Segments

As a result of the sale of Diversey, 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 (including Medical Applications and New Ventures businesses); 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 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 $7.5 million and $6.8 million for years ended December 31, 2016 and 2015, respectively. 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 U.S. GAAP net earnings from continuing operations to Non-U.S. GAAP Total Company Adjusted EBITDA set forth below. The accounting policies of the reportable segments and Corporate are the same as those applied to the Consolidated Financial Statements.

The following tables show net sales and Adjusted EBITDA by our segment reporting structure:



	Year Ended December 31,
(In millions)	2017			2016			2015
Net Sales
Food Care	$	2,815.2		$	2,686.8		$	2,856.1
As a % of Total Company net sales	63.1		%	63.8		%	64.8		%
Product Care	1,646.4			1,524.5			1,554.2
As a % of Total Company net sales	36.9		%	36.2		%	35.2		%
Total Company Net Sales	$	4,461.6		$	4,211.3		$	4,410.3


	Year Ended December 31,
(In millions)	2017			2016			2015
Adjusted EBITDA from continuing operations
Food Care	$	608.3		$	605.4		$	643.7
Adjusted EBITDA Margin	21.6		%	22.5		%	22.5		%
Product Care	332.3			331.1			322.1
Adjusted EBITDA Margin	20.2		%	21.7		%	20.7		%
Corporate⁽¹⁾	(107.3		)	(127.3		)	(115.7		)
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations	$	833.3		$	809.2		$	850.1
Adjusted EBITDA Margin	18.7		%	19.2		%	19.3		%


⁽¹⁾	Corporate includes costs previously allocated to the Diversey Care segment and Food Hygiene and Cleaning business of our Food Care segment which are included as part of continuing operations of $13.7 million, $15.0 million and $16.3 million for December 31, 2017, 2016 and 2015 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:



	Year Ended December 31,
(In millions)	2017			2016			2015
Net earnings from continuing operations	$	62.8		$	292.3		$	158.8
Interest expense	(201.8		)	(199.4		)	(211.0		)
Interest income	17.6			7.5			6.8
Income tax provision⁽¹⁾	330.5			95.6			132.6
Depreciation and amortization⁽⁴⁾	(158.3		)	(154.0		)	(151.3		)
Depreciation and amortization adjustments⁽²⁾	—			1.7			0.1
Special Items:
Restructuring and other charges⁽¹⁾⁽⁵⁾	(12.1		)	(2.5		)	(48.7		)
Other restructuring associated costs included in cost of sales and selling, general and administrative expenses	(14.3		)	(19.8		)	(25.7		)
SARs	2.6			(0.7		)	(3.9		)
Foreign currency exchange loss related to Venezuelan subsidiaries	—			(1.7		)	(27.2		)
Charges related to ceasing operations in Venezuela⁽¹⁾	—			(48.5		)	—
Loss on debt redemption and refinancing activities	—			(0.1		)	(110.0		)
(Loss) gain on sale of North American foam trays and absorbent pads business and European food trays business	—			(1.8		)	13.4
Charges related to acquisitions and divestitures and the sale of property, plant and equipment	(15.5		)	—			—
Charges incurred related to the sale of Diversey	(68.6		)	(1.4		)	—
Settlement/curtailment benefits related to the sale of Diversey pension plans	13.5			—			—
Other Special Items⁽³⁾	(3.1		)	(0.6		)	(1.2		)
Pre-tax impact of Special Items	(97.5		)	(77.1		)	(203.3		)
Non-U.S. GAAP Total Company Adjusted EBITDA from continuing operations	$	833.3		$	809.2		$	850.1


⁽¹⁾	Due to the ongoing challenging economic situation in Venezuela, the Company approved a program in the second quarter of 2016 to cease operations in the country. Refer to Note 2 “Summary of Significant Accounting Policies and Recently Issued Accounting Standards," of the Notes to Consolidated Financial Statements for further details.


⁽²⁾	This includes accelerated depreciation of non-strategic assets related to restructuring programs which were $1.1 million and $0.1 million for the years ended December 31, 2016 and 2015, respectively.

