Segment Information | Note 16 — SEGMENT INFORMATION A segment is a component of an enterprise whose operating results are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Operating income is the primary measure that is reported to our chief operating decision maker for purposes of allocating resources to the segments and assessing their performance. Operating income at the segment level does not include: corporate general and administrative expenses that are not allocated to segments; intersegment sales and profit eliminations; charges related to specific strategic initiatives such as the consolidation of operations; restructuring activities, including employee separation costs resulting from personnel reduction programs, plant closure and phase-in costs; executive separation agreements; share-based compensation costs; asset impairments; environmental remediation costs and other liabilities for facilities no longer owned or closed in prior years; gains and losses on the divestiture of joint ventures and equity investments; actuarial gains and losses associated with our pension and other post-retirement benefit plans; and certain other items that are not included in the measure of segment profit or loss that is reported to and reviewed by our chief operating decision maker. These costs are included in Corporate and eliminations . Segment assets are primarily customer receivables, inventories, net property, plant and equipment, intangible assets and goodwill. Intersegment sales are generally accounted for at prices that approximate those for similar transactions with unaffiliated customers. Corporate and eliminations assets and liabilities primarily include cash, debt, pension and other employee benefits, environmental liabilities, retained assets and liabilities of discontinued operations, and other unallocated corporate assets and liabilities. The accounting policies of each segment are consistent with those described in Note 1, Description of Business and Summary of Significant Accounting Policies . On December 9, 2015, the Company completed the acquisition of specialty color concentrates of Magenta, a leading innovative developer in the global fiber industry, for approximately $18.3 million in cash, net of cash acquired. Magenta results are included within the Color, Additives and Inks segment. On December 1, 2014, the Company completed the acquisition of specialty assets of Accella, a leading North American manufacturer of liquid polymer formulations, for $47.2 million in cash, net of cash acquired. Accella results were included within the Color, Additives and Inks segment. The following is a description of each of our five reportable segments. Color, Additives and Inks Color, Additives and Inks is a leading provider of specialized custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, as well as specialty inks, plastisols, and vinyl slush molding solutions. Color and additive solutions include an innovative array of colors, special effects and performance-enhancing and eco-friendly solutions. When combined with a non-base resin, our solutions help customers achieve differentiated specialized colors and effects targeted at the demands of today’s highly design-oriented consumer and industrial end markets. Our additive concentrates encompass a wide variety of performance and process enhancing characteristics and are commonly categorized by the function that they perform, such as UV stabilization, antimicrobial, anti-static, blowing or foaming, antioxidant, lubricant, and productivity enhancement. Our colorant and additives concentrates are used in a broad range of polymers, including those used in medical and pharmaceutical devices, food packaging, personal care and cosmetics, transportation, building products, wire and cable markets. We also provide custom-formulated liquid systems that meet a variety of customer needs and chemistries, including vinyl, natural rubber and latex, polyurethane and silicone. Our offerings also include proprietary inks and latexes for diversified markets such as recreational and athletic apparel, construction and filtration, outdoor furniture and healthcare. Our liquid polymer coatings and additives are largely based on vinyl and are used in a variety of markets, including building and construction, consumer, healthcare, industrial, packaging, textiles, appliances, transportation, and wire and cable. Color, Additives and Inks has manufacturing, sales and service facilities located throughout North America, South America, Europe, Asia and Africa. Specialty Engineered Materials Specialty Engineered Materials is a leading provider of specialty polymer formulations, services and solutions for designers, assemblers and processors of thermoplastic materials across a wide variety of markets and end-use applications. Our product portfolio, which we believe to be one of the most diverse in our industry, includes specialty formulated high-performance polymer materials that are manufactured using thermoplastic resins and elastomers, which are then combined with advanced polymer additives, reinforcement, filler, colorant and/or biomaterial technologies. Our technical and market expertise enables us to expand the performance range and structural properties of traditional engineering-grade thermoplastic resins to meet evolving customer needs. Specialty Engineered Materials has manufacturing, sales and service facilities located throughout North America, Europe, Asia and South America. Our product development and application reach is further enhanced by the capabilities of our Innovation Centers in the United States, Germany and China, which produce and evaluate prototype and sample parts to help assess end-use performance and guide product development. Our manufacturing capabilities are targeted at meeting our customers’ demand for speed, flexibility and critical quality. Designed Structures and Solutions On March 13, 2013, the Company completed the acquisition of Spartech, a supplier of plastic sheet, color and engineered materials, and packaging solutions. As a result of the acquisition, a new reportable segment, "Designed Structures and Solutions", was created. We believe PolyOne's Designed Structures and Solutions segment is a market leader in providing specialized, full service and innovative solutions in engineered polymer structures, rigid barrier