Business Segments

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Business Segments

BUSINESS SEGMENTS

Tredegar has historically reported two business segments: Film Products and Aluminum Extrusions. In 2015, the Company divided Film Products into two separate reportable segments: PE Films and Flexible Packaging Films. PE Films is comprised of the following operating segments: personal care materials, surface protection films, and engineered polymer solutions; and Flexible Packaging Films is comprised of the Company’s polyester films business, Terphane, which was acquired by Film Products in October 2011. As part of its transition to a new executive leadership team, the Company’s management has decided to discontinue its efforts to integrate Terphane with its other film products operations. In separating PE Films and Flexible Packaging Films, the Company’s management believes that it will be able to more effectively manage the distinct opportunities and challenges that each of these businesses face. Therefore, the Company's business segments are now PE Films, Flexible Packaging Films and Aluminum Extrusions. All historical results for PE Films and Flexible Packaging Films have been separately presented to conform with the new presentation of segments.

Information by business segment and geographic area for the last three years is provided below. There were no accounting transactions between segments and no allocations to segments. Net sales (sales less freight) and operating profit from ongoing operations are the measures of sales and operating profit used by the chief operating decision maker (Tredegar’s President and Chief Executive Officer) for purposes of assessing performance. PE Films’ net sales to The Procter & Gamble Company (“P&G”) totaled $163.9 million in 2015, $220.8 million in 2014 and $261.9 million in 2013. These amounts include plastic film sold to others that convert the film into materials used with products manufactured by P&G.

Net Sales
(In Thousands)	2015		2014		2013
PE Films	$	385,550	$	464,339	$	495,386
Flexible Packaging Films	105,332		114,348		125,853
Aluminum Extrusions	375,457		344,346		309,482
Total net sales	866,339		923,033		930,721
Add back freight	29,838		28,793		28,625
Sales as shown in consolidated statements of income	$	896,177	$	951,826	$	959,346

Operating Profit
(In Thousands)	2015			2014			2013
PE Films:
Ongoing operations	$	48,275		$	60,971		$	61,866
Plant shutdowns, asset impairments, restructurings and other (a)	(4,180		)	(12,236		)	(671		)
Flexible Packaging Films:
Ongoing operations	5,453			(2,917		)	9,100
Plant shutdowns, asset impairments, restructurings and other (a)	(185		)	(591		)	—
Goodwill impairment	(44,465		)	—			—
Aluminum Extrusions:
Ongoing operations	30,432			25,664			18,291
Plant shutdowns, asset impairments, restructurings and other (a)	(708		)	(976		)	(2,748		)
Total	34,622			69,915			85,838
Interest income	294			588			594
Interest expense	3,502			2,713			2,870
Gain (loss) on investment accounted for under the fair value method (a)	(20,500		)	2,000			3,400
Gain on sale of investment property (a)	—			1,208			—
Unrealized loss on investment property (a)	—			—			1,018
Stock option-based compensation expense	483			1,272			1,155
Corporate expenses, net (a)	33,638			24,310			31,857
Income (loss) from continuing operations before income taxes	(23,207		)	45,416			52,932
Income taxes (a)	8,928			9,387			16,995
Income (loss) from continuing operations	(32,135		)	36,029			35,937
Income (loss) from discontinued operations (a)	—			850			(13,990		)
Net income (loss)	$	(32,135	)	$	36,879		$	21,947

Identifiable Assets
(In Thousands)	2015		2014
PE Films	$	270,236	$	283,606
Flexible Packaging Films	146,253		262,604
Aluminum Extrusions	136,935		143,328
Subtotal	553,424		689,538
General corporate (b)	25,680		49,032
Cash and cash equivalents (d)	44,156		50,056
Total	$	623,260	$	788,626

	Depreciation and Amortization						Capital Expenditures
(In Thousands)	2015		2014		2013		2015		2014		2013
PE Films	$	15,480	$	21,399	$	25,656	$	21,218	$	17,000	$	15,615
Flexible Packaging Films	9,697		9,331		9,676		3,489		21,806		49,252
Aluminum Extrusions	9,698		9,974		9,202		8,124		6,092		14,742
Subtotal	34,875		40,704		44,534		32,831		44,898		79,609
General corporate	107		114		121		—		—		52
Total	$	34,982	$	40,818	$	44,655	$	32,831	$	44,898	$	79,661

See footnotes on page 66.

