Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017 | |
Document and Entity Information | |
Entity Registrant Name | Venator Materials PLC |
Entity Central Index Key | 1,705,682 |
Document Type | S1 |
Document Period End Date | Sep. 30, 2017 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
CONDENSED CONSOLIDATED AND COMB
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | ||
Current assets: | ||||
Cash and cash equivalents | [1] | $ 186 | $ 29 | [2] |
Accounts receivable (net of allowance for doubtful accounts of $4 each) | [1] | 411 | 247 | [2] |
Accounts receivable from affiliates | 9 | 243 | ||
Inventories | [1] | 431 | 426 | [2] |
Prepaid expenses | 11 | 11 | ||
Other current assets | 73 | 59 | ||
Current assets of discontinued operations | 84 | |||
Total current assets | 1,121 | 1,099 | ||
Property, plant and equipment, net | [1] | 1,264 | 1,178 | [2] |
Intangible assets, net | [1] | 21 | 23 | [2] |
Investment in unconsolidated affiliates | 77 | 85 | ||
Deferred income taxes | 200 | 142 | ||
Notes receivable from affiliates | 57 | |||
Other noncurrent assets | 41 | 35 | [2] | |
Noncurrent assets of discontinued operations | 42 | |||
Total assets | 2,724 | 2,661 | ||
Current liabilities: | ||||
Accounts payable | [1] | 319 | 297 | [2] |
Accounts payable to affiliates | 15 | 695 | ||
Accrued liabilities | [1] | 213 | 146 | [2] |
Current portion of debt | [1] | 4 | 10 | [2] |
Current liabilities of discontinued operations | 27 | |||
Total current liabilities | 551 | 1,175 | ||
Long-term debt | 747 | 13 | ||
Long-term debt to affiliates | 882 | |||
Deferred income taxes | 9 | 12 | ||
Other noncurrent liabilities | 328 | 324 | ||
Noncurrent payable to affiliates | 73 | |||
Noncurrent liabilities discontinued operations | 78 | |||
Total liabilities | 1,708 | 2,484 | ||
Commitments and contingencies (Notes 11 and 12) | ||||
Equity | ||||
Parent's net investment and advances | 588 | |||
Ordinary shares $0.001 par value, 200 shares authorized, 106 and nil issued and 106 and nil outstanding, respectively | ||||
Additional paid-in capital | 1,318 | |||
Accumulated deficit | (1) | |||
Accumulated other comprehensive loss | (312) | (423) | ||
Total Venator Materials PLC shareholders' equity | 1,005 | 165 | ||
Noncontrolling interest in subsidiaries | 11 | 12 | ||
Total equity | 1,016 | 177 | ||
Total liabilities and equity | $ 2,724 | $ 2,661 | ||
[1] | At September?30, 2017 and December?31, 2016, $6 and $4 of cash and cash equivalents, $7 and $6 of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $18 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note?5. Variable Interest Entities." | |||
[2] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? |
CONDENSED CONSOLIDATED AND COM3
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | ||
Accounts and notes receivable, allowance for doubtful accounts (in dollars) | $ 4 | $ 4 | ||
Ordinary shares, par value | $ 0.001 | $ 0.001 | ||
Ordinary shares, authorized | 200 | 200 | ||
Ordinary shares, issued | 106 | 0 | ||
Ordinary shares, outstanding | 106 | 0 | ||
Variable Interest Entity | ||||
Cash and cash equivalents | [1] | $ 186 | $ 29 | [2] |
Accounts receivable, net | [1] | 411 | 247 | [2] |
Inventories | [1] | 431 | 426 | [2] |
Property, plant and equipment (net) | [1] | 1,264 | 1,178 | [2] |
Intangible assets, net | [1] | 21 | 23 | [2] |
Accounts payable | [1] | 319 | 297 | [2] |
Accrued liabilities | [1] | 213 | 146 | [2] |
Current portion of debt | [1] | 4 | 10 | [2] |
Consolidated VIE's | ||||
Variable Interest Entity | ||||
Cash and cash equivalents | 6 | 4 | ||
Accounts receivable, net | 7 | 6 | ||
Inventories | 1 | 1 | ||
Property, plant and equipment (net) | 4 | 4 | ||
Intangible assets, net | 18 | 20 | ||
Accounts payable | 1 | 1 | ||
Accrued liabilities | 3 | 4 | ||
Current portion of debt | $ 2 | $ 2 | ||
[1] | At September?30, 2017 and December?31, 2016, $6 and $4 of cash and cash equivalents, $7 and $6 of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $18 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note?5. Variable Interest Entities." | |||
[2] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? |
CONDENSED CONSOLIDATED AND COM4
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($)$ / shares | |
STATEMENTS OF OPERATIONS | |
Trade sales, services and fees, net | $ 1,648 |
Cost of goods sold | 1,547 |
Operating expenses: | |
Selling, general and administrative (includes corporate allocations from Huntsman Corporation of $9, $27, $62 and $76, respectively) | 168 |
Restructuring, impairment and plant closing costs | 31 |
Other income, net | (33) |
Total expenses | 166 |
Operating income (loss) | (65) |
Interest expense | (44) |
Interest income | 13 |
Other income | 1 |
Income (loss) from continuing operations before income taxes | (95) |
Income tax (expense) benefit | 14 |
Income (loss) from continuing operations | (81) |
Income from discontinued operations, net of tax | 8 |
Net income (loss) | (73) |
Net income attributable to noncontrolling interests | (8) |
Net income (loss) attributable to Venator | $ (81) |
Basic earnings (losses) per share: | |
Income (loss) from continuing operations attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | $ / shares | $ (0.84) |
Income from discontinued operations attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | $ / shares | 0.08 |
Net income (loss) attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | $ / shares | (0.76) |
Diluted earnings (losses) per share: | |
Income (loss) from continuing operations attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | $ / shares | (0.84) |
Income from discontinued operations attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | $ / shares | 0.08 |
Net income (loss) attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | $ / shares | $ (0.76) |
CONDENSED AND CONSOLIDATED COMB
CONDENSED AND CONSOLIDATED COMBINED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Huntsman | Corporate allocations | |||||||
Selling, general and administrative expenses | $ 9 | $ 27 | $ 62 | $ 76 | $ 104 | $ 90 | $ 78 |
CONDENSED CONSOLIDATED AND COM6
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||
Net income (loss) | $ 53 | $ (2) | $ 74 | $ (73) | $ (77) | $ (352) | $ (162) |
Other comprehensive income (loss), net of tax: | |||||||
Foreign currency translation adjustment | (4) | (30) | 75 | (91) | 32 | (71) | (93) |
Pension and other postretirement benefits adjustments | 8 | 4 | 36 | 16 | (54) | (10) | (16) |
Other comprehensive income (loss), net of tax | 4 | (26) | 111 | (75) | (22) | (82) | (111) |
Comprehensive income (loss) | 57 | (28) | 185 | (148) | (99) | (434) | (273) |
Comprehensive income attributable to noncontrolling interest | (2) | (3) | (8) | (8) | (10) | (7) | (2) |
Comprehensive income (loss) attributable to Venator | $ 55 | $ (31) | $ 177 | $ (156) | $ (109) | $ (441) | $ (275) |
CONDENSED CONSOLIDATED AND COM7
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY - USD ($) $ in Millions | Parent's Net Investment and Advances | Additional paid-in capital | Accumulated Deficit | Accumulated other comprehensive loss | Noncontrolling interests in subsidiaries | Total |
Balance at the beginning of the period at Dec. 31, 2013 | $ 1,454 | $ (208) | $ 1 | $ 1,247 | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (164) | 2 | (162) | |||
Net changes in other comprehensive income (loss) | (111) | (111) | ||||
Dividends paid to noncontrolling interests | (1) | (1) | ||||
Net changes in parent's net investment and advances | 424 | 2 | 426 | |||
Balance at the end of the period at Dec. 31, 2014 | 1,714 | (319) | 20 | 1,415 | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (359) | 7 | (352) | |||
Net changes in other comprehensive income (loss) | (82) | (82) | ||||
Dividends paid to noncontrolling interests | (8) | (8) | ||||
Net changes in parent's net investment and advances | (243) | (2) | (245) | |||
Balance at the end of the period at Dec. 31, 2015 | 1,112 | (401) | 17 | 728 | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (81) | 8 | (73) | |||
Net changes in other comprehensive income (loss) | (75) | (75) | ||||
Dividends paid to noncontrolling interests | (10) | (10) | ||||
Net changes in parent's net investment and advances | (318) | (2) | (320) | |||
Balance at the end of the period at Sep. 30, 2016 | 713 | (476) | 13 | 250 | ||
Balance at the beginning of the period at Dec. 31, 2015 | 1,112 | (401) | 17 | 728 | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (87) | 10 | (77) | |||
Net changes in other comprehensive income (loss) | (22) | (22) | ||||
Dividends paid to noncontrolling interests | (14) | (14) | ||||
Net changes in parent's net investment and advances | (437) | (1) | (438) | |||
Balance at the end of the period at Dec. 31, 2016 | 588 | (423) | 12 | 177 | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 67 | $ (1) | 8 | 74 | ||
Net changes in other comprehensive income (loss) | 111 | 111 | ||||
Dividends paid to noncontrolling interests | (9) | (9) | ||||
Net changes in parent's net investment and advances | 663 | 663 | ||||
Conversion of Parent's net investment and advances to paid-in capital | $ (1,318) | $ 1,318 | ||||
Balance at the end of the period at Sep. 30, 2017 | $ 1,318 | $ (1) | $ (312) | $ 11 | $ 1,016 |
CONDENSED CONSOLIDATED AND COM8
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities: | ||
Net income (loss) | $ 74 | $ (73) |
Income from discontinued operations, net of tax | (8) | (8) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 95 | 84 |
Deferred income taxes | (2) | (17) |
Noncash restructuring and impairment charges | 7 | 9 |
Noncash interest | 18 | 32 |
Noncash (gain) loss on foreign currency transactions | 1 | 2 |
Gain on disposal of businesses/assets, net | (23) | |
Other, net | 2 | 3 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (54) | (5) |
Inventories | 22 | 113 |
Prepaid expenses | (1) | (1) |
Other current assets | (8) | 2 |
Other noncurrent assets | 6 | (7) |
Accounts payable | 8 | 6 |
Accrued liabilities | 40 | (25) |
Other noncurrent liabilities | (20) | (5) |
Net cash provided by operating activities from continuing operations | 180 | 87 |
Net cash provided by operating activities from discontinued operations | 1 | 6 |
Net cash provided by operating activities | 181 | 93 |
Investing Activities: | ||
Capital expenditures | (97) | (76) |
Insurance proceeds for recovery of property damage | 50 | |
Net repayments from (advances to) affiliates | 121 | (36) |
Repayment of government grant | (5) | |
Cash received from unconsolidated affiliates | 37 | 25 |
Investment in unconsolidated affiliates | (33) | (21) |
Proceeds from sale of businesses/assets | 9 | |
Net cash provided by (used in) investing activities from continuing operations | 73 | (99) |
Net cash used in investing activities from discontinued operations | (1) | (6) |
Net cash provided by (used in) investing activities | 72 | (105) |
Financing Activities: | ||
Repayment of long-term debt | (5) | (1) |
Net repayments on affiliate accounts payable | (86) | 23 |
Final settlement of affiliate balances at Separation | (732) | |
Dividends paid to noncontrolling interests | (9) | (10) |
Proceeds from issuance of long-term debt | 750 | |
Debt issuance costs paid | (18) | |
Other financing activities | 1 | (2) |
Net cash (used in) provided by financing activities | (99) | 10 |
Effect of exchange rate changes on cash | 2 | |
Net change in cash and cash equivalents, including discontinued operations | 156 | (2) |
Cash and cash equivalents at beginning of period, including discontinued operations | 30 | 22 |
Cash and cash equivalents at end of period, including discontinued operations | 186 | 20 |
Supplemental cash flow information: | ||
Cash paid for interest | 2 | 4 |
Cash paid for income taxes | 11 | 6 |
Supplemental disclosure of noncash activities: | ||
Capital expenditures included in accounts payable | 19 | 17 |
Received settlements of notes receivable from affiliates | 57 | 230 |
Settlement of long-term notes payable/notes receivable with affiliates | $ 792 | $ (1) |
GENERAL, DESCRIPTION OF BUSINES
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | ||
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | NOTE 1. GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION General Except when the context otherwise requires or where otherwise indicated, (1) all references to "Venator," the "Company," "we," "us" and "our" refer to Venator Materials PLC and its subsidiaries, or, as the context requires, the historical Pigments and Additives business of Huntsman, (2) all references to "Huntsman" refer to Huntsman Corporation, our controlling shareholder, and its subsidiaries, other than us, (3) all references to the "Titanium Dioxide" segment or business refer to the TiO 2 business of Venator, or, as the context requires, the historical Pigments and Additives segment of Huntsman and the related operations and assets, liabilities and obligations, (4) all references to the "Performance Additives" segment or business refer to the functional additives, color pigments, timber treatment and water treatment businesses of Venator, or, as the context requires, the Pigments and Additives segment of Huntsman and the related operations and assets, liabilities and obligations, (5) all references to "other businesses" refer to certain businesses that Huntsman retained in connection with the Separation and that are reported as discontinued operations in our condensed consolidated and combined financial statements, (6) all references to "Huntsman International" refer to Huntsman International LLC, a wholly-owned subsidiary of Huntsman, and the entity through which Huntsman operates all of its businesses, and (7) we refer to the internal reorganization prior to our initial public offering (our “IPO”), the separation transactions initiated to separate the Venator business from Huntsman’s other businesses, including the entry into and effectiveness of the separation agreement and ancillary agreements, and the Senior Credit Facilities (as defined below) and Senior Notes (as defined below), including the use of the net proceeds of the Senior Credit Facilities and the Senior Notes, which were used to repay intercompany debt we owed to Huntsman and to pay related fees and expenses, as the "Separation" and (8) the “Rockwood acquisition” refers to Huntsman’s acquisition of the performance and additives and TiO 2 businesses of Rockwood Holdings, Inc. (“Rockwood”) completed on October 1, 2014. Description of Business Venator operates in two segments: Titanium Dioxide and Performance Additives. The Titanium Dioxide segment manufactures and sells primarily TiO 2 , and operates eight TiO 2 manufacturing facilities across the globe, predominantly in Europe. The Performance Additives segment manufactures and sells functional additives, color pigments, timber treatment and water treatment chemicals. This segment operates 19 color pigments, functional additives, water treatment and timber treatment manufacturing and processing facilities in Europe, North America, Asia and Australia. Recent Developments Initial Public Offering and Separation On August 8, 2017, we completed our IPO of 26,105,000 of our outstanding 106,271,712 ordinary shares, par value $0.001 per share, which includes 3,405,000 ordinary shares issued upon the exercise in full by the underwriters of their option to purchase additional shares, at a public offering price of $20.00 per share. All of the ordinary shares were sold by Huntsman, and we did not receive any proceeds from the offering. The ordinary shares began trading August 3, 2017 on the New York Stock Exchange under the symbol “VNTR.” Following our IPO, Huntsman owns approximately 75% of Venator’s outstanding ordinary shares. The material terms of our IPO are described in the Prospectus. In connection with our IPO and the Separation, Venator and Huntsman entered into certain agreements that allocated between Venator and Huntsman the various assets, employees, liabilities and obligations that were previously part of Huntsman and that govern various interim and ongoing relationships between the parties. On August 15, 2017, we registered 14,025,000 ordinary shares on Form S-8 which are reserved in connection with awards under our 2017 Stock Incentive Plan. Senior Credit Facilities and Senior Notes On August 8, 2017, in connection with our IPO and the Separation, we entered into new financing arrangements and incurred new debt, including borrowings of $375 million under a new senior secured term loan facility with a maturity of seven years (the “Term Loan Facility”). In addition to the Term Loan Facility, we entered into a $300 million asset-based revolving lending facility with a maturity of five years (the “ABL Facility” and, together with the Term Loan Facility, the “Senior Credit Facilities”). On July 14, 2017, in connection with our IPO and the Separation, our subsidiaries Venator Finance S.à.r.l. and Venator Materials LLC (the “Issuers”), issued $375 million in aggregate principal amount of 5.75% of Senior Notes due 2025 (the “Senior Notes”). Promptly following consummation of the Separation, the proceeds of the Senior Notes were released from escrow and Venator used the net proceeds of the Senior Notes and borrowings under the Term Loan Facility to repay approximately $732 million of net intercompany debt owed to Huntsman and to pay related fees and expenses of approximately $18 million. Pori Fire On January 30, 2017, our TiO 2 manufacturing facility in Pori, Finland experienced fire damage and we continue to repair the facility. Prior to the fire, 60% of the site capacity produced specialty products which, on average, contributed greater than 75% of the site EBITDA from January 1, 2015 through January 30, 2017. We are currently operating at 20% of total prior capacity but producing only specialty products, and we currently intend to restore manufacturing of the balance of these more profitable specialty products by the fourth quarter of 2018. The remaining 40% of site capacity is more commoditized and we will determine if and when to rebuild this commoditized capacity depending on market conditions, costs and projected long term returns relative to our other investment opportunities. We have recorded a loss of $31 million for the write-off of fixed assets and lost inventory in other operating income, net in our condensed consolidated and combined statements of operations for the nine months ending September 30, 2017. In addition, we recorded a loss of $18 million of costs for cleanup of the facility in other operating income, net through September 30, 2017. The site is insured for property damage as well as business interruption losses subject to retained deductibles of $15 million and 60 days, respectively, with a limit of $500 million. Due to prevailing strong market conditions, our TiO 2 selling prices continue to improve and our business is benefitting from the resulting improved profitability and cash flows. This also has the effect of increasing our total anticipated business interruption losses from the Pori site. We currently believe the combination of increased TiO 2 profitability and recently estimated reconstruction costs will result in losses and costs in excess of our $500 million insurance limit. We currently expect to contain these over-the-limit costs within $100 million to $150 million, and to account for them as capital expenditures. However, these are preliminary estimates based on a number of significant assumptions, and as a result uninsured costs could exceed current estimates. Factors that could materially impact our current estimates include our actual future TiO 2 profitability and related impact on our business interruption losses; the accuracy of our current property damage estimates; the actual costs and timing of our reconstruction efforts; the extent to which we rebuild the 40% of site capacity that produces commoditized products; our ability to secure government subsidies related to our reconstruction efforts; and a number of other significant market and facility-related assumptions. Please see “Part II. Item 1A. Risk Factors—Disruptions in production at our manufacturing facilities, including our Pori facility, may have a material adverse impact on our business, results of operations and/or financial condition.” The fire at our Pori facility did not have a material impact on our 2017 third quarter operating results as losses incurred were offset by insurance proceeds. We received $141 million of non-refundable partial progress payments from our insurer through September 30, 2017 and we received an additional $112 million payment on October 9, 2017. During the first nine months of 2017, we recorded $128 million of income related to property damage and business interruption insurance recoveries in other operating income, net and cost of goods sold in our condensed consolidated and combined statements of operations to offset property damage and business interruption losses recorded during the period. We recorded $17 million as deferred income in accrued liabilities as of September 30, 2017 for insurance proceeds received for costs not yet incurred. The difference between payments received from our insurers of $141 million and the sum of income of $128 million and deferred income of $17 million is related to the foreign exchange movements of the U.S. Dollar against the Euro during the first nine months of the year. Basis of Presentation Venator’s unaudited condensed consolidated and combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP" or "U.S. GAAP") and in management’s opinion reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results of operations, comprehensive income (loss), financial position and cash flows for the periods presented. Results of interim periods are not necessarily indicative of those to be expected for the full year. These unaudited condensed consolidated and combined financial statements should be read in conjunction with the audited combined financial statements and notes to combined financial statements included in the Prospectus. Prior to the Separation, Venator’s operations were included in Huntsman’s financial results in different legal forms, including but not limited to: (1) wholly-owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities which are comprised of other businesses and include the Titanium Dioxide and/or Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives businesses are the primary beneficiaries. The unaudited condensed consolidated and combined financial statements include all revenues, costs, assets, liabilities and cash flows directly attributable to Venator. The unaudited condensed consolidated and combined financial statements also include allocations of direct and indirect corporate expenses through the date of the Separation, which are based upon an allocation method that in the opinion of management is reasonable. Because the historical condensed consolidated and combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical condensed consolidated and combined financial information includes the results of operations of other businesses that are not a part of our operations after the Separation. We report the results of those other businesses as discontinued operations. See “Note 3. Discontinued Operations” for further discussion of discontinued operations. In addition, the unaudited condensed consolidated and combined financial statements have been prepared from Huntsman’s historical accounting records through the Separation and are presented on a stand-alone basis as if Venator’s operations had been conducted separately from Huntsman; however, prior to the Separation, Venator did not operate as a separate, stand-alone entity for the periods presented and, as such, the condensed consolidated and combined financial statements reflecting balances and activity prior to the Separation, may not be indicative of the financial position, results of operations and cash flows had Venator been a stand-alone company. For purposes of these unaudited condensed consolidated and combined financial statements, all significant transactions with Huntsman International have been included in group equity. All intercompany transactions within the consolidated business have been eliminated. Prior to the Separation, Huntsman’s executive, information technology, EHS and certain other corporate departments performed certain administrative and other services for Venator. Additionally, Huntsman performed certain site services for Venator. Expenses incurred by Huntsman and allocated to Venator were determined based on specific services provided or were allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $9 million and $27 million for the three months ended September 30, 2017 and 2016, respectively, and $62 million and $76 million for the nine months ended September 30, 2017 and 2016, respectively. | 1. DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General —For convenience in this report, the terms “our,” “us,” “we” or “Venator” may be used to refer to Venator Materials PLC and, unless the context otherwise requires, its subsidiaries. Description of Business —Venator (comprising the combined operations and legal entities of the Pigments & Additives division and certain other operations of Huntsman Corporation, or Huntsman) operates in two segments: Titanium Dioxide and Performance Additives. The Titanium Dioxide segment manufactures and sells primarily titanium dioxide (“TiO2”), and has global operations operating eight TiO2 manufacturing facilities, predominantly in Europe. The Performance Additives segment manufactures and sells functional additives, color pigments, timber treatment and water treatment chemicals. This segment operates 19 color pigments, functional additives, water treatment and timber treatment manufacturing and processing facilities in Europe, North America, Asia and Australia. Recent Developments —In February 2017, Huntsman filed suit against the legacy owner and certain former executives of Rockwood, primarily related to the failure of new technology that Huntsman acquired in the Rockwood acquisition that was to be implemented at the new Augusta facility and subsequently at other facilities. Huntsman is seeking various forms of legal remedy, including compensatory damages, punitive damages, expectation damages, consequential damages and restitution. Venator is not party to the suit. On January 30, 2017, Venator’s TiO2 manufacturing facility in Pori, Finland experienced fire damage and is currently not fully operational. We are committed to repairing the facility as quickly as possible. The site is insured for property damage as well as business interruption losses. Basis of Presentation —Venator’s combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP” or “U.S. GAAP”). Venator’s operations were included in Huntsman Corporation’s financial results in different legal forms, including but not limited to: (1) wholly‑owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities which are comprised of other businesses and include the Titanium Dioxide and Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives and other businesses are the primary beneficiaries. The combined financial statements include all revenues, costs, assets, liabilities and cash flows directly attributable to Venator, as well as allocations of direct and indirect corporate expenses, which are based upon an allocation method that in the opinion of management is reasonable. Such corporate cost allocation transactions between Venator and Huntsman Corporation have been considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded and the net effect of the settlement of these intercompany transactions is reflected in the combined statements of cash flows as a financing activity. Because the historical combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical combined financial information includes the results of operations of other Huntsman businesses are not a part of our operations after the Separation. We report the results of those other businesses as discontinued operations. Please see note “3. Discontinued Operations” to our unaudited condensed consolidated and combined financial statements and note “26. Discontinued Operations” to our combined financial statements. In addition, the combined financial statements have been prepared from Huntsman Corporation’s historical accounting records and are presented on a stand‑alone basis as if Venator’s operations had been conducted separately from Huntsman Corporation; however, Venator did not operate as a separate, stand‑alone entity for the periods presented and, as such, the combined financial statements may not be indicative of the financial position, results of operations and cash flows had Venator been a stand‑alone company. For purposes of these combined financial statements, all significant transactions with Huntsman International LLC (“Huntsman International”), a wholly‑owned subsidiary of Huntsman through which Huntsman operates all of its businesses, have been included in group equity. All intercompany transactions within the combined business have been eliminated. Additional disclosures are included in note “20. Related Party Transactions.” Huntsman Corporation’s executive, information technology, environmental, health and safety and certain other corporate departments perform certain administrative and other services for Venator. Additionally, Huntsman Corporation performs certain site services for Venator. Expenses incurred by Huntsman Corporation and allocated to Venator are determined based on specific services provided or are allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman Corporation. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $104 million, $90 million and $78 million for the years ended December 31, 2016, 2015 and 2014, respectively. Asset Retirement Obligations —Venator accrues for asset retirement obligations, which consist primarily of asbestos abatement costs, demolition and removal costs, leasehold remediation costs and landfill closure costs, in the period in which the obligations are incurred. Asset retirement obligations are initially recorded at estimated fair value. When the related liability is initially recorded, Venator capitalizes the cost by increasing the carrying amount of the related long‑lived asset. Over time, the liability is accreted to its estimated settlement value and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, Venator will recognize a gain or loss for any difference between the settlement amount and the liability recorded. Carrying Value of Long‑Lived Assets —Venator reviews long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability is based upon current and anticipated undiscounted cash flows, and Venator recognizes an impairment when such estimated cash flows are less than the carrying value of the asset. Measurement of the amount of impairment, if any, is based upon the difference between carrying value and fair value. Fair value is generally estimated by discounting estimated future cash flows using a discount rate commensurate with the risks involved. Cash and Cash Equivalents —Venator considers cash in bank accounts and short‑term highly liquid investments with remaining maturities of three months or less at the date of purchase to be cash and cash equivalents. Venator’s day‑to‑day funding requirements are primarily met by the Huntsman International treasury function. Venator participates in Huntsman International’s cash pooling program. The cash pooling program is an intercompany borrowing arrangement designed to reduce Venator’s dependence on external short‑term borrowing. See note “14. Related Party Financing.” Cost of Goods Sold —Venator classifies the costs of manufacturing and distributing its products as cost of goods sold. Manufacturing costs include variable costs, primarily raw materials and energy, and fixed expenses directly associated with production. Manufacturing costs include, among other things, plant site operating costs and overhead costs (including depreciation), production planning and logistics costs, repair and maintenance costs, plant site purchasing costs, and engineering and technical support costs. Distribution, freight, and warehousing costs are also included in cost of goods sold. Derivative Transactions —All derivatives are recorded on Venator’s balance sheet at fair value. Changes in fair value of derivatives are recognized in earnings. See note “16. Derivative Instruments and Hedging Activities.” Environmental Expenditures —Environmental‑related restoration and remediation costs are recorded as liabilities when site restoration and environmental remediation and cleanup obligations are either known or considered probable and the related costs can be reasonably estimated. Other environmental expenditures that are principally maintenance or preventative in nature are recorded when expended and incurred and are expensed or capitalized as appropriate. See note “22. Environmental, Health and Safety Matters.” Financial Instruments —The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, amounts receivable from affiliates, accounts payable, amounts payable to affiliates, and accrued liabilities approximate their fair value because of the immediate or short‑term maturity of these financial instruments. The fair value of non‑qualified employee benefit plan investments is estimated using prevailing market prices. The estimated fair values of Venator’s long‑term debt are based on quoted market prices for the identical liability when traded as an asset in an active market. Such fair value approximates carrying value. Foreign Currency Translation —The accounts of Venator’s operating subsidiaries outside of the U.S. consider the functional currency to be the currency of the economic environment in which they operate. Accordingly, assets and liabilities are translated at rates prevailing at the balance sheet date. Revenues, expenses, gains and losses are translated at a weighted average rate for the period. Cumulative translation adjustments are recorded to equity as a component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are recorded in other (income) expense in the combined statements of operations and were net gains of $9 million, $4 million and $1 million for the years ended December 31, 2016, 2015 and 2014, respectively. Income Taxes —Venator is comprised of operations in various tax jurisdictions. Venator’s operations were included in Huntsman Corporation’s financial results in different legal forms, including but not limited to wholly‑owned subsidiaries for which Venator was the sole business, components of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses and variable interest entities in which Venator is the primary beneficiary. Similarly, Venator’s tax obligations and filings were included in different legal forms, including but not limited to legal entities in certain countries where fiscal unity or consolidation is allowed or required with other Huntsman Corporation businesses, components of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses, and legal entities which file separate tax returns in their respective tax jurisdictions. The combined financial statements have been prepared from Huntsman Corporation’s historical accounting records and are presented on a stand‑alone basis as if Venator’s operations had been conducted separately from Huntsman; however, Venator did not operate as a separate, stand‑alone entity for the periods presented and, as such, the tax results and attributes presented in these combined financial statements would not be indicative of the income tax expense or benefit, income tax related assets and liabilities and cash taxes had Venator been a stand‑alone company. The combined financial statements have been prepared under the currently anticipated legal structure of Venator such that the historical results of legal entities are presented as follows: The historical tax results of legal entities which file separate tax returns in their respective tax jurisdictions and which need no restructuring before being contributed are included without adjustment, including the inclusion of any currently held subsidiaries. The historical tax results of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses for which new legal entities will be formed for Venator operations are presented on a stand‑alone basis as if their operations had been conducted separately from Huntsman and any adjustments to current taxes payable have been treated as adjustments to parent’s net investment and advances. The historical tax results of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses for which the Huntsman business will be transferred out have been presented without adjustment, including the historical results of the Huntsman businesses which are unrelated to Venator operating businesses. Pursuant to tax‑sharing agreements, subsidiaries of Huntsman Corporation are charged or credited, in general, with an amount of income taxes as if they filed separate income tax returns. Adjustments to current income taxes payable by Venator have been treated as adjustments to parent’s net investment and advances. Venator includes the U.S. Titanium Dioxide and Performance Additives subsidiaries of Huntsman International which are treated for U.S. tax purposes as divisions of Huntsman International. Huntsman International is included in the U.S. consolidated tax return of its parent, Huntsman Corporation. A 2% U.S. state income tax rate (net of federal benefit) was estimated for Venator based upon the estimated apportionment factors and actual income tax rates in state tax jurisdictions where it has nexus. U.S. foreign tax credits relating to taxes paid by non‑U.S. business entities have been generated and utilized by Huntsman. On a separate entity basis, these foreign tax credits would not have been generated or utilized, therefore, no additional allocation of Huntsman foreign tax credits was necessary. Additionally, Huntsman had no U.S. net operating loss carryforward amounts (“NOLs”) or similar attributes to allocate. Venator believes this methodology is reasonable and complies with Staff Accounting Bulletin Topic 1B, Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity . Venator uses the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial and tax reporting purposes. Venator evaluates deferred tax assets to determine whether it is more likely than not that they will be realized. Valuation allowances are reviewed on a tax jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets for each jurisdiction. These conclusions require significant judgment. In evaluating the objective evidence that historical results provide, Venator considers the cyclicality of Venator and cumulative income or losses during the applicable period. Cumulative losses incurred over the period limits Venator’s ability to consider other subjective evidence such as Venator’s projections for the future. Changes in expected future income in applicable tax jurisdictions could affect the realization of deferred tax assets in those jurisdictions. As of December 31, 2016 and 2015, there were no unremitted earnings of subsidiaries to consider for indefinite reinvestment. Going forward, to the extent future U.S. cash flow needs require distributions from foreign subsidiaries, based on existing law, we expect to have tax attributes (at least up to the amount of anticipated external Venator debt) that could allow repatriation of earnings to the U.S. without incremental U.S. income tax. The U.S. tax expense, deferred tax assets, and deferred tax liabilities in these financial statements do not necessarily reflect the tax expense, deferred tax assets, or deferred tax liabilities that would have resulted had Venator not been operated as a U.S. income tax branch structure in combination with Huntsman Corporation. By illustration, there are no net operating losses to be allocated to Venator given the overall profitability of the Huntsman group in the U.S. The tax provision is not intended in any way to be representative of future taxes. Further, the tax attributes presented reflect calculated unaffiliated results based upon the legal entity structure of Venator and using the stand‑alone methodology. The actual income tax attributes that would be allocated under the various required tax laws to the specific legal entities comprising Venator would be different than the amounts presented. Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The application of income tax law is inherently complex. Venator is required to determine if an income tax position meets the criteria of more‑likely‑than‑not to be realized based on the merits of the position under tax law, in order to recognize an income tax benefit. This requires Venator to make significant judgments regarding the merits of income tax positions and the application of income tax law. Additionally, if a tax position meets the recognition criteria of more‑likely‑than‑not, Venator is required to make judgments and apply assumptions in order to measure the amount of the tax benefits to recognize. The judgments are based on the probability of the amount of tax benefits that would be realized if the tax position was challenged by the taxing authorities. Interpretations and guidance surrounding income tax laws and regulations change over time. As a consequence, changes in assumptions and judgments can materially affect amounts recognized in the combined financial statements. Intangible Assets and Goodwill —Intangible assets are stated at cost (fair value at the time of acquisition) and are amortized using the straight‑line method over the estimated useful lives or the life of the related agreement as follows: Patents and technology 5 ‑ 30 years Trademarks 9 ‑ 30 years Licenses and other agreements 5 ‑ 15 years Other intangibles 5 ‑ 15 years Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill is not subject to any method of amortization, but is tested for impairment annually (at the beginning of the third quarter) and when events and circumstances change that would more‑likely‑than‑not reduce the fair value of a reporting unit below its carrying amount. When the fair value is less than the carrying value of the related reporting unit, Venator is required to reduce the amount of goodwill through a charge to earnings. Fair value is estimated using the market approach, as well as the income approach based on discounted cash flow projections. Goodwill has been assigned to reporting units for purposes of impairment testing. Inventories —Inventories are stated at the lower of cost or market, with cost determined using the first‑in, first‑out and average costs methods for different components of inventory. Legal Costs —Venator expenses legal costs, including those legal costs incurred in connection with a loss contingency, as incurred. Property, Plant, and Equipment —Property, plant, and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful lives or lease term as follows: Buildings and equipment 5 ‑ 50 years Plant and equipment 3 ‑ 30 years Furniture, fixtures and leasehold improvements 5 ‑ 20 years Normal maintenance and repairs of plant and equipment are charged to expense as incurred. Renewals, betterments, and major repairs that significantly extend the useful life of the assets are capitalized and the assets replaced, if any, are retired. Research and Development —Research and development costs are expensed as incurred and recorded in selling, general and administrative expense. Research and development costs charged to expense were $15 million, $17 million and $8 million for the years ended December 31, 2016, 2015 and 2014, respectively. Revenue Recognition —Venator generates substantially all of its revenues through sales in the open market and long‑term supply agreements. Venator recognizes revenue when it is realized or realizable and earned. Revenue for product sales is recognized when a sales arrangement exists, risk and title to the product transfer to the customer, collectibility is reasonably assured, and pricing is fixed or determinable. The transfer of risk and title to the product to the customer usually occurs at the time shipment is made. The revenue recognition policy for sales to related parties does not differ from the policy described above. Securitization of Accounts Receivable —Venator participates in A/R Programs sponsored by Huntsman International. Under the A/R Programs, Venator sells certain of its trade receivables to Huntsman International. Huntsman International grants an undivided interest in these receivables to bankruptcy remote special purpose entities (“SPE”), which serve as security for the issuance of debt of Huntsman International. See note “14. Related Party Financing.” Subsequent Events —Venator evaluated material subsequent events through May 5, 2017, the date these combined financial statements were available to be issued. Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements Pending Adoption in Future Periods In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014‑09, Revenue from Contracts with Customers (Topic 606) , outlining a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and supersedes most current revenue recognition guidance. In August 2015, the FASB issued ASU No. 2015‑14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , deferring the effective date of ASU No. 2014‑09 for all entities by one year. Further, in March 2016, the FASB issued ASU No. 2016‑08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , clarifying the implementation guidance on principal versus agent considerations, in April 2016, the FASB issued ASU No. 2016‑10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , clarifying the implementation guidance on identifying performance obligations in a contract and determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time), in May 2016, the FASB issued ASU No. 2016‑12, Revenue from Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , providing clarifications and practical expedients for certain narrow aspects in Topic 606, and in December 2016, the FASB issued ASU 2016‑20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers . The amendments in these ASUs are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The amendments in ASU No. 2014‑09, ASU No. 2016‑08, ASU No. 2016‑10, ASU No. 2016‑12 and ASU No. 2016‑20 should be applied retrospectively, and early application is permitted. We are substantially complete with our analysis to identify areas that will be impacted by the adoption of the amendments in ASU No. 2014‑09, ASU No. 2016‑08, ASU No. 2016‑10, ASU No. 2016‑12 and ASU No. 2016‑20 on our financial statements. At this time, other than additional required disclosures, we do not expect the adoption of the amendments in these ASUs to have a significant impact on our financial statements. The standard will be adopted in our fiscal year 2018 and we have elected the modified retrospective approach as the transition method. In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) . The amendments in this ASU will increase transparency and comparability among entities by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this ASU will require lessees to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application of the amendments in this ASU is permitted for all entities. Reporting entities are required to recognize and measure leases under these amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact of the adoption of the amendments in this ASU on our financial statements and believe, based on our preliminary assessment, that we will record significant additional right-of-use assets and lease obligations. In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU clarify and include specific guidance to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. We do not expect the adoption of the amendments in this ASU to have a significant impact on our financial statements. In October 2016, the FASB issued ASU No. 2016‑16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . The amendments in this ASU require entities to recognize the current and deferred income taxes for an intra-entity transfer of an asset other than inventory when the transfer occurs, as opposed to deferring the recognition of the income tax consequences until the asset has been sold to an outside party. The amendments in this ASU are effective for annual reporting periods beginning after December 31, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do not expect the adoption of the amendments in this ASU to have a significant impact on our financial statements. In March 2017, the FASB issued ASU No. 2017‑07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The amendments in this ASU require that an employer report the service cost component of net periodic pension cost and net periodic postretirement benefit cost in the same line items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of income from operations. The amendments in this ASU also allow only the service cost component to be eligible for capitalization when applicable (for example, as a cost of internally manufactured inventory or a self-constructed asset). The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments in this ASU should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit cost in assets. The amendments in this ASU will impact the presentation of our financial statements. Our current presentation of service cost components is consistent with the amendments in this ASU. Upon adoption of the amendments in this ASU, we expect to present the other components within other nonoperating income, whereas we currently present these within cost of goods sold and selling, general and administrative expenses. In August 2017, the FASB issued ASU No. 2017‑12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . The amendments in this ASU better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships as well as the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements to increase the understandability of the results of an entity’s intended hedging strategies. The amendments in this ASU also include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted in any interim period after the issuance of this ASU. Transition requirements and elections should be applied to hedging relationships existing on the date of adoption. For cash flow and net investment hedges, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness, and the amended presentation and disclosure guidance is required only prospectively. We are currently evaluating the impact of the adoption of the amendments in this ASU on our financial statements. | 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements Pending Adoption in Future Periods In May 2014, the FASB issued ASU No. 2014‑09, Revenue from Contracts with Customers (Topic 606) , outlining a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and this guidance supersedes most current revenue recognition guidance. In August 2015, the FASB issued ASU No. 2015‑14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , deferring the effective date of ASU No. 2014‑09 for all entities by one year. Further, in March 2016, the FASB issued ASU No. 2016‑08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , clarifying the implementation guidance on principal versus agent considerations, in April 2016, the FASB issued ASU No. 2016‑10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , clarifying the implementation guidance on identifying performance obligations in a contract and determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time), in May 2016, the FASB issued ASU No. 2016‑12, Revenue from Customers (Topic 606): Narrow‑Scope Improvements and Practical Expedients , providing clarifications and practical expedients for certain narrow aspects in Topic 606, and in December 2016, the FASB issued ASU 2016‑20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers . The amendments in these ASUs are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The amendments in ASU No. 2014‑09, ASU No. 2016‑08, ASU No. 2016‑10, ASU No. 2016‑12 and ASU No. 2016‑20 should be applied retrospectively, and early application is permitted. We are currently performing the analysis identifying areas that will be impacted by the adoption of the amendments in ASU No. 2014‑09, ASU No. 2016‑08, ASU No. 2016‑10, ASU No. 2016‑12 and ASU No. 2016‑20 on our combined financial statements. The standard will be adopted in our fiscal year 2018 and we have elected the modified retrospective approach as the transition method. In July 2015, the FASB issued ASU No. 2015‑11, Inventory (Topic 330): Simplifying the Measurement of Inventory . The amendments in this ASU do not apply to inventory that is measured using last‑in first‑out (“LIFO”) or the retail inventory method, but rather does apply to all other inventory, which includes inventory that is measured using first‑in first‑out or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments in this ASU should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect the adoption of the amendments in this ASU to have a significant impact on our combined financial statements. In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) . The amendments in this ASU will increase transparency and comparability among entities by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this ASU will require lessees to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right‑of‑use asset representing its right to use the underlying asset for the lease term. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application of the amendments in this ASU is permitted for all entities. Reporting entities are required to recognize and measure leases under these amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact of the adoption of the amendments in this ASU on our combined financial statements and believe, based on our preliminary assessment, that we will record significant additional right‑to‑use assets and lease obligations. In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU clarify and include specific guidance to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. We do not expect the adoption of the amendments in this ASU to have a significant impact on our combined financial statements. In October 2016, the FASB issued ASU No. 2016‑16, Income Taxes (Topic 740): Intra‑Entity Transfers of Assets Other Than Inventory . The amendments in this ASU require entities to recognize the current and deferred income taxes for an intra‑entity transfer of an asset other than inventory when the transfer occurs, as opposed to deferring the recognition of the income tax consequences until the asset has been sold to an outside party. The amendments in this ASU are effective for annual reporting periods beginning after December 31, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative‑effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do not expect the adoption of the amendments in this ASU to have a significant impact on our combined financial statements. In November 2016, the FASB issued ASU No. 2016‑18, Statement of Cash Flows (Topic 230): Restricted Cash . The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning‑of‑period and end‑of‑period total amounts shown on the statement of cash flows. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, and interim period within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. We do not expect the adoption of the amendments in this ASU to have a significant impact on our combined financial statements. In January 2017, the FASB issued ASU No. 2017‑01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted. The amendments in this ASU should be applied prospectively on or after the effective date. No disclosures are required at transition. We do not expect the adoption of the amendments in this ASU to have a significant impact on our combined financial statements. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
DISCONTINUED OPERATIONS | ||
DISCONTINUED OPERATIONS | NOTE 3. DISCONTINUED OPERATIONS The Titanium Dioxide, Performance Additives and other businesses were included in Huntsman's financial results in different legal forms, including, but not limited to: (1) wholly-owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities that were comprised of other businesses and include the Titanium Dioxide and/or Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide, Performance Additives and other businesses are the primary beneficiaries. Because the historical condensed consolidated and combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical condensed consolidated and combined financial information includes the results of operations of other Huntsman businesses that are not a part of our operations after the Separation. The legal entity structure of Huntsman was reorganized during the fourth quarter of 2016 and the second quarter of 2017 such that the other businesses would not be included in Venator’s legal entity structure and as such, the discontinued operations presented below reflect financial results of the other businesses through the date of such reorganization. The following table summarizes the balance sheet data for discontinued operations: December 31, (Dollars in millions) 2016 ASSETS Current assets: Cash and cash equivalents $ 1 Accounts receivable (net of allowance for doubtful accounts of $1) 10 Accounts receivable from affiliates 61 Inventories 9 Prepaid expenses 1 Other current assets 2 Total current assets of discontinued operations 84 Property, plant and equipment, net 19 Intangible assets, net 2 Deferred income taxes 21 Noncurrent assets of discontinued operations 42 Total assets of discontinued operations $ 126 LIABILITIES Current liabilities: Accounts payable $ 7 Accounts payable to affiliates 2 Accrued liabilities 18 Total current liabilities of discontinued operations 27 Deferred income taxes 1 Other noncurrent liabilities 77 Noncurrent liabilities of discontinued operations 78 Total liabilities of discontinued operations $ 105 The following table summarizes the operations data for discontinued operations: Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Trade sales, services and fees, net $ — $ 28 $ 15 $ 83 Related party sales — 15 17 51 Total revenues — 43 32 134 Cost of goods sold — 36 26 110 Operating expenses: Selling, general and administrative (includes corporate allocations of nil, $2, $1 and $5, respectively) — 6 (7) 16 Restructuring, impairment and plant closing costs — — 1 — Other (income) expense, net — (1) 1 (2) Total expenses (income) — 5 (5) 14 Income from discontinued operations before tax — 2 11 10 Income tax expense — — (3) (2) Net income from discontinued operations $ — $ 2 $ 8 $ 8 | 26. DISCONTINUED OPERATIONS The Titanium Dioxide, Performance Additives and other businesses were included in Huntsman’s financial results in different legal forms, including, but not limited to: (1) wholly‑owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities that are comprised of other businesses and include the Titanium Dioxide and/or Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide, Performance Additives and other businesses are the primary beneficiaries. Because the historical combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical combined financial information includes the results of operations of other Huntsman businesses that are not a part of our operations after the Separation. The legal entity structure of Huntsman was reorganized during the fourth quarter of 2016 and the second quarter of 2017 such that the other businesses would not be included in Venator’s legal entity structure and as such, the discontinued operations presented below reflect financial results of the other businesses through the date of such reorganization. The following table summarizes the balance sheet data for discontinued operations: December 31, December 31, 2016 2015 (Dollars in millions) ASSETS Current assets: Cash and cash equivalents $ 1 $ 1 Accounts receivable (net of allowance for doubtful accounts of $1 each) 10 18 Accounts receivable from affiliates 61 82 Inventories 9 15 Prepaid expenses 1 1 Other current assets 2 2 Total current assets discontinued operations 84 119 Property, plant and equipment, net 19 50 Goodwill 2 2 Deferred income taxes 21 32 Other assets — 5 Noncurrent assets of discontinued operations 42 89 Total assets of discontinued operations $ 126 $ 208 LIABILITIES Current liabilities: Accounts payable $ 7 $ 12 Accounts payable to affiliates 2 2 Accrued liabilities 18 17 Total current liabilities of discontinued operations 27 31 Long-term debt — 4 Deferred income taxes 1 1 Other noncurrent liabilities 77 113 Noncurrent liabilities of discontinued operations 78 118 Total liabilities of discontinued operations $ 105 $ 149 The following table summarizes the operations data for discontinued operations: Year ended December 31, 2016 2015 2014 (Dollars in millions) Revenues: Trade sales, services and fees, net $ 110 $ 108 $ 105 Related party sales 60 60 75 Total revenues 170 168 180 Cost of goods sold 147 146 154 Operating expenses: Selling, general, and administrative (includes corporate allocations of $7, $6 and $8, respectively) 15 8 17 Restructuring, impairment and plant closing costs — 3 2 Other income, net (1) (2) (3) Total expenses 14 9 16 Income from discontinued operations before tax 9 13 10 Income tax expense (1) (3) (1) Net income from discontinued operations $ 8 $ 10 $ 9 |
INVENTORIES
INVENTORIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
INVENTORIES | ||
INVENTORIES | NOTE 4. INVENTORIES Inventories are stated at the lower of cost or market, with cost determined using the average cost method. Inventories at September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, (Dollars in millions) 2017 2016 Raw materials and supplies $ 164 $ 134 Work in process 42 46 Finished goods 225 246 Total $ 431 $ 426 | 4. INVENTORIES Inventories at December 31, 2016 and 2015 consisted of the following (dollars in millions): December 31, 2016 2015 Raw materials and supplies $ 134 $ 174 Work in process 46 69 Finished goods 246 313 Total $ 426 $ 556 |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
VARIABLE INTEREST ENTITIES | ||
