| SEGMENTS AND GEOGRAPHIC INFORMATION |
NOTE 16—SEGMENTS AND GEOGRAPHIC INFORMATION The Company’s Chief Executive Officer, who is the chief operating decision maker, manages the Company’s operations under four segments: Engineered Materials, Latex Binders, Polymer Solutions, and Americas Styrenics. The Engineered Materials segment includes the Company’s compounds and blends products sold into higher growth and value applications, such as consumer electronics, medical, automotive, and other applications, as well as soft thermoplastic elastomers (“TPEs”) products which are sold into markets such as footwear and automotive. Additionally, the Engineered Materials segment also includes PMMA and MMA products, which are sold into a variety of applications including automotive, building & construction, medical, consumer electronics, and wellness, among others. The Latex Binders segment produces styrene-butadiene (“SB”) latex and other latex polymers and binders, primarily for coated paper and packaging board, carpet and artificial turf backings, as well as a number of performance latex binders applications, such as adhesive, building and construction and the technical textile paper market. The Polymer Solutions segment contains the results of the acrylonitrile butadiene styrene (“ABS”), styrene-acrylonitrile (“SAN”), and polycarbonate (“PC”) businesses. The Polymer Solutions segment also includes the results of Heathland, which was acquired in the first quarter of 2022, and the legacy Polystyrene segment, which includes a variety of general purpose polystyrenes (“GPPS”) and polystyrene that has been modified with polybutadiene rubber to increase its impact resistant properties (“HIPS”). Lastly, the Americas Styrenics segment consists solely of the operations of the Company’s 50%-owned joint venture, Americas Styrenics, a producer of both styrene monomer and polystyrene in North America. The following table provides disclosure of the Company’s segment Adjusted EBITDA, which is the metric used by the chief operating decision maker to measure segment operating performance and is defined below, for the three and six months ended June 30, 2026 and 2025. Asset and intersegment sales information by reporting segment is not regularly reviewed or included with the Company’s reporting to the chief operating decision maker. Therefore, this information has not been disclosed below. Refer to Note 3 for the Company’s net sales to external customers by segment and by geography for the three and six months ended June 30, 2026 and 2025. | | | | | | | | | | | | | | | | | | | | | | | | Engineered | | Latex | | Polymer | | Americas | | Total | | Corporate | | | | Three Months Ended (1) | | Materials | | Binders | | Solutions | | Styrenics | | Segments | | Unallocated | | Total | June 30, 2026 | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 291.5 | | $ | 247.9 | | $ | 306.0 | | $ | — | | $ | 845.4 | | $ | — | | $ | 845.4 | Cost of sales | | | (256.5) | | | (228.2) | | | (261.0) | | | — | | | (745.7) | | | — | | | (745.7) | Selling, general and administrative expenses | | | (18.0) | | | (10.2) | | | (12.6) | | | — | | | (40.8) | | | (60.0) | | | (100.8) | Equity in earnings (losses) of unconsolidated affiliate | | | — | | | — | | | — | | | 1.2 | | | 1.2 | | | — | | | 1.2 | Other income and (expense) | | | 0.2 | | | — | | | 0.5 | | | — | | | 0.7 | | | (6.2) | | | (5.5) | Other segment items (2) | | | 0.1 | | | (0.2) | | | 5.2 | | | — | | | 5.1 | | | 42.5 | | | 47.6 | Depreciation and amortization expenses (3) | | | 25.9 | | | 6.5 | | | 5.3 | | | — | | | 37.7 | | | 1.1 | | | 38.8 | Adjusted EBITDA (1) | | $ | 43.2 | | $ | 15.8 | | $ | 43.4 | | $ | 1.2 | | $ | 103.6 | | | | | | | Investments in unconsolidated affiliate | | | — | | | — | | | — | | | 210.2 | | | 210.2 | | | — | | | 210.2 | Capital expenditures | | | 3.5 | | | 3.7 | | | 2.7 | | | — | | | 9.9 | | | 0.1 | | | 10.0 | June 30, 2025 | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 293.2 | | $ | 204.2 | | $ | 286.9 | | $ | — | | $ | 784.3 | | $ | — | | $ | 784.3 | Cost of sales | | | (274.1) | | | (188.9) | | | (284.7) | | | — | | | (747.7) | | | — | | | (747.7) | Selling, general and administrative expenses | | | (19.6) | | | (8.8) | | | (17.4) | | | — | | | (45.8) | | | (32.3) | | | (78.1) | Equity in earnings (losses) of unconsolidated affiliate | | | — | | | — | | | — | | | 8.2 | | | 8.2 | | | — | | | 8.2 | Other income and (expense) | | | 0.1 | | | (0.4) | | | (0.4) | | | — | | | (0.7) | | | 0.5 | | | (0.2) | Other segment items (2) | | | 0.5 | | | — | | | 10.6 | | | — | | | 11.1 | | | 4.2 | | | 15.3 | Depreciation and amortization expenses (3) | | | 31.0 | | | 10.7 | | | 10.2 | | | — | | | 51.9 | | | 7.9 | | | 59.8 | Adjusted EBITDA (1) | | $ | 31.1 | | $ | 16.8 | | $ | 5.2 | | $ | 8.2 | | $ | 61.3 | | | | | | | Investments in unconsolidated affiliate | | | — | | | — | | | — | | | 224.0 | | | 224.0 | | | — | | | 224.0 | Capital expenditures | | | 3.7 | | | 4.0 | | | 1.6 | | | — | | | 9.3 | | | 0.5 | | | 9.8 |
| | | | | | | | | | | | | | | | | | | | | | | | Engineered | | Latex | | Polymer | | Americas | | Total | | Corporate | | | | Six Months Ended (1) | | Materials | | Binders | | Solutions | | Styrenics | | Segments | | Unallocated | | Total | June 30, 2026 | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 554.5 | | $ | 444.4 | | $ | 571.2 | | $ | — | | $ | 1,570.1 | | $ | — | | $ | 1,570.1 | Cost of sales | | | (498.7) | | | (407.9) | | | (502.1) | | | — | | | (1,408.7) | | | — | | | (1,408.7) | Selling, general and administrative expenses | | | (36.7) | | | (19.6) | | | (25.9) | | | — | | | (82.2) | | | (106.0) | | | (188.2) | Equity in earnings (losses) of unconsolidated affiliate | | | — | | | — | | | — | | | 3.3 | | | 3.3 | | | — | | | 3.3 | Other income and (expense) | | | 0.2 | | | — | | | 0.9 | | | — | | | 1.1 | | | (10.8) | | | (9.7) | Other segment items (2) | | | 2.2 | | | (0.1) | | | 9.6 | | | — | | | 11.7 | | | 66.5 | | | 78.2 | Depreciation and amortization expenses (3) | | | 55.4 | | | 15.4 | | | 13.4 | | | — | | | 84.2 | | | 4.4 | | | 88.6 | Adjusted EBITDA (1) | | $ | 76.9 | | $ | 32.2 | | $ | 67.1 | | $ | 3.3 | | $ | 179.5 | | | | | | | Investments in unconsolidated affiliate | | | — | | | — | | | — | | | 210.2 | | | 210.2 | | | — | | | 210.2 | Capital expenditures | | | 7.7 | | | 8.1 | | | 5.4 | | | — | | | 21.2 | | | 0.1 | | | 21.3 | June 30, 2025 | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 570.5 | | $ | 413.5 | | $ | 585.1 | | $ | — | | $ | 1,569.1 | | $ | — | | $ | 1,569.1 | Cost of sales | | | (535.2) | | | (371.5) | | | (562.0) | | | — | | | (1,468.7) | | | — | | | (1,468.7) | Selling, general and administrative expenses | | | (36.1) | | | (17.6) | | | (25.3) | | | — | | | (79.0) | | | (90.1) | | | (169.1) | Equity in earnings (losses) of unconsolidated affiliate | | | — | | | — | | | — | | | 6.4 | | | 6.4 | | | — | | | 6.4 | Other income and (expense) | | | 0.3 | | | (0.8) | | | 25.3 | | | — | | | 24.8 | | | (1.8) | | | 23.0 | Other segment items (2) | | | (0.1) | | | 0.1 | | | 18.3 | | | — | | | 18.3 | | | 31.6 | | | 49.9 | Depreciation and amortization expenses (3) | | | 57.4 | | | 17.6 | | | 8.3 | | | — | | | 83.3 | | | 12.5 | | | 95.8 | Adjusted EBITDA (1) | | $ | 56.8 | | $ | 41.3 | | $ | 49.7 | | $ | 6.4 | | $ | 154.2 | | | | | | | Investments in unconsolidated affiliate | | | — | | | — | | | — | | | 224.0 | | | 224.0 | | | — | | | 224.0 | Capital expenditures | | | 7.1 | | | 7.6 | | | 2.7 | | | — | | | 17.4 | | | 1.1 | | | 18.5 |
| (1) | The Company’s measure of segment operating performance is Adjusted EBITDA, which is defined as income from continuing operations before interest expense, net; provision for income taxes; depreciation and amortization expense; loss on extinguishment of long-term debt and certain debt issuance costs; asset impairment charges; gains or losses on the dispositions of businesses and assets; restructuring charges; acquisition related costs and benefits, and other items. Segment Adjusted EBITDA is the key metric that is used by the chief operating decision maker to evaluate business performance in comparison to budgets, forecasts, and prior year financial results, providing a measure that the chief operating decision maker believes reflects core operating performance by removing the impact of transactions and events that would not be considered a part of core operations. |
