Segment Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We are organized into two operating segments, Flavors and Fragrances; these segments align with the internal structure used to manage these businesses. Flavor compounds are sold to the food and beverage industries for use in consumer products such as prepared foods, beverages, dairy, food and sweet products. Fragrances is comprised of Fragrance Compounds, which are ultimately used by our customers in two broad categories: Fine Fragrances, including perfumes and colognes and Consumer Fragrances, including fragrance compounds for personal care (e.g., soaps), household products (e.g., detergents and cleaning agents) and beauty care, including toiletries; and Fragrance Ingredients, consisting of synthetic and natural ingredients that can be combined with other materials to create unique fine fragrance and consumer compounds. Major fragrance customers include the cosmetics industry, including perfume and toiletries manufacturers, and the household products industry, including manufacturers of soaps, detergents, fabric care, household cleaners and air fresheners.

We evaluate the performance of these operating segments based on segment profit which is defined as operating profit before Restructuring, global expenses (as discussed below) and certain non-recurring items, Interest expense, Other income (expense), net and Taxes on income.

The Global expenses caption represents corporate and headquarters-related expenses which include legal, finance, human resources, certain incentive compensation expenses and other R&D and administrative expenses that are not allocated to individual operating segments. Unallocated assets are principally cash and cash equivalents and other corporate and headquarters-related assets.

Our reportable segment information is as follows:

	December 31,
(DOLLARS IN THOUSANDS)	2014			2013			2012
Net sales
Flavors	$	1,457,055		$	1,422,739		$	1,378,377
Fragrances	1,631,478			1,530,157			1,443,069
Consolidated	$	3,088,533		$	2,952,896		$	2,821,446
	December 31,
(DOLLARS IN THOUSANDS)	2014			2013
Segment assets
Flavors	$	1,539,254		$	1,573,737
Fragrances	1,753,477			1,623,033
Global assets	201,890			134,961
Consolidated	$	3,494,621		$	3,331,731
	December 31,
(DOLLARS IN THOUSANDS)	2014			2013			2012
Segment profit:
Flavors	$	331,257		$	323,562		$	298,326
Fragrances	335,447			283,651			238,379
Global expenses	(65,443		)	(66,942		)	(48,419		)
Restructuring and other charges, net	(1,298		)	(2,151		)	(1,668		)
Spanish capital tax charge (1)	—			(13,011		)	—
Operational improvement initiative costs (2)	(7,642		)	(8,770		)	—
Operating Profit	592,321			516,339			486,618
Interest expense	(46,067		)	(46,767		)	(41,753		)
Other income (expense), net (3)	2,807			15,638			(1,450		)
Income before taxes	$	549,061		$	485,210		$	443,415
Profit margin
Flavors	22.7		%	22.7		%	21.6		%
Fragrances	20.6		%	18.5		%	16.5		%
Consolidated	19.2		%	17.5		%	17.2		%

⁽¹⁾ The Spanish capital tax charge represents the charge recorded during the year ended December 31, 2013 as a result of the unfavorable ruling of the Spanish capital tax case from 2002.

⁽²⁾ Operational improvement initiative costs relate to the closing of a smaller facility in Europe and certain manufacturing activities in Asia, while transferring production to larger facilities in each respective region.

⁽³⁾ Other income (expense), net includes a $14.2 million gain on the sale of non-operating assets for the year ended December 31, 2013.

We have not disclosed revenues at a lower level than provided herein, such as revenues from external customers by product, as it is impracticable for us to do so.

We had one customer that accounted for more than 10% of our consolidated net sales in each year for all periods presented and related net sales were $368 million, $355 million and $320 million in 2014, 2013 and 2012, respectively. The majority of these sales were in the Fragrances operating segment.

Total long-lived assets consist of net property, plant and equipment and amounted to $720 million and $687 million at December 31, 2014 and 2013, respectively. Of this total $159 million and $163 million was located in the United States at December 31, 2014 and 2013, respectively, and $105 million and $107 million were located in the Netherlands at December 31, 2014 and 2013, respectively.

	Capital Expenditures						Depreciation and Amortization
(DOLLARS IN THOUSANDS)	2014		2013		2012		2014		2013		2012
Flavors	$	91,104	$	108,215	$	90,309	$	36,008	$	33,662	$	30,816
Fragrances	43,948		17,616		26,069		43,790		39,716		42,987
Unallocated assets	8,130		8,326		9,762		9,556		9,849		2,864
Consolidated	$	143,182	$	134,157	$	126,140	$	89,354	$	83,227	$	76,667

	Net Sales by Geographic Area
(DOLLARS IN THOUSANDS)	2014		2013		2012
Europe, Africa and Middle East	$	1,041,585	$	971,921	$	912,768
Greater Asia	856,217		823,504		771,877
North America	690,214		680,840		694,430
Latin America	500,517		476,631		442,371
Consolidated	$	3,088,533	$	2,952,896	$	2,821,446

Net sales are attributed to individual regions based upon the destination of product delivery. Net sales related to the U.S. for the years ended December 31, 2014, 2013 and 2012 were $653 million, $653 million and $662 million, respectively. Net sales attributed to all foreign countries in total for the years ended December 31, 2014, 2013 and 2012 were $2,435 million, $2,300 million and $2,159 million, respectively. No non-U.S. country had net sales in any period presented greater than 7.1% of total consolidated net sales.