ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾

Quarterly report pursuant to Section 13 or 15(d)

Note 20 - Operating Segment Information

v3.21.2
Note 20 - Operating Segment Information
 9 Months Ended
Sep. 30, 2021
Notes to Financial Statements Ìý
Segment Reporting Disclosure [Text Block]

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.

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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, and curing and toughening agents; epoxy, acrylic and polyurethane-based formulations; specialty nitrile latex, alkyd resins and carbon nano materials

Textile Effects

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Textile chemicals andÌýdyes

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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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Ìý Ìý

Three months

 Ìý Ìý

Nine months

 Ìý
Ìý Ìý

ended

 Ìý Ìý

ended

 Ìý
Ìý Ìý

September 30,

 Ìý Ìý

September 30,

 Ìý
Ìý Ìý

2021

 Ìý Ìý

2020

 Ìý Ìý

2021

 Ìý Ìý

2020

 Ìý

Revenues:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Polyurethanes

 Ìý $ 1,403 Ìý Ìý $ 936 Ìý Ìý $ 3,626 Ìý Ìý $ 2,554 Ìý

Performance Products

 Ìý Ìý 399 Ìý Ìý Ìý 238 Ìý Ìý Ìý 1,075 Ìý Ìý Ìý 758 Ìý

Advanced Materials

 Ìý Ìý 304 Ìý Ìý Ìý 199 Ìý Ìý Ìý 881 Ìý Ìý Ìý 632 Ìý

Textile Effects

 Ìý Ìý 188 Ìý Ìý Ìý 142 Ìý Ìý Ìý 588 Ìý Ìý Ìý 424 Ìý

Corporate and eliminations

 Ìý Ìý (9 ) Ìý Ìý (5 ) Ìý Ìý (24 ) Ìý Ìý (18 )

Total

 Ìý $ 2,285 Ìý Ìý $ 1,510 Ìý Ìý $ 6,146 Ìý Ìý $ 4,350 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ Corporation:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Segment adjusted EBITDA(1):

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Polyurethanes

 Ìý $ 246 Ìý Ìý $ 156 Ìý Ìý $ 661 Ìý Ìý $ 271 Ìý

Performance Products

 Ìý Ìý 103 Ìý Ìý Ìý 36 Ìý Ìý Ìý 254 Ìý Ìý Ìý 123 Ìý

Advanced Materials

 Ìý Ìý 48 Ìý Ìý Ìý 25 Ìý Ìý Ìý 150 Ìý Ìý Ìý 103 Ìý

Textile Effects

 Ìý Ìý 22 Ìý Ìý Ìý 8 Ìý Ìý Ìý 75 Ìý Ìý Ìý 24 Ìý

Corporate and other(2)

 Ìý Ìý (48 ) Ìý Ìý (37 ) Ìý Ìý (146 ) Ìý Ìý (114 )

Total

 Ìý Ìý 371 Ìý Ìý Ìý 188 Ìý Ìý Ìý 994 Ìý Ìý Ìý 407 Ìý

Reconciliation of adjusted EBITDA to net income (loss):

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Interest expense, net—continuing operations

 Ìý Ìý (15 ) Ìý Ìý (24 ) Ìý Ìý (52 ) Ìý Ìý (63 )

Income tax expense—continuing operations

 Ìý Ìý (38 ) Ìý Ìý (15 ) Ìý Ìý (114 ) Ìý Ìý (9 )

Income tax expense—discontinued operations

 Ìý Ìý (5 ) Ìý Ìý â€� Ìý Ìý Ìý (5 ) Ìý Ìý (239 )

Depreciation and amortization—continuing operations

 Ìý Ìý (72 ) Ìý Ìý (70 ) Ìý Ìý (219 ) Ìý Ìý (206 )

Net income attributable to noncontrolling interests

 Ìý Ìý 16 Ìý Ìý Ìý 9 Ìý Ìý Ìý 49 Ìý Ìý Ìý 15 Ìý

Other adjustments:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Business acquisition and integration expenses and purchase accounting inventory adjustments

 Ìý Ìý (5 ) Ìý Ìý (9 ) Ìý Ìý (19 ) Ìý Ìý (30 )

EBITDA from discontinued operations(3)

 Ìý Ìý â€� Ìý Ìý Ìý â€� Ìý Ìý Ìý 2 Ìý Ìý Ìý 1,021 Ìý

Fair value adjustments to Venator investment

 Ìý Ìý (3 ) Ìý Ìý 6 Ìý Ìý Ìý (28 ) Ìý Ìý (100 )

Loss on early extinguishment of debt

 Ìý Ìý â€� Ìý Ìý Ìý â€� Ìý Ìý Ìý (27 ) Ìý Ìý â€� Ìý

Certain legal and other settlements and related income (expenses)

 Ìý Ìý â€� Ìý Ìý Ìý 4 Ìý Ìý Ìý (10 ) Ìý Ìý (2 )

Gain on sale of businesses/assets

 Ìý Ìý â€� Ìý Ìý Ìý â€� Ìý Ìý Ìý 30 Ìý Ìý Ìý 1 Ìý

Income from transition services arrangements

 Ìý Ìý 2 Ìý Ìý Ìý 1 Ìý Ìý Ìý 6 Ìý Ìý Ìý 6 Ìý

Certain nonrecurring information technology project implementation costs

 Ìý Ìý (2 ) Ìý Ìý (1 ) Ìý Ìý (6 ) Ìý Ìý (3 )

