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Segments | 9 Months Ended
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Mar. 31, 2020
Segment Reporting [Abstract] |
Segments | Segments The Company's business is organized and presented in the two reportable segments outlined below: Flexibles: Consists of operations that manufacture flexible and film packaging in the food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries. Rigid Packaging: Consists of operations that manufacture rigid containers for a broad range of predominantly beverage and food products, including carbonated soft drinks, water, juices, sports drinks, milk-based beverages, spirits and beer, sauces, dressings, spreads and personal care items and plastic caps for a wide variety of applications. Other consists of the Company's equity method investments, including AMVIG, undistributed corporate expenses, intercompany eliminations and other business activities. Operating segments are organized along the Company's product lines and geographical areas. In conjunction with the acquisition of Bemis, the Company reassessed its segment reporting structure in the first fiscal quarter of 2020 and elected to disaggregate the Flexibles Americas operating segment into Flexibles North America and Flexibles Latin America. The five Flexibles operating segments (Flexibles Europe, Middle East and Africa; Flexibles North America, Flexibles Latin America; Flexibles Asia Pacific and Specialty Cartons) have been aggregated in the Flexibles reporting segment as they exhibit similarity in long-term forecasted economic characteristics, similarity in the products they offer, their production technologies, the customers they serve, the nature of their service delivery models, and their regulatory environments. In the fourth quarter of fiscal year 2019, in connection with the acquisition of Bemis, the Company changed its measure of segment performance from adjusted operating income to adjusted earnings before interest and tax ("EBIT") from continuing operations. The Company's chief operating decision maker, the Global Management Team ("GMT"), evaluates performance and allocates resources based on adjusted EBIT from continuing operations. The Company defines adjusted EBIT as operating income adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing operating performance and to include equity in income (loss) of affiliated companies. The GMT consists of the Managing Director and Chief Executive Officer and his direct reports and provides strategic direction and management oversight of the day to day activities of the Company. The accounting policies of the reportable segments are the same as those in the consolidated financial statements. The Company also has investments in operations in AMVIG that are accounted for under the equity method of accounting and, accordingly, those results are not included in segment net sales. The following table presents information about reportable segments:
|  | Three Months Ended March 31, |  |  |  | Nine Months Ended March 31, |  |
($ in millions) |  | 2020 |  | 2019 |  | 2020 |  | 2019
Sales including intersegment sales |  |  |  |  |  |  |  |
Flexibles |  | $ | 2,434.8 |  |  | $ | 1,576.6 |  |  | $ | 7,280.3 |  |  | $ | 4,718.6 |
Rigid Packaging |  | 706.8 |  |  | 733.4 |  |  | 2,046.6 |  |  | 2,137.7 |
Other |  | — |  |  | — |  |  | — |  |  | — |
Total sales including intersegment sales |  | 3,141.6 |  |  | 2,310.0 |  |  | 9,326.9 |  |  | 6,856.3 |
Intersegment sales |  |  |  |  |  |  |  |
Flexibles |  | 0.6 |  |  | 0.1 |  |  | 2.1 |  |  | 1.0 |
Rigid Packaging |  | — |  |  | — |  |  | — |  |  | — |
Other |  | — |  |  | — |  |  | — |  |  | — |
Total intersegment sales |  | 0.6 |  |  | 0.1 |  |  | 2.1 |  |  | 1.0 |
Net sales |  | $ | 3,141.0 |  |  | $ | 2,309.9 |  |  | $ | 9,324.8 |  |  | $ | 6,855.3 |
Adjusted EBIT from continuing operations |  |  |  |  |  |  |  |
Flexibles |  | $ | 326.9 |  |  | $ | 174.7 |  |  | $ | 946.8 |  |  | $ | 543.6 |
Rigid Packaging |  | 71.5 |  |  | 69.9 |  |  | 201.5 |  |  | 218.4 |
Other |  | (38.2) |  |  | (14.2) |  |  | (89.1) |  |  | (38.2) |
Adjusted EBIT from continuing operations |  | 360.2 |  |  | 230.4 |  |  | 1,059.2 |  |  | 723.8 |
Less: Material restructuring programs (1) |  | (19.3) |  |  | (7.0) |  |  | (60.0) |  |  | (44.7) |
Less: Impairments in equity method investments (2) |  | — |  |  | — |  |  | — |  |  | (13.9) |
Less: Material acquisition costs and other (3) |  | (14.8) |  |  | (19.8) |  |  | (116.0) |  |  | (54.9) |
Less: Amortization of acquired intangible assets from business combinations (4) |  | (41.0) |  |  | (4.4) |  |  | (150.2) |  |  | (14.1) |
