Notes
As of June 30, 2014, we had outstanding the following notes (monetary amounts in millions):
|
|
|
|
|
|
|
|
Notes
|
|
Maturity
|
|
Interest
Rate
|
|
Amount Outstanding
|
Senior Notes ("2020 Senior Notes")
|
|
November 2020
|
|
|
4.875
|
%
|
$650 ($647 carrying value)
|
Senior Notes ("2021 Senior Notes")
|
|
April 2021
|
|
|
5.125
|
%
|
€445 (€450 carrying value ($611))
|
Senior Subordinated Notes
|
|
March 2020
|
|
|
8.625
|
%
|
$350
|
Senior Subordinated Notes
|
|
March 2021
|
|
|
8.625
|
%
|
$530 ($540 carrying value)
|
On
June 2, 2014, pursuant to an indenture entered into on December 23, 2013, Huntsman International issued €145 million (approximately
$197 million) aggregate principal amount of additional 2021 Senior Notes. The notes are recorded at carrying value €150 million (approximately $204 million) as of
June 30, 2014.
The
2021 Senior Notes bear interest at the rate of 5.125% per year payable semi-annually on April 15 and October 15 of each year and are due on April 15, 2021.
Huntsman International may redeem the 2021 Senior Notes in whole or in part at any time prior to January 15, 2021 at a price equal to 100% of the principal amount thereof plus a "make-whole"
premium and accrued and unpaid interest.
The
2021 Senior Notes and 2020 Senior Notes are general unsecured senior obligations of Huntsman International and are guaranteed on a general unsecured senior basis by the Guarantors.
The indentures impose certain limitations on the ability of Huntsman International and its subsidiaries to, among other things, incur additional indebtedness secured by any principal properties, incur
indebtedness of nonguarantor subsidiaries, enter into sale and leaseback transactions with respect to any principal properties and consolidate or merge with or into any other person or lease, sell or
transfer all or substantially all of its properties and assets. Upon the occurrence of certain change of control events, holders of the 2021 Senior Notes and 2020 Senior Notes will have the right to
require that Huntsman International purchase all or a portion of such holder's 2021 and 2020 Senior Notes in cash at a purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest to the date of repurchase.
29
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
7. DEBT (Continued)
Redemption of Notes and Loss on Early Extinguishment of Debt
We did not redeem or repurchase any of our notes during the six months ended June 30, 2014. During the six months ended
June 30, 2013, we redeemed or repurchased the following notes (monetary amounts in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of Redemption
|
|
Notes
|
|
Principal Amount of
Notes Redeemed
|
|
Amount Paid
(Excluding Accrued
Interest)
|
|
Loss on Early
Extinguishment
of Debt
|
|
March 4, 2013
|
|
5.50% Senior Notes due 2016
|
|
$
|
200
|
|
$
|
200
|
|
$
|
34
|
|
Variable Interest Entity Debt
As of June 30, 2014, Arabian Amines Company, our consolidated 50%-owned joint venture, had $166 million outstanding under
its loan commitments and debt financing arrangements. Arabian Amines Company is currently not in compliance with certain financial covenants under its loan commitments. We do not guarantee these loan
commitments, and Arabian Amines Company is not a guarantor of any of our other debt obligations. Arabian Amines Company's noncompliance with its financial covenants does not affect any of our debt
obligations. While the lenders under the loan commitments have agreed to certain modifications, we continue discussions with Arabian Amines Company's lenders and expect to resolve the noncompliance.
As of June 30, 2014, the amounts outstanding under these loan commitments were classified as current in our condensed consolidated balance sheets (unaudited).
Note Payable from Huntsman International to Huntsman Corporation
As of June 30, 2014, we have a loan of $807 million to our subsidiary, Huntsman International (the "Intercompany Note").
The Intercompany Note is unsecured and $100 million of the outstanding amount is classified as current as of June 30, 2014 on our condensed consolidated balance sheets (unaudited). As of
June 30, 2014, under the terms of the Intercompany Note, Huntsman International promises to pay us interest on the unpaid principal amount at a rate per annum based on the previous monthly
average borrowing rate obtained under our U.S. accounts
receivable securitization program ("U.S. A/R Program"), less 10 basis points (provided that the rate shall not exceed an amount that is 25 basis points less than the monthly average borrowing rate
obtained for the U.S. LIBOR-based borrowings under our Revolving Facility).
COMPLIANCE WITH COVENANTS
We believe that we are in compliance with the covenants contained in the agreements governing our material debt instruments, including
our Senior Credit Facilities, our U.S. A/R Program and our European accounts receivable securitization program ("European A/R Program" and collectively with the U.S. A/R Program, "A/R Programs") and
our notes. However, Arabian Amines Company, our consolidated 50%-owned joint venture, is currently not in compliance with certain financial covenants contained under its loan commitments. See
"Variable Interest Entity Debt" above.
30
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
7. DEBT (Continued)
Our
material financing arrangements contain certain covenants with which we must comply. A failure to comply with a covenant could result in a default under a financing arrangement
unless we obtained an appropriate waiver or forbearance (as to which we can provide no assurance). A default under these material financing arrangements generally allows debt holders the option to
declare the underlying debt obligations immediately due and payable. Furthermore, certain of our material financing arrangements contain cross-default and cross-acceleration provisions under which a
failure to comply with the covenants in one financing arrangement may result in an event of default under another financing arrangement.
