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16. SEGMENT INFORMATION
We have three reportable segments through which we manage our operating activities: (i) chlorovinyls; (ii) building products; and (iii) aromatics. These three segments reflect the organization used by our management for internal reporting. The chlorovinyls segment consists of a highly integrated chain of electrovinyl products, which includes chlorine, caustic soda, VCM and vinyl resins, and our compound products consisting of compound additives and vinyl compounds. Our vinyl-based building and home improvement products, including window and door profiles and mouldings products and outdoor building products consisting of siding, pipe and pipe fittings and deck, fence and rail products are marketed under the Royal brand names, and are managed within the building products segment. The aromatics segment is also integrated and includes cumene and the co-products phenol and acetone.
Earnings of our segments exclude interest income and expense, unallocated corporate expenses and general plant services, and provision for income taxes. Transactions between operating segments are valued at market based prices. The revenues generated by these transfers are provided in the following table.
The accounting policies of the reportable segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements in our 2010 Annual Report.
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(In thousands) |
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Chlorovinyls |
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Aromatics |
|
Building
Products |
|
Eliminations,
Unallocated
and Other |
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Total |
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Three months ended September 30, 2011: |
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| |
Net sales |
|
$ |
347,195 |
|
$ |
319,906 |
|
$ |
262,535 |
|
$ |
— |
|
$ |
929,636 |
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| |
Intersegment revenues |
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|
63,741 |
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|
— |
|
|
— |
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|
(63,741 |
) |
|
— |
|
| |
Restructuring expense |
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
|
1 |
|
| |
Operating income (loss) |
|
|
46,261 |
|
|
1,689 |
|
|
14,313 |
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|
(7,848 |
) |
|
54,415 |
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| |
Depreciation and amortization |
|
|
14,730 |
|
|
384 |
|
|
10,231 |
|
|
1,118 |
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|
26,463 |
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|
Three months ended September 30, 2010: |
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Net sales |
|
$ |
316,749 |
|
$ |
218,386 |
|
$ |
222,907 |
|
$ |
— |
|
$ |
758,042 |
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| |
Intersegment revenues |
|
|
63,715 |
|
|
— |
|
|
141 |
|
|
(63,856 |
) |
|
— |
|
| |
Restructuring expense (income) |
|
|
141 |
|
|
— |
|
|
(5 |
) |
|
— |
|
|
136 |
|
| |
Operating income (loss) |
|
|
46,137 |
|
|
12,072 |
|
|
5,567 |
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|
(10,550 |
) |
|
53,226 |
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| |
Depreciation and amortization |
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|
15,012 |
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|
337 |
|
|
8,783 |
|
|
1,279 |
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|
25,411 |
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|
(In thousands) |
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Chlorovinyls |
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Aromatics |
|
Building
Products |
|
Eliminations,
Unallocated
and Other |
|
Total |
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|
Nine months ended September 30, 2011: |
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Net sales |
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$ |
997,177 |
|
$ |
857,912 |
|
$ |
694,195 |
|
$ |
— |
|
$ |
2,549,284 |
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| |
Intersegment revenues |
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|
198,441 |
|
|
— |
|
|
3 |
|
|
(198,444 |
) |
|
— |
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| |
Restructuring expense (income) |
|
|
(515 |
) |
|
— |
|
|
392 |
|
|
— |
|
|
(123 |
) |
| |
Operating income (loss) |
|
|
121,826 |
|
|
14,024 |
|
|
19,138 |
|
|
(28,422 |
) |
|
126,566 |
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| |
Depreciation and amortization |
|
|
43,912 |
|
|
1,097 |
|
|
29,980 |
|
|
3,316 |
|
|
78,305 |
|
|
Nine months ended September 30, 2010: |
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| |
Net sales |
|
$ |
905,271 |
|
$ |
600,720 |
|
$ |
619,207 |
|
$ |
— |
|
$ |
2,125,198 |
|
| |
Intersegment revenues |
|
|
199,972 |
|
|
— |
|
|
141 |
|
|
(200,113 |
) |
|
— |
|
| |
Restructuring expense (income) |
|
|
(322 |
) |
|
— |
|
|
593 |
|
|
— |
|
|
271 |
|
| |
Operating income (loss) |
|
|
73,681 |
|
|
13,935 |
|
|
20,632 |
|
|
(27,602 |
) |
|
80,646 |
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| |
Depreciation and amortization |
|
|
44,715 |
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|
1,067 |
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|
25,963 |
|
|
3,776 |
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|
75,521 |
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Sales by Product Line
The table below summarizes net sales by product line. Our electrovinyls products are primarily comprised of chlorine/caustic soda, VCM and vinyl resins. Our compound products are comprised of vinyl compounds, compound additives and plasticizers. Our outdoor building products are comprised of siding, pipe and pipe fittings, and deck, fence, and rail products.
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Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
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(In thousands) |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
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Chlorovinyls |
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|
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Electrovinyl products |
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$ |
235,771 |
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$ |
219,253 |
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$ |
664,333 |
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$ |
610,077 |
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Compound products |
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|
111,424 |
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|
97,496 |
|
|
332,844 |
|
|
295,194 |
|
| |
|
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|
|
|
|
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| |
Total |
|
|
347,195 |
|
|
316,749 |
|
|
997,177 |
|
|
905,271 |
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| |
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|
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|
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Aromatics |
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|
|
|
|
|
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Cumene products |
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|
191,683 |
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|
139,887 |
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|
510,493 |
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|
398,794 |
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Phenol/acetone products |
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|
128,223 |
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|
78,499 |
|
|
347,419 |
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|
201,926 |
|
| |
|
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|
|
|
|
|
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| |
Total |
|
|
319,906 |
|
|
218,386 |
|
|
857,912 |
|
|
600,720 |
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| |
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Building Products |
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|
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|
|
|
|
|
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|
Window & Door Profiles and Moulding products |
|
|
94,362 |
|
|
93,774 |
|
|
255,170 |
|
|
266,662 |
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Outdoor Building products |
|
|
168,173 |
|
|
129,133 |
|
|
439,025 |
|
|
352,545 |
|
| |
|
|
|
|
|
|
|
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| |
Total |
|
|
262,535 |
|
|
222,907 |
|
|
694,195 |
|
|
619,207 |
|
| |
|
|
|
|
|
|
|
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|
|
Total net sales |
|
$ |
929,636 |
|
$ |
758,042 |
|
$ |
2,549,284 |
|
$ |
2,125,198 |
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| |
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