VARIABLE INTEREST ENTITIES | NOTE 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: · Pacific Iron Products Sdn Bhd is our 50%-owned joint venture with Coogee Chemicals that manufactures products for Venator. It was determined that the activities that most significantly impact its economic performance are raw material supply, manufacturing and sales. In this joint venture we supply all the raw materials through a fixed cost supply contract, operate the manufacturing facility and market the products of the joint venture to customers. Through a fixed price raw materials supply contract with the joint venture we are exposed to the risk related to the fluctuation of raw material pricing. As a result, we concluded that we are the primary beneficiary. · Viance, LLC ("Viance") is our 50%-owned joint venture with Dow Chemical Company. Viance markets timber treatment products for Venator. We have determined that the activity that most significantly impacts Viance’s economic performance is manufacturing. The joint venture sources all of its products through a contract manufacturing arrangement at our Harrisburg, North Carolina facility and we bear a disproportionate amount of working capital risk of loss due to the supply arrangement whereby we control manufacturing on Viance’s behalf. As a result, we concluded that we are the primary beneficiary. Creditors of these entities have no recourse to Venator’s general credit. As the primary beneficiary of these variable interest entities at September 30, 2017, the joint ventures’ assets, liabilities and results of operations are included in Venator’s condensed consolidated and combined financial statements. 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, 2017 and 2016 are as follows: Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues $ 31 $ 30 $ 97 $ 89 Income from continuing operations before income taxes 4 5 16 15 Net cash provided by operating activities 6 7 20 19 | 7. 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: · Pacific Iron Products Sdn Bhd is our 50%‑owned joint venture with Coogee Chemicals that manufactures products for Venator. It was determined that the activities that most significantly impact its economic performance are raw material supply, manufacturing and sales. In this joint venture we supply all the raw materials through a fixed cost supply contract, operate the manufacturing facility and market the products of the joint venture to customers. Through a fixed price raw materials supply contract with the joint venture we are exposed to the risk related to the fluctuation of raw material pricing. As a result, we concluded that we are the primary beneficiary. · Viance, LLC (“Viance”) is our 50%‑owned joint venture with Dow Chemical. Viance markets timber treatment products for Venator. Our joint venture interest in Viance was acquired as part of the Rockwood acquisition. It was determined that the activity that most significantly impacts its economic performance is manufacturing. The joint venture sources all of its products through a contract manufacturing arrangement at our Harrisburg, North Carolina facility and we bear a disproportionate amount of working capital risk of loss due to the supply arrangement whereby we control manufacturing on Viance’s behalf. As a result, we concluded that we are the primary beneficiary and began consolidating Viance upon the Rockwood acquisition on October 1, 2014. Creditors of these entities have no recourse to Venator’s general credit. As the primary beneficiary of these variable interest entities at December 31, 2016, the joint ventures’ assets, liabilities and results of operations are included in Venator’s combined financial statements. The revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities for the years ended December 31, 2016, 2015 and 2014 are as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Revenues $ 116 $ 100 $ 24 Income from continuing operations before income taxes 21 13 3 Net cash provided by operating activities 26 17 — |
RESTRUCTURING, IMPAIRMENT AND P
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS | ||
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS | NOTE 6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS Venator has initiated various restructuring programs in an effort to reduce operating costs and maximize operating efficiency. As of September 30, 2017 and December 31, 2016, accrued restructuring and plant closing costs by type of cost and initiative consisted of the following: Other Workforce restructuring (Dollars in millions) reductions(1) costs Total(2) Accrued liabilities as of December 31, 2016 $ 21 $ — $ 21 2017 charges 34 8 42 2017 payments (15) (8) (23) Foreign currency effect on liability balance 1 — 1 Accrued liabilities as of September 30, 2017 $ 41 $ — $ 41 (1) The total workforce reduction reserves of $41 million relate to the termination of 338 positions, of which zero positions had been terminated as of September 30, 2017. (2) Accrued liabilities remaining, for continuing operations, at September 30, 2017 and December 31, 2016 by year of initiatives were as follows: September 30, December 31, (Dollars in millions) 2017 2016 2015 initiatives and prior $ 12 $ 21 2016 initiatives — — 2017 initiatives 29 — Total $ 41 $ 21 Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative: Titanium Performance (Dollars in millions) Dioxide Additives Total Accrued liabilities as of December 31, 2016 $ 12 $ 9 $ 21 2017 charges 33 9 42 2017 payments (14) (9) (23) Foreign currency effect on liability balance 1 — 1 Accrued liabilities as of September 30, 2017 $ 32 $ 9 $ 41 Current portion of restructuring reserves $ 28 $ 9 $ 37 Long-term portion of restructuring reserve 4 — 4 Details with respect to cash and noncash restructuring charges and impairment of assets for the three and nine months ended September 30, 2017 and 2016 by initiative are provided below: Three months ended Nine months ended (Dollars in millions) September 30, 2017 September 30, 2017 Cash charges $ 16 $ 42 Impairment of assets — 3 Other noncash charges — 4 Total 2017 Restructuring, Impairment and Plant Closing Costs $ 16 $ 49 Three months ended Nine months ended (Dollars in millions) September 30, 2016 September 30, 2016 Cash charges $ 6 $ 22 Accelerated depreciation 1 8 Other noncash charges — 1 Total 2016 Restructuring, Impairment and Plant Closing Costs $ 7 $ 31 Restructuring Activities In December 2014, we implemented a comprehensive restructuring program to improve the global competitiveness of our Titanium Dioxide and Performance Additives segments. As part of the program, we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, we recorded restructuring expense of nil and $4 million for the three and nine months ended September 30, 2016, respectively. In February 2015, we announced a plan to close the black end manufacturing operations and ancillary activities at our Calais, France site, which will reduce our TiO 2 capacity by approximately 100 kilotons, or 11% of our European TiO 2 capacity. In connection with this closure, we recorded restructuring expense of nil and $1 million in the three and nine months ended September 30, 2016, respectively. All expected charges have been incurred as of the end of 2016. In July 2016, we announced plans to close our Umbogintwini, South Africa TiO 2 manufacturing facility. As part of the program, we recorded restructuring expense of approximately $1 million and $3 million for the three and nine months ended September 30, 2017, respectively. We expect to incur additional charges of approximately $3 million through the end of the third quarter of 2018. In March 2017, we announced a plan to close the white end finishing and packaging operation of our TiO 2 manufacturing facility at our Calais, France site. The announced plan follows the 2015 closure of the black end manufacturing operations and would result in the closure of the entire facility. In connection with this closure, we recorded restructuring expense of $12 million and $34 million in the three and nine months ended September 30, 2017, respectively. We recorded $1 million and $8 million of accelerated depreciation on the remaining long-lived assets associated with this manufacturing facility during the three and nine months ended September 30, 2016, respectively. We expect to incur additional charges of approximately $45 million through the end of 2021. In September 2017, we announced a plan to close our St. Louis and Easton manufacturing facilities. As part of the program, we recorded restructuring expense of approximately $3 million for the three months ended September 30, 2017. We expect to incur $17 million of accelerated depreciation through the end of 2018. | 11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS Venator has initiated various restructuring programs in an effort to reduce operating costs and maximize operating efficiency. As of December 31, 2016, 2015 and 2014, accrued restructuring and plant closing costs by type of cost and initiative consisted of the following (dollars in millions): Other Workforce restructuring reductions(1) costs Total(2) Accrued liabilities as of January 1, 2014 $ 2 $ — $ 2 2014 charges 60 — 60 2014 payments (4) — (4) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities 1 — 1 Accrued liabilities as of December 31, 2014 59 — 59 2015 charges 90 21 111 2015 payments (54) (21) (75) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities 1 — 1 Foreign currency effect on liability balance (6) — (6) Accrued liabilities as of December 31, 2015 90 — 90 2016 charges 9 16 25 Distribution of prefunded restructuring costs (36) — (36) 2016 payments (42) (16) (58) Foreign currency effect on liability balance — — — Accrued liabilities as of December 31, 2016 $ 21 $ — $ 21 (1) The total workforce reduction reserves of $21 million relate to the termination of 323 positions, of which 323 positions had not been terminated as of December 31, 2016. (2) Accrued liabilities remaining at December 31, 2016 and 2015 by year of initiatives were as follows (dollars in millions): December 31, 2016 2015 2014 initiatives and prior $ 18 $ 77 2015 initiatives 3 13 Total $ 21 $ 90 Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative (dollars in millions): Titanium Performance Dioxide Additives Total Accrued liabilities as of January 1, 2014 $ 2 $ — $ 2 2014 charges 51 9 60 2014 payments (4) — (4) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities — 1 1 Accrued liabilities as of December 31, 2014 49 10 59 2015 charges 75 36 111 2015 payments (62) (13) (75) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities — 1 1 Foreign currency effect on liability balance (5) (1) (6) Accrued liabilities as of December 31, 2015 57 33 90 2016 charges 9 16 25 Distribution of prefunded restructuring costs (23) (13) (36) 2016 payments (29) (29) (58) Foreign currency effect on liability balance (2) 2 — Accrued liabilities as of December 31, 2016 $ 12 $ 9 $ 21 Current portion of restructuring reserves $ 5 $ 9 $ 14 Long-term portion of restructuring reserve 7 — 7 Details with respect to cash and noncash restructuring charges for the years ended December 31, 2016, 2015 and 2014 by initiative are provided below (dollars in millions): Cash charges: 2016 charges $ 25 Accelerated depreciation 9 Other non-cash charges 1 Total 2016 Restructuring, Impairment and Plant Closing Costs $ 35 Cash charges: 2015 charges $ 113 Pension-related charges 3 Accelerated depreciation 68 Other non-cash charges 36 Total 2015 Restructuring, Impairment and Plant Closing Costs $ 220 Cash charges: 2014 charges $ 60 Non-cash charges — Total 2014 Restructuring, Impairment and Plant Closing Costs $ 60 2016 RESTRUCTURING ACTIVITIES In December 2014, we announced a comprehensive restructuring program to improve the global competitiveness of our Titanium Dioxide and Performance Additives divisions. As part of the program, we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, we recorded restructuring expense of $3 million in 2016. In February 2015, we announced a plan to close the black end manufacturing operations and ancillary activities at our Calais, France site, which will reduce our TiO2 capacity by approximately 100,000 metric tons, or 11% of our global TiO2 capacity. In connection with this announcement, we recorded restructuring expense of $1 million in the first quarter of 2016. All expected charges have been incurred as of the end of 2016. In March 2015, we announced plans to restructure our color pigments business, another step in our previously announced plan to significantly restructure our global Titanium Dioxide and Performance Additives divisions, and recorded restructuring expense of approximately $15 million in 2016. In July 2016, we announced plans to close our Umbogintwini, South Africa TiO2 manufacturing facility. As part of the program, we recorded restructuring expense of approximately $6 million in 2016. Additionally, we recorded an impairment charge of $1 million during the second quarter of 2016. The majority of the long‑lived assets associated with this manufacturing facility were impaired in the fourth quarter of 2015. In connection with planned restructuring activities, our Titanium Dioxide and Performance Additives divisions recorded accelerated depreciation as restructuring expense of $8 million during 2016. 2015 RESTRUCTURING ACTIVITIES In December 2014, we announced a comprehensive restructuring program to improve the global competitiveness of our Titanium Dioxide and Performance Additives divisions. As part of the program, we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, during 2015, we recorded charges of $61 million for workforce reductions, $3 million for pension related charges and $15 million in other restructuring costs associated with this initiative. In February 2015, we announced a plan to close the black end manufacturing operations and ancillary activities at our Calais, France site, which will reduce our TiO2 capacity by approximately 100,000 metric tons, or 11%, of our global TiO2 capacity. In connection with this announcement, we began to accelerate depreciation on the affected assets and recorded accelerated depreciation in 2015 of $68 million as restructuring, impairment and plant closing costs. In addition, during 2015, we recorded charges of $30 million primarily for workforce reductions and non‑cash charges of $17 million. In March 2015, we announced plans to restructure our color pigments business, another step in our previously announced plan to significantly restructure our global Titanium Dioxide and Performance Additives divisions, and recorded restructuring expense of approximately $4 million during 2015 primarily related to workforce reductions. During the fourth quarter of 2015, in connection with our plans to shut down the TiO2 manufacturing facility in Umbogintwini, South Africa by the end of the fourth quarter of 2016, we determined that the South African asset group was impaired and recorded an impairment charge of $19 million. 2014 RESTRUCTURING ACTIVITIES In December 2014, we announced a comprehensive restructuring program to improve the global competitiveness of our Titanium Dioxide and Performance Additives divisions. As part of the restructuring program we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, we recorded restructuring expense of $57 million in the fourth quarter of 2014 related primarily to workforce reductions. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
DEBT | NOTE 7. DEBT Outstanding debt, net of debt issuance costs of $12 million, consisted of the following: September 30, December 31, (Dollars in millions) 2017 2016 Term loan facility $ 368 $ — Senior notes 370 — Amounts outstanding under A/R programs — 106 Variable interest entities 2 2 Other 11 21 Total debt—excluding debt to affiliates $ 751 $ 129 Less: short-term debt and current portion of long-term debt 4 10 Total long-term debt—excluding debt to affiliates $ 747 $ 119 Notes payable to affiliates — 882 Total debt $ 747 $ 1,001 The estimated fair values of the Term Loan Facility and the ABL Facility approximate their carrying value. The fair value of the Senior Notes at September 30, 2017 was approximately $390 million. The estimated fair value of the Senior Notes is based on quoted market prices for the identical liability when traded as an asset in an active market (Level 1). Senior Notes On July 14, 2017, the Issuers entered into an indenture in connection with the issuance of the Senior Notes. The Senior Notes are general unsecured senior obligations of the Issuers and are guaranteed on a general unsecured senior basis by Venator and certain of Venator’s subsidiaries. The indenture related to the Senior Notes imposes certain limitations on the ability of Venator and certain of its subsidiaries to, among other things, incur additional indebtedness secured by any principal properties, incur indebtedness of non-guarantor subsidiaries, enter into sale and leaseback transactions with respect to any principal properties and consolidate or merge with or into any other person or lease, sell or transfer all or substantially all of its properties and assets. The Senior Notes bear interest of 5.75% per year payable semi-annually and will mature on July 15, 2025. The Issuers may redeem the Senior Notes in whole or in part at any time prior to July 15, 2020 at a price equal to 100% of the principal amount t hereof plus accrued and unpaid interest, if any, and an early redemption premium, calculated on an agreed percentage of the outstanding principal amount, providing compensation on a portion of foregone future interest payables. The Senior Notes will be redeemable in whole or in part at any time on or after July 15, 2020 at the redemption prices set forth in the indenture, plus accrued and unpaid interest, if any, up to, but not including, the redemption date. In addition, at any time prior to July 15, 2020, the Issuers may redeem up to 40% of the aggregate principal amount of the Senior Notes with an amount not greater than the net cash proceeds of certain equity offerings or contributions to Venator’s equity at 105.75% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date. Upon the occurrence of certain change of control events (other than the Separation), holders of the Venator Notes will have the right to require that the Issuers purchase all or a portion of such holder’s Senior Notes in cash at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase. Senior Credit Facilities On August 8, 2017, we entered into the Senior Credit Facilities that provide for first lien senior secured financing of up to $675 million, consisting of: · the Term Loan Facility in an aggregate principal amount of $375 million, with a maturity of seven years; and · the ABL Facility in an aggregate principal amount of up to $300 million, with a maturity of five years. The Term Loan Facility will amortize in aggregate annual amounts equal to 1% of the original principal amount of the Term Loan Facility, payable quarterly commencing in the fourth quarter of 2017. Availability to borrow under the $300 million of commitments under the ABL Facility is subject to a borrowing base calculation comprised of accounts receivable and inventory in United States, Canada, the United Kingdom, Germany and accounts receivable in France and Spain, that fluctuate from time to time and may be further impacted by the lenders’ discretionary ability to impose reserves and availability blocks that might otherwise incrementally increase borrowing availability. As a result, the aggregate amount available for extensions of credit under the ABL Facility at any time is the lesser of $300 million and the borrowing base calculated according to the formula described above minus the aggregate amount of extensions of credit outstanding under the ABL Facility at such time. Borrowings under the Term Loan Facility bear interest at a rate equal to, at Venator’s option, either (a) a London Interbank Offering Rate (“LIBOR”) based rate determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs subject to an interest rate floor to be agreed or (b) a base rate determined by reference to the highest of (i) the rate of interest per annum determined from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month adjusted LIBOR plus 1.00% per annum, in each case plus an applicable margin to be agreed upon. Borrowings under the ABL Facility bear interest at a variable rate equal to an applicable margin based on the applicable quarterly average excess availability under the ABL Facility plus either a LIBOR or a base rate. The applicable margin percentage is calculated and established once every three calendar months and varies from 150 to 200 basis points for LIBOR loans depending on the quarterly average excess availability under the ABL Facility for the immediately preceding three month period. Guarantees All obligations under the Senior Credit Facilities are guaranteed by Venator and substantially all of its subsidiaries (the “Guarantors”), and are secured by substantially all of the assets of Venator and the Guarantors, in each case subject to certain exceptions. Lien priority as between the Term Loan Facility and the ABL Facility with respect to the collateral will be governed by an intercreditor agreement. Substantially all of our U.S. operations and certain of their foreign subsidiary holdings fully and unconditionally guaranteed Huntsman International’s outstanding notes. Upon the Separation, such operations and entities no longer guarantee Huntsman International’s outstanding notes. As of December 31, 2016, Huntsman International and its guarantors had third-party debt outstanding of $3,793 million. As of December 31, 2016, our U.S. operations and certain of our foreign subsidiaries had total assets, excluding intercompany amounts, of $502 million. Cash Pooling Program Prior to the Separation, Venator addressed cash flow needs by participating in a cash pooling program with Huntsman. Cash pooling transactions were recorded as either amounts receivable from affiliates or amounts payable to affiliates and are presented as "Net advances to affiliates" and "Net borrowings on affiliate accounts payable" in the investing and financing sections, respectively, in the condensed consolidated and combined statements of cash flows. Interest income was earned if an affiliate was a net lender to the cash pool and paid if an affiliate was a net borrower from the cash pool based on a variable interest rate determined historically by Huntsman. Venator exited the cash pooling program prior to the Separation and all receivables and payables generated through the cash pooling program were settled in connection with the Separation. Notes Receivable and Payable of Venator to Huntsman As of September 30, 2017 and December 31, 2016, Venator had notes receivable outstanding from affiliates of nil and $57 million, respectively, and notes payable outstanding to affiliates totaling nil and $882 million, respectively. The borrowers and lenders were subsidiaries of Huntsman International and the notes were unsecured. Substantially all Huntsman receivables or payables were eliminated in connection with the Separation, other than a payable to Huntsman for a liability pursuant to the Tax Matters Agreement dated August 7, 2017, by and among Venator Materials PLC and Huntsman Corporation (the “Tax Matters Agreement”) entered into at the time of the Separation which has been presented as “Noncurrent payable to affiliates” on our condensed consolidated and combined balance sheet. See “Note 9. Income Taxes” for further discussion. A/R Programs Certain of our entities participated in the accounts receivable securitization programs ("A/R Programs") sponsored by Huntsman International. Under the A/R Programs, such entities sold certain of their trade receivables to Huntsman International. Huntsman International granted an undivided interest in these receivables to a special purpose entity, which served as security for the issuance of debt of Huntsman International. On April 21, 2017, Huntsman International amended its accounts receivable securitization facilities, which among other things removed existing receivables sold into the program by Venator and at which time we discontinued our participation in the A/R Programs. As of December 31, 2016, Huntsman International had $106 million of net receivables in their A/R Programs and reflected on their balance sheet associated with Venator. The entities’ allocated losses on the A/R Programs for the three months ended September 30, 2016 was $1 million, and for the nine months ended September 30, 2017 and 2016 were $1 million and $4 million, respectively. The allocation of losses on sale of accounts receivable is based upon the pro-rata portion of total receivables sold into the securitization program as well as other program and interest expenses associated with the A/R Programs. Compliance with Covenants We believe that we are in compliance with the covenants contained in the agreements governing our material financing arrangements, including our Senior Credit Facilities and our Senior Notes. Our material financing agreements are subject to affirmative and negative covenants which are customary for secured financings of this type and include financial covenants for interest coverage and total leverage ratios. A failure to comply with a covenant could result in a default under a material financing arrangement unless we obtained an appropriate waiver or forbearance (as to which we can provide no assurance). A default under these material financing arrangements generally allows debt holders the option to declare the underlying debt obligations immediately due and payable. Furthermore, certain of our material financing arrangements contain cross-default and cross-acceleration provisions under which a failure to comply with the covenants in one material financing arrangement may result in an event of default under another material financing arrangement. If in the future we fail to comply with the financial covenants of our material financing arrangements, we may not have access to the liquidity provided by these financing arrangements. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Venator is exposed to market risks associated with foreign exchange risk. Venator’s cash flows and earnings are subject to fluctuations due to exchange rate variation. Venator’s revenues and expenses are denominated in various foreign currencies. Venator enters into foreign currency derivative instruments to minimize the short-term impact of movements in foreign currency rates. Where practicable, Venator generally nets multicurrency cash balances among its subsidiaries to help reduce exposure to foreign currency exchange rates. Certain other exposures may be managed from time to time through financial market transactions, principally through the purchase of spot or forward foreign exchange contracts (generally with maturities of three months or less). Venator does not hedge its foreign currency exposures in a manner that would eliminate the effect of changes in exchange rates on its cash flows and earnings. At September 30, 2017, Venator had approximately $84 million in notional amount (in U.S. dollar equivalents) outstanding, with maturities of approximately one month. Prior to the Separation, Huntsman International, or its subsidiaries, entered into foreign currency derivatives on Venator’s behalf. As of December 31, 2016, Huntsman International or its subsidiaries, on behalf of Venator, had approximately $88 million in notional amount (in U.S. dollar equivalents) outstanding, respectively, in forward foreign currency contracts with a term of approximately one month. | 16. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Venator is exposed to market risks associated with foreign exchange risks. From time to time, Venator, through Huntsman International or its subsidiaries, will enter into hedging or derivative transactions to mitigate these exposures. Venator’s cash flows and earnings are subject to fluctuations due to exchange rate variation. Venator’s revenues and expenses are denominated in various foreign currencies. From time to time, Huntsman International or its subsidiaries, on behalf of Venator, may enter into foreign currency derivative instruments to minimize the short‑term impact of movements in foreign currency rates. Where practicable, Venator generally nets multicurrency cash balances among its subsidiaries to help reduce exposure to foreign currency exchange rates. Certain other exposures may be managed from time to time through financial market transactions, principally through the purchase of spot or forward foreign exchange contracts (generally with maturities of three months or less). Venator does not hedge its foreign currency exposures in a manner that would eliminate the effect of changes in exchange rates on its cash flows and earnings. As of December 31, 2016 and 2015, Huntsman International or its subsidiaries, on behalf of Venator, had approximately $88 million and $50 million in notional amount (in U.S. dollar equivalents) outstanding, respectively, in forward foreign currency contracts with a term of approximately one month. |
INCOME TAXES
INCOME TAXES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
INCOME TAXES | ||
INCOME TAXES | NOTE 9. INCOME TAXES Venator uses the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial and tax reporting purposes. We evaluate deferred tax assets to determine whether it is more likely than not that they will be realized. Valuation allowances are reviewed on a tax jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets for each jurisdiction. These conclusions require significant judgment. In evaluating the objective evidence that historical results provide, we consider the cyclicality of Venator and cumulative income or losses during the applicable period. Cumulative losses incurred over the period limits our ability to consider other subjective evidence such as our projections for the future. Changes in expected future income in applicable tax jurisdictions could affect the realization of deferred tax assets in those jurisdictions. We recorded income tax expense of $14 million and income tax benefit of $7 million for the three months ended September 30, 2017 and 2016, respectively, and income tax expense of $26 million and income tax benefit of $14 million for the nine months ended September 30, 2017 and 2016, respectively. Our tax expense is significantly affected by the mix of income and losses in tax jurisdictions in which we operate, as impacted by the presence of valuation allowances in certain tax jurisdictions. For U.S. federal income tax purposes Huntsman will recognize a gain as a result of the internal restructuring and IPO to the extent the fair market value of the assets associated with our U.S. businesses exceeded the basis of such assets for U.S. federal income tax purposes at the time of the Separation. As a result of such gain recognized, the basis of the assets associated with our U.S. businesses has increased. This basis step up gives rise to a deferred tax asset of $77 million that we have recognized during the quarter. Pursuant to the Tax Matters Agreement entered into at the time of the Separation, we are required to make a future payment to Huntsman for any actual U.S. federal income savings we recognize as a result of any such basis increase for tax years through December 31, 2028. It is currently estimated (based on a value of our U.S. businesses derived from the IPO price of our ordinary shares and current tax rates) that the aggregate future payments required by this provision are expected to be approximately $73 million. We have recognized a noncurrent liability for this amount as of September 30, 2017. Moreover, any subsequent adjustment asserted by U.S. taxing authorities could increase the amount of gain recognized, the corresponding basis increase, and could result in a higher liability for us under the Tax Matters Agreement. | 18. INCOME TAXES Our income tax basis of presentation is summarized in note “1. Description of Business, Recent Developments, Basis of Presentation and Summary of Significant Accounting Policies.” A summary of the provisions for current and deferred income taxes is as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Income tax (benefit) expense: U.S. Current $ (4) $ (7) $ 4 Deferred (5) 5 — Non-U.S. Current (5) 2 2 Deferred (9) (34) (24) Total $ (23) $ (34) $ (18) The reconciliation of the differences between the U.S. federal income taxes at the U.S. statutory rate to Venator’s provision for income taxes is as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Loss from continuing operations before income taxes $ (109) $ (396) $ (190) Expected tax benefit at U.S. statutory rate of 35% $ (39) $ (138) $ (67) Change resulting from: State tax benefit net of federal benefit — 1 — Non-U.S. tax rate differentials (3) 21 11 Effects of non-U.S. operations (2) 7 2 Non-taxable portion of gain on sale of businesses (3) — — Unrealized currency exchange gains and losses 1 (21) — Tax authority audits and dispute resolutions (1) 4 2 Tax benefit of losses with valuation allowances as a result of other comprehensive income (1) (1) (6) Change in valuation allowance 27 96 39 Other, net (2) (3) 1 Total income tax benefit $ (23) $ (34) $ (18) Included in the non‑U.S. deferred tax expense are income tax benefits of $1 million in 2016, $1 million in 2015 and $6 million in 2014 for losses from continuing operations for certain jurisdictions with valuation allowances to the extent that income was recorded in other comprehensive income in that same jurisdiction. Foreign currency gains and changes in pension related items resulted in other comprehensive income where Venator has a full valuation allowance against the net deferred tax asset. An offsetting income tax expense was recognized in accumulated other comprehensive loss. Venator operates in over 25 non‑U.S. tax jurisdictions with no specific country earning a predominant amount of its off‑shore earnings. The vast majority of these countries have income tax rates that are lower than the U.S. statutory rate. In 2016, the average statutory rate for countries with pre‑tax income was lower than the average statutory rate for countries with pre‑tax losses, resulting in a net benefit as compared to the U.S. statutory rate. For the year ended December 31, 2016, the tax rate differential resulted in lower tax expense of $3 million, reflected in the reconciliation above. In 2015 and 2014, the average statutory rate for countries with pre‑tax losses was lower than the average statutory rate for countries with pre‑tax income, resulting in a net expense as compared to the U.S. statutory rate. In certain non‑U.S. tax jurisdictions, Venator’s U.S. GAAP functional currency is different than the local tax currency. As a result, foreign exchange gains and losses will impact Venator’s effective tax rate. For 2016, this resulted in a tax expense of $1 million. For 2015, this resulted in a tax benefit of $11 million ($21 million of benefit included in “unrealized currency exchange gains and losses” in the reconciliation above, net of $10 million of expense related to establishing contingent liabilities for potential non‑deductibility of these foreign currency losses included in “tax authority audits and dispute resolutions” in the reconciliation above). During 2015, a number of Venator’s intercompany liabilities that were denominated in U.S. dollars were owed by entities whose tax currency was the euro. As a result of the depreciation in the euro opposite the U.S. dollar, these entities recorded a tax only foreign exchange loss. Most of the receivables associated with these same U.S. dollar denominated intercompany debts were held by entities with a tax currency of the U.S. dollar which, therefore, resulted in no taxable gain. The components of loss before income taxes were as follows (dollars in millions): Year ended December 31, 2016 2015 2014 U.S. $ (7) $ (18) $ 8 Non-U.S. (102) (378) (198) Total $ (109) $ (396) $ (190) Components of deferred income tax assets and liabilities at December 31, 2016 and 2015 were as follows (dollars in millions): December 31, 2016 2015 Deferred income tax assets: Net operating carryforwards $ 365 $ 253 Pension and other employee compensation 58 53 Property, plant and equipment 28 59 Intangible assets 19 28 Other, net 36 55 Total $ 506 $ 448 Total deferred income tax liabilities: Property, plant and equipment $ (126) $ (100) Pension and other employee compensation (1) (1) Other, net (4) (1) Total $ (131) $ (102) Net deferred tax assets before valuation allowance $ 375 $ 346 Valuation allowance (245) (241) Net deferred tax assets $ 130 $ 105 Non-current deferred tax assets 142 130 Non-current deferred tax liabilities (12) (25) Net deferred tax assets $ 130 $ 105 The net operating loss carryforward amounts (“NOLs”), including the amounts discussed below, and other attributes reflected in these combined financial statements are based upon the legal entity structure of Venator using the stand‑alone methodology with on‑top income adjustments and do not reflect the actual NOLs and other tax attributes that exist or that would be allocated under the various required tax laws to the specific legal entities comprising Venator. Under the stand‑alone methodology, NOLs that would have been created, utilized or expire unused do not reflect the actual creation, utilization and expiration of NOLs in the legal entities comprising Venator. For example, Huntsman had no U.S. NOLs to allocate to Venator. Venator has NOLs of $1,148 million in various non‑U.S. jurisdictions, all of which have no expiration date. Venator had no NOLs expire unused in 2016. Venator has NOLs of $120 million in U.S. federal and $120 million in U.S. state jurisdictions. Venator has total tax‑effected NOLs of $365 million. After taking into account deferred tax liabilities, there are $215 million of valuation allowances that related to these NOLs. Venator’s NOLs are principally located in France, Germany, Italy, Spain, the U.K. and the U.S. Venator has total net deferred tax assets, before valuation allowance, of $375 million. Venator has a full valuation allowance on net deferred tax assets of $245 million in the following countries: France, Italy, Spain, South Africa, and the U.K. Venator also has net deferred tax assets of $140 million, not subject to valuation allowances, in Canada, Finland, Malaysia and Germany, and net deferred tax liabilities of $10 million in the U.S. Valuation allowances are reviewed each period on a tax jurisdiction by jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets. Uncertainties regarding expected future income in certain jurisdictions could affect the realization of deferred tax assets in those jurisdictions and result in additional valuation allowances in future periods. Valuation allowances are determined on a tax jurisdiction by jurisdiction basis. While Venator has generated consolidated losses before income taxes over the past three years, certain jurisdictions, significantly Germany, but also including Canada, Finland and Malaysia, are profitable and recognize net deferred tax assets. During 2016, Venator released valuation allowances of $6 million in France, as a result of deferred tax liabilities offsetting deferred tax assets, which previously had a valuation allowance. During 2015, Venator established valuation allowances of $12 million. In Italy, Venator established $10 million of valuation allowances on certain net deferred tax assets as a result of cumulative losses, and, in South Africa, Venator established a full valuation allowance on $2 million of deferred tax assets as a result of current year losses shifting it from a net deferred tax liability position. The following is a summary of changes in the valuation allowance (dollars in millions): 2016 2015 2014 Valuation allowance as of January 1 $ 241 $ 156 $ 158 Valuation allowance as of December 31 245 241 156 Net (increase) decrease (4) (85) 2 Foreign currency movements (20) (16) (17) (Decrease) increase to deferred assets with an offsetting increase or decrease to valuation allowances (3) 5 (24) Change in valuation allowance per rate reconciliation $ (27) $ (96) $ (39) Components of change in valuation allowance affecting operating tax expense: Pre-tax income and pre-tax (losses) in jurisdictions with valuation allowances resulting in no tax expense or benefit $ (33) $ (84) $ (39) Release of valuation allowance in various jurisdictions 6 — — Establishments of valuation allowances in various jurisdictions — (12) — Change in valuation allowances per rate reconciliation $ (27) $ (96) $ (39) The following is a reconciliation of the unrecognized tax benefits (dollars in millions): 2016 2015 2014 Unrecognized tax benefits as of January 1 $ 22 $ 24 $ 27 Gross increases and decreases—tax positions taken during a prior period — 3 1 Gross increases and decreases—tax positions taken during the current period (1) 7 — Decreases related to settlements of amounts due to tax authorities — (1) (1) Reductions resulting from the lapse of statutes of limitation — (8) — Foreign currency movements (1) (3) (3) Unrecognized tax benefits as of December 31 $ 20 $ 22 $ 24 As of December 31, 2016, 2015 and 2014, the amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $11 million, $12 million and $12 million, respectively. In accordance with Venator’s accounting policy, it recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense (dollars in millions): Year ended December 31, 2016 2015 2014 Interest included in income tax expense $ — $ (2) $ 1 Penalties expense included in tax expense — — — December 31, 2016 2015 Accrued liability for interest $ — $ — Venator conducts business globally and, as a result, files income tax returns in the U.S. federal, various U.S. state and various non‑U.S. jurisdictions. The following table summarizes the tax years that remain subject to examination by major tax jurisdictions: Tax Jurisdiction Open Tax Years China 2012 and later France 2002 and later Germany 2011 and later Italy 2012 and later Malaysia 2012 and later Spain 2002 and later United Kingdom 2015 and later United States federal 2009 and later Certain of Venator’s U.S. and non‑U.S. income tax returns are currently under various stages of audit by applicable tax authorities and the amounts ultimately agreed upon in resolution of the issues raised may differ materially from the amounts accrued. Venator estimates that it is reasonably possible that certain of its non‑U.S. unrecognized tax benefits could change within 12 months of the reporting date with a resulting decrease in the unrecognized tax benefits within a reasonably possible range of nil to $3 million. For the 12‑month period from the reporting date, Venator would expect that a substantial portion of the decrease in its unrecognized tax benefits would result in a corresponding benefit to its income tax expense. As of December 31, 2016 and 2015, there were no unremitted earnings of subsidiaries to consider for indefinite reinvestment. Going forward, to the extent future U.S. cash flow needs require distributions from foreign subsidiaries, based on existing law, we expect to have tax attributes (at least up to the amount of anticipated external Venator debt) that could allow repatriation of earnings to the U.S. without incremental U.S. income tax. |
EARNINGS (LOSSES) PER SHARE
EARNINGS (LOSSES) PER SHARE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
EARNINGS (LOSSES) PER SHARE | ||
EARNINGS (LOSSES) PER SHARE | NOTE 10. EARNINGS (LOSSES) PER SHARE Basic earnings (losses) per share excludes dilution and is computed by dividing net income (loss) attributable to Venator ordinary shareholders by the weighted average number of shares outstanding during the period. Diluted earnings (losses) per share reflects all potential dilutive ordinary shares outstanding during the period and is computed by dividing net income (loss) available to Venator ordinary shareholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive securities. For the periods prior to our IPO, the average number of ordinary shares outstanding used to calculate basic and diluted earnings (losses) per share was based on the ordinary shares that were outstanding at the time of our IPO. Basic and diluted earnings (losses) per share is determined using the following information: Three months ended Nine months ended September 30, September 30, (In millions) 2017 2016 2017 2016 Numerator: Basic and diluted income (loss) from continuing operations: Income (loss) from continuing operations attributable to Venator $ 51 $ (7) $ 58 $ (89) Basic and diluted net income (loss): Net income (loss) attributable to Venator $ 51 $ (5) $ 66 $ (81) Denominator: Weighted average shares outstanding 106.3 106.3 106.3 106.3 Dilutive share-based awards 0.3 — 0.3 — Total weighted average shares outstanding, including dilutive shares 106.6 106.3 106.6 106.3 | 27. LOSSES PER SHARE Basic losses per share excludes dilution and is computed by dividing net loss attributable to Venator ordinary shareholders by the weighted average number of shares outstanding during the period. Diluted losses per share reflects all potential dilutive ordinary shares outstanding during the period and is computed by dividing net loss available to Venator ordinary shareholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive securities. For the periods prior to our IPO, the average number of ordinary shares outstanding used to calculate basic and diluted losses per share was based on the ordinary shares that were outstanding at the time of our IPO. Basic and diluted losses per share is determined using the following information: (In millions) 2016 2015 2014 Numerator: Basic and diluted loss from continuing operations: Loss from continuing operations attributable to Venator $ (95) $ (369) $ (173) Basic and diluted net loss: Net loss attributable to Venator $ (87) $ (359) $ (164) Denominator: Weighted average shares outstanding 106.3 106.3 106.3 Dilutive share-based awards — — — Total weighted average shares outstanding, including dilutive shares 106.3 106.3 106.3 ****** |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | NOTE 11. COMMITMENTS AND CONTINGENCIES Legal Proceedings Antitrust Matters We were named as a defendant in consolidated class action civil antitrust suits filed on February 9 and 12, 2010 in the U.S. District Court for the District of Maryland alleging that we, our co-defendants and other alleged co-conspirators conspired to fix prices of TiO 2 sold in the U.S. The other defendants named in this matter were E. I. du Pont de Nemours and Company ("DuPont"), Kronos and National Titanium Dioxide Company, Ltd. ("Cristal") (formerly Millennium). On August 28, 2012, the court certified a class consisting of all U.S. customers who purchased TiO 2 directly from the defendants (the "Direct Purchasers") since February 1, 2003. On December 13, 2013, we and all other defendants settled the Direct Purchasers litigation and the court approved the settlement. We paid the settlement in an amount immaterial to our condensed consolidated and combined financial statements. On November 22, 2013, we were named as a defendant in a civil antitrust suit filed in the U.S. District Court for the District of Minnesota brought by a Direct Purchaser who opted out of the Direct Purchasers class litigation (the "Opt-Out Litigation"). On April 21, 2014, the court severed the claims against us from the other defendants sued and ordered our case transferred to the U.S. District Court for the Southern District of Texas. Subsequently, Kronos, another defendant, was also severed from the Minnesota case and claims against it were transferred and consolidated for trial with our case in the Southern District of Texas. On February 26, 2016, we reached an agreement to settle the Opt-Out Litigation and subsequently paid the settlement in an amount immaterial to our condensed consolidated and combined financial statements. We were also named as a defendant in a class action civil antitrust suit filed on March 15, 2013 in the U.S. District Court for the Northern District of California by the purchasers of products made from TiO 2 (the "Indirect Purchasers") making essentially the same allegations as did the Direct Purchasers. On October 14, 2014, plaintiffs filed their Second Amended Class Action Complaint narrowing the class of plaintiffs to those merchants and consumers of architectural coatings containing TiO 2 . On August 11, 2015, the court granted our motion to dismiss the Indirect Purchasers litigation with leave to amend the complaint. A Third Amended Class Action Complaint was filed on September 29, 2015 further limiting the class to consumers of architectural paints. Plaintiffs have raised state antitrust claims under the laws of 15 states, consumer protection claims under the laws of nine states, and unjust enrichment claims under the laws of 16 states. On November 4, 2015, we and our co-defendants filed another motion to dismiss. On June 13, 2016, the court substantially denied the motion to dismiss except as to consumer protection claims in one state. The parties have entered into a settlement, subject to court approval, for an amount immaterial to our condensed consolidated and combined financial statements. On August 23, 2016, we were named as a defendant in a fourth civil antitrust suit filed in the U.S. District Court for the Northern District of California by an Indirect Purchaser, Home Depot. Home Depot is an Indirect Purchaser primarily through paints it purchases from various manufacturers. We settled this matter for an amount immaterial to our condensed consolidated and combined financial statements and the court dismissed the case on May 31, 2017. These Indirect Purchasers seek injunctive relief, treble damages or the maximum damages allowed by state law, costs of suit and attorneys' fees. We are not aware of any illegal conduct by us or any of our employees. Other Proceedings We are a party to various other proceedings instituted by private plaintiffs, governmental authorities and others arising under provisions of applicable laws, including various environmental, products liability and other laws. Except as otherwise disclosed in these condensed consolidated and combined financial statements, we do not believe that the outcome of any of these matters will have a material effect on our financial condition, results of operations or liquidity. | 21. COMMITMENTS AND CONTINGENCIES Purchase Commitments —We have various purchase commitments extending through 2029 for materials, supplies and services entered into in the ordinary course of business. Included in the purchase commitments table below are contracts which require minimum volume purchases that extend beyond one year or are renewable annually and have been renewed for 2017. Certain contracts allow for changes in minimum required purchase volumes in the event of a temporary or permanent shutdown of a facility. To the extent the contract requires a minimum notice period; such notice period has been included in the table below. The contractual purchase prices for substantially all of these contracts are variable based upon market prices, subject to annual negotiations. We have estimated our contractual obligations by using the terms of our current pricing for each contract. We also have a limited number of contracts which require a minimum payment even if no volume is purchased. We believe that all of our purchase obligations will be utilized in our normal operations. For the years ended December 31, 2016, 2015 and 2014, we made minimum payments under such take or pay contracts without taking the product of $1 million, nil and nil, respectively. Total purchase commitments as of December 31, 2016 were as follows (dollars in millions): Year ending December 31, 2017 $ 582 2018 438 2019 49 2020 14 2021 12 Thereafter 39 Operating Leases —We lease certain premises, automobiles, and office equipment under long‑term lease agreements. The total expense recorded under operating lease agreements in the combined statements of operations was approximately $9 million, $9 million and $4 million for the years ended December 31, 2016, 2015 and 2014, respectively. Future minimum lease payments under noncancelable operating leases as of December 31, 2016 were as follows (dollars in millions): Year ending December 31, 2017 $ 8 2018 7 2019 3 2020 2 2021 2 Thereafter 2 Total $ 24 Guarantees —Substantially all of our U.S. operations and certain of their foreign subsidiary holdings fully and unconditionally guaranteed Huntsman International’s outstanding notes. Subsequent to the business separation, such operations and entities will no longer guarantee Huntsman International’s notes. As of December 31, 2016 and 2015, Huntsman International and its guarantors had third‑party debt outstanding of $3,793 million and $4,318 million, respectively. As of December 31, 2016 and 2015, our U.S. operations and certain of our foreign subsidiaries that guarantee Huntsman International’s outstanding notes had total assets, excluding intercompany amounts, of $502 million and $384 million, respectively. LEGAL PROCEEDINGS Antitrust Matters —We were named as a defendant in consolidated class action civil antitrust suits filed on February 9 and 12, 2010 in the U.S. District Court for the District of Maryland alleging that we, our co‑defendants and other alleged co‑conspirators conspired to fix prices of TiO2 sold in the U.S. between at least March 1, 2002 and the present. The other defendants named in this matter were E. I. du Pont de Nemours and Company (DuPont), Kronos Worldwide, Inc. (“Kronos”) and National Titanium Dioxide Company, Ltd. (“Cristal”) (formerly Millennium). On August 28, 2012, the court certified a class consisting of all U.S. customers who purchased TiO2 directly from the defendants (the “Direct Purchasers”) since February 1, 2003. On December 13, 2013, we and all other defendants settled the Direct Purchasers litigation and the court approved the settlement. We paid the settlement in an amount immaterial to our combined financial statements. On November 22, 2013, we were named as a defendant in a civil antitrust suit filed in the U.S. District Court for the District of Minnesota brought by a Direct Purchaser who opted out of the Direct Purchasers class litigation (the “Opt‑Out Litigation”). On April 21, 2014, the court severed the claims against us from the other defendants sued and ordered our case transferred to the U.S. District Court for the Southern District of Texas. Subsequently, Kronos, another defendant, was also severed from the Minnesota case and claims against it were transferred and consolidated for trial with our case in the Southern District of Texas. On February 26, 2016, we reached an agreement to settle the Opt‑Out litigation and subsequently paid the settlement in an amount immaterial to our combined financial statements. We were also named as a defendant in a class action civil antitrust suit filed on March 15, 2013 in the U.S. District Court for the Northern District of California by the purchasers of products made from TiO2 (the “Indirect Purchasers”) making essentially the same allegations as did the Direct Purchasers. On October 14, 2014, plaintiffs filed their Second Amended Class Action Complaint narrowing the class of plaintiffs to those merchants and consumers of architectural coatings containing TiO2. On August 11, 2015, the court granted our motion to dismiss the Indirect Purchasers litigation with leave to amend the complaint. A Third Amended Class Action Complaint was filed on September 29, 2015 further limiting the class to consumers of architectural paints. Plaintiffs have raised state antitrust claims under the laws of 15 states, consumer protection claims under the laws of nine states, and unjust enrichment claims under the laws of 16 states. On November 4, 2015, we and our co‑defendants filed another motion to dismiss. On June 13, 2016, the court substantially denied the motion to dismiss except as to consumer protection claims in one state. The parties are presently negotiating a settlement for an amount that would not be material to our combined financial statements. On August 23, 2016, we were named as a defendant in a fourth civil antitrust suit filed in the U.S. District Court for the Northern District of California by an Indirect Purchaser of TiO2, Home Depot. Home Depot is an Indirect Purchaser of TiO2 primarily through paints it purchases from various manufacturers. Home Depot makes the same claims as the Direct and Indirect Purchasers. On January 13, 2017, we filed a motion to dismiss the Home Depot case, which remains pending. We do not expect this matter to have a material impact on our consolidated financial statements. These Indirect Purchasers seek to recover injunctive relief, treble damages or the maximum damages allowed by state law, costs of suit and attorneys’ fees. We are not aware of any illegal conduct by us or any of our employees. Nevertheless, we have incurred costs relating to these claims and could incur additional costs in amounts which in the aggregate could be material to us. Because of the overall complexity of these cases, we are unable to reasonably estimate any possible loss or range of loss and we have not made a material accrual with respect to these claims. Other Proceedings —We are a party to various other proceedings instituted by private plaintiffs, governmental authorities and others arising under provisions of applicable laws, including various environmental, products liability and other laws. Except as otherwise disclosed in these combined financial statements, we do not believe that the outcome of any of these matters will have a material effect on our financial condition, results of operations or liquidity. |
ENVIRONMENTAL, HEALTH AND SAFET
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | ||
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | NOTE 12. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS Environmental, Health and Safety Capital Expenditures We may incur future costs for capital improvements and general compliance under EHS laws, including costs to acquire, maintain and repair pollution control equipment. For the nine months ended September 30, 2017 and 2016, our capital expenditures for EHS matters totaled $5 million and $7 million, respectively. Because capital expenditures for these matters are subject to evolving regulatory requirements and depend, in part, on the timing, promulgation and enforcement of specific requirements, our capital expenditures for EHS matters have varied significantly from year to year and we cannot provide assurance that our recent expenditures are indicative of future amounts we may spend related to EHS and other applicable laws. Environmental Reserves We accrue liabilities relating to anticipated environmental cleanup obligations, site reclamation and closure costs, and known penalties. Liabilities are recorded when potential liabilities are either known or considered probable and can be reasonably estimated. Our liability estimates are calculated using present value techniques as appropriate and are based upon requirements placed upon us by regulators, available facts, existing technology, and past experience. The environmental liabilities do not include amounts recorded as asset retirement obligations. As of September 30, 2017 and December 31, 2016, we had environmental reserves of $12 million, each. We may incur losses for environmental remediation. Environmental Matters We have incurred, and we may in the future incur, liability to investigate and clean up waste or contamination at our current or former facilities or facilities operated by third parties at which we may have disposed of waste or other materials. Similarly, we may incur costs for the cleanup of waste that was disposed of prior to the purchase of our businesses. Under some circumstances, the scope of our liability may extend to damages to natural resources. Under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and similar state laws, a current or former owner or operator of real property in the U.S. may be liable for remediation costs regardless of whether the release or disposal of hazardous substances was in compliance with law at the time it occurred, and a current owner or operator may be liable regardless of whether it owned or operated the facility at the time of the release. Outside the U.S., analogous contaminated property laws, such as those in effect in France, can hold past owners and/or operators liable for remediation at former facilities. We have not been notified by third parties of claims against us for cleanup liabilities at former facilities or third-party sites, including, but not limited to, sites listed under CERCLA. Under the Resource Conservation and Recovery Act in the U.S. and similar state laws, we may be required to remediate contamination originating from our properties as a condition to our hazardous waste permit. Some of our manufacturing sites have an extended history of industrial chemical manufacturing and use, including on-site waste disposal. We are aware of soil, groundwater or surface contamination from past operations at some of our sites, and we may find contamination at other sites in the future. Similar laws exist in a number of locations in which we currently operate, or previously operated, manufacturing facilities, such as France and Italy. | 22. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS Environmental, Health and Safety (“EHS”) Capital Expenditures —We may incur future costs for capital improvements and general compliance under EHS laws, including costs to acquire, maintain and repair pollution control equipment. For the years ended December 31, 2016, 2015 and 2014, our capital expenditures for EHS matters totaled $11 million, $21 million and $20 million, respectively. Because capital expenditures for these matters are subject to evolving regulatory requirements and depend, in part, on the timing, promulgation and enforcement of specific requirements, our capital expenditures for EHS matters have varied significantly from year to year and we cannot provide assurance that our recent expenditures are indicative of future amounts we may spend related to EHS and other applicable laws. Environmental Reserves —We accrue liabilities relating to anticipated environmental cleanup obligations, site reclamation and closure costs, and known penalties. Liabilities are recorded when potential liabilities are either known or considered probable and can be reasonably estimated. Our liability estimates are calculated using present value techniques as appropriate and are based upon requirements placed upon us by regulators, available facts, existing technology, and past experience. The environmental liabilities do not include amounts recorded as asset retirement obligations. As of December 31, 2016 and 2015, we had environmental reserves of $12 million and $14 million, respectively. We may incur additional losses for environmental remediation. Environmental Matters —We have incurred and we may in the future incur, liability to investigate and clean up waste or contamination at our current or former facilities or facilities operated by third parties at which we may have disposed of waste or other materials. Similarly, we may incur costs for the cleanup of waste that was disposed of prior to the purchase of our businesses. Under some circumstances, the scope of our liability may extend to damages to natural resources. Under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and similar state laws, a current or former owner or operator of real property in the U.S. may be liable for remediation costs regardless of whether the release or disposal of hazardous substances was in compliance with law at the time it occurred, and a current owner or operator may be liable regardless of whether it owned or operated the facility at the time of the release. Outside the U.S., analogous contaminated property laws, such as those in effect in France, can hold past owners and/or operators liable for remediation at former facilities. We have not been notified by third parties of claims against us for cleanup liabilities at former facilities or third‑party sites, including, but not limited to, sites listed under CERCLA. Under the Resource Conservation and Recovery Act in the U.S. and similar state laws, we may be required to remediate contamination originating from our properties as a condition to our hazardous waste permit. Some of our manufacturing sites have an extended history of industrial chemical manufacturing and use, including on‑site waste disposal and we have made accruals for related remediation activity. We are aware of soil, groundwater or surface contamination from past operations at some of our sites and have made accruals for related remediation activity, and we may find contamination at other sites in the future. Similar laws exist in a number of locations in which we currently operate, or previously operated, manufacturing facilities, such as France and Italy. |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
