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Segment Information
 12 Months Ended
Dec. 31, 2011
Segment Information [Abstract]  
Segment Information
18. Segment Information
Factors Used by Management to Identify the Enterprise’s Reportable Segments and Measurement of Segment Income or Loss and Segment Assets
We have two reportable segments (business segments): the Climate Control Business and the Chemical Business. Our reportable segments are based on business units that offer similar products and services. The reportable segments are each managed separately because they manufacture and distribute distinct products with different production processes.
We evaluate performance and allocate resources based on operating income or loss. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.
Description of Each Reportable Segment
Climate Control Business — The Climate Control Business segment manufactures and sells the following variety of heating, ventilation, and air conditioning (“HVAC”) products:
  •  
geothermal and water source heat pumps,
  •  
hydronic fan coils, and
  •  
other HVAC products including large custom air handlers, modular geothermal and other chillers and other products and services.
These HVAC products are primarily for use in commercial/institutional and residential new building construction, renovation of existing buildings and replacement of existing systems. Our various facilities located in Oklahoma City comprise substantially all of the Climate Control segment’s operations. Sales to customers of this segment primarily include original equipment manufacturers, contractors and independent sales representatives located throughout the world.
Chemical Business — The Chemical Business segment manufactures and sells:
  •  
anhydrous ammonia, fertilizer grade AN, UAN, and ammonium nitrate ammonia solution for agricultural applications,
  •  
high purity and commercial grade anhydrous ammonia, high purity AN, sulfuric acids, concentrated, blended and regular nitric acid, mixed nitrating acids, and diesel exhaust fluid for industrial applications, and
  •  
industrial grade AN and solutions for the mining industry.
Our chemical production facilities are located in El Dorado, Arkansas; Cherokee, Alabama; Pryor, Oklahoma; and Baytown, Texas. Sales to customers of this segment primarily include farmers, ranchers, fertilizer dealers and distributors primarily in the ranch land and grain production markets in the United States; industrial users of acids throughout the United States and parts of Canada; and explosive manufacturers in the United States.
The Pryor Facility began limited production in the first quarter of 2010 but did not reach sustained production of anhydrous ammonia until the fourth quarter of 2010. Currently, this facility’s production is predominantly agricultural products, primarily UAN and anhydrous ammonia. During 2011, the Pryor Facility had net sales of approximately $91.9 million to unrelated third parties compared to $25.0 million in 2010 (none in 2009).
As of December 31, 2011, our Chemical Business employed 492 persons, with 149 represented by unions under agreements, which will expire in July through November of 2013.
Other — The business operation classified as “Other” primarily sells industrial machinery and related components to machine tool dealers and end users located primarily in North America.
Segment Financial Information
Information about our continuing operations in different business segments is detailed below.
                         
    2011     2010     2009  
    (In Thousands)  
Net sales:
                       
Climate Control:
                       
Geothermal and water source heat pumps
  $ 183,789     $ 171,561     $ 179,865  
Hydronic fan coils
    54,379       37,923       46,381  
Other HVAC products
    43,397       41,037       39,923  
 
                 
Total Climate Control
    281,565       250,521       266,169  
 
                       
Chemical:
                       
Agricultural products
    231,599       135,598       104,300  
Industrial acids and other chemical products
    161,776       126,846       95,997  
Mining products
    118,479       88,642       57,535  
 
                 
Total Chemical
    511,854       351,086       257,832  
Other
    11,837       8,298       7,837  
 
                 
 
  $ 805,256     $ 609,905     $ 531,838  
 
                 
 
                       
Gross profit:
                       
Climate Control
  $ 88,178     $ 86,364     $ 92,409  
Chemical
    130,687       49,295       42,422  
Other
    4,153       2,966       2,583  
 
                 
 
  $ 223,018     $ 138,625     $ 137,414  
 
                 
 
                       
Operating income:
                       
Climate Control
  $ 32,759     $ 35,338     $ 37,706  
Chemical
    116,503       31,948       15,122  
General corporate expenses and other business operations, net (1)
    (12,819 )     (11,361 )     (12,118 )
 
                 
 
