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Segment Reporting
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Reporting

NOTE 2 – SEGMENT REPORTING

In the second quarter of 2016, we finalized changes to our reporting segments to reflect the development of our management structure and strategy. As a result of these changes, information that the Company’s chief operating decision maker regularly reviews for purposes of allocating resources and assessing financial performance has changed. Therefore, in the third quarter of 2016, the Company has reported its financial performance based on the four reportable segments described below.

 

  •   Fuel Specialties, including the Polymers business previously reported in Performance Chemicals and excluding Oilfield Services business

 

  •   Performance Chemicals, excluding the Polymers business

 

  •   Oilfield Services, which was previously reported within Fuel Specialties

 

  •   Octane Additives (no change)

We have recast certain prior period amounts to conform to the way we internally manage and monitor segment performance.

The Fuel Specialties, Performance Chemicals and Oilfield Services segments operate in markets where we actively seek growth opportunities although their ultimate customers are different. The Octane Additives segment is expected to decline in the near future as our one remaining refinery customer transitions to unleaded fuel.

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:

 

     Three Months Ended
September 30		      Nine Months Ended
September 30		  

(in millions)

    2016      2015      2016      2015  

Net sales:

            

Fuel Specialties

    $ 114.4       $ 121.3       $ 367.1       $ 386.6   

Performance Chemicals

      36.8         33.7         106.8         124.4   

Oilfield Services

      49.7         78.9         132.4         216.3   

Octane Additives

      4.6         20.3         39.3         39.0   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 205.5       $ 254.2       $ 645.6       $ 766.3   
  

 

 

     

 

 

     

 

 

     

 

 

  

Gross profit:

            

Fuel Specialties

    $ 43.8       $ 39.5       $ 129.5       $ 125.4   

Performance Chemicals

      12.3         9.9         34.4         33.3   

Oilfield Services

      20.6         32.0         52.1         82.4   

Octane Additives

      2.5         9.0         24.9         18.6   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 79.2       $ 90.4       $ 240.9       $ 259.7   
  

 

 

     

 

 

     

 

 

     

 

 

  

Operating income:

            

Fuel Specialties

    $ 24.1       $ 21.6       $ 72.2       $ 70.7   

Performance Chemicals

      4.2         3.6         13.3         13.1   

Oilfield Services

      0.0         7.2         (7.1 )       13.8   

Octane Additives

      1.9         8.0         22.5         15.9   

Pension credit

      1.6         0.0         5.1         0.1   

Corporate costs

      (15.2 )       (9.3 )       (37.8 )       (24.8 ) 

Adjustment to fair value of contingent consideration

      2.3         8.5         6.3         31.6   

Profit/(loss) on disposal of subsidiary

      0.0         1.6         (1.4 )       1.6   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total operating income

    $ 18.9       $ 41.2       $ 73.1       $ 122.0   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

The pension credit 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 following table presents a summary of the depreciation and amortization charges incurred by the Company’s reportable segments:

 

     Three Months Ended
September 30		      Nine Months Ended
September 30		  

(in millions)

    2016      2015      2016      2015  

Depreciation:

            

Fuel Specialties

    $ 0.9       $ 0.7       $ 2.8       $ 2.3   

Performance Chemicals

      0.5         0.5         1.6         1.7   

Oilfield Services

      1.7         1.4         4.6         4.1   

Octane Additives

      0.1         0.1         0.4         0.3   

Corporate

      0.3         0.3         0.7         1.1   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 3.5       $ 3.0       $ 10.1       $ 9.5   
  

 

 

     

 

 

     

 

 

     

 

 

  

Amortization:

            

Fuel Specialties

    $ 0.2       $ 0.2       $ 0.7       $ 0.8   

Performance Chemicals

      1.1         1.1         3.1         3.1   

Oilfield Services

      2.9         3.0         8.9         8.9   

Corporate

      1.9         0.9         5.5         2.8   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 6.1       $ 5.2       $ 18.2       $ 15.6