OTHER COMPREHENSIVE INCOME (LOSS) | ||
OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 13. OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive income (loss) consisted of the following: Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to (Dollars in millions) adjustment(a) net of tax(b) affiliates Total interests Venator Beginning balance, January 1, 2017 $ (112) $ (306) $ (5) $ (423) $ — $ (423) Adjustments related to other entities under common control 5 24 — 29 — 29 Tax expense — (3) — (3) — (3) Other comprehensive income before reclassifications 68 3 — 71 — 71 Tax benefit 2 1 — 3 — 3 Amounts reclassified from accumulated other comprehensive loss, gross(c) — 11 — 11 — 11 Tax expense — — — — — — Net current-period other comprehensive income 75 36 — 111 — 111 Ending balance, September 30, 2017 $ (37) $ (270) $ (5) $ (312) $ — $ (312) Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to (Dollars in millions) adjustment(d) net of tax(e) affiliates Total interests Venator Beginning balance, January 1, 2016 $ (144) $ (252) $ (5) $ (401) $ — $ (401) Adjustments related to other entities under common control 2 1 — 3 — 3 Tax expense — — — — — — Other comprehensive (loss) income before reclassifications (92) 7 — (85) — (85) Tax expense (1) (1) — (2) — (2) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 8 — 8 — 8 Tax benefit — 1 — 1 — 1 Net current-period other comprehensive (loss) income (91) 16 — (75) — (75) Ending balance, September 30, 2016 $ (235) $ (236) $ (5) $ (476) $ — $ (476) (a) Amounts are net of tax of $2 million and nil as of September 30, 2017 and January 1, 2017, respectively. (b) Amounts are net of tax of $54 million and $56 million as of September 30, 2017 and January 1, 2017, respectively. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts include a tax benefit of $1 million and nil as of September 30, 2016 and January 1, 2016, respectively. (e) Amounts are net of tax of $60 million at September 30, 2016 and January 1, 2016, each. Three months ended Nine months ended September 30, September 30, Affected line item in the statement (Dollars in millions) 2017 2016 2017 2016 where net income is presented Details about Accumulated Other Comprehensive Loss Components(a): Amortization of pension and other postretirement benefits: Actuarial loss $ 5 $ 3 $ 13 $ 8 (b) Prior service credit (1) — (2) — (b) Total amortization 4 3 11 8 Total before tax Income tax benefit — — — 1 Income tax (expense) benefit Total reclassifications for the period $ 4 $ 3 $ 11 $ 9 Net of tax (a) Pension and other postretirement benefit amounts in parentheses indicate credits on our consolidated statements of operations. (b) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. | 23. OTHER COMPREHENSIVE LOSS Other comprehensive loss consisted of the following (dollars in millions): Pension and other Other Foreign postretirement comprehensive Amounts Amounts currency benefits income of attributable to attributable translation adjustments, unconsolidated noncontrolling to adjustment(a) net of tax(b) affiliates Total interests Venator Beginning balance, January 1, 2016 $ (144) $ (252) $ (5) $ (401) $ — $ (401) Adjustment due to discontinued operations (3) (8) — (11) — (11) Tax benefit — 2 — 2 — 2 Other comprehensive (loss) income before reclassifications 35 (53) — (18) — (18) Tax expense — (7) — (7) — (7) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 11 — 11 — 11 Tax benefit — 1 — 1 — 1 Net current-period other comprehensive (loss) income 32 (54) — (22) — (22) Ending balance, December 31, 2016 $ (112) $ (306) $ (5) $ (423) $ — $ (423) Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to adjustment(d) net of tax(e) affiliates Total interests Venator Beginning balance, January 1, 2015 $ (73) $ (242) $ (4) $ (319) $ — $ (319) Adjustment due to discontinued operations (2) 4 — 2 — 2 Tax expense — (1) — (1) — (1) Other comprehensive (loss) income before reclassifications (69) (20) (1) (90) — (90) Tax expense — (3) — (3) — (3) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 10 — 10 — 10 Tax expense — — — — — — Net current-period other comprehensive loss (71) (10) (1) (82) — (82) Ending balance, December 31, 2015 $ (144) $ (252) $ (5) $ (401) $ — $ (401) (a) Amounts are net of tax of nil each as of December 31, 2016 and January 1, 2016. (b) Amounts are net of tax of $56 and $60 as of December 31, 2016 and January 1, 2016, respectively. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts are net of tax of nil each as of December 31, 2015 and January 1, 2015. (e) Amounts are net of tax of $60 and $64 as of December 31, 2015 and January 1, 2015, respectively. Year ended December 31, Affected line item in the statement 2016 2015 where net income is presented Details about Accumulated Other Comprehensive Loss Components: Amortization of pension and other postretirement benefits: Actuarial loss $ 10 $ 9 (a) Prior service cost 1 1 (a) 11 10 Total before tax 1 — Income tax (expense) Total reclassifications for the period $ 12 $ 10 Net of tax (a) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See note “19. Employee Benefit Plans.” |
OPERATING SEGMENT INFORMATION
OPERATING SEGMENT INFORMATION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
OPERATING SEGMENT INFORMATION | ||
OPERATING SEGMENT INFORMATION | NOTE 14. OPERATING SEGMENT INFORMATION We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of commodity chemical products. We have reported our operations through our two segments, Titanium Dioxide and Performance Additives, and organized our business and derived our operating segments around differences in product lines. We have historically conducted other business within components of legal entities we operated in conjunction with Huntsman businesses, and such businesses are included within the corporate and other line item below. The major product groups of each reportable operating segment are as follows: Segment Product Group Titanium Dioxide titanium dioxide Performance Additives functional additives, color pigments, timber treatment and water treatment chemicals Sales between segments are generally recognized at external market prices and are eliminated in consolidation. Adjusted EBITDA is presented as a measure of the financial performance of our global business units and for reporting the results of our operating segments. The revenues and adjusted EBITDA for each of the two reportable operating segments are as follows: Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Titanium Dioxide $ 431 $ 392 $ 1,217 $ 1,197 Performance Additives 151 140 464 451 Total $ 582 $ 532 $ 1,681 $ 1,648 Segment adjusted EBITDA(1) Titanium Dioxide $ 127 $ 22 $ 268 $ 28 Performance Additives 15 16 57 56 142 38 325 84 Corporate and other (8) (17) (48) (46) Total $ 134 $ 21 $ 277 $ 38 Reconciliation of adjusted EBITDA to net income (loss): Interest expense (30) (14) (54) (44) Interest income 22 2 25 13 Income tax (expense) benefit - continuing operations (14) 7 (26) 14 Depreciation and amortization (35) (30) (95) (84) Net income attributable to noncontrolling interests 2 3 8 8 Other adjustments: Business acquisition and integration expenses (4) (3) (2) (11) Gain on disposition of businesses/assets — 23 — 23 Net income of discontinued operations, net of tax — 2 8 8 Certain legal settlements and related expenses — — (1) (1) Amortization of pension and postretirement actuarial losses (5) (3) (13) (8) Net plant incident (costs) credits (1) (3) (4) 2 Restructuring, impairment and plant closing costs (16) (7) (49) (31) Net income (loss) $ 53 $ (2) $ 74 $ (73) (1) Adjusted EBITDA is defined as net income (loss) of Venator before interest, income tax from continuing operations, depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following adjustments from net income (loss): (a) business acquisition and integration expenses; (b) gain on disposition of businesses/assets (c) net income of discontinued operations, net of income tax; (d) certain legal settlements and related expenses; (e) amortization of pension and postretirement actuarial losses; (f) net plant incident credits (costs); and (g) restructuring, impairment and plant closing costs. | 24. OPERATING SEGMENT INFORMATION We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of commodity chemical products. We have reported our operations through our two segments, Titanium Dioxide and Performance Additives, and organized our business and derived our operating segments around differences in product lines. We also conduct other business within components of legal entities we operated in conjunction with Huntsman businesses. These other businesses will not ultimately be part of Venator. As such, these other businesses do not meet the definition of operating segments. The major product groups of each reportable operating segment are as follows: Segment Product Group Titanium Dioxide titanium dioxide Performance Additives functional additives, color pigments, timber treatment and water treatment chemicals Sales between segments are generally recognized at external market prices and are eliminated in consolidation. Adjusted EBITDA is presented as a measure of the financial performance of our global business units and for reporting the results of our operating segments. The revenues and Adjusted EBITDA for each of the two reportable operating segments are as follows (dollars in millions): Adjusted EBITDA for each of the two reportable operating segments are as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Revenues: Titanium Dioxide $ 1,554 $ 1,584 $ 1,411 Performance Additives 585 578 138 Total $ 2,139 $ 2,162 $ 1,549 Segment Adjusted EBITDA(1) Titanium Dioxide $ 61 $ (8) $ 62 Performance Additives 69 69 14 Corporate and other (53) (53) (49) Total $ 77 $ 8 $ 27 Reconciliation of Adjusted EBITDA to net loss: Interest expense (59) (52) (25) Interest income 15 22 23 Income tax benefit—continuing operations 23 34 18 Depreciation and amortization (114) (100) (87) Net income attributable to noncontrolling interests 10 7 2 Other adjustments: Business acquisition and integration expenses (11) (44) (45) Net income of discontinued operations, net of tax 8 10 9 Purchase accounting adjustments — — (11) Gain (loss) on disposition of business/assets 22 (1) 1 Certain legal settlements and related expenses (2) (3) (3) Amortization of pension and postretirement actuarial losses (10) (9) (11) Net plant incident costs (1) (4) — Restructuring, impairment and plant closing costs (35) (220) (60) Net loss $ (77) $ (352) $ (162) Depreciation and Amortization: Titanium Dioxide $ 87 $ 72 $ 73 Performance Additives 19 20 5 Corporate and other 8 8 9 Total $ 114 $ 100 $ 87 Capital Expenditures: Titanium Dioxide $ 73 $ 124 $ 109 Performance Additives 30 79 27 Total $ 103 $ 203 $ 136 Total Assets(2): Titanium Dioxide $ 1,561 $ 1,707 $ 2,059 Performance Additives 764 783 724 Corporate and other 210 715 939 Total $ 2,535 $ 3,205 $ 3,722 (1) Adjusted EBITDA is defined as net income (loss) of Venator before interest, income tax, depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following adjustments from net income (loss): (a) business acquisition and integration expenses; (b) net income from discontinued operations; (c) purchase accounting adjustments; (d) gain (loss) on disposition of businesses/assets; (e) certain legal settlements and related expenses; (f) amortization of pension and postretirement actuarial losses; (g) net plant incident costs; and (h) restructuring, impairment and plant closing costs. (2) Defined as total assets less current assets of discontinued operations and noncurrent assets of discontinued operations. Year ended December 31, By Geographic Area 2016 2015 2014 Revenues(1): United States $ 491 $ 501 $ 313 Germany 210 235 115 Italy 130 117 95 China 113 97 54 United Kingdom 102 105 94 France 98 94 83 Spain 79 71 71 Switzerland 11 16 10 Canada 59 59 41 Other nations 846 867 673 Total $ 2,139 $ 2,162 $ 1,549 Long Lived Assets: Germany $ 215 $ 216 $ 210 United States 263 256 187 United Kingdom 198 252 241 Italy 155 163 159 Finland 146 150 170 Other nations 201 240 375 Total $ 1,178 $ 1,277 $ 1,342 (1) Geographic information for revenues is based upon countries into which product is sold. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | NOTE 15. RELATED PARTY TRANSACTIONS Venator is party to a variety of transactions and agreements with Huntsman, their former parent and controlling shareholder. Corporate Cost Allocations Prior to the Separation, Huntsman’s executive, information technology, EHS and certain other corporate departments performed certain administrative and other services for Venator. Additionally, Huntsman performed certain site services for Venator. Expenses incurred by Huntsman and allocated to Venator were determined based on specific services provided or were allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $9 million and $27 million for the three months ended September 30, 2017 and 2016, respectively, and $62 million and $76 million for the nine months ended September 30, 2017 and 2016, respectively. Material Agreements between Venator and Huntsman On August 11, 2017, Venator entered into a separation agreement with Huntsman to effect the Separation and to provide a framework for the relationship with Huntsman. This agreement governs the relationship between Venator and Huntsman subsequent to the completion of the Separation and provides for the allocation between Venator and Huntsman of assets, liabilities and obligations attributable to periods prior to the Separation. Because these agreements were entered into in the context of a related party transaction, the terms may not be comparable to terms that would be obtained in a transaction between unaffiliated parties. Other Transactions See descriptions of our financing arrangements with Huntsman before and after the Separation in “Note 7. Debt” and “Note 8. Derivative Instruments and Hedging Activities.” See description of our arrangement with Huntsman as part of the separation in “Note 9. Income Taxes.” | 20. RELATED PARTY TRANSACTIONS Huntsman Corporation’s executive, information technology, EHS and certain other corporate departments perform certain administrative and other services for Venator. Additionally, Huntsman Corporation performs certain site services for Venator. Expenses incurred by Huntsman Corporation and allocated to Venator are determined based on specific services provided or are allocated based on our total revenues, total assets, and total employees in proportion to those of Huntsman Corporation. Management believes that such expense allocations are reasonable. It is not practical to estimate the expenses that would have been incurred by Venator had it been operated on a stand‑alone basis. Corporate allocations include allocated selling, general, and administrative expenses of $104 million, $90 million and $78 million for the years ended December 31, 2016, 2015 and 2014, respectively. We also conduct transactions in the normal course of business with parties under common ownership. Sales of raw materials to LPC as part of a sourcing arrangement were $67 million, $80 million and $108 million for the years ended December 31, 2016, 2015 and 2014, respectively. Proceeds from this arrangement are recorded as a reduction of cost of goods sold in Venator’s combined statements of operations. Related to this same arrangement, purchases of finished goods from LPC were $158 million, $163 million and $194 million for the years ended December 31, 2016, 2015 and 2014, respectively. Inventory purchases from other affiliates of Huntsman by Venator was $2 million for the year ended December 31, 2016. The related accounts receivable from affiliates and accounts payable to affiliates as of December 31, 2016 and 2015 are recognized in the combined balance sheets. We participate in a cash management system with various subsidiaries of Huntsman International, which results in interest expense to Venator. See note “1. Description of Business, Recent Developments, Basis of Presentation and Summary of Significant Accounting Policies” and note “14. Related Party Financing.” |
GENERAL, DESCRIPTION OF BUSIN24
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | ||
BASIS OF PRESENTATION | Basis of Presentation Venator’s unaudited condensed consolidated and combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP" or "U.S. GAAP") and in management’s opinion reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results of operations, comprehensive income (loss), financial position and cash flows for the periods presented. Results of interim periods are not necessarily indicative of those to be expected for the full year. These unaudited condensed consolidated and combined financial statements should be read in conjunction with the audited combined financial statements and notes to combined financial statements included in the Prospectus. Prior to the Separation, Venator’s operations were included in Huntsman’s financial results in different legal forms, including but not limited to: (1) wholly-owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities which are comprised of other businesses and include the Titanium Dioxide and/or Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives businesses are the primary beneficiaries. The unaudited condensed consolidated and combined financial statements include all revenues, costs, assets, liabilities and cash flows directly attributable to Venator. The unaudited condensed consolidated and combined financial statements also include allocations of direct and indirect corporate expenses through the date of the Separation, which are based upon an allocation method that in the opinion of management is reasonable. Because the historical condensed consolidated and combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical condensed consolidated and combined financial information includes the results of operations of other businesses that are not a part of our operations after the Separation. We report the results of those other businesses as discontinued operations. See “Note 3. Discontinued Operations” for further discussion of discontinued operations. In addition, the unaudited condensed consolidated and combined financial statements have been prepared from Huntsman’s historical accounting records through the Separation and are presented on a stand-alone basis as if Venator’s operations had been conducted separately from Huntsman; however, prior to the Separation, Venator did not operate as a separate, stand-alone entity for the periods presented and, as such, the condensed consolidated and combined financial statements reflecting balances and activity prior to the Separation, may not be indicative of the financial position, results of operations and cash flows had Venator been a stand-alone company. For purposes of these unaudited condensed consolidated and combined financial statements, all significant transactions with Huntsman International have been included in group equity. All intercompany transactions within the consolidated business have been eliminated. Prior to the Separation, Huntsman’s executive, information technology, EHS and certain other corporate departments performed certain administrative and other services for Venator. Additionally, Huntsman performed certain site services for Venator. Expenses incurred by Huntsman and allocated to Venator were determined based on specific services provided or were allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $9 million and $27 million for the three months ended September 30, 2017 and 2016, respectively, and $62 million and $76 million for the nine months ended September 30, 2017 and 2016, respectively. | Basis of Presentation —Venator’s combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP” or “U.S. GAAP”). Venator’s operations were included in Huntsman Corporation’s financial results in different legal forms, including but not limited to: (1) wholly‑owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities which are comprised of other businesses and include the Titanium Dioxide and Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives and other businesses are the primary beneficiaries. The combined financial statements include all revenues, costs, assets, liabilities and cash flows directly attributable to Venator, as well as allocations of direct and indirect corporate expenses, which are based upon an allocation method that in the opinion of management is reasonable. Such corporate cost allocation transactions between Venator and Huntsman Corporation have been considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded and the net effect of the settlement of these intercompany transactions is reflected in the combined statements of cash flows as a financing activity. Because the historical combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical combined financial information includes the results of operations of other Huntsman businesses are not a part of our operations after the Separation. We report the results of those other businesses as discontinued operations. Please see note “3. Discontinued Operations” to our unaudited condensed consolidated and combined financial statements and note “26. Discontinued Operations” to our combined financial statements. In addition, the combined financial statements have been prepared from Huntsman Corporation’s historical accounting records and are presented on a stand‑alone basis as if Venator’s operations had been conducted separately from Huntsman Corporation; however, Venator did not operate as a separate, stand‑alone entity for the periods presented and, as such, the combined financial statements may not be indicative of the financial position, results of operations and cash flows had Venator been a stand‑alone company. For purposes of these combined financial statements, all significant transactions with Huntsman International LLC (“Huntsman International”), a wholly‑owned subsidiary of Huntsman through which Huntsman operates all of its businesses, have been included in group equity. All intercompany transactions within the combined business have been eliminated. Additional disclosures are included in note “20. Related Party Transactions.” Huntsman Corporation’s executive, information technology, environmental, health and safety and certain other corporate departments perform certain administrative and other services for Venator. Additionally, Huntsman Corporation performs certain site services for Venator. Expenses incurred by Huntsman Corporation and allocated to Venator are determined based on specific services provided or are allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman Corporation. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $104 million, $90 million and $78 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
DISCONTINUED OPERATIONS | ||
Summarizes the financial data for discontinued operations | The following table summarizes the balance sheet data for discontinued operations: December 31, (Dollars in millions) 2016 ASSETS Current assets: Cash and cash equivalents $ 1 Accounts receivable (net of allowance for doubtful accounts of $1) 10 Accounts receivable from affiliates 61 Inventories 9 Prepaid expenses 1 Other current assets 2 Total current assets of discontinued operations 84 Property, plant and equipment, net 19 Intangible assets, net 2 Deferred income taxes 21 Noncurrent assets of discontinued operations 42 Total assets of discontinued operations $ 126 LIABILITIES Current liabilities: Accounts payable $ 7 Accounts payable to affiliates 2 Accrued liabilities 18 Total current liabilities of discontinued operations 27 Deferred income taxes 1 Other noncurrent liabilities 77 Noncurrent liabilities of discontinued operations 78 Total liabilities of discontinued operations $ 105 The following table summarizes the operations data for discontinued operations: Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Trade sales, services and fees, net $ — $ 28 $ 15 $ 83 Related party sales — 15 17 51 Total revenues — 43 32 134 Cost of goods sold — 36 26 110 Operating expenses: Selling, general and administrative (includes corporate allocations of nil, $2, $1 and $5, respectively) — 6 (7) 16 Restructuring, impairment and plant closing costs — — 1 — Other (income) expense, net — (1) 1 (2) Total expenses (income) — 5 (5) 14 Income from discontinued operations before tax — 2 11 10 Income tax expense — — (3) (2) Net income from discontinued operations $ — $ 2 $ 8 $ 8 | The following table summarizes the balance sheet data for discontinued operations: December 31, December 31, 2016 2015 (Dollars in millions) ASSETS Current assets: Cash and cash equivalents $ 1 $ 1 Accounts receivable (net of allowance for doubtful accounts of $1 each) 10 18 Accounts receivable from affiliates 61 82 Inventories 9 15 Prepaid expenses 1 1 Other current assets 2 2 Total current assets discontinued operations 84 119 Property, plant and equipment, net 19 50 Goodwill 2 2 Deferred income taxes 21 32 Other assets — 5 Noncurrent assets of discontinued operations 42 89 Total assets of discontinued operations $ 126 $ 208 LIABILITIES Current liabilities: Accounts payable $ 7 $ 12 Accounts payable to affiliates 2 2 Accrued liabilities 18 17 Total current liabilities of discontinued operations 27 31 Long-term debt — 4 Deferred income taxes 1 1 Other noncurrent liabilities 77 113 Noncurrent liabilities of discontinued operations 78 118 Total liabilities of discontinued operations $ 105 $ 149 The following table summarizes the operations data for discontinued operations: Year ended December 31, 2016 2015 2014 (Dollars in millions) Revenues: Trade sales, services and fees, net $ 110 $ 108 $ 105 Related party sales 60 60 75 Total revenues 170 168 180 Cost of goods sold 147 146 154 Operating expenses: Selling, general, and administrative (includes corporate allocations of $7, $6 and $8, respectively) 15 8 17 Restructuring, impairment and plant closing costs — 3 2 Other income, net (1) (2) (3) Total expenses 14 9 16 Income from discontinued operations before tax 9 13 10 Income tax expense (1) (3) (1) Net income from discontinued operations $ 8 $ 10 $ 9 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
INVENTORIES | ||
Schedule of components of inventory | September 30, December 31, (Dollars in millions) 2017 2016 Raw materials and supplies $ 164 $ 134 Work in process 42 46 Finished goods 225 246 Total $ 431 $ 426 | December 31, 2016 2015 Raw materials and supplies $ 134 $ 174 Work in process 46 69 Finished goods 246 313 Total $ 426 $ 556 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
VARIABLE INTEREST ENTITIES | ||
Schedule of financial information of VIE's | Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues $ 31 $ 30 $ 97 $ 89 Income from continuing operations before income taxes 4 5 16 15 Net cash provided by operating activities 6 7 20 19 | The revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities for the years ended December 31, 2016, 2015 and 2014 are as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Revenues $ 116 $ 100 $ 24 Income from continuing operations before income taxes 21 13 3 Net cash provided by operating activities 26 17 — |
RESTRUCTURING, IMPAIRMENT AND28
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS | ||
Schedule of accrued restructuring, impairment and plant closing costs by type of cost and initiative | Other Workforce restructuring (Dollars in millions) reductions(1) costs Total(2) Accrued liabilities as of December 31, 2016 $ 21 $ — $ 21 2017 charges 34 8 42 2017 payments (15) (8) (23) Foreign currency effect on liability balance 1 — 1 Accrued liabilities as of September 30, 2017 $ 41 $ — $ 41 (1) The total workforce reduction reserves of $41 million relate to the termination of 338 positions, of which zero positions had been terminated as of September 30, 2017. (2) Accrued liabilities remaining, for continuing operations, at September 30, 2017 and December 31, 2016 by year of initiatives were as follows: September 30, December 31, (Dollars in millions) 2017 2016 2015 initiatives and prior $ 12 $ 21 2016 initiatives — — 2017 initiatives 29 — Total $ 41 $ 21 | As of December 31, 2016, 2015 and 2014, accrued restructuring and plant closing costs by type of cost and initiative consisted of the following (dollars in millions): Other Workforce restructuring reductions(1) costs Total(2) Accrued liabilities as of January 1, 2014 $ 2 $ — $ 2 2014 charges 60 — 60 2014 payments (4) — (4) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities 1 — 1 Accrued liabilities as of December 31, 2014 59 — 59 2015 charges 90 21 111 2015 payments (54) (21) (75) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities 1 — 1 Foreign currency effect on liability balance (6) — (6) Accrued liabilities as of December 31, 2015 90 — 90 2016 charges 9 16 25 Distribution of prefunded restructuring costs (36) — (36) 2016 payments (42) (16) (58) Foreign currency effect on liability balance — — — Accrued liabilities as of December 31, 2016 $ 21 $ — $ 21 (1) The total workforce reduction reserves of $21 million relate to the termination of 323 positions, of which 323 positions had not been terminated as of December 31, 2016. (2) Accrued liabilities remaining at December 31, 2016 and 2015 by year of initiatives were as follows (dollars in millions): December 31, 2016 2015 2014 initiatives and prior $ 18 $ 77 2015 initiatives 3 13 Total $ 21 $ 90 |
Schedule of accrued liabilities by year of initiatives | September 30, December 31, (Dollars in millions) 2017 2016 2015 initiatives and prior $ 12 $ 21 2016 initiatives — — 2017 initiatives 29 — Total $ 41 $ 21 | (1) Accrued liabilities remaining at December 31, 2016 and 2015 by year of initiatives were as follows (dollars in millions): December 31, 2016 2015 2014 initiatives and prior $ 18 $ 77 2015 initiatives 3 13 Total $ 21 $ 90 |
Schedule of details with respect to reserves for restructuring, impairment and plant closing costs, provided by segment and initiative | Titanium Performance (Dollars in millions) Dioxide Additives Total Accrued liabilities as of December 31, 2016 $ 12 $ 9 $ 21 2017 charges 33 9 42 2017 payments (14) (9) (23) Foreign currency effect on liability balance 1 — 1 Accrued liabilities as of September 30, 2017 $ 32 $ 9 $ 41 Current portion of restructuring reserves $ 28 $ 9 $ 37 Long-term portion of restructuring reserve 4 — 4 | Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative (dollars in millions): Titanium Performance Dioxide Additives Total Accrued liabilities as of January 1, 2014 $ 2 $ — $ 2 2014 charges 51 9 60 2014 payments (4) — (4) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities — 1 1 Accrued liabilities as of December 31, 2014 49 10 59 2015 charges 75 36 111 2015 payments (62) (13) (75) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities — 1 1 Foreign currency effect on liability balance (5) (1) (6) Accrued liabilities as of December 31, 2015 57 33 90 2016 charges 9 16 25 Distribution of prefunded restructuring costs (23) (13) (36) 2016 payments (29) (29) (58) Foreign currency effect on liability balance (2) 2 — Accrued liabilities as of December 31, 2016 $ 12 $ 9 $ 21 Current portion of restructuring reserves $ 5 $ 9 $ 14 Long-term portion of restructuring reserve 7 — 7 |
Schedule of cash and noncash restructuring charges by initiative | Three months ended Nine months ended (Dollars in millions) September 30, 2017 September 30, 2017 Cash charges $ 16 $ 42 Impairment of assets — 3 Other noncash charges — 4 Total 2017 Restructuring, Impairment and Plant Closing Costs $ 16 $ 49 Three months ended Nine months ended (Dollars in millions) September 30, 2016 September 30, 2016 Cash charges $ 6 $ 22 Accelerated depreciation 1 8 Other noncash charges — 1 Total 2016 Restructuring, Impairment and Plant Closing Costs $ 7 $ 31 | Details with respect to cash and noncash restructuring charges for the years ended December 31, 2016, 2015 and 2014 by initiative are provided below (dollars in millions): Cash charges: 2016 charges $ 25 Accelerated depreciation 9 Other non-cash charges 1 Total 2016 Restructuring, Impairment and Plant Closing Costs $ 35 Cash charges: 2015 charges $ 113 Pension-related charges 3 Accelerated depreciation 68 Other non-cash charges 36 Total 2015 Restructuring, Impairment and Plant Closing Costs $ 220 Cash charges: 2014 charges $ 60 Non-cash charges — Total 2014 Restructuring, Impairment and Plant Closing Costs $ 60 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
Schedule of outstanding debt | September 30, December 31, (Dollars in millions) 2017 2016 Term loan facility $ 368 $ — Senior notes 370 — Amounts outstanding under A/R programs — 106 Variable interest entities 2 2 Other 11 21 Total debt—excluding debt to affiliates $ 751 $ 129 Less: short-term debt and current portion of long-term debt 4 10 Total long-term debt—excluding debt to affiliates $ 747 $ 119 Notes payable to affiliates — 882 Total debt $ 747 $ 1,001 |
EARNINGS (LOSSES) PER SHARE (Ta
EARNINGS (LOSSES) PER SHARE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
EARNINGS (LOSSES) PER SHARE | ||
Schedule of basic and diluted earnings per share | Three months ended Nine months ended September 30, September 30, (In millions) 2017 2016 2017 2016 Numerator: Basic and diluted income (loss) from continuing operations: Income (loss) from continuing operations attributable to Venator $ 51 $ (7) $ 58 $ (89) Basic and diluted net income (loss): Net income (loss) attributable to Venator $ 51 $ (5) $ 66 $ (81) Denominator: Weighted average shares outstanding 106.3 106.3 106.3 106.3 Dilutive share-based awards 0.3 — 0.3 — Total weighted average shares outstanding, including dilutive shares 106.6 106.3 106.6 106.3 | (In millions) 2016 2015 2014 Numerator: Basic and diluted loss from continuing operations: Loss from continuing operations attributable to Venator $ (95) $ (369) $ (173) Basic and diluted net loss: Net loss attributable to Venator $ (87) $ (359) $ (164) Denominator: Weighted average shares outstanding 106.3 106.3 106.3 Dilutive share-based awards — — — Total weighted average shares outstanding, including dilutive shares 106.3 106.3 106.3 |
OTHER COMPREHENSIVE INCOME (L31
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
OTHER COMPREHENSIVE INCOME (LOSS) | ||
Schedule of other comprehensive loss | Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to (Dollars in millions) adjustment(a) net of tax(b) affiliates Total interests Venator Beginning balance, January 1, 2017 $ (112) $ (306) $ (5) $ (423) $ — $ (423) Adjustments related to other entities under common control 5 24 — 29 — 29 Tax expense — (3) — (3) — (3) Other comprehensive income before reclassifications 68 3 — 71 — 71 Tax benefit 2 1 — 3 — 3 Amounts reclassified from accumulated other comprehensive loss, gross(c) — 11 — 11 — 11 Tax expense — — — — — — Net current-period other comprehensive income 75 36 — 111 — 111 Ending balance, September 30, 2017 $ (37) $ (270) $ (5) $ (312) $ — $ (312) Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to (Dollars in millions) adjustment(d) net of tax(e) affiliates Total interests Venator Beginning balance, January 1, 2016 $ (144) $ (252) $ (5) $ (401) $ — $ (401) Adjustments related to other entities under common control 2 1 — 3 — 3 Tax expense — — — — — — Other comprehensive (loss) income before reclassifications (92) 7 — (85) — (85) Tax expense (1) (1) — (2) — (2) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 8 — 8 — 8 Tax benefit — 1 — 1 — 1 Net current-period other comprehensive (loss) income (91) 16 — (75) — (75) Ending balance, September 30, 2016 $ (235) $ (236) $ (5) $ (476) $ — $ (476) (a) Amounts are net of tax of $2 million and nil as of September 30, 2017 and January 1, 2017, respectively. (b) Amounts are net of tax of $54 million and $56 million as of September 30, 2017 and January 1, 2017, respectively. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts include a tax benefit of $1 million and nil as of September 30, 2016 and January 1, 2016, respectively. (e) Amounts are net of tax of $60 million at September 30, 2016 and January 1, 2016, each. | Other comprehensive loss consisted of the following (dollars in millions): Pension and other Other Foreign postretirement comprehensive Amounts Amounts currency benefits income of attributable to attributable translation adjustments, unconsolidated noncontrolling to adjustment(a) net of tax(b) affiliates Total interests Venator Beginning balance, January 1, 2016 $ (144) $ (252) $ (5) $ (401) $ — $ (401) Adjustment due to discontinued operations (3) (8) — (11) — (11) Tax benefit — 2 — 2 — 2 Other comprehensive (loss) income before reclassifications 35 (53) — (18) — (18) Tax expense — (7) — (7) — (7) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 11 — 11 — 11 Tax benefit — 1 — 1 — 1 Net current-period other comprehensive (loss) income 32 (54) — (22) — (22) Ending balance, December 31, 2016 $ (112) $ (306) $ (5) $ (423) $ — $ (423) Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to adjustment(d) net of tax(e) affiliates Total interests Venator Beginning balance, January 1, 2015 $ (73) $ (242) $ (4) $ (319) $ — $ (319) Adjustment due to discontinued operations (2) 4 — 2 — 2 Tax expense — (1) — (1) — (1) Other comprehensive (loss) income before reclassifications (69) (20) (1) (90) — (90) Tax expense — (3) — (3) — (3) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 10 — 10 — 10 Tax expense — — — — — — Net current-period other comprehensive loss (71) (10) (1) (82) — (82) Ending balance, December 31, 2015 $ (144) $ (252) $ (5) $ (401) $ — $ (401) (a) Amounts are net of tax of nil each as of December 31, 2016 and January 1, 2016. (b) Amounts are net of tax of $56 and $60 as of December 31, 2016 and January 1, 2016, respectively. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts are net of tax of nil each as of December 31, 2015 and January 1, 2015. (e) Amounts are net of tax of $60 and $64 as of December 31, 2015 and January 1, 2015, respectively. |
Schedule of details about reclassifications from other comprehensive loss | Three months ended Nine months ended September 30, September 30, Affected line item in the statement (Dollars in millions) 2017 2016 2017 2016 where net income is presented Details about Accumulated Other Comprehensive Loss Components(a): Amortization of pension and other postretirement benefits: Actuarial loss $ 5 $ 3 $ 13 $ 8 (b) Prior service credit (1) — (2) — (b) Total amortization 4 3 11 8 Total before tax Income tax benefit — — — 1 Income tax (expense) benefit Total reclassifications for the period $ 4 $ 3 $ 11 $ 9 Net of tax (a) Pension and other postretirement benefit amounts in parentheses indicate credits on our consolidated statements of operations. (b) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. | Year ended December 31, Affected line item in the statement 2016 2015 where net income is presented Details about Accumulated Other Comprehensive Loss Components: Amortization of pension and other postretirement benefits: Actuarial loss $ 10 $ 9 (a) Prior service cost 1 1 (a) 11 10 Total before tax 1 — Income tax (expense) Total reclassifications for the period $ 12 $ 10 Net of tax (a) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See note “19. Employee Benefit Plans.” |
OPERATING SEGMENT INFORMATION (
OPERATING SEGMENT INFORMATION (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
OPERATING SEGMENT INFORMATION | ||
Schedule of revenues and EBITDA for each of the entity's reportable operating segments and reconciliation of adjusted EBITDA to net income | Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Titanium Dioxide $ 431 $ 392 $ 1,217 $ 1,197 Performance Additives 151 140 464 451 Total $ 582 $ 532 $ 1,681 $ 1,648 Segment adjusted EBITDA(1) Titanium Dioxide $ 127 $ 22 $ 268 $ 28 Performance Additives 15 16 57 56 142 38 325 84 Corporate and other (8) (17) (48) (46) Total $ 134 $ 21 $ 277 $ 38 Reconciliation of adjusted EBITDA to net income (loss): Interest expense (30) (14) (54) (44) Interest income 22 2 25 13 Income tax (expense) benefit - continuing operations (14) 7 (26) 14 Depreciation and amortization (35) (30) (95) (84) Net income attributable to noncontrolling interests 2 3 8 8 Other adjustments: Business acquisition and integration expenses (4) (3) (2) (11) Gain on disposition of businesses/assets — 23 — 23 Net income of discontinued operations, net of tax — 2 8 8 Certain legal settlements and related expenses — — (1) (1) Amortization of pension and postretirement actuarial losses (5) (3) (13) (8) Net plant incident (costs) credits (1) (3) (4) 2 Restructuring, impairment and plant closing costs (16) (7) (49) (31) Net income (loss) $ 53 $ (2) $ 74 $ (73) (1) Adjusted EBITDA is defined as net income (loss) of Venator before interest, income tax from continuing operations, depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following adjustments from net income (loss): (a) business acquisition and integration expenses; (b) gain on disposition of businesses/assets (c) net income of discontinued operations, net of income tax; (d) certain legal settlements and related expenses; (e) amortization of pension and postretirement actuarial losses; (f) net plant incident credits (costs); and (g) restructuring, impairment and plant closing costs. | Adjusted EBITDA for each of the two reportable operating segments are as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Revenues: Titanium Dioxide $ 1,554 $ 1,584 $ 1,411 Performance Additives 585 578 138 Total $ 2,139 $ 2,162 $ 1,549 Segment Adjusted EBITDA(1) Titanium Dioxide $ 61 $ (8) $ 62 Performance Additives 69 69 14 Corporate and other (53) (53) (49) Total $ 77 $ 8 $ 27 Reconciliation of Adjusted EBITDA to net loss: Interest expense (59) (52) (25) Interest income 15 22 23 Income tax benefit—continuing operations 23 34 18 Depreciation and amortization (114) (100) (87) Net income attributable to noncontrolling interests 10 7 2 Other adjustments: Business acquisition and integration expenses (11) (44) (45) Net income of discontinued operations, net of tax 8 10 9 Purchase accounting adjustments — — (11) Gain (loss) on disposition of business/assets 22 (1) 1 Certain legal settlements and related expenses (2) (3) (3) Amortization of pension and postretirement actuarial losses (10) (9) (11) Net plant incident costs (1) (4) — Restructuring, impairment and plant closing costs (35) (220) (60) Net loss $ (77) $ (352) $ (162) Depreciation and Amortization: Titanium Dioxide $ 87 $ 72 $ 73 Performance Additives 19 20 5 Corporate and other 8 8 9 Total $ 114 $ 100 $ 87 Capital Expenditures: Titanium Dioxide $ 73 $ 124 $ 109 Performance Additives 30 79 27 Total $ 103 $ 203 $ 136 Total Assets(2): Titanium Dioxide $ 1,561 $ 1,707 $ 2,059 Performance Additives 764 783 724 Corporate and other 210 715 939 Total $ 2,535 $ 3,205 $ 3,722 (1) Adjusted EBITDA is defined as net income (loss) of Venator before interest, income tax, depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following adjustments from net income (loss): (a) business acquisition and integration expenses; (b) net income from discontinued operations; (c) purchase accounting adjustments; (d) gain (loss) on disposition of businesses/assets; (e) certain legal settlements and related expenses; (f) amortization of pension and postretirement actuarial losses; (g) net plant incident costs; and (h) restructuring, impairment and plant closing costs. (2) Defined as total assets less current assets of discontinued operations and noncurrent assets of discontinued operations. |
GENERAL, DESCRIPTION OF BUSIN33
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION (Details) $ / shares in Units, $ in Millions | Oct. 09, 2017USD ($) | Aug. 08, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)itemsegment$ / sharesshares | Sep. 30, 2016USD ($) | Dec. 31, 2016itemsegment$ / sharesshares | Jan. 30, 2017 | Aug. 15, 2017shares | Jul. 14, 2017USD ($) |
GENERAL | ||||||||||
Number of reportable segments | segment | 2 | 2 | ||||||||
Number of titanium dioxide manufacturing facilities | item | 8 | 8 | ||||||||
Number of Color Pigments, Functional Additives, Water Treatment And Timber Treatment Manufacturing And Processing Facilities | item | 19 | 19 | ||||||||
Ordinary shares, outstanding | shares | 106,000,000 | 106,000,000 | 0 | |||||||
Par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Authorized number of shares to be granted under the Stock Incentive Plan | shares | 14,025,000 | |||||||||
Loss from write-off of fixed assets and lost inventory | $ (23) | $ (23) | ||||||||
Senior notes | ||||||||||
GENERAL | ||||||||||
Aggregate principal amount | $ 375 | |||||||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | |||||||
Term loan facility | ||||||||||
GENERAL | ||||||||||
Aggregate principal amount | $ 375 | |||||||||
Maturity term | 7 years | |||||||||
ABL facility | ||||||||||
GENERAL | ||||||||||
Maximum borrowing capacity commitment | $ 300 | |||||||||
Maturity term | 5 years | |||||||||
Huntsman | ||||||||||
GENERAL | ||||||||||
Repayments of notes payable | $ 732 | |||||||||
Repayment of fees and expenses | $ 18 | |||||||||
Huntsman | ||||||||||
GENERAL | ||||||||||
Ownership percentage | 75.00% | |||||||||
Initial public offering | ||||||||||
GENERAL | ||||||||||
Number of shares issued | shares | 26,105,000 | |||||||||
Ordinary shares, outstanding | shares | 106,271,712 | |||||||||
Par value | $ / shares | $ 0.001 | |||||||||
Over allotment | ||||||||||
GENERAL | ||||||||||
Number of shares issued | shares | 3,405,000 | |||||||||
Share price | $ / shares | $ 20 | |||||||||
Fire at titanium manufacturing facility in Pori, Finland | ||||||||||
GENERAL | ||||||||||
Percentage of site capacity producing specialty products | 20.00% | 60.00% | ||||||||
Percentage of site capacity more commoditized | 40.00% | |||||||||
Retained deductibles for physical damage due to fire accident | $ 15 | |||||||||
Retained deductibles for number of business interruption days | 60 days | |||||||||
Aggregate insured limit | $ 500 | |||||||||
Partial progress payment received from insurer | $ 112 | 141 | ||||||||
Fire at titanium manufacturing facility in Pori, Finland | Accrued Liabilities | ||||||||||
GENERAL | ||||||||||
Deferred income for costs not yet incurred | $ 17 | 17 | ||||||||
Fire at titanium manufacturing facility in Pori, Finland | Other operating (income) expense, net | ||||||||||
GENERAL | ||||||||||
Loss from write-off of fixed assets and lost inventory | 31 | |||||||||
Loss due to cleanup costs of facility | 18 | |||||||||
Partial progress payment received from insurer | 128 | |||||||||
Minimum | Fire at titanium manufacturing facility in Pori, Finland | ||||||||||
GENERAL | ||||||||||
Percentage of site EBITDA | 75.00% | |||||||||
Uninsured costs in excess of insurance limit | 100 | |||||||||
Maximum | Fire at titanium manufacturing facility in Pori, Finland | ||||||||||
GENERAL | ||||||||||
Uninsured costs in excess of insurance limit | $ 150 |
GENERAL, DESCRIPTION OF BUSIN34
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION - OTHER (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Huntsman | Corporate allocations | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Selling, general and administrative expenses | $ 9 | $ 27 | $ 62 | $ 76 | $ 104 | $ 90 | $ 78 |
DISCONTINUED OPERATIONS - BALAN
DISCONTINUED OPERATIONS - BALANCE SHEET (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Total current assets of discontinued operations | $ 84 | $ 119 |
Noncurrent assets of discontinued operations | 42 | 89 |
Current liabilities: | ||
Total current liabilities of discontinued operations | 27 | 31 |
Noncurrent liabilities of discontinued operations | 78 | 118 |
Titanium Dioxide And Performance Additives Business | Discontinued Operations, Disposed of by Means Other than Sale | ||
Current assets: | ||
Cash and cash equivalents | 1 | 1 |
Accounts receivable (net of allowance for doubtful accounts of $1) | 10 | 18 |
Accounts receivable from affiliates | 61 | 82 |
Inventories | 9 | 15 |
Prepaid expenses | 1 | 1 |
Other current assets | 2 | 2 |
Total current assets of discontinued operations | 84 | 119 |
Property, plant and equipment, net | 19 | 50 |
Intangible assets, net | 2 | |
Deferred income taxes | 21 | 32 |
Noncurrent assets of discontinued operations | 42 | 89 |
Total assets of discontinued operations | 126 | 208 |
Current liabilities: | ||
Accounts payable | 7 | 12 |
Accounts payable to affiliates | 2 | 2 |
Accrued liabilities | 18 | 17 |
Total current liabilities of discontinued operations | 27 | 31 |
Deferred income taxes | 1 | 1 |
Other noncurrent liabilities | 77 | 113 |
Noncurrent liabilities of discontinued operations | 78 | 118 |
Total liabilities of discontinued operations | 105 | $ 149 |
Accounts and notes receivable, allowance for doubtful accounts (in dollars) | $ 1 |
DISCONTINUED OPERATIONS - OPERA
DISCONTINUED OPERATIONS - OPERATIONS DATA (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||||||
Net income from discontinued operations | $ 2 | $ 8 | $ 8 | $ 8 | $ 10 | $ 9 | |
Titanium Dioxide And Performance Additives Business | Discontinued Operations, Disposed of by Means Other than Sale | |||||||
Revenues: | |||||||
Trade sales, services and fees, net | 28 | 15 | 83 | 110 | 108 | 105 | |
Related party sales | 15 | 17 | 51 | 60 | 60 | 75 | |
Total revenues | 43 | 32 | 134 | 170 | 168 | 180 | |
Cost of goods sold | 36 | 26 | 110 | 147 | 146 | 154 | |
Selling, general and administrative (includes corporate allocations of nil, $2, $1 and $5 respectively) | 6 | (7) | 16 | 15 | 8 | 17 | |
Restructuring, impairment and plant closing costs | 1 | 3 | 2 | ||||
Other (income) expense, net | (1) | 1 | (2) | (1) | (2) | (3) | |
Total expenses (income) | 5 | (5) | 14 | 14 | 9 | 16 | |
Income from discontinued operations before tax | 2 | 11 | 10 | 9 | 13 | 10 | |
Income tax expense | (3) | (2) | (1) | (3) | (1) | ||
Net income from discontinued operations | 2 | 8 | 8 | 8 | 10 | 9 | |
Titanium Dioxide And Performance Additives Business | Corporate allocations | Discontinued Operations, Disposed of by Means Other than Sale | |||||||
Revenues: | |||||||
Selling, general and administrative (includes corporate allocations of nil, $2, $1 and $5 respectively) | $ 0 | $ 2 | $ 1 | $ 5 | $ 7 | $ 6 | $ 8 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Inventories | ||||||
Raw materials and supplies | $ 164 | $ 134 | $ 174 | |||
Work in progress | 42 | 46 | 69 | |||
Finished goods | 225 | 246 | 313 | |||
Total | $ 431 | [1] | $ 426 | [1],[2] | $ 556 | [2] |
[1] | At September?30, 2017 and December?31, 2016, $6 and $4 of cash and cash equivalents, $7 and $6 of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $18 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note?5. Variable Interest Entities." | |||||
[2] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities | |||||||
Revenues | $ 582 | $ 532 | $ 1,681 | $ 1,648 | $ 2,139 | $ 2,162 | $ 1,549 |
Income from continuing operations before income taxes | 67 | (11) | 92 | (95) | (108) | (396) | (189) |
Net cash provided by operating activities | 181 | 93 | $ 97 | $ (63) | $ (63) | ||
Consolidated VIE's | |||||||
Revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities | |||||||
Revenues | 31 | 30 | 97 | 89 | |||
Income from continuing operations before income taxes | 4 | 5 | 16 | 15 | |||
Net cash provided by operating activities | $ 6 | $ 7 | $ 20 | $ 19 | |||
Pacific Iron Products | |||||||
Identification of variable interest entities through investments and transactions | |||||||
Variable interest entity ownership percentage | 50.00% | 50.00% | |||||
Viance | |||||||
Identification of variable interest entities through investments and transactions | |||||||
Variable interest entity ownership percentage | 50.00% | 50.00% |
RESTRUCTURING, IMPAIRMENT AND39
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - ACCRUED RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS BY TYPE OF COST AND INITIATIVE (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Dec. 31, 2014USD ($)position | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)position | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Accrued restructuring costs roll forward | |||||||||
Accrued liabilities at the beginning of the period | $ 21 | $ 90 | $ 90 | $ 59 | $ 2 | ||||
Restructuring charges | $ 16 | $ 6 | 42 | 22 | |||||
Restructuring payments | (23) | ||||||||
Foreign currency effect on liability balance | 1 | (6) | |||||||
Accrued liabilities at the end of the period | $ 59 | $ 41 | $ 59 | $ 41 | 21 | 90 | 59 | ||
Number of positions terminated | item | 338 | ||||||||
Number of positions terminated at reporting date | item | 0 | 0 | |||||||
Workforce reductions | |||||||||
Accrued restructuring costs roll forward | |||||||||
Accrued liabilities at the beginning of the period | $ 21 | $ 90 | 90 | 59 | 2 | ||||
Restructuring charges | 57 | 34 | 3 | 61 | |||||
Restructuring payments | (15) | ||||||||
Foreign currency effect on liability balance | 1 | (6) | |||||||
Accrued liabilities at the end of the period | $ 59 | $ 41 | $ 59 | 41 | $ 21 | 90 | $ 59 | ||
Number of positions terminated | position | 900 | 323 | |||||||
Other restructuring costs | |||||||||
Accrued restructuring costs roll forward | |||||||||
Restructuring charges | 8 | $ 15 | |||||||
Restructuring payments | $ (8) |
RESTRUCTURING, IMPAIRMENT AND40
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - ACCRUED LIABILITIES BY INITIATIVE (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accrued liabilities by initiatives | |||||
Accrued liabilities | $ 41 | $ 21 | $ 90 | $ 59 | $ 2 |
2015 and prior initiatives | |||||
Accrued liabilities by initiatives | |||||
Accrued liabilities | 12 | $ 21 | |||
2017 initiatives | |||||
Accrued liabilities by initiatives | |||||
Accrued liabilities | $ 29 |
RESTRUCTURING, IMPAIRMENT AND41
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - RESERVES FOR RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accrued restructuring costs roll forward | |||||||
Accrued liabilities at the beginning of the period | $ 21 | $ 90 | $ 90 | $ 59 | $ 2 | ||
Restructuring charges | $ 16 | $ 6 | 42 | 22 | |||
Restructuring payments | (23) | ||||||
Foreign currency effect on liability balance | 1 | (6) | |||||
Accrued liabilities at the end of the period | 41 | 41 | 21 | 90 | 59 | ||
Current portion of restructuring reserves | 37 | 37 | 14 | 85 | |||
Long-term portion of restructuring reserves | 4 | 4 | 7 | 7 | |||
Titanium Dioxide | |||||||
Accrued restructuring costs roll forward | |||||||
Accrued liabilities at the beginning of the period | 12 | 57 | 57 | 49 | 2 | ||
Restructuring charges | 33 | ||||||
Restructuring payments | (14) | ||||||
Foreign currency effect on liability balance | 1 | (2) | (5) | ||||
Accrued liabilities at the end of the period | 32 | 32 | 12 | 57 | 49 | ||
Current portion of restructuring reserves | 28 | 28 | 5 | ||||
Long-term portion of restructuring reserves | 4 | 4 | 7 | ||||
Performance Additives | |||||||
Accrued restructuring costs roll forward | |||||||
Accrued liabilities at the beginning of the period | 9 | $ 33 | 33 | 10 | |||
Restructuring charges | 9 | ||||||
Restructuring payments | (9) | ||||||
Foreign currency effect on liability balance | 2 | (1) | |||||
Accrued liabilities at the end of the period | 9 | 9 | 9 | $ 33 | $ 10 | ||
Current portion of restructuring reserves | $ 9 | $ 9 | $ 9 |
RESTRUCTURING, IMPAIRMENT AND42
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - CASH AND NONCASH RESTRUCTURING CHARGES AND OTHER INFORMATION (Details) $ in Millions | Feb. 15, 2015kt | Feb. 28, 2015t | Dec. 31, 2014itemposition | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)position | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Restructuring, impairment and plant closing costs | ||||||||||||
Restructuring charges | $ 16 | $ 6 | $ 42 | $ 22 | ||||||||
Impairment of assets | 3 | |||||||||||
Other non-cash charges | 4 | 1 | ||||||||||
Accelerated depreciation | 1 | 8 | $ 9 | $ 68 | ||||||||
Total restructuring, impairment and plant closing costs | 16 | 7 | $ 49 | 31 | 35 | 220 | $ 60 | |||||
Number of positions terminated | item | 338 | |||||||||||
Calais, France Facility | ||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||
Restructuring charges | 12 | 0 | $ 1 | $ 34 | 1 | |||||||
Accelerated depreciation | 1 | 8 | ||||||||||
Decrease in titanium dioxide capacity due to closing operations | 100 | 100,000 | ||||||||||
Decrease in titanium dioxide capacity due to closing operations (as a percent) | 11.00% | 11.00% | ||||||||||
Additional restructuring charges remaining | 45 | 45 | ||||||||||
South African Titanium Dioxide Manufacturing Facility | ||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||
Restructuring charges | 1 | 3 | 6 | |||||||||
Additional restructuring charges remaining | 3 | 3 | ||||||||||
St. Louis and Easton Manufacturing Facilities | ||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||
Restructuring charges | 3 | |||||||||||
Additional restructuring charges remaining | $ 17 | 17 | ||||||||||
Workforce reductions | ||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||
Restructuring charges | $ 57 | $ 34 | $ 3 | 61 | ||||||||
Number of positions terminated | position | 900 | 323 | ||||||||||
Workforce reductions | Calais, France Facility | ||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||
Restructuring charges | $ 30 | |||||||||||
Workforce reductions | Titanium Dioxide And Performance Additives | ||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||
Restructuring charges | $ 0 | $ 4 | ||||||||||
Number of positions terminated | item | 900 |
DEBT - OUTSTANDING DEBT (Detail
DEBT - OUTSTANDING DEBT (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Debt | ||||||
Debt issuance costs | $ 12 | |||||
Total debt-excluding debt to affiliates | 751 | $ 129 | ||||
Less: short-term debt and current portion of long-term debt | 4 | [1] | 10 | [1],[2] | $ 9 | [2] |
Total long-term debt—excluding debt to affiliates | 747 | 119 | ||||
Notes payable to affiliates | 882 | 1,023 | ||||
Total debt | 747 | 1,001 | ||||
Consolidated VIE's | ||||||
Debt | ||||||
Total debt-excluding debt to affiliates | 2 | 2 | ||||
Less: short-term debt and current portion of long-term debt | 2 | 2 | $ 1 | |||
Term loan facility | ||||||
Debt | ||||||
Total debt-excluding debt to affiliates | 368 | |||||
Senior notes | ||||||
Debt | ||||||
Total debt-excluding debt to affiliates | 370 | |||||
Amounts outstanding under A/R programs | ||||||
Debt | ||||||
Total debt-excluding debt to affiliates | 106 | |||||
Other | ||||||
Debt | ||||||
Total debt-excluding debt to affiliates | $ 11 | $ 21 | ||||
[1] | At September?30, 2017 and December?31, 2016, $6 and $4 of cash and cash equivalents, $7 and $6 of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $18 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note?5. Variable Interest Entities." | |||||
[2] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? |
DEBT - SENIOR NOTES, SENIOR CRE
DEBT - SENIOR NOTES, SENIOR CREDIT FACILITIES (Details) - USD ($) $ in Millions | Aug. 08, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 14, 2017 |
Debt | ||||||||
U.S. Operations and certain foreign subsidiaries total assets, excluding intercompany accounts | $ 502 | $ 384 | ||||||
Notes receivable from affiliates | 57 | |||||||
Notes payable to affiliates | 882 | 1,023 | ||||||
Subsidiaries of Huntsman International | ||||||||
Debt | ||||||||
Notes receivable from affiliates | $ 0 | 57 | ||||||
Notes payable to affiliates | 0 | 882 | 1,023 | |||||
Huntsman International | A/R Programs | ||||||||
Debt | ||||||||
Net Receivable in A/R Programs | 106 | 110 | ||||||
Losses on the A/R Programs | $ 1 | 1 | $ 4 | (5) | (3) | $ (4) | ||
Senior notes | ||||||||
Debt | ||||||||
Fair value of debt instruments | $ 390 | |||||||
Aggregate principal amount | $ 375 | |||||||
Stated interest rate as a percentage | 5.75% | 5.75% | ||||||
Senior notes | Prior to July 15 2020 | ||||||||
Debt | ||||||||
Redemption price as a percentage | 100.00% | |||||||
Maximum aggregate principal amount not greater than net cash proceeds of certain equity offerings | 40.00% | |||||||
Net cash proceeds of equity offerings as a percentage of principal amount | 105.75% | |||||||
Senior notes | Occurrence Certain Change Of Control Events | ||||||||
Debt | ||||||||
Redemption price as a percentage | 101.00% | |||||||
Senior Credit Facilities | ||||||||