packaging and specialty cast acrylics. We utilize a variety of polymers, specialty additives and processing technologies to produce a complete portfolio of sheet, custom rollstock and specialty film, laminate and acrylic solutions. Our solutions can be engineered to provide structural or functional performance in an application or design and visual aesthetics to meet our customers’ needs. Our offerings also include a wide range of sustainable, cost-effective stock and custom packaging solutions for various industry processes used in the food, medical, and consumer markets. In addition to packaging, we also work closely with customers to provide solutions for transportation, building and construction, healthcare and consumer markets. Designed Structures and Solutions has manufacturing, sales and service facilities located throughout North America. Performance Products and Solutions Performance Products and Solutions is comprised of the Geon Performance Materials (Geon) and Producer Services business units. The Geon business delivers an array of products and services for vinyl molding and extrusion processors located in North America and Asia. The Geon TM brand name carries strong recognition globally. Geon's products are sold to manufacturers of durable plastic parts and consumer-oriented products. We also offer a wide range of services including materials testing, component analysis, custom formulation development, colorant and additive services, part design assistance, structural analysis, process simulations, mold design and flow analysis and extruder screw design. Vinyl is used across a broad range of markets and applications, including, but not limited to: healthcare, wire and cable, building and construction, consumer and recreational products and transportation and packaging. The Producer Services business unit offers contract manufacturing and outsourced polymer manufacturing services to resin producers and polymer marketers, primarily in the United States and Mexico, as well as its own proprietary compounds for pressure pipe and drip irrigation applications. As a strategic and integrated supply chain partner, Producer Services offers resin producers a capital-efficient way to effectively develop custom products for niche markets by leveraging its extensive process technology expertise, broad manufacturing capabilities and geographic locations. PolyOne Distribution The PolyOne Distribution business distributes more than 3,500 grades of engineering and commodity grade resins, including PolyOne-produced solutions, principally to the North American and Asian markets. These products are sold to over 6,000 custom injection molders and extruders who, in turn, convert them into plastic parts that are sold to end-users in a wide range of industries. Representing over 25 major suppliers, we offer our customers a broad product portfolio, just-in-time delivery from multiple stocking locations and local technical support. Recent expansion in Central America and Asia have bolstered PolyOne Distribution's ability to serve the specialized needs of customers globally. Financial information by reportable segment is as follows: Year Ended December 31, 2015 (In millions) Sales to External Customers Intersegment Sales Total Sales Operating Income Depreciation and (1) Capital Total Assets Color, Additives and Inks 801.2 9.5 810.7 135.4 42.4 27.3 939.5 Specialty Engineered Materials 493.1 49.7 542.8 79.6 15.9 17.7 353.4 Designed Structures and Solutions 448.8 4.7 453.5 13.8 16.9 18.4 449.5 Performance Products and Solutions 615.8 78.3 694.1 57.4 16.2 9.8 237.4 PolyOne Distribution 1,018.7 15.4 1,034.1 68.0 0.7 0.4 200.0 Corporate and eliminations — (157.6 ) (157.6 ) (103.3 ) 12.2 17.6 415.3 Total $ 3,377.6 $ — $ 3,377.6 $ 250.9 $ 104.3 $ 91.2 $ 2,595.1 (1) Corporate and eliminations includes accelerated depreciation associated with restructuring actions of $6.2 million . Year Ended December 31, 2014 (In millions) Sales to External Customers Intersegment Sales Total Sales Operating Income Depreciation and (1) Capital Total Assets Color, Additives and Inks 835.0 15.8 850.8 124.9 41.4 28.1 934.2 Specialty Engineered Materials 555.2 43.1 598.3 72.4 16.7 15.2 370.1 Designed Structures and Solutions 616.5 1.0 617.5 45.1 19.8 25.6 490.1 Performance Products and Solutions 728.2 88.4 816.6 63.1 17.7 15.2 265.5 PolyOne Distribution 1,100.6 13.8 1,114.4 68.2 0.6 0.1 214.2 Corporate and eliminations — (162.1 ) (162.1 ) (218.6 ) 27.7 8.6 392.2 Total $ 3,835.5 $ — $ 3,835.5 $ 155.1 $ 123.9 $ 92.8 $ 2,666.3 (1) Corporate and eliminations includes accelerated depreciation associated with restructuring actions of $23.1 million . Year Ended December 31, 2013 (In millions) Sales to External Customers Intersegment Sales Total Sales Operating Income Depreciation and (1) Capital (1a) Total Assets Color, Additives and Inks 844.6 7.7 852.3 104.0 38.8 29.3 960.7 Specialty Engineered Materials 571.9 43.6 615.5 57.2 18.8 14.3 378.4 Designed Structures and Solutions 597.3 0.1 597.4 33.4 21.2 13.4 523.1 Performance Products and Solutions 690.9 82.3 773.2 56.0 15.5 12.4 276.3 PolyOne Distribution 1,066.5 8.7 1,075.2 63.3 0.6 0.3 216.7 Corporate and eliminations — (142.4 ) (142.4 ) (82.4 ) 13.9 6.5 541.4 Total $ 3,771.2 $ — $ 3,771.2 $ 231.5 $ 108.8 $ 76.2 $ 2,896.6 (1) Excludes $1.0 million of depreciation expense associated with the Resin Business. Corporate and eliminations includes accelerated depreciation associated with restructuring actions of $12.7 million . (1a) Excludes $0.2 million of capital expenditures associated with the Resin Business. Our sales are primarily to customers in the United States, Canada, Mexico, Europe, South America and Asia, and the majority of our assets are located in these same geographic areas. Following is a summary of sales and long-lived assets based on the geographic areas where the sales originated and where the assets are located: (In millions) 2015 2014 2013 Sales: United States $ 2,244.9 $ 2,590.4 $ 2,538.2 Europe 430.1 511.8 519.7 Canada 241.3 277.4 267.8 Asia 235.9 246.2 239.0 Mexico 209.7 178.4 158.1 South America 15.7 31.3 48.4 Total Sales $ 3,377.6 $ 3,835.5 $ 3,771.2 Long-lived assets: United States $ 418.1 $ 421.1 $ 444.4 Europe 94.0 95.7 103.0 Canada 6.9 12.8 13.2 Asia 40.2 39.5 51.8 Mexico 19.4 19.7 20.5 South America 4.9 7.9 13.3 Total Long-lived assets $ 583.5 $ 596.7 $ 646.2 |