Note 5 - Variable Interest Entities

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Variable Interest Entity Disclosure [Text Block]

5. VARIABLE INTEREST ENTITIES

We evaluate our investments and transactions to identify variable interest entities for which we are the primary beneficiary. We hold a variable interest in the following joint ventures for which we are the primary beneficiary:

● Rubicon LLC is our 50%-owned joint venture with Lanxess that manufactures products for our Polyurethanes and Performance Products segments.

● Arabian Amines Company (“AAC”) is our 50%-owned joint venture with Zamil group that manufactures products for our Performance Products segment.

During the nine months ended September 30, 2023, there were no changes in our variable interest entities.

Creditors of our variable interest entities have no recourse to our general credit. See “Note 7. Debt—Direct and Subsidiary Debt.” As the primary beneficiary of these variable interest entities at  September 30, 2023, the joint ventures’ assets, liabilities and results of operations are included in our condensed consolidated financial statements.

The following table summarizes the carrying amounts of our variable interest entities’ assets and liabilities included in our condensed consolidated balance sheet as of  September 30, 2023 and our consolidated balance sheet as of December 31, 2022 (dollars in millions):

	September 30,		December 31,
	2023		2022
Current assets	$	78	$	73
Property, plant and equipment, net		145		149
Operating lease right-of-use assets		29		28
Other noncurrent assets		133		140
Deferred income taxes		13		13
Total assets	$	398	$	403
Current liabilities	$	107	$	144
Long-term debt		19		26
Noncurrent operating lease liabilities		20		19
Other noncurrent liabilities		24		25
Total liabilities	$	170	$	214

The revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities for the three and nine months ended September 30, 2023 and 2022 are as follows (dollars in millions):

	Three months				Nine months
	ended				ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenues	$	—	$	—	$	—	$	—
Income from continuing operations before income taxes		18		11		48		24
Net cash provided by operating activities		12		21		60		56