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Segments | 9 Months Ended
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Sep. 30, 2018
Segment Reporting [Abstract] |
Segments | Segments To accelerate productivity improvements and elimination of operational redundancies, the Company implemented a change in allocation of Corporate expenses. These expenses are now allocated to Food Care and Product Care segments. For comparison purposes, the Company presented 2017 results to reflect the revised allocation of these costs. This segment reporting change has no impact on total Company operating results. The Company’s segment reporting structure consists of two reportable segments and a Corporate category as follows:
• | Food Care; and
• | Product Care.
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 and management team. Corporate includes certain costs that are not allocated to or monitored by the reportable segments' management. We allocate and disclose depreciation and amortization expense to our segments, although depreciation and amortization are not included in the segment performance metric Adjusted EBITDA. We also allocate and disclose restructuring and other charges and impairment of goodwill and other intangible assets by segment, although they are not included in the segment performance metric Adjusted EBITDA since restructuring and other charges and impairment of goodwill and other intangible assets are categorized as Special Items. The accounting policies of the reportable segments and Corporate are the same as those applied to the Condensed Consolidated Financial Statements. Refer to "Non-U.S. GAAP Information" for additional details on the use and calculation of our non-U.S. GAAP measures presented below. The following tables show Net Sales and Adjusted EBITDA by reportable segment:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) |  | 2018 |  | 2017 |  | 2018 |  | 2017
Net Sales: |  |  |  |  |  |  |  |  |  |  |  |
Food Care |  | $ | 727.2 |  |  | $ | 716.0 |  |  | $ | 2,136.5 |  |  | $ | 2,051.1 |
As a % of Total Company net sales |  | 61.3 | % |  | 63.3 | % |  | 61.5 | % |  | 63.4 | %
Product Care |  | 459.0 |  |  | 415.3 |  |  | 1,335.9 |  |  | 1,182.7 |
As a % of Total Company net sales |  | 38.7 | % |  | 36.7 | % |  | 38.5 | % |  | 36.6 | %
Total Company Net Sales |  | $ | 1,186.2 |  |  | $ | 1,131.3 |  |  | $ | 3,472.4 |  |  | $ | 3,233.8 |
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) |  | 2018 |  | 2017 |  | 2018 |  | 2017
Non-U.S. GAAP Adjusted EBITDA from continuing operations |  |  |  |  |  |  |  |  |  |  |  |
Food Care |  | $ | 145.4 |  |  | $ | 139.6 |  |  | $ | 415.5 |  |  | $ | 393.4 |
Adjusted EBITDA Margin |  | 20.0 | % |  | 19.5 | % |  | 19.4 | % |  | 19.2 | %
Product Care |  | 76.4 |  |  | 77.9 |  |  | 233.3 |  |  | 210.6 |
Adjusted EBITDA Margin |  | 16.6 | % |  | 18.8 | % |  | 17.5 | % |  | 17.8 | %
Corporate |  | (2.9 | ) |  | (0.7 | ) |  | (7.6 | ) |  | (9.0 | )
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations |  | $ | 218.9 |  |  | $ | 216.8 |  |  | $ | 641.2 |  |  | $ | 595.0 |
Adjusted EBITDA Margin |  | 18.5 | % |  | 19.2 | % |  | 18.5 | % |  | 18.4 | %
The following table shows a reconciliation of net earnings (loss) from continuing operations to non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) |  | 2018 |  | 2017 |  | 2018 |  | 2017
Net earnings (loss) from continuing operations |  | $ | 75.6 |  |  | $ | 62.5 |  |  | $ | (49.1 | ) |  | $ | 37.8 |
Interest expense, net |  | (44.8 | ) |  | (49.1 | ) |  | (131.3 | ) |  | (143.4 | )