Debt | ||||||||
Aggregate principal amount | $ 675 | |||||||
Term loan facility | ||||||||
Debt | ||||||||
Aggregate principal amount | $ 375 | |||||||
Maturity term | 7 years | |||||||
Amortization of line of credit facility as a percentage of principal amount | 1.00% | |||||||
Term loan facility | Federal funds rate | ||||||||
Debt | ||||||||
Interest rate basis as a percentage | 0.50% | |||||||
Term loan facility | LIBOR | ||||||||
Debt | ||||||||
Reference rate | one-month adjusted LIBOR | |||||||
Interest rate basis as a percentage | 1.00% | |||||||
ABL facility | ||||||||
Debt | ||||||||
Maximum borrowing capacity commitment | $ 300 | |||||||
Maturity term | 5 years | |||||||
ABL facility | LIBOR | ||||||||
Debt | ||||||||
Reference rate | 3-month LIBOR | |||||||
ABL facility | LIBOR | Minimum | ||||||||
Debt | ||||||||
Interest rate basis as a percentage | 1.50% | |||||||
ABL facility | LIBOR | Maximum | ||||||||
Debt | ||||||||
Interest rate basis as a percentage | 2.00% | |||||||
Huntsman International | Reportable legal entities | Guarantors | ||||||||
Debt | ||||||||
Debt outstanding | $ 3,793 | $ 4,318 |
DERIVATIVE INSTRUMENTS AND HE45
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Maximum | |||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||
Maturity period of spot or forward exchange rate contracts | 3 months | ||
Forward foreign currency contracts | |||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||
Notional Amounts | $ 84 | ||
Maturity period of spot or forward exchange rate contracts | 1 month | ||
Forward foreign currency contracts | Maximum | |||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||
Maturity period of spot or forward exchange rate contracts | 3 months | ||
Forward foreign currency contracts | Huntsman International | |||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||
Notional amount entered into by related party | $ 88 | $ 50 | |
Maturity period of spot or forward exchange rate contracts | 1 month |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
INCOME TAXES | |||||||
Income tax (expense) benefit- continuing operations | $ (14) | $ 7 | $ (26) | $ 14 | $ 23 | $ 34 | $ 18 |
Deferred tax asset due to basis step up | 77 | 77 | |||||
Aggregate income tax future payments required per Tax Matters Agreement | $ 73 | $ 73 |
EARNINGS (LOSSES) PER SHARE (De
EARNINGS (LOSSES) PER SHARE (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Basic and diluted income (loss) from continuing operations: | |||||||
Income (loss) from continuing operations attributable to Venator | $ 51 | $ (7) | $ 58 | $ (89) | $ (95) | $ (369) | $ (173) |
Basic and diluted net income (loss): | |||||||
Net income (loss) attributable to Venator | $ 51 | $ (5) | $ 66 | $ (81) | $ (87) | $ (359) | $ (164) |
Denominator: | |||||||
Weighted average shares outstanding | 106.3 | 106.3 | 106.3 | 106.3 | 106.3 | 106.3 | 106.3 |
Dilutive shares: | |||||||
Dilutive share-based awards | 0.3 | 0.3 | |||||
Total weighted average shares outstanding, including dilutive shares | 106.6 | 106.3 | 106.6 | 106.3 | 106.3 | 106.3 | 106.3 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - LEGAL MATTERS (Details) - state | Jun. 13, 2016 | Sep. 29, 2015 | Dec. 31, 2016 |
State Antitrust Claims | |||
LEGAL MATTERS | |||
Number of states in which Plaintiffs have raised claims | 15 | 15 | |
Consumer Protection Claims | |||
LEGAL MATTERS | |||
Number of states in which Plaintiffs have raised claims | 9 | 9 | |
Number of states in which claim was dismissed | 1 | ||
Unjust Enrichment Claims | |||
LEGAL MATTERS | |||
Number of states in which Plaintiffs have raised claims | 16 | 16 |
ENVIRONMENTAL, HEALTH AND SAF49
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | |||||
Capital expenditures for EHS matters | $ 5 | $ 7 | $ 11 | $ 21 | $ 20 |
Accrued environmental liabilities | $ 12 | $ 12 | $ 14 |
OTHER COMPREHENSIVE INCOME (L50
OTHER COMPREHENSIVE INCOME (LOSS) - COMPONENTS AND CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | $ 177 | $ 728 | $ 728 | $ 1,415 | $ 1,247 | ||
Amounts reclassified from accumulated other comprehensive loss, gross | 11 | 10 | |||||
Tax benefit (expense) | 1 | ||||||
Other comprehensive income (loss), net of tax | $ 4 | $ (26) | 111 | (75) | (22) | (82) | (111) |
Balance at the end of the period | 1,016 | 250 | 1,016 | 250 | 177 | 728 | 1,415 |
Total | |||||||
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | (423) | (401) | (401) | (319) | |||
Adjustments related to other entities under common control | 29 | 3 | |||||
Tax expense | (3) | ||||||
Other comprehensive (loss) income before reclassifications, gross | 71 | (85) | (18) | (90) | |||
Tax benefit (expense) | 3 | (2) | (7) | (3) | |||
Amounts reclassified from accumulated other comprehensive loss, gross | 11 | 8 | 11 | 10 | |||
Tax benefit (expense) | 1 | 1 | |||||
Other comprehensive income (loss), net of tax | 111 | (75) | (22) | (82) | |||
Balance at the end of the period | (312) | (476) | (312) | (476) | (423) | (401) | (319) |
Foreign currency translation adjustment | |||||||
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | (112) | (144) | (144) | (73) | |||
Adjustments related to other entities under common control | 5 | 2 | |||||
Other comprehensive (loss) income before reclassifications, gross | 68 | (92) | 35 | (69) | |||
Tax benefit (expense) | 2 | (1) | |||||
Other comprehensive income (loss), net of tax | 75 | (91) | 32 | (71) | |||
Balance at the end of the period | (37) | (235) | (37) | (235) | (112) | (144) | (73) |
Foreign currency translation adjustment, tax | 2 | 1 | 0 | 0 | 0 | ||
Pension and other postretirement benefits adjustments | |||||||
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | (306) | (252) | (252) | (242) | |||
Adjustments related to other entities under common control | 24 | 1 | |||||
Tax expense | (3) | ||||||
Other comprehensive (loss) income before reclassifications, gross | 3 | 7 | (53) | (20) | |||
Tax benefit (expense) | 1 | (1) | (7) | (3) | |||
Amounts reclassified from accumulated other comprehensive loss, gross | 4 | 3 | 11 | 8 | 11 | 10 | |
Tax benefit (expense) | 1 | 1 | |||||
Other comprehensive income (loss), net of tax | 36 | 16 | (54) | (10) | |||
Balance at the end of the period | (270) | (236) | (270) | (236) | (306) | (252) | (242) |
Pension and other postretirement benefits adjustments, tax | 54 | 60 | 56 | 60 | 64 | ||
Other comprehensive income of unconsolidated affiliates | |||||||
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | (5) | (5) | (5) | (4) | |||
Other comprehensive (loss) income before reclassifications, gross | (1) | ||||||
Other comprehensive income (loss), net of tax | (1) | ||||||
Balance at the end of the period | (5) | (5) | (5) | (5) | (5) | (5) | (4) |
Accumulated other comprehensive loss | |||||||
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | (423) | (401) | (401) | (319) | (208) | ||
Adjustments related to other entities under common control | 29 | 3 | |||||
Tax expense | (3) | ||||||
Other comprehensive (loss) income before reclassifications, gross | 71 | (85) | (18) | (90) | |||
Tax benefit (expense) | 3 | (2) | (7) | (3) | |||
Amounts reclassified from accumulated other comprehensive loss, gross | 11 | 8 | 11 | 10 | |||
Tax benefit (expense) | 1 | 1 | |||||
Other comprehensive income (loss), net of tax | 111 | (75) | (22) | (82) | (111) | ||
Balance at the end of the period | $ (312) | $ (476) | $ (312) | $ (476) | $ (423) | $ (401) | $ (319) |
OTHER COMPREHENSIVE INCOME (L51
OTHER COMPREHENSIVE INCOME (LOSS) - RECLASSIFICATION DETAILS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification from accumulated other comprehensive loss | ||||||
Total before tax | $ 11 | $ 10 | ||||
Income tax benefit | 1 | |||||
Net of tax | 12 | 10 | ||||
Pension and other postretirement benefits adjustments | ||||||
Reclassification from accumulated other comprehensive loss | ||||||
Total before tax | $ 4 | $ 3 | $ 11 | $ 8 | 11 | 10 |
Income tax benefit | 1 | 1 | ||||
Net of tax | 4 | 3 | 11 | 9 | ||
Actuarial loss | ||||||
Reclassification from accumulated other comprehensive loss | ||||||
Total before tax | 5 | $ 3 | 13 | $ 8 | 10 | 9 |
Prior service credit | ||||||
Reclassification from accumulated other comprehensive loss | ||||||
Total before tax | $ (1) | $ (2) | $ 1 | $ 1 |
OPERATING SEGMENT INFORMATION -
OPERATING SEGMENT INFORMATION - FINANCIAL INFORMATION BY SEGMENT (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
OPERATING SEGMENT INFORMATION | |||||||
Number of reportable segments | segment | 2 | 2 | |||||
Revenues | $ 582 | $ 532 | $ 1,681 | $ 1,648 | $ 2,139 | $ 2,162 | $ 1,549 |
Segment adjusted EBITDA | 134 | 21 | 277 | 38 | |||
Reconciliation of adjusted EBITDA to net income (loss): | |||||||
Interest expense | (30) | (14) | (54) | (44) | (59) | (52) | (25) |
Interest income | 22 | 2 | 25 | 13 | 15 | 22 | 23 |
Income tax (expense) benefit- continuing operations | (14) | 7 | (26) | 14 | 23 | 34 | 18 |
Depreciation and amortization | (35) | (30) | (95) | (84) | (114) | (100) | (87) |
Net income attributable to noncontrolling interests | 2 | 3 | 8 | 8 | |||
Other adjustments: | |||||||
Business acquisition and integration expenses | (4) | (3) | (2) | (11) | |||
Gain on disposition of businesses/assets | 23 | 23 | |||||
Income from discontinued operations, net of tax | 2 | 8 | 8 | 8 | 10 | 9 | |
Certain legal settlements and related expenses | (1) | (1) | |||||
Amortization of pension and postretirement actuarial losses | (5) | (3) | (13) | (8) | |||
Net plant incident (costs) credits | (1) | (3) | (4) | 2 | |||
Restructuring, impairment and plant closing costs | (16) | (7) | (49) | (31) | (35) | (220) | (60) |
Net income (loss) | 53 | (2) | 74 | (73) | (77) | (352) | (162) |
Operating segments | |||||||
OPERATING SEGMENT INFORMATION | |||||||
Revenues | 2,139 | 2,162 | 1,549 | ||||
Segment adjusted EBITDA | 142 | 38 | 325 | 84 | 77 | 8 | 27 |
Reconciliation of adjusted EBITDA to net income (loss): | |||||||
Interest expense | (59) | (52) | (25) | ||||
Interest income | 15 | 22 | 23 | ||||
Income tax (expense) benefit- continuing operations | 23 | 34 | 18 | ||||
Depreciation and amortization | (114) | (100) | (87) | ||||
Net income attributable to noncontrolling interests | 10 | 7 | 2 | ||||
Other adjustments: | |||||||
Business acquisition and integration expenses | (11) | (44) | (45) | ||||
Gain on disposition of businesses/assets | 22 | (1) | 1 | ||||
Income from discontinued operations, net of tax | 8 | 10 | 9 | ||||
Certain legal settlements and related expenses | (2) | (3) | (3) | ||||
Amortization of pension and postretirement actuarial losses | (10) | (9) | (11) | ||||
Net plant incident (costs) credits | (1) | (4) | |||||
Restructuring, impairment and plant closing costs | (35) | (220) | (60) | ||||
Net income (loss) | (77) | (352) | (162) | ||||
Operating segments | Titanium Dioxide | |||||||
OPERATING SEGMENT INFORMATION | |||||||
Revenues | 431 | 392 | 1,217 | 1,197 | 1,554 | 1,584 | 1,411 |
Segment adjusted EBITDA | 127 | 22 | 268 | 28 | 61 | (8) | 62 |
Reconciliation of adjusted EBITDA to net income (loss): | |||||||
Depreciation and amortization | (87) | (72) | (73) | ||||
Operating segments | Performance Additives | |||||||
OPERATING SEGMENT INFORMATION | |||||||
Revenues | 151 | 140 | 464 | 451 | 585 | 578 | 138 |
Segment adjusted EBITDA | 15 | 16 | 57 | 56 | 69 | 69 | 14 |
Reconciliation of adjusted EBITDA to net income (loss): | |||||||
Depreciation and amortization | (19) | (20) | (5) | ||||
Corporate and Other | |||||||
OPERATING SEGMENT INFORMATION | |||||||
Segment adjusted EBITDA | $ (8) | $ (17) | $ (48) | $ (46) | (53) | (53) | (49) |
Reconciliation of adjusted EBITDA to net income (loss): | |||||||
Depreciation and amortization | $ (8) | $ (8) | $ (9) |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Huntsman | Corporate allocations | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Selling, general and administrative expenses | $ 9 | $ 27 | $ 62 | $ 76 | $ 104 | $ 90 | $ 78 |
COMBINED BALANCE SHEETS
COMBINED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Current assets: | |||||||||
Cash and cash equivalents | $ 186 | [1] | $ 29 | [1],[2] | $ 21 | [2] | |||
Accounts receivable (net of allowance for doubtful accounts of $4 each) | 411 | [1] | 247 | [1],[2] | 242 | [2] | |||
Accounts receivable from affiliates | 9 | 243 | 382 | ||||||
Inventories | 431 | [1] | 426 | [1],[2] | 556 | [2] | |||
Prepaid expenses | 11 | 11 | 49 | ||||||
Other current assets | 73 | 59 | 63 | ||||||
Current assets of discontinued operations | 84 | 119 | |||||||
Total current assets | 1,121 | 1,099 | 1,432 | ||||||
Property, plant and equipment, net | 1,264 | [1] | 1,178 | [1],[2] | 1,277 | [2] | $ 1,342 | ||
Intangible assets, net | 21 | [1] | 23 | [1],[2] | 28 | [2] | |||
Investment in unconsolidated affiliates | 77 | 85 | 98 | ||||||
Deferred income taxes | 200 | 142 | 130 | ||||||
Notes receivable from affiliates | 57 | 327 | |||||||
Other noncurrent assets | 41 | 35 | [2] | 32 | [2] | ||||
Noncurrent assets of discontinued operations | 42 | 89 | |||||||
Total assets | 2,724 | 2,661 | 3,413 | ||||||
Current liabilities: | |||||||||
Accounts payable | 319 | [1] | 297 | [1],[2] | 305 | [2] | |||
Accounts payable to affiliates | 15 | 695 | 621 | ||||||
Accrued liabilities | 213 | [1] | 146 | [1],[2] | 242 | [2] | |||
Current portion of debt | 4 | [1] | 10 | [1],[2] | 9 | [2] | |||
Current liabilities of discontinued operations | 27 | 31 | |||||||
Total current liabilities | 551 | 1,175 | 1,208 | ||||||
Long-term debt | 747 | 13 | 17 | ||||||
Long-term debt to affiliates | 882 | 1,023 | |||||||
Deferred income taxes | 9 | 12 | 25 | ||||||
Other noncurrent liabilities | 328 | 324 | 294 | ||||||
Noncurrent liabilities discontinued operations | 78 | 118 | |||||||
Total liabilities | 1,708 | 2,484 | 2,685 | ||||||
Commitments and contingencies (Notes 21 and 22) | |||||||||
Equity | |||||||||
Parent's net investment and advances | 588 | 1,112 | |||||||
Accumulated other comprehensive loss | (312) | (423) | (401) | ||||||
Total Venator Materials PLC shareholders' equity | 1,005 | 165 | 711 | ||||||
Noncontrolling interest in subsidiaries | 11 | 12 | 17 | ||||||
Total equity | 1,016 | 177 | $ 250 | 728 | $ 1,415 | $ 1,247 | |||
Total liabilities and equity | $ 2,724 | $ 2,661 | $ 3,413 | ||||||
[1] | At September?30, 2017 and December?31, 2016, $6 and $4 of cash and cash equivalents, $7 and $6 of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $18 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note?5. Variable Interest Entities." | ||||||||
[2] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? |
COMBINED BALANCE SHEETS (Parent
COMBINED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 4 | $ 4 | $ 4 | ||||
Variable Interest Entity | |||||||
Cash and cash equivalents | 186 | [1] | 29 | [1],[2] | 21 | [2] | |
Accounts receivable, net | 411 | [1] | 247 | [1],[2] | 242 | [2] | |
Inventories | 431 | [1] | 426 | [1],[2] | 556 | [2] | |
Property, plant and equipment (net) | 1,264 | [1] | 1,178 | [1],[2] | 1,277 | [2] | $ 1,342 |
Intangible assets (net) | 21 | [1] | 23 | [1],[2] | 28 | [2] | |
Accounts payable | 319 | [1] | 297 | [1],[2] | 305 | [2] | |
Accrued liabilities | 213 | [1] | 146 | [1],[2] | 242 | [2] | |
Current portion of debt | 4 | [1] | 10 | [1],[2] | 9 | [2] | |
Consolidated VIE's | |||||||
Variable Interest Entity | |||||||
Cash and cash equivalents | 6 | 4 | 7 | ||||
Accounts receivable, net | 7 | 6 | 4 | ||||
Inventories | 1 | 1 | 1 | ||||
Property, plant and equipment (net) | 4 | 4 | 5 | ||||
Intangible assets (net) | 18 | 20 | 23 | ||||
Accounts payable | 1 | 1 | 1 | ||||
Accrued liabilities | 3 | 4 | 3 | ||||
Current portion of debt | $ 2 | $ 2 | $ 1 | ||||
[1] | At September?30, 2017 and December?31, 2016, $6 and $4 of cash and cash equivalents, $7 and $6 of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $18 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note?5. Variable Interest Entities." | ||||||
[2] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? |
COMBINED STATEMENTS OF OPERATIO
COMBINED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2014 | |
STATEMENTS OF OPERATIONS | ||
Trade sales, services and fees, net | $ 2,139 | $ 1,549 |
Cost of goods sold | 1,987 | 1,483 |
Operating expenses: | ||
Selling, general, and administrative (includes corporate allocations of $104, $90 and $78, respectively) | 225 | 182 |
Restructuring, impairment and plant closing costs | 35 | 60 |
Other (income) expense, net | (45) | 10 |
Total expenses | 215 | 252 |
Operating income (loss) | (63) | (186) |
Interest expense | (59) | (25) |
Interest income | 15 | 23 |
Other expense | (1) | (1) |
Income (loss) from continuing operations before income taxes | (108) | (189) |
Income tax (expense) benefit | 23 | 18 |
Income (loss) from continuing operations | (85) | (171) |
Income from discontinued operations, net of tax | 8 | 9 |
Net income (loss) | (77) | (162) |
Net income attributable to noncontrolling interests | (10) | (2) |
Net income (loss) attributable to Venator | $ (87) | $ (164) |
Basic losses per share: | ||
Loss from continuing operations attributable to Venator Materials PLC ordinary shareholders | $ (0.89) | $ (1.63) |
Income from discontinued operations attributable to Venator Materials PLC ordinary shareholders | 0.07 | 0.09 |
Net income (loss) attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | (0.82) | (1.54) |
Diluted losses per share: | ||
Loss from continuing operations attributable to Venator Materials PLC ordinary shareholders | (0.89) | (1.63) |
Income from discontinued operations attributable to Venator Materials PLC ordinary shareholders | 0.07 | 0.09 |
Net income (loss) attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | $ (0.82) | $ (1.54) |
COMBINED STATEMENTS OF OPERAT57
COMBINED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Huntsman | Corporate allocations | |||||||
Selling, general and administrative expenses | $ 9 | $ 27 | $ 62 | $ 76 | $ 104 | $ 90 | $ 78 |
COMBINED STATEMENTS OF COMPREHE
COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net loss | $ (352) | $ (162) |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustment | (71) | (93) |
Pension and other postretirement benefits adjustments | (10) | (16) |
Other, net | (1) | (2) |
Other comprehensive income (loss), net of tax | (82) | (111) |
Comprehensive income (loss) | (434) | (273) |
Comprehensive income attributable to noncontrolling interest | (7) | (2) |
Comprehensive income (loss) attributable to Venator | $ (441) | $ (275) |
COMBINED STATEMENTS OF EQUITY
COMBINED STATEMENTS OF EQUITY - USD ($) $ in Millions | Parent's Net Investment and Advances | Accumulated other comprehensive loss | Noncontrolling interests in subsidiaries | Total |
Balance at the beginning of the period at Dec. 31, 2013 | $ 1,454 | $ (208) | $ 1 | $ 1,247 |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (164) | 2 | (162) | |
Net changes in other comprehensive loss | (111) | (111) | ||
Dividends paid to noncontrolling interests | (1) | (1) | ||
Acquisition of a business | 16 | 16 | ||
Net changes in parent's net investment and advances | 424 | 2 | 426 | |
Balance at the end of the period at Dec. 31, 2014 | 1,714 | (319) | 20 | 1,415 |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (359) | 7 | (352) | |
Net changes in other comprehensive loss | (82) | (82) | ||
Dividends paid to noncontrolling interests | (8) | (8) | ||
Net changes in parent's net investment and advances | (243) | (2) | (245) | |
Balance at the end of the period at Dec. 31, 2015 | 1,112 | (401) | 17 | 728 |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (81) | 8 | (73) | |
Net changes in other comprehensive loss | (75) | (75) | ||
Dividends paid to noncontrolling interests | (10) | (10) | ||
Net changes in parent's net investment and advances | (318) | (2) | (320) | |
Balance at the end of the period at Sep. 30, 2016 | 713 | (476) | 13 | 250 |
Balance at the beginning of the period at Dec. 31, 2015 | 1,112 | (401) | 17 | 728 |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | (87) | 10 | (77) | |
Net changes in other comprehensive loss | (22) | (22) | ||
Dividends paid to noncontrolling interests | (14) | (14) | ||
Net changes in parent's net investment and advances | (437) | (1) | (438) | |
Balance at the end of the period at Dec. 31, 2016 | 588 | (423) | 12 | 177 |
Increase (Decrease) in Stockholders' Equity | ||||
Net loss | 67 | 8 | 74 | |
Net changes in other comprehensive loss | 111 | 111 | ||
Dividends paid to noncontrolling interests | (9) | (9) | ||
Net changes in parent's net investment and advances | $ 663 | 663 | ||
Balance at the end of the period at Sep. 30, 2017 | $ (312) | $ 11 | $ 1,016 |
COMBINED STATEMENTS OF CASH FLO
COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Activities: | |||
Net loss | $ (77) | $ (352) | $ (162) |
Income from discontinued operations, net of tax | (8) | (10) | (9) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 114 | 100 | 87 |
Deferred income taxes | (14) | (28) | (23) |
(Gain) loss on disposal of assets | (22) | 1 | (1) |
Noncash restructuring and impairment charges | 10 | 104 | |
Noncash interest | 44 | 33 | 1 |
Noncash (gain) loss on foreign currency transactions | (9) | (4) | (1) |
Other, net | 1 | 1 | (1) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (12) | 34 | 35 |
Inventories | 106 | 94 | (6) |
Prepaid expenses | 1 | (42) | (1) |
Other current assets | (4) | 10 | (3) |
Other noncurrent assets | (9) | 2 | (9) |
Accounts payable | 17 | 5 | 29 |
Accrued liabilities | (40) | 29 | 42 |
Other noncurrent liabilities | (18) | (34) | (49) |
Net cash provided by operating activities from continuing operations | 80 | (57) | (71) |
Net cash provided by (used in) operating activities from discontinued operations | 17 | (6) | 8 |
Net cash provided by operating activities | 97 | (63) | (63) |
Investing Activities: | |||
Capital expenditures | (103) | (203) | (136) |
Cash received from unconsolidated affiliates | 32 | 48 | 48 |
Net repayments from (advances to) affiliates | (5) | 97 | 100 |
Investment in unconsolidated affiliates | (29) | (42) | (37) |
Cash acquired from the acquisition of business | 76 | ||
Proceeds from sale of businesses/assets | 9 | 1 | |
Net cash provided by (used in) investing activities from continuing operations | (96) | (100) | 52 |
Net cash used in investing activities from discontinued operations | (22) | (39) | (23) |
Net cash provided by (used in) investing activities | (118) | (139) | 29 |
Financing Activities: | |||
Proceeds from short-term debt | 1 | 1 | |
Net borrowings from affiliate accounts payable | 47 | 194 | 53 |
Principal payments on long-term debt | (2) | (2) | |
Dividends paid to noncontrolling interest | (14) | (8) | |
Net cash provided by financing activities from continuing operations | 32 | 185 | 53 |
Net cash (used in) provided by financing activities from discontinued operations | (2) | 9 | (1) |
Net cash (used in) provided by financing activities | 30 | 194 | 52 |
Effect of exchange rate changes on cash | (1) | (3) | (2) |
Net change in cash and cash equivalents, including discontinued operations | 8 | (11) | 16 |
Cash and cash equivalents at beginning of period, including discontinued operations | 22 | 33 | 17 |
Cash and cash equivalents at end of period, including discontinued operations | 30 | 22 | 33 |
Supplemental cash flow information: | |||
Cash paid for interest | 5 | 4 | 5 |
Cash paid (received) for income taxes | 7 | 8 | (2) |
Supplemental disclosure of noncash activities: | |||
Capital expenditures included in accounts payable | 21 | 25 | 36 |
Received settlements of notes receivable from affiliates | 270 | 256 | 244 |
Settled long-term debt to affiliates | 145 | $ 39 | $ 811 |
Huntsman International | |||
Supplemental disclosure of noncash activities: | |||
Noncash capital contribution from huntsman corporation | $ 960 |
GENERAL, DESCRIPTION OF BUSIN61
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | ||
DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION General Except when the context otherwise requires or where otherwise indicated, (1) all references to "Venator," the "Company," "we," "us" and "our" refer to Venator Materials PLC and its subsidiaries, or, as the context requires, the historical Pigments and Additives business of Huntsman, (2) all references to "Huntsman" refer to Huntsman Corporation, our controlling shareholder, and its subsidiaries, other than us, (3) all references to the "Titanium Dioxide" segment or business refer to the TiO 2 business of Venator, or, as the context requires, the historical Pigments and Additives segment of Huntsman and the related operations and assets, liabilities and obligations, (4) all references to the "Performance Additives" segment or business refer to the functional additives, color pigments, timber treatment and water treatment businesses of Venator, or, as the context requires, the Pigments and Additives segment of Huntsman and the related operations and assets, liabilities and obligations, (5) all references to "other businesses" refer to certain businesses that Huntsman retained in connection with the Separation and that are reported as discontinued operations in our condensed consolidated and combined financial statements, (6) all references to "Huntsman International" refer to Huntsman International LLC, a wholly-owned subsidiary of Huntsman, and the entity through which Huntsman operates all of its businesses, and (7) we refer to the internal reorganization prior to our initial public offering (our “IPO”), the separation transactions initiated to separate the Venator business from Huntsman’s other businesses, including the entry into and effectiveness of the separation agreement and ancillary agreements, and the Senior Credit Facilities (as defined below) and Senior Notes (as defined below), including the use of the net proceeds of the Senior Credit Facilities and the Senior Notes, which were used to repay intercompany debt we owed to Huntsman and to pay related fees and expenses, as the "Separation" and (8) the “Rockwood acquisition” refers to Huntsman’s acquisition of the performance and additives and TiO 2 businesses of Rockwood Holdings, Inc. (“Rockwood”) completed on October 1, 2014. Description of Business Venator operates in two segments: Titanium Dioxide and Performance Additives. The Titanium Dioxide segment manufactures and sells primarily TiO 2 , and operates eight TiO 2 manufacturing facilities across the globe, predominantly in Europe. The Performance Additives segment manufactures and sells functional additives, color pigments, timber treatment and water treatment chemicals. This segment operates 19 color pigments, functional additives, water treatment and timber treatment manufacturing and processing facilities in Europe, North America, Asia and Australia. Recent Developments Initial Public Offering and Separation On August 8, 2017, we completed our IPO of 26,105,000 of our outstanding 106,271,712 ordinary shares, par value $0.001 per share, which includes 3,405,000 ordinary shares issued upon the exercise in full by the underwriters of their option to purchase additional shares, at a public offering price of $20.00 per share. All of the ordinary shares were sold by Huntsman, and we did not receive any proceeds from the offering. The ordinary shares began trading August 3, 2017 on the New York Stock Exchange under the symbol “VNTR.” Following our IPO, Huntsman owns approximately 75% of Venator’s outstanding ordinary shares. The material terms of our IPO are described in the Prospectus. In connection with our IPO and the Separation, Venator and Huntsman entered into certain agreements that allocated between Venator and Huntsman the various assets, employees, liabilities and obligations that were previously part of Huntsman and that govern various interim and ongoing relationships between the parties. On August 15, 2017, we registered 14,025,000 ordinary shares on Form S-8 which are reserved in connection with awards under our 2017 Stock Incentive Plan. Senior Credit Facilities and Senior Notes On August 8, 2017, in connection with our IPO and the Separation, we entered into new financing arrangements and incurred new debt, including borrowings of $375 million under a new senior secured term loan facility with a maturity of seven years (the “Term Loan Facility”). In addition to the Term Loan Facility, we entered into a $300 million asset-based revolving lending facility with a maturity of five years (the “ABL Facility” and, together with the Term Loan Facility, the “Senior Credit Facilities”). On July 14, 2017, in connection with our IPO and the Separation, our subsidiaries Venator Finance S.à.r.l. and Venator Materials LLC (the “Issuers”), issued $375 million in aggregate principal amount of 5.75% of Senior Notes due 2025 (the “Senior Notes”). Promptly following consummation of the Separation, the proceeds of the Senior Notes were released from escrow and Venator used the net proceeds of the Senior Notes and borrowings under the Term Loan Facility to repay approximately $732 million of net intercompany debt owed to Huntsman and to pay related fees and expenses of approximately $18 million. Pori Fire On January 30, 2017, our TiO 2 manufacturing facility in Pori, Finland experienced fire damage and we continue to repair the facility. Prior to the fire, 60% of the site capacity produced specialty products which, on average, contributed greater than 75% of the site EBITDA from January 1, 2015 through January 30, 2017. We are currently operating at 20% of total prior capacity but producing only specialty products, and we currently intend to restore manufacturing of the balance of these more profitable specialty products by the fourth quarter of 2018. The remaining 40% of site capacity is more commoditized and we will determine if and when to rebuild this commoditized capacity depending on market conditions, costs and projected long term returns relative to our other investment opportunities. We have recorded a loss of $31 million for the write-off of fixed assets and lost inventory in other operating income, net in our condensed consolidated and combined statements of operations for the nine months ending September 30, 2017. In addition, we recorded a loss of $18 million of costs for cleanup of the facility in other operating income, net through September 30, 2017. The site is insured for property damage as well as business interruption losses subject to retained deductibles of $15 million and 60 days, respectively, with a limit of $500 million. Due to prevailing strong market conditions, our TiO 2 selling prices continue to improve and our business is benefitting from the resulting improved profitability and cash flows. This also has the effect of increasing our total anticipated business interruption losses from the Pori site. We currently believe the combination of increased TiO 2 profitability and recently estimated reconstruction costs will result in losses and costs in excess of our $500 million insurance limit. We currently expect to contain these over-the-limit costs within $100 million to $150 million, and to account for them as capital expenditures. However, these are preliminary estimates based on a number of significant assumptions, and as a result uninsured costs could exceed current estimates. Factors that could materially impact our current estimates include our actual future TiO 2 profitability and related impact on our business interruption losses; the accuracy of our current property damage estimates; the actual costs and timing of our reconstruction efforts; the extent to which we rebuild the 40% of site capacity that produces commoditized products; our ability to secure government subsidies related to our reconstruction efforts; and a number of other significant market and facility-related assumptions. Please see “Part II. Item 1A. Risk Factors—Disruptions in production at our manufacturing facilities, including our Pori facility, may have a material adverse impact on our business, results of operations and/or financial condition.” The fire at our Pori facility did not have a material impact on our 2017 third quarter operating results as losses incurred were offset by insurance proceeds. We received $141 million of non-refundable partial progress payments from our insurer through September 30, 2017 and we received an additional $112 million payment on October 9, 2017. During the first nine months of 2017, we recorded $128 million of income related to property damage and business interruption insurance recoveries in other operating income, net and cost of goods sold in our condensed consolidated and combined statements of operations to offset property damage and business interruption losses recorded during the period. We recorded $17 million as deferred income in accrued liabilities as of September 30, 2017 for insurance proceeds received for costs not yet incurred. The difference between payments received from our insurers of $141 million and the sum of income of $128 million and deferred income of $17 million is related to the foreign exchange movements of the U.S. Dollar against the Euro during the first nine months of the year. Basis of Presentation Venator’s unaudited condensed consolidated and combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP" or "U.S. GAAP") and in management’s opinion reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results of operations, comprehensive income (loss), financial position and cash flows for the periods presented. Results of interim periods are not necessarily indicative of those to be expected for the full year. These unaudited condensed consolidated and combined financial statements should be read in conjunction with the audited combined financial statements and notes to combined financial statements included in the Prospectus. Prior to the Separation, Venator’s operations were included in Huntsman’s financial results in different legal forms, including but not limited to: (1) wholly-owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities which are comprised of other businesses and include the Titanium Dioxide and/or Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives businesses are the primary beneficiaries. The unaudited condensed consolidated and combined financial statements include all revenues, costs, assets, liabilities and cash flows directly attributable to Venator. The unaudited condensed consolidated and combined financial statements also include allocations of direct and indirect corporate expenses through the date of the Separation, which are based upon an allocation method that in the opinion of management is reasonable. Because the historical condensed consolidated and combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical condensed consolidated and combined financial information includes the results of operations of other businesses that are not a part of our operations after the Separation. We report the results of those other businesses as discontinued operations. See “Note 3. Discontinued Operations” for further discussion of discontinued operations. In addition, the unaudited condensed consolidated and combined financial statements have been prepared from Huntsman’s historical accounting records through the Separation and are presented on a stand-alone basis as if Venator’s operations had been conducted separately from Huntsman; however, prior to the Separation, Venator did not operate as a separate, stand-alone entity for the periods presented and, as such, the condensed consolidated and combined financial statements reflecting balances and activity prior to the Separation, may not be indicative of the financial position, results of operations and cash flows had Venator been a stand-alone company. For purposes of these unaudited condensed consolidated and combined financial statements, all significant transactions with Huntsman International have been included in group equity. All intercompany transactions within the consolidated business have been eliminated. Prior to the Separation, Huntsman’s executive, information technology, EHS and certain other corporate departments performed certain administrative and other services for Venator. Additionally, Huntsman performed certain site services for Venator. Expenses incurred by Huntsman and allocated to Venator were determined based on specific services provided or were allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $9 million and $27 million for the three months ended September 30, 2017 and 2016, respectively, and $62 million and $76 million for the nine months ended September 30, 2017 and 2016, respectively. | 1. DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General —For convenience in this report, the terms “our,” “us,” “we” or “Venator” may be used to refer to Venator Materials PLC and, unless the context otherwise requires, its subsidiaries. Description of Business —Venator (comprising the combined operations and legal entities of the Pigments & Additives division and certain other operations of Huntsman Corporation, or Huntsman) operates in two segments: Titanium Dioxide and Performance Additives. The Titanium Dioxide segment manufactures and sells primarily titanium dioxide (“TiO2”), and has global operations operating eight TiO2 manufacturing facilities, predominantly in Europe. The Performance Additives segment manufactures and sells functional additives, color pigments, timber treatment and water treatment chemicals. This segment operates 19 color pigments, functional additives, water treatment and timber treatment manufacturing and processing facilities in Europe, North America, Asia and Australia. Recent Developments —In February 2017, Huntsman filed suit against the legacy owner and certain former executives of Rockwood, primarily related to the failure of new technology that Huntsman acquired in the Rockwood acquisition that was to be implemented at the new Augusta facility and subsequently at other facilities. Huntsman is seeking various forms of legal remedy, including compensatory damages, punitive damages, expectation damages, consequential damages and restitution. Venator is not party to the suit. On January 30, 2017, Venator’s TiO2 manufacturing facility in Pori, Finland experienced fire damage and is currently not fully operational. We are committed to repairing the facility as quickly as possible. The site is insured for property damage as well as business interruption losses. Basis of Presentation —Venator’s combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP” or “U.S. GAAP”). Venator’s operations were included in Huntsman Corporation’s financial results in different legal forms, including but not limited to: (1) wholly‑owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities which are comprised of other businesses and include the Titanium Dioxide and Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives and other businesses are the primary beneficiaries. The combined financial statements include all revenues, costs, assets, liabilities and cash flows directly attributable to Venator, as well as allocations of direct and indirect corporate expenses, which are based upon an allocation method that in the opinion of management is reasonable. Such corporate cost allocation transactions between Venator and Huntsman Corporation have been considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded and the net effect of the settlement of these intercompany transactions is reflected in the combined statements of cash flows as a financing activity. Because the historical combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical combined financial information includes the results of operations of other Huntsman businesses are not a part of our operations after the Separation. We report the results of those other businesses as discontinued operations. Please see note “3. Discontinued Operations” to our unaudited condensed consolidated and combined financial statements and note “26. Discontinued Operations” to our combined financial statements. In addition, the combined financial statements have been prepared from Huntsman Corporation’s historical accounting records and are presented on a stand‑alone basis as if Venator’s operations had been conducted separately from Huntsman Corporation; however, Venator did not operate as a separate, stand‑alone entity for the periods presented and, as such, the combined financial statements may not be indicative of the financial position, results of operations and cash flows had Venator been a stand‑alone company. For purposes of these combined financial statements, all significant transactions with Huntsman International LLC (“Huntsman International”), a wholly‑owned subsidiary of Huntsman through which Huntsman operates all of its businesses, have been included in group equity. All intercompany transactions within the combined business have been eliminated. Additional disclosures are included in note “20. Related Party Transactions.” Huntsman Corporation’s executive, information technology, environmental, health and safety and certain other corporate departments perform certain administrative and other services for Venator. Additionally, Huntsman Corporation performs certain site services for Venator. Expenses incurred by Huntsman Corporation and allocated to Venator are determined based on specific services provided or are allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman Corporation. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $104 million, $90 million and $78 million for the years ended December 31, 2016, 2015 and 2014, respectively. Asset Retirement Obligations —Venator accrues for asset retirement obligations, which consist primarily of asbestos abatement costs, demolition and removal costs, leasehold remediation costs and landfill closure costs, in the period in which the obligations are incurred. Asset retirement obligations are initially recorded at estimated fair value. When the related liability is initially recorded, Venator capitalizes the cost by increasing the carrying amount of the related long‑lived asset. Over time, the liability is accreted to its estimated settlement value and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, Venator will recognize a gain or loss for any difference between the settlement amount and the liability recorded. Carrying Value of Long‑Lived Assets —Venator reviews long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability is based upon current and anticipated undiscounted cash flows, and Venator recognizes an impairment when such estimated cash flows are less than the carrying value of the asset. Measurement of the amount of impairment, if any, is based upon the difference between carrying value and fair value. Fair value is generally estimated by discounting estimated future cash flows using a discount rate commensurate with the risks involved. Cash and Cash Equivalents —Venator considers cash in bank accounts and short‑term highly liquid investments with remaining maturities of three months or less at the date of purchase to be cash and cash equivalents. Venator’s day‑to‑day funding requirements are primarily met by the Huntsman International treasury function. Venator participates in Huntsman International’s cash pooling program. The cash pooling program is an intercompany borrowing arrangement designed to reduce Venator’s dependence on external short‑term borrowing. See note “14. Related Party Financing.” Cost of Goods Sold —Venator classifies the costs of manufacturing and distributing its products as cost of goods sold. Manufacturing costs include variable costs, primarily raw materials and energy, and fixed expenses directly associated with production. Manufacturing costs include, among other things, plant site operating costs and overhead costs (including depreciation), production planning and logistics costs, repair and maintenance costs, plant site purchasing costs, and engineering and technical support costs. Distribution, freight, and warehousing costs are also included in cost of goods sold. Derivative Transactions —All derivatives are recorded on Venator’s balance sheet at fair value. Changes in fair value of derivatives are recognized in earnings. See note “16. Derivative Instruments and Hedging Activities.” Environmental Expenditures —Environmental‑related restoration and remediation costs are recorded as liabilities when site restoration and environmental remediation and cleanup obligations are either known or considered probable and the related costs can be reasonably estimated. Other environmental expenditures that are principally maintenance or preventative in nature are recorded when expended and incurred and are expensed or capitalized as appropriate. See note “22. Environmental, Health and Safety Matters.” Financial Instruments —The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, amounts receivable from affiliates, accounts payable, amounts payable to affiliates, and accrued liabilities approximate their fair value because of the immediate or short‑term maturity of these financial instruments. The fair value of non‑qualified employee benefit plan investments is estimated using prevailing market prices. The estimated fair values of Venator’s long‑term debt are based on quoted market prices for the identical liability when traded as an asset in an active market. Such fair value approximates carrying value. Foreign Currency Translation —The accounts of Venator’s operating subsidiaries outside of the U.S. consider the functional currency to be the currency of the economic environment in which they operate. Accordingly, assets and liabilities are translated at rates prevailing at the balance sheet date. Revenues, expenses, gains and losses are translated at a weighted average rate for the period. Cumulative translation adjustments are recorded to equity as a component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are recorded in other (income) expense in the combined statements of operations and were net gains of $9 million, $4 million and $1 million for the years ended December 31, 2016, 2015 and 2014, respectively. Income Taxes —Venator is comprised of operations in various tax jurisdictions. Venator’s operations were included in Huntsman Corporation’s financial results in different legal forms, including but not limited to wholly‑owned subsidiaries for which Venator was the sole business, components of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses and variable interest entities in which Venator is the primary beneficiary. Similarly, Venator’s tax obligations and filings were included in different legal forms, including but not limited to legal entities in certain countries where fiscal unity or consolidation is allowed or required with other Huntsman Corporation businesses, components of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses, and legal entities which file separate tax returns in their respective tax jurisdictions. The combined financial statements have been prepared from Huntsman Corporation’s historical accounting records and are presented on a stand‑alone basis as if Venator’s operations had been conducted separately from Huntsman; however, Venator did not operate as a separate, stand‑alone entity for the periods presented and, as such, the tax results and attributes presented in these combined financial statements would not be indicative of the income tax expense or benefit, income tax related assets and liabilities and cash taxes had Venator been a stand‑alone company. The combined financial statements have been prepared under the currently anticipated legal structure of Venator such that the historical results of legal entities are presented as follows: The historical tax results of legal entities which file separate tax returns in their respective tax jurisdictions and which need no restructuring before being contributed are included without adjustment, including the inclusion of any currently held subsidiaries. The historical tax results of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses for which new legal entities will be formed for Venator operations are presented on a stand‑alone basis as if their operations had been conducted separately from Huntsman and any adjustments to current taxes payable have been treated as adjustments to parent’s net investment and advances. The historical tax results of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses for which the Huntsman business will be transferred out have been presented without adjustment, including the historical results of the Huntsman businesses which are unrelated to Venator operating businesses. Pursuant to tax‑sharing agreements, subsidiaries of Huntsman Corporation are charged or credited, in general, with an amount of income taxes as if they filed separate income tax returns. Adjustments to current income taxes payable by Venator have been treated as adjustments to parent’s net investment and advances. Venator includes the U.S. Titanium Dioxide and Performance Additives subsidiaries of Huntsman International which are treated for U.S. tax purposes as divisions of Huntsman International. Huntsman International is included in the U.S. consolidated tax return of its parent, Huntsman Corporation. A 2% U.S. state income tax rate (net of federal benefit) was estimated for Venator based upon the estimated apportionment factors and actual income tax rates in state tax jurisdictions where it has nexus. U.S. foreign tax credits relating to taxes paid by non‑U.S. business entities have been generated and utilized by Huntsman. On a separate entity basis, these foreign tax credits would not have been generated or utilized, therefore, no additional allocation of Huntsman foreign tax credits was necessary. Additionally, Huntsman had no U.S. net operating loss carryforward amounts (“NOLs”) or similar attributes to allocate. Venator believes this methodology is reasonable and complies with Staff Accounting Bulletin Topic 1B, Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity . Venator uses the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial and tax reporting purposes. Venator evaluates deferred tax assets to determine whether it is more likely than not that they will be realized. Valuation allowances are reviewed on a tax jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets for each jurisdiction. These conclusions require significant judgment. In evaluating the objective evidence that historical results provide, Venator considers the cyclicality of Venator and cumulative income or losses during the applicable period. Cumulative losses incurred over the period limits Venator’s ability to consider other subjective evidence such as Venator’s projections for the future. Changes in expected future income in applicable tax jurisdictions could affect the realization of deferred tax assets in those jurisdictions. As of December 31, 2016 and 2015, there were no unremitted earnings of subsidiaries to consider for indefinite reinvestment. Going forward, to the extent future U.S. cash flow needs require distributions from foreign subsidiaries, based on existing law, we expect to have tax attributes (at least up to the amount of anticipated external Venator debt) that could allow repatriation of earnings to the U.S. without incremental U.S. income tax. The U.S. tax expense, deferred tax assets, and deferred tax liabilities in these financial statements do not necessarily reflect the tax expense, deferred tax assets, or deferred tax liabilities that would have resulted had Venator not been operated as a U.S. income tax branch structure in combination with Huntsman Corporation. By illustration, there are no net operating losses to be allocated to Venator given the overall profitability of the Huntsman group in the U.S. The tax provision is not intended in any way to be representative of future taxes. Further, the tax attributes presented reflect calculated unaffiliated results based upon the legal entity structure of Venator and using the stand‑alone methodology. The actual income tax attributes that would be allocated under the various required tax laws to the specific legal entities comprising Venator would be different than the amounts presented. Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The application of income tax law is inherently complex. Venator is required to determine if an income tax position meets the criteria of more‑likely‑than‑not to be realized based on the merits of the position under tax law, in order to recognize an income tax benefit. This requires Venator to make significant judgments regarding the merits of income tax positions and the application of income tax law. Additionally, if a tax position meets the recognition criteria of more‑likely‑than‑not, Venator is required to make judgments and apply assumptions in order to measure the amount of the tax benefits to recognize. The judgments are based on the probability of the amount of tax benefits that would be realized if the tax position was challenged by the taxing authorities. Interpretations and guidance surrounding income tax laws and regulations change over time. As a consequence, changes in assumptions and judgments can materially affect amounts recognized in the combined financial statements. Intangible Assets and Goodwill —Intangible assets are stated at cost (fair value at the time of acquisition) and are amortized using the straight‑line method over the estimated useful lives or the life of the related agreement as follows: Patents and technology 5 ‑ 30 years Trademarks 9 ‑ 30 years Licenses and other agreements 5 ‑ 15 years Other intangibles 5 ‑ 15 years Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill is not subject to any method of amortization, but is tested for impairment annually (at the beginning of the third quarter) and when events and circumstances change that would more‑likely‑than‑not reduce the fair value of a reporting unit below its carrying amount. When the fair value is less than the carrying value of the related reporting unit, Venator is required to reduce the amount of goodwill through a charge to earnings. Fair value is estimated using the market approach, as well as the income approach based on discounted cash flow projections. Goodwill has been assigned to reporting units for purposes of impairment testing. Inventories —Inventories are stated at the lower of cost or market, with cost determined using the first‑in, first‑out and average costs methods for different components of inventory. Legal Costs —Venator expenses legal costs, including those legal costs incurred in connection with a loss contingency, as incurred. Property, Plant, and Equipment —Property, plant, and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful lives or lease term as follows: Buildings and equipment 5 ‑ 50 years Plant and equipment 3 ‑ 30 years Furniture, fixtures and leasehold improvements 5 ‑ 20 years Normal maintenance and repairs of plant and equipment are charged to expense as incurred. Renewals, betterments, and major repairs that significantly extend the useful life of the assets are capitalized and the assets replaced, if any, are retired. Research and Development —Research and development costs are expensed as incurred and recorded in selling, general and administrative expense. Research and development costs charged to expense were $15 million, $17 million and $8 million for the years ended December 31, 2016, 2015 and 2014, respectively. Revenue Recognition —Venator generates substantially all of its revenues through sales in the open market and long‑term supply agreements. Venator recognizes revenue when it is realized or realizable and earned. Revenue for product sales is recognized when a sales arrangement exists, risk and title to the product transfer to the customer, collectibility is reasonably assured, and pricing is fixed or determinable. The transfer of risk and title to the product to the customer usually occurs at the time shipment is made. The revenue recognition policy for sales to related parties does not differ from the policy described above. Securitization of Accounts Receivable —Venator participates in A/R Programs sponsored by Huntsman International. Under the A/R Programs, Venator sells certain of its trade receivables to Huntsman International. Huntsman International grants an undivided interest in these receivables to bankruptcy remote special purpose entities (“SPE”), which serve as security for the issuance of debt of Huntsman International. See note “14. Related Party Financing.” Subsequent Events —Venator evaluated material subsequent events through May 5, 2017, the date these combined financial statements were available to be issued. Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
RECENTLY ISSUED ACCOUNTING PR62
