(4) Segments
During the
fourth quarter of 2012, we began to operate under three new
business divisions for our segment reporting structure. This new
structure replaced our legacy seven business unit structure. We
also refer to our new segment reporting structure as
“divisions”. The changes to our segment reporting
structure did not have any impact on the historical consolidated
results of operations of the Company. Prior period segment results
have been revised to the new segment presentation.
We report our
segment information in accordance with the provisions of FASB ASU
Topic 280, “Segment Reporting.” Our segment reporting
corresponds with management’s current approach of allocating
resources and assessing the performance of our segments. Our
segments are aligned with groups of similar products.
In the third
quarter of 2013, we renamed our global business divisions under our
segment reporting structure, which did not have any impact to the
reportable segment results. The following are the changes to the
names of our three global business divisions:
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• |
|
Food Care, which was previously named Food &
Beverage;
|
| |
• |
|
Diversey Care, which was previously named
Institutional & Laundry; and
|
| |
• |
|
Product Care, which was previously named Protective
Packaging.
|
The following
table shows net sales, depreciation and amortization and operating
profit by our segment reporting structure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months
Ended |
|
|
Nine Months
Ended |
|
| |
|
September 30, |
|
|
September 30, |
|
| |
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food Care
|
|
$ |
950.5 |
|
|
$ |
935.5 |
|
|
$ |
2,799.5 |
|
|
$ |
2,753.2 |
|
|
Diversey Care
|
|
|
531.9 |
|
|
|
527.2 |
|
|
|
1,614.6 |
|
|
|
1,597.9 |
|
|
Product Care
|
|
|
402.7 |
|
|
|
388.9 |
|
|
|
1,183.6 |
|
|
|
1,171.0 |
|
|
Other Category
|
|
|
50.8 |
|
|
|
48.7 |
|
|
|
152.5 |
|
|
|
148.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
1,935.9 |
|
|
$ |
1,900.3 |
|
|
$ |
5,750.2 |
|
|
$ |
5,670.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food Care
|
|
$ |
30.6 |
|
|
$ |
34.9 |
|
|
$ |
96.6 |
|
|
$ |
112.8 |
|
|
Diversey Care
|
|
|
31.1 |
|
|
|
32.6 |
|
|
|
97.4 |
|
|
|
95.7 |
|
|
Product Care
|
|
|
9.5 |
|
|
|
10.4 |
|
|
|
29.9 |
|
|
|
29.6 |
|
|
Other Category
|
|
|
2.3 |
|
|
|
4.2 |
|
|
|
12.7 |
|
|
|
9.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
73.5 |
|
|
$ |
82.1 |
|
|
$ |
236.6 |
|
|
$ |
247.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food Care
|
|
$ |
115.3 |
|
|
$ |
(228.0 |
) |
|
$ |
311.8 |
|
|
$ |
(75.9 |
) |
|
Diversey Care
|
|
|
18.1 |
|
|
|
(976.2 |
) |
|
|
46.8 |
|
|
|
(956.0 |
) |
|
Product Care
|
|
|
52.9 |
|
|
|
53.0 |
|
|
|
143.6 |
|
|
|
150.6 |
|
|
Other Category
|
|
|
3.4 |
|
|
|
(1.7 |
) |
|
|
(1.2 |
) |
|
|
(3.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segments and
other
|
|
|
189.7 |
|
|
|
(1,152.9 |
) |
|
|
501.0 |
|
|
|
(884.6 |
) |
|
Costs related to the
acquisition and integration of Diversey
|
|
|
0.3 |
|
|
|
1.3 |
|
|
|
0.8 |
|
|
|
4.8 |
|
|
Restructuring and other
charges(2)
|
|
|
49.5 |
|
|
|
36.8 |
|
|
|
61.2 |
|
|
|
110.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
139.9 |
|
|
$ |
(1,191.0 |
) |
|
$ |
439.0 |
|
|
$ |
(999.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Includes depreciation and
amortization of $68.1 million in the three months ended
September 30, 2013, $75.4 million in the three months ended
September 30, 2012, $216.3 million in the nine months ended
September 30, 2013 and $230.9 million in the nine months
ended September 30, 2012, and amortization of share-based
incentive compensation expense of $5.4 million in the three months
ended September 30, 2013, $6.6 million in the three months
ended September 30, 2012, $20.3 million in the nine months
ended September 30, 2013 and $16.9 million in the nine
months ended September 30, 2012. |
| (2) |
Restructuring and other
charges by our segment reporting structure were as
follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
September 30, |
|
|
September 30, |
|
| |
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
|
Food Care
|
|
$ |
16.4 |
|
|
$ |
26.6 |
|
|
$ |
19.1 |
|
|
$ |
82.3 |
|
|
Diversey Care
|
|
|
21.4 |
|
|
|
6.5 |
|
|
|
26.3 |
|
|
|
14.1 |
|
|
Product Care
|
|
|
10.4 |
|
|
|
1.4 |
|
|
|
14.5 |
|
|
|
11.0 |
|
|
Other Category
|
|
|
1.3 |
|
|
|
2.3 |
|
|
|
1.3 |
|
|
|
2.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
49.5 |
|
|
$ |
36.8 |
|
|
|
61.2 |
|
|
$ |
110.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
restructuring and other charges in 2013 primarily relate to our
previously announced 2013 Earnings Quality Improvement Program
(EQIP). See Note 9, “Restructuring
Activities.”
Allocation of Goodwill to Reportable
Segments
Our management views
goodwill and identifiable intangible assets as a corporate asset,
so we do not allocate their balances to the reportable segments.
However, we are required to allocate their balances to each
reporting unit to perform our annual impairment review of goodwill.
See Note 7, “Goodwill and Identifiable Intangible
Assets,” for the allocation of goodwill and the changes in
goodwill in the nine months ended September 30, 2013 by our
segment structure.
|