11) (1) % (7) (64) %
Net income $ 59 7 % $ 31 4 % $ 28 90 %
Adjusted EBITDA ⁽¹⁾ $ 131 15 % $ 117 14 % $ 14 12 %
(1)Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Measures" for details, including a reconciliation between net income and Adjusted EBITDA.
Components of Change in Net Revenues for the Three Months Ended March 31, 2026 vs. the Three Months Ended March 31, 2025
Price Volume/Mix Total
Retail Non-Retail
Reynolds Cooking & Kitchen Essentials 15 % 6 % - % 21 %
Hefty Waste & Clean-Up - % (1) % - % (1) %
Hefty Home & Tableware 4 % (3) % - % 1 %
Hefty Storage & Organization (2) % 6 % - % 4 %
Total RCP 5 % 2 % - % 7 %
Total Net Revenues. Total net revenues increased by $59 million, or 7%, to $877 million. The increase was driven by higher pricing, reflecting pricing actions to recover higher input costs, and higher retail volume.
Cost of Sales. Cost of sales increased by $41 million, or 7%, to $670 million. The increase was primarily driven by higher material costs, partially offset by manufacturing efficiencies.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $5 million, or 5%, to $109 million, primarily driven by higher professional fees.
Other Expense, Net. Other expense, net decreased by $9 million, or 100%, reflecting costs to execute strategic initiatives and costs associated with our CEO transition in the prior year period that did not repeat in the current year.
Interest Expense, Net. Interest expense, net was flat compared to the prior year period.
Income Tax Expense. We recognized income tax expense of $18 million on income before income taxes of $77 million (an effective tax rate of 23.6%) for the three months ended March 31, 2026 compared to income tax expense of $11 million on income before income taxes of $42 million (an effective tax rate of 24.5%) for the three months ended March 31, 2025.
Adjusted EBITDA. Adjusted EBITDA increased by $14 million, or 12%, to $131 million. The increase in Adjusted EBITDA was driven by higher retail volume and manufacturing efficiencies, partially offset by higher selling, general and administrative costs. The impact of higher pricing was offset by higher material costs.
Segment Information
Reynolds Cooking & Kitchen Essentials
For the Three Months Ended March 31,
(in millions, except for %) 2026 2025 Change % Change
Retail net revenues $ 241 $ 208 $ 33 16 %
Non-retail net revenues 73 51 22 43 %
Total segment net revenues $ 314 $ 259 $ 55 21 %
Segment Adjusted EBITDA 44 38 6 16 %
Segment Adjusted EBITDA Margin 14 % 15 %
Total Segment Net Revenues. Reynolds Cooking & Kitchen Essentials total segment net revenues increased by $55 million, or 21%, to $314 million. The increase in net revenues was primarily due to higher pricing, reflecting pricing actions to recover higher input costs, and higher retail volume.
Adjusted EBITDA. Reynolds Cooking & Kitchen Essentials Adjusted EBITDA increased by $6 million, or 16%, to $44 million. The increase was primarily driven by increased volume as the pricing actions were offset higher material costs.
Hefty Waste & Clean-Up
For the Three Months Ended March 31,
(in millions, except for %) 2026 2025 Change % Change
Total segment net revenues $ 224 $ 226 $ (2) (1) %
Segment Adjusted EBITDA 62 62 - - %
Segment Adjusted EBITDA Margin 28 % 27 %
Total Segment Net Revenues. Hefty Waste & Clean-Up total segment net revenues decreased by $2 million, or 1%, to $224 million. The decrease in net revenues was due to slightly lower volume.
Adjusted EBITDA. Hefty Waste & Clean-Up Adjusted EBITDA was flat at $62 million as manufacturing efficiencies offset the impact of lower revenue.
Hefty Home & Tableware
For the Three Months Ended March 31,
(in millions, except for %) 2026 2025 Change % Change
Total segment net revenues $ 180 $ 179 $ 1 1 %
Segment Adjusted EBITDA 28 17 11 65 %
Segment Adjusted EBITDA Margin 16 % 9 %
Total Segment Net Revenues. Hefty Home & Tableware total segment net revenues increased by $1 million, or 1%, to $180 million. The increase in net revenues was primarily due to higher pricing, including a reduction in certain promotional activities, partially offset by lower foam volume.
Adjusted EBITDA. Hefty Home & Tableware Adjusted EBITDA increased by $11 million, or 65%, to $28 million. The increase in Adjusted EBITDA was primarily driven by the timing of pricing actions relative to input costs and lower logistics costs.
