ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾

Quarterly report pursuant to Section 13 or 15(d)

Note 20 - Operating Segment Information

v3.24.3
Note 20 - Operating Segment Information
 9 Months Ended
Sep. 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

Nine months

 Ìý
Ìý Ìý

ended

 Ìý Ìý

ended

 Ìý
Ìý Ìý

September 30,

 Ìý Ìý

September 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 $ 1,003 Ìý Ìý $ 967 Ìý Ìý $ 2,930 Ìý Ìý $ 2,970 Ìý

Performance Products

 Ìý Ìý 280 Ìý Ìý Ìý 277 Ìý Ìý Ìý 870 Ìý Ìý Ìý 918 Ìý

Advanced Materials

 Ìý Ìý 261 Ìý Ìý Ìý 268 Ìý Ìý Ìý 801 Ìý Ìý Ìý 841 Ìý

Total reportable segments� revenues

 Ìý Ìý 1,544 Ìý Ìý Ìý 1,512 Ìý Ìý Ìý 4,601 Ìý Ìý Ìý 4,729 Ìý

Intersegment eliminations

 Ìý Ìý (4 ) Ìý Ìý (6 ) Ìý Ìý (17 ) Ìý Ìý (21 )

Total

 Ìý $ 1,540 Ìý Ìý $ 1,506 Ìý Ìý $ 4,584 Ìý Ìý $ 4,708 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 $ 76 Ìý Ìý $ 81 Ìý Ìý $ 195 Ìý Ìý $ 235 Ìý

Performance Products

 Ìý Ìý 42 Ìý Ìý Ìý 47 Ìý Ìý Ìý 130 Ìý Ìý Ìý 173 Ìý

Advanced Materials

 Ìý Ìý 47 Ìý Ìý Ìý 49 Ìý Ìý Ìý 142 Ìý Ìý Ìý 148 Ìý

Total reportable segments� adjusted EBITDA

 Ìý Ìý 165 Ìý Ìý Ìý 177 Ìý Ìý Ìý 467 Ìý Ìý Ìý 556 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 (21 ) Ìý Ìý (15 ) Ìý Ìý (60 ) Ìý Ìý (48 )

Depreciation and amortization—continuing operations

 Ìý Ìý (70 ) Ìý Ìý (69 ) Ìý Ìý (214 ) Ìý Ìý (208 )

Corporate and other costs, net(2)

 Ìý Ìý (34 ) Ìý Ìý (41 ) Ìý Ìý (124 ) Ìý Ìý (128 )

Net income attributable to noncontrolling interests

 Ìý Ìý 16 Ìý Ìý Ìý 15 Ìý Ìý Ìý 46 Ìý Ìý Ìý 40 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 â€� Ìý Ìý Ìý â€� Ìý Ìý Ìý (21 ) Ìý Ìý (3 )

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

 Ìý Ìý 5 Ìý Ìý Ìý â€� Ìý Ìý Ìý 12 Ìý Ìý Ìý (5 )

Certain legal and other settlements and related expenses(3)

 Ìý Ìý (11 ) Ìý Ìý (2 ) Ìý Ìý (13 ) Ìý Ìý (4 )

(Loss) gain on sale of business/assets

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

Certain nonrecurring information technology project implementation costs

 Ìý Ìý â€� Ìý Ìý Ìý (2 ) Ìý Ìý â€� Ìý Ìý Ìý (5 )

Amortization of pension and postretirement actuarial losses

 Ìý Ìý (9 ) Ìý Ìý (10 ) Ìý Ìý (25 ) Ìý Ìý (25 )

Restructuring, impairment and plant closing and transition costs(4)

 Ìý Ìý (6 ) Ìý Ìý (11 ) Ìý Ìý (25 ) Ìý Ìý (13 )

Income from continuing operations before income taxes

 Ìý Ìý 34 Ìý Ìý Ìý 42 Ìý Ìý Ìý 42 Ìý Ìý Ìý 158 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Income tax expense—continuing operations

