ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾

Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENT INFORMATION

v3.20.2
OPERATING SEGMENT INFORMATION
 6 Months Ended
Jun. 30, 2020
OPERATING SEGMENT INFORMATION Ìý
OPERATING SEGMENT INFORMATION

20. OPERATING SEGMENT INFORMATION

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We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of differentiated and commodity chemical products. We have four operating segments, which are also our reportable segments: Polyurethanes, Performance Products, Advanced Materials and Textile Effects. We have organized our business and derived our operating segments around differences in product lines. Beginning in the third quarter of 2019, we reported the results of our Chemical Intermediates Businesses as discontinued operations in our condensed consolidated financial statements for all periods presented. See “Note 4. Discontinued Operations and Business Dispositions—Sale of Chemical Intermediates Businesses.�

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The major products of each reportable operating segment are as follows:

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Segment

ÌýÌýÌýÌý

Products

Polyurethanes

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MDI, polyols, TPU and other polyurethane-related products

PerformanceÌýProducts

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Specialty amines, ethyleneamines, maleic anhydride and technology licenses

Advanced Materials

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Basic liquid and solid epoxy resins; specialty resin compounds; cross-linking, matting, curing and toughening agents; epoxy, acrylic and polyurethane-based formulations

Textile Effects

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Textile chemicals, dyes and digital inks

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Sales between segments are generally recognized at external market prices and are eliminated in consolidation. Adjusted EBITDA is presented as a measure of the financial performance of our global business units and for reporting the results of our operating segments. The adjusted EBITDA of our reportable operating segments excludes items that principally apply to our Company as a whole. The revenues and adjusted EBITDA from continuing operations for each of our reportable operating segments are as follows (dollars in millions):

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ThreeÌýmonths

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Six months

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ended

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ended

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JuneÌý30,Ìý

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JuneÌý30,Ìý

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2020

ÌýÌýÌýÌý

2019

ÌýÌýÌýÌý

2020

ÌýÌýÌýÌý

2019

Revenues:

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ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

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ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

Polyurethanes

$

730

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$

1,014

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$

1,618

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$

1,938

Performance Products

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228

�

�

299

�

�

520

�

�

599

Advanced Materials

�

192

�

�

275

�

�

433

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�

547

Textile Effects

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102

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215

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�

282

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�

404

Corporate and eliminations

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(5)

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(19)

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(13)

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(35)

Total

$

1,247

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$

1,784

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$

2,840

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$

3,453

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ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ Corporation:

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Segment adjusted EBITDA(1):

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�

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�

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�

�

Polyurethanes

$

31

�

$

156

�

$

115

�

$

280

Performance Products

�

29

�

�

42

�

�

87

�

�

87

Advanced Materials

�

30

�

�

55

�

�

78

�

�

108

Textile Effects

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(4)

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�

28

�

�

16

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50

Corporate and other(2)

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(32)

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�

(36)

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�

(77)

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�

(76)

Total

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54

�

�

245

�

�

219

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�

449

Reconciliation of adjusted EBITDA to net (loss) income:

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�

�

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�

�

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�

�

Interest expense, net—continuing operations

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(21)

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�

(29)

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�

(39)

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�

(59)

Income tax benefit (expense)—continuing operations

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13

�

�

(38)

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�

6

�

�

(83)

Income tax expense—discontinued operations

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(1)

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�

(14)

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�

(239)

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�

(19)

Depreciation and amortization—continuing operations

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(69)

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�

(69)

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�

(136)

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�

(136)

Depreciation and amortization—discontinued operations

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�

�

�

(23)

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�

�

�

(46)

Net income attributable to noncontrolling interests

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3

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8

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6

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20

Other adjustments:

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�

�

�

�

�

�

�

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�

Business acquisition and integration expenses and purchase accounting inventory adjustments

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(8)

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�

�

(21)

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�

(1)

EBITDA from discontinued operations(3)

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6

�

�

72

�

�

1,021

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�

123

Fair value adjustments to Venator investment

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4

�

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(18)

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�

(106)

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58

Loss on early extinguishment of debt

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�

�

�

�

�

�

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�

�

(23)

Certain legal settlements and related expenses

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(4)

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�

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(6)

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(Loss) gain on sale of businesses/assets

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(1)

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1

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Income from transition services arrangements

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5

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�

�

�

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5

�

�

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Certain nonrecurring information technology project implementation costs

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(1)

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(2)

