Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 16, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Venator Materials PLC | |
Entity Central Index Key | 1,705,682 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 106,271,712 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS $ in Thousands | Jun. 30, 2017USD ($) |
Current assets: | |
Cash and cash equivalents | $ 20 |
Total current assets | 20 |
Total assets | 20 |
Current liabilities: | |
Accounts payable to affiliates | 20 |
Total current liabilities | 20 |
Total liabilities | 20 |
Equity | |
Shares receivable from Huntsman International | (128) |
Total liabilities and equity | 20 |
Subscriber Shares | |
Equity | |
Subscriber shares | 64 |
Redeemable shares | |
Equity | |
Redeemable shares ($1.28 par value per share, 50,000 shares authorized and subscribed) | $ 64 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Jun. 30, 2017$ / sharesshares | Jun. 30, 2017£ / sharesshares |
Common shares, par value per share | $ / shares | $ 1 | |
Ordinary share, authorized | 1 | 1 |
Ordinary share, subscribed | 1 | 1 |
Subscriber Shares | ||
Common shares, par value per share | (per share) | $ 1.28 | |
Ordinary share, authorized | 50,000 | 50,000 |
Ordinary share, subscribed | 50,000 | 50,000 |
Redeemable shares | ||
Redeemable shares, par value per share | (per share) | $ 1.28 | £ 1 |
Redeemable shares, authorized | 50,000 | 50,000 |
Redeemable shares, subscribed | 50,000 | 50,000 |
BACKGROUND AND BASIS OF PRESENT
BACKGROUND AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2017 | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | |
BACKGROUND AND BASIS OF PRESENTATION | NOTE 1. BACKGROUND AND BASIS OF PRESENTATION Background Venator Materials PLC (the “Company”), a company incorporated in the United Kingdom, was formed on April 28, 2017 and has a single wholly-owned subsidiary, Venator Finance S. à .r.l. Upon our formation, we issued 50,000 of our ordinary shares, par value £1 per share (the "Subscriber Shares"), to Huntsman International (Netherlands) B.V., an indirect wholly-owned subsidiary of Huntsman International LLC (“Huntsman”). On June 30, 2017, (a) Huntsman International (Netherlands) B.V. transferred the Subscriber Shares to Huntsman, and (b) we issued 50,000 redeemable shares, par value £1 per share, and one ordinary share, par value $1 per share, to Huntsman International, all of which (including the Subscriber Shares) were repurchased by us prior to the consummation of our initial public offering (“IPO”). These amounts are reflected in the accompanying consolidated balance sheet as a reduction of equity. Basis of Presentation The accompanying consolidated balance sheet of the Company is prepared in conformity with accounting principles generally accepted in the United States of America. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 2. SUBSEQUENT EVENTS Initial Public Offering On August 8, 2017, we completed our IPO of 26,105,000 ordinary shares, par value $0.001 per share (the “Ordinary Shares”), 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.” In conjunction with the IPO, the Company assumed the Titanium Dioxide and Performance Additives businesses of Huntsman and the related assets, liabilities and obligations and operations. After the IPO, the Company operates in two segments, Titanium Dioxide and Performance Additives. Following the IPO, Huntsman owns approximately 75% of Venator’s outstanding Ordinary Shares. The material terms of the IPO are described in the Prospectus. Senior Credit Facilities and Senior Notes On August 8, 2017, in connection with the IPO and our separation from Huntsman, 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 the IPO and the Separation, our subsidiary Venator Finance S.à.r.l. along with Venator Materials LLC, a related party, issued $375,000,000 in aggregate principal amount of 5.75% of Senior Notes due 2025 (the “Senior Notes”). Venator Materials PLC evaluated subsequent events through August 28, 2017, the date this balance sheet was available to be issued. |
BACKGROUND AND BASIS OF PRESEN6
BACKGROUND AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | Basis of Presentation The accompanying consolidated balance sheet of the Company is prepared in conformity with accounting principles generally accepted in the United States of America. |
BACKGROUND AND BASIS OF PRESEN7
BACKGROUND AND BASIS OF PRESENTATION (Details) | Jun. 30, 2017$ / sharesshares | Jun. 30, 2017£ / sharesshares | Apr. 28, 2017£ / sharesshares |
GENERAL | |||
Shares, issued | 1 | 1 | |
Common shares, par value per share | $ / shares | $ 1 | ||
Subscriber Shares | |||
GENERAL | |||
Shares, issued | 50,000 | ||
Common shares, par value per share | (per share) | $ 1.28 | £ 1 | |
Redeemable shares | |||
GENERAL | |||
Redeemable shares, issued | 50,000 | 50,000 | |
Redeemable shares, par value per share | (per share) | $ 1.28 | £ 1 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Aug. 08, 2017USD ($)segment$ / sharesshares | Jul. 14, 2017USD ($) | Jun. 30, 2017$ / shares |
Subsequent events | |||
Par value | $ / shares | $ 1 | ||
Subsequent Event | |||
Subsequent events | |||
Number of reportable segments | segment | 2 | ||
Subsequent Event | Huntsman | |||
Subsequent events | |||
Ownership percentage | 75.00% | ||
Subsequent Event | Term Loan Facility | |||
Subsequent events | |||
Aggregate principal amount | $ | $ 375,000,000 | ||
Maturity term | 7 years | ||
Subsequent Event | Asset Based Revolving Credit Facility | |||
Subsequent events | |||
Aggregate principal amount | $ | $ 300,000,000 | ||
Maturity term | 5 years | ||
Subsequent Event | Senior notes | |||
Subsequent events | |||
Aggregate principal amount | $ | $ 375,000,000 | ||
Interest rate (as a percent) | 5.75% | ||
Initial public offering | Subsequent Event | |||
Subsequent events | |||
Number of shares issued | shares | 26,105,000 | ||
Par value | $ / shares | $ 0.001 | ||
Over allotment | Subsequent Event | |||
Subsequent events | |||
Number of shares issued | shares | 3,405,000 | ||
Share price | $ / shares | $ 20 |
CONDENSED COMBINED BALANCE SHEE
CONDENSED COMBINED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | |
Current assets: | |||
Cash and cash equivalents(a) | $ 20 | ||
Total current assets | 20 | ||
Total assets | 20 | ||
Current liabilities: | |||
Accounts payable to affiliates | 20 | ||
Total current liabilities | 20 | ||
Total liabilities | 20 | ||
Equity | |||
Total liabilities and equity | 20 | ||
Combined Divisions of Huntsman | |||
Current assets: | |||
Cash and cash equivalents(a) | [1] | 34,000 | $ 29,000 |
Accounts receivable (net of allowance for doubtful accounts of $4 each)(a) | [1] | 402,000 | 247,000 |
Accounts receivable from affiliates | 200,000 | 243,000 | |
Inventories(a) | [1] | 431,000 | 426,000 |
Prepaid expenses | 9,000 | 11,000 | |
Other current assets | 68,000 | 59,000 | |
Current assets of discontinued operations | 84,000 | ||
Total current assets | 1,144,000 | 1,099,000 | |
Property, plant and equipment, net(a) | [1] | 1,189,000 | 1,178,000 |
Intangible assets, net(a) | [1] | 22,000 | 23,000 |
Investment in unconsolidated affiliates | 72,000 | 85,000 | |
Deferred income taxes | 157,000 | 142,000 | |
Notes receivable from affiliates | 57,000 | 57,000 | |
Other noncurrent assets | 36,000 | 35,000 | |
Noncurrent assets of discontinued operations | 42,000 | ||
Total assets | 2,677,000 | 2,661,000 | |
Current liabilities: | |||
Accounts payable(a) | [1] | 292,000 | 297,000 |
Accounts payable to affiliates | 629,000 | 695,000 | |
Accrued liabilities(a) | [1] | 211,000 | 146,000 |
Current portion of debt(a) | [1] | 3,000 | 10,000 |
Current liabilities of discontinued operations | 27,000 | ||
Total current liabilities | 1,135,000 | 1,175,000 | |
Long-term debt | 11,000 | 13,000 | |
Long-term debt to affiliates | 90,000 | 882,000 | |
Deferred income taxes | 10,000 | 12,000 | |
Other noncurrent liabilities | 326,000 | 324,000 | |
Noncurrent liabilities discontinued operations | 78,000 | ||
Total liabilities | 1,572,000 | 2,484,000 | |
Commitments and contingencies (Notes 10 and 11) | |||
Equity | |||
Parent's net investment and advances | 1,410,000 | 588,000 | |
Accumulated other comprehensive loss | (316,000) | (423,000) | |
Venator equity | 1,094,000 | 165,000 | |
Noncontrolling interest in subsidiaries | 11,000 | 12,000 | |
Total equity | 1,105,000 | 177,000 | |
