Industry Segments and Foreign Operations

Our operations are managed through two operating segments: (i) Polymer segment; and (ii) Chemical segment. In accordance with the provisions of ASC 280, Segment Reporting, our chief operating decision maker has been identified as our President and Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company.


•	Polymer Segment is comprised of our SBCs and other engineered polymers business.


•	Chemical Segment is comprised of our pine-based specialty products business.

Our chief operating decision maker uses operating income (loss) as the primary measure of each segment's operating results in order to allocate resources and in assessing the company's performance. In accordance with ASC 280, Segment Reporting, we have presented operating income for each segment. The following table summarizes our operating results by segment. We do not have sales between segments.



	Three Months Ended March 31, 2019								Three Months Ended March 31, 2018
	Polymer		Chemical			Total			Polymer			Chemical		Total
	(In thousands)
Revenue	$	261,055	$	195,356		$	456,411		$	289,071		$	213,321	$	502,392
Cost of goods sold	207,169		142,240			349,409			207,640			147,674		355,314
Gross profit	53,886		53,116			107,002			81,431			65,647		147,078
Operating expenses:
Research and development	7,567		2,984			10,551			7,447			3,350		10,797
Selling, general, and administrative	23,098		17,796			40,894			23,520			15,203		38,723
Depreciation and amortization	13,971		17,551			31,522			17,762			17,614		35,376
Gain on insurance proceeds	—		(11,100		)	(11,100		)	—			—		—
(Gain) loss on disposal of fixed assets	—		—			—			(98		)	125		27
Operating income	$	9,250	$	25,885		35,135			$	32,800		$	29,355	62,155
Other expense						(259		)						(1,113		)
Gain (loss) on extinguishment of debt						210								(7,591		)
Earnings of unconsolidated joint venture						121								137
Interest expense, net						(18,941		)						(29,276		)
Income before income taxes						$	16,266							$	24,312

The following table presents long-lived assets including goodwill and total assets.



	March 31, 2019						December 31, 2018
	Polymer		Chemical		Total		Polymer		Chemical		Total
	(In thousands)
Property, plant, and equipment, net	$	541,194	$	396,107	$	937,301	$	543,086	$	398,390	$	941,476
Investment in unconsolidated joint venture	$	11,500	$	—	$	11,500	$	12,070	$	—	$	12,070
Goodwill	$	—	$	772,462	$	772,462	$	—	$	772,886	$	772,886
Total assets	$	1,155,949	$	1,800,989	$	2,956,938	$	1,160,029	$	1,734,675	$	2,894,704

For geographic reporting, revenue is attributed to the geographic location in which the customers’ facilities are located. Long-lived assets consist primarily of property, plant, and equipment, which are attributed to the geographic location in which they are located and are presented at historical cost.

Following is a summary of revenue by geographic region:



	Three Months Ended March 31, 2019						Three Months Ended March 31, 2018
	Polymer		Chemical		Total		Polymer		Chemical		Total
	(In thousands)						(In thousands)
Revenue:
United States	$	87,968	$	80,357	$	168,325	$	103,729	$	81,324	$	185,053
Germany	25,911		14,981		40,892		31,842		16,236		48,078
All other countries	147,176		100,018		247,194		153,500		115,761		269,261
	$	261,055	$	195,356	$	456,411	$	289,071	$	213,321	$	502,392

Our capital expenditures for the Polymer segment, excluding capital expenditures by the KFPC joint venture, were $11.5 million and $9.7 million during the three months ended March 31, 2019 and 2018, respectively, and capital expenditures for our Chemical segment were $10.9 million and $13.6 million during the three months ended March 31, 2019 and 2018, respectively.

Impact of Hurricane Michael

In October 2018, our Panama City, Florida, facility was damaged by Hurricane Michael. During the three months ended March 31, 2019, we estimate the margin associated with lost sales due to Hurricane Michael to be $5.9 million, and we also incurred an incremental $5.9 million of direct costs as we continued to ramp production back to operating capacity.

During the three months ended March 31, 2019, our insurance carrier notified us that they would provide an additional $10.0 million of advance reimbursement under our insurance policies (which we received in early April 2019). Based on this notification and subsequent receipt, we recorded a receivable for the $10.0 million as of March 31, 2019 and an associated gain on insurance. In addition, we recognized $1.1 million of proceeds received during the fourth quarter of 2018, but which was deferred at that time as unearned until realizable, as a gain on insurance during the first quarter of 2019. The $11.1 million gain on insurance fully offsets the lost margin in the first quarter of 2019, and reimburses us for a portion of the direct costs we have incurred to date. We currently estimate the replacement cost associated with damaged equipment to be in a range of $9.0 million to $11.0 million. We continue to work with our insurance carriers to resolve all claims under our business interruption and property coverage.