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements Pending Adoption in Future Periods In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014‑09, Revenue from Contracts with Customers (Topic 606) , outlining a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and supersedes most current revenue recognition guidance. In August 2015, the FASB issued ASU No. 2015‑14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , deferring the effective date of ASU No. 2014‑09 for all entities by one year. Further, in March 2016, the FASB issued ASU No. 2016‑08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , clarifying the implementation guidance on principal versus agent considerations, in April 2016, the FASB issued ASU No. 2016‑10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , clarifying the implementation guidance on identifying performance obligations in a contract and determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time), in May 2016, the FASB issued ASU No. 2016‑12, Revenue from Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , providing clarifications and practical expedients for certain narrow aspects in Topic 606, and in December 2016, the FASB issued ASU 2016‑20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers . The amendments in these ASUs are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The amendments in ASU No. 2014‑09, ASU No. 2016‑08, ASU No. 2016‑10, ASU No. 2016‑12 and ASU No. 2016‑20 should be applied retrospectively, and early application is permitted. We are substantially complete with our analysis to identify areas that will be impacted by the adoption of the amendments in ASU No. 2014‑09, ASU No. 2016‑08, ASU No. 2016‑10, ASU No. 2016‑12 and ASU No. 2016‑20 on our financial statements. At this time, other than additional required disclosures, we do not expect the adoption of the amendments in these ASUs to have a significant impact on our financial statements. The standard will be adopted in our fiscal year 2018 and we have elected the modified retrospective approach as the transition method. In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) . The amendments in this ASU will increase transparency and comparability among entities by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this ASU will require lessees to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application of the amendments in this ASU is permitted for all entities. Reporting entities are required to recognize and measure leases under these amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact of the adoption of the amendments in this ASU on our financial statements and believe, based on our preliminary assessment, that we will record significant additional right-of-use assets and lease obligations. In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU clarify and include specific guidance to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. We do not expect the adoption of the amendments in this ASU to have a significant impact on our financial statements. In October 2016, the FASB issued ASU No. 2016‑16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . The amendments in this ASU require entities to recognize the current and deferred income taxes for an intra-entity transfer of an asset other than inventory when the transfer occurs, as opposed to deferring the recognition of the income tax consequences until the asset has been sold to an outside party. The amendments in this ASU are effective for annual reporting periods beginning after December 31, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do not expect the adoption of the amendments in this ASU to have a significant impact on our financial statements. In March 2017, the FASB issued ASU No. 2017‑07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The amendments in this ASU require that an employer report the service cost component of net periodic pension cost and net periodic postretirement benefit cost in the same line items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of income from operations. The amendments in this ASU also allow only the service cost component to be eligible for capitalization when applicable (for example, as a cost of internally manufactured inventory or a self-constructed asset). The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments in this ASU should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit cost in assets. The amendments in this ASU will impact the presentation of our financial statements. Our current presentation of service cost components is consistent with the amendments in this ASU. Upon adoption of the amendments in this ASU, we expect to present the other components within other nonoperating income, whereas we currently present these within cost of goods sold and selling, general and administrative expenses. In August 2017, the FASB issued ASU No. 2017‑12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . The amendments in this ASU better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships as well as the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements to increase the understandability of the results of an entity’s intended hedging strategies. The amendments in this ASU also include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted in any interim period after the issuance of this ASU. Transition requirements and elections should be applied to hedging relationships existing on the date of adoption. For cash flow and net investment hedges, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness, and the amended presentation and disclosure guidance is required only prospectively. We are currently evaluating the impact of the adoption of the amendments in this ASU on our financial statements. | 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements Pending Adoption in Future Periods In May 2014, the FASB issued ASU No. 2014‑09, Revenue from Contracts with Customers (Topic 606) , outlining a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and this guidance supersedes most current revenue recognition guidance. In August 2015, the FASB issued ASU No. 2015‑14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , deferring the effective date of ASU No. 2014‑09 for all entities by one year. Further, in March 2016, the FASB issued ASU No. 2016‑08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , clarifying the implementation guidance on principal versus agent considerations, in April 2016, the FASB issued ASU No. 2016‑10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , clarifying the implementation guidance on identifying performance obligations in a contract and determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time), in May 2016, the FASB issued ASU No. 2016‑12, Revenue from Customers (Topic 606): Narrow‑Scope Improvements and Practical Expedients , providing clarifications and practical expedients for certain narrow aspects in Topic 606, and in December 2016, the FASB issued ASU 2016‑20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers . The amendments in these ASUs are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The amendments in ASU No. 2014‑09, ASU No. 2016‑08, ASU No. 2016‑10, ASU No. 2016‑12 and ASU No. 2016‑20 should be applied retrospectively, and early application is permitted. We are currently performing the analysis identifying areas that will be impacted by the adoption of the amendments in ASU No. 2014‑09, ASU No. 2016‑08, ASU No. 2016‑10, ASU No. 2016‑12 and ASU No. 2016‑20 on our combined financial statements. The standard will be adopted in our fiscal year 2018 and we have elected the modified retrospective approach as the transition method. In July 2015, the FASB issued ASU No. 2015‑11, Inventory (Topic 330): Simplifying the Measurement of Inventory . The amendments in this ASU do not apply to inventory that is measured using last‑in first‑out (“LIFO”) or the retail inventory method, but rather does apply to all other inventory, which includes inventory that is measured using first‑in first‑out or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments in this ASU should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect the adoption of the amendments in this ASU to have a significant impact on our combined financial statements. In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) . The amendments in this ASU will increase transparency and comparability among entities by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this ASU will require lessees to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right‑of‑use asset representing its right to use the underlying asset for the lease term. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application of the amendments in this ASU is permitted for all entities. Reporting entities are required to recognize and measure leases under these amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact of the adoption of the amendments in this ASU on our combined financial statements and believe, based on our preliminary assessment, that we will record significant additional right‑to‑use assets and lease obligations. In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU clarify and include specific guidance to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. We do not expect the adoption of the amendments in this ASU to have a significant impact on our combined financial statements. In October 2016, the FASB issued ASU No. 2016‑16, Income Taxes (Topic 740): Intra‑Entity Transfers of Assets Other Than Inventory . The amendments in this ASU require entities to recognize the current and deferred income taxes for an intra‑entity transfer of an asset other than inventory when the transfer occurs, as opposed to deferring the recognition of the income tax consequences until the asset has been sold to an outside party. The amendments in this ASU are effective for annual reporting periods beginning after December 31, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative‑effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do not expect the adoption of the amendments in this ASU to have a significant impact on our combined financial statements. In November 2016, the FASB issued ASU No. 2016‑18, Statement of Cash Flows (Topic 230): Restricted Cash . The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning‑of‑period and end‑of‑period total amounts shown on the statement of cash flows. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, and interim period within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. We do not expect the adoption of the amendments in this ASU to have a significant impact on our combined financial statements. In January 2017, the FASB issued ASU No. 2017‑01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted. The amendments in this ASU should be applied prospectively on or after the effective date. No disclosures are required at transition. We do not expect the adoption of the amendments in this ASU to have a significant impact on our combined financial statements. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2016 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATIONS | 3. BUSINESS COMBINATIONS ROCKWOOD ACQUISITION On October 1, 2014, Huntsman completed the Rockwood acquisition. Huntsman paid $1.02 billion in cash and assumed certain unfunded pension liabilities in connection with the Rockwood acquisition and subsequently contributed these businesses to our Titanium Dioxide and Performance Additives divisions. The acquisition was financed using a bank term loan. Transaction costs charged to expense related to this acquisition were approximately nil, nil and $24 million for the years ended December 31, 2016, 2015 and 2014, respectively, and were recorded in selling, general and administrative expenses in the combined statements of operations. The following businesses were acquired from Rockwood: · TiO2, with strong specialty business in fibers, inks, pharmaceuticals, food and cosmetics; · functional additives made from barium and zinc based inorganics used to make colors more brilliant, primarily in plastics, coatings, films, food, cosmetics, pharmaceuticals and paper; · color pigments made from synthetic iron‑oxide and other non‑TiO2 inorganic pigments used by manufacturers of coatings and colorants; · timber treatment wood protection chemicals used primarily in residential and commercial applications · water treatment products used to improve water purity in industrial, commercial and municipal applications; and · specialty automotive molded components. In connection with securing certain regulatory approvals required to complete the Rockwood acquisition, we sold our TiO2 TR52 product line used in printing inks to Henan in December 2014. The sale did not include any manufacturing assets but does include an agreement to supply TR52 product to Henan during a transitional period. We have accounted for the Rockwood acquisition using the acquisition method. As such, we analyzed the fair value of tangible and intangible assets acquired and liabilities assumed. The allocation of acquisition cost to the assets acquired and liabilities assumed is summarized as follows (dollars in millions): Cash paid for Rockwood Acquisition in 2014 $ 1,038 Purchase price adjustment received in 2015 (18) Net acquisition cost $ 1,020 Fair value of assets acquired and liabilities assumed: Cash $ 77 Accounts receivable 220 Inventories 401 Prepaid expenses and other current assets 55 Property, plant and equipment 665 Intangible assets 31 Deferred income taxes, non-current 106 Other assets 8 Accounts payable (146) Accrued expenses and other current liabilities (106) Long-term debt, non-current (3) Pension and related liabilities (233) Deferred income taxes, non-current (9) Other liabilities (30) Total fair value of net assets acquired 1,036 Noncontrolling interest (16) Total $ 1,020 During the second quarter of 2015, we received $18 million related to the settlement of certain purchase price adjustments. As a result of the finalization of the valuation of the assets and liabilities, reallocations were made in certain property, plant and equipment, deferred tax, accrued liability and other long‑term liability balances. None of the fair value of this acquisition was allocated to goodwill. Intangible assets acquired consist primarily of developed technology, trademarks and customer relationships, all of which are being amortized over nine years. The noncontrolling interest primarily relates to Viance, a 50%‑owned joint venture with Dow Chemical acquired as part of the Rockwood acquisition. The noncontrolling interest was valued at 50% of the fair value of the net assets of Viance as of October 1, 2014, as dictated by the ownership interest percentages. If the Rockwood acquisition were to have occurred on January 1, 2014, the following estimated pro forma revenues and net loss attributable to Venator would have been reported (dollars in millions): Pro Forma Year ended December 31, 2014 (Unaudited) Revenues $ 2,875 Net loss attributable to Venator (65) |
INVENTORIES64
INVENTORIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
INVENTORIES | ||
INVENTORIES | NOTE 4. INVENTORIES Inventories are stated at the lower of cost or market, with cost determined using the average cost method. Inventories at September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, (Dollars in millions) 2017 2016 Raw materials and supplies $ 164 $ 134 Work in process 42 46 Finished goods 225 246 Total $ 431 $ 426 | 4. INVENTORIES Inventories at December 31, 2016 and 2015 consisted of the following (dollars in millions): December 31, 2016 2015 Raw materials and supplies $ 134 $ 174 Work in process 46 69 Finished goods 246 313 Total $ 426 $ 556 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | 5. PROPERTY, PLANT AND EQUIPMENT The cost and accumulated depreciation of property, plant and equipment at December 31, 2016 and 2015 were as follows (dollars in millions): December 31, 2016 2015 Land and land improvements $ 96 $ 75 Buildings 214 201 Plant and equipment 1,789 1,940 Construction in progress 102 312 Total 2,201 2,528 Less accumulated depreciation (1,023) (1,251) Property, plant, and equipment—net $ 1,178 $ 1,277 Depreciation expense for the years ended December 31, 2016, 2015 and 2014 was $110 million, $99 million and $84 million, respectively. |
INVESTMENT IN UNCONSOLIDATED AF
INVESTMENT IN UNCONSOLIDATED AFFILIATES | 12 Months Ended |
Dec. 31, 2016 | |
INVESTMENT IN UNCONSOLIDATED AFFILIATES | |
INVESTMENT IN UNCONSOLIDATED AFFILIATES | 6. INVESTMENT IN UNCONSOLIDATED AFFILIATES Investments in companies in which we exercise significant influence, but do not control, are accounted for using the equity method. Investments in companies in which we do not exercise significant influence are accounted for using the cost method. Tioxide Americas Inc., a wholly‑owned subsidiary of Venator, has a 50% interest in Louisiana Pigment Company, L.P. (“LPC”). Located in Lake Charles, Louisiana, LPC is a joint venture that produces TiO2 for the exclusive benefit of each of the joint venture partners. In accordance with the joint venture agreement, this plant operates on a break‑even basis. This investment is accounted for using the equity method and totaled $81 million and $84 million at December 31, 2016 and 2015, respectively. During 2012, we made a $3 million investment in White Mountain Titanium Corporation, which reflects a 3% ownership interest. This investment is accounted for using the cost method and totaled $3 million each at December 31, 2016 and 2015. Investments in other affiliates of Venator’s parent company totaled $1 million and $11 million at December 31, 2016 and 2015, respectively. |
VARIABLE INTEREST ENTITIES67
VARIABLE INTEREST ENTITIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
VARIABLE INTEREST ENTITIES | ||
VARIABLE INTEREST ENTITIES | NOTE 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: · Pacific Iron Products Sdn Bhd is our 50%-owned joint venture with Coogee Chemicals that manufactures products for Venator. It was determined that the activities that most significantly impact its economic performance are raw material supply, manufacturing and sales. In this joint venture we supply all the raw materials through a fixed cost supply contract, operate the manufacturing facility and market the products of the joint venture to customers. Through a fixed price raw materials supply contract with the joint venture we are exposed to the risk related to the fluctuation of raw material pricing. As a result, we concluded that we are the primary beneficiary. · Viance, LLC ("Viance") is our 50%-owned joint venture with Dow Chemical Company. Viance markets timber treatment products for Venator. We have determined that the activity that most significantly impacts Viance’s economic performance is manufacturing. The joint venture sources all of its products through a contract manufacturing arrangement at our Harrisburg, North Carolina facility and we bear a disproportionate amount of working capital risk of loss due to the supply arrangement whereby we control manufacturing on Viance’s behalf. As a result, we concluded that we are the primary beneficiary. Creditors of these entities have no recourse to Venator’s general credit. As the primary beneficiary of these variable interest entities at September 30, 2017, the joint ventures’ assets, liabilities and results of operations are included in Venator’s condensed consolidated and combined financial statements. 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, 2017 and 2016 are as follows: Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues $ 31 $ 30 $ 97 $ 89 Income from continuing operations before income taxes 4 5 16 15 Net cash provided by operating activities 6 7 20 19 | 7. 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: · Pacific Iron Products Sdn Bhd is our 50%‑owned joint venture with Coogee Chemicals that manufactures products for Venator. It was determined that the activities that most significantly impact its economic performance are raw material supply, manufacturing and sales. In this joint venture we supply all the raw materials through a fixed cost supply contract, operate the manufacturing facility and market the products of the joint venture to customers. Through a fixed price raw materials supply contract with the joint venture we are exposed to the risk related to the fluctuation of raw material pricing. As a result, we concluded that we are the primary beneficiary. · Viance, LLC (“Viance”) is our 50%‑owned joint venture with Dow Chemical. Viance markets timber treatment products for Venator. Our joint venture interest in Viance was acquired as part of the Rockwood acquisition. It was determined that the activity that most significantly impacts its economic performance is manufacturing. The joint venture sources all of its products through a contract manufacturing arrangement at our Harrisburg, North Carolina facility and we bear a disproportionate amount of working capital risk of loss due to the supply arrangement whereby we control manufacturing on Viance’s behalf. As a result, we concluded that we are the primary beneficiary and began consolidating Viance upon the Rockwood acquisition on October 1, 2014. Creditors of these entities have no recourse to Venator’s general credit. As the primary beneficiary of these variable interest entities at December 31, 2016, the joint ventures’ assets, liabilities and results of operations are included in Venator’s combined financial statements. The revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities for the years ended December 31, 2016, 2015 and 2014 are as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Revenues $ 116 $ 100 $ 24 Income from continuing operations before income taxes 21 13 3 Net cash provided by operating activities 26 17 — |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 8. INTANGIBLE ASSETS December 31, 2016 December 31, 2015 Carrying Accumulated Carrying Accumulated Amount Amortization Net Amount Amortization Net Patents, trademarks and technology $ 18 $ 1 $ 17 $ 19 $ 4 $ 15 Other intangibles 14 8 6 22 9 13 Total $ 32 $ 9 $ 23 $ 41 $ 13 $ 28 Amortization expense was $4 million, $1 million and $3 million for the years ended December 31, 2016, 2015 and 2014, respectively. Our estimated future amortization expense for intangible assets over the next five years is as follows (dollars in millions): Year ending December 31, 2017 $ 4 2018 3 2019 3 2020 3 2021 3 |
OTHER NONCURRENT ASSETS
OTHER NONCURRENT ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
OTHER NONCURRENT ASSETS | |
OTHER NONCURRENT ASSETS | 9. OTHER NONCURRENT ASSETS Other noncurrent assets at December 31, 2016 and 2015 consisted of the following (dollars in millions): December 31, 2016 2015 Spare parts inventory $ 13 $ 14 Notes receivable 7 7 Pension assets 4 2 Other 11 9 Total $ 35 $ 32 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | 10. ACCRUED LIABILITIES Accrued liabilities at December 31, 2016 and 2015 consisted of the following (dollars in millions): December 31, 2016 2015 Payroll and benefits $ 50 $ 52 Restructuring and plant closing costs 14 85 Rebate accrual 25 22 Current taxes payable 4 4 Asset retirement obligation 13 18 Taxes other than income taxes 2 2 Pension liabilities 1 1 Other miscellaneous accruals 37 58 Total $ 146 $ 242 |
RESTRUCTURING, IMPAIRMENT AND71
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS | ||
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS | NOTE 6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS Venator has initiated various restructuring programs in an effort to reduce operating costs and maximize operating efficiency. As of September 30, 2017 and December 31, 2016, accrued restructuring and plant closing costs by type of cost and initiative consisted of the following: Other Workforce restructuring (Dollars in millions) reductions(1) costs Total(2) Accrued liabilities as of December 31, 2016 $ 21 $ — $ 21 2017 charges 34 8 42 2017 payments (15) (8) (23) Foreign currency effect on liability balance 1 — 1 Accrued liabilities as of September 30, 2017 $ 41 $ — $ 41 (1) The total workforce reduction reserves of $41 million relate to the termination of 338 positions, of which zero positions had been terminated as of September 30, 2017. (2) Accrued liabilities remaining, for continuing operations, at September 30, 2017 and December 31, 2016 by year of initiatives were as follows: September 30, December 31, (Dollars in millions) 2017 2016 2015 initiatives and prior $ 12 $ 21 2016 initiatives — — 2017 initiatives 29 — Total $ 41 $ 21 Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative: Titanium Performance (Dollars in millions) Dioxide Additives Total Accrued liabilities as of December 31, 2016 $ 12 $ 9 $ 21 2017 charges 33 9 42 2017 payments (14) (9) (23) Foreign currency effect on liability balance 1 — 1 Accrued liabilities as of September 30, 2017 $ 32 $ 9 $ 41 Current portion of restructuring reserves $ 28 $ 9 $ 37 Long-term portion of restructuring reserve 4 — 4 Details with respect to cash and noncash restructuring charges and impairment of assets for the three and nine months ended September 30, 2017 and 2016 by initiative are provided below: Three months ended Nine months ended (Dollars in millions) September 30, 2017 September 30, 2017 Cash charges $ 16 $ 42 Impairment of assets — 3 Other noncash charges — 4 Total 2017 Restructuring, Impairment and Plant Closing Costs $ 16 $ 49 Three months ended Nine months ended (Dollars in millions) September 30, 2016 September 30, 2016 Cash charges $ 6 $ 22 Accelerated depreciation 1 8 Other noncash charges — 1 Total 2016 Restructuring, Impairment and Plant Closing Costs $ 7 $ 31 Restructuring Activities In December 2014, we implemented a comprehensive restructuring program to improve the global competitiveness of our Titanium Dioxide and Performance Additives segments. As part of the program, we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, we recorded restructuring expense of nil and $4 million for the three and nine months ended September 30, 2016, respectively. In February 2015, we announced a plan to close the black end manufacturing operations and ancillary activities at our Calais, France site, which will reduce our TiO 2 capacity by approximately 100 kilotons, or 11% of our European TiO 2 capacity. In connection with this closure, we recorded restructuring expense of nil and $1 million in the three and nine months ended September 30, 2016, respectively. All expected charges have been incurred as of the end of 2016. In July 2016, we announced plans to close our Umbogintwini, South Africa TiO 2 manufacturing facility. As part of the program, we recorded restructuring expense of approximately $1 million and $3 million for the three and nine months ended September 30, 2017, respectively. We expect to incur additional charges of approximately $3 million through the end of the third quarter of 2018. In March 2017, we announced a plan to close the white end finishing and packaging operation of our TiO 2 manufacturing facility at our Calais, France site. The announced plan follows the 2015 closure of the black end manufacturing operations and would result in the closure of the entire facility. In connection with this closure, we recorded restructuring expense of $12 million and $34 million in the three and nine months ended September 30, 2017, respectively. We recorded $1 million and $8 million of accelerated depreciation on the remaining long-lived assets associated with this manufacturing facility during the three and nine months ended September 30, 2016, respectively. We expect to incur additional charges of approximately $45 million through the end of 2021. In September 2017, we announced a plan to close our St. Louis and Easton manufacturing facilities. As part of the program, we recorded restructuring expense of approximately $3 million for the three months ended September 30, 2017. We expect to incur $17 million of accelerated depreciation through the end of 2018. | 11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS Venator has initiated various restructuring programs in an effort to reduce operating costs and maximize operating efficiency. As of December 31, 2016, 2015 and 2014, accrued restructuring and plant closing costs by type of cost and initiative consisted of the following (dollars in millions): Other Workforce restructuring reductions(1) costs Total(2) Accrued liabilities as of January 1, 2014 $ 2 $ — $ 2 2014 charges 60 — 60 2014 payments (4) — (4) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities 1 — 1 Accrued liabilities as of December 31, 2014 59 — 59 2015 charges 90 21 111 2015 payments (54) (21) (75) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities 1 — 1 Foreign currency effect on liability balance (6) — (6) Accrued liabilities as of December 31, 2015 90 — 90 2016 charges 9 16 25 Distribution of prefunded restructuring costs (36) — (36) 2016 payments (42) (16) (58) Foreign currency effect on liability balance — — — Accrued liabilities as of December 31, 2016 $ 21 $ — $ 21 (1) The total workforce reduction reserves of $21 million relate to the termination of 323 positions, of which 323 positions had not been terminated as of December 31, 2016. (2) Accrued liabilities remaining at December 31, 2016 and 2015 by year of initiatives were as follows (dollars in millions): December 31, 2016 2015 2014 initiatives and prior $ 18 $ 77 2015 initiatives 3 13 Total $ 21 $ 90 Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative (dollars in millions): Titanium Performance Dioxide Additives Total Accrued liabilities as of January 1, 2014 $ 2 $ — $ 2 2014 charges 51 9 60 2014 payments (4) — (4) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities — 1 1 Accrued liabilities as of December 31, 2014 49 10 59 2015 charges 75 36 111 2015 payments (62) (13) (75) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities — 1 1 Foreign currency effect on liability balance (5) (1) (6) Accrued liabilities as of December 31, 2015 57 33 90 2016 charges 9 16 25 Distribution of prefunded restructuring costs (23) (13) (36) 2016 payments (29) (29) (58) Foreign currency effect on liability balance (2) 2 — Accrued liabilities as of December 31, 2016 $ 12 $ 9 $ 21 Current portion of restructuring reserves $ 5 $ 9 $ 14 Long-term portion of restructuring reserve 7 — 7 Details with respect to cash and noncash restructuring charges for the years ended December 31, 2016, 2015 and 2014 by initiative are provided below (dollars in millions): Cash charges: 2016 charges $ 25 Accelerated depreciation 9 Other non-cash charges 1 Total 2016 Restructuring, Impairment and Plant Closing Costs $ 35 Cash charges: 2015 charges $ 113 Pension-related charges 3 Accelerated depreciation 68 Other non-cash charges 36 Total 2015 Restructuring, Impairment and Plant Closing Costs $ 220 Cash charges: 2014 charges $ 60 Non-cash charges — Total 2014 Restructuring, Impairment and Plant Closing Costs $ 60 2016 RESTRUCTURING ACTIVITIES In December 2014, we announced a comprehensive restructuring program to improve the global competitiveness of our Titanium Dioxide and Performance Additives divisions. As part of the program, we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, we recorded restructuring expense of $3 million in 2016. In February 2015, we announced a plan to close the black end manufacturing operations and ancillary activities at our Calais, France site, which will reduce our TiO2 capacity by approximately 100,000 metric tons, or 11% of our global TiO2 capacity. In connection with this announcement, we recorded restructuring expense of $1 million in the first quarter of 2016. All expected charges have been incurred as of the end of 2016. In March 2015, we announced plans to restructure our color pigments business, another step in our previously announced plan to significantly restructure our global Titanium Dioxide and Performance Additives divisions, and recorded restructuring expense of approximately $15 million in 2016. In July 2016, we announced plans to close our Umbogintwini, South Africa TiO2 manufacturing facility. As part of the program, we recorded restructuring expense of approximately $6 million in 2016. Additionally, we recorded an impairment charge of $1 million during the second quarter of 2016. The majority of the long‑lived assets associated with this manufacturing facility were impaired in the fourth quarter of 2015. In connection with planned restructuring activities, our Titanium Dioxide and Performance Additives divisions recorded accelerated depreciation as restructuring expense of $8 million during 2016. 2015 RESTRUCTURING ACTIVITIES In December 2014, we announced a comprehensive restructuring program to improve the global competitiveness of our Titanium Dioxide and Performance Additives divisions. As part of the program, we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, during 2015, we recorded charges of $61 million for workforce reductions, $3 million for pension related charges and $15 million in other restructuring costs associated with this initiative. In February 2015, we announced a plan to close the black end manufacturing operations and ancillary activities at our Calais, France site, which will reduce our TiO2 capacity by approximately 100,000 metric tons, or 11%, of our global TiO2 capacity. In connection with this announcement, we began to accelerate depreciation on the affected assets and recorded accelerated depreciation in 2015 of $68 million as restructuring, impairment and plant closing costs. In addition, during 2015, we recorded charges of $30 million primarily for workforce reductions and non‑cash charges of $17 million. In March 2015, we announced plans to restructure our color pigments business, another step in our previously announced plan to significantly restructure our global Titanium Dioxide and Performance Additives divisions, and recorded restructuring expense of approximately $4 million during 2015 primarily related to workforce reductions. During the fourth quarter of 2015, in connection with our plans to shut down the TiO2 manufacturing facility in Umbogintwini, South Africa by the end of the fourth quarter of 2016, we determined that the South African asset group was impaired and recorded an impairment charge of $19 million. 2014 RESTRUCTURING ACTIVITIES In December 2014, we announced a comprehensive restructuring program to improve the global competitiveness of our Titanium Dioxide and Performance Additives divisions. As part of the restructuring program we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, we recorded restructuring expense of $57 million in the fourth quarter of 2014 related primarily to workforce reductions. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
ASSET RETIREMENT OBLIGATIONS | |
ASSET RETIREMENT OBLIGATIONS | 12. ASSET RETIREMENT OBLIGATIONS Asset retirement obligations consist primarily of asbestos abatement costs, demolition and removal costs, leasehold remediation costs and landfill closure costs. Venator is legally required to perform capping and closure and post‑closure care on the landfills and asbestos abatement on certain of its premises. For each asset retirement obligation, Venator recognized the estimated fair value of a liability and capitalized the cost as part of the cost basis of the related asset. The following table describes changes to Venator’s asset retirement obligation liabilities (dollars in millions): December 31, 2016 2015 Asset retirement obligations at beginning of year $ 44 $ 18 Accretion expense 2 2 Liabilities incurred — — Liabilities assumed in connection with the Rockwood acquisition — 30 Liabilities settled (4) (1) Foreign currency effect on reserve balance (3) (5) Asset retirement obligations at end of year $ 39 $ 44 |
OTHER NONCURRENT LIABILITIES
OTHER NONCURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
OTHER NONCURRENT LIABILITIES | |
OTHER NONCURRENT LIABILITIES | 13. OTHER NONCURRENT LIABILITIES Other noncurrent liabilities at December 31, 2016 and 2015 consisted of the following (dollars in millions): December 31, 2016 2015 Pension liabilities $ 266 $ 233 Employee benefit accrual 5 5 Asset retirement obligations 26 26 Other postretirement benefits 3 5 Environmental reserves 12 11 Restructuring and plant closing costs 7 7 Other 5 7 Total $ 324 $ 294 |
RELATED PARTY FINANCING
RELATED PARTY FINANCING | 12 Months Ended |
Dec. 31, 2016 | |
RELATED PARTY FINANCING | |
RELATED PARTY FINANCING | 14. RELATED PARTY FINANCING Venator receives financing from Huntsman International and its subsidiaries, which are related parties. The financing relates to Venator’s participation in a cash pooling program. See note “1. Description of Business, Recent Developments, Basis of Presentation and Summary of Significant Accounting Policies.” Cash Pooling Program —Venator addresses cash flow needs by participating in a cash pooling program. The cash pool provides for the participating subsidiaries of Huntsman International to loan or borrow funds daily from the cash pool. The business records these transactions as either amounts receivable from affiliates or amounts payable to affiliates and reflects these transaction in “Net advances to affiliates” and “Net borrowings on affiliate accounts payable” in the investing and financing sections, respectively, in the combined statements of cash flows. Interest income is earned if Venator is a net lender to the cash pool and paid if Venator is a net borrower from the cash pool based on a variable interest rate determined from time to time by Huntsman International. See note “1. Description of Business, Recent Developments, Basis of Presentation and Summary of Significant Accounting Policies.” Notes Receivable and Payable of Venator to Subsidiaries of Huntsman International —As of December 31, 2016 and 2015, Venator had notes receivable outstanding from affiliates of $57 million and $327 million, respectively, and notes payable outstanding to affiliates totaling $882 million and $1,023 million, respectively. The borrowers and lenders are subsidiaries of Huntsman International and the notes are unsecured. Under the terms of the notes, Venator promises to pay interest on the unpaid principal amounts at a rate per annum as agreed upon from time to time by Huntsman International and Venator. As of December 31, 2016, the average interest rate on notes receivable and notes payable was 4%. A/R Programs —Certain of our entities participate in the accounts receivable securitization programs (“A/R Programs”) sponsored by Huntsman International. Under the A/R Programs, these entities sell certain of their trade receivables to Huntsman International. Huntsman International grants an undivided interest in these receivables to a SPE, which serve as security for the issuance of debt of Huntsman International. These entities continue to service the securitized receivables. As of December 31, 2016 and 2015, Huntsman International had $106 million and $110 million, respectively, of net receivables in their A/R Programs and reflected on their balance sheet associated with Venator. The entities allocated losses on the A/R Programs for the years ended December 31, 2016, 2015 and 2014 were $5 million, $3 million and $4 million, respectively. The allocation of losses on sale of accounts receivable is based upon the pro‑rata portion of total receivables sold into the securitization program as well as other program and interest expenses associated with the A/R Programs. On April 21, 2017, Huntsman International amended its accounts receivable securitization facilities, which among other things removed existing receivables sold into the program by the Pigments and Additives business. In addition, after April 21, 2017 receivables generated by the Pigments and Additives legal entities will no longer participate in the Huntsman A/R Program sponsored by Huntsman. |
THIRD PARTY DEBT AGREEMENTS
THIRD PARTY DEBT AGREEMENTS | 12 Months Ended |
Dec. 31, 2016 | |
THIRD PARTY DEBT AGREEMENTS | |
THIRD PARTY DEBT AGREEMENTS | 15. THIRD‑PARTY DEBT AGREEMENTS Venator also has lease obligations accounted for as capital leases primarily related to manufacturing facilities which are included in other long‑term debt. The scheduled maturities of Venator’s commitments under capital leases are as follows (dollars in millions): Year ending December 31: 2017 $ 7 2018 2 2019 2 2020 2 Thereafter 11 Total minimum payments 24 Less: Amounts representing interest (4) Present value of minimum lease payments 20 Less: Current portion of capital leases (7) Long-term portion of capital leases $ 13 |
DERIVATIVE INSTRUMENTS AND HE76
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Venator is exposed to market risks associated with foreign exchange risk. Venator’s cash flows and earnings are subject to fluctuations due to exchange rate variation. Venator’s revenues and expenses are denominated in various foreign currencies. Venator enters into foreign currency derivative instruments to minimize the short-term impact of movements in foreign currency rates. Where practicable, Venator generally nets multicurrency cash balances among its subsidiaries to help reduce exposure to foreign currency exchange rates. Certain other exposures may be managed from time to time through financial market transactions, principally through the purchase of spot or forward foreign exchange contracts (generally with maturities of three months or less). Venator does not hedge its foreign currency exposures in a manner that would eliminate the effect of changes in exchange rates on its cash flows and earnings. At September 30, 2017, Venator had approximately $84 million in notional amount (in U.S. dollar equivalents) outstanding, with maturities of approximately one month. Prior to the Separation, Huntsman International, or its subsidiaries, entered into foreign currency derivatives on Venator’s behalf. As of December 31, 2016, Huntsman International or its subsidiaries, on behalf of Venator, had approximately $88 million in notional amount (in U.S. dollar equivalents) outstanding, respectively, in forward foreign currency contracts with a term of approximately one month. | 16. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Venator is exposed to market risks associated with foreign exchange risks. From time to time, Venator, through Huntsman International or its subsidiaries, will enter into hedging or derivative transactions to mitigate these exposures. Venator’s cash flows and earnings are subject to fluctuations due to exchange rate variation. Venator’s revenues and expenses are denominated in various foreign currencies. From time to time, Huntsman International or its subsidiaries, on behalf of Venator, may enter into foreign currency derivative instruments to minimize the short‑term impact of movements in foreign currency rates. Where practicable, Venator generally nets multicurrency cash balances among its subsidiaries to help reduce exposure to foreign currency exchange rates. Certain other exposures may be managed from time to time through financial market transactions, principally through the purchase of spot or forward foreign exchange contracts (generally with maturities of three months or less). Venator does not hedge its foreign currency exposures in a manner that would eliminate the effect of changes in exchange rates on its cash flows and earnings. As of December 31, 2016 and 2015, Huntsman International or its subsidiaries, on behalf of Venator, had approximately $88 million and $50 million in notional amount (in U.S. dollar equivalents) outstanding, respectively, in forward foreign currency contracts with a term of approximately one month. |
STOCK-BASED COMPENSATION PLAN
STOCK-BASED COMPENSATION PLAN | 12 Months Ended |
Dec. 31, 2016 | |
STOCK-BASED COMPENSATION PLAN | |
STOCK-BASED COMPENSATION PLAN | 17. STOCK‑BASED COMPENSATION PLAN Under the Huntsman Corporation Stock Incentive Plan, a plan approved by stockholders, Huntsman Corporation may grant non‑qualified stock options, incentive stock options, stock appreciation rights, restricted stock, phantom stock, performance awards and other stock‑based awards to its employees, directors and consultants and to employees and consultants of its subsidiaries, provided that incentive stock options may be granted solely to employees. The terms of the grants are fixed at the grant date. Option awards have a maximum contractual term of 10 years and generally must have an exercise price at least equal to the market price of Huntsman Corporation’s common stock on the date the option award is granted. Stock‑based awards generally vest over a three‑year period; certain performance awards vest over a two‑year period and awards to Huntsman Corporation’s directors vest on the grant date. The compensation cost from continuing operations under the Stock Incentive Plan allocated to Venator was approximately $2 million each for the years ended December 31, 2016, 2015 and 2014. The allocation was determined annually based upon the outstanding number of shares of each type of award granted to individuals employed by Venator. STOCK OPTIONS The fair value of each stock option award is estimated on the date of grant using the Black‑Scholes valuation model that uses the assumptions noted in the following table. Expected volatilities are based on the historical volatility of Huntsman Corporation’s common stock through the grant date. The expected term of options granted was estimated based on the contractual term of the instruments and employees’ expected exercise and post‑vesting employment termination behavior. The risk‑free rate for periods within the contractual life of the option was based on the U.S. Treasury yield curve in effect at the time of grant. The assumptions noted below represent the weighted averages of the assumptions utilized for all stock options granted during the year. Year ended December 31, 2016 2015 2014 Dividend yield 5.6 % 2.3 % 2.4 % Expected volatility 57.9 % 57.6 % 60.3 % Risk-free interest rate 1.4 % 1.4 % 1.7 % Expected life of stock options granted during the period 5.9 years 5.9 years 5.7 years NONVESTED SHARES Nonvested shares granted under the Huntsman Corporation Stock Incentive Plan consist of restricted stock, which is accounted for as an equity award, and phantom stock, which is accounted for as a liability award because it can be settled in either stock or cash. The fair value of each performance share unit award is estimated using a Monte Carlo simulation model that uses various assumptions, including an expected volatility rate and a risk‑free interest rate. For the years ended December 31, 2016 and 2015, the weighted‑average expected volatility rate was 39.3% and 30.0%, respectively and the weighted average risk‑free interest rate was 0.9% and 0.7%, respectively. For the performance awards granted during the years ended December 31, 2016 and 2015, the number of shares earned varies based upon Huntsman Corporation achieving certain performance criteria over two‑year and three‑year performance periods. The performance criteria are total stockholder return of Huntsman Corporation’s common stock relative to the total stockholder return of a specified industry peer‑group for the two‑year and three‑year performance periods. No performance share unit awards were granted during the year ended December 31, 2014. |
INCOME TAXES78
INCOME TAXES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
INCOME TAXES | ||
INCOME TAXES | NOTE 9. INCOME TAXES Venator uses the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial and tax reporting purposes. We evaluate deferred tax assets to determine whether it is more likely than not that they will be realized. Valuation allowances are reviewed on a tax jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets for each jurisdiction. These conclusions require significant judgment. In evaluating the objective evidence that historical results provide, we consider the cyclicality of Venator and cumulative income or losses during the applicable period. Cumulative losses incurred over the period limits our ability to consider other subjective evidence such as our projections for the future. Changes in expected future income in applicable tax jurisdictions could affect the realization of deferred tax assets in those jurisdictions. We recorded income tax expense of $14 million and income tax benefit of $7 million for the three months ended September 30, 2017 and 2016, respectively, and income tax expense of $26 million and income tax benefit of $14 million for the nine months ended September 30, 2017 and 2016, respectively. Our tax expense is significantly affected by the mix of income and losses in tax jurisdictions in which we operate, as impacted by the presence of valuation allowances in certain tax jurisdictions. For U.S. federal income tax purposes Huntsman will recognize a gain as a result of the internal restructuring and IPO to the extent the fair market value of the assets associated with our U.S. businesses exceeded the basis of such assets for U.S. federal income tax purposes at the time of the Separation. As a result of such gain recognized, the basis of the assets associated with our U.S. businesses has increased. This basis step up gives rise to a deferred tax asset of $77 million that we have recognized during the quarter. Pursuant to the Tax Matters Agreement entered into at the time of the Separation, we are required to make a future payment to Huntsman for any actual U.S. federal income savings we recognize as a result of any such basis increase for tax years through December 31, 2028. It is currently estimated (based on a value of our U.S. businesses derived from the IPO price of our ordinary shares and current tax rates) that the aggregate future payments required by this provision are expected to be approximately $73 million. We have recognized a noncurrent liability for this amount as of September 30, 2017. Moreover, any subsequent adjustment asserted by U.S. taxing authorities could increase the amount of gain recognized, the corresponding basis increase, and could result in a higher liability for us under the Tax Matters Agreement. | 18. INCOME TAXES Our income tax basis of presentation is summarized in note “1. Description of Business, Recent Developments, Basis of Presentation and Summary of Significant Accounting Policies.” A summary of the provisions for current and deferred income taxes is as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Income tax (benefit) expense: U.S. Current $ (4) $ (7) $ 4 Deferred (5) 5 — Non-U.S. Current (5) 2 2 Deferred (9) (34) (24) Total $ (23) $ (34) $ (18) The reconciliation of the differences between the U.S. federal income taxes at the U.S. statutory rate to Venator’s provision for income taxes is as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Loss from continuing operations before income taxes $ (109) $ (396) $ (190) Expected tax benefit at U.S. statutory rate of 35% $ (39) $ (138) $ (67) Change resulting from: State tax benefit net of federal benefit — 1 — Non-U.S. tax rate differentials (3) 21 11 Effects of non-U.S. operations (2) 7 2 Non-taxable portion of gain on sale of businesses (3) — — Unrealized currency exchange gains and losses 1 (21) — Tax authority audits and dispute resolutions (1) 4 2 Tax benefit of losses with valuation allowances as a result of other comprehensive income (1) (1) (6) Change in valuation allowance 27 96 39 Other, net (2) (3) 1 Total income tax benefit $ (23) $ (34) $ (18) Included in the non‑U.S. deferred tax expense are income tax benefits of $1 million in 2016, $1 million in 2015 and $6 million in 2014 for losses from continuing operations for certain jurisdictions with valuation allowances to the extent that income was recorded in other comprehensive income in that same jurisdiction. Foreign currency gains and changes in pension related items resulted in other comprehensive income where Venator has a full valuation allowance against the net deferred tax asset. An offsetting income tax expense was recognized in accumulated other comprehensive loss. Venator operates in over 25 non‑U.S. tax jurisdictions with no specific country earning a predominant amount of its off‑shore earnings. The vast majority of these countries have income tax rates that are lower than the U.S. statutory rate. In 2016, the average statutory rate for countries with pre‑tax income was lower than the average statutory rate for countries with pre‑tax losses, resulting in a net benefit as compared to the U.S. statutory rate. For the year ended December 31, 2016, the tax rate differential resulted in lower tax expense of $3 million, reflected in the reconciliation above. In 2015 and 2014, the average statutory rate for countries with pre‑tax losses was lower than the average statutory rate for countries with pre‑tax income, resulting in a net expense as compared to the U.S. statutory rate. In certain non‑U.S. tax jurisdictions, Venator’s U.S. GAAP functional currency is different than the local tax currency. As a result, foreign exchange gains and losses will impact Venator’s effective tax rate. For 2016, this resulted in a tax expense of $1 million. For 2015, this resulted in a tax benefit of $11 million ($21 million of benefit included in “unrealized currency exchange gains and losses” in the reconciliation above, net of $10 million of expense related to establishing contingent liabilities for potential non‑deductibility of these foreign currency losses included in “tax authority audits and dispute resolutions” in the reconciliation above). During 2015, a number of Venator’s intercompany liabilities that were denominated in U.S. dollars were owed by entities whose tax currency was the euro. As a result of the depreciation in the euro opposite the U.S. dollar, these entities recorded a tax only foreign exchange loss. Most of the receivables associated with these same U.S. dollar denominated intercompany debts were held by entities with a tax currency of the U.S. dollar which, therefore, resulted in no taxable gain. The components of loss before income taxes were as follows (dollars in millions): Year ended December 31, 2016 2015 2014 U.S. $ (7) $ (18) $ 8 Non-U.S. (102) (378) (198) Total $ (109) $ (396) $ (190) Components of deferred income tax assets and liabilities at December 31, 2016 and 2015 were as follows (dollars in millions): December 31, 2016 2015 Deferred income tax assets: Net operating carryforwards $ 365 $ 253 Pension and other employee compensation 58 53 Property, plant and equipment 28 59 Intangible assets 19 28 Other, net 36 55 Total $ 506 $ 448 Total deferred income tax liabilities: Property, plant and equipment $ (126) $ (100) Pension and other employee compensation (1) (1) Other, net (4) (1) Total $ (131) $ (102) Net deferred tax assets before valuation allowance $ 375 $ 346 Valuation allowance (245) (241) Net deferred tax assets $ 130 $ 105 Non-current deferred tax assets 142 130 Non-current deferred tax liabilities (12) (25) Net deferred tax assets $ 130 $ 105 The net operating loss carryforward amounts (“NOLs”), including the amounts discussed below, and other attributes reflected in these combined financial statements are based upon the legal entity structure of Venator using the stand‑alone methodology with on‑top income adjustments and do not reflect the actual NOLs and other tax attributes that exist or that would be allocated under the various required tax laws to the specific legal entities comprising Venator. Under the stand‑alone methodology, NOLs that would have been created, utilized or expire unused do not reflect the actual creation, utilization and expiration of NOLs in the legal entities comprising Venator. For example, Huntsman had no U.S. NOLs to allocate to Venator. Venator has NOLs of $1,148 million in various non‑U.S. jurisdictions, all of which have no expiration date. Venator had no NOLs expire unused in 2016. Venator has NOLs of $120 million in U.S. federal and $120 million in U.S. state jurisdictions. Venator has total tax‑effected NOLs of $365 million. After taking into account deferred tax liabilities, there are $215 million of valuation allowances that related to these NOLs. Venator’s NOLs are principally located in France, Germany, Italy, Spain, the U.K. and the U.S. Venator has total net deferred tax assets, before valuation allowance, of $375 million. Venator has a full valuation allowance on net deferred tax assets of $245 million in the following countries: France, Italy, Spain, South Africa, and the U.K. Venator also has net deferred tax assets of $140 million, not subject to valuation allowances, in Canada, Finland, Malaysia and Germany, and net deferred tax liabilities of $10 million in the U.S. Valuation allowances are reviewed each period on a tax jurisdiction by jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets. Uncertainties regarding expected future income in certain jurisdictions could affect the realization of deferred tax assets in those jurisdictions and result in additional valuation allowances in future periods. Valuation allowances are determined on a tax jurisdiction by jurisdiction basis. While Venator has generated consolidated losses before income taxes over the past three years, certain jurisdictions, significantly Germany, but also including Canada, Finland and Malaysia, are profitable and recognize net deferred tax assets. During 2016, Venator released valuation allowances of $6 million in France, as a result of deferred tax liabilities offsetting deferred tax assets, which previously had a valuation allowance. During 2015, Venator established valuation allowances of $12 million. In Italy, Venator established $10 million of valuation allowances on certain net deferred tax assets as a result of cumulative losses, and, in South Africa, Venator established a full valuation allowance on $2 million of deferred tax assets as a result of current year losses shifting it from a net deferred tax liability position. The following is a summary of changes in the valuation allowance (dollars in millions): 2016 2015 2014 Valuation allowance as of January 1 $ 241 $ 156 $ 158 Valuation allowance as of December 31 245 241 156 Net (increase) decrease (4) (85) 2 Foreign currency movements (20) (16) (17) (Decrease) increase to deferred assets with an offsetting increase or decrease to valuation allowances (3) 5 (24) Change in valuation allowance per rate reconciliation $ (27) $ (96) $ (39) Components of change in valuation allowance affecting operating tax expense: Pre-tax income and pre-tax (losses) in jurisdictions with valuation allowances resulting in no tax expense or benefit $ (33) $ (84) $ (39) Release of valuation allowance in various jurisdictions 6 — — Establishments of valuation allowances in various jurisdictions — (12) — Change in valuation allowances per rate reconciliation $ (27) $ (96) $ (39) The following is a reconciliation of the unrecognized tax benefits (dollars in millions): 2016 2015 2014 Unrecognized tax benefits as of January 1 $ 22 $ 24 $ 27 Gross increases and decreases—tax positions taken during a prior period — 3 1 Gross increases and decreases—tax positions taken during the current period (1) 7 — Decreases related to settlements of amounts due to tax authorities — (1) (1) Reductions resulting from the lapse of statutes of limitation — (8) — Foreign currency movements (1) (3) (3) Unrecognized tax benefits as of December 31 $ 20 $ 22 $ 24 As of December 31, 2016, 2015 and 2014, the amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $11 million, $12 million and $12 million, respectively. In accordance with Venator’s accounting policy, it recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense (dollars in millions): Year ended December 31, 2016 2015 2014 Interest included in income tax expense $ — $ (2) $ 1 Penalties expense included in tax expense — — — December 31, 2016 2015 Accrued liability for interest $ — $ — Venator conducts business globally and, as a result, files income tax returns in the U.S. federal, various U.S. state and various non‑U.S. jurisdictions. The following table summarizes the tax years that remain subject to examination by major tax jurisdictions: Tax Jurisdiction Open Tax Years China 2012 and later France 2002 and later Germany 2011 and later Italy 2012 and later Malaysia 2012 and later Spain 2002 and later United Kingdom 2015 and later United States federal 2009 and later Certain of Venator’s U.S. and non‑U.S. income tax returns are currently under various stages of audit by applicable tax authorities and the amounts ultimately agreed upon in resolution of the issues raised may differ materially from the amounts accrued. Venator estimates that it is reasonably possible that certain of its non‑U.S. unrecognized tax benefits could change within 12 months of the reporting date with a resulting decrease in the unrecognized tax benefits within a reasonably possible range of nil to $3 million. For the 12‑month period from the reporting date, Venator would expect that a substantial portion of the decrease in its unrecognized tax benefits would result in a corresponding benefit to its income tax expense. As of December 31, 2016 and 2015, there were no unremitted earnings of subsidiaries to consider for indefinite reinvestment. Going forward, to the extent future U.S. cash flow needs require distributions from foreign subsidiaries, based on existing law, we expect to have tax attributes (at least up to the amount of anticipated external Venator debt) that could allow repatriation of earnings to the U.S. without incremental U.S. income tax. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2016 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 19. EMPLOYEE BENEFIT PLANS Defined Benefit and Other Postretirement Benefit Plans Venator sponsors defined benefit plans in a number of countries outside of the U.S. in which employees of Venator participate. The availability of these plans and their specific design provisions are consistent with local competitive practices and regulations. During 2012, Venator’s U.K. pension plan was closed to new entrants. For existing participants, benefits will only grow as a result of increases in pay. A defined contribution plan was established to replace this pension plan for future benefit accruals. The disclosures for the defined benefit and other postretirement benefit plans within the U.S. are combined with the disclosures of the plans outside of the U.S. Of the total projected benefit obligations for Venator as of December 31, 2016 and 2015, the amount related to the U.S. benefit plans is $15 million and $14 million, respectively, or 1% each. Of the total fair value of plan assets for Venator, the amount related to the U.S. benefit plans for December 31, 2016 and 2015 was $11 million and $10 million, respectively, or 1% each. Certain plans are shared by Venator and other Huntsman International subsidiaries unrelated to Venator. In such cases, the projected benefit obligation is allocated based upon individual employee census data and the fair value of plan assets is allocated based upon a relevant percentage of projected benefit obligation. On December 31, 2016, legal entity restructuring commenced for other businesses that will not ultimately be part of Venator after the separation. As a result, certain other businesses within three legal entities were disposed. The following table sets forth the funded status of the plans for Venator and the amounts recognized in the combined balance sheets at December 31, 2016 and 2015 (dollars in millions): Other Defined Benefit Postretirement Plans Benefit Plans 2016 2015 2016 2015 Change in benefit obligation Benefit obligation at beginning of year $ 1,037 $ 1,144 $ 5 $ 8 Service cost 4 6 — — Interest cost 31 35 1 — Actuarial (gain) loss 184 (31) — — Acquisitions/disposals 1 6 — — Gross benefits paid (48) (50) (1) — Plan amendments — 4 (2) (2) Exchange rates (156) (75) — (1) Curtailments — (4) — — Special termination benefits — 2 — — Benefit obligation at end of year $ 1,053 $ 1,037 $ 3 $ 5 Change in plan assets Fair value of plan assets at beginning of year $ 805 $ 866 $ — $ — Actual return on plan assets 147 2 — — Employer contribution 22 37 1 — Gross benefits paid (48) (50) (1) — Acquisitions/disposals — — — — Exchange rates (136) (50) — — Fair value of plan assets at end of year $ 790 $ 805 $ — $ — Funded status Fair value of plan assets $ 790 $ 805 $ — $ — Benefit obligation (1,053) (1,037) (3) (5) Accrued benefit cost $ (263) $ (232) $ (3) $ (5) Amounts recognized in balance sheet: Noncurrent asset $ 4 $ 2 $ — $ — Current liability (1) (1) — — Noncurrent liability (266) (233) (3) (5) Total $ (263) $ (232) $ (3) $ (5) Amounts recognized in accumulated other comprehensive loss: Net actuarial loss (gain) $ 335 $ 268 $ (3) $ (3) Prior service cost (credit) 8 9 (3) (1) Total $ 343 $ 277 $ (6) $ (4) The amounts in accumulated other comprehensive (loss) income that are expected to be recognized as components of net periodic benefit cost during the next fiscal year are as follows (dollars in millions): Other Defined Postretirement Benefit Plans Benefit Plans Actuarial loss $ 15 $ 1 Prior service credit 1 (3) Total $ 16 $ (2) Components of net periodic benefit costs for the years ended December 31, 2016, 2015 and 2014 were as follows (dollars in millions): Defined Benefit Plans 2016 2015 2014 Service cost $ 4 $ 6 $ 3 Interest cost 31 35 36 Expected return on plan assets (39) (51) (44) Amortization of actuarial loss 10 9 11 Amortization of prior service cost 1 1 1 Special termination benefit — 2 — Net periodic benefit cost $ 7 $ 2 $ 7 Other Postretirement Benefit Plans 2016 2015 2014 Service cost $ — $ — $ — Interest cost — — — Net periodic benefit cost $ — $ — $ — The amounts recognized in net periodic benefit cost and other comprehensive (loss) income as of December 31, 2016, 2015 and 2014 were as follows (dollars in millions): Defined Benefit Plans 2016 2015 2014 Current year actuarial loss $ 86 $ 11 $ 37 Amortization of actuarial loss (11) (11) (11) Current year prior service cost — 9 — Amortization of prior service credits (1) (1) (1) Disposals — — — Total recognized in other comprehensive (loss) income 74 8 25 Amount related to discontinued operations (8) 4 (27) Total recognized in other comprehensive income (loss) from continuing operations 66 12 (2) Net periodic benefit cost 7 2 7 Total recognized in net periodic benefit cost and other comprehensive income $ 81 $ 10 $ 32 Other Postretirement Benefit Plans 2016 2015 2014 Current year actuarial loss $ — $ — $ 1 Current year prior service credits (2) (2) — Total recognized in other comprehensive (loss) income (2) (2) 1 Net periodic benefit cost — — — Total recognized in net periodic benefit cost and other comprehensive income $ (2) $ (2) $ 1 The following weighted‑average assumptions were used to determine the projected benefit obligation at the measurement date and the net periodic pension cost for the year: Defined Benefit Plans 2016 2015 2014 Projected benefit obligation: Discount rate 2.28 % 3.27 % 3.12 % Rate of compensation increase 3.79 % 3.24 % 3.66 % Net periodic pension cost: Discount rate 3.27 % 3.12 % 4.40 % Rate of compensation increase 3.24 % 3.66 % 4.20 % Expected return on plan assets 5.22 % 5.99 % 6.24 % Other Postretirement Benefit Plans 2016 2015 2014 Projected benefit obligation: Discount rate 3.72 % 6.94 % 5.65 % Net periodic pension cost: Discount rate 6.94 % 5.65 % 6.59 % At December 31, 2016 and 2015, the health care trend rate used to measure the expected increase in the cost of benefits was assumed to be 5.82% and 7.0%, respectively, decreasing to 4.38% after 2030. Assumed health care cost trend rates can have a significant effect on the amounts reported for the postretirement benefit plans. A one‑percent point change in assumed health care cost trend rates would not have a significant effect. The projected benefit obligation and fair value of plan assets for the defined benefit plans with projected benefit obligations in excess of plan assets as were as follows (dollars in millions): December 31, 2016 2015 Projected benefit obligation $ 1,033 $ 1,012 Fair value of plan assets 766 779 The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the defined benefit plans with an accumulated benefit obligation in excess of plan assets as of December 31, 2016 and 2015 were as follows (dollars in millions): December 31, 2016 2015 Projected benefit obligation $ 1,033 $ 323 Accumulated benefit obligation 986 309 Fair value of plan assets 766 121 Expected future contributions and benefit payments are as follows (dollars in millions): Other Defined Postretirement Benefit Plans Benefit Plans 2017 expected employer contributions: To plan trusts $ 21 $ — Expected benefit payments: 2017 36 — 2018 36 — 2019 37 — 2020 39 — 2021 40 — 2022 - 2026 217 1 Our investment strategy with respect to pension assets is to pursue an investment plan that, over the long term, is expected to protect the funded status of the plan, enhance the real purchasing power of plan assets and not threaten the plan’s ability to meet currently committed obligations. Additionally, our investment strategy is to achieve returns on plan assets, subject to a prudent level of portfolio risk. Plan assets are invested in a broad range of investments. These investments are diversified in terms of domestic and international equities, both growth and value funds, including small, mid and large capitalization equities; short‑term and long‑term debt securities; real estate; and cash and cash equivalents. The investments are further diversified within each asset category. The portfolio diversification provides protection against a single investment or asset category having a disproportionate impact on the aggregate performance of the plan assets. Our pension plan assets are managed by outside investment managers. The investment managers value our plan assets using quoted market prices, other observable inputs or unobservable inputs. For certain assets, the investment managers obtain third‑party appraisals at least annually, which use valuation techniques and inputs specific to the applicable property, market or geographic location. We have established target allocations for each asset category. Venator’s pension plan assets are periodically rebalanced based upon our target allocations. The fair value of plan assets for the pension plans was $790 million and $805 million at December 31, 2016 and 2015, respectively. The following plan assets are measured at fair value on a recurring basis (dollars in millions): Fair Value Amounts Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs Asset Category 2016 (Level 1) (Level 2) (Level 3) Pension plans: Equities $ 212 $ 206 $ 6 $ — Fixed income 542 40 496 6 Real estate/other 32 — 5 27 Cash and cash equivalents 4 4 — — Total pension plan assets $ 790 $ 250 $ 507 $ 33 Fair Value Amounts Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs Asset Category 2015 (Level 1) (Level 2) (Level 3) Pension plans: Equities $ 213 $ 204 $ 9 $ — Fixed income 565 37 528 — Real estate/other 20 — 12 8 Cash and cash equivalents 7 2 5 — Total pension plan assets $ 805 $ 243 $ 554 $ 8 Real Estate/ Other Year ended December 31, 2016 2015 Fair Value Measurements of Plan Assets Using Significant Unobservable Inputs (Level 3) Balance at the beginning of the period $ 8 $ 9 Return on pension plan assets — (1) Purchases, sales and settlements 19 — Transfers (out of) into Level 3 — — Disposals — — Balance at the end of the period $ 27 $ 8 Fixed Income Year ended December 31, 2016 2015 Fair Value Measurements of Plan Assets Using Significant Unobservable Inputs (Level 3) Balance at the beginning of the period $ — $ — Return on pension plan assets — — Purchases, sales and settlements 6 — Transfers (out of) into Level 3 — — Balance at the end of the period $ 6 $ — Based upon historical returns, the expectations of our investment committee and outside advisors, the expected long‑term rate of return on the pension assets is estimated to be between 5.22% and 6.24%. The asset allocation for our pension plans at December 31, 2016 and 2015 and the target allocation for 2017, by asset category, are as follows: Target Allocation at Allocation at allocation December 31, December 31, Asset category 2017 2016 2015 Pension plans: Equities 27 % 27 % 26 % Fixed income 68 % 69 % 70 % Real estate/other 5 % 4 % 3 % Cash — — 1 % Total pension plans 100 % 100 % 100 % Equity securities in Venator’s pension plans did not include any equity securities of Huntsman Corporation or Venator and its affiliates at the end of 2016. U.S. Benefit Plans Defined Benefit and Other Postretirement Benefit Plans Sponsored by Huntsman International —Venator’s U.S. employees participate in a trusteed, non‑contributory defined benefit pension plan (the “Plan”) that covers substantially all of Huntsman International’s full‑time U.S. employees. Effective July 1, 2004, the Plan formula for employees not covered by a collective bargaining agreement was converted to a cash balance design. For represented employees, participation in the cash balance design is subject to the terms of negotiated contracts. For participating employees, benefits accrued under the prior formula were converted to opening cash balance accounts. The new cash balance benefit formula provides annual pay credits from 4% to 12% of eligible pay, depending on age and service, plus accrued interest. Participants in the plan on July 1, 2004 may be eligible for additional annual pay credits from 1% to 8%, depending on their age and service as of that date, for up to five years. The conversion to the cash balance plan did not have a significant impact on the accrued benefit liability, the funded status or ongoing pension expense. Beginning July 1, 2014, the Huntsman Defined Benefit Pension Plan was closed to new, non‑union entrants. New hires will be provided with a defined contribution plan with a non‑discretionary employer contribution of 6% of pay and a company match of up to 4% of pay, for a total company contribution of up to 10% of pay. Our employees also participate in an unfunded postretirement benefit plan, which provides medical and life insurance benefits. This plan is sponsored by Huntsman International. Our U.S. employees participate in a postretirement benefit plan that provides a fully insured Medicare Part D plan including prescription drug benefits affected by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”). Neither Venator nor Huntsman can determine whether the medical benefits provided by these postretirement benefit plans are actuarially equivalent to those provided by the Act. Neither Venator nor Huntsman collects a subsidy, and our net periodic postretirement benefits cost, and related benefit obligation, do not reflect an amount associated with the subsidy. Non‑U.S. Defined Contribution Plans We have defined contribution plans in a variety of non‑U.S. locations. Venator’s combined expense for these defined contribution plans for the years ended December 31, 2016, 2015 and 2014 was $7 million, $8 million and $7 million, respectively, primarily related to the Huntsman UK Pension Plan. All U.K. associates are eligible to participate in the Huntsman U.K. Pension Plan, a contract based arrangement with a third party. Company contributions vary by business during a five year transition period. Plan participants elect to make voluntary contributions to this plan up to a specified amount of their compensation. We contribute a matching amount not to exceed 12% of the participant’s salary for new hires and 15% of the participant’s salary for all other participants. U.S. Defined Contribution Plans We have a money purchase pension plan covering substantially all of our domestic employees who were hired prior to January 1, 2004. Employer contributions are made based on a percentage of employees’ earnings (ranging up to 8%). During 2014, we closed this plan to non‑union participants, continuing to provide equivalent benefits to those covered under this plan into their salary deferral accounts. We also have a salary deferral plan covering substantially all U.S. employees. Plan participants may elect to make voluntary contributions to this plan up to a specified amount of their compensation. We contribute an amount equal to one‑half of the participant’s contribution, not to exceed 2% of the participant’s compensation. Along with the introduction of the cash balance formula within the defined benefit pension plan, the money purchase pension plan was closed to new hires. At the same time, the employer match in the salary deferral plan was increased, for new hires, to a 100% match, not to exceed 4% of the participant’s compensation, once the participant has achieved six years of service with us. Our total combined expense for the above defined contribution plans was $1 million for the year ended December 31, 2016 and de minimus for each of the years ended December 31, 2015 and 2014. |