Add/(Less): Economic net investment hedging activities not qualifying for hedge accounting (5) |  | — |  |  | (0.1) |  |  | — |  |  | 1.4 |
Less: Impact of hyperinflation (6) |  | (4.9) |  |  | (10.5) |  |  | (23.4) |  |  | (29.5) |
Add: Net legal settlements (7) |  | — |  |  | (0.6) |  |  | — |  |  | 14.9 |
EBIT from continuing operations |  | 280.2 |  |  | 188.0 |  |  | 709.6 |  |  | 583.0 |
Interest income |  | 5.3 |  |  | 3.5 |  |  | 18.3 |  |  | 11.6 |
Interest expense |  | (45.8) |  |  | (51.1) |  |  | (157.8) |  |  | (159.3) |
Equity in (income) loss of affiliated companies, net of tax |  | (3.6) |  |  | (5.6) |  |  | (8.1) |  |  | 1.3 |
Income from continuing operations before income taxes and equity in income (loss) of affiliated companies |  | $ | 236.1 |  |  | $ | 134.8 |  |  | $ | 562.0 |  |  | $ | 436.6 |
(1)Material restructuring programs includes the 2018 Rigid Packaging Restructuring Plan and the 2019 Bemis Integration Plan for the three and nine months ended March 31, 2020. For the three and nine months ended March 31, 2019, material restructuring plans include the 2018 Rigid Packaging Restructuring Plan. Refer to Note 5, "Restructuring Plans," for more information about the Company's restructuring plans. (2)Impairments in equity method investments includes the impairment charges related to other-than-temporary impairments related to the investment in AMVIG. (3)Material acquisition costs and other includes $57.8 million amortization of Bemis acquisition related inventory fair value step-up and $58.2 million of Bemis transaction related costs and integration costs not qualifying as exit costs for the nine months ended March 31, 2020. (4)Amortization of acquired intangible assets from business combinations includes amortization expenses related to all acquired intangible assets from acquisitions impacting the periods presented, including $26.4 million of sales backlog amortization for the nine months ended March 31, 2020 from the Bemis acquisition. (5)Economic net investment hedging activities not qualifying for hedge accounting includes the exchange rate movements on external loans not deemed to be effective net investment hedging instruments resulting from the conversion to U.S. GAAP from Australian Accounting Standards ("AAS") recognized in other non-operating income (loss), net. (6)Impact of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina where the functional currency was the Argentine Peso. (7)Net legal settlements includes the impact of significant legal settlements after associated costs. The Company does not have sales to a single customer that exceeded 10% of consolidated net sales for the nine months ended March 31, 2020. Sales to PepsiCo, and its subsidiaries, accounted for approximately 10.6% of net sales under multiple separate contractual agreements for the nine months ended March 31, 2019. The Company sells to this customer in both the Rigid Packaging and the Flexibles reportable segments. The following tables disaggregates sales, excluding intersegment sales, information by geography in which the Company operates based on manufacturing or selling operation:
|  | Three Months Ended March 31, |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  |  |  |  | 2019 |  |  |  |
($ in millions) |  | Flexibles |  | Rigid Packaging |  | Total |  | Flexibles |  | Rigid Packaging |  | Total
North America |  | $ | 924.1 |  |  | $ | 576.9 |  |  | $ | 1,501.0 |  |  | $ | 197.7 |  |  | $ | 593.3 |  |  | $ | 791.0 |
Latin America |  | 231.2 |  |  | 129.9 |  |  | $ | 361.1 |  |  | 119.2 |  |  | 140.1 |  |  | 259.3 |
Europe |  | 928.8 |  |  | — |  |  | $ | 928.8 |  |  | 934.1 |  |  | — |  |  | 934.1 |
Asia Pacific |  | 350.1 |  |  | — |  |  | $ | 350.1 |  |  | 325.5 |  |  | — |  |  | 325.5 |
Net sales |  | $ | 2,434.2 |  |  | $ | 706.8 |  |  | $ | 3,141.0 |  |  | $ | 1,576.5 |  |  | $ | 733.4 |  |  | $ | 2,309.9 |
|  | Nine Months Ended March 31, |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  |  |  |  | 2019 |  |  |  |
($ in millions) |  | Flexibles |  | Rigid Packaging |  | Total |  | Flexibles |  | Rigid Packaging |  | Total
North America |  | $ | 2,710.2 |  |  | $ | 1,645.7 |  |  | $ | 4,355.9 |  |  | $ | 574.7 |  |  | $ | 1,696.7 |  |  | $ | 2,271.4 |
Latin America |  | 743.7 |  |  | 400.9 |  |  | 1,144.6 |  |  | 377.6 |  |  | 441.0 |  |  | 818.6 |
Europe |  | 2,718.4 |  |  | — |  |  | 2,718.4 |  |  | 2,752.3 |  |  | — |  |  | 2,752.3 |
Asia Pacific |  | 1,105.9 |  |  | — |  |  | 1,105.9 |  |  | 1,013.0 |  |  | — |  |  | 1,013.0 |
Net sales |  | $ | 7,278.2 |  |  |  | $ | 2,046.6 |  |  |  | $ | 9,324.8 |  |  |  | $ | 4,717.6 |  |  |  | $ | 2,137.7 |  |  |  | $ | 6,855.3 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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