Our
Senior Credit Facilities are subject to a single financial covenant (the "Leverage Covenant") which applies only to the Revolving Facility and is calculated at the Huntsman
International level. The Leverage Covenant is applicable only if borrowings, letters of credit or guarantees are outstanding under the Revolving Facility (cash collateralized letters of credit or
guarantees are not deemed outstanding). The Leverage Covenant is a net senior secured leverage ratio covenant which requires that Huntsman International's ratio of senior secured debt to EBITDA (as
defined in the applicable agreement) is not more than 3.75 to 1.
If
in the future Huntsman International fails to comply with the Leverage Covenant, then we may not have access to liquidity under our Revolving Facility. If Huntsman International
failed to comply with the Leverage Covenant at a time when we had uncollateralized loans or letters of credit outstanding under the Revolving Facility, Huntsman International would be in default under
the Senior Credit
Facilities, and, unless Huntsman International obtained a waiver or forbearance with respect to such default (as to which we can provide no assurance), Huntsman International could be required to pay
off the balance of the Senior Credit Facilities in full, and we may not have further access to such facilities.
The
agreements governing our A/R Programs also contain certain receivable performance metrics. Any material failure to meet the applicable A/R Programs' metrics in the future could lead
to an early termination event under the A/R Programs, which could require us to cease our use of such facilities, prohibiting us from additional borrowings against our receivables or, at the
discretion of the lenders, requiring that we repay the A/R Programs in full. An early termination event under the A/R Programs would also constitute an event of default under our Senior Credit
Facilities, which could require us to pay off the balance of the Senior Credit Facilities in full and could result in the loss of our Senior Credit Facilities.
8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
We are exposed to market risks, such as changes in interest rates, foreign exchange rates and commodity pricing risks. From time to time, we enter into transactions, including
transactions involving derivative instruments, to manage certain of these exposures.
All
derivatives, whether designated in hedging relationships or not, are recorded on our balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes
in the fair value of the derivative and the hedged items are recognized in earnings. If the derivative is designated as a cash flow hedge, changes in the fair value of the derivative are recorded in
accumulated other
31
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
comprehensive
loss, to the extent effective, and will be recognized in the income statement when the hedged item affects earnings. To the extent applicable, we perform effectiveness assessments in
order to use hedge accounting at each reporting period. For a derivative that does not qualify as a hedge, changes in fair value are recognized in earnings.
We
also hedge our net investment in certain European operations. Changes in the fair value of the hedge in the net investment of certain European operations are recorded in accumulated
other comprehensive loss.
Our
cash flows and earnings are subject to fluctuations due to exchange rate variation. Our revenues and expenses are denominated in various foreign currencies. From time to time, we may
enter into foreign currency derivative instruments to minimize the short-term impact of movements in foreign currency rates. Where practicable, we generally net multicurrency cash balances among our
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 one year or less). We do not hedge our foreign currency exposures in a manner that would eliminate the effect of
changes in exchange rates on our cash flows and earnings. As of June 30, 2014, we had approximately $215 million in notional amount (in U.S. dollar equivalents) outstanding in forward
foreign currency contracts.
On
December 9, 2009, we entered into a five-year interest rate contract to hedge the variability caused by monthly changes in cash flow due to associated changes in LIBOR under
our Senior Credit Facilities. The notional value of the contract is $50 million, and it has been designated as a cash flow hedge. The effective portion of the changes in the fair value of the
swap was recorded in other comprehensive loss. We will pay a fixed 2.6% on the hedge and receive the one-month LIBOR rate. As of June 30, 2014, the fair value of the hedge was $1 million
and was recorded in current liabilities on our condensed consolidated balance sheets (unaudited).
On
January 19, 2010, we entered into an additional five-year interest rate contract to hedge the variability caused by monthly changes in cash flow due to associated changes in
LIBOR under our Senior Credit Facilities. The notional value of the contract is $50 million, and it has been designated as a cash flow hedge. The effective portion of the changes in the fair
value of the swap was recorded as other comprehensive loss. We will pay a fixed 2.8% on the hedge and receive the one-month LIBOR rate. As of June 30, 2014, the fair value of the hedge was
$1 million and was recorded in current liabilities on our condensed consolidated balance sheets (unaudited).
On
September 1, 2011, we entered into a $50 million forward interest rate contract that will begin in December 2014 with maturity in April 2017 and a $50 million
forward interest rate contract that will begin in January 2015 with maturity in April 2017. These two forward contracts are to hedge the
variability caused by monthly changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities once our existing interest rate hedges mature. These swaps are designated as
cash flow hedges and the effective portion of the changes in the fair value of the swaps were recorded in other comprehensive income. Both interest rate contracts will pay a fixed 2.5% on the hedge
and receive the one-month LIBOR rate once the contracts begin in 2014 and 2015, respectively. As of
32
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
June 30,
2014, the combined fair value of these two hedges was $3 million and was recorded in other noncurrent liabilities on our condensed consolidated balance sheets (unaudited).
In
2009, Sasol-Huntsman entered into derivative transactions to hedge the variable interest rate associated with its local credit facility. These derivative rate hedges include a
floating to fixed interest rate contract providing Sasol-Huntsman with EURIBOR interest payments for a fixed payment of 3.62% and a cap for future periods with a strike price of 3.62%. In connection
with the consolidation of Sasol-Huntsman as of April 1, 2011, the interest rate contract is now included in our consolidated results. See "Note 5. Variable Interest Entities." The
notional amount of the hedges as of June 30, 2014 was €25 million (approximately $34 million) and the derivative transactions do not qualify for hedge accounting.
As of June 30, 2014, the fair value of the hedges was less than €1 million (less than approximately $1 million) and was recorded in other noncurrent liabilities on
our condensed consolidated balance sheets (unaudited). For the three and six months ended June 30, 2014, we recorded a reduction of interest expense of nil and
€1 million (approximately $1 million), respectively, due to changes in the fair value of the hedges.
