Revenue Recognition

6 Months Ended

Jul. 03, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

The Company records revenue when control is transferred to the customer, which is either upon shipment or over time in cases where the Company is entitled to payment with margin for products produced that are customer specific without alternative use. The Company recognizes over time revenue under the input method as goods are produced. Revenue that is recognized at a point in time is recognized when the customer obtains control of the goods. Customers obtain control either when goods are delivered to the customer facility, if the Company is responsible for arranging transportation, or when picked up by the customer's designated carrier. The Company commonly enters into Master Supply Arrangements with customers to provide goods and/or services over specific time periods. Customers submit purchase orders with quantities and prices to create a contract for accounting purposes. Shipping and handling expenses are included in "Cost of Sales," and freight charged to customers is included in "Net Sales" in the Company's Condensed Consolidated Statements of Income.

The Company has rebate agreements with certain customers. These rebates are recorded as reductions of revenue and are accrued using sales data and rebate percentages specific to each customer agreement. Accrued customer rebates are included in "Accrued expenses and other" in the Company's Condensed Consolidated Balance Sheets.

Payment terms under the Company's sales arrangements are short term, generally no longer than 120 days. The Company does provide prompt payment discounts to certain customers if invoices are paid within a predetermined period. Prompt payment discounts are treated as a reduction of revenue and are determinable within a short time period following the sale.

The following tables set forth the effects of contract assets and liabilities from contracts with customers. Contract assets and liabilities are reported in "Other receivables" and "Accrued expenses and other," respectively, on the Company's Condensed Consolidated Balance Sheets.

	July 3, 2022		December 31, 2021
Contract Assets	$	65,377	$	51,106
Contract Liabilities	$	(25,631)	$	(18,993)

Significant changes in the contract assets and liabilities balances during the six months ended July 3, 2022 and the year ended December 31, 2021 were as follows:

	July 3, 2022				December 31, 2021
	Contract Asset		Contract Liability		Contract Asset		Contract Liability
Beginning Balance	$	51,106	$	(18,993)	$	48,390	$	(16,687)
Revenue deferred or rebates accrued	—		(32,207)		—		(36,527)
Recognized as revenue			10,656				7,238
Rebates paid to customers	—		20,330		—		26,983
Increases due to rights to consideration for customer specific goods produced, but not billed during the period	57,270		—		51,106		—
Transferred to receivables from contract assets recognized at the beginning of the period	(51,106)		—		(48,390)		—
Acquired as part of a business combination	8,107		(5,417)		—		—
Ending Balance	$	65,377	$	(25,631)	$	51,106	$	(18,993)

Contract assets and liabilities are generally short in duration given the nature of products produced by the Company. Contract assets represent goods produced without alternative use for which the Company is entitled to payment with margin prior to shipment. Upon shipment, the Company is entitled to bill the customer, and therefore amounts included in contract assets will be reduced with the recording of an account receivable as they represent an unconditional right to payment. Contract liabilities represent revenue deferred due to pricing mechanisms utilized by the Company in certain multi-year arrangements, volume rebates, and payments received in advance. For multi-year arrangements with pricing

mechanisms, the Company will generally defer revenue during the first half of the arrangement and will release the deferral over the back half of the contract term. The Company's reportable segments are aligned by product nature as disclosed in Note 15.

The following tables set forth information about revenue disaggregated by primary geographic regions for the three-month periods ended July 3, 2022 and July 4, 2021. The tables also include a reconciliation of disaggregated revenue with reportable segments.

Three months ended July 3, 2022	Consumer Packaging		Industrial Paper Packaging		All Other		Total
Primary Geographical Markets:
United States	$	791,096	$	436,680	$	161,587	$	1,389,363
Europe	109,910		117,376		22,563		249,849
Canada	27,980		29,312		—		57,292
Asia	23,407		76,803		270		100,480
Other	37,589		67,231		11,528		116,348
Total	$	989,982	$	727,402	$	195,948	$	1,913,332

Three months ended July 4, 2021	Consumer Packaging		Industrial Paper Packaging		All Other		Total
Primary Geographical Markets:
United States	$	413,576	$	346,367	$	142,236	$	902,179
Europe	110,248		104,238		21,930		236,416
Canada	30,193		23,985		—		54,178
Asia	18,375		78,189		279		96,843
Other	25,411		55,753		11,974		93,138
Total	$	597,803	$	608,532	$	176,419	$	1,382,754

The following tables set forth information about revenue disaggregated by primary geographic regions for the six-month periods ended July 3, 2022 and July 4, 2021. The tables also include a reconciliation of disaggregated revenue with reportable segments.

Six months ended July 3, 2022	Consumer Packaging		Industrial Paper Packaging		All Other		Total
Primary Geographical Markets:
United States	$	1,445,511	$	853,965	$	327,660	$	2,627,136
Europe	230,080		234,203		46,689		510,972
Canada	59,188		56,481		—		115,669
Asia	49,041		150,422		563		200,026
Other	74,261		131,458		24,792		230,511
Total	$	1,858,081	$	1,426,529	$	399,704	$	3,684,314

Six months ended July 4, 2021	Consumer Packaging		Industrial Paper Packaging		All Other		Total
Primary Geographical Markets:
United States	$	811,373	$	671,589	$	316,967	$	1,799,929
Europe	225,428		200,922		43,339		469,689
Canada	56,336		45,031		—		101,367
Asia	39,528		151,561		520		191,609
Other	47,891		104,826		20,747		173,464
Total	$	1,180,556	$	1,173,929	$	381,573	$	2,736,058