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Segment Data
 6 Months Ended
Jun. 30, 2022
Segment Reporting [Abstract]  
Segment Data
2. SEGMENT DATA

We are organized based upon geographic region and focus on delivering our platform of products and services to our customers on a geographical basis which reflect how the CODM reviews financial information and makes operating decisions. Our three reportable segments are (i) North America, (ii) Europe, and (iii) APAC & Emerging Markets. Our major product groups that we disaggregate within our reportable segments are (i) supply chain services, (ii) prescription management, and (iii) software services. See Note 3 - Revenue from Contracts with Customers for our third-party, net revenue disaggregated by major product category and reportable segment. We do not allocate expenses managed at the corporate level to our segments, such as corporate wages and related benefits, corporate occupancy costs, professional services utilized at the corporate level, and non-recurring expenses. All intersegment balances and transactions have been eliminated in consolidation.

The following table reflects net sales based on geographic location:
(In millions)Three Months Ended June 30,Six Months Ended June 30,
Net Sales2022202120222021
North America$783 $713 $1,479 $1,348 
Europe327 366 671 727 
APAC & Emerging Markets109 114 221 226 
Eliminations(2)(4)(6)(10)
Total net sales$1,217 $1,189 $2,365 $2,291 

The following tables reflect adjusted EBITDA by geographic location and a reconciliation of Net Income (Loss) Attributable to Covetrus to Non-GAAP Adjusted EBITDA:
(In millions)Three Months Ended June 30,Six Months Ended June 30,
Adjusted EBITDA2022202120222021
North America$63 $59 $120 $111 
Europe17 20 35 41 
APAC & Emerging Markets8 9 18 19 
Corporate(22)(22)(44)(48)
Total Adjusted EBITDA$66 $66 $129 $123 
Three Months Ended June 30,Six Months Ended June 30,
(In millions)2022202120222021
Reconciliation of Net Income (Loss) Attributable to Covetrus to Non-GAAP Adjusted EBITDA
Net income (loss) attributable to Covetrus$(4)$(31)$(6)$(47)
Plus: Depreciation and amortization41438186
Plus: Interest expense, net791418
Plus: Income tax (benefit) expense113417
Earnings (loss) before interest, taxes, depreciation, and amortization45349374
Plus: Share-based compensation10142325
Plus: Strategic consulting—12—14
Plus: Transaction costs7182
Plus: Formation of Covetrus———2
Plus: Separation programs and executive severance2222
Plus: Equity method investments and non-consolidated affiliates1—21
Plus: Other impairments———1
Plus: Other items, net1312
Non-GAAP Adjusted EBITDA$66$66$129$123

Below is a listing of adjustments to EBITDA included in the reconciliation above:

Share-based compensation - Share-based compensation is a non-cash expense.

Strategic consulting - Related to third-party consulting services. Included within this line item are variable performance fees earned for services rendered under a third-party consulting agreement.

Transaction costs - Includes legal, accounting, tax, and other professional fees incurred in connection with contemplated and completed acquisitions and divestitures. The completion of acquisitions and divestitures is often dependent on factors that may be outside of our control and unrelated to us or to the continuing operations of the acquired or divested business. In addition, the amount of acquisition-related costs is generally driven by the complexity inherent in the transaction and may not necessarily indicate the future costs of the acquired business. Excluding transaction costs allows for a better comparison of our historical performance. During the three and six months ended June 30, 2022, we incurred $6 million, and $7 million, respectively, related to the Merger.

Formation of Covetrus - Includes professional and consulting fees, duplicative costs associated with TSAs, and other costs incurred in connection with the separation from Former Parent and establishing Covetrus as an independent public company.

Equity method investment and non-consolidated affiliates - Includes the proportionate share of the adjustments to EBITDA of consolidated and non-consolidated affiliates where Covetrus ownership is less than 100%.

Other impairments - Includes customer relationships intangible impairments as the asset groups were not recoverable due to a significant reduction in cash flows.