# Equity Earnings of Unconsolidated Af iliates, net of Tax

We recorded \$3.0 million and \$2.0 million of equity earnings of unconsolidated affiliates, net of tax, for 2018 and 2017, respectively.

# Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests represents the portion of earnings from the operations of our non­wholly owned, consolidated subsidiaries that belongs to the noncontrolling interests in those subsidiaries. Net income attributable to noncontrolling interests was \$20.1 million and \$16.5 million for 2018 and 2017, respectively. The increase in net income attributable to noncontrolling interests was due primarily to increased earnings of the Flexible Packaging JV.

# Net Income Attributable to Greif, Inc.

Based on the factors noted above, net income attributable to Greif, Inc. increased \$90.8 million to \$209.4 million in 2018 from\$118.6 million in 2017.

# Year 2017 Compared to Year 2016

# Net Sales

Net sales were \$3,638.2 million for 2017 compared with \$3,323.6 million for 2016. The 9.5 percent increase in net sales was primarily due to strategic pricing decisions and increases in index prices in our Rigid Industrial Packaging & Services segment and an increase in volumes in our mills and corrugator facilities in our Paper Packaging & Services segment, partially offset by the impact of our 2016 divestitures in our Rigid Industrial Packaging & Services segment.

# Gross Profit

Gross profit was \$714.7 million for 2017 compared with \$684.9 million for 2016. The respective reasons for the improvement or decline in gross profit for each segment are described below in the "Segment Review." Gross profit margin was 19.6 percent for 2017 compared to 20.6 percent for 2016.

# Selling, General and Administrative Expenses

SG&A expenses increased 0.9 percent to \$380.4 million for 2017 from \$376.8 million for 2016. This increase was primarily due to increases in incentive compensation due to improved business performance and increases in professional fees partially offset by decreased non­income tax expense and the impact of foreign currency translation of \$2.9 million. SG&A expenses were 10.5 percent of net sales for 2017 compared with 11.3 percent of net sales for 2016.

# Restructuring Charges

Restructuring charges were \$12.7 million for 2017 compared with \$26.9 million for 2016. Charges for both periods were primarily related to employee separation costs, relocation fees and professional fees incurred for services specifically associated with employee separation and relocation. Restructuring activities and associated costs during 2017 are anticipated to deliver annual run­rate savings of approximately\$9.9 million with payback periods ranging from one to three years among the plans. We anticipate completion of the current restructuring programs by early 2018. Refer to Note 6 to Consolidated Financial Statements included in Item 8 of this Form 10­K for additional information.

# Impairment Charges

Goodwill impairment charges were \$13.0 million for 2017. These charges were related to the impairment of goodwill within the Rigid Industrial Packaging & Services segment. There were no goodwill impairment charges for 2016.

Non­cash asset impairment charges were \$7.8 million for 2017 compared with \$51.4 million for 2016. In 2017, these charges were primarily related to plant closures and impairments of goodwill allocated to assets held for sale. Refer to Note 9 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10­K for additional information.

# Gain on Disposal of Properties, Plants and Equipment, net

The gain on disposal of properties, plants, and equipment, net was \$0.4 million and \$10.3 million for 2017 and 2016, respectively. See Note 4 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10­K for additional information.

# Loss on Disposal of Businesses, net