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Note 19 - Operating Segment Information
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

19. OPERATING SEGMENT INFORMATION 

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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 and Advanced Materials. 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

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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 nanotubes additives

 

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). 

 

  

Three months

  

Nine months

 
  

ended

  

ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Revenues:

                

Polyurethanes

 $967  $1,257  $2,970  $3,996 

Performance Products

  277   434   918   1,406 

Advanced Materials

  268   328   841   999 

Total reportable segments’ revenues

  1,512   2,019   4,729   6,401 

Intersegment eliminations

  (6)  (8)  (21)  (28)

Total

 $1,506  $2,011  $4,708  $6,373 
                 

Huntsman Corporation:

                

Segment adjusted EBITDA(1):

                

Polyurethanes

 $81  $138  $235  $591 

Performance Products

  47   110   173   408 

Advanced Materials

  49   58   148   192 

Total reportable segments’ adjusted EBITDA

  177   306   556   1,191 
                 

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

                

Interest expense, net—continuing operations

  (15)  (16)  (48)  (46)

Depreciation and amortization—continuing operations

  (69)  (72)  (208)  (207)

Corporate and other costs, net(2)

  (41)  (35)  (128)  (123)

Net income attributable to noncontrolling interests

  15   15   40   46 

Other adjustments:

                

Business acquisition and integration expenses and purchase accounting inventory adjustments

  —   (1)  (3)  (11)

Fair value adjustments to Venator investment, net

  —   (7)  (5)  (9)

Certain legal and other settlements and related expenses

  (2)  (1)  (4)  (15)

Costs associated with the Albemarle Settlement, net

  —   (1)  —   (3)

Gain (loss) on sale of business/assets

  —   (16)  1   (27)

Income from transition services arrangements

  —   —   —   2 

Certain nonrecurring information technology project implementation costs

  (2)  (1)  (5)  (4)

Amortization of pension and postretirement actuarial losses

  (10)  (10)  (25)  (32)

Plant incident remediation (costs) credits

  —   (1)  —   4 

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

  (11)  (14)  (13)  (44)

Income from continuing operations before income taxes

  42   146   158   722 
                 

Income tax expense—continuing operations

  (27)  (30)  (66)  (155)

(Loss) income from discontinued operations, net of tax

  —   (1)  120   30 

Net income

 $15  $115  $212  $597 

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Three months

  

Nine months

 
  

ended

  

ended

 
  

September 30,

  

September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Huntsman International:

                

Segment adjusted EBITDA(1):

                

Polyurethanes

 $81  $138  $235  $591 

Performance Products

  47   110   173   408 

Advanced Materials

  49   58   148   192 

Total reportable segments’ adjusted EBITDA

  177   306   556   1,191 
                 

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

                

Interest expense, net—continuing operations

  (15)  (16)  (48)  (46)

Depreciation and amortization—continuing operations

  (69)  (72)  (208)  (207)

Corporate and other costs, net(2)

  (40)  (36)  (125)  (119)

Net income attributable to noncontrolling interests

  15   15   40   46 

Other adjustments:

                

Business acquisition and integration expenses and purchase accounting inventory adjustments

  —   (1)  (3)  (11)

Fair value adjustments to Venator investment, net

  —   (7)  (5)  (9)

Certain legal and other settlements and related expenses

  (2)  (1)  (4)  (15)

Costs associated with the Albemarle Settlement, net

  —   (1)  —   (3)

Gain (loss) on sale of business/assets

  —   (16)  1   (27)

Income from transition services arrangements

  —   —   —   2 

Certain nonrecurring information technology project implementation costs

  (2)  (1)  (5)  (4)

Amortization of pension and postretirement actuarial losses

  (10)  (10)  (25)  (32)

Plant incident remediation (costs) credits

  —   (1)  —   4 

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

  (11)  (14)  (13)  (44)

Income from continuing operations before income taxes

  43   145   161   726 
                 

Income tax expense—continuing operations

  (27)  (30)  (66)  (156)

(Loss) income from discontinued operations, net of tax

  —   (1)  120   30 

Net income

 $16  $114  $215  $600 

 

(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, net; (c) certain legal and other settlements and related expenses; (d) costs associated with the Albemarle Settlement, net; (e) gain (loss) on sale of business/assets; (f) income from transition services arrangements; (g) certain nonrecurring information technology project implementation costs; (h) amortization of pension and postretirement actuarial losses; (i) plant incident remediation (costs) credits (j) restructuring, impairment, plant closing and transition costs; and (k) (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.

 

(3)

Includes costs associated with transition activities related primarily to our Corporate program to optimize our global approach to leverage shared services capabilities and managed services in various information technology functions.

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