ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾

Quarterly report pursuant to Section 13 or 15(d)

Note 20 - Operating Segment Information

v3.24.2.u1
Note 20 - Operating Segment Information
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements Ìý
Segment Reporting Disclosure [Text Block]

20. 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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Performance amines, ethyleneamines andÌýmaleic anhydride

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 nanomaterials

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

Six months

 Ìý
Ìý Ìý

ended

 Ìý Ìý

ended

 Ìý
Ìý Ìý

June 30,

 Ìý Ìý

June 30,

 Ìý
Ìý Ìý

2024

 Ìý Ìý

2023

 Ìý Ìý

2024

 Ìý Ìý

2023

 Ìý

Revenues:

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

Polyurethanes

 Ìý $ 1,001 Ìý Ìý $ 1,012 Ìý Ìý $ 1,927 Ìý Ìý $ 2,003 Ìý

Performance Products

 Ìý Ìý 299 Ìý Ìý Ìý 307 Ìý Ìý Ìý 590 Ìý Ìý Ìý 641 Ìý

Advanced Materials

 Ìý Ìý 279 Ìý Ìý Ìý 284 Ìý Ìý Ìý 540 Ìý Ìý Ìý 573 Ìý

Total reportable segments� revenues

 Ìý Ìý 1,579 Ìý Ìý Ìý 1,603 Ìý Ìý Ìý 3,057 Ìý Ìý Ìý 3,217 Ìý

Intersegment eliminations

 Ìý Ìý (5 ) Ìý Ìý (7 ) Ìý Ìý (13 ) Ìý Ìý (15 )

Total

 Ìý $ 1,574 Ìý Ìý $ 1,596 Ìý Ìý $ 3,044 Ìý Ìý $ 3,202 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 $ 80 Ìý Ìý $ 88 Ìý Ìý $ 119 Ìý Ìý $ 154 Ìý

Performance Products

 Ìý Ìý 46 Ìý Ìý Ìý 55 Ìý Ìý Ìý 88 Ìý Ìý Ìý 126 Ìý

Advanced Materials

 Ìý Ìý 52 Ìý Ìý Ìý 51 Ìý Ìý Ìý 95 Ìý Ìý Ìý 99 Ìý

Total reportable segments� adjusted EBITDA

 Ìý Ìý 178 Ìý Ìý Ìý 194 Ìý Ìý Ìý 302 Ìý Ìý Ìý 379 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý 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 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Interest expense, net—continuing operations

 Ìý Ìý (20 ) Ìý Ìý (15 ) Ìý Ìý (39 ) Ìý Ìý (33 )

Depreciation and amortization—continuing operations

 Ìý Ìý (75 ) Ìý Ìý (70 ) Ìý Ìý (144 ) Ìý Ìý (139 )

Corporate and other costs, net(2)

 Ìý Ìý (47 ) Ìý Ìý (38 ) Ìý Ìý (90 ) Ìý Ìý (87 )

Net income attributable to noncontrolling interests

 Ìý Ìý 16 Ìý Ìý Ìý 12 Ìý Ìý Ìý 30 Ìý Ìý Ìý 25 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, net

 Ìý Ìý (1 ) Ìý Ìý (2 ) Ìý Ìý (21 ) Ìý Ìý (3 )

Fair value adjustments to Venator investment, net and other tax matter adjustments

 Ìý Ìý 7 Ìý Ìý Ìý (4 ) Ìý Ìý 7 Ìý Ìý Ìý (5 )

Certain legal and other settlements and related expenses

 Ìý Ìý (1 ) Ìý Ìý (1 ) Ìý Ìý (2 ) Ìý Ìý (2 )

Gain on sale of business/assets

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

Certain nonrecurring information technology project implementation costs

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

Amortization of pension and postretirement actuarial losses

 Ìý Ìý (8 ) Ìý Ìý (7 ) Ìý Ìý (16 ) Ìý Ìý (15 )

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

 Ìý Ìý (5 ) Ìý Ìý (8 ) Ìý Ìý (19 ) Ìý Ìý (2 )

Income from continuing operations before income taxes

 Ìý Ìý 44 Ìý Ìý Ìý 61 Ìý Ìý Ìý 8 Ìý Ìý Ìý 116 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Income tax (expense) benefit—continuing operations