Beginning
in 2009, Arabian Amines Company entered into a 12-year floating to fixed interest rate contract providing for a receipt of LIBOR interest payments for a fixed payment of 5.02%.
In connection with the consolidation of Arabian Amines Company as of July 1, 2010, the interest rate contract is now included in our consolidated results. See "Note 5. Variable Interest
Entities." The notional amount of the swap as of June 30, 2014 was $30 million, and the interest rate contract is not designated as a cash flow hedge. As of June 30, 2014, the
fair value of the swap was $3 million and was recorded in current liabilities on our condensed consolidated balance sheets (unaudited). For the three and six months ended June 30, 2014,
we recorded additional (reduction of) interest expense of nil each due to changes in fair value of the swap. As of June 30, 2014, Arabian Amines Company was not in compliance with certain
financial covenants under its loan commitments. For more information, see "Note 7. DebtDirect and Subsidiary DebtVariable Interest Entity Debt."
In
conjunction with the issuance of our 8.625% senior subordinated notes due 2020, we entered into cross-currency interest rate contracts with three counterparties. On March 17,
2010, we made payments of $350 million to these counterparties and received €255 million from these counterparties, and on maturity (March 15, 2015) we are
required to pay €255 million to these counterparties and will receive $350 million from these counterparties. On March 15 and
September 15 of each year, we will receive U.S. dollar interest payments of approximately $15 million (equivalent to an annual rate of 8.625%) and make interest payments of approximately
€11 million (equivalent to an annual rate of approximately 8.41%). This swap is designated as a hedge of net investment for financial reporting purposes. As of June 30,
2014, the fair value of this swap was $3 million and was recorded in current assets on our condensed consolidated balance sheets (unaudited).
We
finance certain of our non-U.S. subsidiaries with intercompany loans that are, in many cases, denominated in currencies other than the entities' functional currency. We manage the net
foreign currency exposure created by this debt through various means, including cross-currency swaps, the designation of certain intercompany loans as permanent loans because they are not expected to
be repaid in the foreseeable future and the designation of certain debt and swaps as net investment hedges.
33
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
Foreign currency transaction gains and losses on intercompany loans that are not designated as permanent loans are recorded in earnings. Foreign currency transaction gains and losses on
intercompany loans that are designated as permanent loans are recorded in other comprehensive income. From time to time, we review such designation of intercompany loans.
We
review our non-U.S. dollar denominated debt and derivative instruments to determine the appropriate amounts designated as hedges. As of June 30, 2014, we have designated
approximately €475 million (approximately $645 million) of euro-denominated debt and cross-currency interest rate contracts as a hedge of our net investment. For the
three and six months ended June 30, 2014, the amount of gain recognized on the hedge of our net investment was $5 million and $6 million, respectively, and was recorded in other
comprehensive income on our condensed consolidated statements of comprehensive income (unaudited). As of June 30, 2014, we had approximately €1,028 million (approximately
$1,397 million) in net euro assets.
9. FAIR VALUE
The fair values of financial instruments were as follows (dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
|
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
|
Non-qualified employee benefit plan investments
|
|
$
|
21
|
|
$
|
21
|
|
$
|
21
|
|
$
|
21
|
|
Cross-currency interest rate contracts
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
2
|
|
Interest rate contracts
|
|
|
(9
|
)
|
|
(9
|
)
|
|
(10
|
)
|
|
(10
|
)
|
Long-term debt (including current portion)
|
|
|
(4,066
|
)
|
|
(4,197
|
)
|
|
(3,910
|
)
|
|
(4,010
|
)
|
The
carrying amounts reported in our condensed consolidated balance sheets (unaudited) of cash and cash equivalents, accounts receivable and accounts payable approximate fair value
because of the immediate or short-term maturity of these financial instruments. The fair value of non-qualified employee benefit plan investments is obtained through market observable pricing using
prevailing market prices. The estimated fair values of our long-term debt are based on quoted market prices for the identical liability when traded as an asset in an active market (Level 1).
The
fair value estimates presented herein are based on pertinent information available to management as of June 30, 2014 and December 31, 2013. Although management is not
aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since
June 30, 2014 and current estimates of fair value may differ significantly from the amounts presented herein.
34
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
9. FAIR VALUE (Continued)
The
following assets and liabilities are measured at fair value on a recurring basis (dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Amounts Using
|
|
Description
|
|
June 30,
2014
|
|
Quoted prices in active
markets for identical
assets (Level 1)(3)
|
|
Significant other
observable inputs
(Level 2)(3)
|
|
Significant
unobservable inputs
(Level 3)(3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for sale equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity mutual funds
|
|
$
|
21
|
|
$
|
21
|
|
$
|
|
|
$
|
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross-currency interest rate contracts(1)
|
|
|
3
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
24
|
|
$
|
21
|
|
$
|
3
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts(2)
|
|
$
|
(9
|
)
|
$
|
|
|
$
|
(9
|
)
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Amounts Using
|
|
Description
|
|
December 31,
2013
|
|
Quoted prices in active
markets for identical
assets (Level 1)(3)
|
|
Significant other
observable inputs
(Level 2)(3)
|
|
Significant
unobservable inputs
(Level 3)(3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for sale equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity mutual funds
|
|
$
|
21
|
|
$
|
21
|
|
$
|
|
|
$
|
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross-currency interest rate contracts(1)
|
|
|
2
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
23
|
|
$
|
21
|
|
$
|
2
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts(2)
|
|
$
|
(10
|
)
|
$
|
|
|
$
|
(10
|
)
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
income approach is used to calculate the fair value of these instruments. Fair value represents the present value of estimated future cash flows,
calculated using relevant interest rates, exchange rates, and yield curves at stated intervals. There were no material changes to the valuation methods or assumptions used to determine the fair value
during the current period.