 Ìý Ìý (39 ) Ìý Ìý (27 ) Ìý Ìý (32 ) Ìý Ìý (66 )

(Loss) income from discontinued operations, net of tax

 Ìý Ìý (12 ) Ìý Ìý â€� Ìý Ìý Ìý (12 ) Ìý Ìý 120 Ìý

Net (loss) income

 Ìý $ (17 ) Ìý $ 15 Ìý Ìý $ (2 ) Ìý $ 212 Ìý

Ìý â€�

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

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 $ 76 Ìý Ìý $ 81 Ìý Ìý $ 195 Ìý Ìý $ 235 Ìý

Performance Products

 Ìý Ìý 42 Ìý Ìý Ìý 47 Ìý Ìý Ìý 130 Ìý Ìý Ìý 173 Ìý

Advanced Materials

 Ìý Ìý 47 Ìý Ìý Ìý 49 Ìý Ìý Ìý 142 Ìý Ìý Ìý 148 Ìý

Total reportable segments� adjusted EBITDA

 Ìý Ìý 165 Ìý Ìý Ìý 177 Ìý Ìý Ìý 467 Ìý Ìý Ìý 556 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 (21 ) Ìý Ìý (15 ) Ìý Ìý (60 ) Ìý Ìý (48 )

Depreciation and amortization—continuing operations

 Ìý Ìý (70 ) Ìý Ìý (69 ) Ìý Ìý (214 ) Ìý Ìý (208 )

Corporate and other costs, net(2)

 Ìý Ìý (33 ) Ìý Ìý (40 ) Ìý Ìý (121 ) Ìý Ìý (125 )

Net income attributable to noncontrolling interests

 Ìý Ìý 16 Ìý Ìý Ìý 15 Ìý Ìý Ìý 46 Ìý Ìý Ìý 40 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 â€� Ìý Ìý Ìý â€� Ìý Ìý Ìý (21 ) Ìý Ìý (3 )

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

 Ìý Ìý 5 Ìý Ìý Ìý â€� Ìý Ìý Ìý 12 Ìý Ìý Ìý (5 )

Certain legal and other settlements and related expenses(3)

 Ìý Ìý (11 ) Ìý Ìý (2 ) Ìý Ìý (13 ) Ìý Ìý (4 )

(Loss) gain on sale of business/assets

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

Certain nonrecurring information technology project implementation costs

 Ìý Ìý â€� Ìý Ìý Ìý (2 ) Ìý Ìý â€� Ìý Ìý Ìý (5 )

Amortization of pension and postretirement actuarial losses

 Ìý Ìý (9 ) Ìý Ìý (10 ) Ìý Ìý (25 ) Ìý Ìý (25 )

Restructuring, impairment and plant closing and transition costs(4)

 Ìý Ìý (6 ) Ìý Ìý (11 ) Ìý Ìý (25 ) Ìý Ìý (13 )

Income from continuing operations before income taxes

 Ìý Ìý 35 Ìý Ìý Ìý 43 Ìý Ìý Ìý 45 Ìý Ìý Ìý 161 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Income tax expense—continuing operations

 Ìý Ìý (39 ) Ìý Ìý (27 ) Ìý Ìý (32 ) Ìý Ìý (66 )

(Loss) income from discontinued operations, net of tax

 Ìý Ìý (12 ) Ìý Ìý â€� Ìý Ìý Ìý (12 ) Ìý Ìý 120 Ìý

Net (loss) income

 Ìý $ (16 ) Ìý $ 16 Ìý Ìý $ 1 Ìý Ìý $ 215 Ìý

ÌýÌýÌý

(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) (loss) 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) (loss) 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) Certain legal and other settlements and related expenses for the three and nine months ended September 30, 2024 includes approximately $10 million related to the settlement of a claim in connection with a commercial dispute.

Ìý

(4)

Includes costs associated with transition activities related primarily to our Corporate program to optimize our global approach to managed services in various information technology functions and our program to realign our cost structure in Europe.

ÌýÌýÌý â€