| OPERATING SEGMENT INFORMATION |
18. 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. In connection with the Venator IPO in August 2017, we separated the P&A Business and, beginning in the third quarter of 2017, we reported the results of operations of the P&A Business as discontinued operations in our condensed consolidated financial statements for all periods presented. See “Note 4. Discontinued Operations.”
The major products of each reportable operating segment are as follows:
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Segment
|
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Products
|
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Polyurethanes
|
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MDI, PO, polyols, PG, TPU, aniline and MTBE
|
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Performance Products
|
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amines, surfactants, LAB, maleic anhydride, other performance chemicals, EG, olefins and technology licenses
|
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Advanced Materials
|
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basic liquid and solid epoxy resins; specialty resin compounds; cross‑linking, matting and curing agents; epoxy, acrylic and polyurethane‑based formulations
|
|
Textile Effects
|
|
textile chemicals, dyes and digital inks
|
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 operating segments excludes items that principally apply to our Company as a whole. The revenues and adjusted EBITDA for each of our reportable operating segments are as follows (dollars in millions):
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|
|
|
|
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|
|
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|
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|
|
|
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Three months
|
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Nine months
|
|
|
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ended
|
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ended
|
|
|
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September 30,
|
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September 30,
|
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2017
|
|
2016
|
|
2017
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|
2016
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
|
1,197
|
|
$
|
891
|
|
$
|
3,172
|
|
$
|
2,703
|
|
Performance Products
|
|
|
501
|
|
|
509
|
|
|
1,595
|
|
|
1,611
|
|
Advanced Materials
|
|
|
263
|
|
|
247
|
|
|
782
|
|
|
774
|
|
Textile Effects
|
|
|
193
|
|
|
184
|
|
|
586
|
|
|
567
|
|
Corporate and eliminations
|
|
|
15
|
|
|
—
|
|
|
20
|
|
|
(41)
|
|
Total
|
|
$
|
2,169
|
|
$
|
1,831
|
|
$
|
6,155
|
|
$
|
5,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment adjusted EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
|
245
|
|
$
|
137
|
|
$
|
556
|
|
$
|
439
|
|
Performance Products
|
|
|
63
|
|
|
70
|
|
|
249
|
|
|
248
|
|
Advanced Materials
|
|
|
56
|
|
|
55
|
|
|
166
|
|
|
173
|
|
Textile Effects
|
|
|
19
|
|
|
17
|
|
|
64
|
|
|
59
|
|
Corporate and other(2)
|
|
|
(43)
|
|
|
(45)
|
|
|
(136)
|
|
|
(132)
|
|
Total
|
|
|
340
|
|
|
234
|
|
|
899
|
|
|
787
|
|
Reconciliation of adjusted EBITDA to net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense—continuing operations
|
|
|
(39)
|
|
|
(52)
|
|
|
(134)
|
|
|
(153)
|
|
Interest (expense) income—discontinued operations
|
|
|
(8)
|
|
|
—
|
|
|
(8)
|
|
|
1
|
|
Income tax expense—continuing operations
|
|
|
(35)
|
|
|
(6)
|
|
|
(78)
|
|
|
(65)
|
|
Income tax (expense) benefit—discontinued operations
|
|
|
(17)
|
|
|
7
|
|
|
(41)
|
|
|
8
|
|
Depreciation and amortization—continuing operations
|
|
|
(80)
|
|
|
(83)
|
|
|
(235)
|
|
|
(238)
|
|
Depreciation and amortization—discontinued operations
|
|
|
(9)
|
|
|
(30)
|
|
|
(68)
|
|
|
(84)
|
|
Net income attributable to noncontrolling interests
|
|
|
32
|
|
|
9
|
|
|
64
|
|
|
22
|
|