-
(2)
-
The
income approach is used to calculate the fair value of these instruments. Fair value represents the present value of estimated future cash flows,
calculated using relevant interest rates and yield
35
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
9. FAIR VALUE (Continued)
curves
at stated intervals. There were no material changes to the valuation methods or assumptions used to determine the fair value during the current period.
-
(3)
-
There
were no transfers between Levels 1 and 2 within the fair value hierarchy for the six months ended June 30, 2014 and the year ended
December 31, 2013. During the six months ended June 30, 2014 and 2013, there were no instruments categorized as Level 3 within the fair value hierarchy.
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 the six months ended June 30, 2014 and 2013, we recorded charges of $6 million and $1 million, respectively, for the impairment of
long-lived assets.
10. EMPLOYEE BENEFIT PLANS
Components of the net periodic benefit costs for the three and six months ended June 30, 2014 and 2013 were as follows (dollars in millions):
Huntsman Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined
Benefit Plans
|
|
Other
Postretirement
Benefit Plans
|
|
|
|
Three months
ended
June 30,
|
|
Three months
ended
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Service cost
|
|
$
|
15
|
|
$
|
16
|
|
$
|
|
|
$
|
1
|
|
Interest cost
|
|
|
37
|
|
|
32
|
|
|
2
|
|
|
1
|
|
Expected return on assets
|
|
|
(49
|
)
|
|
(42
|
)
|
|
|
|
|
|
|
Amortization of prior service benefit
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Amortization of actuarial loss
|
|
|
13
|
|
|
20
|
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost
|
|
$
|
14
|
|
$
|
25
|
|
$
|
2
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
10. EMPLOYEE BENEFIT PLANS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined
Benefit Plans
|
|
Other
Postretirement
Benefit Plans
|
|
|
|
Six months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Service cost
|
|
$
|
30
|
|
$
|
33
|
|
$
|
1
|
|
$
|
2
|
|
Interest cost
|
|
|
74
|
|
|
65
|
|
|
3
|
|
|
2
|
|
Expected return on assets
|
|
|
(98
|
)
|
|
(86
|
)
|
|
|
|
|
|
|
Amortization of prior service benefit
|
|
|
(3
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
Amortization of actuarial loss
|
|
|
26
|
|
|
40
|
|
|
1
|
|
|
1
|
|
Special termination benefits
|
|
|
3
|
|
|
5
|
|
|
|
|
|
|
|
Settlement loss
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost
|
|
$
|
33
|
|
$
|
54
|
|
$
|
3
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined
Benefit Plans
|
|
Other
Postretirement
Benefit Plans
|
|
|
|
Three months
ended
June 30,
|
|
Three months
ended
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Service cost
|
|
$
|
15
|
|
$
|
17
|
|
$
|
|
|
$
|
1
|
|
Interest cost
|
|
|
37
|
|
|
32
|
|
|
2
|
|
|
1
|
|
Expected return on assets
|
|
|
(49
|
)
|
|
(42
|
)
|
|
|
|
|
|
|
Amortization of prior service benefit
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Amortization of actuarial loss
|
|
|
15
|
|
|
21
|
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost
|
|
$
|
16
|
|
$
|
27
|
|
$
|
2
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
10. EMPLOYEE BENEFIT PLANS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined
Benefit Plans
|
|
Other
Postretirement
Benefit Plans
|
|
|
|
Six months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Service cost
|
|
$
|
30
|
|
$
|
34
|
|
$
|
1
|
|
$
|
2
|
|
Interest cost
|
|
|
74
|
|
|
65
|
|
|
3
|
|
|
2
|
|
Expected return on assets
|
|
|
(98
|
)
|
|
(86
|
)
|
|
|
|
|
|
|
Amortization of prior service benefit
|
|
|
(3
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
Amortization of actuarial loss
|
|
|
30
|
|
|
42
|
|
|
1
|
|
|
1
|
|
Special termination benefits
|
|
|
3
|
|
|
5
|
|
|
|
|
|
|
|
Settlement loss
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost
|
|
$
|
37
|
|
$
|
57
|
|
$
|
3
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During
the six months ended June 30, 2014 and 2013, we made contributions to our pension and other postretirement benefit plans of $60 million and $76 million,
respectively. During the remainder of 2014, we expect to contribute an additional amount of approximately $76 million to these plans.
Beginning
July 1, 2014, the Huntsman Defined Benefit Pension Plan was closed to new, non-union entrants. New, non-union entrants will be provided with a defined contribution plan
with a non-discretionary employer contribution and a company match.
11. HUNTSMAN CORPORATION STOCKHOLDERS' EQUITY
COMMON STOCK DIVIDENDS
During each of the quarters ended June 30, 2014 and 2013 and March 31, 2014 and 2013, we paid cash dividends of
$30 million, or $0.125 per share, to common stockholders.
