Note 10 - SEGMENTS OF BUSINESS

The Company’s business activities are organized around its two principal business segments, Flexible Packaging and Pressure Sensitive Materials. Both internal and external reporting conform to this organizational structure with no significant differences in accounting policies applied. Minor intersegment sales are generally priced to reflect nominal markups. The Company evaluates the performance of its segments and allocates resources to them based on operating profit which is defined as profit before general corporate expense, interest expense, income taxes, and minority interest. While there are similarities in selected technology and manufacturing processes utilized, notable differences exist in products, application and distribution of products, and customer base.

Products produced within the Flexible Packaging business segment include high barrier, polyethylene, and paper products for food, medical, personal care, agribusiness, chemicals, pet food, and sanitary products. Products produced within the Pressure Sensitive Materials business segment include film, paper, and metalized plastic film printing stocks used for primary package labeling, promotional decoration, bar code inventory control labels, and laser printing for administrative office and promotional applications. This segment also includes micro-thin film adhesives used in delicate electronic parts assembly and graphic films for decorative signage.

A summary of the Company’s business activities reported by its two business segments follows:

(1) Operating profit is defined as profit before general corporate expense, interest expense, income taxes, and minority interest.

(2) Identifiable assets by business segment include only those assets that are specifically identified with each segment’s operations.

(3) Corporate assets are principally cash and short-term investments, prepaid expenses, and corporate property.

(4) Net sales are attributed to countries based on location of the Company’s manufacturing or selling operation.

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