XML 96 R27.htm IDEA: XBRL DOCUMENT v3.2.0.727
Segment Information
 6 Months Ended
Jun. 30, 2015
Segment Reporting [Abstract]  
Segment Information
SEGMENT INFORMATION
During the first quarter of 2015, the Company completed certain changes to its organizational structure that resulted in a change to the Company's reportable business segments. As a result, the Performance Materials and Graphic Solutions reportable segments were combined into the Performance Applications reportable segment, and the AgroSolutions reportable segment was re-branded to Agricultural Solutions. The new segment reporting structure represents businesses for which separate financial information is utilized by the chief operating decision maker, or CODM, for purpose of allocating resources and evaluating performance. Each reportable segment has its own president, who reports to the CODM.
The Performance Applications segment formulates and markets dynamic chemistry solutions that are used in electronics, automotive production, oil and gas production, drilling, commercial packaging and printing. Our products include surface and coating materials, water-based hydraulic control fluids and photopolymers. We sell these products worldwide. In conjunction with the sale of our products, we provide extensive technical service and support to ensure superior performance of their application. Within this segment, the Company provides specialty chemicals to the following industries; Electronics, Industrial, Offshore and Commercial Packing and Printing. For the electronics industry, we design and formulate a complete line of proprietary “wet” dynamic chemistries that our customers use to process the surface of the printed circuit boards and other electronic components they manufacture. For the industrials, our dynamic chemistries are used for finishing, cleaning and providing surface coatings for a broad range of metal and non-metal surfaces which improve the performance or look of a component of an industrial part or process. For the offshore industry, we produce water-based hydraulic control fluids for major oil companies and drilling contractors for offshore deep water production and drilling applications. For the commercial packaging and printing industries, we produce photopolymers through an extensive line of flexographic plates, used to produce printing plates for transferring images onto commercial packaging, including packaging for consumer food products, pet food bags, corrugated boxes, labels and beverage containers. In addition, we also produce photopolymer printing plates for the flexographic and letterpress newspaper and publications markets.
The Agricultural Solutions segment is based on a solutions-oriented business model that focuses on product innovation to address an ever-increasing need for higher crop yield and quality. We offer a wide variety of proven plant health and pest control products to growers, which are comprised of specific target applications in the following major product lines: adjuvants; fungicides; herbicides; home applications (home and garden and ectoparasiticides); insecticides; miticides; plant growth regulators; and seed treatments. We refer to herbicides, insecticides, fungicides and seed treatment categories, based on patented or proprietary off-patent AIs, as our Global Value Added Portfolio, or GVAP. Our product portfolio also includes biosolutions (biostimulants, innovative nutrition and biocontrol), and regional off-patent AIs that complement our principal product lines. In addition, we offer certain non-crop products, including animal health products, such as honey bee protective miticides and certain veterinary vaccines.
The Company evaluates the performance of its operating segments based on net sales and adjusted EBITDA. Adjusted EBITDA for each segment is calculated by taking net income and adding back interest expense, income tax expense (benefit), depreciation expense and amortization expense. This amount is further adjusted for acquisition-related expenses. Adjusted EBITDA for each segment also includes an allocation of corporate costs such as corporate salary, wages, equity compensation expense and legal costs.
The following table summarizes financial information regarding each reportable segment’s results of operations for the periods presented. The historical periods have been recasted to reflect the change to the Company's reportable business segment structure during the first quarter of 2015.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 (amounts in millions)
2015
 
2014
 
2015
 
2014
Net Sales (from external customers):
 
 
 
 
 
 
 
Performance Applications
$
181.5

 
$
189.1

 
$
361.8

 
$
372.8

Agricultural Solutions
493.6

 
—

 
848.1

 
—

Consolidated net sales
675.1

 
189.1

 
1,209.9

 
372.8

Adjusted EBITDA:
 

 
 

 
 

 
 

Performance Applications
53.9

 
48.2

 
102.4

 
94.1

Agricultural Solutions
113.7

 
—

 
195.7

 
—

Adjusted EBITDA
$
167.6

 
$
48.2

 
$
298.1

 
$
94.1

The following table reconciles Adjusted EBITDA to Net loss attributable to stockholders:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 (amounts in millions)
2015
 
2014
 
2015
 
2014
Adjusted EBITDA
$
167.6

 
$
48.2

 
$
298.1

 
$
94.1

Adjustments to reconcile to net loss attributable to stockholders:
 
 
 
 
 
 
 
Interest expense
(52.5
)
 
(7.9
)
 
(93.0
)
 
(15.7
)
Depreciation and amortization expense
(66.1
)
 
(21.4
)
 
(114.3
)
 
(38.3
)
Restructuring and related expenses
(12.1
)
 
(0.4
)
 
(13.7
)
 
(0.4
)
Manufacturer's profit in inventory adjustment
(20.7
)
 
—

 
(56.7
)
 
(12.0
)
Acquisition transaction costs
(24.1
)
 
(10.5
)
 
(55.4
)
 
(10.5
)
Non-cash fair value adjustment to contingent consideration
(0.9
)
 
(10.8
)
 
(3.6
)
 
(23.8
)
Legal settlement
16.0

 
—

 
16.0

 
—

Acquisition put option expiration
—

 
—

 
3.0

 
—

Foreign exchange gains on foreign denominated external and internal debt
(17.9
)
 
—

 
6.1

 
—

Other income
1.4

 
0.2

 
2.6

 
0.2

Loss before income taxes and non-controlling interest
(9.3
)
 
(2.6
)
 
(10.9
)
 
(6.4
)
Income tax benefit (expense)
0.2

 
4.1

 
(24.5
)
 
1.9

Net income attributable to the non-controlling interests
(3.1
)
 
(1.9
)
 
(3.5
)
 
(3.3
)
Net loss attributable to stockholders
$
(12.2
)
 
$
(0.4
)
 
$
(38.9
)
 
$
(7.8
)