HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. FAIR VALUE (Continued)
The
following table shows a reconciliation of beginning and ending balances for the three months ended March 31, 2016 for instruments measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) (dollars in millions).
|
|
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
|
Cross-Currency
Interest
Rate Contracts
|
|
Beginning balance, January 1, 2016
|
|
$
|
28
|
|
Transfers into Level 3
|
|
|
|
|
Transfers out of Level 3
|
|
|
|
|
Total gains (losses):
|
|
|
|
|
Included in earnings
|
|
|
|
|
Included in other comprehensive income (loss)
|
|
|
(8
|
)
|
Purchases, sales, issuances and settlements
|
|
|
|
|
|
|
|
|
|
Ending balance, March 31, 2016
|
|
$
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still
held at March 31, 2016
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
|
Cross-Currency
Interest
Rate Contracts
|
|
Beginning balance, January 1, 2015
|
|
$
|
5
|
|
Transfers into Level 3
|
|
|
|
|
Transfers out of Level 3
|
|
|
|
|
Total gains (losses):
|
|
|
|
|
Included in earnings
|
|
|
|
|
Included in other comprehensive income (loss)
|
|
|
28
|
|
Purchases, sales, issuances and settlements
|
|
|
|
|
|
|
|
|
|
Ending balance, March 31, 2015
|
|
$
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still
held at March 31, 2015
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. FAIR VALUE (Continued)
Gains
and losses (realized and unrealized) included in earnings for instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are
reported in interest expense and other comprehensive income (loss) as follows (dollars in millions):
|
|
|
|
|
|
|
|
2016
|
|
Interest
expense
|
|
Other
comprehensive
income (loss)
|
|
Total net gains included in earnings
|
|
$
|
|
|
$
|
|
|
Changes in unrealized losses relating to assets still held at March 31, 2016
|
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
2015
|
|
Interest expense
|
|
Other
comprehensive
income (loss)
|
|
Total net gains included in earnings
|
|
$
|
|
|
$
|
|
|
Changes in unrealized gains relating to assets still held at March 31, 2015
|
|
|
|
|
|
28
|
|
We
also have assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets include property, plant and equipment and those
associated with acquired businesses, including goodwill and intangible assets. For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if one or
more is determined to be impaired. During each of the three months ended March 31, 2016 and 2015, we recorded charges of nil for the impairment of long-lived assets.
9. EMPLOYEE BENEFIT PLANS
Components of the net periodic benefit costs for the three months ended March 31, 2016 and 2015 were as follows (dollars in millions):
Huntsman Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined
Benefit Plans
|
|
Other
Postretirement
Benefit Plans
|
|
|
|
Three months
ended
March 31,
|
|
Three months
ended
March 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Service cost
|
|
$
|
16
|
|
$
|
19
|
|
$
|
1
|
|
$
|
1
|
|
Interest cost
|
|
|
30
|
|
|
31
|
|
|
1
|
|
|
1
|
|
Expected return on assets
|
|
|
(47
|
)
|
|
(51
|
)
|
|
|
|
|
|
|
Amortization of prior service benefit
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
Amortization of actuarial loss
|
|
|
16
|
|
|
19
|
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost
|
|
$
|
13
|
|
$
|
16
|
|
$
|
1
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. EMPLOYEE BENEFIT PLANS (Continued)
Huntsman International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined
Benefit Plans
|
|
Other
Postretirement
Benefit Plans
|
|
|
|
Three months
ended
March 31,
|
|
Three months
ended
March 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Service cost
|
|
$
|
16
|
|
$
|
19
|
|
$
|
1
|
|
$
|
1
|
|
Interest cost
|
|
|
30
|
|
|
31
|
|
|
1
|
|
|
1
|
|
Expected return on assets
|
|
|
(47
|
)
|
|
(51
|
)
|
|
|
|
|
|
|
Amortization of prior service benefit
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
Amortization of actuarial loss
|
|
|
18
|
|
|
21
|
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost
|
|
$
|
15
|
|
$
|
18
|
|
$
|
1
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During
the three months ended March 31, 2016 and 2015, we made contributions to our pension and other postretirement benefit plans of $20 million and $33 million,
respectively. During the remainder of 2016, we expect to contribute an additional amount of approximately $55 million to these plans.
10. HUNTSMAN CORPORATION STOCKHOLDERS' EQUITY
SHARE REPURCHASE PROGRAM
On
September 29, 2015, our Board of Directors authorized our Company to repurchase up to $150 million in shares of Huntsman Corporation common
stock. Repurchases under this program may be made through open market transactions, in privately negotiated transactions, through accelerated share repurchase programs or by other means. The timing
and actual number of shares repurchased depends on a variety of factors, including market conditions. The share repurchase authorization does not have an expiration date and repurchases may be
commenced, suspended or discontinued from time to time without prior notice. On October 27, 2015, we entered into and funded an accelerated share repurchase agreement with Citibank, N.A. to
repurchase $100 million of our common stock. Citibank, N.A. made an initial delivery of approximately 7.1 million shares of our common stock based on the closing price of $11.94 on
October 27, 2015. The accelerated share repurchase agreement was completed in January 2016 with the delivery of an additional approximately 1.5 million shares of common stock. The final
number of shares repurchased and the aggregate cost per share of $11.68 was based on the Company's daily volume-weighted average stock price during the term of the transaction, less a discount. For
more information, see "Part 2. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds."
COMMON STOCK DIVIDENDS
During
the three months ended March 31, 2016 and 2015, we paid cash dividends of approximately $30 million and $31 million, respectively,
or $0.125 per share, to common stockholders.
35
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. OTHER COMPREHENSIVE INCOME (LOSS)
The components of other comprehensive income (loss) and changes in accumulated other comprehensive loss by component were as follows (dollars in millions):
Huntsman Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency
translation
adjustment(a)
|
|
Pension and
other
postretirement
benefits
adjustments(b)
|
|
Other
comprehensive
income of
unconsolidated
affiliates
|
|
Other, net
|
|
Total
|
|
Amounts
attributable to
noncontrolling
interests
|
|
Amounts
attributable to
Huntsman
Corporation
|
|
Beginning balance, January 1, 2016
|
|
$
|
(288
|
)
|
$
|
(1,056
|
)
|
$
|
11
|
|
$
|
17
|
|
$
|
(1,316
|
)
|
$
|
28
|
|
$
|
(1,288
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) before reclassifications, gross
|
|
|
17
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
6
|
|
|
(2
|
)
|
|
4
|
|
Tax benefit
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
10
|
|
Amounts reclassified from accumulated other comprehensive loss, gross(c)
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
13
|
|
Tax benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period other comprehensive income (loss)
|
|
|
27
|
|
|
13
|
|
|
(11
|
)
|
|
|
|
|
29
|
|
|
(2
|
)
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance, March 31, 2016
|
|
$
|
(261
|
)
|
$
|
(1,043
|
)
|
$
|
|
|
$
|
17
|
|
$
|
(1,287
|
)
|
$
|
26
|
|
$
|
(1,261
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Amounts
are net of tax of $80 and $90 as of March 31, 2016 and January 1, 2016, respectively.
