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Segment Information
 6 Months Ended
Jun. 30, 2017
Segment Reporting [Abstract]  
Segment Information
Segment Information:
The Company is organized into two operating segments: Flavors and Fragrances. These segments align with the internal structure of the Company used to manage these businesses. Performance of these operating segments is evaluated based on segment profit which is defined as operating profit before Restructuring and other charges, net, Global expenses (as discussed below) and certain non-recurring items, Interest expense, Other income (expense), net and Taxes on income.
The Global expenses caption below represent 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.
Reportable segment information is as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(DOLLARS IN THOUSANDS)
2017
 
2016
 
2017
 
2016
Net sales:
 
 
 
 
 
 
 
Flavors
$
414,323

 
$
379,504

 
$
820,487

 
$
752,012

Fragrances
428,538

 
413,974

 
850,667

 
824,777

Consolidated
$
842,861

 
$
793,478

 
$
1,671,154

 
$
1,576,789

Segment profit:
 
 
 
 
 
 
 
Flavors
$
100,338

 
$
90,337

 
$
198,346

 
$
182,151

Fragrances
84,860

 
87,596

 
166,557

 
176,833

Global expenses
(13,398
)
 
(12,268
)
 
(29,594
)
 
(26,141
)
Restructuring and other charges, net (1)
(791
)
 
(182
)
 
(10,934
)
 
(283
)
Acquisition-related costs (2)
(6,278
)
 
(213
)
 
(15,066
)
 
(1,249
)
Operational improvement initiative costs (3)
(445
)
 
(831
)
 
(1,066
)
 
(1,099
)
Legal (charges) credits (4)
(1,000
)
 
36

 
(1,000
)
 
1,482

Gain on sales of assets (5)
68

 
197

 
89

 
2,910

Tax assessment (6)
19

 
—

 
(5,331
)
 
—

Integration-related costs (7)
(731
)
 
—

 
(1,923
)
 
—

FDA mandated product recall (8)
(3,500
)
 
—

 
(3,500
)
 
—

Operating profit
159,142

 
164,672

 
296,578

 
334,604

Interest expense
(17,556
)
 
(15,060
)
 
(30,363
)
 
(27,539
)
Other income (expense)
454

 
2,438

 
14,312

 
(118
)
Income before taxes
$
142,040

 
$
152,050

 
$
280,527

 
$
306,947


 
(1)
In 2017, charges represent severance costs related to the 2017 Productivity Program. In 2016, charges relate to accelerated depreciation which were recorded in Cost of goods sold.
(2)
Represents transaction costs related to the acquisitions of Fragrance Resources and PowderPure as well as the amortization of inventory "step-up" related to David Michael, Fragrance Resources and PowderPure in the 2017 period and expense related to the amortization of inventory "step-up" and additional transaction costs related to the acquisition of Lucas Meyer in the 2016 period.
(3)
Represents accelerated depreciation in Hangzhou, China in both the 2017 and 2016 periods.
(4)
Represents additional charges related to litigation settlement in 2017 and income receivable from the Spanish government related to the Spanish capital tax case in 2016.
(5)
Represents gains on sale of assets in Latin America in the 2017 period and in Europe in the 2016 period.
(6)
Represents the reserve for a tax assessment related to commercial rent for prior periods.
(7)
Represents costs related to the integration of the David Michael and Fragrance Resources acquisitions in the 2017 period.
(8)
Represents an estimate of the Company's incremental direct costs and customer reimbursement obligations, in excess of the Company's sales value of the recalled products, arising from an FDA mandated recall of consumer products as a result of raw material received and identified by the Company as containing contamination. (As discussed in Note 13, the sales value of the recalled products was reserved in the first quarter of 2017). While the Company does not believe that any of the affected raw material was included in its finished products delivered to the customer, as the delivered product included raw material of the same vendor lot that tested positive, the FDA, after being notified by the Company, initiated a recall of all consumer products including raw material from the affected vendor lot due to the potential for product contamination.
Net sales are attributed to individual regions based upon the destination of product delivery. Net sales related to the U.S. for the three months ended June 30, 2017 and 2016 were $244 million and $185 million, respectively and for the six months ended June 30, 2017 and 2016 were $449 million and $365 million, respectively. Net sales attributed to all foreign countries in total for the three months ended June 30, 2017 and 2016 were $599 million and $608 million, respectively and for the six months ended June 30, 2017 and 2016 were $1,222 million and $1,212 million, respectively. No country other than the U.S. had net sales in any period presented greater than 10% of total consolidated net sales.