RELATED PARTY TRANSACTIONS80
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | NOTE 15. RELATED PARTY TRANSACTIONS Venator is party to a variety of transactions and agreements with Huntsman, their former parent and controlling shareholder. Corporate Cost Allocations Prior to the Separation, Huntsman’s executive, information technology, EHS and certain other corporate departments performed certain administrative and other services for Venator. Additionally, Huntsman performed certain site services for Venator. Expenses incurred by Huntsman and allocated to Venator were determined based on specific services provided or were allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $9 million and $27 million for the three months ended September 30, 2017 and 2016, respectively, and $62 million and $76 million for the nine months ended September 30, 2017 and 2016, respectively. Material Agreements between Venator and Huntsman On August 11, 2017, Venator entered into a separation agreement with Huntsman to effect the Separation and to provide a framework for the relationship with Huntsman. This agreement governs the relationship between Venator and Huntsman subsequent to the completion of the Separation and provides for the allocation between Venator and Huntsman of assets, liabilities and obligations attributable to periods prior to the Separation. Because these agreements were entered into in the context of a related party transaction, the terms may not be comparable to terms that would be obtained in a transaction between unaffiliated parties. Other Transactions See descriptions of our financing arrangements with Huntsman before and after the Separation in “Note 7. Debt” and “Note 8. Derivative Instruments and Hedging Activities.” See description of our arrangement with Huntsman as part of the separation in “Note 9. Income Taxes.” | 20. RELATED PARTY TRANSACTIONS Huntsman Corporation’s executive, information technology, EHS and certain other corporate departments perform certain administrative and other services for Venator. Additionally, Huntsman Corporation performs certain site services for Venator. Expenses incurred by Huntsman Corporation and allocated to Venator are determined based on specific services provided or are allocated based on our total revenues, total assets, and total employees in proportion to those of Huntsman Corporation. Management believes that such expense allocations are reasonable. It is not practical to estimate the expenses that would have been incurred by Venator had it been operated on a stand‑alone basis. Corporate allocations include allocated selling, general, and administrative expenses of $104 million, $90 million and $78 million for the years ended December 31, 2016, 2015 and 2014, respectively. We also conduct transactions in the normal course of business with parties under common ownership. Sales of raw materials to LPC as part of a sourcing arrangement were $67 million, $80 million and $108 million for the years ended December 31, 2016, 2015 and 2014, respectively. Proceeds from this arrangement are recorded as a reduction of cost of goods sold in Venator’s combined statements of operations. Related to this same arrangement, purchases of finished goods from LPC were $158 million, $163 million and $194 million for the years ended December 31, 2016, 2015 and 2014, respectively. Inventory purchases from other affiliates of Huntsman by Venator was $2 million for the year ended December 31, 2016. The related accounts receivable from affiliates and accounts payable to affiliates as of December 31, 2016 and 2015 are recognized in the combined balance sheets. We participate in a cash management system with various subsidiaries of Huntsman International, which results in interest expense to Venator. See note “1. Description of Business, Recent Developments, Basis of Presentation and Summary of Significant Accounting Policies” and note “14. Related Party Financing.” |
COMMITMENTS AND CONTINGENCIES81
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | NOTE 11. COMMITMENTS AND CONTINGENCIES Legal Proceedings Antitrust Matters We were named as a defendant in consolidated class action civil antitrust suits filed on February 9 and 12, 2010 in the U.S. District Court for the District of Maryland alleging that we, our co-defendants and other alleged co-conspirators conspired to fix prices of TiO 2 sold in the U.S. The other defendants named in this matter were E. I. du Pont de Nemours and Company ("DuPont"), Kronos and National Titanium Dioxide Company, Ltd. ("Cristal") (formerly Millennium). On August 28, 2012, the court certified a class consisting of all U.S. customers who purchased TiO 2 directly from the defendants (the "Direct Purchasers") since February 1, 2003. On December 13, 2013, we and all other defendants settled the Direct Purchasers litigation and the court approved the settlement. We paid the settlement in an amount immaterial to our condensed consolidated and combined financial statements. On November 22, 2013, we were named as a defendant in a civil antitrust suit filed in the U.S. District Court for the District of Minnesota brought by a Direct Purchaser who opted out of the Direct Purchasers class litigation (the "Opt-Out Litigation"). On April 21, 2014, the court severed the claims against us from the other defendants sued and ordered our case transferred to the U.S. District Court for the Southern District of Texas. Subsequently, Kronos, another defendant, was also severed from the Minnesota case and claims against it were transferred and consolidated for trial with our case in the Southern District of Texas. On February 26, 2016, we reached an agreement to settle the Opt-Out Litigation and subsequently paid the settlement in an amount immaterial to our condensed consolidated and combined financial statements. We were also named as a defendant in a class action civil antitrust suit filed on March 15, 2013 in the U.S. District Court for the Northern District of California by the purchasers of products made from TiO 2 (the "Indirect Purchasers") making essentially the same allegations as did the Direct Purchasers. On October 14, 2014, plaintiffs filed their Second Amended Class Action Complaint narrowing the class of plaintiffs to those merchants and consumers of architectural coatings containing TiO 2 . On August 11, 2015, the court granted our motion to dismiss the Indirect Purchasers litigation with leave to amend the complaint. A Third Amended Class Action Complaint was filed on September 29, 2015 further limiting the class to consumers of architectural paints. Plaintiffs have raised state antitrust claims under the laws of 15 states, consumer protection claims under the laws of nine states, and unjust enrichment claims under the laws of 16 states. On November 4, 2015, we and our co-defendants filed another motion to dismiss. On June 13, 2016, the court substantially denied the motion to dismiss except as to consumer protection claims in one state. The parties have entered into a settlement, subject to court approval, for an amount immaterial to our condensed consolidated and combined financial statements. On August 23, 2016, we were named as a defendant in a fourth civil antitrust suit filed in the U.S. District Court for the Northern District of California by an Indirect Purchaser, Home Depot. Home Depot is an Indirect Purchaser primarily through paints it purchases from various manufacturers. We settled this matter for an amount immaterial to our condensed consolidated and combined financial statements and the court dismissed the case on May 31, 2017. These Indirect Purchasers seek injunctive relief, treble damages or the maximum damages allowed by state law, costs of suit and attorneys' fees. We are not aware of any illegal conduct by us or any of our employees. Other Proceedings We are a party to various other proceedings instituted by private plaintiffs, governmental authorities and others arising under provisions of applicable laws, including various environmental, products liability and other laws. Except as otherwise disclosed in these condensed consolidated and combined financial statements, we do not believe that the outcome of any of these matters will have a material effect on our financial condition, results of operations or liquidity. | 21. COMMITMENTS AND CONTINGENCIES Purchase Commitments —We have various purchase commitments extending through 2029 for materials, supplies and services entered into in the ordinary course of business. Included in the purchase commitments table below are contracts which require minimum volume purchases that extend beyond one year or are renewable annually and have been renewed for 2017. Certain contracts allow for changes in minimum required purchase volumes in the event of a temporary or permanent shutdown of a facility. To the extent the contract requires a minimum notice period; such notice period has been included in the table below. The contractual purchase prices for substantially all of these contracts are variable based upon market prices, subject to annual negotiations. We have estimated our contractual obligations by using the terms of our current pricing for each contract. We also have a limited number of contracts which require a minimum payment even if no volume is purchased. We believe that all of our purchase obligations will be utilized in our normal operations. For the years ended December 31, 2016, 2015 and 2014, we made minimum payments under such take or pay contracts without taking the product of $1 million, nil and nil, respectively. Total purchase commitments as of December 31, 2016 were as follows (dollars in millions): Year ending December 31, 2017 $ 582 2018 438 2019 49 2020 14 2021 12 Thereafter 39 Operating Leases —We lease certain premises, automobiles, and office equipment under long‑term lease agreements. The total expense recorded under operating lease agreements in the combined statements of operations was approximately $9 million, $9 million and $4 million for the years ended December 31, 2016, 2015 and 2014, respectively. Future minimum lease payments under noncancelable operating leases as of December 31, 2016 were as follows (dollars in millions): Year ending December 31, 2017 $ 8 2018 7 2019 3 2020 2 2021 2 Thereafter 2 Total $ 24 Guarantees —Substantially all of our U.S. operations and certain of their foreign subsidiary holdings fully and unconditionally guaranteed Huntsman International’s outstanding notes. Subsequent to the business separation, such operations and entities will no longer guarantee Huntsman International’s notes. As of December 31, 2016 and 2015, Huntsman International and its guarantors had third‑party debt outstanding of $3,793 million and $4,318 million, respectively. As of December 31, 2016 and 2015, our U.S. operations and certain of our foreign subsidiaries that guarantee Huntsman International’s outstanding notes had total assets, excluding intercompany amounts, of $502 million and $384 million, respectively. LEGAL PROCEEDINGS Antitrust Matters —We were named as a defendant in consolidated class action civil antitrust suits filed on February 9 and 12, 2010 in the U.S. District Court for the District of Maryland alleging that we, our co‑defendants and other alleged co‑conspirators conspired to fix prices of TiO2 sold in the U.S. between at least March 1, 2002 and the present. The other defendants named in this matter were E. I. du Pont de Nemours and Company (DuPont), Kronos Worldwide, Inc. (“Kronos”) and National Titanium Dioxide Company, Ltd. (“Cristal”) (formerly Millennium). On August 28, 2012, the court certified a class consisting of all U.S. customers who purchased TiO2 directly from the defendants (the “Direct Purchasers”) since February 1, 2003. On December 13, 2013, we and all other defendants settled the Direct Purchasers litigation and the court approved the settlement. We paid the settlement in an amount immaterial to our combined financial statements. On November 22, 2013, we were named as a defendant in a civil antitrust suit filed in the U.S. District Court for the District of Minnesota brought by a Direct Purchaser who opted out of the Direct Purchasers class litigation (the “Opt‑Out Litigation”). On April 21, 2014, the court severed the claims against us from the other defendants sued and ordered our case transferred to the U.S. District Court for the Southern District of Texas. Subsequently, Kronos, another defendant, was also severed from the Minnesota case and claims against it were transferred and consolidated for trial with our case in the Southern District of Texas. On February 26, 2016, we reached an agreement to settle the Opt‑Out litigation and subsequently paid the settlement in an amount immaterial to our combined financial statements. We were also named as a defendant in a class action civil antitrust suit filed on March 15, 2013 in the U.S. District Court for the Northern District of California by the purchasers of products made from TiO2 (the “Indirect Purchasers”) making essentially the same allegations as did the Direct Purchasers. On October 14, 2014, plaintiffs filed their Second Amended Class Action Complaint narrowing the class of plaintiffs to those merchants and consumers of architectural coatings containing TiO2. On August 11, 2015, the court granted our motion to dismiss the Indirect Purchasers litigation with leave to amend the complaint. A Third Amended Class Action Complaint was filed on September 29, 2015 further limiting the class to consumers of architectural paints. Plaintiffs have raised state antitrust claims under the laws of 15 states, consumer protection claims under the laws of nine states, and unjust enrichment claims under the laws of 16 states. On November 4, 2015, we and our co‑defendants filed another motion to dismiss. On June 13, 2016, the court substantially denied the motion to dismiss except as to consumer protection claims in one state. The parties are presently negotiating a settlement for an amount that would not be material to our combined financial statements. On August 23, 2016, we were named as a defendant in a fourth civil antitrust suit filed in the U.S. District Court for the Northern District of California by an Indirect Purchaser of TiO2, Home Depot. Home Depot is an Indirect Purchaser of TiO2 primarily through paints it purchases from various manufacturers. Home Depot makes the same claims as the Direct and Indirect Purchasers. On January 13, 2017, we filed a motion to dismiss the Home Depot case, which remains pending. We do not expect this matter to have a material impact on our consolidated financial statements. These Indirect Purchasers seek to recover injunctive relief, treble damages or the maximum damages allowed by state law, costs of suit and attorneys’ fees. We are not aware of any illegal conduct by us or any of our employees. Nevertheless, we have incurred costs relating to these claims and could incur additional costs in amounts which in the aggregate could be material to us. Because of the overall complexity of these cases, we are unable to reasonably estimate any possible loss or range of loss and we have not made a material accrual with respect to these claims. Other Proceedings —We are a party to various other proceedings instituted by private plaintiffs, governmental authorities and others arising under provisions of applicable laws, including various environmental, products liability and other laws. Except as otherwise disclosed in these combined financial statements, we do not believe that the outcome of any of these matters will have a material effect on our financial condition, results of operations or liquidity. |
ENVIRONMENTAL, HEALTH AND SAF82
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | ||
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | NOTE 12. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS Environmental, Health and Safety Capital Expenditures We may incur future costs for capital improvements and general compliance under EHS laws, including costs to acquire, maintain and repair pollution control equipment. For the nine months ended September 30, 2017 and 2016, our capital expenditures for EHS matters totaled $5 million and $7 million, respectively. Because capital expenditures for these matters are subject to evolving regulatory requirements and depend, in part, on the timing, promulgation and enforcement of specific requirements, our capital expenditures for EHS matters have varied significantly from year to year and we cannot provide assurance that our recent expenditures are indicative of future amounts we may spend related to EHS and other applicable laws. Environmental Reserves We accrue liabilities relating to anticipated environmental cleanup obligations, site reclamation and closure costs, and known penalties. Liabilities are recorded when potential liabilities are either known or considered probable and can be reasonably estimated. Our liability estimates are calculated using present value techniques as appropriate and are based upon requirements placed upon us by regulators, available facts, existing technology, and past experience. The environmental liabilities do not include amounts recorded as asset retirement obligations. As of September 30, 2017 and December 31, 2016, we had environmental reserves of $12 million, each. We may incur losses for environmental remediation. Environmental Matters We have incurred, and we may in the future incur, liability to investigate and clean up waste or contamination at our current or former facilities or facilities operated by third parties at which we may have disposed of waste or other materials. Similarly, we may incur costs for the cleanup of waste that was disposed of prior to the purchase of our businesses. Under some circumstances, the scope of our liability may extend to damages to natural resources. Under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and similar state laws, a current or former owner or operator of real property in the U.S. may be liable for remediation costs regardless of whether the release or disposal of hazardous substances was in compliance with law at the time it occurred, and a current owner or operator may be liable regardless of whether it owned or operated the facility at the time of the release. Outside the U.S., analogous contaminated property laws, such as those in effect in France, can hold past owners and/or operators liable for remediation at former facilities. We have not been notified by third parties of claims against us for cleanup liabilities at former facilities or third-party sites, including, but not limited to, sites listed under CERCLA. Under the Resource Conservation and Recovery Act in the U.S. and similar state laws, we may be required to remediate contamination originating from our properties as a condition to our hazardous waste permit. Some of our manufacturing sites have an extended history of industrial chemical manufacturing and use, including on-site waste disposal. We are aware of soil, groundwater or surface contamination from past operations at some of our sites, and we may find contamination at other sites in the future. Similar laws exist in a number of locations in which we currently operate, or previously operated, manufacturing facilities, such as France and Italy. | 22. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS Environmental, Health and Safety (“EHS”) Capital Expenditures —We may incur future costs for capital improvements and general compliance under EHS laws, including costs to acquire, maintain and repair pollution control equipment. For the years ended December 31, 2016, 2015 and 2014, our capital expenditures for EHS matters totaled $11 million, $21 million and $20 million, respectively. Because capital expenditures for these matters are subject to evolving regulatory requirements and depend, in part, on the timing, promulgation and enforcement of specific requirements, our capital expenditures for EHS matters have varied significantly from year to year and we cannot provide assurance that our recent expenditures are indicative of future amounts we may spend related to EHS and other applicable laws. Environmental Reserves —We accrue liabilities relating to anticipated environmental cleanup obligations, site reclamation and closure costs, and known penalties. Liabilities are recorded when potential liabilities are either known or considered probable and can be reasonably estimated. Our liability estimates are calculated using present value techniques as appropriate and are based upon requirements placed upon us by regulators, available facts, existing technology, and past experience. The environmental liabilities do not include amounts recorded as asset retirement obligations. As of December 31, 2016 and 2015, we had environmental reserves of $12 million and $14 million, respectively. We may incur additional losses for environmental remediation. Environmental Matters —We have incurred and we may in the future incur, liability to investigate and clean up waste or contamination at our current or former facilities or facilities operated by third parties at which we may have disposed of waste or other materials. Similarly, we may incur costs for the cleanup of waste that was disposed of prior to the purchase of our businesses. Under some circumstances, the scope of our liability may extend to damages to natural resources. Under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and similar state laws, a current or former owner or operator of real property in the U.S. may be liable for remediation costs regardless of whether the release or disposal of hazardous substances was in compliance with law at the time it occurred, and a current owner or operator may be liable regardless of whether it owned or operated the facility at the time of the release. Outside the U.S., analogous contaminated property laws, such as those in effect in France, can hold past owners and/or operators liable for remediation at former facilities. We have not been notified by third parties of claims against us for cleanup liabilities at former facilities or third‑party sites, including, but not limited to, sites listed under CERCLA. Under the Resource Conservation and Recovery Act in the U.S. and similar state laws, we may be required to remediate contamination originating from our properties as a condition to our hazardous waste permit. Some of our manufacturing sites have an extended history of industrial chemical manufacturing and use, including on‑site waste disposal and we have made accruals for related remediation activity. We are aware of soil, groundwater or surface contamination from past operations at some of our sites and have made accruals for related remediation activity, and we may find contamination at other sites in the future. Similar laws exist in a number of locations in which we currently operate, or previously operated, manufacturing facilities, such as France and Italy. |
OTHER COMPREHENSIVE LOSS
OTHER COMPREHENSIVE LOSS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
OTHER COMPREHENSIVE INCOME (LOSS) | ||
OTHER COMPREHENSIVE LOSS | NOTE 13. OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive income (loss) consisted of the following: Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to (Dollars in millions) adjustment(a) net of tax(b) affiliates Total interests Venator Beginning balance, January 1, 2017 $ (112) $ (306) $ (5) $ (423) $ — $ (423) Adjustments related to other entities under common control 5 24 — 29 — 29 Tax expense — (3) — (3) — (3) Other comprehensive income before reclassifications 68 3 — 71 — 71 Tax benefit 2 1 — 3 — 3 Amounts reclassified from accumulated other comprehensive loss, gross(c) — 11 — 11 — 11 Tax expense — — — — — — Net current-period other comprehensive income 75 36 — 111 — 111 Ending balance, September 30, 2017 $ (37) $ (270) $ (5) $ (312) $ — $ (312) Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to (Dollars in millions) adjustment(d) net of tax(e) affiliates Total interests Venator Beginning balance, January 1, 2016 $ (144) $ (252) $ (5) $ (401) $ — $ (401) Adjustments related to other entities under common control 2 1 — 3 — 3 Tax expense — — — — — — Other comprehensive (loss) income before reclassifications (92) 7 — (85) — (85) Tax expense (1) (1) — (2) — (2) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 8 — 8 — 8 Tax benefit — 1 — 1 — 1 Net current-period other comprehensive (loss) income (91) 16 — (75) — (75) Ending balance, September 30, 2016 $ (235) $ (236) $ (5) $ (476) $ — $ (476) (a) Amounts are net of tax of $2 million and nil as of September 30, 2017 and January 1, 2017, respectively. (b) Amounts are net of tax of $54 million and $56 million as of September 30, 2017 and January 1, 2017, respectively. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts include a tax benefit of $1 million and nil as of September 30, 2016 and January 1, 2016, respectively. (e) Amounts are net of tax of $60 million at September 30, 2016 and January 1, 2016, each. Three months ended Nine months ended September 30, September 30, Affected line item in the statement (Dollars in millions) 2017 2016 2017 2016 where net income is presented Details about Accumulated Other Comprehensive Loss Components(a): Amortization of pension and other postretirement benefits: Actuarial loss $ 5 $ 3 $ 13 $ 8 (b) Prior service credit (1) — (2) — (b) Total amortization 4 3 11 8 Total before tax Income tax benefit — — — 1 Income tax (expense) benefit Total reclassifications for the period $ 4 $ 3 $ 11 $ 9 Net of tax (a) Pension and other postretirement benefit amounts in parentheses indicate credits on our consolidated statements of operations. (b) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. | 23. OTHER COMPREHENSIVE LOSS Other comprehensive loss consisted of the following (dollars in millions): Pension and other Other Foreign postretirement comprehensive Amounts Amounts currency benefits income of attributable to attributable translation adjustments, unconsolidated noncontrolling to adjustment(a) net of tax(b) affiliates Total interests Venator Beginning balance, January 1, 2016 $ (144) $ (252) $ (5) $ (401) $ — $ (401) Adjustment due to discontinued operations (3) (8) — (11) — (11) Tax benefit — 2 — 2 — 2 Other comprehensive (loss) income before reclassifications 35 (53) — (18) — (18) Tax expense — (7) — (7) — (7) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 11 — 11 — 11 Tax benefit — 1 — 1 — 1 Net current-period other comprehensive (loss) income 32 (54) — (22) — (22) Ending balance, December 31, 2016 $ (112) $ (306) $ (5) $ (423) $ — $ (423) Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to adjustment(d) net of tax(e) affiliates Total interests Venator Beginning balance, January 1, 2015 $ (73) $ (242) $ (4) $ (319) $ — $ (319) Adjustment due to discontinued operations (2) 4 — 2 — 2 Tax expense — (1) — (1) — (1) Other comprehensive (loss) income before reclassifications (69) (20) (1) (90) — (90) Tax expense — (3) — (3) — (3) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 10 — 10 — 10 Tax expense — — — — — — Net current-period other comprehensive loss (71) (10) (1) (82) — (82) Ending balance, December 31, 2015 $ (144) $ (252) $ (5) $ (401) $ — $ (401) (a) Amounts are net of tax of nil each as of December 31, 2016 and January 1, 2016. (b) Amounts are net of tax of $56 and $60 as of December 31, 2016 and January 1, 2016, respectively. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts are net of tax of nil each as of December 31, 2015 and January 1, 2015. (e) Amounts are net of tax of $60 and $64 as of December 31, 2015 and January 1, 2015, respectively. Year ended December 31, Affected line item in the statement 2016 2015 where net income is presented Details about Accumulated Other Comprehensive Loss Components: Amortization of pension and other postretirement benefits: Actuarial loss $ 10 $ 9 (a) Prior service cost 1 1 (a) 11 10 Total before tax 1 — Income tax (expense) Total reclassifications for the period $ 12 $ 10 Net of tax (a) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See note “19. Employee Benefit Plans.” |
OPERATING SEGMENT INFORMATION84
OPERATING SEGMENT INFORMATION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
OPERATING SEGMENT INFORMATION | ||
OPERATING SEGMENT INFORMATION | NOTE 14. OPERATING SEGMENT INFORMATION We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of commodity chemical products. We have reported our operations through our two segments, Titanium Dioxide and Performance Additives, and organized our business and derived our operating segments around differences in product lines. We have historically conducted other business within components of legal entities we operated in conjunction with Huntsman businesses, and such businesses are included within the corporate and other line item below. The major product groups of each reportable operating segment are as follows: Segment Product Group Titanium Dioxide titanium dioxide Performance Additives functional additives, color pigments, timber treatment and water treatment chemicals Sales between segments are generally recognized at external market prices and are eliminated in consolidation. Adjusted EBITDA is presented as a measure of the financial performance of our global business units and for reporting the results of our operating segments. The revenues and adjusted EBITDA for each of the two reportable operating segments are as follows: Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Titanium Dioxide $ 431 $ 392 $ 1,217 $ 1,197 Performance Additives 151 140 464 451 Total $ 582 $ 532 $ 1,681 $ 1,648 Segment adjusted EBITDA(1) Titanium Dioxide $ 127 $ 22 $ 268 $ 28 Performance Additives 15 16 57 56 142 38 325 84 Corporate and other (8) (17) (48) (46) Total $ 134 $ 21 $ 277 $ 38 Reconciliation of adjusted EBITDA to net income (loss): Interest expense (30) (14) (54) (44) Interest income 22 2 25 13 Income tax (expense) benefit - continuing operations (14) 7 (26) 14 Depreciation and amortization (35) (30) (95) (84) Net income attributable to noncontrolling interests 2 3 8 8 Other adjustments: Business acquisition and integration expenses (4) (3) (2) (11) Gain on disposition of businesses/assets — 23 — 23 Net income of discontinued operations, net of tax — 2 8 8 Certain legal settlements and related expenses — — (1) (1) Amortization of pension and postretirement actuarial losses (5) (3) (13) (8) Net plant incident (costs) credits (1) (3) (4) 2 Restructuring, impairment and plant closing costs (16) (7) (49) (31) Net income (loss) $ 53 $ (2) $ 74 $ (73) (1) Adjusted EBITDA is defined as net income (loss) of Venator before interest, income tax from continuing operations, depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following adjustments from net income (loss): (a) business acquisition and integration expenses; (b) gain on disposition of businesses/assets (c) net income of discontinued operations, net of income tax; (d) certain legal settlements and related expenses; (e) amortization of pension and postretirement actuarial losses; (f) net plant incident credits (costs); and (g) restructuring, impairment and plant closing costs. | 24. OPERATING SEGMENT INFORMATION We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of commodity chemical products. We have reported our operations through our two segments, Titanium Dioxide and Performance Additives, and organized our business and derived our operating segments around differences in product lines. We also conduct other business within components of legal entities we operated in conjunction with Huntsman businesses. These other businesses will not ultimately be part of Venator. As such, these other businesses do not meet the definition of operating segments. The major product groups of each reportable operating segment are as follows: Segment Product Group Titanium Dioxide titanium dioxide Performance Additives functional additives, color pigments, timber treatment and water treatment chemicals Sales between segments are generally recognized at external market prices and are eliminated in consolidation. Adjusted EBITDA is presented as a measure of the financial performance of our global business units and for reporting the results of our operating segments. The revenues and Adjusted EBITDA for each of the two reportable operating segments are as follows (dollars in millions): Adjusted EBITDA for each of the two reportable operating segments are as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Revenues: Titanium Dioxide $ 1,554 $ 1,584 $ 1,411 Performance Additives 585 578 138 Total $ 2,139 $ 2,162 $ 1,549 Segment Adjusted EBITDA(1) Titanium Dioxide $ 61 $ (8) $ 62 Performance Additives 69 69 14 Corporate and other (53) (53) (49) Total $ 77 $ 8 $ 27 Reconciliation of Adjusted EBITDA to net loss: Interest expense (59) (52) (25) Interest income 15 22 23 Income tax benefit—continuing operations 23 34 18 Depreciation and amortization (114) (100) (87) Net income attributable to noncontrolling interests 10 7 2 Other adjustments: Business acquisition and integration expenses (11) (44) (45) Net income of discontinued operations, net of tax 8 10 9 Purchase accounting adjustments — — (11) Gain (loss) on disposition of business/assets 22 (1) 1 Certain legal settlements and related expenses (2) (3) (3) Amortization of pension and postretirement actuarial losses (10) (9) (11) Net plant incident costs (1) (4) — Restructuring, impairment and plant closing costs (35) (220) (60) Net loss $ (77) $ (352) $ (162) Depreciation and Amortization: Titanium Dioxide $ 87 $ 72 $ 73 Performance Additives 19 20 5 Corporate and other 8 8 9 Total $ 114 $ 100 $ 87 Capital Expenditures: Titanium Dioxide $ 73 $ 124 $ 109 Performance Additives 30 79 27 Total $ 103 $ 203 $ 136 Total Assets(2): Titanium Dioxide $ 1,561 $ 1,707 $ 2,059 Performance Additives 764 783 724 Corporate and other 210 715 939 Total $ 2,535 $ 3,205 $ 3,722 (1) Adjusted EBITDA is defined as net income (loss) of Venator before interest, income tax, depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following adjustments from net income (loss): (a) business acquisition and integration expenses; (b) net income from discontinued operations; (c) purchase accounting adjustments; (d) gain (loss) on disposition of businesses/assets; (e) certain legal settlements and related expenses; (f) amortization of pension and postretirement actuarial losses; (g) net plant incident costs; and (h) restructuring, impairment and plant closing costs. (2) Defined as total assets less current assets of discontinued operations and noncurrent assets of discontinued operations. Year ended December 31, By Geographic Area 2016 2015 2014 Revenues(1): United States $ 491 $ 501 $ 313 Germany 210 235 115 Italy 130 117 95 China 113 97 54 United Kingdom 102 105 94 France 98 94 83 Spain 79 71 71 Switzerland 11 16 10 Canada 59 59 41 Other nations 846 867 673 Total $ 2,139 $ 2,162 $ 1,549 Long Lived Assets: Germany $ 215 $ 216 $ 210 United States 263 256 187 United Kingdom 198 252 241 Italy 155 163 159 Finland 146 150 170 Other nations 201 240 375 Total $ 1,178 $ 1,277 $ 1,342 (1) Geographic information for revenues is based upon countries into which product is sold. |
RESTATEMENT OF COMBINED STATEME
RESTATEMENT OF COMBINED STATEMENTS OF CASH FLOWS | 12 Months Ended |
Dec. 31, 2016 | |
RESTATEMENT OF COMBINED STATEMENTS OF CASH FLOWS | |
RESTATEMENT OF COMBINED STATEMENTS OF CASH FLOWS | 25. RESTATEMENT OF COMBINED STATEMENTS OF CASH FLOWS We identified errors within our previously issued combined statements of cash flows related to our classification of affiliate transactions which were previously presented as cash flows from operating activities. We have concluded that the previously issued combined statements of cash flows for the years ended December 31, 2016, 2015 and 2014 were materially misstated and require restatement. There was no effect on Venator’s previously reported combined balance sheets as of December 31, 2016 and 2015 and the combined statements of operations, comprehensive loss and equity for the three years ended December 31, 2016. The schedule below provides a summary of the impact of these restatement adjustments on our combined statements of cash flows for the years ended December 31, 2016, 2015 and 2014: Year Ended December 31, 2016 As Previously As Restated Reported (in millions) Combined Statements of Cash Flows: Cash Flows from Operating Activities: Accounts payable 17 55 Net cash provided by (used in) operating activities from discontinued operations(1) 17 — Net cash provided by (used in) operating activities 97 143 Cash Flows from Investing Activities Net (advances to) payments from affiliates (5) — Net cash provided by (used in) investing activities from discontinued operations(2) (22) — Net cash (used in) provided by investing activities (118) (101) Cash Flows from Financing Activities: Net borrowings from affiliate accounts payable 47 — Net change in parent company investment — (17) Net cash provided by (used in) financing activities from discontinued operations(3) (2) — Net cash provided by (used in) financing activities 30 (33) Year Ended December 31, 2015 As Previously As Restated Reported (in millions) Combined Statements of Cash Flows: Cash Flows from Operating Activities: Accounts payable 5 242 Net cash provided by (used in) operating activities from discontinued operations(1) (6) — Net cash provided by (used in) operating activities (63) 203 Cash Flows from Investing Activities Net (advances to) payables from affiliates 97 — Net cash provided by (used in) investing activities from discontinued operations(2) (39) — Net cash (used in) provided by investing activities (139) (205) Cash Flows from Financing Activities: Net borrowings on affiliate accounts payable 194 — Net change in parent company investment — 4 Net cash provided by (used in) financing activities from discontinued operations(3) 9 — Net cash provided by (used in) financing activities 194 (6) Year Ended December 31, 2014 As As Previously Restated Reported (in millions) Combined Statements of Cash Flows: Cash Flows from Operating Activities: Accounts payable 29 174 Net cash provided by (used in) operating activities from discontinued operations(1) 8 — Net cash provided by (used in) operating activities (63) 100 Cash Flows from Investing Activities Net (advances to) payables from affiliates 100 — Net cash provided by (used in) investing activities from discontinued operations(2) (23) — Net cash (used in) provided by investing activities 29 (54) Cash Flows from Financing Activities: Net borrowings on affiliate accounts payable 53 — Net change in parent company investment — (27) Net cash provided by (used in) financing activities from discontinued operations(3) (1) — Net cash provided by financing activities 52 (28) (1) Total effect of the error was $(7) million, $(33) million, and $(19) million for the net cash provided by (used in) operating activities from discontinued operations for the years ended December 31, 2016, 2015, and 2014, respectively. (2) Total effect of the error was $(12) million, $(31) million, and $(17) million for the net cash provided by (used in) investing activities from discontinued operations for the years ended December 31, 2016, 2015, and 2014, respectively. (3) Total effect of the error was $5 million, $(2) million, and $(2) million for the net cash provided by (used in) financing activities from discontinued operations for the years ended December 31, 2016, 2015, and 2014, respectively. |
DISCONTINUED OPERATIONS86
DISCONTINUED OPERATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
DISCONTINUED OPERATIONS | ||
DISCONTINUED OPERATIONS | NOTE 3. DISCONTINUED OPERATIONS The Titanium Dioxide, Performance Additives and other businesses were included in Huntsman's financial results in different legal forms, including, but not limited to: (1) wholly-owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities that were comprised of other businesses and include the Titanium Dioxide and/or Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide, Performance Additives and other businesses are the primary beneficiaries. Because the historical condensed consolidated and combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical condensed consolidated and combined financial information includes the results of operations of other Huntsman businesses that are not a part of our operations after the Separation. The legal entity structure of Huntsman was reorganized during the fourth quarter of 2016 and the second quarter of 2017 such that the other businesses would not be included in Venator’s legal entity structure and as such, the discontinued operations presented below reflect financial results of the other businesses through the date of such reorganization. The following table summarizes the balance sheet data for discontinued operations: December 31, (Dollars in millions) 2016 ASSETS Current assets: Cash and cash equivalents $ 1 Accounts receivable (net of allowance for doubtful accounts of $1) 10 Accounts receivable from affiliates 61 Inventories 9 Prepaid expenses 1 Other current assets 2 Total current assets of discontinued operations 84 Property, plant and equipment, net 19 Intangible assets, net 2 Deferred income taxes 21 Noncurrent assets of discontinued operations 42 Total assets of discontinued operations $ 126 LIABILITIES Current liabilities: Accounts payable $ 7 Accounts payable to affiliates 2 Accrued liabilities 18 Total current liabilities of discontinued operations 27 Deferred income taxes 1 Other noncurrent liabilities 77 Noncurrent liabilities of discontinued operations 78 Total liabilities of discontinued operations $ 105 The following table summarizes the operations data for discontinued operations: Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Trade sales, services and fees, net $ — $ 28 $ 15 $ 83 Related party sales — 15 17 51 Total revenues — 43 32 134 Cost of goods sold — 36 26 110 Operating expenses: Selling, general and administrative (includes corporate allocations of nil, $2, $1 and $5, respectively) — 6 (7) 16 Restructuring, impairment and plant closing costs — — 1 — Other (income) expense, net — (1) 1 (2) Total expenses (income) — 5 (5) 14 Income from discontinued operations before tax — 2 11 10 Income tax expense — — (3) (2) Net income from discontinued operations $ — $ 2 $ 8 $ 8 | 26. DISCONTINUED OPERATIONS The Titanium Dioxide, Performance Additives and other businesses were included in Huntsman’s financial results in different legal forms, including, but not limited to: (1) wholly‑owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities that are comprised of other businesses and include the Titanium Dioxide and/or Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide, Performance Additives and other businesses are the primary beneficiaries. Because the historical combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical combined financial information includes the results of operations of other Huntsman businesses that are not a part of our operations after the Separation. The legal entity structure of Huntsman was reorganized during the fourth quarter of 2016 and the second quarter of 2017 such that the other businesses would not be included in Venator’s legal entity structure and as such, the discontinued operations presented below reflect financial results of the other businesses through the date of such reorganization. The following table summarizes the balance sheet data for discontinued operations: December 31, December 31, 2016 2015 (Dollars in millions) ASSETS Current assets: Cash and cash equivalents $ 1 $ 1 Accounts receivable (net of allowance for doubtful accounts of $1 each) 10 18 Accounts receivable from affiliates 61 82 Inventories 9 15 Prepaid expenses 1 1 Other current assets 2 2 Total current assets discontinued operations 84 119 Property, plant and equipment, net 19 50 Goodwill 2 2 Deferred income taxes 21 32 Other assets — 5 Noncurrent assets of discontinued operations 42 89 Total assets of discontinued operations $ 126 $ 208 LIABILITIES Current liabilities: Accounts payable $ 7 $ 12 Accounts payable to affiliates 2 2 Accrued liabilities 18 17 Total current liabilities of discontinued operations 27 31 Long-term debt — 4 Deferred income taxes 1 1 Other noncurrent liabilities 77 113 Noncurrent liabilities of discontinued operations 78 118 Total liabilities of discontinued operations $ 105 $ 149 The following table summarizes the operations data for discontinued operations: Year ended December 31, 2016 2015 2014 (Dollars in millions) Revenues: Trade sales, services and fees, net $ 110 $ 108 $ 105 Related party sales 60 60 75 Total revenues 170 168 180 Cost of goods sold 147 146 154 Operating expenses: Selling, general, and administrative (includes corporate allocations of $7, $6 and $8, respectively) 15 8 17 Restructuring, impairment and plant closing costs — 3 2 Other income, net (1) (2) (3) Total expenses 14 9 16 Income from discontinued operations before tax 9 13 10 Income tax expense (1) (3) (1) Net income from discontinued operations $ 8 $ 10 $ 9 |
LOSSES PER SHARE
LOSSES PER SHARE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
EARNINGS (LOSSES) PER SHARE | ||
LOSSES PER SHARE | NOTE 10. EARNINGS (LOSSES) PER SHARE Basic earnings (losses) per share excludes dilution and is computed by dividing net income (loss) attributable to Venator ordinary shareholders by the weighted average number of shares outstanding during the period. Diluted earnings (losses) per share reflects all potential dilutive ordinary shares outstanding during the period and is computed by dividing net income (loss) available to Venator ordinary shareholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive securities. For the periods prior to our IPO, the average number of ordinary shares outstanding used to calculate basic and diluted earnings (losses) per share was based on the ordinary shares that were outstanding at the time of our IPO. Basic and diluted earnings (losses) per share is determined using the following information: Three months ended Nine months ended September 30, September 30, (In millions) 2017 2016 2017 2016 Numerator: Basic and diluted income (loss) from continuing operations: Income (loss) from continuing operations attributable to Venator $ 51 $ (7) $ 58 $ (89) Basic and diluted net income (loss): Net income (loss) attributable to Venator $ 51 $ (5) $ 66 $ (81) Denominator: Weighted average shares outstanding 106.3 106.3 106.3 106.3 Dilutive share-based awards 0.3 — 0.3 — Total weighted average shares outstanding, including dilutive shares 106.6 106.3 106.6 106.3 | 27. LOSSES PER SHARE Basic losses per share excludes dilution and is computed by dividing net loss attributable to Venator ordinary shareholders by the weighted average number of shares outstanding during the period. Diluted losses per share reflects all potential dilutive ordinary shares outstanding during the period and is computed by dividing net loss available to Venator ordinary shareholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive securities. For the periods prior to our IPO, the average number of ordinary shares outstanding used to calculate basic and diluted losses per share was based on the ordinary shares that were outstanding at the time of our IPO. Basic and diluted losses per share is determined using the following information: (In millions) 2016 2015 2014 Numerator: Basic and diluted loss from continuing operations: Loss from continuing operations attributable to Venator $ (95) $ (369) $ (173) Basic and diluted net loss: Net loss attributable to Venator $ (87) $ (359) $ (164) Denominator: Weighted average shares outstanding 106.3 106.3 106.3 Dilutive share-based awards — — — Total weighted average shares outstanding, including dilutive shares 106.3 106.3 106.3 ****** |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Schedule II - Valuation and Qualifying Accounts | |
Schedule II - Valuation and Qualifying Accounts | Schedule II—Valuation and Qualifying Accounts VENATOR MATERIALS PLC AND SUBSIDIARIES (Dollars in millions) Additions Balance at Charges Charged beginning to cost to other Balance at Description of period and expenses accounts Deductions end of period Allowance for doubtful accounts: Year ended December 31, 2016 $ 4 $ — $ — $ — $ 4 Year ended December 31, 2015 4 — — — 4 Year ended December 31, 2014 7 — (3) — 4 |
DESCRIPTION OF BUSINESS, RECENT
DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | ||
Basis of Presentation | Basis of Presentation Venator’s unaudited condensed consolidated and combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP" or "U.S. GAAP") and in management’s opinion reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results of operations, comprehensive income (loss), financial position and cash flows for the periods presented. Results of interim periods are not necessarily indicative of those to be expected for the full year. These unaudited condensed consolidated and combined financial statements should be read in conjunction with the audited combined financial statements and notes to combined financial statements included in the Prospectus. Prior to the Separation, Venator’s operations were included in Huntsman’s financial results in different legal forms, including but not limited to: (1) wholly-owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities which are comprised of other businesses and include the Titanium Dioxide and/or Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives businesses are the primary beneficiaries. The unaudited condensed consolidated and combined financial statements include all revenues, costs, assets, liabilities and cash flows directly attributable to Venator. The unaudited condensed consolidated and combined financial statements also include allocations of direct and indirect corporate expenses through the date of the Separation, which are based upon an allocation method that in the opinion of management is reasonable. Because the historical condensed consolidated and combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical condensed consolidated and combined financial information includes the results of operations of other businesses that are not a part of our operations after the Separation. We report the results of those other businesses as discontinued operations. See “Note 3. Discontinued Operations” for further discussion of discontinued operations. In addition, the unaudited condensed consolidated and combined financial statements have been prepared from Huntsman’s historical accounting records through the Separation and are presented on a stand-alone basis as if Venator’s operations had been conducted separately from Huntsman; however, prior to the Separation, Venator did not operate as a separate, stand-alone entity for the periods presented and, as such, the condensed consolidated and combined financial statements reflecting balances and activity prior to the Separation, may not be indicative of the financial position, results of operations and cash flows had Venator been a stand-alone company. For purposes of these unaudited condensed consolidated and combined financial statements, all significant transactions with Huntsman International have been included in group equity. All intercompany transactions within the consolidated business have been eliminated. Prior to the Separation, Huntsman’s executive, information technology, EHS and certain other corporate departments performed certain administrative and other services for Venator. Additionally, Huntsman performed certain site services for Venator. Expenses incurred by Huntsman and allocated to Venator were determined based on specific services provided or were allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $9 million and $27 million for the three months ended September 30, 2017 and 2016, respectively, and $62 million and $76 million for the nine months ended September 30, 2017 and 2016, respectively. | Basis of Presentation —Venator’s combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP” or “U.S. GAAP”). Venator’s operations were included in Huntsman Corporation’s financial results in different legal forms, including but not limited to: (1) wholly‑owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities which are comprised of other businesses and include the Titanium Dioxide and Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives and other businesses are the primary beneficiaries. The combined financial statements include all revenues, costs, assets, liabilities and cash flows directly attributable to Venator, as well as allocations of direct and indirect corporate expenses, which are based upon an allocation method that in the opinion of management is reasonable. Such corporate cost allocation transactions between Venator and Huntsman Corporation have been considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded and the net effect of the settlement of these intercompany transactions is reflected in the combined statements of cash flows as a financing activity. Because the historical combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical combined financial information includes the results of operations of other Huntsman businesses are not a part of our operations after the Separation. We report the results of those other businesses as discontinued operations. Please see note “3. Discontinued Operations” to our unaudited condensed consolidated and combined financial statements and note “26. Discontinued Operations” to our combined financial statements. In addition, the combined financial statements have been prepared from Huntsman Corporation’s historical accounting records and are presented on a stand‑alone basis as if Venator’s operations had been conducted separately from Huntsman Corporation; however, Venator did not operate as a separate, stand‑alone entity for the periods presented and, as such, the combined financial statements may not be indicative of the financial position, results of operations and cash flows had Venator been a stand‑alone company. For purposes of these combined financial statements, all significant transactions with Huntsman International LLC (“Huntsman International”), a wholly‑owned subsidiary of Huntsman through which Huntsman operates all of its businesses, have been included in group equity. All intercompany transactions within the combined business have been eliminated. Additional disclosures are included in note “20. Related Party Transactions.” Huntsman Corporation’s executive, information technology, environmental, health and safety and certain other corporate departments perform certain administrative and other services for Venator. Additionally, Huntsman Corporation performs certain site services for Venator. Expenses incurred by Huntsman Corporation and allocated to Venator are determined based on specific services provided or are allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman Corporation. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $104 million, $90 million and $78 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Asset Retirement Obligations | Asset Retirement Obligations —Venator accrues for asset retirement obligations, which consist primarily of asbestos abatement costs, demolition and removal costs, leasehold remediation costs and landfill closure costs, in the period in which the obligations are incurred. Asset retirement obligations are initially recorded at estimated fair value. When the related liability is initially recorded, Venator capitalizes the cost by increasing the carrying amount of the related long‑lived asset. Over time, the liability is accreted to its estimated settlement value and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, Venator will recognize a gain or loss for any difference between the settlement amount and the liability recorded. | |