-
(b)
-
Amounts
are net of tax of $135 as of both March 31, 2016 and January 1, 2016.
-
(c)
-
See
table below for details about these reclassifications.
36
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. OTHER COMPREHENSIVE INCOME (LOSS) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency
translation
adjustment(a)
|
|
Pension and
other
postretirement
benefits
adjustments(b)
|
|
Other
comprehensive
income of
unconsolidated
affiliates
|
|
Other, net
|
|
Total
|
|
Amounts
attributable to
noncontrolling
interests
|
|
Amounts
attributable to
Huntsman
Corporation
|
|
Beginning balance, January 1, 2015
|
|
$
|
25
|
|
$
|
(1,122
|
)
|
$
|
10
|
|
$
|
11
|
|
$
|
(1,076
|
)
|
$
|
23
|
|
$
|
(1,053
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income before reclassifications, gross
|
|
|
(155
|
)
|
|
|
|
|
(1
|
)
|
|
|
|
|
(156
|
)
|
|
7
|
|
|
(149
|
)
|
Tax expense
|
|
|
(27
|
)
|
|
|
|
|
|
|
|
|
|
|
(27
|
)
|
|
|
|
|
(27
|
)
|
Amounts reclassified from accumulated other comprehensive loss, gross(c)
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
17
|
|
Tax expense
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period other comprehensive (loss) income
|
|
|
(182
|
)
|
|
13
|
|
|
(1
|
)
|
|
|
|
|
(170
|
)
|
|
7
|
|
|
(163
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance, March 31, 2015
|
|
$
|
(157
|
)
|
$
|
(1,109
|
)
|
$
|
9
|
|
$
|
11
|
|
$
|
(1,246
|
)
|
$
|
30
|
|
$
|
(1,216
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Amounts
are net of tax of $74 and $47 as of March 31, 2015 and January 1, 2015, respectively.
-
(b)
-
Amounts
are net of tax of $178 and $182 as of March 31, 2015 and January 1, 2015, respectively.
-
(c)
-
See
table below for details about these reclassifications.
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
|
2016
|
|
2015
|
|
|
Details about Accumulated Other
Comprehensive Loss Components(a):
|
|
Amount reclassified from
accumulated other
comprehensive loss
|
|
Amount reclassified from
accumulated other
comprehensive loss
|
|
Affected line item in the
statement where net income is
presented
|
Amortization of pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
Prior service credit
|
|
$
|
(4
|
)
|
$
|
(2
|
)
|
(b)
|
Actuarial loss
|
|
|
17
|
|
|
19
|
|
(b)(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
|
17
|
|
Total before tax
|
|
|
|
|
|
|
(4
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
Total reclassifications for the period
|
|
$
|
13
|
|
$
|
13
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Pension
and other postretirement benefits amounts in parentheses indicate credits on our condensed consolidated statements of operations.
-
(b)
-
These
accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See "Note 9. Employee Benefit
Plans."
37
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. OTHER COMPREHENSIVE INCOME (LOSS) (Continued)
-
(c)
-
Amounts
contain approximately $1 million of actuarial losses related to discontinued operations for both three months ended March 31, 2016 and
2015.
Huntsman International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency
translation
adjustment(a)
|
|
Pension and
other
postretirement
benefits
adjustments(b)
|
|
Other
comprehensive
income of
unconsolidated
affiliates
|
|
Other, net
|
|
Total
|
|
Amounts
attributable to
noncontrolling
interests
|
|
Amounts
attributable to
Huntsman
International
|
|
Beginning balance, January 1, 2016
|
|
$
|
(292
|
)
|
$
|
(1,074
|
)
|
$
|
11
|
|
$
|
11
|
|
$
|
(1,344
|
)
|
$
|
28
|
|
$
|
(1,316
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) before reclassifications, gross
|
|
|
18
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
7
|
|
|
(2
|
)
|
|
5
|
|
Tax benefit
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
10
|
|
Amounts reclassified from accumulated other comprehensive loss, gross(c)
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
15
|
|
Tax benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period other comprehensive income (loss)
|
|
|
28
|
|
|
15
|
|
|
(11
|
)
|
|
|
|
|
32
|
|
|
(2
|
)
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance, March 31, 2016
|
|
$
|
(264
|
)
|
$
|
(1,059
|
)
|
$
|
|
|
$
|
11
|
|
$
|
(1,312
|
)
|
$
|
26
|
|
$
|
(1,286
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Amounts
are net of tax of $66 and $76 as of March 31, 2016 and January 1, 2016, respectively.
-
(b)
-
Amounts
are net of tax of $163 as of both March 31, 2016 and January 1, 2016.
-
(c)
-
See
table below for details about these reclassifications.
38
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. OTHER COMPREHENSIVE INCOME (LOSS) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency
translation
adjustment(a)
|
|
Pension and
other
postretirement
benefits
adjustments(b)
|
|
Other
comprehensive
income of
unconsolidated
affiliates
|
|
Other, net
|
|
Total
|
|
Amounts
attributable to
noncontrolling
interests
|
|
Amounts
attributable to
Huntsman
International
|
|
Beginning balance, January 1, 2015
|
|
$
|
22
|
|
$
|
(1,147
|
)
|
$
|
10
|
|
$
|
5
|
|
$
|
(1,110
|
)
|
$
|
23
|
|
$
|
(1,087
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income before reclassifications, gross
|
|
|
(155
|
)
|
|
|
|
|
(1
|
)
|
|
|
|
|
(156
|
)
|
|
7
|
|
|
(149
|
)
|
Tax expense
|
|
|
(27
|
)
|
|
|
|
|
|
|
|
|
|
|
(27
|
)
|
|
|
|
|
(27
|
)
|
Amounts reclassified from accumulated other comprehensive loss, gross(c)
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
19
|
|
Tax expense
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period other comprehensive (loss) income
|
|
|
(182
|
)
|
|
15
|
|
|
(1
|
)
|
|
|
|
|
(168
|
)
|
|
7
|
|
|
(161
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance, March 31, 2015
|
|
$
|
(160
|
)
|
$
|
(1,132
|
)
|
$
|
9
|
|
$
|
5
|
|
$
|
(1,278
|
)
|
$
|
30
|
|
$
|
(1,248
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Amounts
are net of tax of $61 and $34 as of March 31, 2015 and January 1, 2015, respectively.
-
(b)
-
Amounts
are net of tax of $207 and $211 as of March 31, 2015 and January 1, 2015, respectively.
-
(c)
-
See
table below for details about these reclassifications.
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
|
2016
|
|
2015
|
|
|
Details about Accumulated Other
Comprehensive Loss Components(a):
|
|
Amount reclassified from
accumulated other
comprehensive loss
|
|
Amount reclassified from
accumulated other
comprehensive loss
|
|
Affected line item in the
statement where net
income is presented
|
Amortization of pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
Prior service credit
|
|
$
|
(4
|
)
|
$
|
(2
|
)
|
(b)
|
Actuarial loss
|
|
|
19
|
|
|
21
|
|
(b)(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
19
|
|
Total before tax
|
|
|
|
|
|
|
(4
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
Total reclassifications for the period
|
|
$
|
15
|
|
$
|
15
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Pension
and other postretirement benefits amounts in parentheses indicate credits on our condensed consolidated statements of operations.
