Segment Information

3 Months Ended

Mar. 31, 2017

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 March 31, 2017, 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 March 31,
	2017		2016
Epoxy, Phenolic and Coating Resins	$	492	$	575
Forest Products Resins	378		334
Total	$	870	$	909

(1) Intersegment sales are not significant and, as such, are eliminated within the selling segment.

Reconciliation of Net Loss to Segment EBITDA:

	Three Months Ended March 31,
	2017			2016
Reconciliation:
Net loss	$	(42	)	$	(44	)
Income tax expense	8			7
Interest expense, net	83			79
Depreciation and amortization	28			35
Accelerated depreciation	—			46
EBITDA	$	77		$	123
Items not included in Segment EBITDA:
Business realignment costs	7			3
Realized and unrealized foreign currency (gains) losses	(1		)	2
Loss (gain) on extinguishment of debt	3			(23		)
Other	9			17
Total adjustments	18			(1		)
Segment EBITDA	$	95		$	122
Segment EBITDA:
Epoxy, Phenolic and Coating Resins	$	52		$	83
Forest Products Resins	61			56
Corporate and Other	(18		)	(17		)
Total	$	95		$	122

Items Not Included in Segment EBITDA

Not included in Segment EBITDA are certain non-cash items and other income and expenses. For the three months ended March 31, 2017, these items primarily include expenses from retention programs and certain professional fees related to strategic projects, partially offset by gains on the sale of assets. For the three months ended March 31, 2016, these items primarily include expenses from retention programs and certain professional fees. Business realignment costs for three months ended March 31, 2017 primarily include costs related to certain in-process facility rationalizations and cost reduction programs. Business realignment costs for the three months ended March 31, 2016 include costs for environmental remediation at certain formerly owned locations and expenses related to certain in-process cost reduction programs.