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SEGMENTS AND GEOGRAPHIC INFORMATION
 6 Months Ended
Jun. 30, 2024
SEGMENTS AND GEOGRAPHIC INFORMATION  
SEGMENTS AND GEOGRAPHIC INFORMATION

NOTE 17—SEGMENTS AND GEOGRAPHIC INFORMATION

Effective January 1, 2024, the Company realigned its reporting segments to reflect the new model under which the business is managed, and results are reviewed by the chief executive officer, the Company’s chief operating decision maker. Following this change, the Company is operating under five segments, all of which remain unchanged from the Company’s prior six segment segmentation: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, and Americas Styrenics.

The Company’s Feedstocks segment, which included the Company’s production and procurement of styrene monomer outside of North America, was eliminated as a result of the closures of the styrene plants located in Boehlen, Germany and Terneuzen, the Netherlands under an asset restructuring plan. Styrene monomer is a key raw material in many of the Company’s products, including polystyrene, styrene-butadiene latex (“SB latex”), and acrylonitrile-butadiene-styrene (“ABS”) resins. The Company no longer produces styrene, but instead purchases all of our styrene needs from third parties. Therefore, the information in the tables below has been adjusted to show the historical results of the Feedstocks segment within the segments that consumed styrene monomer in their end products, Latex Binders, Plastics Solutions and Polystyrene.

The Engineered Materials segment includes the Company’s compounds and blends products sold into higher growth and value applications, such as consumer electronics and medical, as well as soft thermoplastic elastomers (“TPEs”) products which are sold into markets such as footwear and automotive. Additionally, following the PMMA

Acquisition and the Aristech Surfaces Acquisition in 2021, the Engineered Materials segment also includes PMMA and activated methyl methacrylates (“MMA”) products, which are sold into a variety of applications including automotive, building & construction, medical, consumer electronics, and wellness, among others. The Latex Binders segment produces SB latex and other latex polymers and binders, primarily for coated paper and packaging board, carpet and artificial turf backings, as well as a number of performance latex binders applications, such as adhesive, building and construction and the technical textile paper market. The Plastics Solutions segment contains the results of the ABS, styrene-acrylonitrile (“SAN”), and polycarbonate (“PC”) businesses, as well as compounds and blends for automotive and other applications. The Plastics Solutions segment also includes the results of Heathland, which was acquired in the first quarter of 2022. The Polystyrene segment includes a variety of general purpose polystyrenes (“GPPS”) and polystyrene that has been modified with polybutadiene rubber to increase its impact resistant properties (“HIPS”). Lastly, the Americas Styrenics segment consists solely of the operations of the Company’s 50%-owned joint venture, Americas Styrenics, a producer of both styrene monomer and polystyrene in North America.

The following table provides disclosure of the Company’s segment Adjusted EBITDA, which is used to measure segment operating performance and is defined below, for the three and six months ended June 30, 2024 and 2023. Asset and intersegment sales information by reporting segment are not regularly reviewed or included with the Company’s reporting to the chief operating decision maker. Therefore, this information has not been disclosed below. Refer to Note 3 for the Company’s net sales to external customers by segment for the three and six months ended June 30, 2024 and 2023.

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Engineered

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Latex

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Plastics

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​

​

Americas

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Total Segment

 

Three Months Ended (1)

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Materials

​

Binders

​

Solutions

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Polystyrene

​

Styrenics

​

Adjusted EBITDA

 

June 30, 2024

  

$

25.2

​

$

25.6

​

$

16.3

​

$

6.6

​

$

15.6

  

$

89.3

​

June 30, 2023

​

$

11.8

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$

23.5

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$

24.6

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$

1.7

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$

12.5

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$

74.1

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Engineered

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Latex

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Plastics

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​

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Americas

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Total Segment

 

Six Months Ended (1)

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Materials

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Binders

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Solutions

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Polystyrene

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Styrenics

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Adjusted EBITDA

 

June 30, 2024

  

$

29.5

  

$

51.3

  

$

39.0

  

$

19.2

  

