Note 5 - Variable Interest Entities

3 Months Ended

Mar. 31, 2026

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 three months ended March 31, 2026, there were no changes in our variable interest entities.

Creditors of our variable interest entities have no recourse to our general credit. See “Note 8. Debt—Direct and Subsidiary Debt.” As the primary beneficiary of these variable interest entities at March 31, 2026, 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 March 31, 2026 and our consolidated balance sheet as of December 31, 2025 (dollars in millions):

		*March 31,*				*December 31,*
		*2026*				*2025*
Current assets		$	102			$	81
Property, plant and equipment, net			122				122
Operating lease right-of-use assets			71				19
Other noncurrent assets			146				139
Deferred income taxes			8				8
Total assets		$	449			$	369
Current liabilities		$	150			$	126
Noncurrent operating lease liabilities			66				12
Other noncurrent liabilities			15				15
Deferred income taxes			2				2
Total liabilities		$	233			$	155

Certain operating activities for our variable interest entities for the three months ended March 31, 2026 and 2025 were as follows (dollars in millions):

		*Three months ended*
		*March 31,*
		*2026*				*2025*
Income from continuing operations before income taxes		$	6			$	16
Net cash provided by operating activities			11				16