38
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
12. 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,
net of tax(b)
|
|
Other
comprehensive
income of
unconsolidated
affiliates
|
|
Other,
net
|
|
Total
|
|
Amounts
attributable to
noncontrolling
interests
|
|
Amounts
attributable to
Huntsman
Corporation
|
|
Beginning balance, January 1, 2014
|
|
$
|
246
|
|
$
|
(851
|
)
|
$
|
12
|
|
$
|
8
|
|
$
|
(585
|
)
|
$
|
8
|
|
$
|
(577
|
)
|
Other comprehensive income before reclassifications
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
3
|
|
Amounts reclassified from accumulated other comprehensive loss(c)
|
|
|
|
|
|
17
|
|
|
|
|
|
1
|
|
|
18
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period other comprehensive income
|
|
|
|
|
|
17
|
|
|
|
|
|
1
|
|
|
18
|
|
|
3
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance, June 30, 2014
|
|
$
|
246
|
|
$
|
(834
|
)
|
$
|
12
|
|
$
|
9
|
|
$
|
(567
|
)
|
$
|
11
|
|
$
|
(556
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Amounts
are net of tax of $15 and $13 as of June 30, 2014 and January 1, 2014, respectively.
-
(b)
-
Amounts
are net of tax of $77 and $83 as of June 30, 2014 and January 1, 2014, respectively.
-
(c)
-
See
table below for details about these reclassifications.
39
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
12. OTHER COMPREHENSIVE INCOME (LOSS) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency
translation
adjustment(a)
|
|
Pension and
other
postretirement
benefits
adjustments, net
of tax(b)
|
|
Other
comprehensive
income of
unconsolidated affiliates
|
|
Other,
net
|
|
Total
|
|
Amounts
attributable to
noncontrolling
interests
|
|
Amounts
attributable to
Huntsman
Corporation
|
|
Beginning balance, January 1, 2013
|
|
$
|
269
|
|
$
|
(1,036
|
)
|
$
|
7
|
|
$
|
3
|
|
$
|
(757
|
)
|
$
|
13
|
|
$
|
(744
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
|
(97
|
)
|
|
22
|
|
|
|
|
|
2
|
|
|
(73
|
)
|
|
3
|
|
|
(70
|
)
|
Amounts reclassified from accumulated other comprehensive loss(c)
|
|
|
|
|
|
28
|
|
|
|
|
|
|
|
|
28
|
|
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period other comprehensive income
|
|
|
(97
|
)
|
|
50
|
|
|
|
|
|
2
|
|
|
(45
|
)
|
|
3
|
|
|
(42
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance, June, 30 2013
|
|
$
|
172
|
|
$
|
(986
|
)
|
$
|
7
|
|
$
|
5
|
|
$
|
(802
|
)
|
$
|
16
|
|
$
|
(786
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Amounts
are net of tax of $21 and $20 as of June 30, 2013 and January 1, 2013, respectively.
-
(b)
-
Amounts
are net of tax of $182 and $197 as of June 30, 2013 and January 1, 2013, respectively.
-
(c)
-
See
table below for details about these reclassifications.
|
|
|
|
|
|
|
|
|
|
|
Three months
ended June 30, 2014
|
|
Six months
ended June 30, 2014
|
|
|
|
|
Affected line item in
the statement where
net income is
presented
|
Details about Accumulated Other
Comprehensive Loss Components:
|
|
Amounts reclassified
from accumulated other
comprehensive loss
|
|
Amounts reclassified
from accumulated other
comprehensive loss
|
Amortization of pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
Prior service credit
|
|
$
|
(3
|
)
|
$
|
(5
|
)
|
(a)(b)
|
Actuarial loss
|
|
|
14
|
|
|
27
|
|
(a)(b)(c)
|
Settlement loss
|
|
|
|
|
|
1
|
|
(a)(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
|
|
|
23
|
|
Total before tax
|
|
|
|
(3
|
)
|
|
(6
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total reclassifications for the period
|
|
$
|
8
|
|
$
|
17
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended June 30, 2013
|
|
Six months
ended June 30, 2013
|
|
|
|
|
Affected line item in
the statement where
net income is
presented
|
Details about Accumulated Other
Comprehensive Loss Components:
|
|
Amounts reclassified
from accumulated other
comprehensive loss
|
|
Amounts reclassified
from accumulated other
comprehensive loss
|
Amortization of pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
Prior service credit
|
|
$
|
(2
|
)
|
$
|
(4
|
)
|
(a)(b)
|
Actuarial loss
|
|
|
21
|
|
|
41
|
|
(a)(b)(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|
37
|
|
Total before tax
|
|
|
|
(5
|
)
|
|
(9
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total reclassifications for the period
|
|
$
|
14
|
|
$
|
28
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Amounts
in parentheses indicate credits on our condensed consolidated statements of operations (unaudited).
40
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
12. OTHER COMPREHENSIVE INCOME (LOSS) (Continued)
-
(b)
-
These
accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See "Note 10. Employee Benefit
Plans."
-
(c)
-
Amounts
contain approximately $1 million and $3 million of actuarial losses related to discontinued operations for each of the three months
ended June 30, 2014 and 2013, respectively, and $2 and $4 million for the six months ended June 30, 2014 and 2013, respectively.
Huntsman International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency
translation
adjustment(a)
|
|
Pension and
other
postretirement
benefits
adjustments,
net of tax(b)
|
|
Other
comprehensive
income (loss) of
unconsolidated
affiliates
|
|
Other, net
|
|
Total
|
|
Amounts
attributable to
noncontrolling
interests
|
|
Amounts
attributable to
Huntsman
International
|
|
Beginning balance, January 1, 2014
|
|
$
|
243
|
|
$
|
(883
|
)
|
$
|
12
|
|
$
|
2
|
|
$
|
(626
|
)
|
$
|
8
|
|
$
|
(618
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income before reclassifications
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
3
|
|
Amounts reclassified from accumulated other comprehensive loss(c)
|
|
|
|
|
|
20
|
|
|
|
|
|
1
|
|
|
21
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period other comprehensive income
|
|
|
|
|
|
20
|
|
|
|
|
|
1
|
|
|
21
|
|
|
3
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance, June 30, 2014
|
|
$
|
243
|
|
$
|
(863
|
)
|
$
|
12
|
|
$
|
3
|
|
$
|
(605
|
)
|
$
|
11
|
|
$
|
(594
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Amounts
are net of tax of $2 and nil as of June 30, 2014 and January 1, 2014, respectively.