-
(b)
-
These
accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See "Note 9. Employee Benefit
Plans."
39
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. OTHER COMPREHENSIVE INCOME (LOSS) (Continued)
-
(c)
-
Amounts
contain approximately $1 million of actuarial losses related to discontinued operations for both three months ended March 31, 2016 and
2015.
12. COMMITMENTS AND CONTINGENCIES
LEGAL MATTERS
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 and our co-defendants and other alleged co-conspirators conspired to fix prices of titanium dioxide sold in the U.S. between at least
March 1, 2002 and the present. The other defendants named in this matter were DuPont, Kronos and Cristal (formerly Millennium). On August 28, 2012, the court certified a class consisting
of all U.S. customers who purchased titanium dioxide 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 consolidated 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 for an amount immaterial to our financial
statements. The case was subsequently dismissed on March 9, 2016.
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 titanium dioxide (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 titanium dioxide. 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 9 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, which remains pending. The Indirect Purchasers plaintiffs seek to recover
injunctive relief, treble damages or the maximum damages allowed by state law, costs of suit and attorneys' fees. We are not aware of any illegal conduct by us or any of our
employees. Nevertheless, we have incurred costs relating to this claim and could incur additional costs in amounts which in the aggregate could be material to us. Because of the overall complexity of
this case, we are unable to reasonably estimate any possible loss or range of loss and we have made no accrual with respect to this claim.
40
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. COMMITMENTS AND CONTINGENCIES (Continued)
Product Delivery Claim
We have been notified by a customer of potential claims related to our alleged delivery of a different product than the one the
customer had ordered. Our customer claims that it was unaware that the different product had been delivered until after that product had been used to manufacture materials which were subsequently
sold. Originally, the customer stated that it had been notified of claims by its customers of up to an aggregate of €153 million (approximately $172 million) relating to
this matter and claimed that we may be responsible for all or a portion of these potential claims. Our customer has since resolved some of these claims and the aggregate amount of the current claims
is now approximately €113 million (approximately $127 million). Based on the facts currently available, we believe that we are insured for any liability we may ultimately
have in excess of $10 million. However, no assurance can be given regarding our ultimate liability or costs. We believe our range of possible loss in this matter is between €0
and €113 million (approximately $127 million), and we have made no accrual with respect to this matter.
Indemnification Matters
On July 3, 2012, Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC ("the Banks") demanded that
we indemnify them for claims brought against them by certain MatlinPatterson entities that were formerly our stockholders ("MatlinPatterson") in litigation filed by MatlinPatterson on June 19,
2012 in the 9th District Court in Montgomery County, Texas (the "Texas Litigation"). These claims allegedly arose from the failed acquisition by and merger with Hexion. The Texas Litigation was
dismissed, which was upheld by the Ninth Court of Appeals and the Texas Supreme Court denied review by final order entered January 7, 2016.
On
July 14, 2014, the Banks demanded that we indemnify them for additional claims brought against them by certain other former Company stockholders in litigation filed
June 14, 2014 in the United States District Court for the Eastern District of Wisconsin (the "Wisconsin Litigation"). The stockholders in the Wisconsin Litigation have made essentially the same
factual allegations as MatlinPatterson made in the Texas Litigation and, additionally, have named Apollo Global Management LLC and Apollo Management Holdings, L.P. as defendants.
Stockholder plaintiffs in the Wisconsin Litigation assert claims for misrepresentation and conspiracy to defraud. On April 9, 2015, the court denied the Banks' motions to dismiss the Wisconsin
Litigation, which were on the same grounds asserted in the Texas Litigation, as moot. We expect the Banks to refile these motions once limited discovery related to jurisdiction is complete. We denied
the Banks' indemnification demand for both the Texas Litigation and the Wisconsin Litigation.
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 this report, 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.
41
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
EHS CAPITAL EXPENDITURES
We may incur future costs for capital improvements and general compliance under EHS laws, including costs to acquire, maintain and
repair pollution control equipment. For the three months ended March 31, 2016 and 2015, our capital expenditures for EHS matters totaled $11 million and $26 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 have accrued 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. We had accrued $39 million and $38 million for environmental liabilities as of March 31, 2016 and December 31, 2015, respectively.
Of these amounts, $7 million and $6 million were classified as accrued liabilities in
our consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively, and $32 million was classified as other noncurrent liabilities in our consolidated
balance sheets for both March 31, 2016 and December 31, 2015. In certain cases, our remediation liabilities may be payable over periods of up to 30 years. We may incur losses for
environmental remediation in excess of the amounts accrued; however, we are not able to estimate the amount or range of such potential excess.
ENVIRONMENTAL MATTERS
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 and Australia, can hold past owners and/or operators liable for remediation at former facilities. Currently, there are approximately 10 former facilities or third-party
sites in the U.S. for which we have been notified of potential claims against us for cleanup liabilities, including, but not limited to, sites listed under CERCLA. Based on current information and
past experiences at other CERCLA sites, we do not expect these third-party claims to have a material impact on our consolidated financial statements.
Under
the Resource Conservation and Recovery Act ("RCRA") 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
42
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)
other
sites in the future. For example, our Port Neches, Texas, and Geismar, Louisiana, facilities are the subject of ongoing remediation requirements imposed under RCRA. Similar laws exist in a
number of locations in which we currently operate, or previously operated, manufacturing facilities, such as Australia, India, France, Hungary and Italy.
West Footscray Remediation
By letter dated March 7, 2006, our former Base Chemicals and Polymers facility in West Footscray, Australia was issued a cleanup
notice by the Environmental Protection Authority Victoria ("EPA Victoria") due to concerns about soil and groundwater contamination emanating from the site. On August 23, 2010, EPA Victoria
revoked a second cleanup notice and issued a revised notice that included a requirement for financial assurance for the remediation. As of March 31, 2016, we had an accrued liability of
approximately $17 million related to estimated environmental remediation costs at this site. We can provide no assurance that the authority will not seek to institute additional requirements
for the site or that additional costs will not be required for the cleanup.
North Maybe Mine Remediation
The North Maybe Canyon Mine site is a CERCLA site and involves a former phosphorous mine near Soda Springs, Idaho, which is believed to
have been operated by several companies, including a predecessor company to us. In 2004, the U.S. Forest Service notified us that we are a CERCLA PRP for contamination originating from the site. In
February 2010, we and Wells Cargo (another PRP) agreed to conduct a Remedial Investigation/Feasibility Study of a portion of the site and are currently engaged in that process. At this time, we are
unable to reasonably estimate our potential liabilities at this site.
Port Neches Flaring Matter
As part of the Environmental Protection Agency's (the "EPA") national enforcement initiative on flaring operations and by letter dated
October 12, 2012, the U.S. Department of Justice (the "DOJ") notified us that we were in violation of the CAA based on our response to a 2010 CAA Section 114 Information Request. The EPA
has used the enforcement initiative to bring similar actions against refiners and other chemical manufacturers and has sought to collect civil penalties in excess of $100,000. Specifically, the EPA
alleged violations at our Port Neches, Texas facility from 2007-2012 for flare operations not consistent with good pollution control practice and not in compliance with certain flare-related
regulations. As a result of these findings, the EPA referred this matter to the DOJ. We provided a formal response to the DOJ and the EPA with a supplemental data submission on April 29, 2013.
