STEPAN COSCL

STEPAN CO Segments Disclosure

10-KFiled Feb 26, 20265 min read

17. Segment Reporting

The Company has three reportable segments: Surfactants, Polymers and Specialty Products. Each segment provides distinct products and requires separate management due to unique markets, technologies and production processes. Surfactants are used in a variety of consumer and industrial cleaning and disinfection products such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos and body washes. Other applications include fabric softeners, germicidal quaternary compounds, disinfectants, lubricating ingredients, emulsifiers for spreading agricultural products and industrial applications such as latex systems, plastics and composites. Polymers include polyurethane polyols, polyester resins and phthalic anhydride. Polyurethane polyols are used in the manufacture of rigid foam for thermal insulation in the construction industry and are also a base raw material for coatings, adhesives, sealants and elastomers (collectively, CASE products). Powdered polyester resins are used in coating applications. CASE and powdered polyester resins are collectively referred to as specialty polyols. Phthalic anhydride is used in unsaturated polyester resins, alkyd resins and plasticizers for applications in construction materials and components of automotive, boating and other consumer products. In addition, the Company uses phthalic anhydride internally in the production of polyols. Specialty Products include flavors, emulsifiers and solubilizers used in food, flavoring, nutritional supplement and pharmaceutical applications.

The Company’s Chief Operating Decision Maker (CODM) is the President and Chief Executive Officer. The CODM regularly uses multiple financial measures to allocate financial and human resources to individual segments and evaluate segment performance. The CODM also uses these measures in the annual budget and quarterly forecasting processes. The CODM uses segment information for comparison of the Company’s segments’ performance with competitors’ performance as well as monitoring of actual results versus budget to establish management’s business goals and compensation objectives. It is also used to allocate resources to

individual segments and evaluate their performances. This information includes net sales, cost of sales, gross profit, operating expenses and operating income.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies (see Note 1, Summary of Significant Accounting Policies, of the notes to the Company’s consolidated financial statements included in Item 8 of this Form 10-K).

The following is segment data for the three years ended December 31, 2025, 2024 and 2023 and reconciliations of segment data to the consolidated financial statements and non-GAAP measures:

 

(In thousands)

 

Surfactants

 

 

Polymers

 

 

Specialty
Products

 

 

Total

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

1,665,983

 

 

$

584,477

 

 

$

81,654

 

 

$

2,332,114

 

Cost of Sales (1)

 

 

1,497,333

 

 

 

512,872

 

 

 

52,646

 

 

 

2,062,851

 

Operating Expenses (2)

 

 

101,292

 

 

 

28,340

 

 

 

3,368

 

 

 

133,000

 

Operating Income

 

$

67,358

 

 

$

43,265

 

 

$

25,640

 

 

$

136,263

 

Unallocated Corporate Expenses (3)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(57,714

)

Consolidated Operating Income

 

 

 

 

 

 

 

 

 

 

$

78,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Assets

 

$

1,630,551

 

 

$

536,748

 

 

$

82,300

 

 

$

2,249,599

 

Unallocated Assets (4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

108,103

 

Consolidated Assets

 

 

 

 

 

 

 

 

 

 

$

2,357,702

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Capital Expenditures

 

$

88,676

 

 

$

30,528

 

 

$

5,514

 

 

$

124,718

 

Unallocated Capital Expenditures (5)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,204

)

Consolidated Capital Expenditures

 

 

 

 

 

 

 

 

 

 

$

122,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Depreciation and Amortization

 

$

85,655

 

 

$

33,103

 

 

$

5,902

 

 

$

124,660

 

Unallocated Depreciation and Amortization (6)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,381

 

Consolidated Depreciation and Amortization

 

 

 

 

 

 

 

 

 

 

$

126,041

 

 

(In thousands)

 

Surfactants

 

 

Polymers

 

 

Specialty
Products

 

 

Total

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

1,532,115

 

 

$

584,905

 

 

$

63,254

 

 

$

2,180,274

 

Cost of Sales (1)

 

 

1,352,022

 

 

 

516,902

 

 

 

39,219

 

 

 

1,908,143

 

Operating Expenses (2)

 

 

94,475

 

 

 

27,380

 

 

 

3,127

 

 

 

124,982

 

Operating Income

 

$

85,618

 

 

$

40,623

 

 

$

20,908

 

 

$

147,149

 

Unallocated Corporate Expenses (3)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(76,669

)

Consolidated Operating Income

 

 

 

 

 

 

 

 

 

 

$

70,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Assets

 

$

1,578,689

 

 

$

523,192

 

 

$

70,898

 

 

$

2,172,779

 

Unallocated Assets (4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

131,869

 

Consolidated Assets

 

 

 

 

 

 

 

 

 

 

$

2,304,648

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Capital Expenditures

 

$

90,766

 

 

$

25,827

 

 

$

3,992

 

 

$

120,585

 

Unallocated Capital Expenditures (5)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,191

 

Consolidated Capital Expenditures

 

 

 

 

 

 

 

 

 

 

$

122,776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Depreciation and Amortization

 

$

72,028

 

 

$

32,417

 

 

$

5,949

 

 

$

110,394

 

Unallocated Depreciation and Amortization (6)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,803

 

Consolidated Depreciation and Amortization

 

 

 

 

 

 

 

 

 

 

$

112,197

 

 

 

(In thousands)

 

Surfactants

 

 

Polymers

 

 

Specialty
Products

 

 

Total

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

1,602,819

 

 

$

642,471

 

 

$

80,478

 

 

$

2,325,768

 

