XML 27 R16.htm IDEA: XBRL DOCUMENT v3.5.0.2
Segment Information
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
Segment Information
The Company’s business segments are based on the products that the Company offers and the markets that it serves. At September 30, 2016, the Company had two reportable segments: Epoxy, Phenolic and Coating Resins and Forest Products Resins. A summary of the major products of the Company’s reportable segments follows:
 
•
Epoxy, Phenolic and Coating Resins: epoxy specialty resins, phenolic encapsulated substrates, versatic acids and derivatives, basic epoxy resins and intermediates and phenolic specialty resins and molding compounds
 
•
Forest Products Resins: forest products resins and formaldehyde applications

Reportable Segments
Following are net sales and Segment EBITDA (earnings before interest, income taxes, depreciation and amortization) by reportable segment. Segment EBITDA is defined as EBITDA adjusted for certain non-cash items and other income and expenses. Segment EBITDA is the primary performance measure used by the Company’s senior management, the chief operating decision-maker and the board of directors to evaluate operating results and allocate capital resources among segments. Segment EBITDA is also the profitability measure used to set management and executive incentive compensation goals. Corporate and Other is primarily corporate general and administrative expenses that are not allocated to the segments, such as shared service and administrative functions, foreign exchange gains and losses and legacy company costs not allocated to continuing segments.
Net Sales (1):
 
Three Months Ended September 30,

Nine Months Ended September 30,
 
2016

2015

2016
 
2015
Epoxy, Phenolic and Coating Resins
$
476


$
669


$
1,664

 
$
2,026

Forest Products Resins
343


396


1,016

 
1,205

Total
$
819


$
1,065


$
2,680

 
$
3,231

(1)     Intersegment sales are not significant and, as such, are eliminated within the selling segment.
Segment EBITDA:
 
Three Months Ended September 30,

Nine Months Ended September 30,
 
2016

2015

2016
 
2015
Epoxy, Phenolic and Coating Resins
$
64


$
92


$
230

 
$
265

Forest Products Resins
65


59


184

 
182

Corporate and Other
(17
)

(18
)

(50
)
 
(54
)
Total
$
112


$
133


$
364

 
$
393


Reconciliation of Segment EBITDA to Net (Loss) Income:
 
Three Months Ended September 30,

Nine Months Ended September 30,
 
2016

2015

2016

2015
Segment EBITDA:







Epoxy, Phenolic and Coating Resins
$
64


$
92


$
230


$
265

Forest Products Resins
65


59


184


182

Corporate and Other
(17
)

(18
)

(50
)

(54
)
Total
$
112


$
133


$
364


$
393









Reconciliation:







Items not included in Segment EBITDA:







Business realignment income (costs)
$
3


$
(3
)

$
(42
)

$
(11
)
Gain on dispositions
—


—


240


—

Gain on extinguishment of debt
3


14


47


14

Realized and unrealized foreign currency (losses) gains
(6
)

(14
)

3


(17
)
Other
(16
)

(4
)

(50
)

(33
)
Total adjustments
(16
)

(7
)

198


(47
)
Interest expense, net
(76
)

(84
)

(235
)

(245
)
Income tax expense
(16
)

(1
)

(40
)

(28
)
Depreciation and amortization
(30
)

(34
)

(101
)

(102
)
Accelerated depreciation
(21
)

—


(127
)

—

Net (loss) income
$
(47
)

$
7


$
59


$
(29
)


Items Not Included in Segment EBITDA
Not included in Segment EBITDA are certain non-cash items and other income and expenses. For the three and nine months ended September 30, 2016, these items primarily include certain professional fees related to strategic projects and expenses from retention programs. For the three and nine months ended September 30, 2015, these items primarily include expenses from retention programs, losses on the disposal of assets, certain professional fees related to strategic projects and a gain on a step acquisition. Business realignment costs for the three and nine months ended September 30, 2016 primarily include costs related to the planned facility rationalizations within the Epoxy, Phenolic and Coating Resins segment and costs related to certain in-process cost reduction programs. Business realignment costs for the three and nine months ended September 30, 2015 include costs related to certain in-process cost reduction programs.