Operating Segments

12 Months Ended

Dec. 01, 2012

Operating Segments Abstract

Segment Reporting Disclosure

Note 15: Operating Segments

We are required to report segment information in the same way that management internally organizes its business for assessing performance and making decisions regarding allocation of resources. We evaluate the performance of each of our operating segments based on segment operating income, which is defined as gross profit less selling, general and administrative (SG&A) expenses. Segment operating income excludes special charges, net and asset impairment charges. Corporate expenses are fully allocated to each operating segment. Corporate assets are not allocated to the segments. Inter-segment revenues are recorded at cost plus a markup for administrative costs. Operating results of each of these segments are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

The business components within each operating segment are managed to maximize the results of the overall operating segment rather than the results of any individual business component of the operating segment. Results of individual components of each operating segment are subject to numerous allocations of segment-wide costs that may or may not have been focused on that particular component for a particular reporting period. The costs for these allocated resources are not tracked on a “where-used” basis as financial performance is assessed at the total operating segment level.

After the sale of our Central America Paints business in 2012, we now have five reportable segments: North America Adhesives, Construction Products, EIMEA, Latin America Adhesives and Asia Pacific. Prior periods have been restated for the removal of our Latin America Paints operating segment which is now considered discontinued operations. Corporate expenses, which are fully allocated to each operating segment, have been reallocated to the remaining reportable operating segments.

The net revenue, inter-segment sales, segment operating income depreciation and amortization, total assets and capital expenditures of the industrial adhesives business, acquired in the second quarter of 2012, was recorded in our North America Adhesives, EIMEA, Latin America Adhesives and Asia Pacific operating segments.

Reportable operating segment financial information for all periods presented follows:

			2012		2011		2010
Net revenue
	North America Adhesives	$	682,981	$	489,903	$	445,081
	Construction Products		147,080		134,591		122,210
	EIMEA		672,423		473,763		404,801
	Latin America Adhesives		155,634		147,140		129,849
	Asia Pacific		228,121		198,688		154,884
	Total	$	1,886,239	$	1,444,085	$	1,256,825
Inter-segment sales
	North America Adhesives	$	57,304	$	60,793	$	46,130
	Construction Products		462		686		262
	EIMEA		9,228		10,031		9,846
	Asia Pacific		14,818		9,334		7,027
Segment operating income
	North America Adhesives	$	99,150	$	73,508	$	68,278
	Construction Products		8,334		2,992		2,072
	EIMEA		34,483		24,590		11,975
	Latin America Adhesives		13,218		8,002		6,944
	Asia Pacific		7,356		7,869		5,351
	Total	$	162,541	$	116,961	$	94,620
Depreciation and amortization
	North America Adhesives	$	16,835	$	10,519	$	10,866
	Construction Products		11,001		11,000		11,424
	EIMEA		18,399		10,748		11,240
	Latin America Adhesives		2,017		1,703		1,788
	Asia Pacific		6,238		5,080		3,490
	Total	$	54,490	$	39,050	$	38,808
Total assets1
	North America Adhesives	$	367,808	$	189,371	$	169,410
	Construction Products		179,508		180,861		185,736
	EIMEA		674,665		344,935		294,105
	Latin America Adhesives		97,445		91,321		92,967
	Asia Pacific		197,999		150,949		145,152
	Corporate		267,030		200,929		200,296
	Discontinued Operations		1,865		69,343		65,791
	Total	$	1,786,320	$	1,227,709	$	1,153,457
Capital expenditures
	North America Adhesives	$	14,641	$	3,989	$	5,283
	Construction Products		1,923		3,936		921
	EIMEA		14,628		16,458		10,080
	Latin America Adhesives		1,770		1,202		1,555
	Asia Pacific		3,832		3,511		10,673
	Corporate		2,403		4,696		6,035
	Total	$	39,197	$	33,792	$	34,547
1Segment assets include primarily inventory, accounts receivable, property, plant and equipment and other miscellaneous assets. Corporate assets include primarily corporate property, plant and equipment, deferred tax assets, certain investments and other assets.
Reconciliation of segment operating income to income from continuing operations before income taxes and income from equity method investments
			2012		2011		2010
Segment operating income		$	162,541	$	116,961	$	94,620
Special charges, net			(52,467)		(7,499)		-
Asset impairment charges			(1,517)		(332)		(8,785)
Other income, net			784		4,101		1,197
Interest expense			(19,793)		(10,811)		(10,414)
Income from continuing operations before income taxes and income from equity method investments		$	89,548	$	102,420	$	76,618
Financial information about geographic areas
		Net Revenue
			2012		2011		2010
	United States	$	802,362	$	613,250	$	556,407
	All other countries with less than 10 percent of total		1,083,877		830,835		700,418
	Total	$	1,886,239	$	1,444,085	$	1,256,825
		Property, Plant and Equipment, net
			2012		2011		2010
	United States	$	158,973	$	121,333	$	124,124
	Germany		42,434		33,278		32,993
	All other countries with less than 10 percent of total		127,609		87,976		80,529
	Total	$	329,016	$	242,587	$	237,646