Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENT INFORMATION

v3.10.0.1
OPERATING SEGMENT INFORMATION
9 Months Ended
Sep. 30, 2018
OPERATING SEGMENT INFORMATION  
OPERATING SEGMENT INFORMATION

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. 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:

 

 

 

 

Segment

    

Products

Polyurethanes

 

MDI, PO, polyols, PG, TPU, aniline and MTBE

Performance Products

 

Amines, surfactants, LAB, maleic anhydride, other performance chemicals, EG, olefins and technology licenses

Advanced Materials

 

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):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

Nine months

 

 

ended

 

ended

 

 

September 30, 

 

September 30, 

 

    

2018

    

2017

    

2018

    

2017

Revenues:

    

 

 

 

 

 

 

 

           

 

 

           

Polyurethanes

 

$

1,355

 

$

1,197

 

$

3,890

 

$

3,172

Performance Products

 

 

599

 

 

501

 

 

1,795

 

 

1,595

Advanced Materials

 

 

279

 

 

263

 

 

850

 

 

782

Textile Effects

 

 

204

 

 

193

 

 

631

 

 

586

Corporate and eliminations

 

 

 7

 

 

15

 

 

(23)

 

 

20

Total

 

$

2,444

 

$

2,169

 

$

7,143

 

$

6,155

 

 

 

 

 

 

 

 

 

 

 

 

 

Huntsman Corporation:

 

 

 

 

 

 

 

 

 

 

 

 

Segment adjusted EBITDA(1):

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

247

 

$

245

 

$

777

 

$

556

Performance Products

 

 

93

 

 

63

 

 

289

 

 

249

Advanced Materials

 

 

56

 

 

56

 

 

177

 

 

166

Textile Effects

 

 

25

 

 

19

 

 

80

 

 

64

Corporate and other(2)

 

 

(47)

 

 

(43)

 

 

(129)

 

 

(136)

Total

 

 

374

 

 

340

 

 

1,194

 

 

899

Reconciliation of adjusted EBITDA to net income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense—continuing operations

 

 

(30)

 

 

(39)

 

 

(86)

 

 

(134)

Interest expense—discontinued operations

 

 

(10)

 

 

(8)

 

 

(30)

 

 

(8)

Income tax expense—continuing operations

 

 

(27)

 

 

(35)

 

 

(84)

 

 

(78)

Income tax benefit (expense)—discontinued operations

 

 

52

 

 

(17)

 

 

(52)

 

 

(41)

Depreciation and amortization—continuing operations

 

 

(85)

 

 

(80)

 

 

(250)

 

 

(235)

Depreciation and amortization—discontinued operations

 

 

 —

 

 

(9)

 

 

 —

 

 

(68)

Net income attributable to noncontrolling interests

 

 

 3

 

 

32

 

 

288

 

 

64

Other adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration expenses and purchase accounting adjustments

 

 

(2)

 

 

(10)

 

 

(10)

 

 

(17)

Merger costs

 

 

(1)

 

 

(12)

 

 

(2)

 

 

(18)

EBITDA from discontinued operations

 

 

(279)

 

 

97

 

 

293

 

 

218

Noncontrolling interest of discontinued operations

 

 

21

 

 

(12)

 

 

(222)

 

 

(18)

Loss on early extinguishment of debt

 

 

 —

 

 

(35)

 

 

(3)

 

 

(36)

Certain legal and other settlements and related expenses

 

 

(1)

 

 

 —

 

 

(9)

 

 

(1)

Gain on sale of businesses/assets

 

 

 —

 

 

 —

 

 

 —

 

 

 8

Amortization of pension and postretirement actuarial losses

 

 

(18)

 

 

(19)

 

 

(53)

 

 

(55)

Plant incident remediation costs

 

 

 —

 

 

(13)

 

 

 —

 

 

(13)

Restructuring, impairment and plant closing and transition costs

 

 

(5)

 

 

(1)

 

 

(9)

 

 

(13)

Net (loss) income

 

$

(8)

 

$

179

 

$

965

 

$

454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

Nine months

 

 

ended

 

ended

 

 

September 30, 

 

September 30, 

 

    

2018

    

2017

    

2018

    

2017

Huntsman International:

 

 

 

 

 

 

 

 

           

 

 

           

Segment adjusted EBITDA(1):

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

247

 

$

245

 

$

777

 

$

556

Performance Products

 

 

93

 

 

63

 

 

289

 

 

249

Advanced Materials

 

 

56

 

 

56

 

 

177

 

 

166

Textile Effects

 

 

25

 

 

19

 

 

80

 

 

64

Corporate and other(2)

 

 

(46)

 

 

(41)

 

 

(125)

 

 

(132)

Total

 

 

375

 

 

342

 

 

1,198

 

 

903

Reconciliation of adjusted EBITDA to net income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense—continuing operations

 

 

(36)

 

 

(44)

 

 

(102)

 

 

(146)

Interest expense—discontinued operations

 

 

(10)

 

 

(8)

 

 

(30)

 

 

(8)

Income tax expense—continuing operations

 

 

(26)

 

 

(34)

 

 

(81)

 

 

(77)

Income tax benefit (expense)—discontinued operations

 

 

52

 

 

(17)

 

 

(52)

 

 

(41)

Depreciation and amortization—continuing operations

 

 

(83)

 

 

(78)

 

 

(247)

 

 

(227)

Depreciation and amortization—discontinued operations

 

 

 —

 

 

(9)

 

 

 —

 

 

(68)

Net income attributable to noncontrolling interests

 

 

 3

 

 

32

 

 

288

 

 

64

Other adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration expenses and purchase accounting adjustments

 

 

(2)

 

 

(10)

 

 

(10)

 

 

(17)

Merger costs

 

 

(1)

 

 

(12)

 

 

(2)

 

 

(18)

EBITDA from discontinued operations

 

 

(279)

 

 

96

 

 

293

 

 

215

Noncontrolling interest of discontinued operations

 

 

21

 

 

(12)

 

 

(222)

 

 

(18)

Loss on early extinguishment of debt

 

 

 —

 

 

(35)

 

 

(3)

 

 

(36)

Certain legal and other settlements and related expenses

 

 

(1)

 

 

 —

 

 

(9)

 

 

(1)

Gain on sale of businesses/assets

 

 

 —

 

 

 —

 

 

 —

 

 

 8

Amortization of pension and postretirement actuarial losses

 

 

(19)

 

 

(20)

 

 

(56)

 

 

(57)

Plant incident remediation costs

 

 

 —

 

 

(13)

 

 

 —

 

 

(13)

Restructuring, impairment and plant closing and transition costs

 

 

(5)

 

 

(1)

 

 

(9)

 

 

(13)

Net (loss) income

 

$

(11)

 

$

177

 

$

956

 

$

450


(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) acquisition and integration expenses and purchase accounting adjustments; (b) merger costs; (c) EBITDA from discontinued operations; (d) noncontrolling interest of discontinued operations; (e) loss on early extinguishment of debt; (f) certain legal and other settlements and related expenses; (g) gain on sale of businesses/assets; (h) amortization of pension and postretirement actuarial losses; (i) plant incident remediation costs; (j) restructuring, impairment and plant closing and transition costs; and (k) U.S. Tax Reform Act impact on noncontrolling interest.

 

(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.