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Business Segments | 12 Months Ended
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Dec. 31, 2019
Segment Reporting [Abstract] |
Business Segments | BUSINESS SEGMENTS The Company's business segments are Aluminum Extrusions, PE Films and Flexible Packaging Films. Aluminum Extrusions, also known as Bonnell Aluminum, produces high-quality, soft-alloy and medium-strength aluminum extrusions primarily for the following markets: building and construction, automotive, and specialty (which consists of consumer durables, machinery and equipment, electrical and distribution end-use products). PE Films is comprised of the following operating segments: surface protection films, personal care materials, and films for other markets. Flexible Packaging Films is comprised of the Company’s polyester films business, Terphane Holdings LLC (“Terphane”). The Company’s reportable segments are based on its method of internal reporting, which is generally segregated by differences in products. Accounting standards for presentation of segments require an approach based on the way the Company organizes the segments for making operating decisions and how the chief operating decision maker (“CODM”) assesses performance. Earnings before interest, taxes, depreciation and amortization from ongoing operations (“EBITDA from ongoing operations”) is the measure of profit and loss used by the CODM (Tredegar’s President and Chief Executive Officer) for purposes of assessing financial performance. In the fourth quarter of 2019, the Company concluded that “EBITDA from ongoing operations,” instead of “operating profit from ongoing operations,” is the most relevant metric for measuring segment financial performance. EBITDA from ongoing operations is the key profitability metric used by Tredegar’s President and Chief Executive Officer, who was elected by the Tredegar Board of Directors in March 2019. This change resulted in a revision of the Company’s segment disclosures for all periods to report EBITDA from ongoing operations as the measure of segment financial performance. The Company uses sales less freight (“net sales”) as its measure of revenues from external customers at the segment level. This measure is separately included in the financial information regularly provided to the CODM. PE Films’ net sales to The Procter & Gamble Company (“P&G”) totaled $58.8 million in 2019, $106.5 million in 2018 and $122.4 million in 2017. These sales include plastic film sold to others that convert the film into materials used with products manufactured by P&G. Information by business segment and geographic area for the last three years is provided in the segment tables below. There were no accounting transactions between segments and no allocations to segments.
Net Sales
(In thousands) |  | 2019 |  | 2018 |  | 2017
Aluminum Extrusions | $ | 529,602 |  |  | $ | 573,126 |  |  | $ | 466,833 |
PE Films | 272,758 |  |  | 332,488 |  |  | 352,459 |
Flexible Packaging Films | 133,935 |  |  | 123,830 |  |  | 108,355 |
Total net sales | 936,295 |  |  | 1,029,444 |  |  | 927,647 |
Add back freight | 36,063 |  |  | 36,027 |  |  | 33,683 |
Sales as shown in consolidated statements of income | $ | 972,358 |  |  | $ | 1,065,471 |  |  | $ | 961,330 |
EBITDA from Ongoing Operations
(In thousands) |  | 2019 |  | 2018 |  | 2017
Aluminum Extrusions: |  |  |  |  |
Ongoing operations: |  |  |  |  |
EBITDA | $ | 65,683 |  |  | $ | 65,479 |  |  | $ | 58,524 |
Depreciation & amortization (c) | (16,719 | ) |  | (16,866 | ) |  | (15,070 | )
EBIT | 48,964 |  |  | 48,613 |  |  | 43,454 |
Plant shutdowns, asset impairments, restructurings and other (a) | (561 | ) |  | (505 | ) |  | 321 |
