17. Segment Reporting

The Company has three reportable segments: Surfactants, Polymers and Specialty Products. Each segment provides distinct products and requires separate management due to unique markets, technologies and production processes. Surfactants are used in a variety of consumer and industrial cleaning compounds as well as in agricultural products, lubricating ingredients, oil field chemicals and other specialized applications. Polymers are used primarily in plastics, building materials, refrigeration systems and CASE applications. Specialty Products are used in food, flavoring, nutritional supplement and pharmaceutical applications.

The Company evaluates the performance of its segments and allocates resources based on operating income before interest expense, other income/expense items and income tax provision. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

The following is segment data for the three years ended December 31, 2017, 2016 and 2015:

(In thousands)	Surfactants		Polymers		Specialty Products		Segment Totals
2017
Net sales	$	1,297,555	$	546,634	$	80,818	$	1,925,007
Operating income		119,990		82,801		9,952		212,743
Assets		881,415		355,065		75,452		1,311,932
Capital expenditures		50,400		21,146		4,234		75,780
Depreciation and amortization expenses		49,102		22,998		5,019		77,119

2016
Net sales	$	1,181,563	$	498,826	$	85,777	$	1,766,166
Operating income		99,796		96,788		10,698		207,282
Assets		831,324		301,890		75,483		1,208,697
Capital expenditures		64,121		31,890		4,194		100,205
Depreciation and amortization expenses		48,643		20,275		4,204		73,122

2015
Net sales	$	1,205,849	$	491,488	$	78,830	$	1,776,167
Operating income		104,080		80,942		4,397		189,419
Assets		758,524		293,790		72,604		1,124,918
Capital expenditures		79,171		31,309		6,387		116,867
Depreciation and amortization expenses		42,122		19,541		3,659		65,322

Below are reconciliations of segment data to the consolidated financial statements:

(In thousands)	2017			2016			2015
Operating income - segment totals	$	212,743		$	207,282		$	189,419
Business restructuring and asset impairments ^(a)		(3,069	)		(7,064	)		—
Unallocated corporate expenses ^(b)		(63,514	)		(74,025	)		(66,629	)
Total operating income		146,160			126,193			122,790
Interest expense, net		(11,444	)		(13,205	)		(14,533	)
Loss from equity in joint ventures		—			—			(6,985	)
Other, net		4,521			828			1,584
Consolidated income before income taxes	$	139,237		$	113,816		$	102,856

Assets - segment totals	$	1,311,932		$	1,208,697		$	1,124,918
Unallocated corporate assets ^(c)		158,929			145,193			113,474
Consolidated assets	$	1,470,861		$	1,353,890		$	1,238,392

Capital expenditures - segment totals	$	75,780		$	100,205		$	116,867
Unallocated corporate expenditures		2,833			2,871			2,482
Consolidated capital expenditures	$	78,613		$	103,076		$	119,349

Depreciation and amortization expenses – segment totals	$	77,119		$	73,122		$	65,322
Unallocated corporate depreciation expenses		1,903			1,845			1,663
Consolidated depreciation and amortization expenses	$	79,022		$	74,967		$	66,985

(a)

See Note 22 regarding business restructuring and asset impairment costs.

(b)

Unallocated corporate expenses primarily comprise corporate administrative expenses (e.g., corporate finance, legal, human resources, information systems, deferred compensation and environmental remediation) that are not included in segment operating income and not used to evaluate segment performance.

(c)

The changes in unallocated corporate assets between 2017, 2016 and 2015 were primarily attributable to changes in the balance of U.S. cash and cash equivalents, which are not allocated to segments.

Below is certain Company-wide geographic data for the years ended December 31, 2017, 2016 and 2015:

(In thousands)	2017		2016		2015
Net sales ^(a)
United States	$	1,159,578	$	1,076,259	$	1,069,526
France		176,052		151,031		169,072
Poland		188,244		153,986		150,654
United Kingdom		99,069		86,458		89,757
Brazil		109,960		74,961		63,439
All other countries		192,104		223,471		233,719
Total	$	1,925,007	$	1,766,166	$	1,776,167

Long-lived assets ^(b)
United States	$	420,342	$	411,023	$	387,744
Germany		29,116		27,475		30,268
Singapore		33,530		36,270		39,181
Brazil ^(c)		55,974		58,106		26,721
China		30,849		29,508		25,689
United Kingdom		21,657		20,309		22,943
All other countries		50,631		47,670		52,139
Total	$	642,099	$	630,361	$	584,685

(a)

Net sales are attributed to countries based on the location of the Company facility making the sales.

(b)

Includes net property, plant and equipment, goodwill and other intangible assets.

(c)

The change between 2016 and 2015 was attributable to the acquisition described in Note 20.