ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾

Quarterly report pursuant to Section 13 or 15(d)

Note 19 - Operating Segment Information

v3.23.1
Note 19 - Operating Segment Information
 3 Months Ended
Mar. 31, 2023
Notes to Financial Statements Ìý
Segment Reporting Disclosure [Text Block]

19. OPERATING SEGMENT INFORMATIONÌý

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We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of diversified organic chemical products. We have three operating segments, which are also our reportable segments: Polyurethanes, Performance Products andÌýAdvanced Materials. We have organized our business and derived our operating segments around differences in product lines.Ìý

Ìý

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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Technologically-advanced epoxy, phenoxy, acrylic, polyurethane and acrylonitrile-butadiene-based polymer formulations; high performance thermoset resins, curing agents, toughening agents, and carbon nanotubes additives

Ìý

Sales between segments are generally recognized at external market prices and are eliminated in consolidation. We use adjusted EBITDA to measure the financial performance of our global business units and for reporting the results of our operating segments. This measure includes all operating items relating to the businesses. The adjusted EBITDA of operating segments excludes items that principally apply to our Company as a whole. The following schedule includes revenues and adjusted EBITDA for each of our reportable operating segments (dollars in millions).Ìý

Ìý

Ìý Ìý

Three months

 Ìý
Ìý Ìý

ended

 Ìý
Ìý Ìý

March 31,

 Ìý
Ìý Ìý

2023

 Ìý Ìý

2022

 Ìý

Revenues:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Polyurethanes

 Ìý $ 991 Ìý Ìý $ 1,386 Ìý

Performance Products

 Ìý Ìý 334 Ìý Ìý Ìý 480 Ìý

Advanced Materials

 Ìý Ìý 289 Ìý Ìý Ìý 335 Ìý

Total reportable segments� revenues

 Ìý Ìý 1,614 Ìý Ìý Ìý 2,201 Ìý

Intersegment eliminations

 Ìý Ìý (8 ) Ìý Ìý (9 )

Total

 Ìý $ 1,606 Ìý Ìý $ 2,192 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ Corporation:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Segment adjusted EBITDA(1):

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Polyurethanes

 Ìý $ 66 Ìý Ìý $ 224 Ìý

Performance Products

 Ìý Ìý 71 Ìý Ìý Ìý 146 Ìý

Advanced Materials

 Ìý Ìý 48 Ìý Ìý Ìý 67 Ìý

Total reportable segments� adjusted EBITDA

 Ìý Ìý 185 Ìý Ìý Ìý 437 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Reconciliation of total reportable segments� adjusted EBITDA to income from continuing operations before income taxes:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Interest expense, net—continuing operations

 Ìý Ìý (18 ) Ìý Ìý (14 )

Depreciation and amortization—continuing operations

 Ìý Ìý (69 ) Ìý Ìý (67 )

Corporate and other costs, net(2)

 Ìý Ìý (49 ) Ìý Ìý (50 )

Net income attributable to noncontrolling interests

 Ìý Ìý 13 Ìý Ìý Ìý 17 Ìý

Other adjustments:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Business acquisition and integration expenses and purchase accounting inventory adjustments

 Ìý Ìý (1 ) Ìý Ìý (6 )

Fair value adjustments to Venator investment, net

 Ìý Ìý (1 ) Ìý Ìý (2 )

Certain legal and other settlements and related expenses

 Ìý Ìý (1 ) Ìý Ìý (12 )

Costs associated with the Albemarle Settlement, net

 Ìý Ìý â€� Ìý Ìý Ìý (1 )

Loss on sale of business/assets

 Ìý Ìý â€� Ìý Ìý Ìý (4 )

Income from transition services arrangements

 Ìý Ìý â€� Ìý Ìý Ìý 1 Ìý

Certain nonrecurring information technology project implementation costs

 Ìý Ìý (2 ) Ìý Ìý (2 )

Amortization of pension and postretirement actuarial losses

 Ìý Ìý (8 ) Ìý Ìý (12 )

Restructuring, impairment and plant closing and transition credits (costs)(3)

 Ìý Ìý 6 Ìý Ìý Ìý (3 )

