Segments and Geographic Information

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 and 2015 segment results have been reclassified to conform with the revised structure. The revised 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 derivative amounts originally excluded from Segment EBIT in prior years have 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. It is impracticable to provide revenue by product categories.



Year ended December 31, (dollars in thousands)	2017			2016			2015
Net Sales:
U.S. & Canada	$	481,797		$	482,296		$	492,051
Latin America	144,322			151,389			167,069
EMEA	126,924			126,591			129,549
Other	28,785			33,144			33,676
Consolidated	$	781,828		$	793,420		$	822,345

Segment EBIT:
U.S. & Canada	$	48,044		$	75,449		$	78,144
Latin America	6,590			12,583			22,235
EMEA	1,321			1,387			3,289
Other	(3,838		)	1,001			4,614
Total Segment EBIT	$	52,117		$	90,420		$	108,282

Reconciliation of Segment EBIT to Net Income (Loss):
Segment EBIT	$	52,117		$	90,420		$	108,282
Retained corporate costs	(27,099		)	(27,265		)	(34,645		)
Goodwill impairment (note 4)	(79,700		)	—			—
Pension settlement charges (note 8)	—			(168		)	(21,693		)
Environmental obligation (note 17)	—			—			(157		)
Reorganization charges	(2,488		)	—			(4,316		)
Product portfolio optimization⁽¹⁾	—			(5,693		)	—
Work stoppage ⁽²⁾	—			(4,162		)	—
Executive terminations	—			(4,460		)	(870		)
Interest expense	(20,400		)	(20,888		)	(18,484		)
(Provision) benefit for income taxes	(15,798		)	(17,711		)	38,216
Net income (loss)	$	(93,368	)	$	10,073		$	66,333

Depreciation & Amortization:
U.S. & Canada	$	12,665		$	12,748		$	12,214
Latin America	18,576			19,068			14,738
EMEA	7,377			9,377			8,510
Other	5,088			5,588			5,855
Corporate	1,838			1,705			1,395
Consolidated	$	45,544		$	48,486		$	42,712

Capital Expenditures:
U.S. & Canada	$	10,056		$	10,671		$	25,106
Latin America	18,520			11,032			11,944
EMEA	17,158			7,571			6,773
Other	1,226			2,905			1,855
Corporate	668			2,425			2,458
Consolidated	$	47,628		$	34,604		$	48,136

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⁽¹⁾Product portfolio optimization relates to inventory reductions to simplify and improve our operations.

⁽²⁾ Work stoppage relates to the lower production volume impact, shipping costs and other direct incremental expenses associated with the two-week Toledo, Ohio work stoppage in the fourth quarter of 2016.



December 31, (dollars in thousands)	2017		2016		2015
Segment Assets⁽¹⁾:
U.S. & Canada	$	147,809	$	130,390	$	140,840
Latin America	63,093		63,838		68,599
EMEA	48,270		44,588		48,924
Other	18,711		16,306		14,043
Consolidated	$	277,883	$	255,122	$	272,406

______________________________

⁽¹⁾ Segment assets are defined as net accounts receivable plus net inventory.

Geographic data for the U.S., Mexico and Other countries for 2017, 2016 and 2015 is presented below. Net sales are based on the geographical destination of the sale. The long-lived assets include net property, plant and equipment.



(dollars in thousands)	United States		Mexico		All Other		Consolidated
2017
Net sales	$	479,018	$	93,370	$	209,440	$	781,828
Long-lived assets	$	89,838	$	87,836	$	88,001	$	265,675

2016
Net sales	$	478,342	$	100,829	$	214,249	$	793,420
Long-lived assets	$	91,834	$	89,963	$	74,595	$	256,392

2015
Net sales	$	488,582	$	107,386	$	226,377	$	822,345
Long-lived assets	$	94,206	$	93,573	$	84,755	$	272,534