Segment Information

3 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment Information

Note 7. Segment Information

We report our financial results of operations in the following four reportable segments:

•Corrugated Packaging, which substantially consists of our integrated corrugated converting operations and generates its revenues primarily from the sale of corrugated containers and other corrugated products, including the operations acquired in the Mexico Acquisition;

•Consumer Packaging, which consists of our integrated consumer converting operations and generates its revenues primarily from the sale of consumer packaging products such as folding cartons, interior partitions (before divestiture in September 2023) and other consumer products;

•Global Paper, which consists of our commercial paper operations and generates its revenues primarily from the sale of containerboard and paperboard to external customers; and

•Distribution, which consists of our distribution and display assembly operations and generates its revenues primarily from the distribution of packaging products and assembly of display products.

We determined our operating segments based on the products and services we offer. Our operating segments are consistent with our internal management structure, and we do not aggregate operating segments. We report the benefit of vertical integration with our mills in each reportable segment that ultimately sells the associated paper and packaging products to our external customers. We account for intersegment sales at prices that approximate market prices.

Adjusted EBITDA is our measure of segment profitability in accordance with ASC 280, “Segment Reporting” (“ASC 280”) because it is used by our chief operating decision maker ("CODM") to make decisions regarding allocation of resources and to assess segment performance. Certain items are not allocated to our operating

segments and, thus, the information that our CODM uses to make operating decisions and assess performance does not reflect such amounts. Adjusted EBITDA is defined as pre-tax earnings of a reportable segment before depreciation, depletion and amortization, and excludes the following items our CODM does not consider part of our segment performance: restructuring and other costs, net, non-allocated expenses, interest expense, net, other (expense) income, net, gain on sale of RTS and Chattanooga, and other adjustments - each as outlined in the table below ("Adjusted EBITDA"). Management believes excluding these items is useful in the evaluation of operating performance from period to period because these items are not representative of our ongoing operations or are items our CODM does not consider part of our reportable segments.

The tables in this Note 7 show selected financial data for our reportable segments (in millions):

	Three Months Ended
	December 31,
	2023			2022
Net sales (aggregate):
Corrugated Packaging	$	2,419.9		$	2,337.4
Consumer Packaging		1,059.3			1,215.0
Global Paper		918.3			1,123.6
Distribution		289.7			321.5
Total	$	4,687.2		$	4,997.5
Less net sales (intersegment):
Corrugated Packaging	$	59.2		$	68.4
Consumer Packaging		5.3			4.7
Distribution		2.7			1.3
Total	$	67.2		$	74.4
Net sales (unaffiliated customers):
Corrugated Packaging	$	2,360.7		$	2,269.0
Consumer Packaging		1,054.0			1,210.3
Global Paper		918.3			1,123.6
Distribution		287.0			320.2
Total	$	4,620.0		$	4,923.1
Adjusted EBITDA:
Corrugated Packaging	$	327.8		$	329.4
Consumer Packaging		166.2			183.3
Global Paper		118.4			157.3
Distribution		9.0			10.8
Total		621.4			680.8
Depreciation, depletion and amortization		(381.8	)		(373.2	)
Restructuring and other costs, net		(65.5	)		(32.1	)
Non-allocated expenses		(50.7	)		(28.7	)
Interest expense, net		(101.4	)		(97.3	)
Other (expense) income, net		(4.7	)		25.2
Gain on sale of RTS and Chattanooga		0.5			—
Other adjustments		(34.8	)		(119.6	)
Income (loss) before income taxes	$	(17.0	)	$	55.1

See “Note 4. Restructuring and Other Costs, Net” for additional information on how the Restructuring and other costs, net relate to our reportable segments.

Additional selected financial data (in millions):

	Three Months Ended
	December 31,
	2023			2022
Depreciation, depletion and amortization:
Corrugated Packaging	$	205.3		$	192.2
Consumer Packaging		86.5			84.1
Global Paper		81.1			89.1
Distribution		7.3			6.9
Corporate		1.6			0.9
Total	$	381.8		$	373.2
Other adjustments:
Corrugated Packaging	$	5.1		$	49.8
Consumer Packaging		3.6			31.6
Global Paper		1.5			17.5
Distribution		(0.3	)		—
Corporate		24.9			20.7
Total	$	34.8		$	119.6
Equity in income (loss) of unconsolidated entities:
Corrugated Packaging	$	3.2		$	(35.8	)
Consumer Packaging		—			—
Global Paper		1.0			(0.2	)
Total	$	4.2		$	(36.0	)

Other adjustments in the table above for the three months ended December 31, 2023 consist primarily of:

•business systems transformation costs in Corporate of $24.9 million, and

•losses at facilities in the process of being closed of $9.1 million (excluding depreciation and amortization), split across our segments.

Other adjustments in the table above for the three months ended December 31, 2022 consist primarily of:

•a $46.8 million non-cash, pre-tax loss in the Corrugated Packaging segment related to the Mexico Acquisition as discussed in “Note 3. Acquisitions”,

•incremental work stoppage costs at our Mahrt mill of $31.3 million pre-tax in our Consumer Packaging segment and $10.3 million pre-tax in our Global Paper segment,

•business systems transformation costs in Corporate of $20.2 million, and

•acquisition accounting inventory-related adjustments of $5.5 million and $3.0 million in the Global Paper and Corrugated Packaging segments, respectively.