Segments

Our reporting segments align with our regionally focused organizational structure, which we believe enables us to better serve customers across the globe. Under this structure, we report financial results for U.S. and Canada; Latin America; Europe, the Middle East and Africa (EMEA); and Other. Segment results are based primarily on the geographical destination of the sale. In the first quarter of 2017, net sales and related costs for certain countries were reclassified between segments to align with changes in business unit responsibilities. Accordingly, 2016 segment results have been reclassified to conform with the revised structure. The revised 2016 segment results do not affect any previously reported consolidated financial results. Our three reportable segments are defined below. Our operating segment that does not meet the criteria to be a reportable segment is disclosed as Other.

U.S. & Canada—includes sales of manufactured and sourced tableware having an end-market destination in the U.S and Canada, excluding glass products for Original Equipment Manufacturers (OEM), which remain in the Latin America segment.

Latin America—includes primarily sales of manufactured and sourced glass tableware having an end-market destination in Latin America, as well as glass products for OEMs regardless of end–market destination.

EMEA—includes primarily sales of manufactured and sourced glass tableware having an end-market destination in Europe, the Middle East and Africa.

Other—includes primarily sales of manufactured and sourced glass tableware having an end-market destination in Asia Pacific.

Our measure of profit for our reportable segments is Segment Earnings before Interest and Taxes (Segment EBIT) and excludes amounts related to certain items we consider not representative of ongoing operations as well as certain retained corporate costs and other allocations that are not considered by management when evaluating performance. Segment EBIT also includes an allocation of manufacturing costs for inventory produced at a Libbey facility that is located in a region other than the end market in which the inventory is sold. This allocation can fluctuate from year to year based on the relative demands for products produced in regions other than the end markets in which they are sold. As the gain (loss) on mark-to-market natural gas contracts is considered representative of our ongoing operations, it is included in Segment EBIT in 2017; the prior year derivative amount originally excluded from Segment EBIT in 2016 has been reclassified and included in Segment EBIT to conform to the current year presentation. We use Segment EBIT, along with net sales and selected cash flow information, to evaluate performance and to allocate resources. Segment EBIT for reportable segments includes an allocation of some corporate expenses based on the costs of services performed.

Certain activities not related to any particular reportable segment are reported within retained corporate costs. These costs include certain headquarter, administrative and facility costs, and other costs that are global in nature and are not allocable to the reporting segments.

The accounting policies of the reportable segments are the same as those described in note 2. We do not have any customers who represent 10 percent or more of total sales. Inter-segment sales are consummated at arm’s length and are reflected at end-market reporting below.



	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2017			2016			2017			2016
Net Sales:
U.S. & Canada	$	112,252		$	117,268		$	343,452		$	354,381
Latin America	35,339			40,149			102,564			114,971
EMEA	33,743			32,489			90,128			93,058
Other	6,005			6,967			21,703			25,172
Consolidated	$	187,339		$	196,873		$	557,847		$	587,582

Segment EBIT:
U.S. & Canada	$	10,761		$	18,635		$	33,307		$	55,932
Latin America	3,721			1,954			2,549			15,226
EMEA	1,482			175			(1,412		)	33
Other	(1,529		)	(347		)	(3,598		)	979
Total Segment EBIT	$	14,435		$	20,417		$	30,846		$	72,170

Reconciliation of Segment EBIT to Net Income (Loss):
Segment EBIT	$	14,435		$	20,417		$	30,846		$	72,170
Retained corporate costs	(5,701		)	(6,925		)	(18,087		)	(20,699		)
Goodwill impairment (note 14)	(79,700		)	—			(79,700		)	—
Pension settlement	—			—			—			(212		)
Reorganization charges	—			—			(2,488		)	—
Product portfolio optimization	—			—			—			(6,784		)
Executive terminations	—			98			—			(4,521		)
Interest expense	(5,118		)	(5,231		)	(15,123		)	(15,629		)
Provision for income taxes	(2,731		)	(5,450		)	(1,665		)	(12,003		)
Net income (loss)	$	(78,815	)	$	2,909		$	(86,217	)	$	12,322

Depreciation & Amortization:
U.S. & Canada	$	2,850		$	2,883		$	9,016		$	9,718
Latin America	4,850			4,667			13,757			13,725
EMEA	1,816			1,885			5,508			7,660
Other	1,138			1,325			3,821			4,162
Corporate	579			474			1,514			1,404
Consolidated	$	11,233		$	11,234		$	33,616		$	36,669

Capital Expenditures:
U.S. & Canada	$	2,751		$	3,037		$	7,145		$	9,030
Latin America	3,937			2,041			15,401			5,717
EMEA	5,050			1,549			15,446			4,656
Other	348			939			816			2,529
Corporate	6			446			332			1,591
Consolidated	$	12,092		$	8,012		$	39,140		$	23,523