We have been engaged in discussions with the DOJ and the EPA regarding these alleged violations and conducted field trials on an alternate flare monitoring method
beginning in September 2014. We are currently unable to determine the likelihood or magnitude of any potential penalty or injunctive relief that may be incurred in resolving this matter.
43
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. STOCK-BASED COMPENSATION PLANS
Under the Huntsman Corporation Stock Incentive Plan, as amended and restated (the "Stock Incentive Plan"), a plan approved by stockholders, we may grant nonqualified stock options,
incentive stock options, stock appreciation rights, restricted stock, phantom stock, performance share unit awards and other stock-based awards to our employees, directors and consultants and to
employees and consultants of our subsidiaries, provided that incentive stock options may be granted solely to employees. The terms of the grants are fixed at the grant date. As of March 31,
2016, we were authorized to grant up to 37.2 million shares under the Stock Incentive Plan. As of March 31, 2016, we had 3 million shares remaining under the Stock Incentive Plan
available for grant. Option awards have a maximum contractual term of 10 years and generally must have an exercise price at least equal to the market price of our common stock on the date the
option award is granted. Stock-based awards generally vest over a three-year period; certain performance share unit awards vest over a two-year period.
The
compensation cost from continuing operations under the Stock Incentive Plan for our Company and Huntsman International were as follows (dollars in millions):
|
|
|
|
|
|
|
|
|
|
Three months
ended
March 31,
|
|
|
|
2016
|
|
2015
|
|
Huntsman Corporation compensation cost
|
|
$
|
8
|
|
$
|
9
|
|
Huntsman International compensation cost
|
|
|
7
|
|
|
8
|
|
The
total income tax benefit recognized in the statements of operations for us and Huntsman International for stock-based compensation arrangements was $2 million for each of the
three months ended March 31, 2016 and 2015.
STOCK OPTIONS
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses the
assumptions noted in the following table. Expected volatilities are based on the historical volatility of our common stock through the grant date. The expected term of options granted was estimated
based on the contractual term of the instruments and employees' expected exercise and post-vesting employment termination behavior. The risk-free rate for periods within the contractual life of the
option was based on the U.S. Treasury yield curve in effect at the time of grant. The assumptions noted below represent the weighted average of the assumptions utilized for stock options granted
during the periods.
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
2016
|
|
2015
|
|
Dividend yield
|
|
|
5.6
|
%
|
|
2.2
|
%
|
Expected volatility
|
|
|
57.9
|
%
|
|
58.0
|
%
|
Risk-free interest rate
|
|
|
1.4
|
%
|
|
1.4
|
%
|
Expected life of stock options granted during the period
|
|
|
5.9 years
|
|
|
5.9 years
|
|
44
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. STOCK-BASED COMPENSATION PLANS (Continued)
A
summary of stock option activity under the Stock Incentive Plan as of March 31, 2016 and changes during the three months then ended is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|
|
|
(in thousands)
|
|
|
|
(years)
|
|
(in millions)
|
|
Outstanding at January 1, 2016
|
|
|
9,544
|
|
$
|
15.51
|
|
|
|
|
|
|
|
Granted
|
|
|
2,940
|
|
|
8.86
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
(931
|
)
|
|
20.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2016
|
|
|
11,553
|
|
|
13.43
|
|
|
6.2
|
|
$
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at March 31, 2016
|
|
|
7,558
|
|
|
14.07
|
|
|
4.5
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2016 was $2.94 per option. As of March 31, 2016, there was
$16 million of total unrecognized compensation cost related to nonvested stock option arrangements granted under the Stock Incentive Plan. That cost is expected to be recognized over a
weighted-average period of approximately 2.2 years.
The
total intrinsic value of stock options exercised during the three months ended both March 31, 2016 and 2015 was approximately nil.
NONVESTED SHARES
Nonvested shares granted under the Stock Incentive Plan consist of restricted stock and performance share unit awards, which are
accounted for as equity awards, and phantom stock, which is accounted for as a liability award because it can be settled in either stock or cash.
The
fair value of each performance share unit award is estimated using a Monte Carlo simulation model that uses various assumptions, including an expected volatility rate and a risk-free
interest rate. For the three months ended March 31, 2016 and 2015, the weighted-average expected volatility rate was 39.3% and 30.0%, respectively and the weighted average risk-free interest
rate was 0.9% and 0.7%, respectively. For the performance share unit awards granted in the three months ended March 31, 2016 and 2015 the number of shares earned varies based upon the Company
achieving certain performance criteria over two-year and three-year performance periods. The performance criteria are total stockholder return of our common stock relative to the total stockholder
return of a specified industry peer group for the two-year and three-year performance periods.
45
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HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. STOCK-BASED COMPENSATION PLANS (Continued)
A
summary of the status of our nonvested shares as of March 31, 2016 and changes during the three months then ended is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Awards
|
|
Liability Awards
|
|
|
|
Shares
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
Shares
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
Nonvested at January 1, 2016
|
|
|
1,854
|
|
$
|
19.97
|
|
|
475
|
|
$
|
21.37
|
|
Granted
|
|
|
1,871
|
|
|
9.23
|
|
|
693
|
|
|
8.86
|
|
Vested
|
|
|
(652
|
)(1)
|
|
19.86
|
|
|
(229
|
)
|
|
20.65
|
|
Forfeited
|
|
|
(3
|
)
|
|
22.25
|
|
|
(13
|
)
|
|
18.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested at March 31, 2016
|
|
|
3,070
|
|
|
13.44
|
|
|
926
|
|
|
12.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
As
of March 31, 2016, a total of 454,900 restricted stock units were vested but not yet issued, of which 60,948 vested during the three months ended
March 31, 2016. These shares have not been reflected as vested shares in this table because, in accordance with the restricted stock unit agreements, shares of common stock are not issued for
vested restricted stock units until termination of employment.
As
of March 31, 2016, there was $40 million of total unrecognized compensation cost related to nonvested share compensation arrangements granted under the Stock Incentive
Plan. That cost is expected to be recognized over a weighted-average period of approximately 2.4 years. The value of share awards that vested during the three months ended March 31, 2016
and 2015 was $15 million and $20 million, respectively.
15. INCOME TAXES
We use 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 an individual 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.
These conclusions require significant judgment. In evaluating the objective evidence that historical results provide, we consider the cyclicality of our businesses and cumulative income or losses
during the applicable period. Cumulative losses incurred over the applicable period limits our ability to consider other subjective evidence such as our projections for the future. Changes in expected
future income in applicable jurisdictions could affect the realization of deferred tax assets in those jurisdictions.
