Segments of Business

The Company's business activities are organized around and aggregated into its three principal business segments, U.S. Packaging, Latin America Packaging, and Rest of World Packaging, based on their similar economic characteristics, products, production process, types of customers, and distribution methods. Both internal and external reporting conforms to this organizational structure, with no significant differences in accounting policies applied. Intersegment sales (which are not significant) are generally priced to reflect nominal markups.

The Company evaluates the performance of its segments and allocates resources to them based primarily on operating profit, which is defined as profit before restructuring and other costs, general corporate expense, interest expense, other non-operating income, and income taxes.

Sales to the Kraft Heinz Company, and its subsidiaries, accounted for approximately 11 percent of the Company's sales for the three months ended March 31, 2019 and 2018. The Company sells to Kraft Heinz primarily through its U.S. Packaging segment.

A summary of the Company’s business activities reported by its three business segments follows:



	Three Months Ended March 31,
Business Segments (in millions)	2019			2018
Sales including intersegment sales:
U.S. Packaging	$	681.8		$	676.1
Latin America Packaging	143.4			170.5
Rest of World Packaging	193.4			196.1

Intersegment sales:
U.S. Packaging	(12.9		)	(10.1		)
Latin America Packaging	(1.3		)	(1.1		)
Rest of World Packaging	(3.0		)	(4.1		)
Total net sales	$	1,001.4		$	1,027.4

Segment operating profit
U.S. Packaging	$	91.5		$	87.2
Latin America Packaging (1)	11.9			8.0
Rest of World Packaging	20.1			16.5

Restructuring and other costs	6.9			13.4
General corporate expenses	19.5			17.8

Operating income	97.1			80.5

Interest expense	18.5			18.9
Other non-operating income	(1.8		)	(0.9		)

Income before income taxes	$	80.4		$	62.5

(1)

In the first quarter of 2019, the Company recognized a non-cash benefit for Brazil tax credits as a result of a final Brazilian court decision related to indirect taxes previously paid. The benefit was $5.8 million pre-tax and $3.8 million net of taxes. Please refer to the Reconciliation of Non-GAAP Earnings per share in this release. As reported in its Annual Report on Form 10-K, in the fourth quarter of 2018, the Company recognized a non-cash benefit of $15.3 million pre-tax and $10.1 million net of taxes related to the same topic. The additional amount was recorded in the first quarter of 2019 after the Company completed its analysis of the benefit to which it is entitled under the Brazilian court decision in 2018.

A summary of the Company’s net sales by geographic area reported by its three business segments follows:



	Three Months Ended March 31, 2019
Net sales by geographic area (in millions)	U.S. Packaging		Latin America Packaging		Rest of World Packaging		Total
Net sales (1):
United States	$	668.9	$	—	$	66.2	$	735.1
Brazil	—		93.8		—		93.8
Other Americas	—		48.3		—		48.3
Europe	—		—		81.1		81.1
Asia-Pacific	—		—		43.1		43.1
Total	$	668.9	$	142.1	$	190.4	$	1,001.4



	Three Months Ended March 31, 2018
Net sales by geographic area (in millions)	U.S. Packaging		Latin America Packaging		Rest of World Packaging		Total
Net sales (1):
United States	$	666.0	$	—	$	59.3	$	725.3
Brazil	—		112.1		—		112.1
Other Americas	—		57.3		—		57.3
Europe	—		—		85.4		85.4
Asia-Pacific	—		—		47.3		47.3
Total	$	666.0	$	169.4	$	192.0	$	1,027.4


(1)	Net sales are attributed to geographic areas based on location of the Company’s manufacturing or selling operation.