Segment and Geographic Information

Segment Information

The Company operates in two principal operating 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.

No single customer accounted for more than 10% of sales in the Olefins segment for the years ended December 31, 2018, 2017 or 2016.

The Company's Vinyl segment manufactures and markets PVC, VCM, ethylene dichloride ("EDC"), chlor-alkali (chlorine and caustic soda), chlorinated derivative products and ethylene. The Company also manufactures and sells building products fabricated from PVC, including siding, pipe, fittings, profiles, trim, mouldings, fence and decking products, window and door components and film and sheet products. The Company's primary North American chemical manufacturing facilities are located in its Calvert City, Kentucky and Lake Charles, Plaquemine and Geismar, Louisiana sites. The Company also produces chlorine, caustic soda, hydrogen and chlorinated derivative products at its facilities in Natrium, Longview, Washington and Beauharnois, Quebec and PVC resin and PVC compounds at several facilities in Mississippi. In addition, the Company has manufacturing facilities in Germany, the United Kingdom, Taiwan and the People's Republic of China.

As of December 31, 2018, the Company owned 24 building products facilities. The Company uses its chlorine, VCM and PVC production to manufacture its building products. No single customer accounted for more than 10% of sales in the Vinyls segment for the years ended December 31, 2018, 2017 or 2016.

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



	Year Ended December 31,
	2018			2017			2016
Net external sales
Olefins
Polyethylene	$	1,519		$	1,518		$	1,463
Styrene, feedstock and other	500			533			431
Total olefins	2,019			2,051			1,894
Vinyls
PVC, caustic soda and other	5,359			4,769			2,493
Building products	1,257			1,221			689
Total vinyls	6,616			5,990			3,182
	$	8,635		$	8,041		$	5,076

Intersegment sales
Olefins	$	500		$	393		$	165
Vinyls	2			1			26
	$	502		$	394		$	191

Income (loss) from operations
Olefins	$	573		$	655		$	558
Vinyls	913			639			176
Corporate and other	(78		)	(69		)	(151		)
	$	1,408		$	1,225		$	583

Depreciation and amortization
Olefins	$	138		$	145		$	136
Vinyls	491			449			238
Corporate and other	12			7			4
	$	641		$	601		$	378

Other income, net
Olefins	$	4		$	3		$	5
Vinyls	35			7			1
Corporate and other	13			5			48
	$	52		$	15		$	54

Provision for (benefit from) income taxes
Olefins	$	128		$	63		$	175
Vinyls	212			(302		)	25
Corporate and other	(40		)	(19		)	(62		)
	$	300		$	(258	)	$	138

Capital expenditures
Olefins	$	110		$	97		$	324
Vinyls	585			459			302
Corporate and other	7			21			3
	$	702		$	577		$	629

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



	Year Ended December 31,
	2018			2017			2016
Income from operations for reportable segments	$	1,408		$	1,225		$	583
Interest expense	(126		)	(159		)	(79		)
Other income, net	52			15			54
Income before income taxes	$	1,334		$	1,081		$	558



	December 31, 2018		December 31, 2017
Total assets
Olefins	$	2,024	$	2,006
Vinyls	8,879		8,853
Corporate and other	699		1,217
	$	11,602	$	12,076

Geographic Information



	Year Ended December 31,
	2018		2017		2016
Net sales to external customers ⁽¹⁾
United States	$	6,114	$	5,739	$	3,526
Foreign
Canada	649		653		317
Germany	500		432		402
China	155		104		87
Italy	105		96		84
Taiwan	102		96		25
Other	1,010		921		635
	$	8,635	$	8,041	$	5,076



	December 31, 2018		December 31, 2017
Long-lived assets
United States	$	5,829	$	5,668
Foreign
Germany	528		504
Other	238		240
	$	6,595	$	6,412

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