During
the three months ended March 31, 2016 and 2015, for unrecognized tax benefits that impact tax expense, we recorded a net decrease in unrecognized tax benefits and a
corresponding income tax
benefit of $1 million and a net decrease in unrecognized benefits and a corresponding income tax benefit of $9 million, respectively. Additional increases and decreases in unrecognized
tax
46
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HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. INCOME TAXES (Continued)
benefits
were offset by cash settlements or decreases in net deferred tax assets and, therefore, did not affect income tax expense.
Huntsman Corporation
We recorded income tax expense of $27 million and $2 million for the three months ended March 31, 2016 and 2015,
respectively. Our tax expense is significantly affected by the mix of income and losses in the tax jurisdictions in which we operate, as impacted by the presence of valuation allowances in certain tax
jurisdictions. Notably, we continue to earn a significant portion of our pre-tax income in the United States with an approximate 35% federal and state blended effective tax rate.
Huntsman International
Huntsman International recorded income tax expense of $27 million and $3 million for the three months ended
March 31, 2016 and 2015, respectively. Our tax expense is significantly affected by the mix of income and losses in the tax jurisdictions in which we operate, as impacted by the presence of
valuation allowances in certain tax jurisdictions. Notably, we continue to earn a significant portion of our pre-tax income in the United States with an approximate 35% federal and state blended
effective tax rate.
16. NET INCOME PER SHARE
Basic income per share excludes dilution and is computed by dividing net income attributable to Huntsman Corporation common stockholders by the weighted average number of shares
outstanding during the period. Diluted income per share reflects all potential dilutive common shares outstanding during the period and is computed by dividing net income available to Huntsman
Corporation common stockholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive
securities.
Basic
and diluted income per share is determined using the following information (in millions):
|
|
|
|
|
|
|
|
|
|
Three months
ended March 31,
|
|
|
|
2016
|
|
2015
|
|
Numerator:
|
|
|
|
|
|
|
|
Basic and diluted income from continuing operations:
|
|
|
|
|
|
|
|
Income from continuing operations attributable to Huntsman Corporation
|
|
$
|
57
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income:
|
|
|
|
|
|
|
|
Net income attributable to Huntsman Corporation
|
|
$
|
56
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares (denominator):
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
236.1
|
|
|
243.9
|
|
Dilutive securities:
|
|
|
|
|
|
|
|
Stock-based awards
|
|
|
1.8
|
|
|
3.3
|
|
|
|
|
|
|
|
|
|
Total weighted average shares outstanding, including dilutive shares
|
|
|
237.9
|
|
|
247.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47
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HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. NET INCOME PER SHARE (Continued)
Additional
stock-based awards of 11.8 million and 2.3 million weighted average equivalent shares of stock were outstanding during the three months ended March 31,
2016 and 2015, respectively. However, these stock-based awards were not included in the computation of diluted earnings per share for the three months ended March 31, 2016 and 2015 because the
effect would be anti-dilutive.
17. OPERATING SEGMENT INFORMATION
We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of differentiated and commodity chemical products. We have reported our operations through
five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments and Additives. We have organized our business and derived our operating segments around differences
in product lines.
The
major products of each reportable operating segment are as follows:
|
|
|
Segment
|
|
Products
|
Polyurethanes
|
|
MDI, PO, polyols, PG, TPU, aniline and MTBE
|
Performance Products
|
|
amines, surfactants, LAB, maleic anhydride, other performance chemicals, EG, olefins and technology licenses
|
Advanced Materials
|
|
basic liquid and solid epoxy resins; specialty resin compounds; cross-linking, matting and curing agents; epoxy, acrylic and polyurethane-based formulations
|
Textile Effects
|
|
textile chemicals, dyes and inks
|
Pigments and Additives
|
|
titanium dioxide, 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. We use EBITDA to measure the financial performance of our global business
units and for reporting the results of our operating segments. This measure includes all operating items relating to the businesses. The EBITDA of operating segments excludes items that principally
apply to our
48
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HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. OPERATING SEGMENT INFORMATION (Continued)
Company
as a whole. The revenues and EBITDA for each of our reportable operating segments are as follows (dollars in millions):
|
|
|
|
|
|
|
|
|
|
Three months
ended March 31,
|
|
|
|
2016
|
|
2015
|
|
Revenues:
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
|
836
|
|
$
|
890
|
|
Performance Products
|
|
|
536
|
|
|
656
|
|
Advanced Materials
|
|
|
266
|
|
|
290
|
|
Textile Effects
|
|
|
185
|
|
|
206
|
|
Pigments and Additives
|
|
|
540
|
|
|
572
|
|
Corporate and eliminations
|
|
|
(8
|
)
|
|
(25
|
)
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,355
|
|
$
|
2,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman Corporation:
|
|
|
|
|
|
|
|
Segment EBITDA(1):
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
|
123
|
|
$
|
93
|
|
Performance Products
|
|
|
90
|
|
|
118
|
|
Advanced Materials
|
|
|
57
|
|
|
55
|
|
Textile Effects
|
|
|
15
|
|
|
11
|
|
Pigments and Additives
|
|
|
(8
|
)
|
|
(75
|
)
|
Corporate and other(2)
|
|
|
(43
|
)
|
|
(42
|
)
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
234
|
|
|
160
|
|
Discontinued Operations(3)
|
|
|
(2
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
Total
|
|
|
232
|
|
|
159
|
|
Interest expense, net
|
|
|
(50
|
)
|
|
(56
|
)
|
Income tax expensecontinuing operations
|
|
|
(27
|
)
|
|
(2
|
)
|
Income tax benefit (expense)discontinued operations
|
|
|
1
|
|
|
(1
|
)
|
Depreciation and amortization
|
|
|
(100
|
)
|
|
(95
|
)
|
|
|
|
|
|
|
|
|
Net income attributable to Huntsman Corporation
|
|
$
|
56
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. OPERATING SEGMENT INFORMATION (Continued)
|
|
|
|
|
|
|
|
|
|
Three months
ended
March 31,
|
|
|
|
2016
|
|
2015
|
|
Huntsman International:
|
|
|
|
|
|
|
|
Segment EBITDA(1):
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
|
123
|
|
$
|
93
|
|
Performance Products
|
|
|
90
|
|
|
118
|
|
Advanced Materials
|
|
|
57
|
|
|
55
|
|
Textile Effects
|
|
|
15
|
|
|
11
|
|
Pigments and Additives
|
|
|
(8
|
)
|
|
(75
|
)
|
Corporate and other(2)
|
|
|
(43
|
)
|
|
(42
|
)
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
234
|
|
|
160
|
|
Discontinued Operations(3)
|
|
|
(2
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
Total
|
|
|
232
|
|
|
159
|
|
Interest expense, net
|
|
|
(53
|
)
|
|
(58
|
)
|
Income tax expensecontinuing operations
|
|
|
(27
|
)
|
|
(3
|
)
|
Income tax benefit (expense)discontinued operations
|
|
|
1
|
|
|
(1
|
)
|
Depreciation and amortization
|
|
|
(97
|
)
|
|
(92
|
)
|
|
|
|
|
|
|
|
|
Net income attributable to Huntsman International
|
|
$
|
56
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Segment
EBITDA is defined as net income attributable to Huntsman Corporation or Huntsman International, as appropriate, before interest, income tax,
depreciation and amortization, and certain Corporate and other items.
