Segments

12 Months Ended

Dec. 31, 2013

Segments

18. Segments

Segment Information

The Company operates three reportable segments: Consumer Domestic, Consumer International and SPD. These segments are determined based on differences in the nature of products and organizational and ownership structures. The Company also has a Corporate segment.

Segment revenues are derived from the sale of the following products:

Segment	Products
Consumer Domestic	Household and personal care products
Consumer International	Primarily personal care products
SPD	Specialty chemical products

The Corporate segment income consists of equity in earnings (losses) of affiliates. As of December 31, 2013, the Company held 50% ownership interests in each of Armand and ArmaKleen, respectively, and a one-third ownership interest in Natronx. The Company’s equity in earnings (losses) of Armand, ArmaKleen and Natronx for the twelve months ended December 31, 2013, 2012 and 2011 are included in the Corporate segment.

Some of the subsidiaries that are included in the Consumer International segment manufacture and sell personal care products to the Consumer Domestic segment. These sales are eliminated from the Consumer International segment results set forth in the table below.

The following table presents selected financial information relating to the Company’s segments for each of the three years in the period ended December 31, 2013:

	Consumer Domestic			Consumer International			SPD			Corporate(1)			As Reported
Net sales
2013	$	2,413.5		$	532.8		$	248.0		$	0.0		$	3,194.3
2012		2,156.9			510.1			254.9			0.0			2,921.9
2011		1,979.1			509.1			261.1			0.0			2,749.3
Gross profit
2013		1,163.0			243.0			63.3			(31.3	)		1,438.0
2012		1,015.9			236.9			68.0			(29.4	)		1,291.4
2011		936.9			238.7			64.2			(25.3	)		1,214.5
Marketing Expenses
2013		320.5			76.6			2.7			0.0			399.8
2012		280.3			74.5			2.5			0.0			357.3
2011		274.9			75.9			3.3			0.0			354.1
Selling, General and Administrative Expenses
2013		318.6			98.8			29.9			(31.3	)		416.0
2012		297.6			89.8			31.0			(29.4	)		389.0
2011		269.5			92.8			30.8			(25.3	)		367.8
Income from Operations
2013		524.0			67.4			30.8			0.0			622.2
2012		438.0			72.6			34.5			0.0			545.1
2011		392.5			70.0			30.1			0.0			492.6
Equity in Earnings of Affiliates
2013		0.0			0.0			0.0			2.8			2.8
2012		0.0			0.0			0.0			8.9			8.9
2011		0.0			0.0			0.0			10.0			10.0
Interest Expense(2)
2013		23.4			3.0			1.3			0.0			27.7
2012		11.2			1.9			0.9			0.0			14.0
2011		7.0			1.2			0.5			0.0			8.7
Investment Earnings(2)
2013		2.2			0.3			0.1			0.0			2.6
2012		1.4			0.2			0.1			0.0			1.7
2011		1.5			0.3			0.1			0.0			1.9
Other Income, net(2)
2013		(1.8	)		(0.2	)		(0.1	)		0.0			(2.1	)
2012		0.6			0.1			0.1			0.0			0.8
2011		(1.0	)		(0.2	)		0.0			0.0			(1.2	)
Income Before Income Taxes
2013		501.0			64.5			29.5			2.8			597.8
2012		428.8			71.0			33.8			8.9			542.5
2011		386.0			68.9			29.7			10.0			494.6
Identifiable Assets
2013		3,407.4			602.5			140.6			109.2			4,259.7
2012		3,317.5			543.8			135.1			101.7			4,098.1
2011		2,437.9			476.5			132.2			71.0			3,117.6
Capital Expenditures
2013		53.6			10.3			3.2			0.0			67.1
2012		58.9			10.0			5.6			0.0			74.5
2011		57.4			12.2			7.0			0.0			76.6
Depreciation & Amortization
2013		77.3			6.1			5.4			1.7			90.5
2012		70.5			7.9			5.1			1.5			85.0
2011		61.4			8.1			5.7			1.9			77.1

(1) The Corporate segment reflects the following:

(A) The administrative costs of the production planning and logistics functions are included in segment Selling, General and Administrative expenses but are elements of Cost of Sales in the Company’s Consolidated Statements of Income. Such amounts were $31.3, $29.4, and $25.3 for 2013, 2012 and 2011, respectively.

(B) Equity in earnings (loss) of affiliates from Armand, Armakleen and Natronx.

(C) Corporate assets include notes receivable, domestic deferred income taxes, deferred compensation investments and the Company’s investment in unconsolidated affiliates.

(2) In determining Income before Income Taxes, interest expense, investment earnings, and other income, net, were allocated to the segments based upon each segment’s relative Income from Operations.

Other than the differences noted in footnote ⁽¹⁾ and ⁽²⁾ above, the accounting policies followed by each of the segments, including intersegment transactions, are substantially consistent with the accounting policies described in Note 1.

Intersegment sales from Consumer International to Consumer Domestic, which are not reflected in the table above, were $2.2, $3.4 and $5.2 for the twelve months ended December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

Product line revenues from external customers for each of the three years ended December 31, 2013, December 31, 2012 and December 31, 2011 were as follows:

	2013		2012		2011
Household Products	$	1,436.1	$	1,411.3	$	1,295.0
Personal Care Products		977.4		745.6		684.1
Total Consumer Domestic		2,413.5		2,156.9		1,979.1
Total Consumer International		532.8		510.1		509.1
Total SPD		248.0		254.9		261.1
Total Consolidated Net Sales	$	3,194.3	$	2,921.9	$	2,749.3

Household Products include deodorizing, cleaning and laundry products. Personal Care Products include condoms, pregnancy kits, oral care products, skin care products and vitamin and mineral supplements.

Geographic Information

Approximately 80%, 79% and 79% of the net sales reported in the accompanying consolidated financial statements in 2013, 2012 and 2011, respectively, were to customers in the U.S. Approximately 97%, 97% and 96% of long-lived assets were located in the U.S. at December 31, 2013, 2012 and 2011, respectively. Other than the U.S., no one country accounts for more than 7% of consolidated net sales and 5% of total assets.

Customers

A group of three customers accounted for approximately 35%, 34% and 33% of consolidated net sales in 2013, 2012 and 2011, respectively, of which a single customer (Wal-Mart Stores, Inc. and its affiliates) accounted for approximately 24%, 24% and 23% in 2013, 2012 and 2011, respectively.