$

21.8

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$

160.8

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June 30, 2023

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$

0.1

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$

47.5

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$

48.2

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$

10.6

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$

30.1

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$

136.5

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(1)

The Company’s primary measure of segment operating performance is Adjusted EBITDA, which is defined as income from continuing operations before interest expense, net; provision for income taxes; depreciation and amortization expense; loss on extinguishment of long-term debt; asset impairment charges; gains or losses on the dispositions of businesses and assets; restructuring charges; acquisition related costs and benefits and other items. Segment Adjusted EBITDA is a key metric that is used by management to evaluate business performance in comparison to budgets, forecasts, and prior year financial results, providing a measure that management believes reflects core operating performance by removing the impact of transactions and events that would not be considered a part of core operations. Other companies in the industry may define segment Adjusted EBITDA differently than the Company, and as a result, it may be difficult to use segment Adjusted EBITDA, or similarly named financial measures, that other companies may use to compare the performance of those companies to the Company’s segment performance.

The reconciliation of income (loss) from continuing operations before income taxes to segment Adjusted EBITDA is as follows:

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Three Months Ended

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Six Months Ended

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June 30, 

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June 30, 

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2024

    

2023

    

2024

    

2023

    

Loss before income taxes

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$

(47.5)

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$

(374.1)

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$

(117.6)

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$

(439.7)

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Interest expense, net

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64.7

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40.2

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127.7

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78.5

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Depreciation and amortization

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46.6

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52.5

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91.6

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108.5

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Corporate Unallocated(2)

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​

22.5

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17.3

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49.0

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43.4

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Adjusted EBITDA Addbacks(3)

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3.0

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338.2

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10.1

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345.8

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Segment Adjusted EBITDA

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$

89.3

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$

74.1

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$

160.8

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$

136.5

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(2)

Corporate unallocated includes corporate overhead costs and certain other income and expenses.

(3)

Adjusted EBITDA addbacks for the three and six months ended June 30, 2024 and 2023 are as follows:

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Three Months Ended

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Six Months Ended

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June 30, 

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June 30, 

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2024

    

2023

    

2024

    

2023

    

Net gain on disposition of businesses and assets (a)

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$

(3.5)

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$

(16.3)

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$

(7.1)

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$

(16.3)

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Restructuring and other charges (Note 4)

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​

4.0

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1.5

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​

13.4

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​

5.2

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Asset impairment charges or write-offs (Note 13)

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​

—

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1.3

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—

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1.6

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Goodwill impairment charges (Note 10)

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—

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349.0

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—

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349.0

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Other items (b)

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​

2.5

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2.7

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3.8

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​

6.3

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Total Adjusted EBITDA Addbacks

​

$

3.0

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$

338.2

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$

10.1

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$

345.8

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(a)In June 2024, the Company entered into an agreement to sell certain European emission certifications the Company no longer intends to utilize for a cash consideration of approximately $3.5 million, which was entirely recorded as a pre-tax gain on sale within “Other expense (income), net” in the condensed consolidated statements of operations during the three and six months ended June 30, 2024. In March 2024, the Company entered into two separate agreements to sell its land, buildings and equipment in Bronderslev, Denmark and Belen, New Mexico for gross cash consideration of approximately $4.7 million. The Company recorded pre-tax gain on sales of $3.6 million during the six months ended June 30, 2024, which was recorded within “Selling, general and administrative expenses” in the condensed consolidated statements of operations.

In April 2023, the Company entered into an agreement to sell its land, buildings and equipment in Matamoros, Mexico for a cash consideration of approximately $19.0 million. The Company recorded a pre-tax gain on sale of $14.4 million during the three and six months ended June 30, 2023, which was recorded within “Selling, general and administrative expenses” in the condensed consolidated statements of operations.

(b)Other items for the three and six months ended June 30, 2024 and 2023 primarily relate to costs incurred in conjunction with certain of the Company’s strategic initiatives. Other items for the three and six months ended June 30, 2023 also relate to our transition to a new enterprise resource planning system.