Total liabilities and equity | $ 2,677,000 | $ 2,661,000 | |
[1] | At June 30, 2017 and December 31, 2016, respectively, $5 and $4 of cash and cash equivalents, $6 each of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $19 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 5. Variable Interest Entities." |
CONDENSED COMBINED BALANCE SH10
CONDENSED COMBINED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | |
Variable Interest Entity | |||
Cash and cash equivalents | $ 20 | ||
Combined Divisions of Huntsman | |||
Accounts and notes receivable, allowance for doubtful accounts (in dollars) | 4,000 | $ 4,000 | |
Variable Interest Entity | |||
Cash and cash equivalents | [1] | 34,000 | 29,000 |
Accounts receivable, net | [1] | 402,000 | 247,000 |
Inventories | [1] | 431,000 | 426,000 |
Property, plant and equipment (net) | [1] | 1,189,000 | 1,178,000 |
Intangible assets, net | [1] | 22,000 | 23,000 |
Accounts payable | [1] | 292,000 | 297,000 |
Accrued liabilities | [1] | 211,000 | 146,000 |
Current portion of debt | [1] | 3,000 | 10,000 |
Combined Divisions of Huntsman | Consolidated VIE's | |||
Variable Interest Entity | |||
Cash and cash equivalents | 5,000 | 4,000 | |
Accounts receivable, net | 6,000 | 6,000 | |
Inventories | 1,000 | 1,000 | |
Property, plant and equipment (net) | 4,000 | 4,000 | |
Intangible assets, net | 19,000 | 20,000 | |
Accounts payable | 1,000 | 1,000 | |
Accrued liabilities | 3,000 | 4,000 | |
Current portion of debt | $ 2,000 | $ 2,000 | |
[1] | At June 30, 2017 and December 31, 2016, respectively, $5 and $4 of cash and cash equivalents, $6 each of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $19 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 5. Variable Interest Entities." |
CONDENSED COMBINED STATEMENTS O
CONDENSED COMBINED STATEMENTS OF OPERATIONS - Combined Divisions of Huntsman - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Trade sales, services and fees, net | $ 562 | $ 576 | $ 1,099 | $ 1,116 |
Cost of goods sold | 479 | 543 | 942 | 1,056 |
Operating expenses: | ||||
Selling, general and administrative (includes corporate allocations of $28, $28, $52 and $49 respectively) | 57 | 60 | 108 | 113 |
Restructuring, impairment and plant closing costs | 7 | 13 | 33 | 24 |
Other income, net | (40) | (18) | (30) | (11) |
Total expenses | 24 | 55 | 111 | 126 |
Operating income (loss) | 59 | (22) | 46 | (66) |
Interest expense | (10) | (16) | (24) | (30) |
Interest income | 1 | 7 | 3 | 11 |
Other income | 1 | 1 | ||
Income (loss) from continuing operations before income taxes | 50 | (30) | 25 | (84) |
Income tax (expense) benefit | (16) | 6 | (12) | 7 |
Income (loss) from continuing operations | 34 | (24) | 13 | (77) |
Income from discontinued operations, net of tax | 1 | 8 | 6 | |
Net income (loss) | 34 | (23) | 21 | (71) |
Net income attributable to noncontrolling interests | (3) | (3) | (6) | (5) |
Net income (loss) attributable to Venator | $ 31 | $ (26) | $ 15 | $ (76) |
CONDENSED COMBINED STATEMENTS12
CONDENSED COMBINED STATEMENTS OF OPERATIONS (Parenthetical) - Combined Divisions of Huntsman - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Selling, General and Administrative Expense | $ 57 | $ 60 | $ 108 | $ 113 |
Corporate allocations | ||||
Selling, General and Administrative Expense | $ 28 | $ 26 | $ 52 | $ 49 |
CONDENSED COMBINED STATEMENTS13
CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - Combined Divisions of Huntsman - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net income (loss) | $ 34 | $ (23) | $ 21 | $ (71) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | 74 | (14) | 79 | (61) |
Pension and other postretirement benefits adjustments | 24 | 4 | 28 | 12 |
Other comprehensive income (loss), net of tax: | 98 | (10) | 107 | (49) |
Comprehensive income (loss) | 132 | (33) | 128 | (120) |
Comprehensive income attributable to noncontrolling interest | (3) | (3) | (6) | (5) |
Comprehensive income (loss) attributable to Venator | $ 129 | $ (36) | $ 122 | $ (125) |
CONDENSED COMBINED STATEMENTS14
CONDENSED COMBINED STATEMENTS OF EQUITY - Combined Divisions of Huntsman - 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, 2015 | $ 1,112 | $ (401) | $ 17 | $ 728 |
Increase (Decrease) in Stockholders' Equity | ||||
Net (loss) income | (76) | 5 | (71) | |
Net changes in other comprehensive income (loss) | (49) | (49) | ||
Dividends paid to noncontrolling interests | (8) | (8) | ||
Net changes in parent's net investment and advances | (316) | (1) | (317) | |
Balance at the end of the period at Jun. 30, 2016 | 720 | (450) | 13 | 283 |
Balance at the beginning of the period at Dec. 31, 2016 | 588 | (423) | 12 | 177 |
Increase (Decrease) in Stockholders' Equity | ||||
Net (loss) income | 15 | 6 | 21 | |
Net changes in other comprehensive income (loss) | 107 | 107 | ||
Dividends paid to noncontrolling interests | (6) | (6) | ||
Net changes in parent's net investment and advances | 807 | (1) | 806 | |
Balance at the end of the period at Jun. 30, 2017 | $ 1,410 | $ (316) | $ 11 | $ 1,105 |
CONDENSED COMBINED STATEMENTS15
CONDENSED COMBINED STATEMENTS OF CASH FLOWS - Combined Divisions of Huntsman - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Activities: | ||
Net income (loss) | $ 21 | $ (71) |
Income from discontinued operations, net of tax | (8) | (6) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 59 | 54 |
Deferred income taxes | 1 | (11) |
Noncash restructuring charges | 6 | 8 |
Noncash interest | 20 | 21 |
Noncash loss on foreign currency transactions | 6 | 2 |
Insurance proceeds for business interruption, net of gain on recovery | 28 | |
Other, net | 4 | 4 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (156) | (22) |
Inventories | 12 | 101 |
Prepaid expenses | 2 | 2 |
Other current assets | (4) | 2 |
Other noncurrent assets | 2 | (5) |
Accounts payable | (7) | (26) |
Accrued liabilities | (24) | |
Other noncurrent liabilities | (16) | (4) |
Net cash (used in) provided by operating activities from continuing operations | (30) | 25 |
Net cash provided by operating activities from discontinued operations | 1 | 8 |
Net cash (used in) provided by operating activities | (29) | 33 |
Investing Activities: | ||
Capital expenditures | (40) | (57) |
Insurance proceeds for recovery of property damage | 50 | |
Net advances to affiliates | 91 | 84 |
Repayment of government grant | (5) | |
Cash received from unconsolidated affiliates | 27 | 19 |
Investment in unconsolidated affiliates | (19) | (13) |
Net cash provided by investing activities from continuing operations | 104 | 33 |
Net cash used in investing activities from discontinued operations | (1) | (4) |
Net cash provided by investing activities | 103 | 29 |
Financing Activities: | ||
Repayments of long-term debt | (5) | |
Net repayments on affiliate accounts payable | (60) | (47) |
Dividends paid to noncontrolling interest | (6) | (8) |
Net cash used in financing activities from continuing operations | (71) | (55) |
Net cash used in financing activities from discontinued operations | (2) | |
Net cash used in financing activities | (71) | (57) |
Effect of exchange rate changes on cash | 1 | |
Net change in cash and cash equivalents | 4 | 5 |
Cash and cash equivalents at beginning of period, including discontinued operations | 30 | 22 |
Cash and cash equivalents at end of period, including discontinued operations | 34 | 27 |
Supplemental cash flow information: | ||
Cash paid for interest | 2 | 2 |
Cash paid for income taxes | 4 | 3 |
Supplemental disclosure of noncash activities: | ||
Capital expenditures included in accounts payable | 9 | 11 |
Received settlements of notes receivable from affiliates | 229 | |
Settled long-term debt to affiliates | $ 792 | $ 15 |
GENERAL, DESCRIPTION OF BUSINES
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2017 | |
GENERAL | |