Trade name accelerated amortization | (10,040 | ) |  | — |  |  | — |
PE Films: |  |  |  |  |
Ongoing operations: |  |  |  |  |
EBITDA | 37,803 |  |  | 51,058 |  |  | 55,889 |
Depreciation & amortization (c) | (14,627 | ) |  | (14,877 | ) |  | (14,343 | )
EBIT | 23,176 |  |  | 36,181 |  |  | 41,546 |
Plant shutdowns, asset impairments, restructurings and other (a) | (475 | ) |  | (5,905 | ) |  | (4,905 | )
Goodwill impairment charge | — |  |  | (46,792 | ) |  | — |
Flexible Packaging Films: |  |  |  |  |
Ongoing operations: |  |  |  |  |
EBITDA | 14,737 |  |  | 11,154 |  |  | 7,817 |
Depreciation & amortization | (1,517 | ) |  | (1,262 | ) |  | (10,443 | )
EBIT | 13,220 |  |  | 9,892 |  |  | (2,626 | )
Plant shutdowns, asset impairments, restructurings and other (a) | — |  |  | (45 | ) |  | (89,398 | )
Total | 74,284 |  |  | 41,439 |  |  | (11,608 | )
Interest income | 296 |  |  | 369 |  |  | 209 |
Interest expense | 4,051 |  |  | 5,702 |  |  | 6,170 |
Gain on investment in kaléo accounted for under the fair value method (a) | 28,482 |  |  | 30,600 |  |  | 33,800 |
Loss on sale of investment property (a) | — |  |  | (38 | ) |  | — |
Unrealized loss on investment property (a) | — |  |  | (186 | ) |  | — |
Stock option-based compensation expense | 4,209 |  |  | 1,221 |  |  | 264 |
Corporate expenses, net (a)(d) | 36,630 |  |  | 28,893 |  |  | 30,879 |
Income (loss) before income taxes | 58,172 |  |  | 36,368 |  |  | (14,912 | )
Income tax expense (benefit) (a) | 9,913 |  |  | 11,526 |  |  | (53,163 | )
Net income (loss) | $ | 48,259 |  |  | $ | 24,842 |  |  | $ | 38,251 |
See footnotes following the tables.
Identifiable Assets
(In thousands) |  | 2019 |  | 2018
Aluminum Extrusions | $ | 265,027 |  |  | $ | 281,372 |
PE Films | 230,415 |  |  | 231,720 |
Flexible Packaging Films | 74,016 |  |  | 58,964 |
Subtotal | 569,458 |  |  | 572,056 |
General corporate | 111,788 |  |  | 100,920 |
Cash and cash equivalents (b) | 31,422 |  |  | 34,397 |
Total | $ | 712,668 |  |  | $ | 707,373 |
|  | Depreciation and Amortization |  | Capital Expenditures
(In thousands) |  | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017
Aluminum Extrusions | $ | 26,759 |  |  | $ | 16,866 |  |  | $ | 15,070 |  |  | $ | 17,855 |  |  | $ | 12,966 |  |  | $ | 25,653 |
PE Films | 15,822 |  |  | 15,513 |  |  | 14,609 |  |  | 23,920 |  |  | 21,998 |  |  | 15,029 |
Flexible Packaging Films | 1,517 |  |  | 1,262 |  |  | 10,443 |  |  | 8,866 |  |  | 5,423 |  |  | 3,619 |
Subtotal | 44,098 |  |  | 33,641 |  |  | 40,122 |  |  | 50,641 |  |  | 40,387 |  |  | 44,301 |
General corporate (d) | 186 |  |  | 163 |  |  | 155 |  |  | 223 |  |  | 427 |  |  | 61 |
Total | $ | 44,284 |  |  | $ | 33,804 |  |  | $ | 40,277 |  |  | $ | 50,864 |  |  | $ | 40,814 |  |  | $ | 44,362 |
Net Sales by Geographic Area (b)
(In thousands) |  | 2019 |  | 2018 |  | 2017
United States | $ | 638,815 |  |  | $ | 691,232 |  |  | $ | 584,066 |
Exports from the United States to: |  |  |  |  |
Asia | 82,829 |  |  | 75,904 |  |  | 84,846 |
Canada | 16,846 |  |  | 51,984 |  |  | 46,505 |
Europe | 6,091 |  |  | 6,203 |  |  | 8,505 |
Latin America | 13,735 |  |  | 12,106 |  |  | 15,199 |
Operations outside the United States: |  |  |  |  |
Brazil | 111,246 |  |  | 101,217 |  |  | 87,155 |
The Netherlands | 35,871 |  |  | 45,667 |  |  | 54,380 |
Hungary | 25,530 |  |  | 33,512 |  |  | 24,727 |
China | 225 |  |  | 7,814 |  |  | 12,199 |
India | 5,107 |  |  | 3,805 |  |  | 10,065 |
Total | $ | 936,295 |  |  | $ | 1,029,444 |  |  | $ | 927,647 |
|  | Identifiable Assets by Geographic Area (b) |  | Property, Plant & Equipment, Net by Geographic Area (b)