Income tax provision |  | 33.4 |  |  | 43.7 |  |  | 388.4 |  |  | 236.5 |
Depreciation and amortization(1) |  | (41.1 | ) |  | (42.7 | ) |  | (122.3 | ) |  | (116.3 | )
Depreciation and amortization adjustments |  | 0.1 |  |  | — |  |  | 0.4 |  |  | — |
Special Items: |  |  |  |  |  |  |  |
Restructuring and other charges(2) |  | (6.6 | ) |  | (6.2 | ) |  | (22.3 | ) |  | (9.2 | )
Other restructuring associated costs |  | (0.7 | ) |  | (2.9 | ) |  | (2.5 | ) |  | (12.7 | )
Debt modification/extinguishment costs |  | (1.5 | ) |  | — |  |  | (1.9 | ) |  | — |
Charges related to acquisition and divestiture activity |  | (4.8 | ) |  | (6.7 | ) |  | (10.0 | ) |  | (4.8 | )
Charges incurred due to the sale of Diversey |  | (8.7 | ) |  | (13.7 | ) |  | (21.3 | ) |  | (47.6 | )
Gain from class-action litigation settlement |  | — |  |  | — |  |  | 12.6 |  |  | — |
Settlement/curtailment benefits related to retained Diversey retirement plans |  | — |  |  | 13.5 |  |  | — |  |  | 13.5 |
Other Special Items(3) |  | (1.8 | ) |  | (2.8 | ) |  | (3.3 | ) |  | (0.2 | )
Pre-tax impact of Special Items |  | (24.1 | ) |  | (18.8 | ) |  | (48.7 | ) |  | (61.0 | )
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations |  | $ | 218.9 |  |  | $ | 216.8 |  |  | $ | 641.2 |  |  | $ | 595.0 |
(1) | Depreciation and amortization by segment is as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) |  | 2018 |  | 2017 |  | 2018 |  | 2017
Food Care |  | $ | 25.6 |  |  | $ | 29.8 |  |  | $ | 79.8 |  |  | $ | 80.3 |
Product Care |  | 15.5 |  |  | 12.9 |  |  | 42.5 |  |  | 36.0 |
Total Company depreciation and amortization(i) |  | $ | 41.1 |  |  | $ | 42.7 |  |  | $ | 122.3 |  |  | $ | 116.3 |
(i) | Includes share-based incentive compensation of $8.3 million and $23.6 million for the three and nine months ended September 30, 2018, respectively, and $12.3 million and $31.2 million for the three and nine months ended September 30, 2017, respectively.
(2) | Restructuring and other charges by segment were as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) |  | 2018 |  | 2017 |  | 2018 |  | 2017
Food Care |  | $ | 2.3 |  |  | $ | 3.9 |  |  | $ | 8.4 |  |  | $ | 5.8 |
Product Care |  | 4.3 |  |  | 2.3 |  |  | 13.9 |  |  | 3.4 |
Total Company restructuring and other charges |  | $ | 6.6 |  |  | $ | 6.2 |  |  | $ | 22.3 |  |  | $ | 9.2 |
(3) | Other Special Items for the three and nine months ended September 30, 2018, primarily included fees related to professional services. Other Special Items for the three and nine months ended September 30, 2017, primarily included transaction fees related to various divestitures and acquisitions.
Assets by Reportable Segments The following table shows assets allocated by reportable segment. Assets allocated by reportable segment include: trade receivables, net, inventory, net, property and equipment, net, goodwill, net, intangible assets, net and leased systems, net.
(In millions) |  | September 30, 2018 |  | December 31, 2017
Assets allocated to segments: |  |  |  |  |  |
Food Care |  | $ | 1,680.9 |  |  | $ | 1,545.5 |
Product Care |  | 2,589.0 |  |  | 2,620.2 |
Total segments |  | 4,269.9 |  |  | 4,165.7 |
Assets not allocated: |  |  |  |
Cash and cash equivalents |  | $ | 191.3 |  |  | $ | 594.0 |
Assets held for sale |  | 0.6 |  |  | 4.0 |
Income tax receivables |  | 32.7 |  |  | 85.1 |
Other receivables |  | 88.7 |  |  | 90.2 |
Deferred taxes |  | 113.6 |  |  | 176.2 |
Other |  | 300.2 |  |  | 165.1 |
Total |  | $ | 4,997.0 |  |  | $ | 5,280.3 |

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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