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION | NOTE 1. BACKGROUND AND BASIS OF PRESENTATION Background Venator Materials PLC (the “Company”), a company incorporated in the United Kingdom, was formed on April 28, 2017 and has a single wholly-owned subsidiary, Venator Finance S. à .r.l. Upon our formation, we issued 50,000 of our ordinary shares, par value £1 per share (the "Subscriber Shares"), to Huntsman International (Netherlands) B.V., an indirect wholly-owned subsidiary of Huntsman International LLC (“Huntsman”). On June 30, 2017, (a) Huntsman International (Netherlands) B.V. transferred the Subscriber Shares to Huntsman, and (b) we issued 50,000 redeemable shares, par value £1 per share, and one ordinary share, par value $1 per share, to Huntsman International, all of which (including the Subscriber Shares) were repurchased by us prior to the consummation of our initial public offering (“IPO”). These amounts are reflected in the accompanying consolidated balance sheet as a reduction of equity. Basis of Presentation The accompanying consolidated balance sheet of the Company is prepared in conformity with accounting principles generally accepted in the United States of America. |
Combined Divisions of Huntsman | |
GENERAL | |
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 and assume the completion of the Separation (defined below), (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 TiO2 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 combined financial statements, (6) all references to "Huntsman International" refer to Huntsman International LLC, a wholly-owned subsidiary of Huntsman, a shareholder 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, 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 (defined below) and Senior Notes (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 TiO2 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 initial public offering (the “IPO”) of 26,105,000 ordinary shares, par value $0.001 per share (the “Ordinary Shares”), 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 the IPO, Huntsman owns approximately 75% of Venator’s outstanding Ordinary Shares. The material terms of the IPO are described in the Prospectus. In connection with the 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. Senior Credit Facilities and Senior Notes On August 8, 2017, in connection with the 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 the IPO and the Separation, our subsidiaries Venator Finance S.à.r.l. and Venator Materials LLC, issued $375,000,000 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 intercompany debt owed to Huntsman and to pay related fees and expenses. See “Note 7. Related Party Financing” for further discussion of our debt owed to Huntsman. Pori Fire On January 30, 2017, our TiO 2 manufacturing facility in Pori, Finland experienced fire damage and it is currently not fully operational. We are committed to repairing the facility as quickly as possible and a portion of our white end production became operational during the second quarter of 2017. During the first half of 2017, we recorded a loss of $32 million for the write-off of fixed assets and lost inventory in other operating income, net in our condensed combined statements of operations. In addition, we recorded a loss of $15 million of costs for cleanup of the facility in other operating income, net through June 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. The fire at our Pori facility did not have a material impact on our 2017 second quarter operating results as losses incurred were offset by insurance proceeds. On February 9, 2017 and May 2, 2017, we received $54 million and $76 million, respectively, as partial progress payments from our insurer. During the first six months of 2017, we recorded $84 million of income related to property damage and business interruption insurance recoveries in other operating income, net in our condensed combined statements of operations to offset property damage and business interruption losses recorded during the period. In addition, we recorded $46 million as deferred income in accrued liabilities as of June 30, 2017 for insurance proceeds received for costs not yet incurred. On July 10, 2017, we received an additional progress payment of $11 million from our insurer. Basis of Presentation Venator’s unaudited condensed 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 combined financial statements should be read in conjunction with the audited combined financial statements and notes to combined financial statements included in the Prospectus. 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 the Titanium Dioxide and Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives businesses are the primary beneficiaries. The unaudited condensed 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 have been considered to be effectively settled for cash in the condensed 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 condensed combined statements of cash flows as a financing activity. Because the historical condensed combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical condensed 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. See “Note 3. Discontinued Operations” for further discussion of discontinued operations. In addition, the unaudited condensed combined financial statements have been prepared from Huntsman’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 condensed 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 unaudited condensed combined financial statements, all significant transactions with Huntsman International have been included in group equity. All intercompany transactions within the combined business have been eliminated. Huntsman’s executive, information technology, EHS and certain other corporate departments perform certain administrative and other services for Venator. Additionally, Huntsman performs certain site services for Venator. Expenses incurred by Huntsman 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. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $28 million and $26 million for the three months ended June 30, 2017 and 2016, respectively, and $52 million and $49 million for the six months ended June 30, 2017 and 2016, respectively. |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements Adopted During 2017 In July 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. We adopted the amendments in this ASU effective January 1, 2017, and the initial adoption of the amendment in this ASU did not have a significant impact on our condensed combined financial statements. 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 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 condensed combined 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 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 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 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. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
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 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 condensed combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical condensed 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 Six months ended June 30, June 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Trade sales, services and fees, net $ — $ 29 $ 15 $ 55 Related party sales — 17 17 36 Total revenues — 46 32 91 Cost of goods sold — 38 26 74 Operating expenses: Selling, general and administrative (includes corporate allocations of nil, $2, $2 and $3, respectively) — 6 (7) 10 Restructuring, impairment and plant closing costs — — 1 — Other (income) expense, net — (1) 1 (1) Total expenses (income) — 5 (5) 9 Income from discontinued operations before tax — 3 11 8 Income tax expense — (2) (3) (2) Net income from discontinued operations $ — $ 1 $ 8 $ 6 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
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 June 30, 2017 and December 31, 2016 consisted of the following: June 30, December 31, (Dollars in millions) 2017 2016 Raw materials and supplies $ 154 $ 134 Work in process 46 46 Finished goods 231 246 Total $ 431 $ 426 |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
Identification of variable interest entities through investments and transactions | |
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 June 30, 2017, the joint ventures’ assets, liabilities and results of operations are included in Venator’s condensed 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 six months ended June 30, 2017 and 2016 are as follows: Three months ended Six months ended June 30, June 30, (Dollars in millions) 2017 2016 2017 2016 Revenues $ 32 $ 30 $ 66 $ 59 Income from continuing operations before income taxes 5 6 12 10 Net cash provided by operating activities 7 5 14 12 |
RESTRUCTURING, IMPAIRMENT AND P
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