(In thousands) |  | 2019 |  | 2018 |  | 2019 |  | 2018
United States | $ | 458,066 |  |  | $ | 454,178 |  |  | $ | 181,989 |  |  | $ | 166,550 |
Operations outside the United States: |  |  |  |  |  |  |
Brazil | 54,698 |  |  | 52,796 |  |  | 20,542 |  |  | 16,072 |
The Netherlands | 12,579 |  |  | 15,020 |  |  | 5,729 |  |  | 6,005 |
Hungary | 20,179 |  |  | 23,615 |  |  | 13,715 |  |  | 15,436 |
China | 18,056 |  |  | 21,610 |  |  | 16,210 |  |  | 19,213 |
India | 5,880 |  |  | 4,837 |  |  | 3,316 |  |  | 3,692 |
General corporate | 111,788 |  |  | 100,920 |  |  | 1,389 |  |  | 1,401 |
Cash and cash equivalents (b) | 31,422 |  |  | 34,397 |  |  | n/a |  |  | n/a |
Total | $ | 712,668 |  |  | $ | 707,373 |  |  | $ | 242,890 |  |  | $ | 228,369 |
See footnotes following the tables and a reconciliation of net sales to sales as shown in the Consolidated Statements of Income in the first table of this Note 5.
Net Sales by Product Group
(In thousands) |  | 2019 |  | 2018 |  | 2017
Aluminum Extrusions: |  |  |  |  |
Nonresidential building & construction | $ | 272,729 |  |  | $ | 289,572 |  |  | $ | 239,713 |
Consumer durables | 57,607 |  |  | 66,416 |  |  | 54,126 |
Automotive | 46,461 |  |  | 48,037 |  |  | 38,261 |
Machinery & equipment | 38,657 |  |  | 41,899 |  |  | 33,450 |
Distribution | 34,753 |  |  | 40,924 |  |  | 30,202 |
Residential building & construction | 43,554 |  |  | 43,943 |  |  | 40,354 |
Electrical | 35,841 |  |  | 42,335 |  |  | 30,727 |
Subtotal | 529,602 |  |  | 573,126 |  |  | 466,833 |
PE Films: |  |  |  |  |
Personal care materials | 161,493 |  |  | 227,090 |  |  | 246,416 |
Surface protection films | 103,893 |  |  | 98,126 |  |  | 99,079 |
LED-based products | 7,372 |  |  | 7,272 |  |  | 6,964 |
Subtotal | 272,758 |  |  | 332,488 |  |  | 352,459 |
Flexible Packaging Films | 133,935 |  |  | 123,830 |  |  | 108,355 |
Total | $ | 936,295 |  |  | $ | 1,029,444 |  |  | $ | 927,647 |
(a) | See Notes 1, 3, 4 and 17 for more information on losses associated with plant shutdowns, asset impairments and restructurings, unusual items, gains or losses from sale of assets, gains or losses on an investment accounted for under the fair value method and other items.
(b) | Information on exports and foreign operations are provided on the previous page. Cash and cash equivalents includes funds held in locations outside the U.S. of $23.0 million and $31.1 million at December 31, 2019 and 2018, respectively. Export sales relate almost entirely to PE Films. Operations outside the U.S. in The Netherlands, Hungary, China and India also relate to PE Films. Operations in Brazil are primarily related to Flexible Packaging Films, but also include PE Films operations. Sales from locations in The Netherlands and Hungary are primarily to customers located in Europe. Sales from locations in China (Guangzhou and Shanghai) are primarily to customers located in China, but also include other customers in Asia. The facility in Shanghai was shut down in the fourth quarter of 2018.
(c) | Depreciation and amortization for Aluminum Extrusions in 2019 excludes $10.0 million for accelerated amortization of trade names as a result of a rebranding initiative (see Note 8 for more information) and for PE Films in 2019, 2018 and 2017 excludes $1.2 million, $0.6 million and $0.3 million, respectively, for accelerated depreciation associated with restructurings and plant closures.
(d) | Corporate depreciation and amortization is included in Corporate expenses, net, on the EBITDA from ongoing operations table above.

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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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