Hefty Storage & Organization
For the Three Months Ended March 31,
(in millions, except for %) 2026 2025 Change % Change
Total segment net revenues $ 159 $ 153 $ 6 4 %
Segment Adjusted EBITDA 27 21 6 29 %
Segment Adjusted EBITDA Margin 17 % 14 %
Total Segment Net Revenues. Hefty Storage & Organization total segment net revenues increased by $6 million, or 4%, to $159 million. The increase in net revenues was due to higher volume.
Adjusted EBITDA. Hefty Storage & Organization Adjusted EBITDA increased by $6 million, or 29%, to $27 million. The increase in Adjusted EBITDA was primarily driven by higher volume and manufacturing efficiencies.
Liquidity and Capital Resources
Our principal sources of liquidity are existing cash and cash equivalents, cash generated from operating activities and available borrowings under the Revolving Facility.
The following table discloses our cash flows for the periods presented:
For the Three Months Ended March 31,
(in millions) 2026 2025
Net cash provided by operating activities $ 71 $ 56
Net cash used in investing activities (44) (39)
Net cash used in financing activities (103) (96)
Decrease in cash and cash equivalents $ (76) $ (79)
Cash provided by operating activities
Net cash from operating activities increased by $15 million to $71 million in the three months ended March 31, 2026. The increase was primarily driven by higher net income.
Cash used in investing activities
Net cash used in investing activities increased by $5 million to $44 million. The increase was driven by higher cash outlays for capital expenditures.
Cash used in financing activities
Net cash used in financing activities increased by $7 million to $103 million. The increase was primarily attributable to tax withholdings on stock awards.
External Debt Facilities
Our External Debt Facilities consist of a senior secured term loan facility ("Term Loan Facility") and a $700 million senior secured revolving credit facility ("Revolving Facility") in a syndicated loan arrangement. During March 2025, we amended the Term Loan Facility, replacing the then-existing facility, which was originally set to mature in February 2027, with a new $1,645 million facility maturing in March 2032 ("Amendment No. 4"). Other than the new maturity date and the recommencement of quarterly amortization payments, the material terms of our External Debt Facilities as a result of Amendment No. 4 remained unchanged .
As of March 31, 2026, the outstanding balance under the Term Loan Facility was $1,536 million. As of March 31, 2026, we had no outstanding borrowings under the Revolving Facility, and we had $7 million of letters of credit outstanding, which reduces the borrowing capacity under the Revolving Facility.
The borrower under the External Debt Facilities is Reynolds Consumer Products LLC (the "Borrower"). The Revolving Facility includes a sub-facility for letters of credit. In addition, the External Debt Facilities provide that the Borrower has the right at any time, subject to customary conditions, to request incremental term loans or incremental revolving credit commitments in amounts and on terms set forth therein. The lenders under the External Debt Facilities are not under any obligation to provide any such incremental loans or commitments, and any such addition of or increase in loans is subject to certain customary conditions precedent and other provisions.
Interest rate
Borrowings under the External Debt Facilities bear interest at a rate per annum equal to, at our option, either a base rate plus an applicable margin of 0.75% or SOFR plus an applicable margin of 1.75%.
We have entered into a series of interest rate swaps to fix the SOFR of our External Debt Facilities.
The aggregate notional amount of interest rate swaps in effect as of March 31, 2026 was $900 million, and the SOFR was fixed at an annual rate of 3.33% to 3.41% (resulting in annual effective interest rates of 5.08% to 5.16%, including margin). These interest rate swaps hedge a portion of the interest rate exposure resulting from borrowings under our Term Loan Facility for between two and five years.
Prepayments
The Term Loan Facility contains customary mandatory prepayments, including with respect to excess cash flow, asset sale proceeds and proceeds from certain incurrences of indebtedness.
The Borrower may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary breakage costs with respect to SOFR based loans.
During the three months ended March 31, 2026, we made voluntary principal payments of $50 million related to our Term Loan Facility.
Amortization and maturity
The Term Loan Facility matures in March 2032. The Term Loan Facility amortizes in equal quarterly installments of $4 million, which commenced in June 2025, with the balance payable on maturity. As a result of voluntary principal repayments made, the Term Loan Facility has no quarterly amortization payments due until December 2031, when the quarterly amortization payments will recommence.
The Revolving Facility matures in October 2029.
Guarantee and security
All obligations under the External Debt Facilities and certain hedge agreements and cash management arrangements provided by any lender party to the External Debt Facilities or any of its affiliates and certain other persons are unconditionally guaranteed by Reynolds Consumer Products Inc. ("RCPI"), the Borrower (with respect to hedge agreements and cash management arrangements not entered into by the Borrower) and certain of RCPI's existing and subsequently acquired or organized direct or indirect material wholly-owned U.S. restricted subsidiaries, with customary exceptions including, among other things, where providing such guarantees is not permitted by law, regulation or contract or would result in material adverse tax consequences.
