Financial Information by Segment (Tables)

6 Months Ended

Mar. 31, 2015

Financial Information by Reportable Segment

Financial information by reportable segment is as follows:


	Reinforcement Materials		Performance Chemicals		Purification Solutions			Specialty Fluids			Segment Total		Unallocated and Other⁽¹⁾			Consolidated Total
	(Dollars in millions)

Three Months Ended March 31, 2015
Revenues from external customers⁽²⁾	$	358	$	237	$	71		$	8		$	674	$	20		$	694
Income (loss) from continuing operations before taxes⁽³⁾	$	27	$	42	$	1		$	(1	)	$	69	$	(30	)	$	39

Three Months Ended March 31, 2014
Revenues from external customers⁽²⁾	$	512	$	264	$	80		$	25		$	881	$	17		$	898
Income (loss) from continuing operations before taxes⁽³⁾	$	65	$	46	$	(4	)	$	9		$	116	$	(68	)	$	48


Six Months Ended March 31, 2015
Revenues from external customers⁽²⁾	$	818	$	466	$	147		$	24		$	1,455	$	51		$	1,506
Income (loss) from continuing operations before taxes⁽³⁾	$	80	$	81	$	—		$	5		$	166	$	(76	)	$	90

Six Months Ended March 31, 2014
Revenues from external customers⁽²⁾	$	1,045	$	501	$	152		$	53		$	1,751	$	45		$	1,796
Income (loss) from continuing operations before taxes⁽³⁾	$	138	$	83	$	(13	)	$	22		$	230	$	(73	)	$	157

⁽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 Chief Operating Decision Maker.

⁽²⁾	Unallocated and Other reflects royalties, other operating revenues, external shipping and handling costs, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable. Details are provided in the table below:


	Three Months Ended March 31						Six Months Ended March 31
	2015			2014			2015			2014
	(Dollars in millions)
Royalties, other operating revenues, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable.	$	(8	)	$	(12	)	$	(4	)	$	(12	)
Shipping and handling fees		28			29			55			57

Total	$	20		$	17		$	51		$	45

⁽³⁾	Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes:


	Three Months Ended March 31						Six Months Ended March 31
	2015			2014			2015			2014
	(Dollars in millions)
Interest expense	$	(14	)	$	(13	)	$	(27	)	$	(27	)
Total certain items, pre-tax^(a)		(6	)		(36	)		(32	)		(12	)
Equity in (earnings) loss of affiliated companies, net of tax^(b)		(2	)		2			(3	)		—
Unallocated corporate costs^(c)		(11	)		(16	)		(23	)		(29	)
General unallocated income (expense)^(d)		3			(5	)		9			(5	)

Total	$	(30	)	$	(68	)	$	(76	)	$	(73	)

(a)

Certain items are items that management does not consider to be representative of operating segment results and they are, therefore, excluded from Segment EBIT. Certain items, pre-tax, for the three months ended March 31, 2015 include $5 million related to global restructuring activities and $1 million for acquisition and integration-related charges. Certain items, pre-tax, for the six months ended March 31, 2015 include $12 million related to global restructuring activities, $2 million for acquisition and integration-related charges and $18 million related to an employee benefit plan settlement charge. Certain items, pre-tax, for the three months ended March 31, 2014 include $16 million related to global restructuring activities, $6 million of foreign currency loss on revaluations and $14 million for legal and environmental matters and reserves. Certain items, pre-tax, for the six months ended March 31, 2014 include $21 million related to global restructuring activities, $5 million for acquisition and integration-related charges (consisting of $3 million for certain other one-time integration costs and $2 million of additional charges related to acquisition accounting adjustments for the acquired inventory of NHUMO) and $15 million for legal and environmental matters and reserves offset by a $29 million non-cash gain recognized on the Company’s pre-existing investment in NHUMO as a result of the NHUMO transaction.

(b)

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

(c)

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

(d)

General unallocated income consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the impact of accounting for certain inventory on a LIFO basis, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of an equity affiliate in Purification Solutions Segment EBIT.

Schedule of Performance Segment

The net sales from each of these businesses for the three and six months ended March 31, 2015 and 2014 are as follows:


	Three Months Ended March 31				Six Months Ended March 31
	2015		2014		2015		2014
	(Dollars in millions)
Specialty Carbons and Formulations	$	162	$	186	$	319	$	349
Metal Oxides		75		78		147		152

Total Performance Chemicals	$	237	$	264	$	466	$	501

- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

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