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 June 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 19 8 27 2017 payments (8) (8) (16) Foreign currency effect on liability balance 1 — 1 Accrued liabilities as of June 30, 2017 $ 33 $ — $ 33 (1) The total workforce reduction reserves of $33 million relate to the termination of 335 positions, of which zero positions had been terminated as of June 30, 2017. (2) Accrued liabilities remaining at June 30, 2017 and December 31, 2016 by year of initiatives were as follows: June 30, December 31, (Dollars in millions) 2017 2016 2015 initiatives and prior $ 14 $ 21 2016 initiatives — — 2017 initiatives 19 — Total $ 33 $ 21 Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative: Titanium Performance Discontinued (Dollars in millions) Dioxide Additives Operations Total Accrued liabilities as of December 31, 2016 $ 12 $ 9 $ 1 $ 21 2017 charges 21 6 — 27 2017 payments (10) (6) — (16) Net activity due to discontinued operations — — (1) — Foreign currency effect on liability balance 1 — — 1 Accrued liabilities as of June 30, 2017 $ 24 $ 9 $ — $ 33 Current portion of restructuring reserves $ 20 $ 9 $ — $ 29 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 six months ended June 30, 2017 and 2016 by initiative are provided below: Three months ended Six months ended (Dollars in millions) June 30, 2017 June 30, 2017 Cash charges $ 4 $ 27 Impairment of assets 3 3 Other noncash charges — 3 Total 2017 Restructuring, Impairment and Plant Closing Costs $ 7 $ 33 Three months ended Six months ended (Dollars in millions) June 30, 2016 June 30, 2016 Cash charges $ 10 $ 16 Accelerated depreciation 3 7 Other noncash charges — 1 Total 2016 Restructuring, Impairment and Plant Closing Costs $ 13 $ 24 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 $1 million and $4 million for the three and six months ended June 30, 2016, respectively. We expect to incur additional charges of approximately $6 million through the end of 2017. 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 six months ended June 30, 2016, respectively. All expected charges have been incurred as of the end of 2016. In March 2015, we implemented a restructuring program in our color pigments business. In connection with this restructuring, we recorded restructuring expenses of approximately $2 million and $5 million in the three months ended June 30, 2017 and 2016, respectively, and $5 million and $8 million in the six months ended June 30, 2017 and 2016, respectively. We expect to incur additional charges of approximately $2 million through the end of 2017. 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 $2 million for the three and six months ended June 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 nil and $22 million in the three and six months ended June 30, 2017, respectively. We recorded $3 million and $7 million of accelerated depreciation on the remaining long-lived assets associated with this manufacturing facility during the three and six months ended June 30, 2016, respectively. We expect to incur additional charges of approximately $41 million through the end of 2021. |
RELATED PARTY FINANCING
RELATED PARTY FINANCING | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
RELATED PARTY FINANCING | |
RELATED PARTY FINANCING | NOTE 7. RELATED PARTY FINANCING As of June 30, 2017, and prior to the Separation, Venator received financing from Huntsman through participation in a cash pooling program and through long-term financing. Following the Separation, Venator has not received any funding through the Huntsman cash pooling program. All Huntsman receivables or payables were eliminated in connection with the Separation, other than a payable to Huntsman for certain post-Separation adjustments relating to, among other things, cash held by Venator and Pori insurance proceeds. Cash Pooling Program Venator has historically 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 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. Notes Receivable and Payable of Venator to Huntsman As of June 30, 2017 and December 31, 2016, Venator had notes receivable outstanding from affiliates of $57 million each, and notes payable outstanding to affiliates totaling $90 million and $882 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 determined from time to time by Huntsman International. As of June 30, 2017, the average interest rate on notes receivable and notes payable was 4%. All Huntsman receivables or payables were eliminated in connection with the Separation, other than a payable to Huntsman for certain post-Separation adjustments relating to, among other things, cash held by Venator and Pori insurance proceeds. 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 June 30, 2017 and 2016 were nil and $1 million, respectively, and for the six months ended June 30, 2017 and 2016 were $1 million and $3 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. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
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. Prior to the Separation, from time to time, Huntsman International, or its subsidiaries, on behalf of Venator, entered into foreign currency derivative instruments to minimize the short-term impact of movements in foreign currency rates. Where practicable, Venator generally netted 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 June 30, 2017 and December 31, 2016, Huntsman International or its subsidiaries, on behalf of Venator, had approximately $70 million and $88 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 | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
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 $16 million and income tax benefit of $6 million for the three months ended June 30, 2017 and 2016, respectively, and income tax expense of $12 million and income tax benefit of $7 million for the six months ended June 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. To the extent any such gain is recognized, the basis of the assets associated with our U.S. businesses will be increased. This basis step up will give rise to a deferred tax asset that may be subject to a valuation allowance. 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 $83 million. The actual amount of any gain recognized and any corresponding basis increase will not be known until the filing of the tax returns for 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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
LEGAL MATTERS | |
COMMITMENTS AND CONTINGENCIES | NOTE 10. COMMITMENTS AND CONTINGENCIES 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 outstanding notes. As of June 30, 2017 and December 31, 2016, Huntsman International and its guarantors had third-party debt outstanding of $3,746 million and $3,793 million, respectively. As of June 30, 2017 and December 31, 2016, our U.S. operations and certain of our foreign subsidiaries had total assets, excluding intercompany amounts, of $462 million and $502 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 TiO 2 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 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 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 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 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 and the court dismissed the case on May 31, 2017 for an amount immaterial to our condensed combined financial statements. 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 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 | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
Environmental, Health, and Safety Matters | |
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | NOTE 11. 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 six months ended June 30, 2017 and 2016, our capital expenditures for EHS matters totaled $3 million and $6 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 June 30, 2017 and December 31, 2016, we had environmental reserves of $13 million and $12 million, respectively. 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. |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
OTHER COMPREHENSIVE INCOME (LOSS) | |
OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 12. 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 72 — — 72 — 72 Tax benefit 2 — — 2 — 2 Amounts reclassified from accumulated other comprehensive loss, gross(c) — 7 — 7 — 7 Tax expense — — — — — — Net current-period other comprehensive income 79 28 — 107 — 107 Ending balance, June 30, 2017 $ (33) $ (278) $ (5) $ (316) $ — $ (316) 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 1 1 — 2 — 2 Tax expense — — — — — — Other comprehensive (loss) income before reclassifications (62) 6 — (56) — (56) Tax expense — (1) — (1) — (1) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 5 — 5 — 5 Tax benefit — 1 — 1 — 1 Net current-period other comprehensive (loss) income (61) 12 — (49) — (49) Ending balance, June 30, 2016 $ (205) $ (240) $ (5) $ (450) $ — $ (450) (a) Amounts are net of tax of $2 million and nil as of June 30, 2017 and January 1, 2017, respectively. (b) Amounts are net of tax of $53 million and $56 million as of June 30, 2017 and January 1, 2017, respectively. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts are net of tax of nil as of June 30, 2016 and January 1, 2016, each. (e) Amounts are net of tax of $60 million at June 30, 2016 and January 1, 2016, each. Three months ended Six months ended June 30, June 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 $ 4 $ 3 $ 8 $ 5 (b) Prior service credit (1) — (1) — (b) Total amortization 3 3 7 5 Total before tax Income tax benefit — 1 — 1 Income tax (expense) benefit Total reclassifications for the period $ 3 $ 4 $ 7 $ 6 Net of tax (a) Pension and other postretirement benefit amounts in parentheses indicate credits on our combined statements of operations. (b) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. |
OPERATING SEGMENT INFORMATION
OPERATING SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
OPERATING SEGMENT INFORMATION | |
OPERATING SEGMENT INFORMATION | NOTE 13. 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 Six months ended June 30, June 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Titanium Dioxide $ 401 $ 413 $ 786 $ 805 Performance Additives 161 163 313 311 Total $ 562 $ 576 $ 1,099 $ 1,116 Segment Adjusted EBITDA(1) Titanium Dioxide $ 93 $ 9 $ 141 $ 6 Performance Additives 21 22 42 40 114 31 183 46 Corporate and other (20) (14) (40) (30) Total $ 94 $ 17 $ 143 $ 16 Reconciliation of adjusted EBITDA to net income (loss): Interest expense (10) (16) (24) (30) Interest income 1 7 3 11 Income tax (expense) benefit - continuing operations (16) 6 (12) 7 Depreciation and amortization (29) (30) (59) (54) Net income attributable to noncontrolling interests 3 3 6 5 Other adjustments: Business acquisition and integration expenses — (2) — (8) Net income of discontinued operations, net of tax — 1 8 6 Certain legal settlements and related expenses — — — (1) Amortization of pension and postretirement actuarial losses (4) (3) (8) (5) Net plant incident credits (costs) 2 7 (3) 6 Restructuring, impairment and plant closing costs (7) (13) (33) (24) Net income (loss) $ 34 $ (23) $ 21 $ (71) (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) Net income of discontinued operations, net of income tax; (c) certain legal settlements and related expenses; (d) amortization of pension and postretirement actuarial losses; (e) net plant incident credits (costs); and (f) restructuring, impairment and plant closing costs. |
GENERAL, DESCRIPTION OF BUSIN29
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
GENERAL | |
BASIS OF PRESENTATION | Basis of Presentation The accompanying consolidated balance sheet of the Company is prepared in conformity with accounting principles generally accepted in the United States of America. |
Combined Divisions of Huntsman | |
GENERAL | |
BASIS OF PRESENTATION | Basis of Presentation Venator’s unaudited condensed 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 combined financial statements should be read in conjunction with the audited combined financial statements and notes to combined financial statements included in the Prospectus. 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 the Titanium Dioxide and Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives businesses are the primary beneficiaries. The unaudited condensed 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 have been considered to be effectively settled for cash in the condensed 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 condensed combined statements of cash flows as a financing activity. Because the historical condensed combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical condensed 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. See “Note 3. Discontinued Operations” for further discussion of discontinued operations. In addition, the unaudited condensed combined financial statements have been prepared from Huntsman’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 condensed 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 unaudited condensed combined financial statements, all significant transactions with Huntsman International have been included in group equity. All intercompany transactions within the combined business have been eliminated. Huntsman’s executive, information technology, EHS and certain other corporate departments perform certain administrative and other services for Venator. Additionally, Huntsman performs certain site services for Venator. Expenses incurred by Huntsman 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. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $28 million and $26 million for the three months ended June 30, 2017 and 2016, respectively, and $52 million and $49 million for the six months ended June 30, 2017 and 2016, respectively. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
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 Six months ended June 30, June 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Trade sales, services and fees, net $ — $ 29 $ 15 $ 55 Related party sales — 17 17 36 Total revenues — 46 32 91 Cost of goods sold — 38 26 74 Operating expenses: Selling, general and administrative (includes corporate allocations of nil, $2, $2 and $3, respectively) — 6 (7) 10 Restructuring, impairment and plant closing costs — — 1 — Other (income) expense, net — (1) 1 (1) Total expenses (income) — 5 (5) 9 Income from discontinued operations before tax — 3 11 8 Income tax expense — (2) (3) (2) Net income from discontinued operations $ — $ 1 $ 8 $ 6 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
INVENTORIES | |
Schedule of components of inventory | June 30, December 31, (Dollars in millions) 2017 2016 Raw materials and supplies $ 154 $ 134 Work in process 46 46 Finished goods 231 246 Total $ 431 $ 426 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
Identification of variable interest entities through investments and transactions | |
Schedule of financial information of VIE's | Three months ended Six months ended June 30, June 30, (Dollars in millions) 2017 2016 2017 2016 Revenues $ 32 $ 30 $ 66 $ 59 Income from continuing operations before income taxes 5 6 12 10 Net cash provided by operating activities 7 5 14 12 |
RESTRUCTURING, IMPAIRMENT AND33
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Tables) - Combined Divisions of Huntsman | 6 Months Ended |
Jun. 30, 2017 | |
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 19 8 27 2017 payments (8) (8) (16) Foreign currency effect on liability balance 1 — 1 Accrued liabilities as of June 30, 2017 $ 33 $ — $ 33 (1) The total workforce reduction reserves of $33 million relate to the termination of 335 positions, of which zero positions had been terminated as of June 30, 2017. (2) Accrued liabilities remaining at June 30, 2017 and December 31, 2016 by year of initiatives were as follows: June 30, December 31, (Dollars in millions) 2017 2016 2015 initiatives and prior $ 14 $ 21 2016 initiatives — — 2017 initiatives 19 — Total $ 33 $ 21 |
Schedule of accrued liabilities by year of initiatives | June 30, December 31, (Dollars in millions) 2017 2016 2015 initiatives and prior $ 14 $ 21 2016 initiatives — — 2017 initiatives 19 — Total $ 33 $ 21 |
Schedule of details with respect to reserves for restructuring, impairment and plant closing costs, provided by segment and initiative | Titanium Performance Discontinued (Dollars in millions) Dioxide Additives Operations Total Accrued liabilities as of December 31, 2016 $ 12 $ 9 $ 1 $ 21 2017 charges 21 6 — 27 2017 payments (10) (6) — (16) Net activity due to discontinued operations — — (1) — Foreign currency effect on liability balance 1 — — 1 Accrued liabilities as of June 30, 2017 $ 24 $ 9 $ — $ 33 Current portion of restructuring reserves $ 20 $ 9 $ — $ 29 Long-term portion of restructuring reserve 4 — — 4 |
