Segment Reporting

12 Months Ended

Dec. 31, 2019

18. 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, 2019, 2018 and 2017:

(In thousands)	Surfactants		Polymers		Specialty Products		Segment Totals
2019
Net sales	$	1,272,723	$	512,347	$	73,675	$	1,858,745
Operating income		122,780		69,567		16,415		208,762
Assets		907,032		338,179		86,718		1,331,929
Capital expenditures		69,725		29,188		4,441		103,354
Depreciation and amortization expenses		48,422		22,151		5,483		76,056

2018
Net sales	$	1,385,932	$	527,420	$	80,505	$	1,993,857
Operating income ⁽¹⁾		133,518		66,373		11,661		211,552
Assets		850,553		351,690		82,957		1,285,200
Capital expenditures		51,543		26,663		6,192		84,398
Depreciation and amortization expenses		50,514		23,253		5,150		78,917

2017
Net sales	$	1,297,555	$	546,634	$	80,818	$	1,925,007
Operating income ⁽¹⁾		125,712		85,745		9,965		221,422
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

(1)

The 2018 and 2017 amounts for the noted line items have been retrospectively changed from the amounts originally reported as a result of the Company’s first quarter 2019 change in method of accounting for U.S. inventory valuation from LIFO to FIFO.

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

(In thousands)	2019			2018			2017
Operating income - segment totals ⁽¹⁾	$	208,762		$	211,552		$	221,422
Business restructuring ⁽²⁾		(2,744	)		(2,588	)		(3,069	)
Unallocated corporate expenses ⁽³⁾		(78,758	)		(59,699	)		(63,513	)
Total operating income		127,260			149,265			154,840
Interest expense, net		(5,932	)		(10,771	)		(11,444	)
Other, net		4,571			(725	)		3,486
Consolidated income before income taxes⁽¹⁾	$	125,899		$	137,769		$	146,882

Assets - segment totals	$	1,331,929		$	1,285,200		$	1,311,932
Unallocated corporate assets ⁽¹⁾⁽⁴⁾		247,438			229,414			190,960
Consolidated assets	$	1,579,367		$	1,514,614		$	1,502,892

Capital expenditures - segment totals	$	103,354		$	84,398		$	75,780
Unallocated corporate expenditures		2,218			2,249			2,833
Consolidated capital expenditures	$	105,572		$	86,647		$	78,613

Depreciation and amortization expenses – segment totals	$	76,056		$	78,917		$	77,119
Unallocated corporate depreciation expenses		2,645			2,198			1,903
Consolidated depreciation and amortization expenses	$	78,701		$	81,115		$	79,022

(1)

(2)

See Note 23 regarding business restructuring costs.

(3)

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.

(4)

The changes in unallocated corporate assets between 2019, 2018 and 2017 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, 2019, 2018 and 2017:

(In thousands)	2019		2018		2017
Net sales ⁽¹⁾
United States	$	1,115,993	$	1,193,938	$	1,159,578
France		145,933		171,010		176,052
Poland		156,391		170,474		188,244
United Kingdom		96,842		105,732		99,069
Brazil		102,590		100,328		109,960
All other countries		240,996		252,375		192,104
Total	$	1,858,745	$	1,993,857	$	1,925,007

Long-lived assets ⁽²⁾
United States	$	462,199	$	427,274	$	420,342
Germany		30,084		29,151		29,116
Singapore		28,741		30,838		33,530
Brazil		46,740		48,427		55,974
China		27,201		29,030		30,849
United Kingdom		21,551		20,225		21,657
All other countries		64,239		61,145		50,631
Total	$	680,755	$	646,090	$	642,099

(1)

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

(2)

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