All obligations under the External Debt Facilities and certain hedge agreements and cash management arrangements provided by any lender party to the External Debt Facilities or any of its affiliates and certain other persons, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by: (i) a perfected first-priority pledge of all the equity interests of each wholly-owned material restricted subsidiary of RCPI, the Borrower or a subsidiary guarantor, including the equity interests of the Borrower (limited to 65% of voting stock in the case of first-tier non-U.S. subsidiaries of RCPI, the Borrower or any subsidiary guarantor) and (ii) perfected first-priority security interests in substantially all tangible and intangible personal property of RCPI, the Borrower and the subsidiary guarantors (subject to certain other exclusions).
Certain covenants and events of default
The External Debt Facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of the restricted subsidiaries of RCPI to:
•incur additional indebtedness and guarantee indebtedness;
•create or incur liens;
•engage in mergers or consolidations;
•sell, transfer or otherwise dispose of assets;
•pay dividends and distributions or repurchase capital stock;
•prepay, redeem or repurchase certain indebtedness;
•make investments, loans and advances;
•enter into certain transactions with affiliates;
•enter into agreements which limit the ability of our restricted subsidiaries to incur restrictions on their ability to make distributions; and
•enter into amendments to certain indebtedness in a manner materially adverse to the lenders.
The External Debt Facilities contain a springing financial covenant requiring compliance with a ratio of first lien net indebtedness to consolidated EBITDA, applicable solely to the Revolving Facility. The financial covenant is tested on the last day of any fiscal quarter only if the aggregate principal amount of borrowings under the Revolving Facility and drawn but unreimbursed letters of credit exceed 35% of the total amount of commitments under the Revolving Facility on such day.
If an event of default occurs, the lenders under the External Debt Facilities are entitled to take various actions, including the acceleration of amounts due under the External Debt Facilities and all actions permitted to be taken by secured creditors.
We are currently in compliance with the covenants contained in our External Debt Facilities.
Accounts Receivable Factoring
We are party to a factoring agreement with a global financial institution to sell certain accounts receivable up to $95 million. We had no factored receivables as of March 31, 2026. Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the condensed consolidated balance sheet at the time of the sales transaction. We classify proceeds received from sales of accounts receivable as an operating cash flow in the condensed consolidated statement of cash flows. We record the discount as other expense, net in the condensed consolidated statement of income.
Supply Chain Financing
We have an ongoing Supply Chain Finance program (the "SCF") with a global financial institution (the "SCF Bank"). Under the SCF, qualifying suppliers may elect to sell their receivables from us to the SCF Bank. These participating suppliers negotiate their receivables sales arrangements directly with the SCF Bank. We are not party to those agreements, nor do we provide any security or other forms of guarantees to the SCF Bank. The participation in the program is at the sole discretion of the supplier, we have no economic interest in a supplier's decision to enter into the agreement and have no direct financial relationship with the SCF Bank, as it relates to the SCF. Once a qualifying supplier elects to participate in the SCF and reaches an agreement with the SCF Bank, they elect which individual invoices they sell to the SCF Bank.
The terms of our payment obligations are not impacted by a supplier's participation in the SCF and as such, the SCF has no impact on our balance sheets, cash flows or liquidity. Our payment terms with our suppliers for similar services and materials within individual markets are consistent between suppliers that elect to participate in the SCF and those that do not participate.
All outstanding amounts related to suppliers participating in the SCF are recorded within accounts payable in our condensed consolidated balance sheet and associated payments are included as an operating cash flow in the condensed
consolidated statement of cash flows. The amount of obligations outstanding that we have confirmed as valid under the SCF was $9 million as of each of March 31, 2026 and December 31, 2025.
Dividends
During the three months ended March 31, 2026, cash dividends of $0.23 per share, were declared and paid. On April 30, 2026, a quarterly cash dividend of $0.23 per share was declared and is to be paid on May 29, 2026. We expect to continue paying cash dividends on a quarterly basis; however, future dividends are at the discretion of our Board of Directors and will depend upon our earnings, capital requirements, financial condition, contractual limitations (including under the External Debt Facilities) and other factors.
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We believe that our projected cash position, cash flows from operations, including proceeds from factored receivables, and available borrowings under the Revolving Facility are sufficient to meet debt service, capital expenditures and working capital needs for the foreseeable future. However, we cannot ensure that our business will generate sufficient cash flow from operations or that future borrowings will be available under our borrowing agreements in amounts sufficient to pay indebtedness or fund other liquidity needs. Actual results of operations will depend on numerous factors, many of which are beyond our control as further discussed in "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Critical Accounting Policies and Estimates
Accounting policies and estimates are considered critical when they require management to make subjective and complex judgments, estimates and assumptions about matters that have a material impact on the presentation of our financial statements and accompanying notes. For a description of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
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