-
(2)
-
Corporate
and other includes unallocated corporate overhead, unallocated foreign exchange gains and losses, LIFO inventory valuation reserve adjustments,
loss on early extinguishment of debt, unallocated restructuring, impairment and plant closing costs, nonoperating income and expense, benzene sales and gains and losses on the disposition of corporate
assets.
-
(3)
-
The
operating results of our former polymers, base chemicals and Australian styrenics businesses are classified as discontinued operations, and,
accordingly, the revenues of these businesses are excluded for all periods presented. The EBITDA of our former polymers, base chemicals and Australian styrenics businesses are included in discontinued
operations for all periods presented.
50
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC
The following unaudited condensed consolidating financial statements present, in separate columns, financial information for the following: Huntsman International (on a parent only
basis), with its investment in subsidiaries recorded under the equity method; the Guarantors on a combined, and where appropriate, consolidated basis; and the nonguarantors on a combined, and where
appropriate, consolidated basis. Additional columns present eliminating adjustments and consolidated totals as of March 31, 2016 and December 31, 2015 and for the three months ended
March 31, 2016 and 2015. There are no contractual restrictions limiting transfers of cash from the Guarantors to Huntsman International. Each of the Guarantors is wholly-owned by Huntsman
International and has fully and unconditionally guaranteed, subject to certain customary release provisions, Huntsman International's outstanding notes on a joint and several basis.
51
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF MARCH 31, 2016
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International
LLC
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
31
|
|
$
|
|
|
$
|
177
|
|
$
|
|
|
$
|
208
|
|
Restricted cash
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
10
|
|
Accounts and notes receivable, net
|
|
|
31
|
|
|
105
|
|
|
1,415
|
|
|
7
|
|
|
1,558
|
|
Accounts receivable from affiliates
|
|
|
1,885
|
|
|
4,777
|
|
|
172
|
|
|
(6,505
|
)
|
|
329
|
|
Inventories
|
|
|
87
|
|
|
338
|
|
|
1,268
|
|
|
(4
|
)
|
|
1,689
|
|
Prepaid expenses
|
|
|
36
|
|
|
13
|
|
|
48
|
|
|
(28
|
)
|
|
69
|
|
Other current assets
|
|
|
804
|
|
|
8
|
|
|
194
|
|
|
(730
|
)
|
|
276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
2,874
|
|
|
5,241
|
|
|
3,284
|
|
|
(7,260
|
)
|
|
4,139
|
|
Property, plant and equipment, net
|
|
|
459
|
|
|
1,432
|
|
|
2,513
|
|
|
1
|
|
|
4,405
|
|
Investment in unconsolidated affiliates
|
|
|
6,132
|
|
|
1,644
|
|
|
256
|
|
|
(7,688
|
)
|
|
344
|
|
Intangible assets, net
|
|
|
31
|
|
|
3
|
|
|
72
|
|
|
|
|
|
106
|
|
Goodwill
|
|
|
(13
|
)
|
|
82
|
|
|
54
|
|
|
|
|
|
123
|
|
Deferred income taxes
|
|
|
480
|
|
|
|
|
|
436
|
|
|
(492
|
)
|
|
424
|
|
Notes receivable from affiliates
|
|
|
36
|
|
|
550
|
|
|
|
|
|
(586
|
)
|
|
|
|
Other noncurrent assets
|
|
|
63
|
|
|
216
|
|
|
298
|
|
|
(1
|
)
|
|
576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
10,062
|
|
$
|
9,168
|
|
$
|
6,913
|
|
$
|
(16,026
|
)
|
$
|
10,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
47
|
|
$
|
181
|
|
$
|
763
|
|
$
|
7
|
|
$
|
998
|
|
Accounts payable to affiliates
|
|
|
3,678
|
|
|
976
|
|
|
1,905
|
|
|
(6,505
|
)
|
|
54
|
|
Accrued liabilities
|
|
|
78
|
|
|
811
|
|
|
518
|
|
|
(757
|
)
|
|
650
|
|
Note payable to affiliate
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
100
|
|
Current portion of debt
|
|
|
27
|
|
|
|
|
|
76
|
|
|
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
3,930
|
|
|
1,968
|
|
|
3,262
|
|
|
(7,255
|
)
|
|
1,905
|
|
Long-term debt
|
|
|
4,293
|
|
|
|
|
|
431
|
|
|
|
|
|
4,724
|
|
Notes payable to affiliates
|
|
|
697
|
|
|
|
|
|
588
|
|
|
(587
|
)
|
|
698
|
|
Deferred income taxes
|
|
|
24
|
|
|
278
|
|
|
44
|
|
|
75
|
|
|
421
|
|
Other noncurrent liabilities
|
|
|
161
|
|
|
244
|
|
|
820
|
|
|
1
|
|
|
1,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
9,105
|
|
|
2,490
|
|
|
5,145
|
|
|
(7,766
|
)
|
|
8,974
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman International LLC members' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity
|
|
|
3,200
|
|
|
4,512
|
|
|
3,386
|
|
|
(7,898
|
)
|
|
3,200
|
|
Accumulated (deficit) income
|
|
|
(957
|
)
|
|
746
|
|
|
(514
|
)
|
|
(232
|
)
|
|
(957
|
)
|
Accumulated other comprehensive (loss) income
|
|
|
(1,286
|
)
|
|
1,420
|
|
|
(1,267
|
)
|
|
(153
|
)
|
|
(1,286
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Huntsman International LLC members' equity
|
|
|
957
|
|
|
6,678
|
|
|
1,605
|
|
|
(8,283
|
)
|
|
957
|
|
Noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
|
|
163
|
|
|
23
|
|
|
186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
957
|
|
|
6,678
|
|
|
1,768
|
|
|
(8,260
|
)
|
|
1,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
10,062
|
|
$
|
9,168
|
|
$
|
6,913
|
|
$
|
(16,026
|
)
|
$
|
10,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2015
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International
LLC
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
44
|
|
$
|
1
|
|
$
|
212
|
|
$
|
|
|
$
|
257
|
|
Restricted cash
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
12
|
|
Accounts and notes receivable, net
|
|
|
21
|
|
|
96
|
|
|
1,298
|
|
|
5
|
|
|
1,420
|
|
Accounts receivable from affiliates
|
|
|
2,163
|
|
|
4,730
|
|
|
163
|
|
|
(6,716
|
)
|
|
340
|
|
Inventories
|
|
|
101
|
|
|
322
|
|
|
1,275
|
|
|
(6
|
)
|
|
1,692
|
|
Prepaid expenses
|
|
|
49
|
|
|
31
|
|
|
91
|
|
|
(60
|
)
|
|
111
|
|
Other current assets
|
|
|
790
|
|
|
8
|
|
|
212
|
|
|
(704
|
)
|
|
306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
3,168
|
|
|
5,188
|
|
|
3,263
|
|
|
(7,481
|
)
|
|
4,138
|
|
Property, plant and equipment, net
|
|
|
473
|
|
|
1,433
|
|
|
2,503
|
|
|
1
|
|
|
4,410
|
|
Investment in unconsolidated affiliates
|
|
|
5,991
|
|
|
1,558
|
|
|
263
|
|
|
(7,465
|
)
|
|
347