 Ìý Ìý (13 ) Ìý Ìý (28 ) Ìý Ìý 7 Ìý Ìý Ìý (39 )

Income (loss) from discontinued operations, net of tax

 Ìý Ìý 7 Ìý Ìý Ìý (2 ) Ìý Ìý â€� Ìý Ìý Ìý 120 Ìý

Net income

 Ìý $ 38 Ìý Ìý $ 31 Ìý Ìý $ 15 Ìý Ìý $ 197 Ìý

Ìý â€�

Ìý Ìý

Three months

 Ìý Ìý

Six months

 Ìý
Ìý Ìý

ended

 Ìý Ìý

ended

 Ìý
Ìý Ìý

June 30,

 Ìý Ìý

June 30,

 Ìý
Ìý Ìý

2024

 Ìý Ìý

2023

 Ìý Ìý

2024

 Ìý Ìý

2023

 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 $ 80 Ìý Ìý $ 88 Ìý Ìý $ 119 Ìý Ìý $ 154 Ìý

Performance Products

 Ìý Ìý 46 Ìý Ìý Ìý 55 Ìý Ìý Ìý 88 Ìý Ìý Ìý 126 Ìý

Advanced Materials

 Ìý Ìý 52 Ìý Ìý Ìý 51 Ìý Ìý Ìý 95 Ìý Ìý Ìý 99 Ìý

Total reportable segments� adjusted EBITDA

 Ìý Ìý 178 Ìý Ìý Ìý 194 Ìý Ìý Ìý 302 Ìý Ìý Ìý 379 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý 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 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Interest expense, net—continuing operations

 Ìý Ìý (20 ) Ìý Ìý (15 ) Ìý Ìý (39 ) Ìý Ìý (33 )

Depreciation and amortization—continuing operations

 Ìý Ìý (75 ) Ìý Ìý (70 ) Ìý Ìý (144 ) Ìý Ìý (139 )

Corporate and other costs, net(2)

 Ìý Ìý (47 ) Ìý Ìý (38 ) Ìý Ìý (88 ) Ìý Ìý (85 )

Net income attributable to noncontrolling interests

 Ìý Ìý 16 Ìý Ìý Ìý 12 Ìý Ìý Ìý 30 Ìý Ìý Ìý 25 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, net

 Ìý Ìý (1 ) Ìý Ìý (2 ) Ìý Ìý (21 ) Ìý Ìý (3 )

Fair value adjustments to Venator investment, net and other tax matter adjustments

 Ìý Ìý 7 Ìý Ìý Ìý (4 ) Ìý Ìý 7 Ìý Ìý Ìý (5 )

Certain legal and other settlements and related expenses

 Ìý Ìý (1 ) Ìý Ìý (1 ) Ìý Ìý (2 ) Ìý Ìý (2 )

Gain on sale of business/assets

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

Certain nonrecurring information technology project implementation costs

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

Amortization of pension and postretirement actuarial losses

 Ìý Ìý (8 ) Ìý Ìý (7 ) Ìý Ìý (16 ) Ìý Ìý (15 )

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

 Ìý Ìý (5 ) Ìý Ìý (8 ) Ìý Ìý (19 ) Ìý Ìý (2 )

Income from continuing operations before income taxes

 Ìý Ìý 44 Ìý Ìý Ìý 61 Ìý Ìý Ìý 10 Ìý Ìý Ìý 118 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Income tax (expense) benefit—continuing operations

 Ìý Ìý (13 ) Ìý Ìý (28 ) Ìý Ìý 7 Ìý Ìý Ìý (39 )

Income (loss) from discontinued operations, net of tax

 Ìý Ìý 7 Ìý Ìý Ìý (2 ) Ìý Ìý â€� Ìý Ìý Ìý 120 Ìý

Net income

 Ìý $ 38 Ìý Ìý $ 31 Ìý Ìý $ 17 Ìý Ìý $ 199 Ìý

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, net;Ìý(b) fair value adjustments to Venator investment, net and other tax matter adjustments; (c) certain legal and other settlements and related expenses; (d) gain on sale of business/assets; (e) certain nonrecurring information technology project implementation costs; (f) amortization of pension and postretirement actuarial losses; (g) restructuring, impairment andÌýplant closing and transition costs; and (h) income (loss) 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€