Note 14 - Operating Segments

12 Months Ended

Dec. 03, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note

14

: Operating Segments

We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. For segment evaluation by the chief operating decision maker, segment operating income is defined as gross profit less SG&A expenses. Segment operating income excludes special charges, net. Corporate expenses are fully allocated to each operating segment. Corporate assets are not allocated to the operating 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.

Through the

fourth

quarter of

2015,

our business was reported in

four

operating segments: Americas Adhesives, EIMEA (Europe, India, Middle East and Africa), Asia Pacific and Construction Products. Changes in our management reporting structure during the

first

quarter of

2016

required us to conduct an operating segment assessment in accordance with ASC Topic

280,

Segment Reporting

, to determine our reportable segments. As a result of this assessment, we now have

five

reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Products and Engineering Adhesives. Prior period segment information has been recast retrospectively to reflect our new operating segments.

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.

Reportable operating segment financial information for all periods presented is as follows:

	2016		2015		2014
Net revenue
Americas Adhesives	$	806,062	$	830,811	$	877,633
EIMEA		545,135		549,568		652,032
Asia Pacific		241,827		230,671		234,185
Construction Products		256,346		272,692		237,234
Engineering Adhesives		245,235		199,919		103,370
Total	$	2,094,605	$	2,083,660	$	2,104,454
Inter-segment sales
Americas Adhesives	$	16,064	$	20,891	$	23,569
EIMEA		19,165		16,189		19,089
Asia Pacific		4,716		10,873		14,402
Segment operating income
Americas Adhesives	$	125,979	$	127,780	$	105,787
EIMEA		40,121		15,116		33,200
Asia Pacific		15,410		12,953		8,348
Construction Products		3,265		13,766		2,801
Engineering Adhesives		17,390		870		(295	)
Total	$	202,165	$	170,485	$	149,841
Depreciation and amortization
Americas Adhesives	$	18,979	$	19,892	$	19,892
EIMEA		21,441		19,965		20,546
Asia Pacific		7,484		6,930		6,373
Construction Products		14,977		15,321		14,192
Engineering Adhesives		14,804		12,782		4,521
Total	$	77,685	$	74,890	$	65,524
Total assets 1
Americas Adhesives	$	414,098	$	436,526
EIMEA		506,336		628,780
Asia Pacific		237,920		213,026
Construction Products		215,537		218,898
Engineering Adhesives		408,877		387,206
Corporate		275,486		157,816
Total	$	2,058,254	$	2,042,252
Capital expenditures
Americas Adhesives	$	10,230	$	9,366
EIMEA		14,317		16,864
Asia Pacific		12,694		10,927
Construction Products		15,059		13,925
Engineering Adhesives		3,447		2,820
Corporate		7,563		4,722
Total	$	63,310	$	58,624

1

Segment 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

	2016			2015			2014
Segment operating income	$	202,165		$	170,485		$	149,841
Special charges, net		168			(4,654	)		(51,501	)
Other income (expense), net		(7,549	)		(2,465	)		716
Interest expense		(27,359	)		(25,021	)		(19,744	)
Income from continuing operations before income taxes and income from equity method investments	$	167,425		$	138,345		$	79,312

Financial information about geographic areas

	Net Revenue
	2016		2015		2014
United States	$	869,919	$	891,436	$	878,058
China		257,779		226,335
Countries with more than 10 percent of total		1,127,698		1,117,771
All other countries with less than 10 percent of total		966,907		965,889		1,226,396
Total	$	2,094,605	$	2,083,660	$	2,104,454

	Property, Plant and Equipment, net
	2016		2015		2014
United States	$	202,944	$	193,819	$	205,412
Germany		99,229		101,013		116,301
China		83,548		94,763		40,748
All other countries with less than 10 percent of total		129,554		123,265		140,173
Total	$	515,275	$	512,860	$	502,634