|
|
Intangible assets, net
|
|
|
32
|
|
|
3
|
|
|
51
|
|
|
|
|
|
86
|
|
Goodwill
|
|
|
(13
|
)
|
|
82
|
|
|
47
|
|
|
|
|
|
116
|
|
Deferred income taxes
|
|
|
473
|
|
|
|
|
|
430
|
|
|
(485
|
)
|
|
418
|
|
Notes receivable from affiliates
|
|
|
36
|
|
|
539
|
|
|
6
|
|
|
(581
|
)
|
|
|
|
Other noncurrent assets
|
|
|
71
|
|
|
223
|
|
|
279
|
|
|
|
|
|
573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
10,231
|
|
$
|
9,026
|
|
$
|
6,842
|
|
$
|
(16,011
|
)
|
$
|
10,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
50
|
|
$
|
207
|
|
$
|
772
|
|
$
|
5
|
|
$
|
1,034
|
|
Accounts payable to affiliates
|
|
|
3,905
|
|
|
973
|
|
|
1,891
|
|
|
(6,717
|
)
|
|
52
|
|
Accrued liabilities
|
|
|
74
|
|
|
793
|
|
|
581
|
|
|
(765
|
)
|
|
683
|
|
Note payable to affiliate
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
100
|
|
Current portion of debt
|
|
|
89
|
|
|
|
|
|
81
|
|
|
|
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
4,218
|
|
|
1,973
|
|
|
3,325
|
|
|
(7,477
|
)
|
|
2,039
|
|
Long-term debt
|
|
|
4,229
|
|
|
|
|
|
396
|
|
|
|
|
|
4,625
|
|
Notes payable to affiliates
|
|
|
703
|
|
|
|
|
|
576
|
|
|
(581
|
)
|
|
698
|
|
Deferred income taxes
|
|
|
24
|
|
|
276
|
|
|
36
|
|
|
82
|
|
|
418
|
|
Other noncurrent liabilities
|
|
|
160
|
|
|
241
|
|
|
819
|
|
|
4
|
|
|
1,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
9,334
|
|
|
2,490
|
|
|
5,152
|
|
|
(7,972
|
)
|
|
9,004
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman International LLC members' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity
|
|
|
3,196
|
|
|
4,517
|
|
|
3,394
|
|
|
(7,911
|
)
|
|
3,196
|
|
Accumulated (deficit) income
|
|
|
(983
|
)
|
|
652
|
|
|
(557
|
)
|
|
(95
|
)
|
|
(983
|
)
|
Accumulated other comprehensive (loss) income
|
|
|
(1,316
|
)
|
|
1,367
|
|
|
(1,311
|
)
|
|
(56
|
)
|
|
(1,316
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Huntsman International LLC members' equity
|
|
|
897
|
|
|
6,536
|
|
|
1,526
|
|
|
(8,062
|
)
|
|
897
|
|
Noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
|
|
164
|
|
|
23
|
|
|
187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
897
|
|
|
6,536
|
|
|
1,690
|
|
|
(8,039
|
)
|
|
1,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
10,231
|
|
$
|
9,026
|
|
$
|
6,842
|
|
$
|
(16,011
|
)
|
$
|
10,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
THREE MONTHS ENDED MARCH 31, 2016
(In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International LLC
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade sales, services and fees, net
|
|
$
|
251
|
|
$
|
566
|
|
$
|
1,504
|
|
$
|
|
|
$
|
2,321
|
|
Related party sales
|
|
|
53
|
|
|
104
|
|
|
269
|
|
|
(392
|
)
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
304
|
|
|
670
|
|
|
1,773
|
|
|
(392
|
)
|
|
2,355
|
|
Cost of goods sold
|
|
|
240
|
|
|
548
|
|
|
1,543
|
|
|
(393
|
)
|
|
1,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
64
|
|
|
122
|
|
|
230
|
|
|
1
|
|
|
417
|
|
Selling, general and administrative
|
|
|
40
|
|
|
46
|
|
|
135
|
|
|
|
|
|
221
|
|
Research and development
|
|
|
11
|
|
|
11
|
|
|
15
|
|
|
|
|
|
37
|
|
Other operating expense (income)
|
|
|
12
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
5
|
|
Restructuring, impairment and plant closing costs
|
|
|
|
|
|
4
|
|
|
9
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
1
|
|
|
68
|
|
|
71
|
|
|
1
|
|
|
141
|
|
Interest (expense) income
|
|
|
(54
|
)
|
|
8
|
|
|
(7
|
)
|
|
|
|
|
(53
|
)
|
Equity in income of investment in affiliates and subsidiaries
|
|
|
92
|
|
|
44
|
|
|
1
|
|
|
(136
|
)
|
|
1
|
|
Other income
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
40
|
|
|
120
|
|
|
65
|
|
|
(135
|
)
|
|
90
|
|
Income tax benefit (expense)
|
|
|
15
|
|
|
(26
|
)
|
|
(16
|
)
|
|
|
|
|
(27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
55
|
|
|
94
|
|
|
49
|
|
|
(135
|
)
|
|
63
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
1
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
56
|
|
|
94
|
|
|
47
|
|
|
(135
|
)
|
|
62
|
|
Net income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Huntsman International LLC
|
|
$
|
56
|
|
$
|
94
|
|
$
|
44
|
|
$
|
(138
|
)
|
$
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
56
|
|
$
|
94
|
|
$
|
47
|
|
$
|
(135
|
)
|
$
|
62
|
|
Other comprehensive income
|
|
|
30
|
|
|
55
|
|
|
50
|
|
|
(103
|
)
|
|
32
|
|
Comprehensive income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to Huntsman International LLC
|
|
$
|
86
|
|
$
|
149
|
|
$
|
92
|
|
$
|
(241
|
)
|
$
|
86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
THREE MONTHS ENDED MARCH 31, 2015
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International LLC
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade sales, services and fees, net
|
|
$
|
257
|
|
$
|
579
|
|
$
|
1,724
|
|
$
|
|
|
$
|
2,560
|
|
Related party sales
|
|
|
68
|
|
|
122
|
|
|
267
|
|
|
(428
|
)
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
325
|
|
|
701
|
|
|
1,991
|
|
|
(428
|
)
|
|
2,589
|
|
Cost of goods sold
|
|
|
261
|
|
|
579
|
|
|
1,723
|
|
|
(426
|
)
|
|
2,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
64
|
|
|
122
|
|
|
268
|
|
|
(2
|
)
|
|
452
|
|
Selling, general and administrative
|
|
|
45
|
|
|
40
|
|
|
159
|
|
|
|
|
|
244
|
|
Research and development
|
|
|
11
|
|
|
10
|
|
|
21
|
|
|
|
|
|
42
|
|
Other operating (income) expense
|
|
|
(28
|
)
|
|
1
|
|
|
20
|
|
|
|
|
|
(7
|
)
|
Restructuring, impairment and plant closing costs
|
|
|
|
|
|
|
|
|
93
|
|
|
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
36
|
|
|
71
|
|
|
(25
|
)
|
|
(2
|
)
|
|
80
|
|
Interest (expense) income
|
|
|
(57
|
)
|
|
8
|
|
|
(9
|
)
|
|
|
|
|
(58
|
)
|
Equity in income (loss) of investment in affiliates and subsidiaries
|
|
|
25
|
|
|
(16
|
)
|
|
2
|
|
|
(9
|
)
|
|
2
|
|
Loss on early extinguishment of debt
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
Other income (loss)
|
|
|
1
|
|
|
(7
|
)
|
|
5
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
2
|
|
|
56
|
|
|
(27
|
)
|
|
(11
|
)
|
|
20
|
|
Income tax benefit (expense)
|
|
|
4
|
|
|
(23
|
)
|
|
16