| (2) | Other segment items contain activity primarily defined as addbacks to arrive at Adjusted EBITDA included from the loss on extinguishment of long-term debt and certain debt issuance costs; asset impairment charges; gains or losses on the dispositions of businesses and assets; restructuring charges; acquisition related costs and benefits, and other items. |
| (3) | Segment depreciation and amortization expense is included as a component of cost of goods sold; and selling, general, and administrative expense in the amounts regularly provided to the chief operating decision maker and are therefore added back to arrive at Segment Adjusted EBITDA. |
The reconciliation of loss before income taxes to segment Adjusted EBITDA is as follows: | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30, | | June 30, | | | 2026 | | 2025 | | 2026 | | 2025 | Loss before income taxes | | $ | (119.1) | | $ | (103.0) | | $ | (225.6) | | $ | (175.4) | Interest expense, net (4) | | | 72.4 | | | 69.5 | | | 151.1 | | | 136.1 | Depreciation and Amortization (5) | | | 38.8 | | | 59.8 | | | 88.6 | | | 95.8 | Corporate Unallocated (6) | | | 22.6 | | | 19.7 | | | 45.9 | | | 47.8 | Adjusted EBITDA Addbacks (7) | | | 88.9 | | | 15.3 | | | 119.5 | | | 49.9 | Segment Adjusted EBITDA | | $ | 103.6 | | $ | 61.3 | | $ | 179.5 | | $ | 154.2 |
(4) | During the three and six months ended June 30, 2026, the Company did not recognize approximately $18.2 million of contractual interest expense that would have been recognized if not for the Chapter 11 Cases. |
(5) | During the six months ended June 30, 2026, the Company recognized $9.2 million for accelerated amortization of capitalized software assets related to our transition of current enterprise resource planning (“ERP”) system to a cloud based system. |
During the three months ended June 30, 2025, the Company entered into an agreement to move our current enterprise resource planning (“ERP”) system to a cloud based system, triggering an acceleration of the amortization of the capitalized software assets totaling $13.8 million. During the six months ended June 30, 2025, an $8.1 million credit was recognized due to a change in cost estimate related to the Boehlen, Germany Asset Retirement Obligation as the Company was able to realize efficiencies during decommissioning. (6) | Corporate unallocated includes corporate overhead costs and certain other income and expenses. |
(7) | Adjusted EBITDA addbacks for the three and six months ended June 30, 2026 and 2025 are as follows: |
| | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30, | | June 30, | | | 2026 | | 2025 | | 2026 | | 2025 | Loss on financing transactions (Note 10) | | $ | 6.0 | | $ | 1.6 | | $ | 6.0 | | $ | 26.5 | Net gain on disposition of businesses and assets | | | (2.5) | | | — | | | (6.1) | | | — | Restructuring and other charges (Note 4) | | | 8.8 | | | 10.8 | | | 18.0 | | | 18.2 | Reorganization items, net (Note 19) | | | 41.3 | | | — | | | 41.3 | | | — | Other items (a) | | | 35.3 | | | 2.9 | | | 60.3 | | | 5.2 | Total Adjusted EBITDA Addbacks | | $ | 88.9 | | $ | 15.3 | | $ | 119.5 | | $ | 49.9 |
| (a) | Other items for the three and six months ended June 30, 2026 primarily relate to fees incurred in connection with the Company’s ongoing lender negotiations incurred before the Company filed for bankruptcy or were incurred by non-Debtor entities. Any fees incurred in connection with the Company’s ongoing lender negotiations by the Debtors during the pendency of the Chapter 11 bankruptcy is included within Reorganization items, net. |
Other items for the three and six months ended June 30, 2025 primarily relate to fees incurred in conjunction with the legal defense costs associated with Synthos litigation, described in Note 13.
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