| Segment Information |
SEGMENT INFORMATION The Company conducts its business within the following operating segments: Softgel Technologies, Modified Release Technologies, Medication Delivery Solutions and Development and Clinical Services. The Softgel Technologies and Modified Release Technologies segments are aggregated into one reportable operating segment – Oral Technologies. The Company evaluates the performance of its segments based on segment earnings before noncontrolling interest, other (income) expense, impairments, restructuring costs, interest expense, income tax (benefit)/expense, and depreciation and amortization (“Segment EBITDA”). EBITDA from continuing operations is consolidated earnings from continuing operations before interest expense, income tax (benefit)/expense, depreciation and amortization and is adjusted for the income or loss attributable to noncontrolling interest. The Company’s presentation of Segment EBITDA and EBITDA from continuing operations may not be comparable to similarly titled measures used by other companies. The following tables include net revenue and Segment EBITDA during the three and nine months ended March 31, 2016 and March 31, 2015: | | | | | | | | | | | | | | | | | | Three Months Ended
March 31, | | Nine Months Ended
March 31, | (Dollars in millions) | 2016 | | 2015 | | 2016 | | 2015 | Oral Technologies | | | | | | | | Net revenue | $ | 260.8 |
| | $ | 284.0 |
| | $ | 763.6 |
| | $ | 822.3 |
| Segment EBITDA | 55.6 |
| | 81.7 |
| | 165.8 |
| | 214.1 |
| Medication Delivery Solutions | | | | | | | | Net revenue | 68.3 |
| | 61.2 |
| | 195.1 |
| | 191.8 |
| Segment EBITDA | 12.1 |
| | 10.9 |
| | 37.1 |
| | 38.9 |
| Development and Clinical Services | | | | | | | | Net revenue | 112.6 |
| | 103.7 |
| | 367.1 |
| | 314.6 |
| Segment EBITDA | 19.7 |
| | 23.8 |
| | 80.9 |
| | 67.1 |
| Inter-segment revenue elimination | (3.7 | ) | | (2.3 | ) | | (9.9 | ) | | (8.0 | ) | Unallocated Costs (1) | (16.9 | ) | | (16.3 | ) | | (43.7 | ) | | (81.7 | ) | Combined Totals: | | | | | | | | Net revenue | $ | 438.0 |
| | $ | 446.6 |
| | $ | 1,315.9 |
| | $ | 1,320.7 |
| | | | | | | | | EBITDA from continuing operations | $ | 70.5 |
| | $ | 100.1 |
| | $ | 240.1 |
| | $ | 238.4 |
|
| | (1) | Unallocated costs include restructuring and special items, equity-based compensation, impairment charges, certain other corporate directed costs, and other costs that are not allocated to the segments as follows: |
| | | | | | | | | | | | | | | | | | Three Months Ended
March 31, | | Nine Months Ended
March 31, | (Dollars in millions) | 2016 | | 2015 | | 2016 | | 2015 | Impairment charges and gain/(loss) on sale of assets | $ | 0.3 |
| | $ | (0.3 | ) | | $ | (0.8 | ) | | $ | (3.8 | ) | Equity compensation | (3.4 | ) | | (2.2 | ) | | (8.5 | ) | | (6.4 | ) | Restructuring and other special items (2) | (9.5 | ) | | (7.7 | ) | | (15.7 | ) | | (18.8 | ) | Noncontrolling interest | — |
| | 0.7 |
| | 0.3 |
| | 1.6 |
| Other income/(expense), net (3) | 4.2 |
| | (0.8 | ) | | 7.1 |
| | (38.5 | ) | Non-allocated corporate costs, net | (8.5 | ) | | (6.0 | ) | | (26.1 | ) | | (15.8 | ) | Total unallocated costs | $ | (16.9 | ) | | $ | (16.3 | ) | | $ | (43.7 | ) | | $ | (81.7 | ) |
| | (2) | Segment results do not include restructuring and certain acquisition-related costs. |
| | (3) | For the three and nine months ended March 31, 2016, amounts primarily relate to foreign currency translation gains and losses during all periods presented. For the nine months ended March 31, 2015, amounts primarily relate to the expense associated with the termination of the sponsor advisory services agreement of $29.8 million in connection with the IPO, expenses related to financing transactions of $21.8 million, offset by an acquisition-related gain of $10.2 million. |
Provided below is a reconciliation of earnings/(loss) from continuing operations to EBITDA from continuing operations: | | | | | | | | | | | | | | | | | | Three Months Ended
March 31, | | Nine Months Ended
March 31, | (Dollars in millions) | 2016 | | 2015 | | 2016 | | 2015 | Earnings from continuing operations | $ | 9.8 |
| | $ | 30.8 |
| | $ | 49.3 |
| | $ | 56.7 |
| Depreciation and amortization | 34.8 |
| | 34.4 |
| | 105.5 |
| | 104.6 |
| Interest expense, net | 21.7 |
| | 23.0 |
| | 66.7 |
| | 82.4 |
| Income tax (benefit)/expense | 4.2 |
| | 11.2 |
| | 18.3 |
| | (6.9 | ) | Noncontrolling interest | — |
| | 0.7 |
| | 0.3 |
| | 1.6 |
| EBITDA from continuing operations | $ | 70.5 |
| | $ | 100.1 |
| | $ | 240.1 |
| | $ | 238.4 |
|
The following table includes total assets for each segment, as well as reconciling items necessary to total the amounts reported in the consolidated financial statements: | | | | | | | | | (Dollars in millions) | March 31,
2016 | | June 30,
2015 | Assets | | | | Oral Technologies | $ | 2,493.8 |
| | $ | 2,477.3 |
| Medication Delivery Solutions | 257.2 |
| | 247.8 |
| Development and Clinical Services | 720.9 |
| | 703.2 |
| Corporate and eliminations | (414.2 | ) | | (290.0 | ) | Total assets | $ | 3,057.7 |
| | $ | 3,138.3 |
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