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
6
|
|
|
33
|
|
|
(11
|
)
|
|
(11
|
)
|
|
17
|
|
Loss from discontinued operations, net of tax
|
|
|
(1
|
)
|
|
|
|
|
(1
|
)
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
5
|
|
|
33
|
|
|
(12
|
)
|
|
(11
|
)
|
|
15
|
|
Net income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
(2
|
)
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Huntsman International LLC
|
|
$
|
5
|
|
$
|
33
|
|
$
|
(20
|
)
|
$
|
(13
|
)
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
5
|
|
$
|
33
|
|
$
|
(12
|
)
|
$
|
(11
|
)
|
$
|
15
|
|
Other comprehensive (loss) income
|
|
|
(161
|
)
|
|
73
|
|
|
(170
|
)
|
|
90
|
|
|
(168
|
)
|
Comprehensive income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income attributable to Huntsman International LLC
|
|
$
|
(156
|
)
|
$
|
106
|
|
$
|
(182
|
)
|
$
|
76
|
|
$
|
(156
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2016
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International
LLC
|
|
Net cash provided by (used in) operating activities
|
|
$
|
55
|
|
$
|
34
|
|
$
|
(3
|
)
|
$
|
1
|
|
$
|
87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(6
|
)
|
|
(31
|
)
|
|
(62
|
)
|
|
|
|
|
(99
|
)
|
Cash received from unconsolidated affiliates
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
10
|
|
Investment in affiliate
|
|
|
(7
|
)
|
|
2
|
|
|
|
|
|
5
|
|
|
|
|
Investment in unconsolidated affiliates
|
|
|
|
|
|
(11
|
)
|
|
(1
|
)
|
|
|
|
|
(12
|
)
|
Increase in receivable from affiliate
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
Change in restricted cash
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
2
|
|
Other, net
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(15
|
)
|
|
(30
|
)
|
|
(62
|
)
|
|
5
|
|
|
(102
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowings under revolving loan facilities
|
|
|
|
|
|
|
|
|
45
|
|
|
|
|
|
45
|
|
Repayments of short-term debt
|
|
|
|
|
|
|
|
|
(12
|
)
|
|
|
|
|
(12
|
)
|
Borrowings on short-term debt
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
4
|
|
Repayments of long-term debt
|
|
|
(16
|
)
|
|
|
|
|
(11
|
)
|
|
|
|
|
(27
|
)
|
Proceeds from notes payable to affiliate
|
|
|
|
|
|
|
|
|
6
|
|
|
(6
|
)
|
|
|
|
Repayments of notes payable
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
Borrowings on notes payable
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
Dividends paid to noncontrolling intrests
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
(4
|
)
|
|
(9
|
)
|
Contribution from parent
|
|
|
|
|
|
2
|
|
|
7
|
|
|
(9
|
)
|
|
|
|
Distribution to parent
|
|
|
|
|
|
(7
|
)
|
|
(6
|
)
|
|
13
|
|
|
|
|
Dividends paid to parent
|
|
|
(30
|
)
|
|
|
|
|
|
|
|
|
|
|
(30
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by financing activities
|
|
|
(53
|
)
|
|
(5
|
)
|
|
28
|
|
|
(6
|
)
|
|
(36
|
)
|
Effect of exchange rate changes on cash
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
(13
|
)
|
|
(1
|
)
|
|
(35
|
)
|
|
|
|
|
(49
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
44
|
|
|
1
|
|
|
212
|
|
|
|
|
|
257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
31
|
|
$
|
|
|
$
|
177
|
|
$
|
|
|
$
|
208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2015
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International
LLC
|
|
Net cash (used in) provided by operating activities
|
|
$
|
(410
|
)
|
$
|
42
|
|
$
|
403
|
|
$
|
|
|
$
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(22
|
)
|
|
(53
|
)
|
|
(74
|
)
|
|
|
|
|
(149
|
)
|
Cash received from unconsolidated affiliates
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
15
|
|
Investment in affiliate
|
|
|
(20
|
)
|
|
(1
|
)
|
|
|
|
|
21
|
|
|
|
|
Investment in unconsolidated affiliates
|
|
|
|
|
|
(4
|
)
|
|
(9
|
)
|
|
|
|
|
(13
|
)
|
Increase in receivable from affiliate
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
Cash received from termination of cross-currency interest rate contracts
|
|
|
66
|
|
|
|
|
|
|
|
|
|
|
|
66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
18
|
|
|
(43
|
)
|
|
(83
|
)
|
|
21
|
|
|
(87
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net repayments on overdraft facilities
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
(2
|
)
|
Repayments of short-term debt
|
|
|
|
|
|
|
|
|
(17
|
)
|
|
|
|
|
(17
|
)
|
Repayments of long-term debt
|
|
|
(54
|
)
|
|
|
|
|
(5
|
)
|
|
|
|
|
(59
|
)
|
Proceeds from issuance of long-term debt
|
|
|
326
|
|
|
|
|
|
|
|
|
|
|
|
326
|
|
Repayments of notes payable to affiliate
|
|
|
(50
|
)
|
|
|
|
|
|
|
|
|
|
|
(50
|
)
|
Repayments of notes payable
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
Debt issuance costs paid
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
Call premiums related to early extinguishment of debt
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
Contingent consideration paid for acquisition
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
Contribution from parent
|
|
|
|
|
|
2
|
|
|
28
|
|
|
(30
|
)
|
|
|
|
Distribution to parent
|
|
|
|
|
|
(7
|
)
|
|
(2
|
)
|
|
9
|
|
|
|
|
Dividends paid to parent
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
(31
|
)
|
Excess tax benefit related to stock-based compensation
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Other, net
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
172
|
|
|
(5
|
)
|
|
|
|
|
(21
|
)
|
|
146
|
|
Effect of exchange rate changes on cash
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents
|
|
|
(220
|
)
|
|
(6
|
)
|
|
312
|
|
|
|
|
|
86
|
|
Cash and cash equivalents at beginning of period
|
|
|
353
|
|
|
6
|
|
|
351
|
|
|
|
|
|
710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
133
|
|
$
|
|
|
$
|
663
|
|
$
|
|
|
$
|
796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During
the three months ended March 31, 2015, we made a noncash capital contribution of approximately $284 million between guarantor and nonguarantor entities and a noncash
capital contribution of approximately $123 million between parent and guarantor entities.
57
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