-
(b)
-
Amounts
are net of tax of $106 and $113 as of June 30, 2014 and January 1, 2014, respectively.
-
(c)
-
See
table below for details about these reclassifications.
41
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
12. OTHER COMPREHENSIVE INCOME (LOSS) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency
translation
adjustment(a)
|
|
Pension and
other
postretirement
benefits
adjustments,
net of tax(b)
|
|
Other
comprehensive
income of
unconsolidated
affiliates
|
|
Other,
net
|
|
Total
|
|
Amounts
attributable to
noncontrolling
interests
|
|
Amounts
attributable to
Huntsman
International
|
|
Beginning balance, January 1, 2013
|
|
$
|
268
|
|
$
|
(1,076
|
)
|
$
|
7
|
|
$
|
(3
|
)
|
$
|
(804
|
)
|
$
|
13
|
|
$
|
(791
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income before reclassifications
|
|
|
(97
|
)
|
|
22
|
|
|
|
|
|
3
|
|
|
(72
|
)
|
|
3
|
|
|
(69
|
)
|
Amounts reclassified from accumulated other comprehensive loss(c)
|
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
30
|
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current-period other comprehensive (loss) income
|
|
|
(97
|
)
|
|
52
|
|
|
|
|
|
3
|
|
|
(42
|
)
|
|
3
|
|
|
(39
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance, June 30, 2013
|
|
$
|
171
|
|
$
|
(1,024
|
)
|
$
|
7
|
|
$
|
|
|
$
|
(846
|
)
|
$
|
16
|
|
$
|
(830
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Amounts
are net of tax of $8 and $7 as of June 30, 2013 and January 1, 2013, respectively.
-
(b)
-
Amounts
are net of tax of $213 and $228 as of June 30, 2013 and January 1, 2013, respectively.
-
(c)
-
See
table below for details about these reclassifications.
|
|
|
|
|
|
|
|
|
|
|
Three months
ended June 30, 2014
|
|
Six months
ended June 30, 2014
|
|
|
|
|
Affected line item in
the statement where
net income is
presented
|
Details about Accumulated Other
Comprehensive Loss Components:
|
|
Amounts reclassified
from accumulated other
comprehensive loss
|
|
Amounts reclassified
from accumulated other
comprehensive loss
|
Amortization of pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
Prior service credit
|
|
$
|
(3
|
)
|
$
|
(5
|
)
|
(a)(b)
|
Actuarial loss
|
|
|
16
|
|
|
31
|
|
(a)(b)(c)
|
Settlement loss
|
|
|
|
|
|
1
|
|
(a)(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
|
27
|
|
Total before tax
|
|
|
|
(3
|
)
|
|
(7
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total reclassifications for the period
|
|
$
|
10
|
|
$
|
20
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
12. OTHER COMPREHENSIVE INCOME (LOSS) (Continued)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2013
|
|
Six months ended
June 30, 2013
|
|
|
|
|
Affected line item in
the statement where
net income is
presented
|
Details about Accumulated Other Comprehensive Loss Components:
|
|
Amounts reclassified
from accumulated other
comprehensive loss
|
|
Amounts reclassified
from accumulated other
comprehensive loss
|
Amortization of pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
Prior service credit
|
|
$
|
(2
|
)
|
$
|
(4
|
)
|
(a)(b)
|
Actuarial loss
|
|
|
22
|
|
|
43
|
|
(a)(b)(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
39
|
|
Total before tax
|
|
|
|
(4
|
)
|
|
(9
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total reclassifications for the period
|
|
$
|
16
|
|
$
|
30
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Amounts
in parentheses indicate credits on our condensed consolidated statements of operations (unaudited).
-
(b)
-
These
accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See "Note 10. Employee Benefit
Plans."
-
(c)
-
Amounts
contain approximately $1 million and $3 million of actuarial losses related to discontinued operations for each of the three months
ended June 30, 2014 and 2013, respectively, and $2 and $4 million for the six months ended June 30, 2014 and 2013, respectively.
13. COMMITMENTS AND CONTINGENCIES
LEGAL MATTERS
Asbestos Litigation
We have been named as a "premises defendant" in a number of asbestos exposure cases, typically claims by nonemployees of exposure to
asbestos while at a facility. These complaints generally do not provide specific information about the amount of damages being sought, the time period in which the alleged injuries occurred or the
alleged exposures giving rise to the asserted liability. This information, which would be central to any estimate of probable loss, generally must be obtained through legal discovery.
Where
a claimant's alleged exposure occurred prior to our ownership of the relevant "premises," the prior owners generally have contractually agreed to retain liability for, and to
indemnify us against, asbestos exposure claims. This indemnification is not subject to any time or dollar amount limitations. Upon service of a complaint in one of these cases, we tender it to the
prior owner. The prior owner accepts responsibility for the conduct of the defense of the cases and payment of any amounts due to the claimants. In our twenty-year experience with tendering these
cases, we have not made any payment with respect to any tendered asbestos cases. We believe that the prior owners have the intention and ability to continue to honor their indemnity obligations,
although we cannot assure you that they will continue to do so or that we will not be liable for these cases if they do not.
