Financial Information by Segment (Tables)

6 Months Ended

Mar. 31, 2021

The net sales from each of these businesses for the three and six months ended March 31, 2021 and 2020 were as follows:

	Three Months Ended March 31				Six Months Ended March 31
	2021		2020		2021		2020
	(In millions)
Performance Additives	$	203	$	168	$	387	$	338
Formulated Solutions		91		77		174		149
Total Performance Chemicals	$	294	$	245	$	561	$	487

Financial Information by Reportable Segment

Financial information by reportable segment is as follows:

	Reinforcement Materials		Performance Chemicals		Purification Solutions		Segment Total		Unallocated and Other⁽¹⁾			Consolidated Total
	(In millions)
Three Months Ended March 31, 2021
Revenues from external customers⁽²⁾	$	434	$	294	$	63	$	791	$	51		$	842
Income (loss) before income taxes⁽³⁾	$	89	$	58	$	2	$	149	$	(31	)	$	118

Three Months Ended March 31, 2020
Revenues from external customers⁽²⁾	$	355	$	245	$	64	$	664	$	46		$	710
Income (loss) before income taxes⁽³⁾	$	61	$	31	$	3	$	95	$	(83	)	$	12

Six Months Ended March 31, 2021
Revenues from external customers⁽²⁾	$	809	$	561	$	122	$	1,492	$	96		$	1,588
Income (loss) before income taxes⁽³⁾	$	177	$	112	$	—	$	289	$	(72	)	$	217

Six Months Ended March 31, 2020
Revenues from external customers⁽²⁾	$	734	$	487	$	123	$	1,344	$	93		$	1,437
Income (loss) before income taxes⁽³⁾	$	108	$	72	$	1	$	181	$	(119	)	$	62

⁽¹⁾	^{Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the CODM.}

⁽²⁾

Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statements of Operations. Revenues from external customers that are categorized as Unallocated and Other reflects royalties, external shipping and handling fees, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate, discounting charges for certain Notes receivable, and by-product revenue. Details are provided in the table below:

	Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2021			2020
	(In millions)
Royalties, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain notes receivable	$	(5	)	$	(1	)	$	(10	)	$	(2	)
Shipping and handling fees		38			30			71			61
By-product sales		18			17			35			34
Total	$	51		$	46		$	96		$	93

⁽³⁾	Consolidated Total Income (loss) before income taxes reconciles to Income (loss) before income taxes and equity in earnings of affiliated companies on the Consolidated Statements of Operations. Income (loss) before income taxes that are categorized as Unallocated and Other includes:

	Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2021			2020
	(In millions)
Interest expense	$	(13	)	$	(14	)	$	(25	)	$	(28	)
Certain items^(a)
Employee benefit plan settlement and other charges (Note D)		1			(1	)		(5	)		(3	)
Global restructuring activities (Note J)		(1	)		(5	)		(4	)		(13	)
Acquisition and integration-related charges		(1	)		(1	)		(2	)		(2	)
Legal and environmental matters and reserves		—			(51	)		—			(50	)
Specialty Fluids loss on sale and asset impairment charges		—			(1	)		—			(1	)
Indirect tax settlement credits		—			3			—			3
Other		—			—			(1	)		(1	)
Total certain items, pre-tax		(1	)		(56	)		(12	)		(67	)
Unallocated corporate costs^(b)		(16	)		(12	)		(29	)		(22	)
General unallocated income (expense)^(c)		—			—			(5	)		(1	)
Less: Equity in earnings of affiliated companies, net of tax^(d)		1			1			1			1
Total	$	(31	)	$	(83	)	$	(72	)	$	(119	)

^(a)

Certain items are items of expense and income that management does not consider representative of the Company’s fundamental on-going segment results and they are, therefore, excluded from Segment EBIT.

^(b)

Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests.

^(c)

General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, Interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue, the impact of including the full operating results of a contractual joint venture in Purification Solutions Segment EBIT and unrealized holding gains (losses) for equity securities.

^(d)

Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed in Unallocated and other to reconcile to Income (loss) from operations before income taxes and equity in earnings from affiliated companies.

Revenues from External Customers by Geographic Region

The Company’s segments operate globally. In addition to presenting Revenue from external customers by reportable segment, the following tables further disaggregate Revenues from external customers by geographic region.

	Three Months Ended March 31, 2021
	Reinforcement Materials		Performance Chemicals		Purification Solutions		Consolidated Total
	(In millions)
Americas	$	163	$	78	$	26	$	267
Asia Pacific		185		122		9		316
Europe, Middle East and Africa		86		94		28		208
Segment revenues from external customers		434		294		63		791
Unallocated and other								51
Net sales and other operating revenues							$	842

	Three Months Ended March 31, 2020
	Reinforcement Materials		Performance Chemicals		Purification Solutions		Consolidated Total
	(In millions)
Americas	$	154	$	76	$	29	$	259
Asia Pacific		122		79		9		210
Europe, Middle East and Africa		79		90		26		195
Segment revenues from external customers		355		245		64		664
Unallocated and other								46
Net sales and other operating revenues							$	710

	Six Months Ended March 31, 2021
	Reinforcement Materials		Performance Chemicals		Purification Solutions		Consolidated Total
	(In millions)
Americas	$	312	$	147	$	51	$	510
Asia Pacific		340		240		18		598
Europe, Middle East and Africa		157		174		53		384
Segment revenues from external customers		809		561		122		1,492
Unallocated and other								96
Net sales and other operating revenues							$	1,588

	Six Months Ended March 31, 2020
	Reinforcement Materials		Performance Chemicals		Purification Solutions		Consolidated Total
	(In millions)
Americas	$	295	$	152	$	55	$	502
Asia Pacific		292		173		18		483
Europe, Middle East and Africa		147		162		50		359
Segment revenues from external customers		734		487		123		1,344
Unallocated and other								93
Net sales and other operating revenues							$	1,437