| SEGMENT INFORMATION |
17. 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 purposes. Our chlorovinyls segment produces a highly integrated chain of products, including chlor-alkali and derivative products (chlorine, caustic soda, vinyl chloride monomer ("VCM"), vinyl resins, ethylene dichloride, chlorinated solvents, calcium hypochlorite, muriatic acid and phosgene derivatives) and compound products (vinyl compounds, compound additives and plasticizers). The financial results of the Merged Business are included with the chlorovinyls segment from January 28, 2013, the closing date of the Merger. Our building products segment consists of two primary product groups: (i) window and door profiles and mouldings products, which include extruded vinyl window and door profiles and interior and exterior moulding products; and (ii) vinyl-based home improvement and building products. Our aromatics segment is highly integrated and manufactures cumene products and phenol and acetone products (co-products made from cumene).
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 for the three and six month periods ended June 30, 2013 and 2012 are provided in the tables below.
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(In millions) |
|
Chlorovinyls |
|
Building
Products |
|
Aromatics |
|
Eliminations,
Unallocated
and Other |
|
Total |
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|
Three Months Ended June 30, 2013 |
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|
|
|
|
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|
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Net sales |
|
$ |
801.8 |
|
$ |
244.5 |
|
$ |
226.5 |
|
$ |
- |
|
$ |
1,272.8 |
|
|
Intersegment revenues |
|
$ |
64.2 |
|
|
- |
|
|
- |
|
|
(64.2 |
) |
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Total net sales |
|
$ |
866.0 |
|
|
244.5 |
|
|
226.5 |
|
|
(64.2 |
) |
$ |
1,272.8 |
|
|
Transaction related costs and other, net |
|
$ |
1.9 |
|
|
0.1 |
|
|
- |
|
|
6.8 |
|
$ |
8.8 |
|
|
Operating income |
|
$ |
118.2 |
|
|
19.6 |
|
|
4.3 |
|
|
(17.5 |
) |
$ |
124.6 |
|
|
Depreciation and amortization |
|
$ |
47.5 |
|
|
8.6 |
|
|
0.3 |
|
|
1.6 |
|
$ |
58.0 |
|
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Capital expenditures |
|
$ |
27.6 |
|
|
9.0 |
|
|
0.8 |
|
|
1.8 |
|
$ |
39.2 |
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Three Months Ended June 30, 2012 |
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Net sales |
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$ |
339.8 |
|
$ |
252.4 |
|
$ |
275.5 |
|
$ |
- |
|
$ |
867.7 |
|
|
Intersegment revenues |
|
$ |
73.2 |
|
|
0.1 |
|
|
- |
|
|
(73.3 |
) |
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
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Total net sales |
|
$ |
413.0 |
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|
252.5 |
|
|
275.5 |
|
|
(73.3 |
) |
$ |
867.7 |
|
|
Transaction related costs and other, net |
|
$ |
- |
|
|
(0.5 |
) |
|
- |
|
|
7.1 |
|
$ |
6.6 |
|
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Operating income |
|
$ |
34.5 |
|
|
15.4 |
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(2.4 |
) |
|
(19.1 |
) |
$ |
28.4 |
|
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Depreciation and amortization |
|
$ |
11.4 |
|
|
9.5 |
|
|
0.4 |
|
|
1.1 |
|
$ |
22.4 |
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Capital expenditures |
|
$ |
18.3 |
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|
4.5 |
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|
0.7 |
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|
3.6 |
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$ |
27.1 |
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|
(In millions) |
|
Chlorovinyls |
|
Building
Products |
|
Aromatics |
|
Eliminations,
Unallocated
and Other |
|
Total |
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|
Six Months Ended June 30, 2013 |
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|
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Net sales |
|
$ |
1,416.3 |
|
$ |
406.7 |
|
$ |
511.0 |
|
$ |
- |
|
$ |
2,334.0 |
|
|
Intersegment revenues |
|
$ |
122.9 |
|
|
- |
|
|
- |
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|
(122.9 |
) |
$ |
- |
|
| |
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Total net sales |
|
$ |
1,539.2 |
|
|