43
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
13. COMMITMENTS AND CONTINGENCIES (Continued)
The following table presents for the periods indicated certain information about cases for which service has been received that we have tendered to the indemnifying party, all of which
have been accepted by the indemnifying party.
|
|
|
|
|
|
|
|
|
|
Six months
ended June 30,
|
|
|
|
2014
|
|
2013
|
|
Unresolved at beginning of period
|
|
|
1,073
|
|
|
1,080
|
|
Tendered during period
|
|
|
|
|
|
3
|
|
Resolved during period(1)
|
|
|
1
|
|
|
11
|
|
Unresolved at end of period
|
|
|
1,072
|
|
|
1,072
|
|
-
(1)
-
Although
the indemnifying party informs us when tendered cases have been resolved, it generally does not inform us of the settlement amounts relating to
such cases, if any. The indemnifying party has informed us that it typically manages our defense together with the defense of other entities in such cases and resolves claims involving multiple
defendants simultaneously, and that it considers the allocation of settlement amounts, if any, among defendants to be confidential and proprietary. Consequently, we are not able to provide the number
of cases resolved with payment by the indemnifying party or the amount of such payments.
We
have never made any payments with respect to these cases. As of June 30, 2014, we had an accrued liability of approximately $10 million relating to these cases and a
corresponding receivable of approximately $10 million relating to our indemnity protection with respect to these cases. We cannot assure you that our liability will not exceed our accruals or
that our liability associated with these cases would not be material to our financial condition, results of operations or liquidity; accordingly, we are
not able to estimate the amount or range of loss in excess of our accruals. Additional asbestos exposure claims may be made against us in the future, and such claims could be material. However,
because we are not able to estimate the amount or range of losses associated with such claims, we have made no accruals with respect to unasserted asbestos exposure claims as of June 30, 2014.
Certain
cases in which we are a premises defendant are not subject to indemnification by prior owners or operators. However, we may be entitled to insurance or other recoveries in some
of these cases. The following table presents for the periods indicated certain information about these cases.
44
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
13. COMMITMENTS AND CONTINGENCIES (Continued)
Cases
include all cases for which service has been received by us. Certain prior cases that were filed in error against us have been dismissed.
|
|
|
|
|
|
|
|
|
|
Six months
ended
June 30,
|
|
|
|
2014
|
|
2013
|
|
Unresolved at beginning of period
|
|
|
48
|
|
|
50
|
|
Filed during period
|
|
|
4
|
|
|
2
|
|
Resolved during period
|
|
|
5
|
|
|
1
|
|
Unresolved at end of period
|
|
|
47
|
|
|
51
|
|
We
paid gross settlement costs for asbestos exposure cases that are not subject to indemnification of $414,000 and nil for the six months ended June 30, 2014 and 2013,
respectively. As of June 30, 2014, we had an accrual of $141,000 relating to these cases. We cannot assure you that our liability will not exceed our accruals or that our liability associated
with these cases would not be material to our financial condition, results of operations or liquidity; accordingly, we are not able to estimate the amount or range of loss in excess of our accruals.
Additional asbestos exposure claims may be made against us in the future, and such claims could be material. However, because we are not able to estimate the amount or range of losses associated with
such claims, we have made no accruals with respect to unasserted asbestos exposure claims as of June 30, 2014.
Antitrust Matters
We have been 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 asserted 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 are 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. We and all other defendants settled the Direct Purchasers
litigation and the court approved the settlement on December 13, 2013. We have paid the settlement in an amount immaterial to our condensed consolidated financial statements (unaudited).
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 and ordered our case transferred
to the U.S. District Court for the Southern District of Texas. It is possible that additional claims will be filed by other Direct Purchasers who opted out of the class litigation.
We
have also been 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 the Direct Purchasers. The Opt-Out Litigation and Indirect Purchasers
plaintiffs seek to recover injunctive
45
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
13. COMMITMENTS AND CONTINGENCIES (Continued)
relief,
treble damages or the maximum damages allowed by state law, costs of suit and attorneys' fees. We are not aware of any illegal conduct by us or any of our employees. Nevertheless, we have
incurred costs relating to these claims and could incur additional costs in amounts which in the aggregate could be material to us. Because of the overall complexity of these cases, we are unable to
reasonably estimate any possible loss or range of loss associated with these claims and we have made no accruals with respect to these claims.
Product Delivery Claim
We have been notified by a customer of potential claims related to our allegedly delivering a different product than it had ordered.
Our customer claims that it was unaware that the different product had been delivered until after it had been used to manufacture materials which were subsequently sold. Originally, the customer
stated that it had been notified of claims of up to an aggregate of €153 million (approximately $208 million) relating to this matter and believed 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 $154 million). Based on the facts currently available to us, 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, 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, or the banks, demanded that
we indemnify them for claims brought by certain MatlinPatterson entities that were formerly our stockholders ("MatlinPatterson") in litigation filed June 19, 2012 in the 9th District
Court in Montgomery County, Texas (the "Texas Litigation"). The banks assert that they are entitled to indemnification pursuant to the Agreement of Compromise and Settlement between the banks and our
Company, dated June 22, 2009, wherein the banks and our Company settled claims that we brought relating to the failed merger with Hexion. MatlinPatterson claims that the banks knowingly made
materially false representations about the nature of the financing for the acquisition of our Company by Hexion and that they suffered substantial losses to their 19 million shares of our
common stock as a result of the banks' misrepresentations. MatlinPatterson is asserting statutory fraud, common law fraud and aiding and abetting statutory fraud and are seeking actual damages,
exemplary damages, costs and attorney's fees, pre-judgment and post-judgment interest. On December 21, 2012, the court dismissed the Texas Litigation, a decision which was affirmed by the Ninth
Court of Appeals of Texas on May 15, 2014. A subsequent motion for rehearing by MatlinPatterson was denied by the same appellate court on June 12, 2014. A petition for discretionary
review in the Texas Supreme Court was filed on July 28, 2014.
