Segment Information | NOTE 16 — SEGMENT INFORMATION During the quarter ended August 31, 2018, we made the determination to streamline certain businesses and management structures within our industrial reportable segment. As a result, our former tremco illbruck Group, Tremco Group and several components from our Performance Coatings Group, including our Euclid and Flowcrete businesses, were combined to form a new Construction Products Group. There were no changes in the composition of any of our reportable segments and, therefore, previously reported business segment information remains unchanged. We operate a portfolio of businesses and product lines that manufacture and sell a variety of specialty paints, protective coatings and roofing systems, sealants and adhesives. We manage our portfolio by organizing our businesses and product lines into three reportable segments: the industrial reportable segment, the consumer reportable segment and the specialty reportable segment. Within each reportable segment, we aggregate operating segments or product lines that consist of individual companies or groups of companies and product lines, which generally address common markets, share similar economic characteristics, utilize similar technologies and can share manufacturing or distribution capabilities. Our six operating segments represent components of our business for which separate financial information is available that is utilized on a regular basis by our chief operating decision maker in determining how to allocate the assets of the company and evaluate performance. These six operating segments are each managed by an operating segment manager, who is responsible for the day-to-day operating decisions and performance evaluation of the operating segment’s underlying businesses. We evaluate the profit performance of our segments primarily based on income before income taxes, but also look to earnings (loss) before interest and taxes (“EBIT”) as a performance evaluation measure because interest expense is essentially related to acquisitions, as opposed to segment operations. Our industrial reportable segment products are sold throughout North America and also account for the majority of our international sales. Our industrial product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. The industrial reportable segment comprises two separate operating segments — Construction Products Group and Performance Coatings Group. Products and services within this reportable segment include construction chemicals, roofing systems, weatherproofing and other sealants, and polymer flooring. Our consumer reportable segment manufactures and markets professional use and do-it-yourself (“DIY”) products for a variety of mainly consumer applications, including home improvement and personal leisure activities. Our consumer segment’s major manufacturing and distribution operations are located primarily in North America, along with a few locations in Europe and other parts of the world. Our consumer reportable segment products are primarily sold directly to mass merchandisers, home improvement centers, hardware stores, paint stores, craft shops, cosmetic companies and through distributors. This reportable segment comprises three operating segments — Rust-Oleum Group, DAP Group and SPG-Consumer Group. Products within this reportable segment include specialty, hobby and professional paints; nail enamels; caulks; adhesives; silicone sealants and wood stains. Our specialty reportable segment products are sold throughout North America and a few international locations, primarily in Europe. Our specialty product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. The specialty reportable segment is a single operating segment, which offers products that include industrial cleaners, restoration services equipment, colorants, exterior finishes, edible coatings and specialty glazes for pharmaceutical and food industries, and other specialty OEM coatings. In addition to our three reportable segments, there is a category of certain business activities and expenses, referred to as corporate/other, that does not constitute an operating segment. This category includes our corporate headquarters and related administrative expenses, results of our captive insurance companies, gains or losses on the sales of certain assets and other expenses not directly associated with any reportable segment. Assets related to the corporate/other category consist primarily of investments, prepaid expenses and headquarters’ property and equipment. These corporate and other assets and expenses reconcile reportable segment data to total consolidated income before income taxes and identifiable assets. We reflect income from our joint ventures on the equity method, and receive royalties from our licensees. The following tables present a disaggregation of revenues by geography, and reflect the results of our reportable segments consistent with our management philosophy, by representing the information we utilize, in conjunction with various strategic, operational and other financial performance criteria, in evaluating the performance of our portfolio of businesses. Three Months Ended February 28, 2019 Industrial Segment Consumer Segment Specialty Segment Consolidated (In thousands) Net Sales (based on shipping location) United States $ 299,442 $ 304,184 $ 137,181 $ 740,807 Foreign Canada 40,378 21,404 8,211 69,993 Europe 154,753 43,888 21,060 219,701 Latin America 44,420 6,781 306 51,507 Asia Pacific 28,415 6,904 7,987 43,306 Other Foreign 13,481 1,835 - 15,316 Total Foreign 281,447 80,812 37,564 399,823 Total $ 580,889 $ 384,996 $ 174,745 $ 1,140,630 Three Months Ended February 28, 2018 Industrial Segment Consumer Segment Specialty Segment Consolidated (In thousands) Net Sales (based on shipping location) United States $ 277,374 $ 280,422 $ 137,863 $ 695,659 Foreign Canada 40,006 19,421 3,144 62,571 Europe 155,127 46,997 20,929 223,053 Latin America 50,763 6,946 332 58,041 Asia Pacific 29,021 7,643 7,829 44,493 Other Foreign 16,919 1,941 - 18,860 Total Foreign 291,836 82,948 32,234 407,018 Total $ 569,210 $ 363,370 $ 170,097 $ 1,102,677 Nine Months Ended February 28, 2019 Industrial Segment Consumer Segment Specialty Segment Consolidated (In thousands) Net Sales (based on shipping location) United States $ 1,118,016 $ 1,021,933 $ 452,918 $ 2,592,867 Foreign Canada 163,141 73,813 32,058 269,012 Europe 526,962 159,118 70,041 756,121 Latin America 136,905 20,183 976 158,064 Asia Pacific 87,626 21,735 23,559 132,920 Other Foreign 48,180 5,986 - 54,166 Total Foreign 962,814 280,835 126,634 1,370,283 Total $ 2,080,830 $ 1,302,768 $ 579,552 $ 3,963,150 Nine Months Ended February 28, 2018 Industrial Segment Consumer Segment Specialty Segment Consolidated (In thousands) Net Sales (based on shipping location) United States $ 1,038,594 $ 920,714 $ 444,424 $ 2,403,732 Foreign Canada 166,056 69,658 16,253 251,967 Europe 517,303 164,678 69,553 751,534 Latin America 145,315 20,582 1,085 166,982 Asia Pacific 84,087 24,251 24,344 132,682 Other Foreign 50,528 6,062 - 56,590 Total Foreign 963,289 285,231 111,235 1,359,755 Total $ 2,001,883 $ 1,205,945 $ 555,659 $ 3,763,487 Three Months Ended Nine Months Ended February 28, February 28, February 28, February 28, 2019 2018 2019 2018 (In thousands) Income (Loss) Before Income Taxes Industrial Segment $ 11,368 $ 17,804 $ 134,818 $ 174,402 Consumer Segment 23,212 29,123 115,747 146,576 Specialty Segment 17,147 22,792 74,927 90,398 Corporate/Other (47,263 ) (35,021 ) (162,497 ) (112,213 ) Consolidated $ 4,464 $ 34,698 $ 162,995 $ 299,163 |