⁽³⁾

Other Special Items for the year ended December 31, 2017 primarily included transaction costs related to reorganizations. Other Special Items for the year ended December 31, 2016 primarily included legal fees associated with restructuring and immaterial divestitures and acquisitions partially offset by a reduction in a non-income tax reserve following the completion of a governmental audit. Other Special Items for the year ended December 31, 2015 primarily included legal fees associated with restructuring and acquisitions.


⁽⁴⁾	Depreciation and amortization by segment is as follows:



	Year Ended December 31,
(In millions)	2017		2016		2015
Food Care	$	103.8	$	92.2	$	97.1
Product Care	47.3		40.1		37.6
Corporate	7.2		21.7		16.6
Total Company depreciation and amortization⁽ⁱ⁾	$	158.3	$	154.0	$	151.3


⁽ⁱ⁾	Includes share-based incentive compensation of $38.2 million in 2017, $50.9 million in 2016 and $51.0 million in 2015.


⁽⁵⁾	Restructuring and other charges by segment were as follows:



	Year Ended December 31,
(In millions)	2017		2016		2015
Food Care	$	7.6	$	1.6	$	31.5
Product Care	4.5		0.9		17.2
Total Company restructuring and other charges⁽ⁱ⁾	$	12.1	$	2.5	$	48.7


⁽ⁱ⁾	For the year ended December 31, 2016 restructuring and other charges excludes $0.3 million related to severance and termination benefits for employees in our Venezuelan subsidiaries.

Assets by Reportable Segments

The following table shows assets allocated by our segment reporting structure. Only assets which are identifiable by segment and reviewed by our chief operating decision maker by segment are allocated to the reportable segment assets, which are trade receivables, net, and finished goods inventories, net. All other assets are included in “Assets not allocated.”



	December 31,
(In millions)	2017		2016
Assets:
Trade receivables, net, and finished goods inventories, net
Food Care	$	511.5	$	459.9
Product Care	339.1		261.5
Total segments and other	$	850.6	$	721.4
Assets not allocated
Cash and cash equivalents	594.0		333.7
Property and equipment, net	998.4		889.6
Goodwill	1,939.8		1,882.9
Intangible assets, net	83.6		40.1
Assets held for sale	4.0		2,840.8
Other	809.9		707.0
Total	$	5,280.3	$	7,415.5

Allocation of Goodwill and Identifiable Intangible Assets to Reportable Segments

Our management views goodwill and identifiable intangible assets as corporate assets, so we do not allocate their balances to the reportable segments. However, we are required to allocate their balances to each reporting unit to perform our annual impairment review, which we do during the fourth quarter of the year using a measurement date of October 1st. See Note 7, “Goodwill and Identifiable Intangible Assets, Net,” of the Notes to Consolidated Financial Statements for the allocation of goodwill and identifiable intangible assets and the changes in their balances in the year ended December 31, 2017 by our segment reporting structure, and the details of our impairment review.

Geographic Information



	Year Ended December 31,
(In millions)	2017		2016		2015
Net sales⁽¹⁾:
North America⁽³⁾	$	2,415.0	$	2,237.8	$	2,315.2
EMEA	984.7		962.7		1,033.1
Latin America	409.3		396.8		423.3
APAC	652.6		614.0		638.7
Total	$	4,461.6	$	4,211.3	$	4,410.3
Total long-lived assets⁽¹⁾⁽²⁾:
North America	$	639.6	$	633.5
EMEA	274.1		213.3
Latin America	74.6		68.7
APAC	226.0		149.5
Total	$	1,214.3	$	1,065.0


⁽¹⁾	Net sales to external customers attributed to geographic areas represent net sales to external customers based on destination. No non-U.S. country accounted for net sales in excess of 10% of consolidated net sales for the years ended December 31, 2017, 2016 or 2015 or long-lived assets in excess of 10% of consolidated long-lived assets at December 31, 2017 and 2016.


⁽²⁾	Total long-lived assets represent total assets excluding total current assets, deferred tax assets, goodwill, intangible assets and non-current assets held for sale.


⁽³⁾	Net sales to external customers within the U.S. were $2,278.6 million for the year ended December 31, 2017, $2,112.1 million for the year ended December 31, 2016 and $2,188.8 million for the year ended December 31, 2015.