Business combinations, inventory fair value step-up

  
    The following table presents information about reportable segments:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Years ended June 30,  |
| ($ in millions) |  | 2022 |  | 2021 |  | 2020 |
| Sales including intersegment sales |  |  |  |  |  |  |
| Flexibles |  | $ | 11,151  |  |  | $ | 10,040  |  |  | $ | 9,755  |  |
| Rigid Packaging |  | 3,393  |  |  | 2,823  |  |  | 2,716  |  |
| Other |  | —  |  |  | —  |  |  | —  |  |
| Total sales including intersegment sales |  | 14,544  |  |  | 12,863  |  |  | 12,471  |  |
|  |  |  |  |  |  |  |
| Intersegment sales |  |  |  |  |  |  |
| Flexibles |  | —  |  |  | 2  |  |  | 3  |  |
| Rigid Packaging |  | —  |  |  | —  |  |  | —  |  |
| Other |  | —  |  |  | —  |  |  | —  |  |
| Total intersegment sales |  | —  |  |  | 2  |  |  | 3  |  |
|  |  |  |  |  |  |  |
| Net sales |  | $ | 14,544  |  |  | $ | 12,861  |  |  | $ | 12,468  |  |
|  |  |  |  |  |  |  |
| Adjusted earnings before interest and taxes ("Adjusted EBIT") from continuing operations |  |  |  |  |  |  |
| Flexibles |  | 1,517  |  |  | 1,427  |  |  | 1,296  |  |
| Rigid Packaging |  | 289  |  |  | 299  |  |  | 284  |  |
| Other |  | (105) |  |  | (105) |  |  | (83) |  |
| Adjusted EBIT from continuing operations |  | 1,701  |  |  | 1,621  |  |  | 1,497  |  |
| Less: Material restructuring programs (1) |  | (37) |  |  | (88) |  |  | (106) |  |
| Less: Impairments in equity method investments (2) |  | —  |  |  | —  |  |  | (26) |  |
| Less: Material acquisition costs and other (3) |  | (4) |  |  | (7) |  |  | (145) |  |
| Less: Amortization of acquired intangible assets from business combinations (4) |  | (163) |  |  | (165) |  |  | (191) |  |
|  |  |  |  |  |  |  |
| Less: Impact of hyperinflation (5) |  | (16) |  |  | (19) |  |  | (28) |  |
|  |  |  |  |  |  |  |
| Less: Pension settlements (6) |  | (8) |  |  | —  |  |  | (5) |  |
| Add/(Less): Net gain/(loss) on disposals (7) |  | (10) |  |  | 9  |  |  | —  |  |
| Less: Property and other losses, net (8) |  | (13) |  |  | —  |  |  | —  |  |
| Less: Russia-Ukraine conflict impacts (9) |  | (200) |  |  | —  |  |  | —  |  |
| EBIT from continuing operations |  | 1,250  |  |  | 1,351  |  |  | 996  |  |
|  |  |  |  |  |  |  |
| Interest income |  | 24  |  |  | 14  |  |  | 22  |  |
| Interest expense |  | (159) |  |  | (153) |  |  | (207) |  |
| Equity in income (loss) of affiliated companies, net of tax |  | —  |  |  | (19) |  |  | 14  |  |
| Income from continuing operations before income taxes and equity in income (loss) of affiliated companies |  | $ | 1,115  |  |  | $ | 1,193  |  |  | $ | 825  |  |

(1)Material restructuring programs includes restructuring and related expenses for the 2019 Bemis Integration Plan for fiscal year 2022 and 2018 Rigid Packaging Restructuring Plan and the 2019 Bemis Integration Plan for fiscal years 2021 and 2020. Refer to Note 7, "Restructuring," for more information about the Company's restructuring activities. (2)Impairments in equity method investments include the impairment charges related to other-than-temporary impairments related to the investment in AMVIG. During the fiscal year 2021, the Company sold its interest in AMVIG. Refer to Note 8, "Equity Method and Other Investments," for more information about the Company's equity method investments. (3)Includes costs associated with the Bemis transaction. Fiscal year 2021 includes a $19 million benefit related to Brazil indirect taxes resulting from a May 2021 Brazil Supreme Court decision. During fiscal year 2020, material acquisition costs and other includes $58 million amortization of Bemis acquisition related inventory fair value step-up and $88 million of Bemis transaction related costs and integration costs not qualifying as exit costs, including certain advisory, legal, audit, and audit related fees.(4)Amortization of acquired intangible assets from business combinations includes amortization expenses related to all acquired intangible assets from past acquisitions, including $26 million of sales backlog amortization for the fiscal year 2020 from the Bemis acquisition.(5)Impact of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina where the functional currency was the Argentine Peso.98