Schedule of cash and noncash restructuring charges by initiative | Three months ended Six months ended (Dollars in millions) June 30, 2017 June 30, 2017 Cash charges $ 4 $ 27 Impairment of assets 3 3 Other noncash charges — 3 Total 2017 Restructuring, Impairment and Plant Closing Costs $ 7 $ 33 Three months ended Six months ended (Dollars in millions) June 30, 2016 June 30, 2016 Cash charges $ 10 $ 16 Accelerated depreciation 3 7 Other noncash charges — 1 Total 2016 Restructuring, Impairment and Plant Closing Costs $ 13 $ 24 |
OTHER COMPREHENSIVE INCOME (L34
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) - Combined Divisions of Huntsman | 6 Months Ended |
Jun. 30, 2017 | |
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 72 — — 72 — 72 Tax benefit 2 — — 2 — 2 Amounts reclassified from accumulated other comprehensive loss, gross(c) — 7 — 7 — 7 Tax expense — — — — — — Net current-period other comprehensive income 79 28 — 107 — 107 Ending balance, June 30, 2017 $ (33) $ (278) $ (5) $ (316) $ — $ (316) 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 1 1 — 2 — 2 Tax expense — — — — — — Other comprehensive (loss) income before reclassifications (62) 6 — (56) — (56) Tax expense — (1) — (1) — (1) Amounts reclassified from accumulated other comprehensive loss, gross(c) — 5 — 5 — 5 Tax benefit — 1 — 1 — 1 Net current-period other comprehensive (loss) income (61) 12 — (49) — (49) Ending balance, June 30, 2016 $ (205) $ (240) $ (5) $ (450) $ — $ (450) (a) Amounts are net of tax of $2 million and nil as of June 30, 2017 and January 1, 2017, respectively. (b) Amounts are net of tax of $53 million and $56 million as of June 30, 2017 and January 1, 2017, respectively. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts are net of tax of nil as of June 30, 2016 and January 1, 2016, each. (e) Amounts are net of tax of $60 million at June 30, 2016 and January 1, 2016, each. |
Schedule of details about reclassifications from other comprehensive loss | Three months ended Six months ended June 30, June 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 $ 4 $ 3 $ 8 $ 5 (b) Prior service credit (1) — (1) — (b) Total amortization 3 3 7 5 Total before tax Income tax benefit — 1 — 1 Income tax (expense) benefit Total reclassifications for the period $ 3 $ 4 $ 7 $ 6 Net of tax (a) Pension and other postretirement benefit amounts in parentheses indicate credits on our combined statements of operations. (b) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. |
OPERATING SEGMENT INFORMATION (
OPERATING SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Combined Divisions of Huntsman | |
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 Six months ended June 30, June 30, (Dollars in millions) 2017 2016 2017 2016 Revenues: Titanium Dioxide $ 401 $ 413 $ 786 $ 805 Performance Additives 161 163 313 311 Total $ 562 $ 576 $ 1,099 $ 1,116 Segment Adjusted EBITDA(1) Titanium Dioxide $ 93 $ 9 $ 141 $ 6 Performance Additives 21 22 42 40 114 31 183 46 Corporate and other (20) (14) (40) (30) Total $ 94 $ 17 $ 143 $ 16 Reconciliation of adjusted EBITDA to net income (loss): Interest expense (10) (16) (24) (30) Interest income 1 7 3 11 Income tax (expense) benefit - continuing operations (16) 6 (12) 7 Depreciation and amortization (29) (30) (59) (54) Net income attributable to noncontrolling interests 3 3 6 5 Other adjustments: Business acquisition and integration expenses — (2) — (8) Net income of discontinued operations, net of tax — 1 8 6 Certain legal settlements and related expenses — — — (1) Amortization of pension and postretirement actuarial losses (4) (3) (8) (5) Net plant incident credits (costs) 2 7 (3) 6 Restructuring, impairment and plant closing costs (7) (13) (33) (24) Net income (loss) $ 34 $ (23) $ 21 $ (71) (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) Net income of discontinued operations, net of income tax; (c) certain legal settlements and related expenses; (d) amortization of pension and postretirement actuarial losses; (e) net plant incident credits (costs); and (f) restructuring, impairment and plant closing costs. |
GENERAL, DESCRIPTION OF BUSIN36
GENERAL, DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND BASIS OF PRESENTATION (Details) | Aug. 08, 2017USD ($)segment$ / sharesshares | Jul. 10, 2017USD ($) | May 02, 2017USD ($) | Feb. 09, 2017USD ($) | Jun. 30, 2017USD ($)$ / shares | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)itemsegment$ / shares | Jun. 30, 2016USD ($) | Jul. 14, 2017USD ($) |
GENERAL | |||||||||
Par value | $ / shares | $ 1 | $ 1 | |||||||
Combined Divisions of Huntsman | |||||||||
GENERAL | |||||||||
Number of reportable segments | segment | 2 | ||||||||
Number of titanium dioxide manufacturing facilities | item | 8 | ||||||||
Number of Color Pigments, Functional Additives, Water Treatment And Timber Treatment Manufacturing And Processing Facilities | item | 19 | ||||||||
Selling, general and administrative expenses | $ 57,000,000 | $ 60,000,000 | $ 108,000,000 | $ 113,000,000 | |||||
Corporate allocations | Combined Divisions of Huntsman | |||||||||
GENERAL | |||||||||
Selling, general and administrative expenses | 28,000,000 | $ 26,000,000 | 52,000,000 | $ 49,000,000 | |||||
Fire at titanium manufacturing facility in Pori, Finland | Combined Divisions of Huntsman | |||||||||
GENERAL | |||||||||
Retained deductibles for physical damage due to fire accident | $ 15,000,000 | ||||||||
Retained deductibles for number of business interruption days | 60 days | ||||||||
Aggregate insured limit | $ 500,000,000 | ||||||||
Partial progress payment received from insurer | $ 76,000,000 | $ 54,000,000 | |||||||
Fire at titanium manufacturing facility in Pori, Finland | Accrued Liabilities | Combined Divisions of Huntsman | |||||||||
GENERAL | |||||||||
Deferred income for costs not yet incurred | $ 46,000,000 | 46,000,000 | |||||||
Fire at titanium manufacturing facility in Pori, Finland | Other operating (income) expense, net | Combined Divisions of Huntsman | |||||||||
GENERAL | |||||||||
Loss from write-off of fixed assets and lost inventory | 32,000,000 | ||||||||
Loss due to cleanup costs of facility | 15,000,000 | ||||||||
Partial progress payment received from insurer | $ 84,000,000 | ||||||||
Subsequent Event | |||||||||
GENERAL | |||||||||
Number of reportable segments | segment | 2 | ||||||||
Subsequent Event | Senior notes | |||||||||
GENERAL | |||||||||
Aggregate principal amount | $ 375,000,000 | ||||||||
Interest rate (as a percent) | 5.75% | ||||||||
Subsequent Event | Term Loan Facility | |||||||||
GENERAL | |||||||||
Aggregate principal amount | $ 375,000,000 | ||||||||
Maturity term | 7 years | ||||||||
Subsequent Event | Asset Based Revolving Credit Facility | |||||||||
GENERAL | |||||||||
Aggregate principal amount | $ 300,000,000 | ||||||||
Maturity term | 5 years | ||||||||
Subsequent Event | Combined Divisions of Huntsman | |||||||||
GENERAL | |||||||||
Ownership percentage | 75.00% | ||||||||
Subsequent Event | Combined Divisions of Huntsman | Senior notes | |||||||||
GENERAL | |||||||||
Aggregate principal amount | $ 375,000,000 | ||||||||
Interest rate (as a percent) | 5.75% | ||||||||
Subsequent Event | Combined Divisions of Huntsman | Term Loan Facility | |||||||||
GENERAL | |||||||||
Aggregate principal amount | $ 375,000,000 | ||||||||
Maturity term | 7 years | ||||||||
Subsequent Event | Combined Divisions of Huntsman | Asset Based Revolving Credit Facility | |||||||||
GENERAL | |||||||||
Aggregate principal amount | $ 300,000,000 | ||||||||
Maturity term | 5 years | ||||||||
Subsequent Event | Initial public offering | |||||||||
GENERAL | |||||||||
Number of shares issued | shares | 26,105,000 | ||||||||
Par value | $ / shares | $ 0.001 | ||||||||
Subsequent Event | Initial public offering | Combined Divisions of Huntsman | |||||||||
GENERAL | |||||||||
Number of shares issued | shares | 26,105,000 | ||||||||
Par value | $ / shares | $ 0.001 | ||||||||
Subsequent Event | Over allotment | |||||||||
GENERAL | |||||||||
Number of shares issued | shares | 3,405,000 | ||||||||
Share price | $ / shares | $ 20 | ||||||||
Subsequent Event | Over allotment | Combined Divisions of Huntsman | |||||||||
GENERAL | |||||||||
