Segment And Geographic Information

12 Months Ended

Dec. 31, 2011

Segment And Geographic Information [Abstract]

Segment And Geographic Information

19. Segment and Geographic Information

Segment Information

The Company operates in two principal business segments: Olefins and Vinyls. These segments are strategic business units that offer a variety of different products. The Company manages each segment separately as each business requires different technology and marketing strategies.

The Company's Olefins segment manufactures and markets ethylene, polyethylene, styrene monomer and various ethylene co-products. The majority of the Company's ethylene production is used in the Company's polyethylene, styrene and VCM operations. The remainder of the Company's ethylene is sold to external customers. In addition, the Company makes ethylene co-products such as propylene, crude butadiene and hydrogen that are sold to external customers.

The majority of sales in the Company's Olefins business are made under long-term agreements where contract volumes are established within a range (typically, more than one year). Earlier terminations may occur if the parties fail to agree on price and deliveries are suspended for a period of several months. In most cases, these contracts also contemplate extension of the term unless specifically terminated by one of the parties. No single customer accounted for more than 10% of sales in the Olefins segment for the years ended December 31, 2011, 2010 or 2009.

The Company's Vinyls segment manufactures and markets PVC, VCM, chlorine, caustic soda and ethylene. The Company also manufactures and sells products fabricated from PVC that the Company produces, including pipe, window and door profiles and fence. The Company's main manufacturing complex is located in Calvert City. It includes an ethylene plant, a chlor-alkali plant, a VCM plant and a PVC plant. The Company also operates a PVC and VCM manufacturing facility in Geismar, Louisiana. In addition, the Company owns a 59% interest in a PVC joint venture in China.

The Company uses its chlorine, VCM and PVC production to manufacture building products at the Company's 10 regional plants. For the years ended December 31, 2011 and 2009, no single customer accounted for more than 10% of sales in the Vinyls segment. For the year ended December 31, 2010, one customer in the Company's Vinyls segment accounted for 10.6% of segment net sales.

The accounting policies of the individual segments are the same as those described in Note 1.

	Year Ended December 31,
	2011			2010			2009
Net external sales
Olefins
Polyethylene	$	1,772,144		$	1,656,203		$	1,210,706
Ethylene, styrene and other		795,698			605,009			400,745
Total olefins		2,567,842			2,261,212			1,611,451
Vinyls
PVC, caustic soda and other		757,314			558,156			398,825
Building products		294,692			352,419			315,447
Total vinyls		1,052,006			910,575			714,272
	$	3,619,848		$	3,171,787		$	2,325,723
Intersegment sales
Olefins	$	444,889		$	322,125		$	233,746
Vinyls		1,474			1,047			1,222
	$	446,363		$	323,172		$	234,968
Income (loss) from operations
Olefins	$	459,266		$	460,027		$	177,101
Vinyls		4,012			(62,429	)		(57,445	)
Corporate and other		(16,482	)		(19,234	)		(12,399	)
	$	446,796		$	378,364		$	107,257
Depreciation and amortization
Olefins	$	86,915		$	86,086		$	82,952
Vinyls		43,877			42,062			39,843
Corporate and other		605			584			404
	$	131,397		$	128,732		$	123,199
Other income, net
Olefins	$	2,813		$	440		$	440
Vinyls		194			399			478
Corporate and other		2,621			3,632			5,535
	$	5,628		$	4,471		$	6,453
Provision for (benefit from) income taxes
Olefins	$	149,033		$	147,296		$	44,987
Vinyls		(2,193	)		(24,519	)		(31,287	)
Corporate and other		(4,374	)		(1,210	)		12,058
	$	142,466		$	121,567		$	25,758

Capital expenditures
Olefins	$	90,641	$	37,865	$	40,251
Vinyls		84,192		42,371		58,186
Corporate and other		2,010		1,033		1,332
	$	176,843	$	81,269	$	99,769

	December 31, 2011		December 31, 2010
Total assets
Olefins	$	1,441,752	$	1,351,088
Vinyls		824,825		767,875
Corporate and other		1,000,244		835,181
	$	3,266,821	$	2,954,144

In the first quarter of 2011, in order to better reflect large buyer market related pricing, the Company changed its intersegment market pricing methodology used to account for intersegment sales of ethylene sold from the Olefins segment to the Vinyls segment. Had this pricing methodology been in effect on January 1, 2010, the impact on Olefins segment income from operations for 2010 would be a reduction of $29,813. This reduction would be offset by an improvement in the Vinyls and Corporate segments' operating results for 2010 of $25,536 and $4,277, respectively. If this pricing methodology were in effect on January 1, 2009, income from operations for the Olefins segment for 2009 would have increased by $2,979. This increase would be offset by a reduction in the Vinyls and Corporate segments' operating results for 2009 of $2,847 and $132, respectively. The impact on the Corporate segment's loss from operations for 2010 and 2009 is attributable to changes in intercompany profit in inventory reserve related to sales from the Olefins segment to the Vinyls segment. There would be no impact on the Company's reported consolidated income from operations for 2010 or 2009.

A reconciliation of total segment income from operations to consolidated income before income taxes is as follows:

	Year Ended December 31,
	2011			2010			2009
Income from operations for reportable segments	$	446,796		$	378,364		$	107,257
Interest expense		(50,992	)		(39,875	)		(34,957	)
Other income, net		5,628			4,471			6,453
Income before income taxes	$	401,432		$	342,960		$	78,753

Geographic Information

	Year Ended December 31,
	2011		2010		2009
Sales to external customers (1)
United States	$	3,221,562	$	2,832,980	$	2,088,344
Foreign
Canada		247,357		214,662		154,972
Singapore		29,210		32,733		27,300
Other		121,719		91,412		55,107
	$	3,619,848	$	3,171,787	$	2,325,723

	December 31, 2011		December 31, 2010
Long-lived assets
United States	$	1,223,073	$	1,159,051
Foreign		8,993		11,283
	$	1,232,066	$	1,170,334

(1) Revenues are attributed to countries based on location of customer.