QUAKER CHEMICAL CORPKWR
QUAKER CHEMICAL CORP Segments Disclosure
Business Segments
The Company’s operating segments, which are consistent with its reportable segments, reflect the structure of the Company’s internal organization and the manner by which the CODM, which is the Company’s Chief Executive Officer, allocates resources and assesses performance.
The CODM evaluates performance for the Company’s operating segments based on segment operating earnings. Segment operating earnings for each of the Company’s reportable segments are comprised of the segment’s net sales less directly related product costs and other segment items. Operating expenses not directly attributable to the net sales of each respective segment, such as certain corporate and administrative costs, impairment charges, and restructuring charges, are not included in segment operating earnings. Other items not specifically identified with the Company’s reportable segments include Interest expense and Other (expense) income, net.
The CODM uses segment operating earnings to allocate resources for each segment predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a monthly basis for segment operating earnings when making decisions about allocating capital and personnel to the segments. The CODM also uses segment operating earnings to assess the performance for each segment and in the compensation of certain employees.
Segment asset information is not regularly provided to or reviewed by the CODM. Therefore, the Company does not disclose segment asset information for each reportable segment.
The following table presents information about the performance of the Company’s reportable segments for the years ended December 31, 2025, 2024 and 2023.
| Americas | EMEA | Asia/Pacific | Totals | ||||||||||||||||||||
| 2025 | |||||||||||||||||||||||
Net sales (1) | $ | 865,332 | $ | 548,110 | $ | 475,192 | $ | 1,888,634 | |||||||||||||||
| Significant segment expenses | |||||||||||||||||||||||
Product costs (2) (4) (5) | 429,432 | 293,351 | 251,855 | 974,638 | |||||||||||||||||||
Other segment items (3) | 208,331 | 158,119 | 99,114 | 465,564 | |||||||||||||||||||
| Segment operating earnings | $ | 227,569 | $ | 96,640 | $ | 124,223 | $ | 448,432 | |||||||||||||||
| 2024 | |||||||||||||||||||||||
Net sales (1) | $ | 882,131 | $ | 536,435 | $ | 421,120 | $ | 1,839,686 | |||||||||||||||
| Significant segment expenses | |||||||||||||||||||||||
Product costs (2) | 427,399 | 286,330 | 216,432 | 930,161 | |||||||||||||||||||
Other segment items (3) | 210,775 | 150,679 | 81,950 | 443,404 | |||||||||||||||||||
| Segment operating earnings | $ | 243,957 | $ | 99,426 | $ | 122,738 | $ | 466,121 | |||||||||||||||
| 2023 | |||||||||||||||||||||||
Net sales (1) | $ | 977,095 | $ | 571,347 | $ | 404,871 | $ | 1,953,313 | |||||||||||||||
| Significant segment expenses | |||||||||||||||||||||||
Product costs (2) | 497,690 | 318,279 | 209,422 | 1,025,391 | |||||||||||||||||||
Other segment items (3) | 213,369 | 148,257 | 76,991 | 438,617 | |||||||||||||||||||
| Segment operating earnings | $ | 266,036 | $ | 104,811 | $ | 118,458 | $ | 489,305 | |||||||||||||||
(1) Net sales relate to external customers only. All intersegment sales are eliminated in consolidation.
(2) Product costs include the costs of raw materials and are recorded in Cost of goods sold in the Company’s Consolidated Statements of Operations.
(3) Other operating expenses include overhead costs of operating the Company’s production facilities and providing chemical management services to customers and direct SG&A costs.
(4) Product costs includes the $6.0 million amortization of the fair value step-up in Dipsol's inventories as a result of the acquisition for the year ended December 31, 2025, which is comprised of approximately $2.6 million in the Americas segment, $3.0 million in the Asia/Pacific segment, and $0.4 million in the EMEA segment.
(5) Product costs includes a $2.9 million gain related to immaterial out-of-period adjustments for inventory for the year ended December 31, 2025, which was comprised of a $0.7 million gain in the Americas segment and a $2.2 million gain in the EMEA segment.
The following table presents a reconciliation of the Company’s segment operating earnings to income before taxes and equity in net income of associated companies in the Company’s Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023.
| 2025 | 2024 | 2023 | |||||||||||||||
| Segment operating earnings | $ | 448,432 | $ | 466,121 | $ | 489,305 | |||||||||||
| Restructuring and related charges, net | (35,130) | (6,530) | (7,588) | ||||||||||||||
| Impairment charges | (88,840) | — | — | ||||||||||||||
| Non-operating and administrative expenses | (205,651) | (203,956) | (206,398) | ||||||||||||||
| Depreciation of corporate assets and amortization | (65,825) | (60,929) | (60,824) | ||||||||||||||
| Operating income | $ | 52,986 | $ | 194,706 | $ | 214,495 | |||||||||||
| Other (expense) income, net | (1,909) | 1,354 | (10,672) | ||||||||||||||
| Interest expense | (44,048) | (41,002) | (50,699) | ||||||||||||||
| Income before taxes and equity in net income of associated companies | $ | 7,029 | $ | 155,058 | $ | 153,124 | |||||||||||
The following tables present information regarding the Company’s reportable segments’ depreciation for identifiable assets for the years ended December 31, 2025, 2024 and 2023:
| Depreciation | 2025 | 2024 | 2023 | |||||||||||||||||
| Americas | $ | 11,770 | $ | 13,646 | $ | 12,298 | ||||||||||||||
| EMEA | 8,411 | 7,641 | 7,321 | |||||||||||||||||
| Asia/Pacific | 7,447 | 4,608 | 4,214 | |||||||||||||||||
| Total segment depreciation | $ | 27,628 | $ | 25,895 | $ | 23,833 | ||||||||||||||
The following tables summarize net sales attributed to geographic regions based on the country of origin and long-lived assets attributed to geographic regions based on asset location for the years ended December 31, 2025, 2024 and 2023:
| Net sales | 2025 | 2024 | 2023 | |||||||||||||||||
| United States | $ | 622,308 | $ | 637,755 | $ | 718,742 | ||||||||||||||
| China | 251,177 | 230,622 | 231,331 | |||||||||||||||||
| Other foreign operations | 1,015,149 | 971,309 | 1,003,240 | |||||||||||||||||
| Total net sales | $ | 1,888,634 | $ | 1,839,686 | $ | 1,953,313 | ||||||||||||||
| Long-lived assets | 2025 | 2024 | 2023 | |||||||||||||||||
| United States | $ | 241,261 | $ | 217,687 | $ | 217,834 | ||||||||||||||
| China | 57,106 | 32,082 | 24,317 | |||||||||||||||||
| Foreign operations | 190,991 | 129,255 | 124,198 | |||||||||||||||||
| Total long-lived assets | $ | 489,358 | $ | 379,024 | $ | 366,349 | ||||||||||||||
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.