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Amortization of pension and postretirement actuarial losses

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(19)

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(16)

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(37)

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�

(33)

Plant incident remediation costs

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(1)

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(1)

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Restructuring, impairment and plant closing and transition costs

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(19)

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(22)

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�

(1)

Net (loss) income

$

(59)

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$

118

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$

649

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$

249

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ThreeÌýmonths

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Six months

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ended

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ended

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JuneÌý30,Ìý

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JuneÌý30,Ìý

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2020

ÌýÌýÌýÌý

2019

ÌýÌýÌýÌý

2020

ÌýÌýÌýÌý

2019

ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International:

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ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

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ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

Segment adjusted EBITDA(1):

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�

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�

�

�

Polyurethanes

$

31

�

$

156

�

$

115

�

$

280

Performance Products

�

29

�

�

42

�

�

87

�

�

87

Advanced Materials

�

30

�

�

55

�

�

78

�

�

108

Textile Effects

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(4)

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28

�

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16

�

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50

Corporate and other(2)

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(30)

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�

(35)

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�

(74)

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�

(73)

Total

�

56

�

�

246

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�

222

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�

452

Reconciliation of adjusted EBITDA to net (loss) income:

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�

�

�

�

�

�

�

�

�

�

Interest expense, net—continuing operations

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(21)

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(33)

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(41)

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�

(68)

Income tax benefit (expense)—continuing operations

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13

�

�

(37)

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�

6

�

�

(81)

Income tax expense—discontinued operations

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(1)

�

�

(14)

�

�

(239)

�

�

(19)

Depreciation and amortization—continuing operations

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(69)

�

�

(69)

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�

(136)

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�

(136)

Depreciation and amortization—discontinued operations

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�

�

�

(23)

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�

�

�

�

(46)

Net income attributable to noncontrolling interests

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3

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�

8

�

�

6

�

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20

Other adjustments:

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�

�

�

�

�

�

�

�

�

�

Business acquisition and integration expenses and purchase accounting inventory adjustments

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(8)

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�

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(21)

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�

(1)

EBITDA from discontinued operations(3)

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6

�

�

72

�

�

1,021

�

�

123

Fair value adjustments to Venator investment

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4

�

�

(18)

�

�

(106)

�

�

58

Loss on early extinguishment of debt

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�

�

�

�

�

�

�

�

�

(23)

Certain legal settlements and related expenses

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(4)

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�

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(6)

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�

�

(Loss) gain on sale of businesses/assets

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(1)

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�

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�

�

1

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�

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Income from transition services arrangements

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5

�

�

�

�

�

5

�

�

�

Certain nonrecurring information technology project implementation costs

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(1)

�

�

�

�

�

(2)

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�

�

Amortization of pension and postretirement actuarial losses

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(21)

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�

(17)

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�

(39)

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�

(35)

Plant incident remediation costs

�

(1)

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�

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�

�

(1)

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�

�

Restructuring, impairment and plant closing and transition costs

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(19)

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�

�

�

�

(22)

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�

(1)

Net (loss) income

$

(59)

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$

115

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$

648

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$

243
(1) We use segment adjusted EBITDA as the measure of each segment’s profit or loss. We believe that segment adjusted EBITDA more accurately reflects what the chief operating decision maker uses to make decisions about resources to be allocated to the segments and assess their financial performance. Segment adjusted EBITDA is defined as net (loss) income of ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ Corporation or ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International, as appropriate, before interest, income tax, depreciation and amortization, net income attributable to noncontrolling interests and certain Corporate and other items, as well as eliminating the following adjustments: (a) business acquisition and integration expenses and purchase accounting inventory adjustments; (b)ÌýEBITDA from discontinued operations; (c) fair value adjustments to Venator investment; (d) loss on early extinguishment of debt; (e) certain legal settlements and related expenses; (f) (loss) gain on sale of businesses/assets; (g) income from transition services arrangements related to the sale of our Chemical Intermediates Businesses to Indorama; (h) certain nonrecurring information technology project implementation costs; (i) amortization of pension and postretirement actuarial losses; (j) plant incident remediation costs; and (k) restructuring, impairment, plant closing and transition costs.

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(2) Corporate and other includes unallocated corporate overhead, unallocated foreign exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt, unallocated restructuring, impairment and plant closing costs, nonoperating income and expense and gains and losses on the disposition of corporate assets.

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(3) Includes the gain on the sale of our Chemical Intermediates Businesses in 2020.