Segment And Geographic Information

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Segment and Geographic Information

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 polyethylene, styrene monomer and various ethylene co-products. The Company's ethylene production is used in the Company's polyethylene, styrene and VCM operations. In addition, the Company sells ethylene and ethylene co-products, primarily propylene, crude butadiene, pyrolysis gasoline and hydrogen, 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, 2012, 2011 or 2010.

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, 2012 and 2011, 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,
	2012			2011			2010
Net external sales
Olefins
Polyethylene	$	1,658,551		$	1,772,144		$	1,656,203
Styrene, feedstock and other	841,427			795,698			605,009
Total olefins	2,499,978			2,567,842			2,261,212
Vinyls
PVC, caustic soda and other	743,275			757,314			558,156
Building products	327,788			294,692			352,419
Total vinyls	1,071,063			1,052,006			910,575
	$	3,571,041		$	3,619,848		$	3,171,787
Intersegment sales
Olefins	$	318,322		$	444,889		$	322,125
Vinyls	1,603			1,474			1,047
	$	319,925		$	446,363		$	323,172
Income (loss) from operations
Olefins	$	552,762		$	459,266		$	460,027
Vinyls	85,942			4,012			(62,429		)
Corporate and other	(23,353		)	(16,482		)	(19,234		)
	$	615,351		$	446,796		$	378,364
Depreciation and amortization
Olefins	$	97,906		$	86,915		$	86,086
Vinyls	46,146			43,877			42,062
Corporate and other	489			605			584
	$	144,541		$	131,397		$	128,732
Other income (expense), net
Olefins	$	3,899		$	2,813		$	440
Vinyls	(965		)	194			399
Corporate and other	586			2,621			3,632
	$	3,520		$	5,628		$	4,471
Provision for (benefit from) income taxes
Olefins	$	177,176		$	149,033		$	147,296
Vinyls	22,389			(2,193		)	(24,519		)
Corporate and other	49			(4,374		)	(1,210		)
	$	199,614		$	142,466		$	121,567
Capital expenditures
Olefins	$	135,886		$	90,641		$	37,865
Vinyls	246,827			84,192			42,371
Corporate and other	4,169			2,010			1,033
	$	386,882		$	176,843		$	81,269

	December 31, 2012		December 31, 2011
Total assets
Olefins	$	1,439,308	$	1,441,752
Vinyls	1,030,912		824,825
Corporate and other	941,976		1,000,244
	$	3,412,196	$	3,266,821

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. The improvement in the Corporate segment's loss from operations is attributable to a reduction 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.

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

	Year Ended December 31,
	2012			2011			2010
Income from operations for reportable segments	$	615,351		$	446,796		$	378,364
Interest expense	(43,049		)	(50,992		)	(39,875		)
Debt retirement costs	(7,082		)	—			—
Gain from sales of equity securities	16,429			—			—
Other income, net	3,520			5,628			4,471
Income before income taxes	$	585,169		$	401,432		$	342,960

Geographic Information

	Year Ended December 31,
	2012		2011		2010
Sales to external customers (1)
United States	$	3,176,202	$	3,221,562	$	2,832,980
Foreign
Canada	294,643		247,357		214,662
Switzerland	32,927		19,922		257
Singapore	15,308		29,210		32,733
Other	51,961		101,797		91,155
	$	3,571,041	$	3,619,848	$	3,171,787

	December 31, 2012		December 31, 2011
Long-lived assets
United States	$	1,502,902	$	1,223,073
Foreign	7,146		8,993
	$	1,510,048	$	1,232,066

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