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Segments | 3 Months Ended
--- | ---
Mar. 31, 2017
Segment Reporting [Abstract] |
Segments | Note 4 Segments As a result of the Diversey transaction, we have changed our segment reporting structure. The Food Care division now excludes the food hygiene and cleaning business, which is included in discontinued operations, and includes our Medical Applications and New Ventures businesses, which were previously reported in the “Other” category. The Other category also previously included “Corporate” which is now its own category. The Company’s segment reporting structure now consists of two reportable segments and a Corporate category as follows:
| • | Food Care (includes Medical Applications and New Ventures businesses);
| • | Product Care; and
| • | Corporate.
The Company’s Food Care and Product Care segments are considered reportable segments under FASB ASC Topic 280. Our reportable segments are aligned with similar groups of products. Corporate includes certain costs that are not allocated to the reportable segments, primarily consisting of unallocated corporate overhead costs, including administrative functions and cost recovery variances not allocated to the reportable segments from global functional expenses. We allocate and disclose depreciation and amortization expense to our segments, although property and equipment, net is not allocated to the segment assets, nor is depreciation and amortization included in the segment performance metric Adjusted EBITDA. As of January 1, 2017 we modified our calculation of Adjusted EBITDA to exclude interest income. The impact in this modification was $1.6 million for the three months ended March 31, 2016. We also disclose restructuring and other charges by segment, although these items are not included in the segment performance metric Adjusted EBITDA since restructuring and other charges are categorized as special items as outlined in the table reconciling Non-U.S. GAAP Total Company Adjusted EBITDA to U.S. GAAP net earnings from continuing operations set forth below. The accounting policies of the reportable segments and Other are the same as those applied to the Condensed Consolidated Financial Statements. The following tables show Net Sales and Adjusted EBITDA by our segment reporting structure:
|  | Three Months Ended |
|  | March 31, |
(In millions) |  | 2017 |  |  | 2016 |
Net Sales: |  |  |  |  |  |  |  |
Food Care |  | $ | 655.6 |  |  | $ | 638.4 |
As a % of Total Company net sales |  |  | 63.5 | % |  |  | 63.5 | %
Product Care |  |  | 376.6 |  |  |  | 367.5 |
As a % of Total Company net sales |  |  | 36.5 | % |  |  | 36.5 | %
Total Company Net Sales |  | $ | 1,032.2 |  |  | $ | 1,005.9 |
|  | Three Months Ended |
|  | March 31, |
(In millions) |  | 2017 |  |  | 2016 |
Adjusted EBITDA from continuing operations: |  |  |  |  |  |  |  |
Food Care |  |  | 141.5 |  |  | $ | 138.6 |
Adjusted EBITDA Margin |  |  | 21.6 | % |  |  | 21.7 | %
Product Care |  | 74.1 |  |  |  | 77.1 |
Adjusted EBITDA Margin |  |  | 19.7 | % |  |  | 21.0 | %
Corporate(1) |  |  | (33.7 | ) |  |  | (29.5 | )
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations |  | $ | 181.9 |  |  | $ | 186.2 |
Adjusted EBITDA Margin |  |  | 17.6 | % |  |  | 18.5 | %
(1) | Corporate includes costs previously allocated to the Diversey Care segment and food hygiene and cleaning business of our Food Care segment reported within discontinued operations of $8.0 million and $5.1 million for three months ended March 31, 2017 and 2016, respectively.
The following table shows a reconciliation of U.S. GAAP net earnings from continuing operations to Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations:
|  | Three Months Ended |
|  | March 31, |
(In millions) |  | 2017 |  |  | 2016 |
Net (loss) earnings from continuing operations |  | $ | (53.8 | ) |  | $ | 74.9 |
Interest expense |  |  | (48.8 | ) |  |  | (50.9 | )
Interest income |  |  | 2.2 |  |  |  | 1.6 |
Income tax provision |  |  | 136.4 |  |  |  | 17.6 |
Depreciation and amortization(2) |  |  | (37.2 | ) |  |  | (34.9 | )
Special items: |  |  |  |  |  |  |  |
Restructuring and other charges(3) |  |  | (1.9 | ) |  |  | 0.2 |
Other restructuring associated costs included in cost of sales and selling, general and administrative expenses |  |  | (3.9 | ) |  |  | (3.9 | )
SARs |  |  | — |  |  |  | (0.1 | )
Foreign currency exchange loss related to Venezuelan subsidiaries |  |  | — |  |  |  | (1.0 | )
Gain on sale of European food trays business |  |  | 2.3 |  |  |  | (1.6 | )
Loss related to the sale of other businesses, investments and property, plant and equipment |  |  | — |  |  |  | (1.7 | )
Charges incurred related to the sale of Diversey |  |  | (16.1 | ) |  |  | — |
Other special items(1) |  |  | 4.1 |  |  |  | (1.4 | )
Pre-tax impact of Special items |  |  | (15.5 | ) |  |  | (9.5 | )
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations |  | $ | 181.9 |  |  | $ | 186.2 |
(1) | Other Special Items for the three months ended March 31, 2017 primarily included a recovered wage tax as the result of a court ruling partially offset by legal fees associated with restructuring and acquisitions. Other Special Items for the three months ended March 31, 2016 primarily included legal fees associated with restructuring and acquisitions.
(2) | Depreciation and amortization by segment is as follows:
|  | Three Months Ended |
|  | March 31, |
(In millions) |  | 2017 |  |  | 2016 |
Food Care |  | $ | 25.1 |  |  | $ | 22.9 |
Product Care |  |  | 11.5 |  |  |  | 9.6 |
Corporate |  |  | 0.6 |  |  |  | 2.4 |
Total Company depreciation and amortization(1) |  | $ | 37.2 |  |  | $ | 34.9 |
| (1) | Includes share-based incentive compensation of $8.0 million for the three months ended March 31, 2017 and $11.5 million for the three months ended March 31, 2016.
(3) | Restructuring and other charges by segment were as follows:
|  | Three Months Ended |
|  | March 31, |
(In millions) |  |  | 2017 |  |  |  | 2016 |
Food Care |  | $ | 1.2 |  |  | $ | (0.1 | )
Product Care |  |  | 0.7 |  |  |  | (0.1 | )
Total Company restructuring and other charges |  | $ | 1.9 |  |  | $ | (0.2 | )
Assets by Reportable Segments The following table shows assets allocated by our segment reporting structure. Only assets identifiable by segment and reviewed by our chief operating decision maker by segment are allocated by the reportable segment assets, which are trade receivables, net, and finished goods inventory, net. All other assets are included in “Assets not allocated.”
|  | March 31, |  |  | December 31, |
(In millions) |  | 2017 |  |  | 2016 |
Assets: |  |  |  |  |  |  |  |
Trade receivables, net, and finished goods inventories, net |  |  |  |  |  |  |  |
Food Care |  | $ | 461.4 |  |  | $ | 459.8 |
Product Care |  |  | 279.2 |  |  |  | 261.5 |
Total segments and other |  |  | 740.6 |  |  |  | 721.3 |
Assets not allocated |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  | 258.4 |  |  |  | 333.7 |
Property and equipment, net |  |  | 910.1 |  |  |  | 889.6 |
Goodwill |  |  | 1,884.7 |  |  |  | 1,882.9 |
Intangible assets, net |  |  | 39.3 |  |  |  | 40.1 |
Assets held for sale |  |  | 2,891.8 |  |  |  | 2,851.7 |
Other |  |  | 696.3 |  |  |  | 679.9 |
Total |  | $ | 7,421.2 |  |  | $ | 7,399.2 |

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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