Other adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business acquisition and integration expenses
|
|
|
(10)
|
|
|
(6)
|
|
|
(17)
|
|
|
(11)
|
|
Merger costs
|
|
|
(12)
|
|
|
—
|
|
|
(18)
|
|
|
—
|
|
EBITDA from discontinued operations
|
|
|
97
|
|
|
47
|
|
|
218
|
|
|
63
|
|
Minority interest of discontinued operations
|
|
|
(12)
|
|
|
(3)
|
|
|
(18)
|
|
|
(8)
|
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Loss on early extinguishment of debt
|
|
|
(35)
|
|
|
(1)
|
|
|
(36)
|
|
|
(3)
|
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Certain legal settlements and related expenses
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
Gain on sale of assets
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
Amortization of pension and postretirement actuarial losses
|
|
|
(19)
|
|
|
(14)
|
|
|
(55)
|
|
|
(42)
|
|
Plant incident remediation costs
|
|
|
(13)
|
|
|
—
|
|
|
(13)
|
|
|
—
|
|
Restructuring, impairment and plant closing and transition costs
|
|
|
(1)
|
|
|
(38)
|
|
|
(13)
|
|
|
(57)
|
|
Net income
|
|
$
|
179
|
|
$
|
64
|
|
$
|
454
|
|
$
|
220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
|
|
Nine months
|
|
|
|
ended
|
|
ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Huntsman International:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment adjusted EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
|
245
|
|
$
|
137
|
|
$
|
556
|
|
$
|
439
|
|
Performance Products
|
|
|
63
|
|
|
70
|
|
|
249
|
|
|
248
|
|
Advanced Materials
|
|
|
56
|
|
|
55
|
|
|
166
|
|
|
173
|
|
Textile Effects
|
|
|
19
|
|
|
17
|
|
|
64
|
|
|
59
|
|
Corporate and other(2)
|
|
|
(41)
|
|
|
(43)
|
|
|
(132)
|
|
|
(128)
|
|
Total
|
|
|
342
|
|
|
236
|
|
|
903
|
|
|
791
|
|
Reconciliation of adjusted EBITDA to net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense—continuing operations
|
|
|
(44)
|
|
|
(55)
|
|
|
(146)
|
|
|
(162)
|
|
Interest (expense) income—discontinued operations
|
|
|
(8)
|
|
|
—
|
|
|
(8)
|
|
|
1
|
|
Income tax expense—continuing operations
|
|
|
(34)
|
|
|
(7)
|
|
|
(77)
|
|
|
(65)
|
|
Income tax (expense) benefit—discontinued operations
|
|
|
(17)
|
|
|
7
|
|
|
(41)
|
|
|
8
|
|
Depreciation and amortization—continuing operations
|
|
|
(78)
|
|
|
(79)
|
|
|
(227)
|
|
|
(228)
|
|
Depreciation and amortization—discontinued operations
|
|
|
(9)
|
|
|
(30)
|
|
|
(68)
|
|
|
(84)
|
|
Net income attributable to noncontrolling interests
|
|
|
32
|
|
|
9
|
|
|
64
|
|
|
22
|
|
Other adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business acquisition and integration expenses
|
|
|
(10)
|
|
|
(6)
|
|
|
(17)
|
|
|
(11)
|
|
Merger costs
|
|
|
(12)
|
|
|
—
|
|
|
(18)
|
|
|
—
|
|
EBITDA from discontinued operations
|
|
|
96
|
|
|
45
|
|
|
215
|
|
|
58
|
|
Minority interest of discontinued operations
|
|
|
(12)
|
|
|
(3)
|
|
|
(18)
|
|
|
(8)
|
|
Loss on early extinguishment of debt
|
|
|
(35)
|
|
|
(1)
|
|
|
(36)
|
|
|
(3)
|
|
Certain legal settlements and related expenses
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
Gain on sale of assets
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
Amortization of pension and postretirement actuarial losses
|
|
|
(20)
|
|
|
(15)
|
|
|
(57)
|
|
|
(44)
|
|
Plant incident remediation costs
|
|
|
(13)
|
|
|
—
|
|
|
(13)
|
|
|
—
|
|
Restructuring, impairment and plant closing and transition costs
|
|
|
(1)
|
|
|
(38)
|
|
|
(13)
|
|
|
(57)
|
|
Net income
|
|
$
|
177
|
|
$
|
63
|
|
$
|
450
|
|
$
|
218
|
|
(1)
|
|
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; (b) merger costs; (c) EBITDA from discontinued operations; (d) minority interest of discontinued operations; (e) loss on early extinguishment of debt; (f) certain legal settlements and related expenses; (g) gain on sale of assets; (h) amortization of pension and postretirement actuarial losses; (i) net plant incident credits (costs); and (j) restructuring, impairment and plant closing and transition costs.
|
|
(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, benzene sales and gains and losses on the disposition of corporate assets.
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|