Segment Information

Our business operations are organized into two reportable segments, Proprietary Products and Contract-Manufactured Products. Our Proprietary Products reportable segment offers proprietary packaging, containment and drug delivery products, along with analytical lab services, to biologic, generic and pharmaceutical drug customers. Our Contract-Manufactured Products reportable segment serves as a fully integrated business, focused on the design, manufacture, and automated assembly of complex devices, primarily for pharmaceutical, diagnostic, and medical device customers.

We evaluate the performance of our segments based upon, among other things, segment net sales and operating profit. Segment operating profit excludes general corporate costs, which include executive and director compensation, stock-based compensation, adjustments to annual incentive plan expense for over- or under-attainment of targets, certain pension and other retirement benefit costs, and other corporate facilities and administrative expenses not allocated to the segments. Also excluded are items that we consider not representative of ongoing operations. Such items are referred to as other unallocated items and generally include restructuring and related charges, certain asset impairments and other specifically-identified income or expense items.

The following table presents information about our reportable segments, reconciled to consolidated totals:



	Three Months Ended September 30,						Nine Months Ended September 30,
($ in millions)	2018			2017			2018			2017
Net sales:
Proprietary Products	$	325.2		$	308.9		$	997.4		$	930.5
Contract-Manufactured Products	106.7			89.3			297.7			253.3
Intersegment sales elimination	(0.2		)	—			(0.2		)	(0.3		)
Consolidated net sales	$	431.7		$	398.2		$	1,294.9		$	1,183.5
Operating profit (loss):
Proprietary Products	$	68.2		$	67.5		$	202.7		$	189.3
Contract-Manufactured Products	11.2			10.8			29.7			30.1
Corporate	(16.3		)	(15.4		)	(50.1		)	(42.9		)
Other unallocated items	(2.3		)	—			(7.8		)	(11.1		)
Total operating profit	$	60.8		$	62.9		$	174.5		$	165.4
Interest expense	2.0			1.4			6.1			5.7
Interest income	(0.5		)	(0.3		)	(1.4		)	(0.9		)
Other nonoperating income	(1.8		)	(1.1		)	(5.1		)	(2.5		)
Income before income taxes	$	61.1		$	62.9		$	174.9		$	163.1

The intersegment sales elimination, which is required for the presentation of consolidated net sales, represents the elimination of components sold between our segments.

Other unallocated items during the three and nine months ended September 30, 2018, consisted of $1.2 million and $6.7 million, respectively, in restructuring and related charges. In addition, during the three and nine months ended September 30, 2018, other unallocated items included a charge of $1.1 million related to the classification of Argentina’s economy as highly inflationary under U.S. GAAP as of July 1, 2018. Other unallocated items during the nine months ended September 30, 2017 consisted of a charge of $11.1 million related to the deconsolidation of our Venezuelan subsidiary. Please refer to Note 13, Other (Income) Expense, for further discussion of these items.

In March 2017, the FASB issued guidance on the presentation of net periodic pension and postretirement benefit cost (net benefit cost). We adopted this guidance as of January 1, 2018, on a retrospective basis. As a result of this adoption, we reclassified net benefit cost components other than service cost from operating income to outside of operations. Net periodic benefit cost for the three months ended September 30, 2018 and 2017 was $0.8 million and $1.4 million, respectively, of which $2.6 million and $2.5 million, respectively, related to service cost and $1.8 million and $1.1 million, respectively, related to net benefit cost components other than service cost. Net periodic benefit cost for the nine months ended September 30, 2018 and 2017 was $3.0 million and $5.3 million, respectively, of which $8.1 million and $7.8 million, respectively, related to service cost and $5.1 million and $2.5 million, respectively, related to net benefit cost components other than service cost. Please refer to Note 2, New Accounting Standards, for additional information.