Carrying Value of Long Lived Assets | Carrying Value of Long‑Lived Assets —Venator reviews long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability is based upon current and anticipated undiscounted cash flows, and Venator recognizes an impairment when such estimated cash flows are less than the carrying value of the asset. Measurement of the amount of impairment, if any, is based upon the difference between carrying value and fair value. Fair value is generally estimated by discounting estimated future cash flows using a discount rate commensurate with the risks involved. | |
Cash and Cash Equivalents | Cash and Cash Equivalents —Venator considers cash in bank accounts and short‑term highly liquid investments with remaining maturities of three months or less at the date of purchase to be cash and cash equivalents. Venator’s day‑to‑day funding requirements are primarily met by the Huntsman International treasury function. Venator participates in Huntsman International’s cash pooling program. The cash pooling program is an intercompany borrowing arrangement designed to reduce Venator’s dependence on external short‑term borrowing. See note “14. Related Party Financing.” | |
Cost of Goods Sold | Cost of Goods Sold —Venator classifies the costs of manufacturing and distributing its products as cost of goods sold. Manufacturing costs include variable costs, primarily raw materials and energy, and fixed expenses directly associated with production. Manufacturing costs include, among other things, plant site operating costs and overhead costs (including depreciation), production planning and logistics costs, repair and maintenance costs, plant site purchasing costs, and engineering and technical support costs. Distribution, freight, and warehousing costs are also included in cost of goods sold. | |
Derivative Transactions | Derivative Transactions —All derivatives are recorded on Venator’s balance sheet at fair value. Changes in fair value of derivatives are recognized in earnings. See note “16. Derivative Instruments and Hedging Activities.” | |
Environmental Expenditures | Environmental Expenditures —Environmental‑related restoration and remediation costs are recorded as liabilities when site restoration and environmental remediation and cleanup obligations are either known or considered probable and the related costs can be reasonably estimated. Other environmental expenditures that are principally maintenance or preventative in nature are recorded when expended and incurred and are expensed or capitalized as appropriate. See note “22. Environmental, Health and Safety Matters.” | |
Financial Instruments | Financial Instruments —The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, amounts receivable from affiliates, accounts payable, amounts payable to affiliates, and accrued liabilities approximate their fair value because of the immediate or short‑term maturity of these financial instruments. The fair value of non‑qualified employee benefit plan investments is estimated using prevailing market prices. The estimated fair values of Venator’s long‑term debt are based on quoted market prices for the identical liability when traded as an asset in an active market. Such fair value approximates carrying value. | |
Foreign Currency Translation | Foreign Currency Translation —The accounts of Venator’s operating subsidiaries outside of the U.S. consider the functional currency to be the currency of the economic environment in which they operate. Accordingly, assets and liabilities are translated at rates prevailing at the balance sheet date. Revenues, expenses, gains and losses are translated at a weighted average rate for the period. Cumulative translation adjustments are recorded to equity as a component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are recorded in other (income) expense in the combined statements of operations and were net gains of $9 million, $4 million and $1 million for the years ended December 31, 2016, 2015 and 2014, respectively. | |
Income Taxes | Income Taxes —Venator is comprised of operations in various tax jurisdictions. Venator’s operations were included in Huntsman Corporation’s financial results in different legal forms, including but not limited to wholly‑owned subsidiaries for which Venator was the sole business, components of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses and variable interest entities in which Venator is the primary beneficiary. Similarly, Venator’s tax obligations and filings were included in different legal forms, including but not limited to legal entities in certain countries where fiscal unity or consolidation is allowed or required with other Huntsman Corporation businesses, components of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses, and legal entities which file separate tax returns in their respective tax jurisdictions. The combined financial statements have been prepared from Huntsman Corporation’s historical accounting records and are presented on a stand‑alone basis as if Venator’s operations had been conducted separately from Huntsman; however, Venator did not operate as a separate, stand‑alone entity for the periods presented and, as such, the tax results and attributes presented in these combined financial statements would not be indicative of the income tax expense or benefit, income tax related assets and liabilities and cash taxes had Venator been a stand‑alone company. The combined financial statements have been prepared under the currently anticipated legal structure of Venator such that the historical results of legal entities are presented as follows: The historical tax results of legal entities which file separate tax returns in their respective tax jurisdictions and which need no restructuring before being contributed are included without adjustment, including the inclusion of any currently held subsidiaries. The historical tax results of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses for which new legal entities will be formed for Venator operations are presented on a stand‑alone basis as if their operations had been conducted separately from Huntsman and any adjustments to current taxes payable have been treated as adjustments to parent’s net investment and advances. The historical tax results of legal entities in which Venator operated in conjunction with other Huntsman Corporation businesses for which the Huntsman business will be transferred out have been presented without adjustment, including the historical results of the Huntsman businesses which are unrelated to Venator operating businesses. Pursuant to tax‑sharing agreements, subsidiaries of Huntsman Corporation are charged or credited, in general, with an amount of income taxes as if they filed separate income tax returns. Adjustments to current income taxes payable by Venator have been treated as adjustments to parent’s net investment and advances. Venator includes the U.S. Titanium Dioxide and Performance Additives subsidiaries of Huntsman International which are treated for U.S. tax purposes as divisions of Huntsman International. Huntsman International is included in the U.S. consolidated tax return of its parent, Huntsman Corporation. A 2% U.S. state income tax rate (net of federal benefit) was estimated for Venator based upon the estimated apportionment factors and actual income tax rates in state tax jurisdictions where it has nexus. U.S. foreign tax credits relating to taxes paid by non‑U.S. business entities have been generated and utilized by Huntsman. On a separate entity basis, these foreign tax credits would not have been generated or utilized, therefore, no additional allocation of Huntsman foreign tax credits was necessary. Additionally, Huntsman had no U.S. net operating loss carryforward amounts (“NOLs”) or similar attributes to allocate. Venator believes this methodology is reasonable and complies with Staff Accounting Bulletin Topic 1B, Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity . Venator uses the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial and tax reporting purposes. Venator evaluates deferred tax assets to determine whether it is more likely than not that they will be realized. Valuation allowances are reviewed on a tax jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets for each jurisdiction. These conclusions require significant judgment. In evaluating the objective evidence that historical results provide, Venator considers the cyclicality of Venator and cumulative income or losses during the applicable period. Cumulative losses incurred over the period limits Venator’s ability to consider other subjective evidence such as Venator’s projections for the future. Changes in expected future income in applicable tax jurisdictions could affect the realization of deferred tax assets in those jurisdictions. As of December 31, 2016 and 2015, there were no unremitted earnings of subsidiaries to consider for indefinite reinvestment. Going forward, to the extent future U.S. cash flow needs require distributions from foreign subsidiaries, based on existing law, we expect to have tax attributes (at least up to the amount of anticipated external Venator debt) that could allow repatriation of earnings to the U.S. without incremental U.S. income tax. The U.S. tax expense, deferred tax assets, and deferred tax liabilities in these financial statements do not necessarily reflect the tax expense, deferred tax assets, or deferred tax liabilities that would have resulted had Venator not been operated as a U.S. income tax branch structure in combination with Huntsman Corporation. By illustration, there are no net operating losses to be allocated to Venator given the overall profitability of the Huntsman group in the U.S. The tax provision is not intended in any way to be representative of future taxes. Further, the tax attributes presented reflect calculated unaffiliated results based upon the legal entity structure of Venator and using the stand‑alone methodology. The actual income tax attributes that would be allocated under the various required tax laws to the specific legal entities comprising Venator would be different than the amounts presented. Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The application of income tax law is inherently complex. Venator is required to determine if an income tax position meets the criteria of more‑likely‑than‑not to be realized based on the merits of the position under tax law, in order to recognize an income tax benefit. This requires Venator to make significant judgments regarding the merits of income tax positions and the application of income tax law. Additionally, if a tax position meets the recognition criteria of more‑likely‑than‑not, Venator is required to make judgments and apply assumptions in order to measure the amount of the tax benefits to recognize. The judgments are based on the probability of the amount of tax benefits that would be realized if the tax position was challenged by the taxing authorities. Interpretations and guidance surrounding income tax laws and regulations change over time. As a consequence, changes in assumptions and judgments can materially affect amounts recognized in the combined financial statements. | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill —Intangible assets are stated at cost (fair value at the time of acquisition) and are amortized using the straight‑line method over the estimated useful lives or the life of the related agreement as follows: Patents and technology 5 ‑ 30 years Trademarks 9 ‑ 30 years Licenses and other agreements 5 ‑ 15 years Other intangibles 5 ‑ 15 years Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill is not subject to any method of amortization, but is tested for impairment annually (at the beginning of the third quarter) and when events and circumstances change that would more‑likely‑than‑not reduce the fair value of a reporting unit below its carrying amount. When the fair value is less than the carrying value of the related reporting unit, Venator is required to reduce the amount of goodwill through a charge to earnings. Fair value is estimated using the market approach, as well as the income approach based on discounted cash flow projections. Goodwill has been assigned to reporting units for purposes of impairment testing. | |
Inventories | Inventories —Inventories are stated at the lower of cost or market, with cost determined using the first‑in, first‑out and average costs methods for different components of inventory. | |
Legal Costs | Legal Costs —Venator expenses legal costs, including those legal costs incurred in connection with a loss contingency, as incurred. | |
Property, Plant, and Equipment | Property, Plant, and Equipment —Property, plant, and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful lives or lease term as follows: Buildings and equipment 5 ‑ 50 years Plant and equipment 3 ‑ 30 years Furniture, fixtures and leasehold improvements 5 ‑ 20 years Normal maintenance and repairs of plant and equipment are charged to expense as incurred. Renewals, betterments, and major repairs that significantly extend the useful life of the assets are capitalized and the assets replaced, if any, are retired. | |
Research and Development | Research and Development —Research and development costs are expensed as incurred and recorded in selling, general and administrative expense. Research and development costs charged to expense were $15 million, $17 million and $8 million for the years ended December 31, 2016, 2015 and 2014, respectively. | |
Revenue Recognition | Revenue Recognition —Venator generates substantially all of its revenues through sales in the open market and long‑term supply agreements. Venator recognizes revenue when it is realized or realizable and earned. Revenue for product sales is recognized when a sales arrangement exists, risk and title to the product transfer to the customer, collectibility is reasonably assured, and pricing is fixed or determinable. The transfer of risk and title to the product to the customer usually occurs at the time shipment is made. The revenue recognition policy for sales to related parties does not differ from the policy described above. | |
Securitization of Accounts Receivable | Securitization of Accounts Receivable —Venator participates in A/R Programs sponsored by Huntsman International. Under the A/R Programs, Venator sells certain of its trade receivables to Huntsman International. Huntsman International grants an undivided interest in these receivables to bankruptcy remote special purpose entities (“SPE”), which serve as security for the issuance of debt of Huntsman International. See note “14. Related Party Financing.” | |
Subsequent Events | Subsequent Events —Venator evaluated material subsequent events through May 5, 2017, the date these combined financial statements were available to be issued. | |
Use of Estimates | Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
DESCRIPTION OF BUSINESS, RECE90
DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | |
Schedule of estimated useful lives of intangible assets or life of the related agreement | Patents and technology 5 ‑ 30 years Trademarks 9 ‑ 30 years Licenses and other agreements 5 ‑ 15 years Other intangibles 5 ‑ 15 years |
Schedule of estimated useful lives or lease term of property, plant and equipment | Buildings and equipment 5 ‑ 50 years Plant and equipment 3 ‑ 30 years Furniture, fixtures and leasehold improvements 5 ‑ 20 years |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
BUSINESS COMBINATIONS | |
Schedule of allocation of acquisition cost to the assets acquired and liabilities assumed | Cash paid for Rockwood Acquisition in 2014 $ 1,038 Purchase price adjustment received in 2015 (18) Net acquisition cost $ 1,020 Fair value of assets acquired and liabilities assumed: Cash $ 77 Accounts receivable 220 Inventories 401 Prepaid expenses and other current assets 55 Property, plant and equipment 665 Intangible assets 31 Deferred income taxes, non-current 106 Other assets 8 Accounts payable (146) Accrued expenses and other current liabilities (106) Long-term debt, non-current (3) Pension and related liabilities (233) Deferred income taxes, non-current (9) Other liabilities (30) Total fair value of net assets acquired 1,036 Noncontrolling interest (16) Total $ 1,020 |
Schedule of estimated pro forma revenues and net loss | Pro Forma Year ended December 31, 2014 (Unaudited) Revenues $ 2,875 Net loss attributable to Venator (65) |
INVENTORIES (Tables)92
INVENTORIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
INVENTORIES | ||
Schedule of components of inventory | September 30, December 31, (Dollars in millions) 2017 2016 Raw materials and supplies $ 164 $ 134 Work in process 42 46 Finished goods 225 246 Total $ 431 $ 426 | December 31, 2016 2015 Raw materials and supplies $ 134 $ 174 Work in process 46 69 Finished goods 246 313 Total $ 426 $ 556 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of property, plant and equipment | December 31, 2016 2015 Land and land improvements $ 96 $ 75 Buildings 214 201 Plant and equipment 1,789 1,940 Construction in progress 102 312 Total 2,201 2,528 Less accumulated depreciation (1,023) (1,251) Property, plant, and equipment—net $ 1,178 $ 1,277 |
VARIABLE INTEREST ENTITIES (T94
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
VARIABLE INTEREST ENTITIES | ||
Schedule of financial information of VIE's | Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues $ 31 $ 30 $ 97 $ 89 Income from continuing operations before income taxes 4 5 16 15 Net cash provided by operating activities 6 7 20 19 | The revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities for the years ended December 31, 2016, 2015 and 2014 are as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Revenues $ 116 $ 100 $ 24 Income from continuing operations before income taxes 21 13 3 Net cash provided by operating activities 26 17 — |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INTANGIBLE ASSETS | |
Schedule of gross carrying amount and accumulated amortization of intangible assets | December 31, 2016 December 31, 2015 Carrying Accumulated Carrying Accumulated Amount Amortization Net Amount Amortization Net Patents, trademarks and technology $ 18 $ 1 $ 17 $ 19 $ 4 $ 15 Other intangibles 14 8 6 22 9 13 Total $ 32 $ 9 $ 23 $ 41 $ 13 $ 28 |
Schedule of estimated future amortization expense for intangible assets | Our estimated future amortization expense for intangible assets over the next five years is as follows (dollars in millions): Year ending December 31, 2017 $ 4 2018 3 2019 3 2020 3 2021 3 |
OTHER NONCURRENT ASSETS (Tables
OTHER NONCURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
OTHER NONCURRENT ASSETS | |
Schedule of components of other noncurrent assets | Other noncurrent assets at December 31, 2016 and 2015 consisted of the following (dollars in millions): December 31, 2016 2015 Spare parts inventory $ 13 $ 14 Notes receivable 7 7 Pension assets 4 2 Other 11 9 Total $ 35 $ 32 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ACCRUED LIABILITIES | |
Schedule of components of accrued liabilities | Accrued liabilities at December 31, 2016 and 2015 consisted of the following (dollars in millions): December 31, 2016 2015 Payroll and benefits $ 50 $ 52 Restructuring and plant closing costs 14 85 Rebate accrual 25 22 Current taxes payable 4 4 Asset retirement obligation 13 18 Taxes other than income taxes 2 2 Pension liabilities 1 1 Other miscellaneous accruals 37 58 Total $ 146 $ 242 |
RESTRUCTURING, IMPAIRMENT AND98
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS | ||
Schedule of accrued restructuring, impairment and plant closing costs by type of cost and initiative | Other Workforce restructuring (Dollars in millions) reductions(1) costs Total(2) Accrued liabilities as of December 31, 2016 $ 21 $ — $ 21 2017 charges 34 8 42 2017 payments (15) (8) (23) Foreign currency effect on liability balance 1 — 1 Accrued liabilities as of September 30, 2017 $ 41 $ — $ 41 (1) The total workforce reduction reserves of $41 million relate to the termination of 338 positions, of which zero positions had been terminated as of September 30, 2017. (2) Accrued liabilities remaining, for continuing operations, at September 30, 2017 and December 31, 2016 by year of initiatives were as follows: September 30, December 31, (Dollars in millions) 2017 2016 2015 initiatives and prior $ 12 $ 21 2016 initiatives — — 2017 initiatives 29 — Total $ 41 $ 21 | As of December 31, 2016, 2015 and 2014, accrued restructuring and plant closing costs by type of cost and initiative consisted of the following (dollars in millions): Other Workforce restructuring reductions(1) costs Total(2) Accrued liabilities as of January 1, 2014 $ 2 $ — $ 2 2014 charges 60 — 60 2014 payments (4) — (4) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities 1 — 1 Accrued liabilities as of December 31, 2014 59 — 59 2015 charges 90 21 111 2015 payments (54) (21) (75) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities 1 — 1 Foreign currency effect on liability balance (6) — (6) Accrued liabilities as of December 31, 2015 90 — 90 2016 charges 9 16 25 Distribution of prefunded restructuring costs (36) — (36) 2016 payments (42) (16) (58) Foreign currency effect on liability balance — — — Accrued liabilities as of December 31, 2016 $ 21 $ — $ 21 (1) The total workforce reduction reserves of $21 million relate to the termination of 323 positions, of which 323 positions had not been terminated as of December 31, 2016. (2) Accrued liabilities remaining at December 31, 2016 and 2015 by year of initiatives were as follows (dollars in millions): December 31, 2016 2015 2014 initiatives and prior $ 18 $ 77 2015 initiatives 3 13 Total $ 21 $ 90 |
Schedule of accrued liabilities by year of initiatives | September 30, December 31, (Dollars in millions) 2017 2016 2015 initiatives and prior $ 12 $ 21 2016 initiatives — — 2017 initiatives 29 — Total $ 41 $ 21 | (1) Accrued liabilities remaining at December 31, 2016 and 2015 by year of initiatives were as follows (dollars in millions): December 31, 2016 2015 2014 initiatives and prior $ 18 $ 77 2015 initiatives 3 13 Total $ 21 $ 90 |
Schedule of details with respect to reserves for restructuring, impairment and plant closing costs, provided by segment and initiative | Titanium Performance (Dollars in millions) Dioxide Additives Total Accrued liabilities as of December 31, 2016 $ 12 $ 9 $ 21 2017 charges 33 9 42 2017 payments (14) (9) (23) Foreign currency effect on liability balance 1 — 1 Accrued liabilities as of September 30, 2017 $ 32 $ 9 $ 41 Current portion of restructuring reserves $ 28 $ 9 $ 37 Long-term portion of restructuring reserve 4 — 4 | Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative (dollars in millions): Titanium Performance Dioxide Additives Total Accrued liabilities as of January 1, 2014 $ 2 $ — $ 2 2014 charges 51 9 60 2014 payments (4) — (4) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities — 1 1 Accrued liabilities as of December 31, 2014 49 10 59 2015 charges 75 36 111 2015 payments (62) (13) (75) Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities — 1 1 Foreign currency effect on liability balance (5) (1) (6) Accrued liabilities as of December 31, 2015 57 33 90 2016 charges 9 16 25 Distribution of prefunded restructuring costs (23) (13) (36) 2016 payments (29) (29) (58) Foreign currency effect on liability balance (2) 2 — Accrued liabilities as of December 31, 2016 $ 12 $ 9 $ 21 Current portion of restructuring reserves $ 5 $ 9 $ 14 Long-term portion of restructuring reserve 7 — 7 |
Schedule of cash and noncash restructuring charges by initiative | Three months ended Nine months ended (Dollars in millions) September 30, 2017 September 30, 2017 Cash charges $ 16 $ 42 Impairment of assets — 3 Other noncash charges — 4 Total 2017 Restructuring, Impairment and Plant Closing Costs $ 16 $ 49 Three months ended Nine months ended (Dollars in millions) September 30, 2016 September 30, 2016 Cash charges $ 6 $ 22 Accelerated depreciation 1 8 Other noncash charges — 1 Total 2016 Restructuring, Impairment and Plant Closing Costs $ 7 $ 31 | Details with respect to cash and noncash restructuring charges for the years ended December 31, 2016, 2015 and 2014 by initiative are provided below (dollars in millions): Cash charges: 2016 charges $ 25 Accelerated depreciation 9 Other non-cash charges 1 Total 2016 Restructuring, Impairment and Plant Closing Costs $ 35 Cash charges: 2015 charges $ 113 Pension-related charges 3 Accelerated depreciation 68 Other non-cash charges 36 Total 2015 Restructuring, Impairment and Plant Closing Costs $ 220 Cash charges: 2014 charges $ 60 Non-cash charges — Total 2014 Restructuring, Impairment and Plant Closing Costs $ 60 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ASSET RETIREMENT OBLIGATIONS | |
Schedule of changes to Venator's asset retirement obligation liabilities | December 31, 2016 2015 Asset retirement obligations at beginning of year $ 44 $ 18 Accretion expense 2 2 Liabilities incurred — — Liabilities assumed in connection with the Rockwood acquisition — 30 Liabilities settled (4) (1) Foreign currency effect on reserve balance (3) (5) Asset retirement obligations at end of year $ 39 $ 44 |
OTHER NONCURRENT LIABILITIES (T
OTHER NONCURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
OTHER NONCURRENT LIABILITIES | |
Schedule of components of other noncurrent liabilities | December 31, 2016 2015 Pension liabilities $ 266 $ 233 Employee benefit accrual 5 5 Asset retirement obligations 26 26 Other postretirement benefits 3 5 Environmental reserves 12 11 Restructuring and plant closing costs 7 7 Other 5 7 Total $ 324 $ 294 |
THIRD PARTY DEBT AGREEMENTS (Ta
THIRD PARTY DEBT AGREEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
THIRD PARTY DEBT AGREEMENTS | |
Schedule of maturities of Venator's commitments under capital leases | Year ending December 31: 2017 $ 7 2018 2 2019 2 2020 2 Thereafter 11 Total minimum payments 24 Less: Amounts representing interest (4) Present value of minimum lease payments 20 Less: Current portion of capital leases (7) Long-term portion of capital leases $ 13 |
STOCK-BASED COMPENSATION PLAN (
STOCK-BASED COMPENSATION PLAN (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
STOCK-BASED COMPENSATION PLAN | |
Schedule of assumptions used to calculate fair value of each stock option award estimated on the date of grant using the Black-Scholes valuation model | Year ended December 31, 2016 2015 2014 Dividend yield 5.6 % 2.3 % 2.4 % Expected volatility 57.9 % 57.6 % 60.3 % Risk-free interest rate 1.4 % 1.4 % 1.7 % Expected life of stock options granted during the period 5.9 years 5.9 years 5.7 years |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES | |
Schedule of income tax expense (benefit) | Year ended December 31, 2016 2015 2014 Income tax (benefit) expense: U.S. Current $ (4) $ (7) $ 4 Deferred (5) 5 — Non-U.S. Current (5) 2 2 Deferred (9) (34) (24) Total $ (23) $ (34) $ (18) |
Schedule of reconciliation of the differences between the U.S. federal income taxes at the U.S. statutory rate to total provision for income taxes | Year ended December 31, 2016 2015 2014 Loss from continuing operations before income taxes $ (109) $ (396) $ (190) Expected tax benefit at U.S. statutory rate of 35% $ (39) $ (138) $ (67) Change resulting from: State tax benefit net of federal benefit — 1 — Non-U.S. tax rate differentials (3) 21 11 Effects of non-U.S. operations (2) 7 2 Non-taxable portion of gain on sale of businesses (3) — — Unrealized currency exchange gains and losses 1 (21) — Tax authority audits and dispute resolutions (1) 4 2 Tax benefit of losses with valuation allowances as a result of other comprehensive income (1) (1) (6) Change in valuation allowance 27 96 39 Other, net (2) (3) 1 Total income tax benefit $ (23) $ (34) $ (18) |
Schedule of components of loss before income taxes | Year ended December 31, 2016 2015 2014 U.S. $ (7) $ (18) $ 8 Non-U.S. (102) (378) (198) Total $ (109) $ (396) $ (190) |
Schedule of components of deferred income tax assets and liabilities | December 31, 2016 2015 Deferred income tax assets: Net operating carryforwards $ 365 $ 253 Pension and other employee compensation 58 53 Property, plant and equipment 28 59 Intangible assets 19 28 Other, net 36 55 Total $ 506 $ 448 Total deferred income tax liabilities: Property, plant and equipment $ (126) $ (100) Pension and other employee compensation (1) (1) Other, net (4) (1) Total $ (131) $ (102) Net deferred tax assets before valuation allowance $ 375 $ 346 Valuation allowance (245) (241) Net deferred tax assets $ 130 $ 105 Non-current deferred tax assets 142 130 Non-current deferred tax liabilities (12) (25) Net deferred tax assets $ 130 $ 105 |
Schedule of changes in valuation allowance | 2016 2015 2014 Valuation allowance as of January 1 $ 241 $ 156 $ 158 Valuation allowance as of December 31 245 241 156 Net (increase) decrease (4) (85) 2 Foreign currency movements (20) (16) (17) (Decrease) increase to deferred assets with an offsetting increase or decrease to valuation allowances (3) 5 (24) Change in valuation allowance per rate reconciliation $ (27) $ (96) $ (39) Components of change in valuation allowance affecting operating tax expense: Pre-tax income and pre-tax (losses) in jurisdictions with valuation allowances resulting in no tax expense or benefit $ (33) $ (84) $ (39) Release of valuation allowance in various jurisdictions 6 — — Establishments of valuation allowances in various jurisdictions — (12) — Change in valuation allowances per rate reconciliation $ (27) $ (96) $ (39) |
Schedule of reconciliation of unrecognized tax benefits | 2016 2015 2014 Unrecognized tax benefits as of January 1 $ 22 $ 24 $ 27 Gross increases and decreases—tax positions taken during a prior period — 3 1 Gross increases and decreases—tax positions taken during the current period (1) 7 — Decreases related to settlements of amounts due to tax authorities — (1) (1) Reductions resulting from the lapse of statutes of limitation — (8) — Foreign currency movements (1) (3) (3) Unrecognized tax benefits as of December 31 $ 20 $ 22 $ 24 |
Schedule of interest and penalties accrued related to unrecognized tax benefits included in the income tax expense | Year ended December 31, 2016 2015 2014 Interest included in income tax expense $ — $ (2) $ 1 Penalties expense included in tax expense — — — December 31, 2016 2015 Accrued liability for interest $ — $ — |
Summary of the tax years that remain subject to examination by major tax jurisdictions | Tax Jurisdiction Open Tax Years China 2012 and later France 2002 and later Germany 2011 and later Italy 2012 and later Malaysia 2012 and later Spain 2002 and later United Kingdom 2015 and later United States federal 2009 and later |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of funded status of the plans and the amounts recognized in the consolidated balance sheets | The following table sets forth the funded status of the plans for Venator and the amounts recognized in the combined balance sheets at December 31, 2016 and 2015 (dollars in millions): Other Defined Benefit Postretirement Plans Benefit Plans 2016 2015 2016 2015 Change in benefit obligation Benefit obligation at beginning of year $ 1,037 $ 1,144 $ 5 $ 8 Service cost 4 6 — — Interest cost 31 35 1 — Actuarial (gain) loss 184 (31) — — Acquisitions/disposals 1 6 — — Gross benefits paid (48) (50) (1) — Plan amendments — 4 (2) (2) Exchange rates (156) (75) — (1) Curtailments — (4) — — Special termination benefits — 2 — — Benefit obligation at end of year $ 1,053 $ 1,037 $ 3 $ 5 Change in plan assets Fair value of plan assets at beginning of year $ 805 $ 866 $ — $ — Actual return on plan assets 147 2 — — Employer contribution 22 37 1 — Gross benefits paid (48) (50) (1) — Acquisitions/disposals — — — — Exchange rates (136) (50) — — Fair value of plan assets at end of year $ 790 $ 805 $ — $ — Funded status Fair value of plan assets $ 790 $ 805 $ — $ — Benefit obligation (1,053) (1,037) (3) (5) Accrued benefit cost $ (263) $ (232) $ (3) $ (5) Amounts recognized in balance sheet: Noncurrent asset $ 4 $ 2 $ — $ — Current liability (1) (1) — — Noncurrent liability (266) (233) (3) (5) Total $ (263) $ (232) $ (3) $ (5) Amounts recognized in accumulated other comprehensive loss: Net actuarial loss (gain) $ 335 $ 268 $ (3) $ (3) Prior service cost (credit) 8 9 (3) (1) Total $ 343 $ 277 $ (6) $ (4) |
Schedule of amounts recognized in accumulated other comprehensive loss | The amounts in accumulated other comprehensive (loss) income that are expected to be recognized as components of net periodic benefit cost during the next fiscal year are as follows (dollars in millions): Other Defined Postretirement Benefit Plans Benefit Plans Actuarial loss $ 15 $ 1 Prior service credit 1 (3) Total $ 16 $ (2) |
Components of the net periodic benefit costs | Components of net periodic benefit costs for the years ended December 31, 2016, 2015 and 2014 were as follows (dollars in millions): Defined Benefit Plans 2016 2015 2014 Service cost $ 4 $ 6 $ 3 Interest cost 31 35 36 Expected return on plan assets (39) (51) (44) Amortization of actuarial loss 10 9 11 Amortization of prior service cost 1 1 1 Special termination benefit — 2 — Net periodic benefit cost $ 7 $ 2 $ 7 Other Postretirement Benefit Plans 2016 2015 2014 Service cost $ — $ — $ — Interest cost — — — Net periodic benefit cost $ — $ — $ — |
Schedule of amounts recognized in net periodic benefit cost and other comprehensive (loss) income | The amounts recognized in net periodic benefit cost and other comprehensive (loss) income as of December 31, 2016, 2015 and 2014 were as follows (dollars in millions): Defined Benefit Plans 2016 2015 2014 Current year actuarial loss $ 86 $ 11 $ 37 Amortization of actuarial loss (11) (11) (11) Current year prior service cost — 9 — Amortization of prior service credits (1) (1) (1) Disposals — — — Total recognized in other comprehensive (loss) income 74 8 25 Amount related to discontinued operations (8) 4 (27) Total recognized in other comprehensive income (loss) from continuing operations 66 12 (2) Net periodic benefit cost 7 2 7 Total recognized in net periodic benefit cost and other comprehensive income $ 81 $ 10 $ 32 Other Postretirement Benefit Plans 2016 2015 2014 Current year actuarial loss $ — $ — $ 1 Current year prior service credits (2) (2) — Total recognized in other comprehensive (loss) income (2) (2) 1 Net periodic benefit cost — — — Total recognized in net periodic benefit cost and other comprehensive income $ (2) $ (2) $ 1 |
Schedule of weighted-average assumptions used to determine the projected benefit obligation and the net periodic pension cost | The following weighted‑average assumptions were used to determine the projected benefit obligation at the measurement date and the net periodic pension cost for the year: Defined Benefit Plans 2016 2015 2014 Projected benefit obligation: Discount rate 2.28 % 3.27 % 3.12 % Rate of compensation increase 3.79 % 3.24 % 3.66 % Net periodic pension cost: Discount rate 3.27 % 3.12 % 4.40 % Rate of compensation increase 3.24 % 3.66 % 4.20 % Expected return on plan assets 5.22 % 5.99 % 6.24 % Other Postretirement Benefit Plans 2016 2015 2014 Projected benefit obligation: Discount rate 3.72 % 6.94 % 5.65 % Net periodic pension cost: Discount rate 6.94 % 5.65 % 6.59 % |
Schedule of projected benefit obligation and fair value of plan assets for the defined benefit plans with projected benefit obligations in excess of fair value of plan assets | The projected benefit obligation and fair value of plan assets for the defined benefit plans with projected benefit obligations in excess of plan assets as were as follows (dollars in millions): December 31, 2016 2015 Projected benefit obligation $ 1,033 $ 1,012 Fair value of plan assets 766 779 |
Schedule of defined benefit plans with an accumulated benefit obligation in excess of fair value of plan assets | The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the defined benefit plans with an accumulated benefit obligation in excess of plan assets as of December 31, 2016 and 2015 were as follows (dollars in millions): December 31, 2016 2015 Projected benefit obligation $ 1,033 $ 323 Accumulated benefit obligation 986 309 Fair value of plan assets 766 121 |
Schedule of expected future contributions and benefit payments | Expected future contributions and benefit payments are as follows (dollars in millions): Other Defined Postretirement Benefit Plans Benefit Plans 2017 expected employer contributions: To plan trusts $ 21 $ — Expected benefit payments: 2017 36 — 2018 36 — 2019 37 — 2020 39 — 2021 40 — 2022 - 2026 217 1 |
Schedule of plan assets measured at fair value on a recurring basis | The following plan assets are measured at fair value on a recurring basis (dollars in millions): Fair Value Amounts Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs Asset Category 2016 (Level 1) (Level 2) (Level 3) Pension plans: Equities $ 212 $ 206 $ 6 $ — Fixed income 542 40 496 6 Real estate/other 32 — 5 27 Cash and cash equivalents 4 4 — — Total pension plan assets $ 790 $ 250 $ 507 $ 33 Fair Value Amounts Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs Asset Category 2015 (Level 1) (Level 2) (Level 3) Pension plans: Equities $ 213 $ 204 $ 9 $ — Fixed income 565 37 528 — Real estate/other 20 — 12 8 Cash and cash equivalents 7 2 5 — Total pension plan assets $ 805 $ 243 $ 554 $ 8 |
Schedule of asset allocation for pension plans and the target allocation, by asset category | Target Allocation at Allocation at allocation December 31, December 31, Asset category 2017 2016 2015 Pension plans: Equities 27 % 27 % 26 % Fixed income 68 % 69 % 70 % Real estate/other 5 % 4 % 3 % Cash — — 1 % Total pension plans 100 % 100 % 100 % |
Real Estate/Other | |
EMPLOYEE BENEFIT PLANS | |
Schedule of reconciliation of the beginning and ending balances of plan assets measured at fair value using unobservable inputs (level 3) | Real Estate/ Other Year ended December 31, 2016 2015 Fair Value Measurements of Plan Assets Using Significant Unobservable Inputs (Level 3) Balance at the beginning of the period $ 8 $ 9 Return on pension plan assets — (1) Purchases, sales and settlements 19 — Transfers (out of) into Level 3 — — Disposals — — Balance at the end of the period $ 27 $ 8 |
Fixed income | |
EMPLOYEE BENEFIT PLANS | |
Schedule of reconciliation of the beginning and ending balances of plan assets measured at fair value using unobservable inputs (level 3) | Fixed Income Year ended December 31, 2016 2015 Fair Value Measurements of Plan Assets Using Significant Unobservable Inputs (Level 3) Balance at the beginning of the period $ — $ — Return on pension plan assets — — Purchases, sales and settlements 6 — Transfers (out of) into Level 3 — — Balance at the end of the period $ 6 $ — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of total purchase commitments | Total purchase commitments as of December 31, 2016 were as follows (dollars in millions): Year ending December 31, 2017 $ 582 2018 438 2019 49 2020 14 2021 12 Thereafter 39 |
Schedule of future minimum lease payments under operating leases | Future minimum lease payments under noncancelable operating leases as of December 31, 2016 were as follows (dollars in millions): Year ending December 31, 2017 $ 8 2018 7 2019 3 2020 2 2021 2 Thereafter 2 Total $ 24 |
OTHER COMPREHENSIVE LOSS (Table
OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
OTHER COMPREHENSIVE INCOME (LOSS) | ||
Schedule of other comprehensive loss | Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to (Dollars in millions) adjustment(a) net of tax(b) affiliates Total interests Venator Beginning balance, January 1, 2017 $ (112) $ (306) $ (5) $ (423) $ — $ (423) Adjustments related to other entities under common control 5 24 — 29 — 29 Tax expense — (3) — (3) — (3) Other comprehensive income before reclassifications 68 3 — 71 — 71 Tax benefit 2 1 — 3 — 3 Amounts reclassified from accumulated other comprehensive loss, gross(c) — 11 — 11 — 11 Tax expense — — — — — — Net current-period other comprehensive income 75 36 — 111 — 111 Ending balance, September 30, 2017 $ (37) $ (270) $ (5) $ (312) $ — $ (312) Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to (Dollars in millions) adjustment(d) net of tax(e) affiliates Total interests Venator Beginning balance, January 1, 2016 $ (144) $ (252) $ (5) $ (401) $ — $ (401) Adjustments related to other entities under common control 2 1 — 3 — 3 Tax expense — — — — — — Other comprehensive (loss) income before reclassifications (92) 7 — (85) — (85) Tax expense (1) (1) — (2) — (2) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 8 — 8 — 8 Tax benefit — 1 — 1 — 1 Net current-period other comprehensive (loss) income (91) 16 — (75) — (75) Ending balance, September 30, 2016 $ (235) $ (236) $ (5) $ (476) $ — $ (476) (a) Amounts are net of tax of $2 million and nil as of September 30, 2017 and January 1, 2017, respectively. (b) Amounts are net of tax of $54 million and $56 million as of September 30, 2017 and January 1, 2017, respectively. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts include a tax benefit of $1 million and nil as of September 30, 2016 and January 1, 2016, respectively. (e) Amounts are net of tax of $60 million at September 30, 2016 and January 1, 2016, each. | Other comprehensive loss consisted of the following (dollars in millions): Pension and other Other Foreign postretirement comprehensive Amounts Amounts currency benefits income of attributable to attributable translation adjustments, unconsolidated noncontrolling to adjustment(a) net of tax(b) affiliates Total interests Venator Beginning balance, January 1, 2016 $ (144) $ (252) $ (5) $ (401) $ — $ (401) Adjustment due to discontinued operations (3) (8) — (11) — (11) Tax benefit — 2 — 2 — 2 Other comprehensive (loss) income before reclassifications 35 (53) — (18) — (18) Tax expense — (7) — (7) — (7) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 11 — 11 — 11 Tax benefit — 1 — 1 — 1 Net current-period other comprehensive (loss) income 32 (54) — (22) — (22) Ending balance, December 31, 2016 $ (112) $ (306) $ (5) $ (423) $ — $ (423) Pension and other Other Foreign postretirement comprehensive Amounts currency benefits income of attributable to Amounts translation adjustments, unconsolidated noncontrolling attributable to adjustment(d) net of tax(e) affiliates Total interests Venator Beginning balance, January 1, 2015 $ (73) $ (242) $ (4) $ (319) $ — $ (319) Adjustment due to discontinued operations (2) 4 — 2 — 2 Tax expense — (1) — (1) — (1) Other comprehensive (loss) income before reclassifications (69) (20) (1) (90) — (90) Tax expense — (3) — (3) — (3) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 10 — 10 — 10 Tax expense — — — — — — Net current-period other comprehensive loss (71) (10) (1) (82) — (82) Ending balance, December 31, 2015 $ (144) $ (252) $ (5) $ (401) $ — $ (401) (a) Amounts are net of tax of nil each as of December 31, 2016 and January 1, 2016. (b) Amounts are net of tax of $56 and $60 as of December 31, 2016 and January 1, 2016, respectively. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts are net of tax of nil each as of December 31, 2015 and January 1, 2015. (e) Amounts are net of tax of $60 and $64 as of December 31, 2015 and January 1, 2015, respectively. |
Schedule of details about reclassifications from other comprehensive loss | Three months ended Nine months ended September 30, September 30, Affected line item in the statement (Dollars in millions) 2017 2016 2017 2016 where net income is presented Details about Accumulated Other Comprehensive Loss Components(a): Amortization of pension and other postretirement benefits: Actuarial loss $ 5 $ 3 $ 13 $ 8 (b) Prior service credit (1) — (2) — (b) Total amortization 4 3 11 8 Total before tax Income tax benefit — — — 1 Income tax (expense) benefit Total reclassifications for the period $ 4 $ 3 $ 11 $ 9 Net of tax (a) Pension and other postretirement benefit amounts in parentheses indicate credits on our consolidated statements of operations. (b) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. | Year ended December 31, Affected line item in the statement 2016 2015 where net income is presented Details about Accumulated Other Comprehensive Loss Components: Amortization of pension and other postretirement benefits: Actuarial loss $ 10 $ 9 (a) Prior service cost 1 1 (a) 11 10 Total before tax 1 — Income tax (expense) Total reclassifications for the period $ 12 $ 10 Net of tax (a) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See note “19. Employee Benefit Plans.” |
OPERATING SEGMENT INFORMATIO107
OPERATING SEGMENT INFORMATION (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
OPERATING SEGMENT INFORMATION | ||
Schedule of revenues and EBITDA for each of the entity's reportable operating segments and reconciliation of adjusted EBITDA to net income | Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Titanium Dioxide $ 431 $ 392 $ 1,217 $ 1,197 Performance Additives 151 140 464 451 Total $ 582 $ 532 $ 1,681 $ 1,648 Segment adjusted EBITDA(1) Titanium Dioxide $ 127 $ 22 $ 268 $ 28 Performance Additives 15 16 57 56 142 38 325 84 Corporate and other (8) (17) (48) (46) Total $ 134 $ 21 $ 277 $ 38 Reconciliation of adjusted EBITDA to net income (loss): Interest expense (30) (14) (54) (44) Interest income 22 2 25 13 Income tax (expense) benefit - continuing operations (14) 7 (26) 14 Depreciation and amortization (35) (30) (95) (84) Net income attributable to noncontrolling interests 2 3 8 8 Other adjustments: Business acquisition and integration expenses (4) (3) (2) (11) Gain on disposition of businesses/assets — 23 — 23 Net income of discontinued operations, net of tax — 2 8 8 Certain legal settlements and related expenses — — (1) (1) Amortization of pension and postretirement actuarial losses (5) (3) (13) (8) Net plant incident (costs) credits (1) (3) (4) 2 Restructuring, impairment and plant closing costs (16) (7) (49) (31) Net income (loss) $ 53 $ (2) $ 74 $ (73) (1) Adjusted EBITDA is defined as net income (loss) of Venator before interest, income tax from continuing operations, depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following adjustments from net income (loss): (a) business acquisition and integration expenses; (b) gain on disposition of businesses/assets (c) net income of discontinued operations, net of income tax; (d) certain legal settlements and related expenses; (e) amortization of pension and postretirement actuarial losses; (f) net plant incident credits (costs); and (g) restructuring, impairment and plant closing costs. | Adjusted EBITDA for each of the two reportable operating segments are as follows (dollars in millions): Year ended December 31, 2016 2015 2014 Revenues: Titanium Dioxide $ 1,554 $ 1,584 $ 1,411 Performance Additives 585 578 138 Total $ 2,139 $ 2,162 $ 1,549 Segment Adjusted EBITDA(1) Titanium Dioxide $ 61 $ (8) $ 62 Performance Additives 69 69 14 Corporate and other (53) (53) (49) Total $ 77 $ 8 $ 27 Reconciliation of Adjusted EBITDA to net loss: Interest expense (59) (52) (25) Interest income 15 22 23 Income tax benefit—continuing operations 23 34 18 Depreciation and amortization (114) (100) (87) Net income attributable to noncontrolling interests 10 7 2 Other adjustments: Business acquisition and integration expenses (11) (44) (45) Net income of discontinued operations, net of tax 8 10 9 Purchase accounting adjustments — — (11) Gain (loss) on disposition of business/assets 22 (1) 1 Certain legal settlements and related expenses (2) (3) (3) Amortization of pension and postretirement actuarial losses (10) (9) (11) Net plant incident costs (1) (4) — Restructuring, impairment and plant closing costs (35) (220) (60) Net loss $ (77) $ (352) $ (162) Depreciation and Amortization: Titanium Dioxide $ 87 $ 72 $ 73 Performance Additives 19 20 5 Corporate and other 8 8 9 Total $ 114 $ 100 $ 87 Capital Expenditures: Titanium Dioxide $ 73 $ 124 $ 109 Performance Additives 30 79 27 Total $ 103 $ 203 $ 136 Total Assets(2): Titanium Dioxide $ 1,561 $ 1,707 $ 2,059 Performance Additives 764 783 724 Corporate and other 210 715 939 Total $ 2,535 $ 3,205 $ 3,722 (1) Adjusted EBITDA is defined as net income (loss) of Venator before interest, income tax, depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following adjustments from net income (loss): (a) business acquisition and integration expenses; (b) net income from discontinued operations; (c) purchase accounting adjustments; (d) gain (loss) on disposition of businesses/assets; (e) certain legal settlements and related expenses; (f) amortization of pension and postretirement actuarial losses; (g) net plant incident costs; and (h) restructuring, impairment and plant closing costs. (2) Defined as total assets less current assets of discontinued operations and noncurrent assets of discontinued operations. |
Schedule of revenues and long-lived assets by geographical area | Year ended December 31, By Geographic Area 2016 2015 2014 Revenues(1): United States $ 491 $ 501 $ 313 Germany 210 235 115 Italy 130 117 95 China 113 97 54 United Kingdom 102 105 94 France 98 94 83 Spain 79 71 71 Switzerland 11 16 10 Canada 59 59 41 Other nations 846 867 673 Total $ 2,139 $ 2,162 $ 1,549 Long Lived Assets: Germany $ 215 $ 216 $ 210 United States 263 256 187 United Kingdom 198 252 241 Italy 155 163 159 Finland 146 150 170 Other nations 201 240 375 Total $ 1,178 $ 1,277 $ 1,342 (1) Geographic information for revenues is based upon countries into which product is sold. |
RESTATEMENT OF COMBINED STAT108
RESTATEMENT OF COMBINED STATEMENTS OF CASH FLOWS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
RESTATEMENT OF COMBINED STATEMENTS OF CASH FLOWS | |
Schedule of table for the restatement of combined statements of cash flows | Year Ended December 31, 2016 As Previously As Restated Reported (in millions) Combined Statements of Cash Flows: Cash Flows from Operating Activities: Accounts payable 17 55 Net cash provided by (used in) operating activities from discontinued operations(1) 17 — Net cash provided by (used in) operating activities 97 143 Cash Flows from Investing Activities Net (advances to) payments from affiliates (5) — Net cash provided by (used in) investing activities from discontinued operations(2) (22) — Net cash (used in) provided by investing activities (118) (101) Cash Flows from Financing Activities: Net borrowings from affiliate accounts payable 47 — Net change in parent company investment — (17) Net cash provided by (used in) financing activities from discontinued operations(3) (2) — Net cash provided by (used in) financing activities 30 (33) Year Ended December 31, 2015 As Previously As Restated Reported (in millions) Combined Statements of Cash Flows: Cash Flows from Operating Activities: Accounts payable 5 242 Net cash provided by (used in) operating activities from discontinued operations(1) (6) — Net cash provided by (used in) operating activities (63) 203 Cash Flows from Investing Activities Net (advances to) payables from affiliates 97 — Net cash provided by (used in) investing activities from discontinued operations(2) (39) — Net cash (used in) provided by investing activities (139) (205) Cash Flows from Financing Activities: Net borrowings on affiliate accounts payable 194 — Net change in parent company investment — 4 Net cash provided by (used in) financing activities from discontinued operations(3) 9 — Net cash provided by (used in) financing activities 194 (6) Year Ended December 31, 2014 As As Previously Restated Reported (in millions) Combined Statements of Cash Flows: Cash Flows from Operating Activities: Accounts payable 29 174 Net cash provided by (used in) operating activities from discontinued operations(1) 8 — Net cash provided by (used in) operating activities (63) 100 Cash Flows from Investing Activities Net (advances to) payables from affiliates 100 — Net cash provided by (used in) investing activities from discontinued operations(2) (23) — Net cash (used in) provided by investing activities 29 (54) Cash Flows from Financing Activities: Net borrowings on affiliate accounts payable 53 — Net change in parent company investment — (27) Net cash provided by (used in) financing activities from discontinued operations(3) (1) — Net cash provided by financing activities 52 (28) (1) Total effect of the error was $(7) million, $(33) million, and $(19) million for the net cash provided by (used in) operating activities from discontinued operations for the years ended December 31, 2016, 2015, and 2014, respectively. (2) Total effect of the error was $(12) million, $(31) million, and $(17) million for the net cash provided by (used in) investing activities from discontinued operations for the years ended December 31, 2016, 2015, and 2014, respectively. (3) Total effect of the error was $5 million, $(2) million, and $(2) million for the net cash provided by (used in) financing activities from discontinued operations for the years ended December 31, 2016, 2015, and 2014, respectively. |
DISCONTINUED OPERATIONS (Tab109
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
DISCONTINUED OPERATIONS | ||
Summarizes the financial data for discontinued operations | The following table summarizes the balance sheet data for discontinued operations: December 31, (Dollars in millions) 2016 ASSETS Current assets: Cash and cash equivalents $ 1 Accounts receivable (net of allowance for doubtful accounts of $1) 10 Accounts receivable from affiliates 61 Inventories 9 Prepaid expenses 1 Other current assets 2 Total current assets of discontinued operations 84 Property, plant and equipment, net 19 Intangible assets, net 2 Deferred income taxes 21 Noncurrent assets of discontinued operations 42 Total assets of discontinued operations $ 126 LIABILITIES Current liabilities: Accounts payable $ 7 Accounts payable to affiliates 2 Accrued liabilities 18 Total current liabilities of discontinued operations 27 Deferred income taxes 1 Other noncurrent liabilities 77 Noncurrent liabilities of discontinued operations 78 Total liabilities of discontinued operations $ 105 The following table summarizes the operations data for discontinued operations: Three months ended Nine months ended September 30, September 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Trade sales, services and fees, net $ — $ 28 $ 15 $ 83 Related party sales — 15 17 51 Total revenues — 43 32 134 Cost of goods sold — 36 26 110 Operating expenses: Selling, general and administrative (includes corporate allocations of nil, $2, $1 and $5, respectively) — 6 (7) 16 Restructuring, impairment and plant closing costs — — 1 — Other (income) expense, net — (1) 1 (2) Total expenses (income) — 5 (5) 14 Income from discontinued operations before tax — 2 11 10 Income tax expense — — (3) (2) Net income from discontinued operations $ — $ 2 $ 8 $ 8 | The following table summarizes the balance sheet data for discontinued operations: December 31, December 31, 2016 2015 (Dollars in millions) ASSETS Current assets: Cash and cash equivalents $ 1 $ 1 Accounts receivable (net of allowance for doubtful accounts of $1 each) 10 18 Accounts receivable from affiliates 61 82 Inventories 9 15 Prepaid expenses 1 1 Other current assets 2 2 Total current assets discontinued operations 84 119 Property, plant and equipment, net 19 50 Goodwill 2 2 Deferred income taxes 21 32 Other assets — 5 Noncurrent assets of discontinued operations 42 89 Total assets of discontinued operations $ 126 $ 208 LIABILITIES Current liabilities: Accounts payable $ 7 $ 12 Accounts payable to affiliates 2 2 Accrued liabilities 18 17 Total current liabilities of discontinued operations 27 31 Long-term debt — 4 Deferred income taxes 1 1 Other noncurrent liabilities 77 113 Noncurrent liabilities of discontinued operations 78 118 Total liabilities of discontinued operations $ 105 $ 149 The following table summarizes the operations data for discontinued operations: Year ended December 31, 2016 2015 2014 (Dollars in millions) Revenues: Trade sales, services and fees, net $ 110 $ 108 $ 105 Related party sales 60 60 75 Total revenues 170 168 180 Cost of goods sold 147 146 154 Operating expenses: Selling, general, and administrative (includes corporate allocations of $7, $6 and $8, respectively) 15 8 17 Restructuring, impairment and plant closing costs — 3 2 Other income, net (1) (2) (3) Total expenses 14 9 16 Income from discontinued operations before tax 9 13 10 Income tax expense (1) (3) (1) Net income from discontinued operations $ 8 $ 10 $ 9 |
LOSSES PER SHARE (Tables)
LOSSES PER SHARE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
EARNINGS (LOSSES) PER SHARE | ||
Schedule of basic and diluted earnings per share | Three months ended Nine months ended September 30, September 30, (In millions) 2017 2016 2017 2016 Numerator: Basic and diluted income (loss) from continuing operations: Income (loss) from continuing operations attributable to Venator $ 51 $ (7) $ 58 $ (89) Basic and diluted net income (loss): Net income (loss) attributable to Venator $ 51 $ (5) $ 66 $ (81) Denominator: Weighted average shares outstanding 106.3 106.3 106.3 106.3 Dilutive share-based awards 0.3 — 0.3 — Total weighted average shares outstanding, including dilutive shares 106.6 106.3 106.6 106.3 | (In millions) 2016 2015 2014 Numerator: Basic and diluted loss from continuing operations: Loss from continuing operations attributable to Venator $ (95) $ (369) $ (173) Basic and diluted net loss: Net loss attributable to Venator $ (87) $ (359) $ (164) Denominator: Weighted average shares outstanding 106.3 106.3 106.3 Dilutive share-based awards — — — Total weighted average shares outstanding, including dilutive shares 106.3 106.3 106.3 |
GENERAL, DESCRIPTION OF BUSI111
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION - Description of Business (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017itemsegment | Dec. 31, 2016itemsegment | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | ||
Number of reportable segments | segment | 2 | 2 |
Number of titanium dioxide manufacturing facilities | 8 | 8 |
Number of Color Pigments, Functional Additives, Water Treatment And Timber Treatment Manufacturing And Processing Facilities | 19 | 19 |
GENERAL, DESCRIPTION OF BUSI112
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION - Basis of Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Huntsman | Corporate allocations | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Selling, general and administrative expenses | $ 9 | $ 27 | $ 62 | $ 76 | $ 104 | $ 90 | $ 78 |
GENERAL, DESCRIPTION OF BUSI113
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION - Foreign Currency Translation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | |||
Foreign currency transaction gains | $ 9 | $ 4 | $ 1 |
GENERAL, DESCRIPTION OF BUSI114
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION - Income taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | ||
Income tax rate net of federal benefit | 2.00% | |
Additional allocation of foreign tax credits | $ 0 | |
Net operating loss carryforwards | 0 | |
Unremitted earnings of foreign subsidiaries | $ 0 | $ 0 |
GENERAL, DESCRIPTION OF BUSI115
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION - Intangible Assets and Goodwill (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Minimum | Patents and technology | |
INTANGIBLE ASSETS | |
Estimated useful life | 5 years |
Minimum | Trademarks | |
INTANGIBLE ASSETS | |
Estimated useful life | 9 years |
Minimum | Licenses and other agreements | |
INTANGIBLE ASSETS | |
Estimated useful life | 5 years |
Minimum | Other intangibles | |
INTANGIBLE ASSETS | |
Estimated useful life | 5 years |
Maximum | Patents and technology | |
INTANGIBLE ASSETS | |
Estimated useful life | 30 years |
Maximum | Trademarks | |
INTANGIBLE ASSETS | |
Estimated useful life | 30 years |
Maximum | Licenses and other agreements | |
INTANGIBLE ASSETS | |
Estimated useful life | 15 years |
Maximum | Other intangibles | |
INTANGIBLE ASSETS | |
Estimated useful life | 15 years |
GENERAL, DESCRIPTION OF BUSI116
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION - PPE (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Buildings and equipment | Minimum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful lives | 5 years |
Buildings and equipment | Maximum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful lives | 50 years |
Plant and equipment | Minimum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful lives | 3 years |
Plant and equipment | Maximum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful lives | 30 years |
Furniture, fixtures and leasehold improvements | Minimum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful lives | 5 years |
Furniture, fixtures and leasehold improvements | Maximum | |
PROPERTY, PLANT AND EQUIPMENT | |
Estimated useful lives | 20 years |
GENERAL, DESCRIPTION OF BUSI117
