Quarterly report pursuant to Section 13 or 15(d)

Note 20 - Operating Segment Information

v3.22.1
Note 20 - Operating Segment Information
3 Months Ended
Mar. 31, 2022
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

20. OPERATING SEGMENT INFORMATION

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.

 

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

Segment

    

Products

Polyurethanes

MDI, polyols, TPU and other polyurethane-related products

Performance Products

Specialty amines, ethyleneamines, maleic anhydride and technology licenses

Advanced Materials

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

Textile chemicals and dyes

 

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). We have revised our prior years’ presentation below to reconcile total reportable segments’ adjusted EBITDA to income from continuing operations before income taxes, in addition to net income, and removed “corporate and other costs, net” from the total reportable segments’ adjusted EBITDA and included such amounts in the reconciliation to income from continuing operations before income taxes. Additionally, we have revised our prior years’ presentation of total reportable segments’ revenues, in which we removed intersegment eliminations from the total reportable segment’s revenues. 

 

   

Three months

 
   

ended

 
   

March 31,

 
   

2022

   

2021

 

Revenues:

               

Polyurethanes

  $ 1,386     $ 1,068  

Performance Products

    480       305  

Advanced Materials

    335       278  

Textile Effects

    197       193  

Total reportable segment’s revenue

    2,398       1,844  

Intersegment eliminations

    (9 )     (7 )

Total

  $ 2,389     $ 1,837  
                 

Huntsman Corporation:

               

Segment adjusted EBITDA(1):

               

Polyurethanes

  $ 224     $ 207  

Performance Products

    146       63  

Advanced Materials

    67       44  

Textile Effects

    28       25  

Total reportable segments’ adjusted EBITDA

    465       339  
                 

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

               

Interest expense, net—continuing operations

    (14 )     (19 )

Depreciation and amortization—continuing operations

    (71 )     (74 )

Corporate and other costs, net(2)

    (50 )     (50 )

Net income attributable to noncontrolling interests

    17       17  

Other adjustments:

               

Business acquisition and integration expenses and purchase accounting inventory adjustments

    (6 )     (9 )

Fair value adjustments to Venator investment

    (2 )     (19 )

Certain legal and other settlements and related expenses

    (12 )     (2 )

Costs associated with the Albemarle Settlement, net

    (1 )      

Loss on sale of business/assets

    (4 )      

Income from transition services arrangements

    1       1  

Certain nonrecurring information technology project implementation costs

    (2 )     (1 )

Amortization of pension and postretirement actuarial losses

    (14 )     (22 )

Plant incident remediation costs

          (4 )

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

    (3 )     (24 )

Income from continuing operations before income taxes

    304       133  
                 

Income tax expense—continuing operations

    (65 )     (34 )

Income from discontinued operations

    1       1  

Net income

  $ 240     $ 100  

   

Three months

 
   

ended

 
   

March 31,

 
   

2022

   

2021

 

Huntsman International:

               

Segment adjusted EBITDA(1):

               

Polyurethanes

  $ 224     $ 207  

Performance Products

    146       63  

Advanced Materials

    67       44  

Textile Effects

    28       25  

Total reportable segments’ adjusted EBITDA

    465       339  
                 

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

               

Interest expense, net—continuing operations

    (14 )     (19 )

Depreciation and amortization—continuing operations

    (71 )     (73 )

Corporate and other costs, net(2)

    (47 )     (47 )

Net income attributable to noncontrolling interests

    17       17  

Other adjustments:

               

Business acquisition and integration expenses and purchase accounting inventory adjustments

    (6 )     (9 )

Fair value adjustments to Venator investment

    (2 )     (19 )

Certain legal and other settlements and related expenses

    (12 )     (2 )

Costs associated with the Albemarle Settlement, net

    (1 )      

Loss on sale of business/assets

    (4 )      

Income from transition services arrangements

    1       1  

Certain nonrecurring information technology project implementation costs

    (2 )     (1 )

Amortization of pension and postretirement actuarial losses

    (14 )     (23 )

Plant incident remediation costs

          (4 )

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

    (3 )     (24 )

Income from continuing operations before income taxes

    307       136  
                 

Income tax expense—continuing operations

    (65 )     (35 )

Income from discontinued operations

    1       1  

Net income

  $ 243     $ 102  

 


(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 income of Huntsman Corporation or Huntsman 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) fair value adjustments to Venator investment; (c) certain legal and other settlements and related income (expenses); (d) costs associated with the Albemarle Settlement, net; (e) loss on sale of business/assets; (f) income from transition services arrangements related to the sale of our Chemical Intermediates Businesses to Indorama; (g) certain nonrecurring information technology project implementation costs; (h) amortization of pension and postretirement actuarial losses; (i) plant incident remediation costs; and (j) restructuring, impairment, plant closing and transition costs.

(2) Corporate and other costs, (net) 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.

 

(3)

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