Net Sales by Geographic Area (d)
(In Thousands)	2015		2014		2013
United States	$	528,881	$	542,395	$	534,346
Exports from the United States to:
Asia	75,383		72,597		82,235
Canada	45,290		47,391		46,481
Europe	9,809		10,874		6,984
Latin America	3,464		3,116		3,505
Operations outside the United States:
Brazil	89,829		97,954		109,415
The Netherlands	53,211		74,329		68,471
Hungary	32,612		39,457		43,482
China	18,919		26,109		28,702
India	8,941		8,811		7,100
Total (c)	$	866,339	$	923,033	$	930,721

	Identifiable Assets by Geographic Area (d)				Property, Plant & Equipment, Net by Geographic Area (d)
(In Thousands)	2015		2014		2015		2014
United States (b)	$	351,115	$	409,272	$	104,380	$	115,189
Operations outside the United States:
Brazil	126,478		212,186		78,845		119,066
China	34,409		23,037		27,563		14,141
The Netherlands	19,372		23,729		6,224		9,117
Hungary	14,798		13,440		8,135		5,829
India	7,252		7,874		5,234		5,575
General corporate (b)	25,680		49,032		934		1,040
Cash and cash equivalents (d)	44,156		50,056		n/a		n/a
Total	$	623,260	$	788,626	$	231,315	$	269,957

Net Sales by Product Group
(In Thousands)	2015		2014		2013
PE Films:
Personal care materials	$	287,768	$	367,451	$	401,451
Surface protection films	90,197		90,129		90,182
Engineered polymer solutions	7,585		6,759		3,753
Subtotal	385,550		464,339		495,386
Flexible Packaging Films	105,332		114,348		125,853
Aluminum Extrusions:
Nonresidential building & construction	221,363		200,707		179,437
Consumer durables	41,835		44,897		39,565
Automotive	30,250		22,272		19,919
Residential building & construction	22,737		21,470		22,055
Electrical	22,511		12,775		13,455
Distribution	18,659		15,318		13,115
Machinery & equipment	18,102		26,907		21,936
Subtotal	375,457		344,346		309,482
Total	$	866,339	$	923,033	$	930,721

See footnotes on page 66 and a reconciliation of net sales to sales as shown in the Consolidated Statements of Income on page 64.

(a) See Notes 1, 3, 4 and 18 for more information on losses associated with plant shutdowns, asset impairments and restructurings, unusual items, gains or losses from sale of assets, gains or losses on an investment accounted for under the fair value method and other items.

(b) The balance sheets include the funded status of each of the Company’s defined benefit pension and other postretirement plans. The funded status of the Company’s defined benefit pension plan was a net liability of $93.2 million and $96.4 million as of December 31, 2015 and 2014, respectively. See Note 14 for more information on the Company’s pension and other postretirement plans.

(c) The difference between total consolidated sales as reported in the consolidated statements of income and segment, geographic and product group net sales reported in this note is freight of $29.8 million in 2015, $28.8 million in 2014 and $28.6 million in 2013.

(d) Information on exports and foreign operations are provided on the previous page. Cash and cash equivalents includes funds held in locations outside the U.S. of $27.7 million and $40.5 million at December 31, 2015 and 2014, respectively. Export sales relate almost entirely to PE Films. Operations outside the U.S. in The Netherlands, Hungary, China and India also relate to PE Films. Operations in Brazil are primarily related to Flexible Packaging Films, but also include PE Films operations. Sales from locations in The Netherlands and Hungary are primarily to customers located in Europe. Sales from locations in China (Guangzhou and Shanghai) are primarily to customers located in China, but also include other customers in Asia.