Number of shares issued | shares | 3,405,000 | ||||||||
Share price | $ / shares | $ 20 | ||||||||
Subsequent Event | Fire at titanium manufacturing facility in Pori, Finland | Combined Divisions of Huntsman | |||||||||
GENERAL | |||||||||
Partial progress payment received from insurer | $ 11,000,000 |
DISCONTINUED OPERATIONS - BALAN
DISCONTINUED OPERATIONS - BALANCE SHEET (Details) - Combined Divisions of Huntsman $ in Millions | Dec. 31, 2016USD ($) |
Current assets: | |
Total current assets of discontinued operations | $ 84 |
Noncurrent assets of discontinued operations | 42 |
Current liabilities: | |
Total current liabilities of discontinued operations | 27 |
Noncurrent liabilities of discontinued operations | 78 |
Titanium Dioxide And Performance Additives Business | Discontinued Operations, Disposed of by Means Other than Sale | |
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 |
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 |
Accounts and notes receivable, allowance for doubtful accounts (in dollars) | $ 1 |
DISCONTINUED OPERATIONS - OPERA
DISCONTINUED OPERATIONS - OPERATIONS DATA (Details) - Combined Divisions of Huntsman - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Net income from discontinued operations | $ 1 | $ 8 | $ 6 | |
Titanium Dioxide And Performance Additives Business | Discontinued Operations, Disposed of by Means Other than Sale | ||||
Revenues: | ||||
Trade sales, services and fees, net | 29 | 15 | 55 | |
Related party sales | 17 | 17 | 36 | |
Total revenues | 46 | 32 | 91 | |
Cost of goods sold | 38 | 26 | 74 | |
Selling, general and administrative (includes corporate allocations of nil, $2, $1 and $1 respectively) | 6 | (7) | 10 | |
Restructuring, impairment and plant closing costs | 1 | |||
Other (income) expense, net | (1) | 1 | (1) | |
Total expenses (income) | 5 | (5) | 9 | |
Income from discontinued operations before tax | 3 | 11 | 8 | |
Income tax expense | (2) | (3) | (2) | |
Net income from discontinued operations | 1 | 8 | 6 | |
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 $1 respectively) | $ 0 | $ 2 | $ 2 | $ 3 |
INVENTORIES (Details)
INVENTORIES (Details) - Combined Divisions of Huntsman - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 | |
Inventories | |||
Raw materials and supplies | $ 154 | $ 134 | |
Work in progress | 46 | 46 | |
Finished goods | 231 | 246 | |
Total | [1] | $ 431 | $ 426 |
[1] | At June 30, 2017 and December 31, 2016, respectively, $5 and $4 of cash and cash equivalents, $6 each of accounts receivable, (net), $1 each of inventories, $4 each of property, plant and equipment, (net), $19 and $20 of intangible assets, (net), $1 each of accounts payable, $3 and $4 of accrued liabilities, and $2 each of current portion of debt, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 5. Variable Interest Entities." |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - Combined Divisions of Huntsman - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities | ||||
Revenues | $ 562 | $ 576 | $ 1,099 | $ 1,116 |
Income from continuing operations before income taxes | 50 | (30) | 25 | (84) |
Net cash provided by operating activities | (29) | 33 | ||
Consolidated VIE's | ||||
Revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities | ||||
Revenues | 32 | 30 | 66 | 59 |
Income from continuing operations before income taxes | 5 | 6 | 12 | 10 |
Net cash provided by operating activities | $ 7 | $ 5 | $ 14 | $ 12 |
Pacific Iron Products | ||||
Identification of variable interest entities through investments and transactions | ||||
Variable interest entity ownership percentage | 50.00% | |||
Viance | ||||
Identification of variable interest entities through investments and transactions | ||||
Variable interest entity ownership percentage | 50.00% |
RESTRUCTURING, IMPAIRMENT AND41
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - ACCRUED RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS BY TYPE OF COST AND INITIATIVE (Details) - Combined Divisions of Huntsman $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($)item | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)item | Jun. 30, 2016USD ($) | |
Accrued restructuring costs roll forward | ||||
Accrued liabilities at the beginning of the period | $ 21 | |||
Restructuring charges | $ 4 | $ 10 | 27 | $ 16 |
Restructuring payments | (16) | |||
Foreign currency effect on liability balance | 1 | |||
Accrued liabilities at the end of the period | $ 33 | $ 33 | ||
Number of positions terminated | item | 335 | |||
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 | |||
Restructuring charges | 19 | |||
Restructuring payments | (8) | |||
Foreign currency effect on liability balance | 1 | |||
Accrued liabilities at the end of the period | $ 33 | 33 | ||
Other restructuring costs | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | 8 | |||
Restructuring payments | $ (8) |
RESTRUCTURING, IMPAIRMENT AND42
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - ACCRUED LIABILITIES BY INITIATIVE (Details) - Combined Divisions of Huntsman - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Accrued liabilities by initiatives | ||
Accrued liabilities | $ 33 | $ 21 |
2015 and prior initiatives | ||
Accrued liabilities by initiatives | ||
Accrued liabilities | 14 | $ 21 |
2017 initiatives | ||
Accrued liabilities by initiatives | ||
Accrued liabilities | $ 19 |
RESTRUCTURING, IMPAIRMENT AND43
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - RESERVES FOR RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Details) - Combined Divisions of Huntsman - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accrued restructuring costs roll forward | ||||
Accrued liabilities at the beginning of the period | $ 21 | |||
Restructuring charges | $ 4 | $ 10 | 27 | $ 16 |
Restructuring payments | (16) | |||
Foreign currency effect on liability balance | 1 | |||
Accrued liabilities at the end of the period | 33 | 33 | ||
Current portion of restructuring reserves | 29 | 29 | ||
Long-term portion of restructuring reserves | 4 | 4 | ||
Titanium Dioxide | ||||
Accrued restructuring costs roll forward | ||||
Accrued liabilities at the beginning of the period | 12 | |||
Restructuring charges | 21 | |||
Restructuring payments | (10) | |||
Foreign currency effect on liability balance | 1 | |||
Accrued liabilities at the end of the period | 24 | 24 | ||
Current portion of restructuring reserves | 20 | 20 | ||
Long-term portion of restructuring reserves | 4 | 4 | ||
Performance Additives | ||||
Accrued restructuring costs roll forward | ||||
Accrued liabilities at the beginning of the period | 9 | |||
Restructuring charges | 6 | |||
Restructuring payments | (6) | |||
Accrued liabilities at the end of the period | 9 | 9 | ||
Current portion of restructuring reserves | $ 9 | 9 | ||
Discontinued Operations | ||||
Accrued restructuring costs roll forward | ||||
Accrued liabilities at the beginning of the period | 1 | |||
Net activity due to discontinued operations | $ (1) |
RESTRUCTURING, IMPAIRMENT AND44
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS - CASH AND NONCASH RESTRUCTURING CHARGES AND OTHER INFORMATION (Details) - Combined Divisions of Huntsman $ in Millions | Feb. 15, 2015kt | Dec. 31, 2014item | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)item | Jun. 30, 2016USD ($) |
Restructuring, impairment and plant closing costs | ||||||
Restructuring charges | $ 4 | $ 10 | $ 27 | $ 16 | ||
Impairment of assets | 3 | 3 | ||||
Other non-cash charges | 3 | 1 | ||||
Accelerated depreciation | 3 | 7 | ||||
Total restructuring, impairment and plant closing costs | 7 | 13 | $ 33 | 24 | ||
Number of positions terminated | item | 335 | |||||
Calais, France Facility | ||||||
Restructuring, impairment and plant closing costs | ||||||
Restructuring charges | 0 | 0 | $ 22 | 1 | ||
Accelerated depreciation | 3 | 7 | ||||
Decrease in titanium dioxide capacity due to closing operations | kt | 100 | |||||
Decrease in titanium dioxide capacity due to closing operations (as a percent) | 11.00% | |||||
Restructuring and Related Cost, Expected Cost Remaining | 41 | 41 | ||||
South African Titanium Dioxide Manufacturing Facility | ||||||
Restructuring, impairment and plant closing costs | ||||||
Restructuring charges | 1 | 2 | ||||
Restructuring and Related Cost, Expected Cost Remaining | 3 | 3 | ||||
Color Pigments Business | ||||||
Restructuring, impairment and plant closing costs | ||||||
