Segment Information

12 Months Ended

Dec. 31, 2012

Segment Information

NOTE 12.    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: functional fragrances, including fragrance compounds for personal care (e.g., soaps) and household products (e.g., detergents and cleaning agents) and fine fragrance and beauty care, including perfumes, colognes and toiletries; and Fragrance Ingredients, consisting of synthetic and natural ingredients that can be combined with other materials to create unique functional and fine fragrance 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 and certain non-recurring adjustments, Interest expense, Other expense, net and Taxes on income. The Global expenses caption represents corporate and headquarters-related expenses which include legal, finance, human resources and other administrative expenses that are not allocated to individual business units. 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)	2012			2011			2010
Net sales
Flavors	$	1,378,377		$	1,347,340		$	1,203,274
Fragrances		1,443,069			1,440,678			1,419,588
Consolidated	$	2,821,446		$	2,788,018		$	2,622,862
(DOLLARS IN THOUSANDS)	2012			2011
Segment assets
Flavors	$	1,422,762		$	1,327,279
Fragrances		1,519,219			1,512,511
Global assets		307,619			125,791
Consolidated	$	3,249,600		$	2,965,581
	December 31,
(DOLLARS IN THOUSANDS)	2012			2011			2010
Segment profit:
Flavors	$	298,326		$	284,246		$	242,528
Fragrances		238,379			226,560			244,966
Global expenses		(48,419	)		(36,410	)		(61,056	)
Restructuring and other charges, net		(1,668	)		(13,172	)		(10,077	)
Mane patent litigation settlement		—			(33,495	)		—
Operating Profit		486,618			427,729			416,361
Interest expense		(41,753	)		(44,639	)		(48,709	)
Other expense, net		(1,450	)		(9,544	)		(8,059	)
Income before taxes	$	443,415		$	373,546		$	359,593
Profit margin
Flavors		21.6	%		21.1	%		20.2	%
Fragrances		16.5	%		15.7	%		17.3	%
Consolidated		17.2	%		15.3	%		15.9	%

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 $320 million, $297 million and $273 million in 2012, 2011 and 2010, 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 $655 million and $608 million at December 31, 2012 and 2011, respectively. Of this total $162 million and $163 million was located in the United States at December 31, 2012 and 2011, respectively, and $97 million and $89 million were located in the Netherlands at December 31, 2012 and 2011, respectively.

	Capital Expenditures						Depreciation and Amortization
(DOLLARS IN THOUSANDS)	2012		2011		2010		2012		2011		2010
Flavors	$	90,309	$	69,675	$	46,776	$	39,565	$	31,140	$	31,634
Fragrances		26,069		50,454		53,969		34,238		41,941		45,713
Unallocated assets		9,762		7,328		5,556		2,864		2,246		1,895
Consolidated	$	126,140	$	127,457	$	106,301	$	76,667	$	75,327	$	79,242

	Net Sales by Geographic Area
(DOLLARS IN THOUSANDS)	2012		2011		2010
Europe, Africa and Middle East	$	912,768	$	956,977	$	896,647
Greater Asia		771,877		744,810		676,838
North America		694,430		678,763		651,057
Latin America		442,371		407,468		398,320
Consolidated	$	2,821,446	$	2,788,018	$	2,622,862

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, 2012, 2011 and 2010 were $662 million, $644 million and $618 million, respectively. Net sales attributed to all foreign countries in total for the years ended December 31, 2012, 2011 and 2010 were $2,159 million, $2,144 million and $2,005 million, respectively. No non-U.S. country had net sales in any period presented greater than 7% of total consolidated net sales.