Cost of Sales (1)

 

 

1,431,462

 

 

 

553,590

 

 

 

65,443

 

 

 

2,050,495

 

Operating Expenses (2)

 

 

98,958

 

 

 

28,111

 

 

 

3,559

 

 

 

130,628

 

Operating Income

 

$

72,399

 

 

$

60,770

 

 

$

11,476

 

 

$

144,645

 

Unallocated Corporate Expenses (3)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(86,032

)

Consolidated Operating Income

 

 

 

 

 

 

 

 

 

 

$

58,613

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Assets

 

$

1,586,148

 

 

$

537,193

 

 

$

70,508

 

 

$

2,193,849

 

Unallocated Assets (4)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

169,505

 

Consolidated Assets

 

 

 

 

 

 

 

 

 

 

$

2,363,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Capital Expenditures

 

$

231,341

 

 

$

19,971

 

 

$

9,310

 

 

$

260,622

 

Unallocated Capital Expenditures (5)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(287

)

Consolidated Capital Expenditures

 

 

 

 

 

 

 

 

 

 

$

260,335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Depreciation and Amortization

 

$

64,377

 

 

$

32,426

 

 

$

5,789

 

 

$

102,592

 

Unallocated Depreciation and Amortization (6)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,746

 

Consolidated Depreciation and Amortization

 

 

 

 

 

 

 

 

 

 

$

105,338

 

 

(1)
Cost of sales is comprised of raw material costs (including freight and handling expenses to deliver the raw materials), manufacturing plant labor expenses and various manufacturing overhead expenses, such as utilities, maintenance, operating supplies, amortization and manufacturing asset depreciation expenses, warehouse and rail car expenses that can be allocated to reportable segments. For more details about items included in Cost of sales line item on the Consolidated Statements of Income, see Note 1, Summary of Significant Accounting Policies, of the notes to the Company’s consolidated financial statements included in Item 8 of this Form 10-K).
(2)
Operating expenses allocated to reportable segments are comprised of selling, administrative and research and development expenses. The CODM uses operating expenses balances in their aggregate to analyze the performance of each reportable segment. For more details about items included in Operating expenses line items on the Consolidated Statements of Income, see Note 1, Summary of Significant Accounting Policies, of the notes to the Company’s consolidated financial statements included in Item 8 of this Form 10-K).
(3)
Unallocated corporate expenses are primarily comprised of corporate administrative expenses (e.g., corporate finance, legal, human resources and information technology), environmental remediation expenses, deferred compensation, business restructuring, assets and goodwill impairment expenses and gain on sales of assets that are not included in segment operating income and not used to evaluate segment performance. For more details about items included in unallocated corporate expenses, see Note 22, Business Restructuring and Assets Impairment and Note 20, Sales of Assets of the notes to the Company’s consolidated financial statements included in Item 8 of this Form 10-K).
(4)
Unallocated assets primarily include assets at the Company’s headquarters.
(5)
Unallocated capital expenditures primarily include capital expenditures related to the Company’s headquarters.
(6)
Unallocated depreciation and amortization primarily includes depreciation related to the Company’s headquarters.

Below is certain Company-wide geographic data for the years ended December 31, 2025, 2024 and 2023:

 

(In thousands)

 

2025

 

 

2024

 

 

2023

 

Net sales (1)

 

 

 

 

 

 

 

 

 

United States

 

$

1,299,993

 

 

$

1,202,822

 

 

$

1,312,866

 

France

 

 

211,452

 

 

 

173,165

 

 

 

202,038

 

Poland

 

 

148,942

 

 

 

162,118

 

 

 

171,889

 

United Kingdom

 

 

169,909

 

 

 

175,044

 

 

 

174,574

 

Brazil

 

 

156,239

 

 

 

135,341

 

 

 

124,661

 

Mexico

 

 

164,012

 

 

 

150,491

 

 

 

144,163

 

All other countries

 

 

181,567

 

 

 

181,293

 

 

 

195,577

 

Total

 

$

2,332,114

 

 

$

2,180,274

 

 

$

2,325,768

 

 

 

 

 

 

 

 

 

 

 

Long-lived assets (2)

 

 

 

 

 

 

 

 

 

United States

 

$

1,028,791

 

 

$

1,026,637

 

 

$

1,007,337

 

Netherlands

 

 

89,469

 

 

 

77,628

 

 

 

80,335

 

Germany

 

 

39,275

 

 

 

36,768

 

 

 

41,878

 

Singapore

 

 

12,778

 

 

 

15,244

 

 

 

17,617

 

Brazil

 

 

34,061

 

 

 

30,484

 

 

 

39,512

 

China

 

 

21,852

 

 

 

22,841

 

 

 

25,704

 

United Kingdom

 

 

31,220

 

 

 

30,730

 

 

 

33,857

 

Mexico

 

 

59,385

 

 

 

57,485

 

 

 

73,449

 

All other countries

 

 

34,892

 

 

 

34,678

 

 

 

36,989

 

Total

 

$

1,351,723

 

 

$

1,332,495

 

 

$

1,356,678

 

 

(1)
Net sales are attributed to countries based on the location of the Company legal entity making the sale.
(2)
Includes net property, plant and equipment, goodwill and other intangible assets.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 27, 2025
2023Feb 29, 2024
2022Feb 28, 2023
2021Feb 25, 2022
2020Feb 26, 2021
2019Feb 27, 2020
2018Feb 27, 2019
2017Feb 27, 2018
2016Feb 24, 2017
2015Feb 24, 2016

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.

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