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION - Research and development (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | |||
Research and development costs charged to expense | $ 15 | $ 17 | $ 8 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) - Rockwood Holdings, Inc - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 01, 2014 | |
Acquisition cost | ||||
Transaction related costs | $ 0 | $ 0 | $ 24 | |
Cash paid for Rockwood Acquisition in 2014 | 1,038 | |||
Purchase price adjustment received in 2015 | (18) | |||
Net acquisition cost | 1,020 | |||
Fair value of assets acquired and liabilities assumed: | ||||
Cash | 77 | |||
Accounts receivable | 220 | |||
Inventories | 401 | |||
Prepaid expenses and other current assets | 55 | |||
Property, plant and equipment | 665 | |||
Intangible assets | 31 | |||
Deferred income taxes, non-current | 106 | |||
Other assets | 8 | |||
Accounts payable | (146) | |||
Accrued expenses and other current liabilities | (106) | |||
Long-term debt, non-current | (3) | |||
Pension and related liabilities | (233) | |||
Deferred income taxes, non-current | (9) | |||
Other liabilities | (30) | |||
Total fair value of net assets acquired | 1,036 | |||
Noncontrolling interest | (16) | |||
Total | $ 1,020 | |||
Estimated pro forma revenues and net income (loss) attributable to business acquisition | ||||
Revenues | 2,875 | |||
Net loss attributable to Venator | $ (65) | |||
Developed technology | ||||
Fair value of assets acquired and liabilities assumed: | ||||
Acquired intangible assets estimated useful life | 9 years | |||
Trademarks | ||||
Fair value of assets acquired and liabilities assumed: | ||||
Acquired intangible assets estimated useful life | 9 years | |||
Customer relationships | ||||
Fair value of assets acquired and liabilities assumed: | ||||
Acquired intangible assets estimated useful life | 9 years | |||
Viance | ||||
Fair value of assets acquired and liabilities assumed: | ||||
Ownership interest of noncontrolling interest (as a percent) | 50.00% |
INVENTORIES (Details)119
INVENTORIES (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Inventories | ||||||
Raw materials and supplies | $ 164 | $ 134 | $ 174 | |||
Work in process | 42 | 46 | 69 | |||
Finished goods | 225 | 246 | 313 | |||
Total | $ 431 | [1] | $ 426 | [1],[2] | $ 556 | [2] |
[1] | At September?30, 2017 and December?31, 2016, $6 and $4 of cash and cash equivalents, $7 and $6 of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $18 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note?5. Variable Interest Entities." | |||||
[2] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? |
PROPERTY, PLANT AND EQUIPMEN120
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2017 | [2] | |||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Total | $ 2,201 | $ 2,528 | |||||
Less accumulated depreciation | (1,023) | (1,251) | |||||
Property, plant, and equipment-net | 1,178 | [1],[2] | 1,277 | [1] | $ 1,342 | $ 1,264 | |
Depreciation expense | 110 | 99 | $ 84 | ||||
Land and land improvements | |||||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Total | 96 | 75 | |||||
Buildings | |||||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Total | 214 | 201 | |||||
Plant and equipment | |||||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Total | 1,789 | 1,940 | |||||
Construction in progress | |||||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Total | $ 102 | $ 312 | |||||
[1] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? | ||||||
[2] | At September?30, 2017 and December?31, 2016, $6 and $4 of cash and cash equivalents, $7 and $6 of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $18 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note?5. Variable Interest Entities." |
INVESTMENT IN UNCONSOLIDATED121
INVESTMENT IN UNCONSOLIDATED AFFILIATES (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2012 |
White Mountain Titanium Corporation | |||
Schedule of Equity Method Investments [Line Items] | |||
Cost Method Investments | $ 3 | $ 3 | $ 3 |
Ownership percentage in cost method unconsolidated affiliates | 3.00% | ||
Other Affiliates | |||
Schedule of Equity Method Investments [Line Items] | |||
Cost Method Investments | $ 1 | 11 | |
LPC | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest (as a percent) | 50.00% | ||
Total equity method investments | $ 81 | $ 84 |
VARIABLE INTEREST ENTITIES (122
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities | |||||||
Revenues | $ 582 | $ 532 | $ 1,681 | $ 1,648 | $ 2,139 | $ 2,162 | $ 1,549 |
Loss from continuing operations before income taxes | $ 67 | $ (11) | 92 | (95) | (108) | (396) | (189) |
Net cash provided by operating activities | $ 181 | $ 93 | 97 | (63) | (63) | ||
Pacific Iron Products and Viance, LLC | |||||||
Revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities | |||||||
Revenues | 116 | 100 | 24 | ||||
Loss from continuing operations before income taxes | 21 | 13 | $ 3 | ||||
Net cash provided by operating activities | $ 26 | $ 17 | |||||
Pacific Iron Products | |||||||
Identification of variable interest entities through investments and transactions | |||||||
Variable interest entity ownership percentage | 50.00% | 50.00% | |||||
Viance | |||||||
Identification of variable interest entities through investments and transactions | |||||||
Variable interest entity ownership percentage | 50.00% | 50.00% |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
INTANGIBLE ASSETS | |||
Carrying Amount | $ 32 | $ 41 | |
Accumulated Amortization | 9 | 13 | |
Net | 23 | 28 | |
Amortization expense | 4 | 1 | $ 3 |
Estimated future amortization expense | |||
2,017 | 4 | ||
2,018 | 3 | ||
2,019 | 3 | ||
2,020 | 3 | ||
2,021 | 3 | ||
Patents, trademarks and technology | |||
INTANGIBLE ASSETS | |||
Carrying Amount | 18 | 19 | |
Accumulated Amortization | 1 | 4 | |
Net | 17 | 15 | |
Other intangibles | |||
INTANGIBLE ASSETS | |||
Carrying Amount | 14 | 22 | |
Accumulated Amortization | 8 | 9 | |
Net | $ 6 | $ 13 |
OTHER NONCURRENT ASSETS (Detail
OTHER NONCURRENT ASSETS (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
OTHER NONCURRENT ASSETS | |||||
Spare parts inventory | $ 13 | $ 14 | |||
Notes receivable | 7 | 7 | |||
Pension assets | 4 | 2 | |||
Other | 11 | 9 | |||
Total | $ 41 | $ 35 | [1] | $ 32 | [1] |
[1] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
ACCRUED LIABILITIES | ||||||
Payroll and related accruals | $ 50 | $ 52 | ||||
Restructuring and plant closing reserves | $ 37 | 14 | 85 | |||
Rebate accrual | 25 | 22 | ||||
Current taxes payable | 4 | 4 | ||||
Asset retirement obligations | 13 | 18 | ||||
Taxes other than income taxes | 2 | 2 | ||||
Pension liabilities | 1 | 1 | ||||
Other miscellaneous accruals | 37 | 58 | ||||
Total | $ 213 | [1] | $ 146 | [1],[2] | $ 242 | [2] |
[1] | At September?30, 2017 and December?31, 2016, $6 and $4 of cash and cash equivalents, $7 and $6 of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $18 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note?5. Variable Interest Entities." | |||||
[2] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? |
RESTRUCTURING, IMPAIRMENT AN126
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - ACCRUED RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS BY TYPE OF COST AND INITIATIVE (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Dec. 31, 2014USD ($)position | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)position | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Accrued restructuring costs roll forward | |||||||||
Accrued liabilities at the beginning of the period | $ 21 | $ 90 | $ 90 | $ 59 | $ 2 | ||||
Restructuring charges | $ 16 | $ 6 | 42 | 22 | |||||
Distribution of prefunded restructuring costs | (36) | ||||||||
Restructuring payments | (23) | ||||||||
Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities | 1 | 1 | |||||||
Foreign currency effect on liability balance | 1 | (6) | |||||||
Accrued liabilities at the end of the period | $ 59 | 41 | $ 59 | $ 41 | 21 | 90 | 59 | ||
Number of positions terminated | item | 338 | ||||||||
2014 initiatives | |||||||||
Accrued restructuring costs roll forward | |||||||||
Restructuring charges | 60 | ||||||||
Restructuring payments | (4) | ||||||||
2015 initiatives | |||||||||
Accrued restructuring costs roll forward | |||||||||
Accrued liabilities at the beginning of the period | $ 3 | 13 | 13 | ||||||
Restructuring charges | 111 | ||||||||
Restructuring payments | (75) | ||||||||
Accrued liabilities at the end of the period | 3 | 13 | |||||||
2016 initiatives | |||||||||
Accrued restructuring costs roll forward | |||||||||
Restructuring charges | 25 | ||||||||
Restructuring payments | (58) | ||||||||
Workforce reductions | |||||||||
Accrued restructuring costs roll forward | |||||||||
Accrued liabilities at the beginning of the period | 21 | $ 90 | 90 | 59 | 2 | ||||
Restructuring charges | 57 | 34 | 3 | 61 | |||||
Distribution of prefunded restructuring costs | (36) | ||||||||
Restructuring payments | (15) | ||||||||
Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities | 1 | 1 | |||||||
Foreign currency effect on liability balance | 1 | (6) | |||||||
Accrued liabilities at the end of the period | $ 59 | $ 41 | $ 59 | 41 | $ 21 | 90 | 59 | ||
Number of positions terminated | position | 900 | 323 | |||||||
Number of positions not terminated | position | 323 | ||||||||
Workforce reductions | 2014 initiatives | |||||||||
Accrued restructuring costs roll forward | |||||||||
Restructuring charges | 60 | ||||||||
Restructuring payments | $ (4) | ||||||||
Workforce reductions | 2015 initiatives | |||||||||
Accrued restructuring costs roll forward | |||||||||
Restructuring charges | 90 | ||||||||
Restructuring payments | (54) | ||||||||
Workforce reductions | 2016 initiatives | |||||||||
Accrued restructuring costs roll forward | |||||||||
Restructuring charges | $ 9 | ||||||||
Restructuring payments | (42) | ||||||||
Other restructuring costs | |||||||||
Accrued restructuring costs roll forward | |||||||||
Restructuring charges | 8 | 15 | |||||||
Restructuring payments | $ (8) | ||||||||
Other restructuring costs | 2015 initiatives | |||||||||
Accrued restructuring costs roll forward | |||||||||
Restructuring charges | 21 | ||||||||
Restructuring payments | $ (21) | ||||||||
Other restructuring costs | 2016 initiatives | |||||||||
Accrued restructuring costs roll forward | |||||||||
Restructuring charges | 16 | ||||||||
Restructuring payments | $ (16) |
RESTRUCTURING, IMPAIRMENT AN127
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - ACCRUED LIABILITIES BY INITIATIVE (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accrued liabilities by initiatives | |||||
Accrued liabilities | $ 41 | $ 21 | $ 90 | $ 59 | $ 2 |
2014 initiatives and prior | |||||
Accrued liabilities by initiatives | |||||
Accrued liabilities | 18 | 77 | |||
2015 initiatives | |||||
Accrued liabilities by initiatives | |||||
Accrued liabilities | $ 3 | $ 13 |
RESTRUCTURING, IMPAIRMENT AN128
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - RESERVES FOR RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accrued restructuring costs roll forward | |||||||
Accrued liabilities at the beginning of the period | $ 21 | $ 90 | $ 90 | $ 59 | $ 2 | ||
Restructuring charges | $ 16 | $ 6 | 42 | 22 | |||
Distribution of prefunded restructuring costs | (36) | ||||||
Restructuring payments | (23) | ||||||
Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities | 1 | 1 | |||||
Foreign currency effect on liability balance | 1 | (6) | |||||
Accrued liabilities at the end of the period | 41 | 41 | 21 | 90 | 59 | ||
Current portion of restructuring reserves | 37 | 37 | 14 | 85 | |||
Long-term portion of restructuring reserve | 4 | 4 | 7 | 7 | |||
2014 initiatives | |||||||
Accrued restructuring costs roll forward | |||||||
Restructuring charges | 60 | ||||||
Restructuring payments | (4) | ||||||
2015 initiatives | |||||||
Accrued restructuring costs roll forward | |||||||
Accrued liabilities at the beginning of the period | 3 | 13 | 13 | ||||
Restructuring charges | 111 | ||||||
Restructuring payments | (75) | ||||||
Accrued liabilities at the end of the period | 3 | 13 | |||||
2016 initiatives | |||||||
Accrued restructuring costs roll forward | |||||||
Restructuring charges | 25 | ||||||
Restructuring payments | (58) | ||||||
Titanium Dioxide | |||||||
Accrued restructuring costs roll forward | |||||||
Accrued liabilities at the beginning of the period | 12 | 57 | 57 | 49 | 2 | ||
Restructuring charges | 33 | ||||||
Distribution of prefunded restructuring costs | (23) | ||||||
Restructuring payments | (14) | ||||||
Foreign currency effect on liability balance | 1 | (2) | (5) | ||||
Accrued liabilities at the end of the period | 32 | 32 | 12 | 57 | 49 | ||
Current portion of restructuring reserves | 28 | 28 | 5 | ||||
Long-term portion of restructuring reserve | 4 | 4 | 7 | ||||
Titanium Dioxide | 2014 initiatives | |||||||
Accrued restructuring costs roll forward | |||||||
Restructuring charges | 51 | ||||||
Restructuring payments | (4) | ||||||
Titanium Dioxide | 2015 initiatives | |||||||
Accrued restructuring costs roll forward | |||||||
Restructuring charges | 75 | ||||||
Restructuring payments | (62) | ||||||
Titanium Dioxide | 2016 initiatives | |||||||
Accrued restructuring costs roll forward | |||||||
Restructuring charges | 9 | ||||||
Restructuring payments | (29) | ||||||
Performance Additives | |||||||
Accrued restructuring costs roll forward | |||||||
Accrued liabilities at the beginning of the period | 9 | $ 33 | 33 | 10 | |||
Restructuring charges | 9 | ||||||
Distribution of prefunded restructuring costs | (13) | ||||||
Restructuring payments | (9) | ||||||
Adjustment to Titanium Dioxide and Performance Additives opening balance sheet liabilities | 1 | 1 | |||||
Foreign currency effect on liability balance | 2 | (1) | |||||
Accrued liabilities at the end of the period | 9 | 9 | 9 | 33 | 10 | ||
Current portion of restructuring reserves | $ 9 | $ 9 | 9 | ||||
Performance Additives | 2014 initiatives | |||||||
Accrued restructuring costs roll forward | |||||||
Restructuring charges | $ 9 | ||||||
Performance Additives | 2015 initiatives | |||||||
Accrued restructuring costs roll forward | |||||||
Restructuring charges | 36 | ||||||
Restructuring payments | $ (13) | ||||||
Performance Additives | 2016 initiatives | |||||||
Accrued restructuring costs roll forward | |||||||
Restructuring charges | 16 | ||||||
Restructuring payments | $ (29) |
RESTRUCTURING, IMPAIRMENT AN129
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - CASH AND NONCASH RESTRUCTURING CHARGES AND OTHER INFORMATION (Details) $ in Millions | Feb. 15, 2015kt | Mar. 31, 2015USD ($) | Feb. 28, 2015t | Dec. 31, 2014position | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)position | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | $ 16 | $ 6 | $ 42 | $ 22 | ||||||||||
Pension-related charges | $ 3 | |||||||||||||
Accelerated depreciation | 1 | 8 | $ 9 | 68 | ||||||||||
Other non-cash charges | 1 | 36 | ||||||||||||
Total restructuring, impairment and plant closing costs | 16 | 7 | $ 49 | 31 | 35 | 220 | $ 60 | |||||||
Number of positions terminated | item | 338 | |||||||||||||
Accelerated depreciation | 8 | |||||||||||||
Impairment of assets | $ 3 | |||||||||||||
Calais, France Facility | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | 12 | 0 | $ 1 | 34 | 1 | |||||||||
Accelerated depreciation | $ 1 | $ 8 | ||||||||||||
Non-cash charges (credits), net | 17 | |||||||||||||
Decrease in titanium dioxide capacity due to closing operations | 100 | 100,000 | ||||||||||||
Decrease in titanium dioxide capacity due to closing operations (as a percent) | 11.00% | 11.00% | ||||||||||||
Accelerated depreciation | 68 | |||||||||||||
South African Titanium Dioxide Manufacturing Facility | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | $ 1 | 3 | 6 | |||||||||||
Impairment of long-lived assets to be disposed of | $ 1 | |||||||||||||
South African Asset Group Of Pigments And Additives | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Impairment of assets | $ 19 | |||||||||||||
Color Pigments Business | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | 15 | |||||||||||||
Workforce reductions | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | $ 57 | 34 | $ 3 | 61 | ||||||||||
Number of positions terminated | position | 900 | 323 | ||||||||||||
Workforce reductions | Calais, France Facility | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | 30 | |||||||||||||
Workforce reductions | Color Pigments Business | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | 4 | |||||||||||||
Other restructuring costs | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | $ 8 | 15 | ||||||||||||
2014 initiatives | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | 60 | |||||||||||||
2014 initiatives | Workforce reductions | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | $ 60 | |||||||||||||
2015 initiatives | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | 111 | |||||||||||||
2015 initiatives | Workforce reductions | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | 90 | |||||||||||||
2015 initiatives | Other restructuring costs | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | $ 21 | |||||||||||||
2016 initiatives | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | $ 25 | |||||||||||||
2016 initiatives | Workforce reductions | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | 9 | |||||||||||||
2016 initiatives | Other restructuring costs | ||||||||||||||
Restructuring, impairment and plant closing costs | ||||||||||||||
Restructuring charges | $ 16 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
ASSET RETIREMENT OBLIGATIONS | ||
Asset retirement obligations at beginning of year | $ 44 | $ 18 |
Accretion expense | 2 | 2 |
Liabilities assumed in connection with the Rockwood acquisition | 30 | |
Liabilities settled | (4) | (1) |
Foreign currency effect on reserve balance | (3) | (5) |
Asset retirement obligations at end of year | $ 39 | $ 44 |
OTHER NONCURRENT LIABILITIES (D
OTHER NONCURRENT LIABILITIES (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
OTHER NONCURRENT LIABILITIES | |||
Pension liabilities | $ 266 | $ 233 | |
Employee benefit accrual | 5 | 5 | |
Asset retirement obligations | 26 | 26 | |
Other postretirement benefits | 3 | 5 | |
Environmental reserves | 12 | 11 | |
Long-term portion of restructuring reserve | $ 4 | 7 | 7 |
Other | 5 | 7 | |
Total | $ 328 | $ 324 | $ 294 |
RELATED PARTY FINANCING (Detail
RELATED PARTY FINANCING (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||||||
Notes receivable from affiliates | $ 57 | $ 327 | ||||
Notes payable to affiliates | 882 | 1,023 | ||||
Subsidiaries of Huntsman International | ||||||
Related Party Transaction [Line Items] | ||||||
Notes receivable from affiliates | 57 | 327 | ||||
Notes payable to affiliates | $ 0 | $ 882 | 1,023 | |||
Weighted average interest rate | 4.00% | |||||
A/R Programs | Huntsman International | ||||||
Related Party Transaction [Line Items] | ||||||
Net Receivable in A/R Programs | $ 106 | 110 | ||||
Losses on the A/R Programs | $ (1) | $ (1) | $ (4) | $ 5 | $ 3 | $ 4 |
THIRD PARTY DEBT AGREEMENTS (De
THIRD PARTY DEBT AGREEMENTS (Details) $ in Millions | Dec. 31, 2016USD ($) |
THIRD PARTY DEBT AGREEMENTS | |
2,017 | $ 7 |
2,018 | 2 |
2,019 | 2 |
2,020 | 2 |
Thereafter | 11 |
Total minimum payments | 24 |
Less: Amounts representing interest | (4) |
Present value of minimum lease payments | 20 |
Less: Current portion of capital leases | (7) |
Long-term portion of capital leases | $ 13 |
DERIVATIVE INSTRUMENTS AND H134
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Maximum | |||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||
Maturity period of spot or forward exchange rate contracts | 3 months | ||
Forward foreign currency contracts | |||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||
Maturity period of spot or forward exchange rate contracts | 1 month | ||
Forward foreign currency contracts | Maximum | |||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||
Maturity period of spot or forward exchange rate contracts | 3 months | ||
Forward foreign currency contracts | Huntsman International | |||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||
Maturity period of spot or forward exchange rate contracts | 1 month | ||
Notional amount entered into by related party | $ 88 | $ 50 |
STOCK-BASED COMPENSATION PLA135
STOCK-BASED COMPENSATION PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
STOCK-BASED COMPENSATION PLAN | |||
Vesting period | 3 years | ||
Compensation cost from continuing operations | $ 2 | $ 2 | $ 2 |
Stock options | |||
STOCK-BASED COMPENSATION PLAN | |||
Dividend yield (as a percent) | 5.60% | 2.30% | 2.40% |
Expected volatility (as a percent) | 57.90% | 57.60% | 60.30% |
Risk-free interest rate (as a percent) | 1.40% | 1.40% | 1.70% |
Expected life of stock options granted during the period | 5 years 10 months 24 days | 5 years 10 months 24 days | 5 years 8 months 12 days |
Performance share units | |||
STOCK-BASED COMPENSATION PLAN | |||
Vesting period | 2 years | ||
Risk-free interest rate (as a percent) | 0.90% | 0.70% | |
Expected weighted average volatility (as a percent) | 39.30% | 30.00% | |
Granted (in shares) | 0 | ||
Maximum | Stock options | |||
STOCK-BASED COMPENSATION PLAN | |||
Contractual term | 10 years | ||
Maximum | Performance share units | |||
STOCK-BASED COMPENSATION PLAN | |||
Performance period | 3 years | ||
Minimum | Performance share units | |||
STOCK-BASED COMPENSATION PLAN | |||
Performance period | 2 years |
INCOME TAXES - COMPONENTS OF IN
INCOME TAXES - COMPONENTS OF INCOME TAX EXPENSE, RECONCILIATION, AND DEFERRED TAX ASSETS AND LIABILITIES (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
U.S. | ||||||||
Current | $ (4) | $ (7) | $ 4 | |||||
Deferred | (5) | 5 | ||||||
Non-U.S. | ||||||||
Current | (5) | 2 | 2 | |||||
Deferred | (9) | (34) | (24) | |||||
Total income tax benefit | $ 14 | $ (7) | $ 26 | $ (14) | (23) | (34) | (18) | |
Reconciliation between the U.S. federal income taxes at the U.S. statutory rate to the provision for income taxes | ||||||||
Loss from continuing operations before income taxes | 67 | (11) | 92 | (95) | (108) | (396) | (189) | |
Expected tax expense at U.S. statutory rate of 35% | (39) | (138) | (67) | |||||
Change resulting from: | ||||||||
State tax expense net of federal benefit | 1 | |||||||
Non-U.S. tax rate differentials | (3) | 21 | 11 | |||||
Effects of non-U.S. operations | (2) | 7 | 2 | |||||
Non-taxable portion of gain on sale of businesses | (3) | |||||||
Unrealized currency exchange gains and losses | 1 | (21) | ||||||
Tax authority audits and dispute resolutions | (1) | 4 | 2 | |||||
Tax benefit of losses with valuation allowances as a result of other comprehensive income | (1) | (1) | (6) | |||||
Change in valuation allowance | 27 | 96 | 39 | |||||
Other, net | (2) | (3) | 1 | |||||
Total income tax benefit | 14 | (7) | 26 | (14) | $ (23) | $ (34) | $ (18) | |
U.S. income tax statutory rate (as a percent) | 35.00% | 35.00% | 35.00% | |||||
Number of non-U.S. tax jurisdictions in which the entity is operating | item | 25 | |||||||
Tax benefit from foreign exchange transactions | $ 11 | |||||||
Expense related to establishing contingent liabilities for potential non deductibility of the foreign currency losses | 10 | |||||||
Components of loss before income taxes | ||||||||
U.S. | $ (7) | (18) | $ 8 | |||||
Non-U.S. | (102) | (378) | (198) | |||||
Income (loss) from continuing operations before income taxes | 67 | $ (11) | 92 | $ (95) | (108) | (396) | (189) | |
Deferred income tax assets: | ||||||||
Net operating carryforwards | 365 | 253 | ||||||
Pension and other employee compensation | 58 | 53 | ||||||
Property, plant and equipment | 28 | 59 | ||||||
Intangible assets | 19 | 28 | ||||||
Other, net | 36 | 55 | ||||||
Total | 506 | 448 | ||||||
Total deferred income tax liabilities: | ||||||||
Property, plant and equipment | (126) | (100) | ||||||
Pension and other employee compensation | (1) | (1) | ||||||
Other, net | (4) | (1) | ||||||
Total | (131) | (102) | ||||||
Net deferred tax asset before valuation allowance | 375 | 346 | ||||||
Valuation allowance | (245) | (241) | (156) | $ (158) | ||||
Net deferred tax asset | 130 | 105 | ||||||
Non-current deferred tax asset | 200 | 200 | 142 | 130 | ||||
Non-current deferred tax liability | $ (9) | $ (9) | (12) | (25) | ||||
Non-US | ||||||||
Non-U.S. | ||||||||
Deferred | $ (1) | $ (1) | $ (6) |
INCOME TAXES - TAX CREDITS AND
INCOME TAXES - TAX CREDITS AND OPERATING LOSS CARRYFORWARDS (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax | |||||
Net operating loss carryforwards | $ 0 | ||||
Net operating carryforwards | 365 | $ 253 | |||
Operating loss carryforwards, valuation allowance | 215 | ||||
Net deferred tax asset | 375 | 346 | |||
Valuation allowance on net deferred tax assets | 245 | 241 | $ 156 | $ 158 | |
Non-current deferred tax asset | 142 | 130 | $ 200 | ||
Net deferred tax liabilities | 12 | 25 | $ 9 | ||
Operating loss carryforwards, subject to expiration | 0 | ||||
Establishments of valuation allowances in various jurisdictions | 12 | ||||
Non-US | |||||
Income Tax | |||||
Net operating loss carryforwards | 1,148 | ||||
France, Italy, Spain, South Africa and U.K. | |||||
Income Tax | |||||
Valuation allowance on net deferred tax assets | 245 | ||||
France | |||||
Income Tax | |||||
Releases of valuation allowances in various jurisdictions | 6 | ||||
Italy | |||||
Income Tax | |||||
Establishments of valuation allowances in various jurisdictions | 10 | ||||
South Africa | |||||
Income Tax | |||||
Establishments of valuation allowances in various jurisdictions | $ 2 | ||||
Canada, Finland, Malaysia and Germany | |||||
Income Tax | |||||
Non-current deferred tax asset | 140 | ||||
State | |||||
Income Tax | |||||
Net operating loss carryforwards | 120 | ||||
Federal | |||||
Income Tax | |||||
Net operating loss carryforwards | 120 | ||||
Net deferred tax liabilities | 10 | ||||
Huntsman | |||||
Income Tax | |||||
Net operating loss carryforwards | $ 0 |
INCOME TAXES - SUMMARY OF CHANG
INCOME TAXES - SUMMARY OF CHANGES IN VALUATION ALLOWANCE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
INCOME TAXES | |||
Valuation allowance at the beginning of the period | $ 241 | $ 156 | $ 158 |
Valuation allowance at the end of the period | 245 | 241 | 156 |
Net (increase) decrease | (4) | (85) | 2 |
Foreign currency movements | (20) | (16) | (17) |
(Decrease) increase to deferred assets with an offsetting increase or decrease to valuation allowances | (3) | 5 | (24) |
Change in valuation allowance per rate reconciliation | (27) | (96) | (39) |
Components of change in valuation allowance affecting operating tax expense: | |||
Pre-tax income and pre-tax (losses) in jurisdictions with valuation allowances resulting in no tax expense or benefit | (33) | (84) | (39) |
Releases of valuation allowances in various jurisdictions | 6 | ||
Establishments of valuation allowances in various jurisdictions | (12) | ||
Change in valuation allowance per rate reconciliation | $ (27) | $ (96) | $ (39) |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of unrecognized tax benefits | |||
Unrecognized tax benefits, balance at the beginning of the period | $ 22 | $ 24 | $ 27 |
Gross increases and decreases-tax positions taken during the prior period | 3 | 1 | |
Gross increases and decreases-tax positions taken during the current period | (1) | 7 | |
Decreases related to settlement of amounts due to tax authorities | (1) | (1) | |
Reductions resulting from the lapse of statutes of limitation | (8) | ||
Foreign currency movements | (1) | (3) | (3) |
Unrecognized tax benefits, balance at the end of the period | 20 | 22 | 24 |
Unrecognized tax benefits which, if recognized, would affect the effective tax rate | $ 11 | 12 | 12 |
Interest and penalties related to unrecognized tax benefits included in tax expense | |||
Interest included in income tax expense | (2) | $ 1 | |
Number of months from the reporting date during which unrecognized tax benefit would result in change in income tax | 12 months | ||
Unremitted earnings of subsidiaries to consider for indefinite reinvestment | $ 0 | $ 0 | |
Minimum | |||
Interest and penalties related to unrecognized tax benefits included in tax expense | |||
Decrease in the unrecognized tax benefits reasonably possible, low end of range | 0 | ||
Maximum | |||
Interest and penalties related to unrecognized tax benefits included in tax expense | |||
Decrease in the unrecognized tax benefits reasonably possible, low end of range | $ 3 |
EMPLOYEE BENEFIT PLANS - Funded
EMPLOYEE BENEFIT PLANS - Funded status of the plans (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)entity | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
EMPLOYEE BENEFIT PLANS | |||||||||
Number of legal entities | entity | 3 | ||||||||
Amounts recognized in balance sheet: | |||||||||
Noncurrent asset | $ 4 | $ 2 | |||||||
Components of net periodic benefit cost | |||||||||
Amortization of actuarial loss | $ 5 | $ 3 | $ 13 | $ 8 | |||||
Defined Benefit Plans | |||||||||
EMPLOYEE BENEFIT PLANS | |||||||||
Projected benefit obligation | 1,053 | 1,037 | $ 1,053 | $ 1,144 | $ 1,144 | 1,053 | 1,037 | ||
Fair value of plan assets | 790 | 805 | 790 | 866 | 866 | 790 | 805 | ||
Change in benefit obligation | |||||||||
Benefit obligation at beginning of year | 1,053 | 1,037 | 1,037 | 1,144 | |||||
Service cost | 4 | 6 | 3 | ||||||
Interest cost | 31 | 35 | 36 | ||||||
Actuarial (gain) loss | 184 | (31) | |||||||
Acquisitions/disposals | 1 | 6 | |||||||
Gross benefits paid | (48) | (50) | |||||||
Plan amendments | 4 | ||||||||
Exchange rates | (156) | (75) | |||||||
Curtailments | (4) | ||||||||
Special termination benefits | 2 | ||||||||
Benefit obligation at end of year | 1,053 | 1,037 | 1,144 | ||||||
Change in plan assets | |||||||||
Fair value of plan assets at beginning of year | 790 | 805 | 805 | 866 | |||||
Actual return on plan assets | 147 | 2 | |||||||
Employer contributions | 22 | 37 | |||||||
Exchange rates | (136) | (50) | |||||||
Fair value of plan assets at end of year | 790 | 805 | 866 | ||||||
Funded status | |||||||||
Fair value of plan assets | 790 | 805 | 790 | 866 | 866 | 790 | 805 | ||
Benefit obligation | (1,053) | (1,037) | (1,053) | (1,144) | (1,144) | (1,053) | (1,037) | ||
Accrued benefit cost | (263) | (232) | |||||||
Amounts recognized in balance sheet: | |||||||||
Noncurrent asset | 4 | 2 | |||||||
Current liability | (1) | (1) | |||||||
Noncurrent liability | (266) | (233) | |||||||
Total | (263) | (232) | |||||||
Amounts recognized in accumulated other comprehensive loss: | |||||||||
Net actuarial loss (gain) | 335 | 268 | |||||||
Prior service cost (credit) | 8 | 9 | |||||||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax, Total | 343 | 277 | |||||||
Amounts in accumulated other comprehensive (loss) income that are expected to be recognized as components of net periodic benefit cost | |||||||||
Actuarial Loss | 15 | ||||||||
Prior service credit | 1 | ||||||||
Total | 16 | ||||||||
Components of net periodic benefit cost | |||||||||
Service cost | 4 | 6 | 3 | ||||||
Interest cost | 31 | 35 | 36 | ||||||
Expected return on plan assets | (39) | (51) | (44) | ||||||
Amortization of actuarial loss | 10 | 9 | 11 | ||||||
Amortization of prior service credit | 1 | 1 | 1 | ||||||
Special termination benefits | 2 | ||||||||
Net periodic benefit cost | 7 | 2 | 7 | ||||||
U.S. Defined Benefit Plans | |||||||||
EMPLOYEE BENEFIT PLANS | |||||||||
Projected benefit obligation | 15 | 14 | $ 15 | $ 14 | 15 | 14 | |||
Percentage of US portion of projected benefit obligation | 1.00% | 1.00% | |||||||
Fair value of plan assets | 11 | 10 | $ 11 | $ 10 | 11 | 10 | |||
Percentage of US portion of fair value of plan assets | 1.00% | 1.00% | |||||||
Change in benefit obligation | |||||||||
Benefit obligation at beginning of year | 15 | 14 | $ 14 | ||||||
Benefit obligation at end of year | 15 | $ 14 | |||||||
Change in plan assets | |||||||||
Fair value of plan assets at beginning of year | 11 | 10 | 10 | ||||||
Fair value of plan assets at end of year | 11 | 10 | |||||||
Funded status | |||||||||
Fair value of plan assets | 11 | 10 | 11 | 10 | 11 | 10 | |||
Benefit obligation | (15) | (14) | (15) | (14) | (15) | (14) | |||
Other Postretirement Benefits Plan | |||||||||
EMPLOYEE BENEFIT PLANS | |||||||||
Projected benefit obligation | 3 | 5 | 3 | 8 | 8 | 3 | 5 | ||
Change in benefit obligation | |||||||||
Benefit obligation at beginning of year | 3 | 5 | 5 | 8 | |||||
Interest cost | 1 | ||||||||
Gross benefits paid | (1) | ||||||||
Plan amendments | (2) | (2) | |||||||
Exchange rates | (1) | ||||||||
Benefit obligation at end of year | 3 | 5 | 8 | ||||||
Change in plan assets | |||||||||
Employer contributions | 1 | ||||||||
Funded status | |||||||||
Benefit obligation | $ (3) | $ (5) | (3) | $ (8) | $ (8) | (3) | (5) | ||
Accrued benefit cost | (3) | (5) | |||||||
Amounts recognized in balance sheet: | |||||||||
Noncurrent liability | (3) | (5) | |||||||
Total | (3) | (5) | |||||||
Amounts recognized in accumulated other comprehensive loss: | |||||||||
Net actuarial loss (gain) | (3) | (3) | |||||||
Prior service cost (credit) | (3) | (1) | |||||||
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax, Total | (6) | $ (4) | |||||||
Amounts in accumulated other comprehensive (loss) income that are expected to be recognized as components of net periodic benefit cost | |||||||||
Actuarial Loss | 1 | ||||||||
Prior service credit | (3) | ||||||||
Total | $ (2) | ||||||||
Components of net periodic benefit cost | |||||||||
Interest cost | $ 1 |
EMPLOYEE BENEFIT PLANS - Amount
EMPLOYEE BENEFIT PLANS - Amounts recognized in net periodic benefit cost and other comprehensive (loss) income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net periodic pension cost: | |||
Health care trend rate (as a percent) | 5.82% | 7.00% | |
Decrease in health care trend rate after 2030 (as a percent) | 4.38% | 4.38% | |
Defined Benefit Plans | |||
Amounts recognized in net periodic benefit cost and other comprehensive income (loss) | |||
Current year actuarial loss | $ 86 | $ 11 | $ 37 |
Amortization of actuarial loss | (11) | (11) | (11) |
Current year prior service credit | 9 | ||
Amortization of prior service credit | (1) | (1) | (1) |
Total recognized in other comprehensive (loss) income | 74 | 8 | 25 |
Amount related to discontinued operations | (8) | 4 | (27) |
Total recognized in other comprehensive income (loss) from continuing operations | 66 | 12 | (2) |
Net periodic benefit cost | 7 | 2 | 7 |
Total recognized in net periodic benefit cost and other comprehensive income | $ 81 | $ 10 | $ 32 |
Projected benefit obligation: | |||
Discount rate (as a percent) | 2.28% | 3.27% | 3.12% |
Rate of compensation increase (as a percent) | 3.79% | 3.24% | 3.66% |
Net periodic pension cost: | |||
Discount rate (as a percent) | 3.27% | 3.12% | 4.40% |
Rate of compensation increase (as a percent) | 3.24% | 3.66% | 4.20% |
Expected return on plan assets (as a percent) | 5.22% | 5.99% | 6.24% |
Other Postretirement Benefits Plan | |||
Amounts recognized in net periodic benefit cost and other comprehensive income (loss) | |||
Current year actuarial loss | $ 1 | ||
Current year prior service credit | $ (2) | $ (2) | |
Total recognized in other comprehensive income (loss) from continuing operations | (2) | (2) | 1 |
Total recognized in net periodic benefit cost and other comprehensive income | $ (2) | $ (2) | $ 1 |
Projected benefit obligation: | |||
Discount rate (as a percent) | 3.72% | 6.94% | 5.65% |
Net periodic pension cost: | |||
Discount rate (as a percent) | 6.94% | 5.65% | 6.59% |
EMPLOYEE BENEFIT PLANS -Project
EMPLOYEE BENEFIT PLANS -Projected benefit obligation in excess of plan assets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plans | ||
Projected benefit obligation in excess of plan assets | ||
Projected benefit obligation | $ 1,033 | $ 1,012 |
Fair value of plan assets | 766 | 779 |
Accumulated benefit obligation in excess of plan assets | ||
Projected benefit obligation | 1,033 | 323 |
Accumulated benefit obligation | 986 | 309 |
Fair value of plan assets | 766 | $ 121 |
2017 expected employer contributions: | ||
To plan trusts | 21 | |
Expected benefit payments: | ||
2,017 | 36 | |
2,018 | 36 | |
2,019 | 37 | |
2,020 | 39 | |
2,021 | 40 | |
2022 - 2026 | 217 | |
Other Postretirement Benefits Plan | ||
Expected benefit payments: | ||
2022 - 2026 | $ 1 |
EMPLOYEE BENEFIT PLANS - Fair v
EMPLOYEE BENEFIT PLANS - Fair value of plan assets (Details) - Defined Benefit Plans - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | $ 790 | $ 805 | $ 866 | |
Fair Value Measurements of Plan Assets | ||||
Expected long term rate of return on the pension assets (as a percent) | 5.22% | 5.99% | 6.24% | |
Target allocation (as a percent) | 100.00% | |||
Allocation (as a percent) | 100.00% | 100.00% | ||
Minimum | ||||
Fair Value Measurements of Plan Assets | ||||
Expected long term rate of return on the pension assets (as a percent) | 5.22% | |||
Maximum | ||||
Fair Value Measurements of Plan Assets | ||||
Expected long term rate of return on the pension assets (as a percent) | 6.24% | |||
Recurring basis | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | $ 790 | $ 805 | ||
Recurring basis | Fair value amounts using quoted prices in active markets for identical assets (Level 1) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | 250 | 243 | ||
Recurring basis | Significant other observable inputs (Level 2) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | 507 | 554 | ||
Recurring basis | Significant unobservable inputs (Level 3) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | $ 33 | $ 8 | ||
Equities | ||||
Fair Value Measurements of Plan Assets | ||||
Target allocation (as a percent) | 27.00% | |||
Allocation (as a percent) | 27.00% | 26.00% | ||
Equities | Recurring basis | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | $ 212 | $ 213 | ||
Equities | Recurring basis | Fair value amounts using quoted prices in active markets for identical assets (Level 1) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | 206 | 204 | ||
Equities | Recurring basis | Significant other observable inputs (Level 2) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | $ 6 | $ 9 | ||
Fixed income | ||||
Fair Value Measurements of Plan Assets | ||||
Target allocation (as a percent) | 68.00% | |||
Allocation (as a percent) | 69.00% | 70.00% | ||
Fixed income | Recurring basis | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | $ 542 | $ 565 | ||
Fixed income | Recurring basis | Fair value amounts using quoted prices in active markets for identical assets (Level 1) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | 40 | 37 | ||
Fixed income | Recurring basis | Significant other observable inputs (Level 2) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | 496 | $ 528 | ||
Fixed income | Recurring basis | Significant unobservable inputs (Level 3) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | 6 | |||
Fair Value Measurements of Plan Assets | ||||
Purchases, sales and settlements | 6 | |||
Balance at end of period | $ 6 | |||
Real Estate/Other | ||||
Fair Value Measurements of Plan Assets | ||||
Target allocation (as a percent) | 5.00% | |||
Allocation (as a percent) | 4.00% | 3.00% | ||
Real Estate/Other | Recurring basis | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | $ 32 | $ 20 | ||
Real Estate/Other | Recurring basis | Significant other observable inputs (Level 2) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | 5 | 12 | ||
Real Estate/Other | Recurring basis | Significant unobservable inputs (Level 3) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | 27 | 8 | ||
Fair Value Measurements of Plan Assets | ||||
Balance at beginning of period | 8 | 9 | ||
Return on pension plan assets | (1) | |||
Purchases, sales and settlements | 19 | |||
Balance at end of period | 27 | 8 | $ 9 | |
Cash and cash equivalents | Recurring basis | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | 4 | 7 | ||
Cash and cash equivalents | Recurring basis | Fair value amounts using quoted prices in active markets for identical assets (Level 1) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | $ 4 | 2 | ||
Cash and cash equivalents | Recurring basis | Significant other observable inputs (Level 2) | ||||
EMPLOYEE BENEFIT PLANS | ||||
Fair value of plan assets | $ 5 | |||
Cash | ||||
Fair Value Measurements of Plan Assets | ||||
Allocation (as a percent) | 1.00% |
EMPLOYEE BENEFIT PLANS - Define
EMPLOYEE BENEFIT PLANS - Defined benefit plans and other postretirement benefit plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
EMPLOYEE BENEFIT PLANS | |||
Deferred compensation expense | $ 1 | $ 1 | $ 1 |
Money purchase pension plan | |||
EMPLOYEE BENEFIT PLANS | |||
Employer contribution limit (as a percent of compensation) | 8.00% | ||
Salary deferral plan for new hires | |||
EMPLOYEE BENEFIT PLANS | |||
Employer matching contribution as a percentage of employee's contribution | 100.00% | ||
Employer contribution limit (as a percent of compensation) | 4.00% | ||
Period of service, to be achieved by the employees, to receive additional matching percentage | 6 years | ||
Salary deferral plan | |||
EMPLOYEE BENEFIT PLANS | |||
Employer contribution limit (as a percent of compensation) | 2.00% | ||
United States | |||
EMPLOYEE BENEFIT PLANS | |||
Period of additional annual pay credits | 5 years | ||
Non-discretionary employer contributions (as a percent) | 6.00% | ||
Employer matching contribution (as a percent) | 4.00% | ||
Total Employer contribution (as a percent) | 10.00% | ||
Non U.S. | |||
EMPLOYEE BENEFIT PLANS | |||
Total defined contribution expense | $ 7 | $ 8 | $ 7 |
Transition period for contributions | 5 years | ||
Non U.S. | Salary deferral plan for new hires | |||
EMPLOYEE BENEFIT PLANS | |||
Employer matching contribution as a percentage of employee's contribution | 12.00% | ||
Non U.S. | Salary deferral plan | |||
EMPLOYEE BENEFIT PLANS | |||
Employer matching contribution as a percentage of employee's contribution | 15.00% | ||
Minimum | Salary deferral plan | |||
EMPLOYEE BENEFIT PLANS | |||
Employer contribution limit (as a percent of compensation) | 0.50% | ||
Minimum | United States | |||
EMPLOYEE BENEFIT PLANS | |||
Annual pay credits, percentage of eligible pay | 4.00% | ||
Additional annual pay credits, percentage of eligible pay for participants in the plan on July 1, 2004 | 1.00% | ||
Maximum | United States | |||
EMPLOYEE BENEFIT PLANS | |||
Annual pay credits, percentage of eligible pay | 12.00% | ||
Additional annual pay credits, percentage of eligible pay for participants in the plan on July 1, 2004 | 8.00% |
RELATED PARTY TRANSACTIONS (145
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Huntsman | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Purchases | $ 2 | ||||||
Huntsman | Corporate allocations | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Selling, general and administrative expenses | $ 9 | $ 27 | $ 62 | $ 76 | 104 | $ 90 | $ 78 |
LPC | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Sales of raw material | 67 | 80 | 108 | ||||
Purchases | $ 158 | $ 163 | $ 194 |
COMMITMENTS AND CONTINGENCIE146
COMMITMENTS AND CONTINGENCIES - PURCHASE COMMITMENTS AND OPERATING LEASES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES | |||
Minimum contracts period which require minimum volume purchases | 1 year | ||
Minimum payments under purchase commitments | $ 1 | $ 0 | $ 0 |
Purchase commitments: | |||
2,017 | 582 | ||
2,018 | 438 | ||
2,019 | 49 | ||
2,020 | 14 | ||
2,021 | 12 | ||
Thereafter | 39 | ||
Operating Leases | |||
Rent expense | 9 | $ 9 | $ 4 |
Future minimum payments | |||
2,017 | 8 | ||
2,018 | 7 | ||
2,019 | 3 | ||
2,020 | 2 | ||
2,021 | 2 | ||
Thereafter | 2 | ||
Total | $ 24 |
COMMITMENTS AND CONTINGENCIE147
COMMITMENTS AND CONTINGENCIES - LEGAL MATTERS (Details) $ in Millions | Jun. 13, 2016state | Sep. 29, 2015state | Dec. 31, 2016USD ($)state | Dec. 31, 2015USD ($) |
LEGAL MATTERS | ||||
U.S. Operations and certain foreign subsidiaries total assets, excluding intercompany accounts | $ | $ 502 | $ 384 | ||
State Antitrust Claims | ||||
LEGAL MATTERS | ||||
Number of states in which Plaintiffs have raised claims | 15 | 15 | ||
Consumer Protection Claims | ||||
LEGAL MATTERS | ||||
Number of states in which Plaintiffs have raised claims | 9 | 9 | ||
Number of states in which claim was dismissed | 1 | |||
Unjust Enrichment Claims | ||||
LEGAL MATTERS | ||||
Number of states in which Plaintiffs have raised claims | 16 | 16 | ||
Huntsman International | Reportable legal entities | Guarantors | ||||
LEGAL MATTERS | ||||
Third-party debt outstanding | $ | $ 3,793 | $ 4,318 |
ENVIRONMENTAL, HEALTH AND SA148
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | |||||
Capital expenditures for EHS matters | $ 5 | $ 7 | $ 11 | $ 21 | $ 20 |
Accrued environmental liabilities | $ 12 | $ 12 | $ 14 |
OTHER COMPREHENSIVE LOSS - COMP
OTHER COMPREHENSIVE LOSS - COMPONENTS AND CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | $ 177 | $ 728 | $ 728 | $ 1,415 | $ 1,247 | ||
Amounts reclassified from accumulated other comprehensive loss, gross | 11 | 10 | |||||
Tax benefit (expense) | 1 | ||||||
Other comprehensive income (loss), net of tax | $ 4 | $ (26) | 111 | (75) | (22) | (82) | (111) |
Balance at the end of the period | 1,016 | 250 | 1,016 | 250 | 177 | 728 | 1,415 |
Total | |||||||
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | (423) | (401) | (401) | (319) | |||
Adjustment due to discontinued operations | (11) | 2 | |||||
Tax benefit (expense) | 2 | (1) | |||||
Other comprehensive (loss) income before reclassifications | 71 | (85) | (18) | (90) | |||
Tax benefit (expense) | 3 | (2) | (7) | (3) | |||
Amounts reclassified from accumulated other comprehensive loss, gross | 11 | 8 | 11 | 10 | |||
Tax benefit (expense) | 1 | 1 | |||||
Other comprehensive income (loss), net of tax | 111 | (75) | (22) | (82) | |||
Balance at the end of the period | (312) | (476) | (312) | (476) | (423) | (401) | (319) |
Foreign currency translation adjustment | |||||||
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | (112) | (144) | (144) | (73) | |||
Adjustment due to discontinued operations | (3) | (2) | |||||
Other comprehensive (loss) income before reclassifications | 68 | (92) | 35 | (69) | |||
Tax benefit (expense) | 2 | (1) | |||||
Other comprehensive income (loss), net of tax | 75 | (91) | 32 | (71) | |||
Balance at the end of the period | (37) | (235) | (37) | (235) | (112) | (144) | (73) |
Foreign currency translation adjustment, tax | 2 | 1 | 0 | 0 | 0 | ||
Pension and other postretirement benefits adjustments | |||||||
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | (306) | (252) | (252) | (242) | |||
Adjustment due to discontinued operations | (8) | 4 | |||||
Tax benefit (expense) | 2 | (1) | |||||
Other comprehensive (loss) income before reclassifications | 3 | 7 | (53) | (20) | |||
Tax benefit (expense) | 1 | (1) | (7) | (3) | |||
Amounts reclassified from accumulated other comprehensive loss, gross | 4 | 3 | 11 | 8 | 11 | 10 | |
Tax benefit (expense) | 1 | 1 | |||||
Other comprehensive income (loss), net of tax | 36 | 16 | (54) | (10) | |||
Balance at the end of the period | (270) | (236) | (270) | (236) | (306) | (252) | (242) |
Pension and other postretirement benefits adjustments, tax | 54 | 60 | 56 | 60 | 64 | ||
Other comprehensive income of unconsolidated affiliates | |||||||
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | (5) | (5) | (5) | (4) | |||
Other comprehensive (loss) income before reclassifications | (1) | ||||||
Other comprehensive income (loss), net of tax | (1) | ||||||
Balance at the end of the period | (5) | (5) | (5) | (5) | (5) | (5) | (4) |
Accumulated other comprehensive loss | |||||||
Components of other comprehensive loss | |||||||
Balance at the beginning of the period | (423) | (401) | (401) | (319) | (208) | ||
Adjustment due to discontinued operations | (11) | 2 | |||||
Tax benefit (expense) | 2 | (1) | |||||
Other comprehensive (loss) income before reclassifications | 71 | (85) | (18) | (90) | |||
Tax benefit (expense) | 3 | (2) | (7) | (3) | |||
Amounts reclassified from accumulated other comprehensive loss, gross | 11 | 8 | 11 | 10 | |||
Tax benefit (expense) | 1 | 1 | |||||
Other comprehensive income (loss), net of tax | 111 | (75) | (22) | (82) | (111) | ||
Balance at the end of the period | $ (312) | $ (476) | $ (312) | $ (476) | $ (423) | $ (401) | $ (319) |
OTHER COMPREHENSIVE LOSS - RECL
OTHER COMPREHENSIVE LOSS - RECLASSIFICATION DETAILS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification from accumulated other comprehensive loss | ||||||
Total before tax | $ 11 | $ 10 | ||||
Income tax benefit | 1 | |||||
Net of tax | 12 | 10 | ||||
Pension and other postretirement benefits adjustments | ||||||
Reclassification from accumulated other comprehensive loss | ||||||
Total before tax | $ 4 | $ 3 | $ 11 | $ 8 | 11 | 10 |
Income tax benefit | 1 | 1 | ||||
Net of tax | 4 | 3 | 11 | 9 | ||
Actuarial loss | ||||||
Reclassification from accumulated other comprehensive loss | ||||||
Total before tax | 5 | $ 3 | 13 | $ 8 | 10 | 9 |
Prior service credit | ||||||
Reclassification from accumulated other comprehensive loss | ||||||
Total before tax | $ (1) | $ (2) | $ 1 | $ 1 |
OPERATING SEGMENT INFORMATIO151
OPERATING SEGMENT INFORMATION - FINANCIAL INFORMATION BY SEGMENT (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
OPERATING SEGMENT INFORMATION | |||||||
Number of reportable segments | segment | 2 | 2 | |||||
Revenues: | |||||||
Revenues | $ 582 | $ 532 | $ 1,681 | $ 1,648 | $ 2,139 | $ 2,162 | $ 1,549 |
Segment Adjusted EBITDA | |||||||
Segment adjusted EBITDA | 134 | 21 | 277 | 38 | |||
Reconciliation of Adjusted EBITDA to net loss: | |||||||
Interest expense | (30) | (14) | (54) | (44) | (59) | (52) | (25) |
Interest income | 22 | 2 | 25 | 13 | 15 | 22 | 23 |
Income tax (expense) benefit- continuing operations | (14) | 7 | (26) | 14 | 23 | 34 | 18 |
Depreciation and amortization | (35) | (30) | (95) | (84) | (114) | (100) | (87) |
Net income attributable to noncontrolling interests | 2 | 3 | 8 | 8 | |||
Other adjustments: | |||||||
Business acquisition and integration expenses | (4) | (3) | (2) | (11) | |||
Net income from discontinued operations | 2 | 8 | 8 | 8 | 10 | 9 | |
Gain (loss) on disposition of business/assets | 23 | 23 | |||||
Certain legal settlements and related expenses | (1) | (1) | |||||
Amortization of pension and postretirement actuarial losses | (5) | (3) | (13) | (8) | |||
Net plant incident costs | (1) | (3) | (4) | 2 | |||
Restructuring, impairment and plant closing costs | (16) | (7) | (49) | (31) | (35) | (220) | (60) |
Net income (loss) | 53 | (2) | 74 | (73) | (77) | (352) | (162) |
Depreciation and Amortization: | |||||||
Depreciation and amortization | 35 | 30 | 95 | 84 | 114 | 100 | 87 |
Capital Expenditures: | |||||||
Capital Expenditures | 97 | 76 | 103 | 203 | 136 | ||
Total Assets | |||||||
Total Assets | 2,724 | 2,724 | 2,661 | 3,413 | |||
Operating segments | |||||||
Revenues: | |||||||
Revenues | 2,139 | 2,162 | 1,549 | ||||
Segment Adjusted EBITDA | |||||||
Segment adjusted EBITDA | 142 | 38 | 325 | 84 | 77 | 8 | 27 |
Reconciliation of Adjusted EBITDA to net loss: | |||||||
Interest expense | (59) | (52) | (25) | ||||
Interest income | 15 | 22 | 23 | ||||
Income tax (expense) benefit- continuing operations | 23 | 34 | 18 | ||||
Depreciation and amortization | (114) | (100) | (87) | ||||
Net income attributable to noncontrolling interests | 10 | 7 | 2 | ||||
Other adjustments: | |||||||
Business acquisition and integration expenses | (11) | (44) | (45) | ||||
Net income from discontinued operations | 8 | 10 | 9 | ||||
Purchase accounting adjustments | (11) | ||||||
Gain (loss) on disposition of business/assets | 22 | (1) | 1 | ||||
Certain legal settlements and related expenses | (2) | (3) | (3) | ||||
Amortization of pension and postretirement actuarial losses | (10) | (9) | (11) | ||||
Net plant incident costs | (1) | (4) | |||||
Restructuring, impairment and plant closing costs | (35) | (220) | (60) | ||||
Net income (loss) | (77) | (352) | (162) | ||||
Depreciation and Amortization: | |||||||
Depreciation and amortization | 114 | 100 | 87 | ||||
Capital Expenditures: | |||||||
Capital Expenditures | 103 | 203 | 136 | ||||
Total Assets | |||||||
Total Assets | 2,535 | 3,205 | 3,722 | ||||
Operating segments | Titanium Dioxide | |||||||
Revenues: | |||||||
Revenues | 431 | 392 | 1,217 | 1,197 | 1,554 | 1,584 | 1,411 |
Segment Adjusted EBITDA | |||||||
Segment adjusted EBITDA | 127 | 22 | 268 | 28 | 61 | (8) | 62 |
Reconciliation of Adjusted EBITDA to net loss: | |||||||
Depreciation and amortization | (87) | (72) | (73) | ||||
Depreciation and Amortization: | |||||||
Depreciation and amortization | 87 | 72 | 73 | ||||
Capital Expenditures: | |||||||
Capital Expenditures | 73 | 124 | 109 | ||||
Total Assets | |||||||
Total Assets | 1,561 | 1,707 | 2,059 | ||||
Operating segments | Performance Additives | |||||||
Revenues: | |||||||
Revenues | 151 | 140 | 464 | 451 | 585 | 578 | 138 |
Segment Adjusted EBITDA | |||||||
Segment adjusted EBITDA | 15 | 16 | 57 | 56 | 69 | 69 | 14 |
Reconciliation of Adjusted EBITDA to net loss: | |||||||
Depreciation and amortization | (19) | (20) | (5) | ||||
Depreciation and Amortization: | |||||||
Depreciation and amortization | 19 | 20 | 5 | ||||
Capital Expenditures: | |||||||
Capital Expenditures | 30 | 79 | 27 | ||||
Total Assets | |||||||
Total Assets | 764 | 783 | 724 | ||||
Corporate and Other | |||||||
Segment Adjusted EBITDA | |||||||
Segment adjusted EBITDA | $ (8) | $ (17) | $ (48) | $ (46) | (53) | (53) | (49) |
Reconciliation of Adjusted EBITDA to net loss: | |||||||
Depreciation and amortization | (8) | (8) | (9) | ||||
Depreciation and Amortization: | |||||||
Depreciation and amortization | 8 | 8 | 9 | ||||
Total Assets | |||||||
Total Assets | $ 210 | $ 715 | $ 939 |
OPERATING SEGMENT INFORMATIO152
OPERATING SEGMENT INFORMATION - REVENUES AND LONG-LIVED ASSETS BY GEOGRAPHICAL AREA (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||
Revenues and long-lived assets | |||||||||||
Revenues | $ 582 | $ 532 | $ 1,681 | $ 1,648 | $ 2,139 | $ 2,162 | $ 1,549 | ||||
Long-lived assets | $ 1,264 | [1] | $ 1,264 | [1] | 1,178 | [1],[2] | 1,277 | [2] | 1,342 | ||
United States | |||||||||||
Revenues and long-lived assets | |||||||||||
Revenues | 491 | 501 | 313 | ||||||||
Long-lived assets | 263 | 256 | 187 | ||||||||
Germany | |||||||||||
Revenues and long-lived assets | |||||||||||
Revenues | 210 | 235 | 115 | ||||||||
Long-lived assets | 215 | 216 | 210 | ||||||||
Italy | |||||||||||
Revenues and long-lived assets | |||||||||||
Revenues | 130 | 117 | 95 | ||||||||
Long-lived assets | 155 | 163 | 159 | ||||||||
Finland | |||||||||||
Revenues and long-lived assets | |||||||||||
Long-lived assets | 146 | 150 | 170 | ||||||||
China | |||||||||||
Revenues and long-lived assets | |||||||||||
Revenues | 113 | 97 | 54 | ||||||||
United Kingdom | |||||||||||
Revenues and long-lived assets | |||||||||||
Revenues | 102 | 105 | 94 | ||||||||
Long-lived assets | 198 | 252 | 241 | ||||||||
France | |||||||||||
Revenues and long-lived assets | |||||||||||
Revenues | 98 | 94 | 83 | ||||||||
Spain | |||||||||||
Revenues and long-lived assets | |||||||||||
Revenues | 79 | 71 | 71 | ||||||||
Switzerland | |||||||||||
Revenues and long-lived assets | |||||||||||
Revenues | 11 | 16 | 10 | ||||||||
Canada | |||||||||||
Revenues and long-lived assets | |||||||||||
Revenues | 59 | 59 | 41 | ||||||||
Other nations | |||||||||||
Revenues and long-lived assets | |||||||||||
Revenues | 846 | 867 | 673 | ||||||||
Long-lived assets | $ 201 | $ 240 | $ 375 | ||||||||
[1] | At September?30, 2017 and December?31, 2016, $6 and $4 of cash and cash equivalents, $7 and $6 of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $18 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note?5. Variable Interest Entities." | ||||||||||
[2] | At December?31, 2016 and 2015, respectively, $4 and $7 of cash and cash equivalents, $6 and $4 of accounts receivable (net), $1 each of inventories, $4 and $5 of property, plant and equipment (net), $20 and $23 of intangible assets (net), $1 each of accounts payable, $4 and $3 of accrued liabilities, and $2 and $1 of current portion of debt from consolidated variable interest entities are included in the respective balance sheet captions above. See note ?7. Variable Interest Entities.? |
RESTATEMENT OF COMBINED STAT153
RESTATEMENT OF COMBINED STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows from Operating Activities: | |||||
Accounts payable | $ 8 | $ 6 | $ 17 | $ 5 | $ 29 |
Net cash provided by (used in) operating activities from discontinued operations | 1 | 6 | 17 | (6) | 8 |
Net cash provided by (used in) operating activities | 181 | 93 | 97 | (63) | (63) |
Investing Activities: | |||||
Net (advances to) payments from affiliates | 121 | (36) | (5) | 97 | 100 |
Net cash provided by (used in) investing activities from discontinued operations | (1) | (6) | (22) | (39) | (23) |
Net cash (used in) provided by investing activities | 72 | (105) | (118) | (139) | 29 |
Financing activities: | |||||
Net borrowings from affiliate accounts payable | 47 | 194 | 53 | ||
Net cash provided by (used in) financing activities from discontinued operations | (2) | 9 | (1) | ||
Net cash provided by (used in) financing activities | $ (99) | $ 10 | 30 | 194 | 52 |
Restatement Adjustment | |||||
Cash Flows from Operating Activities: | |||||
Net cash provided by (used in) operating activities from discontinued operations | (7) | (33) | (19) | ||
Investing Activities: | |||||
Net cash provided by (used in) investing activities from discontinued operations | (12) | (31) | (17) | ||
Financing activities: | |||||
Net cash provided by (used in) financing activities from discontinued operations | 5 | (2) | (2) | ||
As Previously Reported | |||||
Cash Flows from Operating Activities: | |||||
Accounts payable | 55 | 242 | 174 | ||
Net cash provided by (used in) operating activities | 143 | 203 | 100 | ||
Investing Activities: | |||||
Net cash (used in) provided by investing activities | (101) | (205) | (54) | ||
Financing activities: | |||||
Net change in parent company investment | (17) | 4 | (27) | ||
Net cash provided by (used in) financing activities | $ (33) | $ (6) | $ (28) |
DISCONTINUED OPERATIONS - BA154
DISCONTINUED OPERATIONS - BALANCE SHEET (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Total current assets of discontinued operations | $ 84 | $ 119 |
Noncurrent assets of discontinued operations | 42 | 89 |
Current liabilities: | ||
Total current liabilities of discontinued operations | 27 | 31 |
Noncurrent liabilities of discontinued operations | 78 | 118 |
Titanium Dioxide And Performance Additives Business | Discontinued Operations, Disposed of by Means Other than Sale | ||
Current assets: | ||
Cash and cash equivalents | 1 | 1 |
Accounts receivable (net of allowance for doubtful accounts of $1) | 10 | 18 |
Accounts receivable from affiliates | 61 | 82 |
Inventories | 9 | 15 |
Prepaid expenses | 1 | 1 |
Other current assets | 2 | 2 |
Total current assets of discontinued operations | 84 | 119 |
Property, plant and equipment, net | 19 | 50 |
Goodwill | 2 | 2 |
Deferred income taxes | 21 | 32 |
Other assets | 5 | |
Noncurrent assets of discontinued operations | 42 | 89 |
Total assets of discontinued operations | 126 | 208 |
Current liabilities: | ||
Accounts payable | 7 | 12 |
Accounts payable to affiliates | 2 | 2 |
Accrued liabilities | 18 | 17 |
Total current liabilities of discontinued operations | 27 | 31 |
Long-term debt | 4 | |
Deferred income taxes | 1 | 1 |
Other noncurrent liabilities | 77 | 113 |
Noncurrent liabilities of discontinued operations | 78 | 118 |
Total liabilities of discontinued operations | 105 | $ 149 |
Accounts and notes receivable, allowance for doubtful accounts (in dollars) | $ 1 |
DISCONTINUED OPERATIONS - OP155
DISCONTINUED OPERATIONS - OPERATIONS DATA (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||||||
Net income from discontinued operations | $ 2 | $ 8 | $ 8 | $ 8 | $ 10 | $ 9 | |
Titanium Dioxide And Performance Additives Business | Discontinued Operations, Disposed of by Means Other than Sale | |||||||
Revenues: | |||||||
Trade sales, services and fees, net | 28 | 15 | 83 | 110 | 108 | 105 | |
Related party sales | 15 | 17 | 51 | 60 | 60 | 75 | |
Total revenues | 43 | 32 | 134 | 170 | 168 | 180 | |
Cost of goods sold | 36 | 26 | 110 | 147 | 146 | 154 | |
Selling, general, and administrative (includes corporate allocations of $7, $6 and $8, respectively) | 6 | (7) | 16 | 15 | 8 | 17 | |
Restructuring, impairment and plant closing costs | 1 | 3 | 2 | ||||
Other income, net | (1) | 1 | (2) | (1) | (2) | (3) | |
Total expenses (income) | 5 | (5) | 14 | 14 | 9 | 16 | |
Income from discontinued operations before tax | 2 | 11 | 10 | 9 | 13 | 10 | |
Income tax expense | (3) | (2) | (1) | (3) | (1) | ||
Net income from discontinued operations | 2 | 8 | 8 | 8 | 10 | 9 | |
Titanium Dioxide And Performance Additives Business | Corporate allocations | Discontinued Operations, Disposed of by Means Other than Sale | |||||||
Revenues: | |||||||
Selling, general, and administrative (includes corporate allocations of $7, $6 and $8, respectively) | $ 0 | $ 2 | $ 1 | $ 5 | $ 7 | $ 6 | $ 8 |
LOSSES PER SHARE (Details)
LOSSES PER SHARE (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Basic and diluted income (loss) from continuing operations: | |||||||
Income (loss) from continuing operations attributable to Venator | $ 51 | $ (7) | $ 58 | $ (89) | $ (95) | $ (369) | $ (173) |
Basic and diluted net income (loss): | |||||||
Net income (loss) attributable to Venator | $ 51 | $ (5) | $ 66 | $ (81) | $ (87) | $ (359) | $ (164) |
Denominator: | |||||||
Weighted average shares outstanding | 106.3 | 106.3 | 106.3 | 106.3 | 106.3 | 106.3 | 106.3 |
Dilutive shares: | |||||||
Total weighted average shares outstanding, including dilutive shares | 106.6 | 106.3 | 106.6 | 106.3 | 106.3 | 106.3 | 106.3 |
Schedule II - Valuation and 157
Schedule II - Valuation and Qualifying Accounts (Details) - Allowance for doubtful accounts - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule II - Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | $ 4 | $ 4 | $ 7 |
Charges (credits) to cost and expenses | 0 | 0 | 0 |
Charged to other accounts | 0 | 0 | (3) |
Deductions | 0 | 0 | 0 |
Balance at End of Period | $ 4 | $ 4 | $ 4 |