Restructuring charges | 2 | 5 | 5 | 8 | ||
Restructuring and Related Cost, Expected Cost Remaining | 2 | 2 | ||||
Workforce reductions | ||||||
Restructuring, impairment and plant closing costs | ||||||
Restructuring charges | 19 | |||||
Workforce reductions | Titanium Dioxide And Performance Additives | ||||||
Restructuring, impairment and plant closing costs | ||||||
Restructuring charges | $ 1 | $ 4 | ||||
Number of positions terminated | item | 900 | |||||
Restructuring and Related Cost, Expected Cost Remaining | $ 6 | $ 6 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Combined Divisions of Huntsman - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Subsidiaries of Huntsman International | |||||
RELATED PARTY FINANCING | |||||
Notes receivable outstanding | $ 57 | $ 57 | $ 57 | ||
Notes payable outstanding | 90 | $ 90 | 882 | ||
Average interest rate on notes receivable and payable | 4.00% | ||||
Huntsman International | A/R Programs | |||||
RELATED PARTY FINANCING | |||||
Net Receivable in A/R Programs | $ 106 | ||||
Losses on the A/R Programs | $ 0 | $ 1 | $ 1 | $ 3 |
DERIVATIVE INSTRUMENTS AND HE46
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - Forward foreign currency contracts - Combined Divisions of Huntsman - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional Amounts | $ 70 | $ 88 |
Maturity period of spot or forward exchange rate contracts | 1 month | |
Maximum | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Maturity period of spot or forward exchange rate contracts | 3 months |
INCOME TAXES (Details)
INCOME TAXES (Details) - Combined Divisions of Huntsman - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
INCOME TAXES | ||||
Income tax expense (benefit) | $ 16 | $ (6) | $ 12 | $ (7) |
Aggregate income tax future payments required per Tax Matters Agreement | $ 83 | $ 83 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - LEGAL MATTERS (Details) - Combined Divisions of Huntsman $ in Millions | Jun. 13, 2016state | Sep. 29, 2015state | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
LEGAL MATTERS | ||||
Third-party debt outstanding | $ | $ 3,746 | $ 3,793 | ||
U.S. Operations and certain foreign subsidiaries total assets, excluding intercompany accounts | $ | $ 462 | $ 502 | ||
State Antitrust Claims | ||||
LEGAL MATTERS | ||||
Number of states in which Plaintiffs have raised claims | 15 | |||
Consumer Protection Claims | ||||
LEGAL MATTERS | ||||
Number of states in which Plaintiffs have raised claims | 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 |
ENVIRONMENTAL, HEALTH AND SAF49
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Details) - Combined Divisions of Huntsman - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Environmental, Health, and Safety Matters | |||
Capital expenditures for EHS matters | $ 3 | $ 6 | |
Accrued environmental liabilities | $ 13 | $ 12 |
OTHER COMPREHENSIVE INCOME (L50
OTHER COMPREHENSIVE INCOME (LOSS) - COMPONENTS AND CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - Combined Divisions of Huntsman - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | $ 177 | $ 728 | $ 728 | |||
Other comprehensive income (loss), net of tax: | $ 98 | $ (10) | 107 | (49) | ||
Balance at the end of the period | 1,105 | 283 | 1,105 | 283 | 177 | $ 728 |
Total | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (423) | (401) | (401) | |||
Adjustments related to other entities under common control | 29 | 2 | ||||
Tax expense | (3) | |||||
Other comprehensive (loss) income before reclassifications, gross | 72 | (56) | ||||
Tax benefit (expense) | 2 | (1) | ||||
Amounts reclassified from accumulated other comprehensive loss, gross | 7 | 5 | ||||
Tax benefit (expense) | 1 | |||||
Other comprehensive income (loss), net of tax: | 107 | (49) | ||||
Balance at the end of the period | (316) | (450) | (316) | (450) | (423) | (401) |
Foreign currency translation adjustment | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (112) | (144) | (144) | |||
Adjustments related to other entities under common control | 5 | 1 | ||||
Other comprehensive (loss) income before reclassifications, gross | 72 | (62) | ||||
Tax benefit (expense) | 2 | |||||
Other comprehensive income (loss), net of tax: | 79 | (61) | ||||
Balance at the end of the period | (33) | (205) | (33) | (205) | (112) | (144) |
Foreign currency translation adjustment, tax | 2 | 0 | 0 | 0 | ||
Pension and other postretirement benefits adjustments | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (306) | (252) | (252) | |||
Adjustments related to other entities under common control | 24 | 1 | ||||
Tax expense | (3) | |||||
Other comprehensive (loss) income before reclassifications, gross | 6 | |||||
Tax benefit (expense) | (1) | |||||
Amounts reclassified from accumulated other comprehensive loss, gross | 3 | 3 | 7 | 5 | ||
Tax benefit (expense) | 1 | 1 | ||||
Other comprehensive income (loss), net of tax: | 28 | 12 | ||||
Balance at the end of the period | (278) | (240) | (278) | (240) | (306) | (252) |
Pension and other postretirement benefits adjustments, tax | 53 | 60 | 56 | 60 | ||
Other comprehensive income of unconsolidated affiliates | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (5) | (5) | (5) | |||
Balance at the end of the period | (5) | (5) | (5) | (5) | (5) | (5) |
Accumulated other comprehensive loss | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (423) | (401) | (401) | |||
Adjustments related to other entities under common control | 29 | 2 | ||||
Tax expense | (3) | |||||
Other comprehensive (loss) income before reclassifications, gross | 72 | (56) | ||||
Tax benefit (expense) | 2 | (1) | ||||
Amounts reclassified from accumulated other comprehensive loss, gross | 7 | 5 | ||||
Tax benefit (expense) | 1 | |||||
Other comprehensive income (loss), net of tax: | 107 | (49) | ||||
Balance at the end of the period | $ (316) | $ (450) | $ (316) | $ (450) | $ (423) | $ (401) |
OTHER COMPREHENSIVE INCOME (L51
OTHER COMPREHENSIVE INCOME (LOSS) - RECLASSIFICATION DETAILS (Details) - Combined Divisions of Huntsman - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Pension and other postretirement benefits adjustments | ||||
Reclassification from accumulated other comprehensive loss | ||||
Total before tax | $ 3 | $ 3 | $ 7 | $ 5 |
Income tax benefit | 1 | 1 | ||
Net of tax | 3 | 4 | 7 | 6 |
Prior service credit | ||||
Reclassification from accumulated other comprehensive loss | ||||
Total before tax | (1) | (1) | ||
Actuarial loss | ||||
Reclassification from accumulated other comprehensive loss | ||||
Total before tax | $ 4 | $ 3 | $ 8 | $ 5 |
OPERATING SEGMENT INFORMATION -
OPERATING SEGMENT INFORMATION - FINANCIAL INFORMATION BY SEGMENT (Details) - Combined Divisions of Huntsman $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)segment | Jun. 30, 2016USD ($) | |
OPERATING SEGMENT INFORMATION | ||||
Number of reportable segments | segment | 2 | |||
Revenues | $ 562 | $ 576 | $ 1,099 | $ 1,116 |
Segment adjusted EBITDA | 94 | 17 | 143 | 16 |
Reconciliation of adjusted EBITDA to net income (loss): | ||||
Interest expense | (10) | (16) | (24) | (30) |
Interest income | 1 | 7 | 3 | 11 |
Income tax benefit (expense) - continuing operations | (16) | 6 | (12) | 7 |
Depreciation and amortization | (29) | (30) | (59) | (54) |
Net income attributable to noncontrolling interests | 3 | 3 | 6 | 5 |
Other adjustments: | ||||
Business acquisition and integration expenses | (2) | (8) | ||
Income from discontinued operations, net of tax | 1 | 8 | 6 | |
Certain legal settlements and related expenses | (1) | |||
Amortization of pension and postretirement actuarial losses | (4) | (3) | (8) | (5) |
Net plant incident credits (costs) | 2 | 7 | (3) | 6 |
Restructuring, impairment and plant closing costs | (7) | (13) | (33) | (24) |
Net income (loss) | 34 | (23) | 21 | (71) |
Operating segments | ||||
OPERATING SEGMENT INFORMATION | ||||
Segment adjusted EBITDA | 114 | 31 | 183 | 46 |
Operating segments | Titanium Dioxide | ||||
OPERATING SEGMENT INFORMATION | ||||
Revenues | 401 | 413 | 786 | 805 |
Segment adjusted EBITDA | 93 | 9 | 141 | 6 |
Operating segments | Performance Additives | ||||
OPERATING SEGMENT INFORMATION | ||||
Revenues | 161 | 163 | 313 | 311 |
Segment adjusted EBITDA | 21 | 22 | 42 | 40 |
Corporate and Other | ||||
OPERATING SEGMENT INFORMATION | ||||
Segment adjusted EBITDA | $ (20) | $ (14) | $ (40) | $ (30) |