XML 99 R14.htm IDEA: XBRL DOCUMENT v2.4.1.9
Segmental Reporting and Geographical Area Data
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Segmental Reporting and Geographical Area Data

Note 3.     Segmental Reporting and Geographical Area Data

 

Innospec divides its business into three segments for management and reporting purposes: Fuel Specialties, Performance Chemicals and Octane Additives. The Fuel Specialties and Performance Chemicals segments operate in markets where we actively seek growth opportunities although their ultimate customers are different. The Octane Additives segment is generally characterized by volatile and declining demand.

 

In 2014, the Company had as a significant customer in the Fuel Specialties segment, Royal Dutch Shell plc and its affiliates (“Shell”), which accounted for $81.9 million (8.5%) of our net group sales. In 2013 and 2012, Shell accounted for $83.1 million (10%) and $82.9 million (11%) of our net group sales, respectively.

 

The Company evaluates the performance of its segments based on operating income. The following table analyzes sales and other financial information by the Company’s reportable segments:

 

(in millions)

    2014     2013     2012  

Net sales:

       

Fuel Specialties

    $ 682.2      $ 567.4      $ 527.2   

Performance Chemicals

      223.5        192.4        179.6   

Octane Additives

      55.2        59.0        69.6   
  

 

 

    

 

 

    

 

 

  
   $ 960.9      $ 818.8      $ 776.4   
  

 

 

    

 

 

    

 

 

  

Gross profit:

       

Fuel Specialties

    $ 219.0      $ 181.1      $ 158.7   

Performance Chemicals

      54.4        46.3        43.8   

Octane Additives

      28.6        27.8        33.9   
  

 

 

    

 

 

    

 

 

  
   $ 302.0      $ 255.2      $ 236.4   
  

 

 

    

 

 

    

 

 

  
Operating income:       

Fuel Specialties

    $ 104.4      $ 92.7      $ 87.6   

Performance Chemicals

      25.6        23.6        24.3   

Octane Additives

      22.6        21.5        26.0   

Pension credit/(charge)

      (3.3 )      (2.3 )      (1.6 ) 

Corporate costs

      (38.7 )      (43.6 )      (38.6 ) 

Fair value of contingent consideration

      1.9        0.0        0.0   

Impairment of Octane Additives segment goodwill

      0.0        (1.3 )      (1.2 ) 
  

 

 

    

 

 

    

 

 

  

Total operating income

    $ 112.5      $ 90.6      $ 96.5   
  

 

 

    

 

 

    

 

 

  

Identifiable assets at year end:

       

Fuel Specialties

    $ 676.9      $ 446.4      $ 356.6   

Performance Chemicals

      181.0        176.8        113.4   

Octane Additives

      29.2        42.0        48.9   

Corporate

      112.8        129.5        60.5   
  

 

 

    

 

 

    

 

 

  
   $ 999.9      $ 794.7      $ 579.4   
  

 

 

    

 

 

    

 

 

  

 

Restructuring charges separately disclosed in prior periods have been reclassified to corporate costs. We have reclassified the prior period amounts to conform to the current period presentation.

 

The pension charge relates to the United Kingdom defined benefit pension plan which is closed to future service accrual. The charges related to our other much smaller pension arrangements in the U.S. and overseas are included in the segment and income statement captions consistent with the related employees’ costs.

 

The Company includes within the corporate costs line item the costs of:

 

  •  

managing the Group as a company with securities listed on the NASDAQ and registered with the SEC;

 

  •  

the President/CEO’s office, group finance, group human resources, group legal and compliance counsel, and investor relations;

 

  •  

running the corporate offices in the U.S. and Europe;

 

  •  

the corporate development function since they do not relate to the current trading activities of our other reporting segments; and

 

  •  

the corporate share of the information technology, accounting and human resources departments.

 

Sales by geographical area are reported by source, being where the transactions originated. Intercompany sales are priced using an appropriate pricing methodology and are eliminated in the consolidated financial statements.

 

Identifiable assets are those directly associated with the operations of the geographical area.

 

Goodwill has not been allocated by geographical location on the grounds that it would be impracticable to do so.

 

(in millions)

    2014     2013     2012  

Net sales by source:

       

United States

    $ 468.6      $ 276.1      $ 274.1   

United Kingdom

      486.1        502.4        475.1   

Rest of Europe

      146.9        129.1        142.8   

Rest of World

      21.4        0.2        0.5   

Sales between areas

      (162.1 )      (89.0 )      (116.1 ) 
  

 

 

    

 

 

    

 

 

  
   $ 960.9      $ 818.8      $ 776.4   
  

 

 

    

 

 

    

 

 

  

Income before income taxes:

       

United States

    $ 15.2      $ 10.0      $ 5.6   

United Kingdom

      57.8        43.7        36.3   

Rest of Europe

      39.3        40.4        52.6   

Rest of World

      (1.4 )      0.0        0.0   

Impairment of Octane Additives segment goodwill

      0.0        (1.3 )      (1.2 ) 
  

 

 

    

 

 

    

 

 

  
   $ 110.9      $ 92.8      $ 93.3   
  

 

 

    

 

 

    

 

 

  

Long-lived assets at year end:

       

United States

    $ 197.9      $ 148.2      $ 31.5   

United Kingdom

      54.1        29.4        28.7   

Rest of Europe

      10.4        11.5        11.5   

Rest of World

      0.6        0.0        0.0   
  

 

 

    

 

 

    

 

 

  
   $ 263.0      $ 189.1      $ 71.7   
  

 

 

    

 

 

    

 

 

  

Identifiable assets at year end:

       

United States

    $ 449.3      $ 291.7      $ 174.1   

United Kingdom

      216.4        261.5        192.1   

Rest of Europe

      39.0        53.2        63.8   

Rest of World

      19.1        0.4        0.4   

Goodwill

      276.1        187.9        149.0   
  

 

 

    

 

 

    

 

 

  
   $ 999.9      $ 794.7      $ 579.4