Amortization of pension and postretirement actuarial losses

 Ìý Ìý (22 ) Ìý Ìý (20 ) Ìý Ìý (65 ) Ìý Ìý (57 )

Plant incident remediation costs

 Ìý Ìý (2 ) Ìý Ìý â€� Ìý Ìý Ìý (3 ) Ìý Ìý (1 )

Restructuring, impairment and plant closing and transition costs

 Ìý Ìý â€� Ìý Ìý Ìý (12 ) Ìý Ìý (36 ) Ìý Ìý (34 )

Net income

 Ìý $ 225 Ìý Ìý $ 57 Ìý Ìý $ 497 Ìý Ìý $ 706 Ìý

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Ìý Ìý

Three months

 Ìý Ìý

Nine months

 Ìý
Ìý Ìý

ended

 Ìý Ìý

ended

 Ìý
Ìý Ìý

September 30,

 Ìý Ìý

September 30,

 Ìý
Ìý Ìý

2021

 Ìý Ìý

2020

 Ìý Ìý

2021

 Ìý Ìý

2020

 Ìý

ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Segment adjusted EBITDA(1):

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Polyurethanes

 Ìý $ 246 Ìý Ìý $ 156 Ìý Ìý $ 661 Ìý Ìý $ 271 Ìý

Performance Products

 Ìý Ìý 103 Ìý Ìý Ìý 36 Ìý Ìý Ìý 254 Ìý Ìý Ìý 123 Ìý

Advanced Materials

 Ìý Ìý 48 Ìý Ìý Ìý 25 Ìý Ìý Ìý 150 Ìý Ìý Ìý 103 Ìý

Textile Effects

 Ìý Ìý 22 Ìý Ìý Ìý 8 Ìý Ìý Ìý 75 Ìý Ìý Ìý 24 Ìý

Corporate and other(2)

 Ìý Ìý (47 ) Ìý Ìý (36 ) Ìý Ìý (140 ) Ìý Ìý (110 )

Total

 Ìý Ìý 372 Ìý Ìý Ìý 189 Ìý Ìý Ìý 1,000 Ìý Ìý Ìý 411 Ìý

Reconciliation of adjusted EBITDA to net income (loss):

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Interest expense, net—continuing operations

 Ìý Ìý (15 ) Ìý Ìý (24 ) Ìý Ìý (52 ) Ìý Ìý (65 )

Income tax expense—continuing operations

 Ìý Ìý (39 ) Ìý Ìý (15 ) Ìý Ìý (115 ) Ìý Ìý (9 )

Income tax expense—discontinued operations

 Ìý Ìý (5 ) Ìý Ìý â€� Ìý Ìý Ìý (5 ) Ìý Ìý (239 )

Depreciation and amortization—continuing operations

 Ìý Ìý (72 ) Ìý Ìý (70 ) Ìý Ìý (219 ) Ìý Ìý (206 )

Net income attributable to noncontrolling interests

 Ìý Ìý 16 Ìý Ìý Ìý 9 Ìý Ìý Ìý 49 Ìý Ìý Ìý 15 Ìý

Other adjustments:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Business acquisition and integration expenses and purchase accounting inventory adjustments

 Ìý Ìý (5 ) Ìý Ìý (9 ) Ìý Ìý (19 ) Ìý Ìý (30 )

EBITDA from discontinued operations(3)

 Ìý Ìý â€� Ìý Ìý Ìý â€� Ìý Ìý Ìý 2 Ìý Ìý Ìý 1,021 Ìý

Fair value adjustments to Venator investment

 Ìý Ìý (3 ) Ìý Ìý 6 Ìý Ìý Ìý (28 ) Ìý Ìý (100 )

Loss on early extinguishment of debt

 Ìý Ìý â€� Ìý Ìý Ìý â€� Ìý Ìý Ìý (27 ) Ìý Ìý â€� Ìý

Certain legal and other settlements and related income (expenses)

 Ìý Ìý â€� Ìý Ìý Ìý 4 Ìý Ìý Ìý (10 ) Ìý Ìý (2 )

Gain on sale of businesses/assets

 Ìý Ìý â€� Ìý Ìý Ìý â€� Ìý Ìý Ìý 30 Ìý Ìý Ìý 1 Ìý

Income from transition services arrangements

 Ìý Ìý 2 Ìý Ìý Ìý 1 Ìý Ìý Ìý 6 Ìý Ìý Ìý 6 Ìý

Certain nonrecurring information technology project implementation costs

 Ìý Ìý (2 ) Ìý Ìý (1 ) Ìý Ìý (6 ) Ìý Ìý (3 )

Amortization of pension and postretirement actuarial losses

 Ìý Ìý (22 ) Ìý Ìý (20 ) Ìý Ìý (67 ) Ìý Ìý (59 )

Plant incident remediation costs

 Ìý Ìý (2 ) Ìý Ìý â€� Ìý Ìý Ìý (3 ) Ìý Ìý (1 )

Restructuring, impairment and plant closing and transition costs

 Ìý Ìý â€� Ìý Ìý Ìý (12 ) Ìý Ìý (36 ) Ìý Ìý (34 )

Net income

 Ìý $ 225 Ìý Ìý $ 58 Ìý Ìý $ 500 Ìý Ìý $ 706 Ìý

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(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 netÌýincome 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 and other settlements and related income (expenses); (f) gainÌýon 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.

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