406.7 |
|
|
511.0 |
|
|
(122.9 |
) |
$ |
2,334.0 |
|
|
Transaction related costs and other, net |
|
$ |
3.2 |
|
|
2.4 |
|
|
- |
|
|
15.9 |
|
$ |
21.5 |
|
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Operating income |
|
$ |
209.4 |
|
|
5.8 |
|
|
17.3 |
|
|
(36.7 |
) |
$ |
195.8 |
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Depreciation and amortization |
|
$ |
79.0 |
|
|
17.4 |
|
|
0.6 |
|
|
3.3 |
|
$ |
100.3 |
|
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Capital expenditures |
|
$ |
39.0 |
|
|
13.1 |
|
|
0.9 |
|
|
2.6 |
|
$ |
55.6 |
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Six Months Ended June 30, 2012 |
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Net sales |
|
$ |
669.3 |
|
$ |
439.6 |
|
$ |
618.7 |
|
$ |
- |
|
$ |
1,727.6 |
|
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Intersegment revenues |
|
$ |
139.0 |
|
|
0.3 |
|
|
- |
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|
(139.3 |
) |
$ |
- |
|
| |
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Total net sales |
|
$ |
808.3 |
|
|
439.9 |
|
|
618.7 |
|
|
(139.3 |
) |
$ |
1,727.6 |
|
|
Transaction related costs and other, net |
|
$ |
- |
|
|
(0.7 |
) |
|
- |
|
|
12.3 |
|
$ |
11.6 |
|
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Gain on sale of assets |
|
$ |
(17.4 |
) |
|
- |
|
|
- |
|
|
- |
|
$ |
(17.4 |
) |
|
Operating income |
|
$ |
86.4 |
|
|
9.0 |
|
|
35.2 |
|
|
(34.0 |
) |
$ |
96.6 |
|
|
Depreciation and amortization |
|
$ |
22.5 |
|
|
19.5 |
|
|
0.8 |
|
|
2.2 |
|
$ |
45.0 |
|
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Capital expenditures |
|
$ |
24.2 |
|
|
10.4 |
|
|
1.0 |
|
|
5.1 |
|
$ |
40.7 |
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Sales by Product Line
The table below summarizes sales by product line:
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Three Months Ended June 30, |
|
Six Months Ended June 30, |
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|
(In millions) |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
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Chlorovinyls |
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|
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|
|
|
|
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|
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Chlor-alkali and derivative products |
|
$ |
679.4 |
|
$ |
217.3 |
|
$ |
1,171.7 |
|
$ |
424.8 |
|
|
Compound products |
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|
122.4 |
|
|
122.5 |
|
|
244.6 |
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|
244.5 |
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| |
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Total |
|
|
801.8 |
|
|
339.8 |
|
|
1,416.3 |
|
|
669.3 |
|
| |
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|
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Building Products |
|
|
|
|
|
|
|
|
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Window and door profiles and moulding products |
|
|
86.3 |
|
|
91.0 |
|
|
149.3 |
|
|
157.8 |
|
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Outdoor building products |
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|
158.2 |
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|
161.4 |
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|
257.4 |
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|
281.8 |
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| |
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Total |
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|
244.5 |
|
|
252.4 |
|
|
406.7 |
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|
439.6 |
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Aromatics |
|
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Cumene products |
|
|
129.5 |
|
|
181.7 |
|
|
332.3 |
|
|
433.5 |
|
|
Phenol and acetone products |
|
|
97.0 |
|
|
93.8 |
|
|
178.7 |
|
|
185.2 |
|
| |
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Total |
|
|
226.5 |
|
|
275.5 |
|
|
511.0 |
|
|
618.7 |
|
| |
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|
|
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|
|
|
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|
Net Sales |
|
$ |
1,272.8 |
|
$ |
867.7 |
|
$ |
2,334.0 |
|
$ |
1,727.6 |
|
| |
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