Segment Information

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment Information

Note 19. Segment Information

ASC 280 Segment Reporting establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280, we have three reportable segments: Foodservice, Food Merchandising and Beverage Merchandising. These reportable segments reflect our operating structure and the manner in which our Chief Operating Decision Maker (“CODM”) assesses information for decision-making purposes.

The key factors used to identify these reportable segments are the organization and alignment of our internal operations and the nature of our products. This reflects how our CODM monitors performance, allocates capital and makes strategic and operational decisions. Our reportable segments are described as follows:

Foodservice - Manufactures a broad range of products that enable consumers to eat and drink where they want and when they want with convenience. Foodservice manufactures food containers, drinkware (hot and cold cups and lids), dinnerware, serviceware and other products which make eating on-the-go more enjoyable and easy to do.

Food Merchandising - Manufactures products that protect and attractively display food while preserving freshness. Food Merchandising products include clear rigid-display containers, containers for prepared and ready-to-eat food, trays for meat and poultry and molded fiber cartons.

Beverage Merchandising - Manufactures cartons for fresh refrigerated beverage products, primarily serving dairy (including plant-based, organic and specialties), juice and other specialty beverage end-markets. Beverage Merchandising manufactures and supplies integrated fresh carton systems, which include printed cartons, spouts and filling machinery. It also produces fiber-based liquid packaging board for its internal requirements and to sell to other fresh beverage carton manufacturers as well as a range of paper-based products which it sells to paper and packaging converters.

Other/Unallocated - In addition to our reportable segments, we have other operating segments that do not meet the threshold for presentation as a reportable segment. These operating segments include the remaining components of our former closures business, which generate revenue from the sale of caps and closures, and are presented as “Other” in the reconciliation between total reportable segment amounts and the equivalent consolidated measure. Unallocated includes corporate costs, primarily relating to companywide functions such as finance, tax and legal and the effects of the PEPP and equity based compensation.

Information by Segment

We present reportable segment adjusted EBITDA ("Adjusted EBITDA") as this is the financial measure by which management and our CODM allocate resources and analyze the performance of our reportable segments.

Adjusted EBITDA represents each segment's earnings before interest, tax, depreciation and amortization and is further adjusted to exclude certain items of a significant or unusual nature, including but not limited to, foreign exchange gains or losses on cash, related party management fees, unrealized gains or losses on derivatives, gains or losses on the sale of businesses and noncurrent assets, impairment charges, restructuring, asset impairment and other related charges, operational process engineering-related consultancy costs, non-cash pension income or expense, strategic review and transaction-related costs, and executive transition charges.

Reportable segment assets represent trade receivables, inventory and property, plant and equipment:

	Foodservice		Food Merchandising		Beverage Merchandising			Reportable Segment Total
For the Three Months Ended March 31, 2021
Net revenues	$	454	$	342	$	339		$	1,135
Intersegment revenues		—		—		18			18
Total reportable segment net revenues	$	454	$	342	$	357		$	1,153
Adjusted EBITDA	$	61	$	55	$	(32	)	$	84
For the Three Months Ended March 31, 2020
Net revenues	$	473	$	344	$	363		$	1,180
Intersegment revenues		—		—		34			34
Total reportable segment net revenues	$	473	$	344	$	397		$	1,214
Adjusted EBITDA	$	56	$	53	$	49		$	158

Reportable segment assets consisted of the following:

	Foodservice		Food Merchandising		Beverage Merchandising		Reportable Segment Total
As of March 31, 2021	$	1,099	$	722	$	1,065	$	2,886
As of December 31, 2020		1,064		703		1,039		2,806

The following table presents a reconciliation of reportable segment Adjusted EBITDA to consolidated U.S. GAAP (loss) income from continuing operations before income taxes:

	For the Three Months Ended March 31,
	2021			2020
Reportable segment Adjusted EBITDA	$	84		$	158
Other		1			2
Unallocated		(8	)		(15	)
		77			145
Adjustments to reconcile to U.S. GAAP (loss) income    from continuing operations before income taxes
Interest expense, net		(42	)		(102	)
Depreciation and amortization		(73	)		(68	)
Restructuring, asset impairment and other related charges		2			(3	)
Non-cash pension income		23			18
Operational process engineering related consultancy costs		(3	)		(8	)
Related party management fee		—			(5	)
Strategic review and transaction-related costs		—			(6	)
Foreign exchange gains on cash		—			84
Unrealized losses on derivatives		(1	)		(17	)
Executive transition charges		(10	)		—
Other		(2	)		1
(Loss) income from continuing operations before tax	$	(29	)	$	39

The following table presents a reconciliation of reportable segment assets to consolidated assets:

	As of March 31, 2021		As of December 31, 2020
Reportable segment assets	$	2,886	$	2,806
Other		40		34
Unallocated(1)		3,825		4,003
Total assets	$	6,751	$	6,843

⁽¹⁾ Unallocated includes unallocated assets, which are comprised of cash and cash equivalents, other current assets, assets held for sale or distribution, entity-wide property, plant and equipment, operating lease right-of-use assets, goodwill, intangible assets, deferred income taxes, related party receivables and other noncurrent assets.

Information in Relation to Products

Net revenues by product line are as follows:

	For the Three Months Ended March 31,
	2021			2020
Foodservice
Drinkware(1)	$	165		$	182
Containers(1)		209			179
Tableware(1)		38			64
Serviceware and other(1)		42			48
Food Merchandising
Meat trays		87			95
Bakery/snack/produce/fruit containers		69			64
Prepared food trays		34			34
Egg cartons		26			26
Tableware(2)		82			87
Other		44			38
Beverage Merchandising
Cartons for fresh beverage products		192			200
Liquid packaging board		91			115
Paper products		74			82
Reportable segment net revenues		1,153			1,214
Other / Unallocated
Other		29			32
Inter-segment eliminations		(18	)		(34	)
Net revenues	$	1,164		$	1,212

⁽¹⁾ Certain product sales in the prior year have been re-categorized to conform with the current year presentation as the segment realigned its go-to-market product strategy.

⁽²⁾ During the current year, Food Merchandising changed the name of its historical Dinnerware product line to Tableware.

For all product lines, there is a relatively short time period between the receipt of the order and the transfer of control over the goods to the customer.