    136,443       55,925       40,710  
Interest expense
    (6,658 )     (7,427 )     (6,746 )
Gain (losses) on extinguishment of debt
    (136 )     (52 )     1,783  
Non-operating income (expense), net:
                       
Climate Control
    2       3       8  
Chemical
    1       7       31  
Corporate and other business operations
    (3 )     43       91  
Provisions for income taxes
    (46,208 )     (19,787 )     (15,024 )
 
                       
Equity in earnings of affiliate — Climate Control
    543       1,003       996  
 
                 
Income from continuing operations
  $ 83,984     $ 29,715     $ 21,849  
 
                 
(1) General corporate expenses and other business operations, net consist of the following:
                         
    2011     2010     2009  
    (In Thousands)  
Gross profit-Other
  $ 4,153     $ 2,966     $ 2,583  
Selling, general and administrative:
                       
Personnel costs
    (8,418 )     (7,865 )     (8,083 )
Professional fees
    (3,805 )     (3,784 )     (3,687 )
All other
    (4,224 )     (3,040 )     (2,917 )
 
                 
Total selling, general and administrative
    (16,447 )     (14,689 )     (14,687 )
 
                       
Other income
    118       366       192  
Other expense
    (643 )     (4 )     (206 )
 
                 
Total general corporate expenses and other business operations, net
  $ (12,819 )   $ (11,361 )   $ (12,118 )
 
                 
Information about our PP&E and total assets by business segment is detailed below:
                         
    2011     2010     2009  
    (In Thousands)  
Depreciation of PP&E:
                       
Climate Control
  $ 3,853     $ 4,026     $ 4,077  
Chemical
    14,659       13,154       11,291  
Corporate assets and other
    250       149       233  
 
                 
Total depreciation of PP&E
  $ 18,762     $ 17,329     $ 15,601  
 
                 
 
                       
Additions to PP&E:
                       
Climate Control
  $ 5,746     $ 7,177     $ 6,438  
Chemical
    39,835       28,850       24,627  
Corporate assets and other
    2,376       518       271  
 
                 
Total additions to PP&E
  $ 47,957     $ 36,545     $ 31,336  
 
                 
 
                       
Total assets at December 31:
                       
Climate Control
  $ 119,323     $ 112,894     $ 102,029  
Chemical
    214,246       179,033       143,800  
Corporate assets and other
    168,440       96,054       92,804  
 
                 
Total assets
  $ 502,009     $ 387,981     $ 338,633  
 
                 
Net sales by business segment include net sales to unaffiliated customers as reported in the consolidated financial statements. Net sales classified as “Other” consist of sales of industrial machinery and related components. Intersegment net sales are not significant.
Gross profit by business segment represents net sales less cost of sales. Gross profit classified as “Other” relates to the sales of industrial machinery and related components.
Our chief operating decision makers use operating income by business segment for purposes of making decisions that include resource allocations and performance evaluations. Operating income by business segment represents gross profit by business segment less SG&A incurred by each business segment plus other income and other expense earned/incurred by each business segment before general corporate expenses and other business operations, net. General corporate expenses and other business operations, net consist of unallocated portions of gross profit, SG&A, other income and other expense.
Identifiable assets by business segment are those assets used in the operations of each business. Corporate assets and other are those principally owned by LSB or by subsidiaries not involved in the two identified businesses.
All net sales and long-lived assets relate to domestic operations for the periods presented.
Net sales to unaffiliated customers are to U.S. customers except foreign export sales as follows:
                         
Geographic Area   2011     2010     2009  
    (In Thousands)  
Canada
  $ 23,765     $ 19,345     $ 20,224  
Middle East
    5,688       6,257       4,440  
Mexico, Central and South America
    2,452       1,411       2,154  
Europe
    2,015       2,373       1,114  
South and East Asia
    1,077       1,635       1,124  
Other
    1,218       835       843  
 
                 
 
  $ 36,215     $ 31,856     $ 29,899  
 
                 
In general, foreign export sales are attributed based upon the location of the customer.
Major Customer
Net sales to one customer, Orica, of our Chemical Business segment represented approximately 11%, 11% and 7% of our total net sales for 2011, 2010 and 2009, respectively. See discussion concerning the supply agreement in Note 11 — Commitments and Contingencies.