Business Segment Information

12 Months Ended

Dec. 31, 2012

Business Segment Information

NOTE 16. BUSINESS SEGMENT INFORMATION

We are engaged in the packaging industry and report our results in three business segments: metal containers, closures and plastic containers. The metal containers segment manufactures steel and aluminum containers for human and pet food and general line products. The closures segment manufactures an extensive range of metal, composite and plastic vacuum closures for food and beverage products and plastic closures for the dairy and juice markets. The plastic containers segment manufactures custom designed plastic containers, tubes and closures for personal care, food, health care, pharmaceutical, household and industrial chemical, pet care, agricultural chemical, automotive and marine chemical products. These segments are strategic business operations that are managed separately to maximize the production, technology and marketing of their packaging product. Our metal container business operates primarily in North America and Europe. Our closures business operates in North and South America, Europe and Asia. Our plastic container business operates primarily in North America. The accounting policies of the business segments are the same as those described in Note 1.

Information for each of the past three years for our business segments is as follows:

	Metal Containers		Closures		Plastic Containers		Corporate			Total
	(Dollars in thousands)
2012
Net sales	$	2,293,749	$	680,031	$	614,538	$	—		$	3,588,318
Depreciation and amortization		87,629		32,427		44,203		756			165,015
Rationalization charges		2,446		2,878		3,336		—			8,660
Segment income from operations (1)		231,456		73,148		30,848		(9,943	)		325,509
Segment assets		1,742,842		639,598		809,937		33,726			3,226,103
Capital expenditures		68,737		19,838		30,405		261			119,241
2011
Net sales	$	2,211,549	$	687,801	$	609,877	$	—		$	3,509,227
Depreciation and amortization		79,655		33,232		44,237		1,677			158,801
Rationalization charges		1,378		1,805		3,996		538			7,717
Segment income from operations (2)		256,336		75,897		12,639		9,249			354,121
Segment assets		1,714,516		632,048		561,312		36,868			2,944,744
Capital expenditures		108,394		24,637		39,904		74			173,009
2010
Net sales	$	1,864,157	$	618,805	$	588,583	$	—		$	3,071,545
Depreciation and amortization		67,114		28,771		45,385		1,679			142,949
Rationalization charges		694		9,212		12,308		—			22,214
Segment income from operations (3)		232,620		58,557		10,291		(18,149	)		283,319
Segment assets		931,244		627,006		537,978		39,940			2,136,168
Capital expenditures		47,836		15,769		41,707		83			105,395

¹⁾  Metal containers includes plant start-up costs of $6.4 million. Corporate includes costs attributable to announced acquisitions of $1.5 million.

²⁾  Metal containers includes a charge for the resolution of a past product liability dispute of $3.3 million. Corporate includes income of $25.2 million for proceeds received as a result of the termination of the merger agreement with Graham Packaging, net of costs associated with certain corporate development activities.

³⁾  Closures includes a charge of $3.2 million for the remeasurement of net assets in Venezuela. Corporate includes costs attributable to announced acquisitions of $2.7 million.

Total segment income from operations is reconciled to income before income taxes as follows:

	2012		2011		2010
	(Dollars in thousands)
Total segment income from operations	$	325,509	$	354,121	$	283,319
Interest and other debt expense		101,722		63,954		61,639
Income before income taxes	$	223,787	$	290,167	$	221,680

Total segment assets at December 31 are reconciled to total assets as follows:

	2012		2011
	(Dollars in thousands)
Total segment assets	$	3,226,103	$	2,944,744
Other assets		67,440		34,343
Total assets	$	3,293,543	$	2,979,087

Financial information relating to our operations by geographic area is as follows:

	2012		2011		2010
	(Dollars in thousands)
Net sales:
United States	$	2,845,773	$	2,767,293	$	2,627,539
Foreign:
Europe		559,818		563,991		269,513
Canada		124,059		128,882		121,494
Other		58,668		49,061		52,999
Total net sales from foreign operations		742,545		741,934		444,006
Total net sales	$	3,588,318	$	3,509,227	$	3,071,545
Long-lived assets:
United States	$	679,273	$	689,705
Foreign:
Europe		341,908		301,001
Canada		46,804		42,021
Other		30,824		31,981
Total long-lived assets at foreign operations		419,536		375,003
Total long-lived assets	$	1,098,809	$	1,064,708

Net sales are attributed to the country from which the product was manufactured and shipped.

Sales of our metal containers segment to Nestlé Food Company accounted for 11.3 percent, 10.6 percent and 10.4 percent of our consolidated net sales in 2012, 2011 and 2010, respectively.

Sales and income from operations of our metal container business and part of our closures business are dependent, in part, upon the vegetable and fruit harvests in the United States and, to a lesser extent, in a variety of national growing regions in Europe. The size and quality of these harvests varies from year to year, depending in large part upon the weather conditions in applicable regions. Because of the seasonality of the harvests, we have historically experienced higher unit sales volume in the third quarter of our fiscal year and generated a disproportionate amount of our annual income from operations during that quarter (see Note 17).