Income from continuing operations before income taxes

 Ìý Ìý 55 Ìý Ìý Ìý 282 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Income tax expense—continuing operations

 Ìý Ìý (11 ) Ìý Ìý (60 )

Income from discontinued operations, net of tax

 Ìý Ìý 122 Ìý Ìý Ìý 18 Ìý

Net income

 Ìý $ 166 Ìý Ìý $ 240 Ìý

Ìý â€�

Ìý Ìý

Three months

 Ìý
Ìý Ìý

ended

 Ìý
Ìý Ìý

March 31,

 Ìý
Ìý Ìý

2023

 Ìý Ìý

2022

 Ìý

ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Segment adjusted EBITDA(1):

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Polyurethanes

 Ìý $ 66 Ìý Ìý $ 224 Ìý

Performance Products

 Ìý Ìý 71 Ìý Ìý Ìý 146 Ìý

Advanced Materials

 Ìý Ìý 48 Ìý Ìý Ìý 67 Ìý

Total reportable segments� adjusted EBITDA

 Ìý Ìý 185 Ìý Ìý Ìý 437 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Reconciliation of total reportable segments� adjusted EBITDA to income from continuing operations before income taxes:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Interest expense, net—continuing operations

 Ìý Ìý (18 ) Ìý Ìý (14 )

Depreciation and amortization—continuing operations

 Ìý Ìý (69 ) Ìý Ìý (67 )

Corporate and other costs, net(2)

 Ìý Ìý (47 ) Ìý Ìý (47 )

Net income attributable to noncontrolling interests

 Ìý Ìý 13 Ìý Ìý Ìý 17 Ìý

Other adjustments:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Business acquisition and integration expenses and purchase accounting inventory adjustments

 Ìý Ìý (1 ) Ìý Ìý (6 )

Fair value adjustments to Venator investment, net

 Ìý Ìý (1 ) Ìý Ìý (2 )

Certain legal and other settlements and related expenses

 Ìý Ìý (1 ) Ìý Ìý (12 )

Costs associated with the Albemarle Settlement, net

 Ìý Ìý â€� Ìý Ìý Ìý (1 )

Loss on sale of business/assets

 Ìý Ìý â€� Ìý Ìý Ìý (4 )

Income from transition services arrangements

 Ìý Ìý â€� Ìý Ìý Ìý 1 Ìý

Certain nonrecurring information technology project implementation costs

 Ìý Ìý (2 ) Ìý Ìý (2 )

Amortization of pension and postretirement actuarial losses

 Ìý Ìý (8 ) Ìý Ìý (12 )

Restructuring, impairment and plant closing and transition credits (costs)(3)

 Ìý Ìý 6 Ìý Ìý Ìý (3 )

Income from continuing operations before income taxes

 Ìý Ìý 57 Ìý Ìý Ìý 285 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Income tax expense—continuing operations

 Ìý Ìý (11 ) Ìý Ìý (60 )

Income from discontinued operations, net of tax

 Ìý Ìý 122 Ìý Ìý Ìý 18 Ìý

Net income

 Ìý $ 168 Ìý Ìý $ 243 Ìý

Ìý

(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 andÌýcertain Corporate and other items, as well as eliminating the following adjustments: (a) business acquisition and integration expenses and purchase accounting inventory adjustments;Ìý(b) fair value adjustments to Venator investment, net; (c) certain legal and other settlements and related expenses; (d) costs associated with the Albemarle Settlement, net; (e) lossÌýon sale of business/assets; (f) income from transition services arrangements; (g) certain nonrecurring information technology project implementation costs; (h) amortization of pension and postretirement actuarial losses; (i) restructuring, impairment, plant closing and transition credits (costs); and (j) income from discontinued operations, net of tax.

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(2) Corporate and other costs, net includes unallocated corporate overhead, unallocated foreign currency exchange gains and losses, LIFO inventory valuation reserve adjustments, nonoperating income and expense and gains and losses on the disposition of corporate assets.

Ìý

(3)

Includes costs associated with transition activities related primarily to our Corporate program to optimize our global approach to leverage shared services capabilities.

ÌýÌýÌý â€