NOTE 2 – SEGMENT REPORTING

The Company reports its financial performance based on the four reportable segments Fuel Specialties, Performance Chemicals, Oilfield Services and Octane Additives.

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 tables analyze sales and other financial information by the Company’s reportable segments:


	Three Months Ended June 30				Six Months Ended June 30
(in millions)	2017		2016		2017		2016
Net Sales:
Refinery and Performance	$	88.7	$	93.7	$	189.1	$	192.0
Other		32.6		35.6		58.6		60.7

Fuel Specialties		121.3		129.3		247.7		252.7

Personal Care		48.6		31.8		96.1		64.0
Home Care		29.4		0.6		56.3		0.9
Other		26.9		2.9		47.0		5.1

Performance Chemicals		104.9		35.3		199.4		70.0
Oilfield Services		76.1		46.5		142.6		82.7
Octane Additives		24.0		16.9		30.9		34.7

	$	326.3	$	228.0	$	620.6	$	440.1


	Three Months Ended June 30						Six Months Ended June 30
(in millions)	2017			2016			2017			2016
Net sales:
Fuel Specialties	$	121.3		$	129.3		$	247.7		$	252.7
Performance Chemicals		104.9			35.3			199.4			70.0
Oilfield Services		76.1			46.5			142.6			82.7
Octane Additives		24.0			16.9			30.9			34.7

	$	326.3		$	228.0		$	620.6		$	440.1

Gross profit:
Fuel Specialties	$	45.2		$	43.7		$	91.3		$	85.7
Performance Chemicals		17.4			11.3			34.1			22.1
Oilfield Services		29.0			19.9			54.4			31.5
Octane Additives		13.5			10.6			16.2			22.4

	$	105.1		$	85.5		$	196.0		$	161.7

Operating income:
Fuel Specialties	$	23.8		$	24.2		$	50.6		$	48.1
Performance Chemicals		6.5			4.7			12.5			9.1
Oilfield Services		3.7			(1.6	)		6.7			(7.1	)
Octane Additives		12.8			9.6			14.8			20.6
Pension credit		1.0			1.7			2.1			3.5
Corporate costs		(12.1	)		(12.4	)		(22.8	)		(22.6	)
Adjustment to fair value of contingent consideration		0.0			2.4			0.0			4.0
Loss on disposal of subsidiary		(1.0	)		0.0			(1.0	)		(1.4	)
Foreign exchange loss on liquidation of subsidiary		0.0			0.0			(1.8	)		0.0

Total operating income	$	34.7		$	28.6		$	61.1		$	54.2

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 June 30				Six Months Ended June 30
(in millions)	2017		2016		2017		2016
Depreciation:
Fuel Specialties	$	1.0	$	1.0	$	2.0	$	1.9
Performance Chemicals		2.3		0.6		4.5		1.1
Oilfield Services		1.6		1.5		3.2		2.9
Octane Additives		0.2		0.2		0.4		0.3
Corporate		0.2		0.2		0.4		0.4

	$	5.3	$	3.5	$	10.5	$	6.6

Amortization:
Fuel Specialties	$	0.2	$	0.3	$	0.4	$	0.5
Performance Chemicals		1.8		1.0		3.7		2.0
Oilfield Services		3.0		3.0		6.0		6.0
Corporate		1.8		1.8		3.6		3.6

	$	6.8	$	6.1	$	13.7	$	12.1