On
July 14, 2014, the banks demanded that we indemnify them for claims brought by certain 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 have made essentially the same allegations as MatlinPatterson made in the Texas Litigation and,
additionally, have named
46
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
13. COMMITMENTS AND CONTINGENCIES (Continued)
Apollo
Global Management LLC and Apollo Management Holdings, L.P. as defendants. The plaintiffs in the Wisconsin Litigation assert claims for misrepresentation and conspiracy to defraud.
We denied the banks' indemnification demand for both the Texas and 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.
14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
General
We are subject to extensive federal, state, local and international laws, regulations, rules and ordinances relating to operational and
process safety, pollution, protection of the environment, product management and distribution, and the generation, storage, handling, transportation, treatment, disposal and remediation of hazardous
substances and waste materials. In the ordinary course of business, we are subject to frequent environmental inspections and monitoring and occasional investigations by governmental enforcement
authorities. In addition, our production facilities require operating permits that are subject to renewal, modification and, in certain circumstances, revocation. Actual or alleged violations of
safety laws, environmental laws or permit requirements could result in restrictions or prohibitions on plant operations or product distribution, substantial civil or criminal sanctions, as well as,
under some environmental laws, the assessment of strict liability and/or joint and several liability. Moreover, changes in environmental regulations could inhibit or interrupt our operations, or
require us to modify our facilities or operations. Accordingly, environmental or regulatory matters may cause us to incur significant unanticipated losses, costs or liabilities.
Environmental, Health and Safety Systems
We are committed to achieving and maintaining compliance with all applicable environmental, health and safety ("EHS") legal
requirements, and we have developed policies and management systems that are intended to identify the multitude of EHS legal requirements applicable to our operations, enhance compliance with
applicable legal requirements, improve the safety of our employees, contractors, community neighbors and customers and minimize the production and emission of wastes and other pollutants. Although EHS
legal requirements are constantly changing and are frequently difficult to comply with, these EHS management systems are designed to assist us in our compliance goals while also fostering efficiency
and improvement and reducing overall risk to us.
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 six months ended
47
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)
June 30,
2014 and 2013, our capital expenditures for EHS matters totaled $37 million and $35 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.
Remediation Liabilities
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 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 condensed consolidated financial statements (unaudited).
One
of these sites, the North Maybe Canyon Mine site, 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 potentially responsible party ("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.
In
addition, 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 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.
48
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)
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. We have reached agreement with the authority that a mortgage on the land will be held by the authority as financial
surety during the
period covered by the current cleanup notice, which ends on July 30, 2014. As of June 30, 2014, we had an accrued liability of approximately $24 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.
In
many cases, our potential liability arising from historical contamination is based on operations and other events occurring prior to our ownership of a business or specific facility.
In these situations, we frequently obtained an indemnity agreement from the prior owner addressing remediation liabilities arising from pre-closing conditions. We have successfully exercised our
rights under these contractual covenants for a number of sites and, where applicable, mitigated our ultimate remediation liability. We cannot assure you, however, that the liabilities for all such
matters subject to indemnity will be honored by the prior owner or that our existing indemnities will be sufficient to cover our liabilities for such matters.
Based
on available information and the indemnification rights we believe are likely to be available, we believe that the costs to investigate and remediate known contamination will not
have a material effect on our financial statements. However, if such indemnities are not honored or do not fully cover the costs of investigation and remediation or we are required to contribute to
such costs, then such expenditures may have a material effect on our financial statements. At the current time, we are unable to estimate the total cost, exclusive of indemnification benefits, to
remediate any of the known contamination sites.
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 $28 million and $27 million for environmental liabilities as of June 30, 2014 and December 31, 2013, respectively.
Of these amounts, $3 million and $5 million were classified as accrued liabilities in our consolidated balance sheets as of June 30, 2014 and December 31, 2013, and
$25 million and $22 million were classified as other noncurrent liabilities in our consolidated balance sheets as of June 30, 2014 and December 31, 2013, respectively. 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.
49
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)
REGULATORY DEVELOPMENTS
The European Union regulatory framework for chemicals, called "REACH," became effective in 2007 and is designed to be phased in
gradually over 11 years. As a REACH-regulated company that manufactures in or imports more than one metric ton per year of a chemical substance into the European Economic Area, we were required
to pre-register with the European Chemicals Agency such chemical substances and isolated intermediates to take advantage of the 11 year phase-in period. To meet our compliance obligations, a
cross-business REACH team was established, through which we were able to fulfill all required pre-registrations, our first phase registrations by the November 30, 2010 deadline and our second
phase registrations by the May 31, 2013 deadline. While we continue our registration efforts to meet the next registration deadline of May 31, 2018, our REACH implementation team is now
strategically focused on the evaluation and authorization phases of the REACH process, directing its efforts to address "Substances of Very High Concern" and evaluating potential business
implications. Where warranted, evaluation of substitute chemicals will be an important element of our ongoing manufacturing sustainability efforts. As a chemical manufacturer with global operations,
we are also actively monitoring and addressing analogous regulatory regimes being considered or implemented outside of the European Union, such as in Korea and Taiwan.
Although
the total long-term cost for REACH compliance is unknown at this time, we spent approximately $4 million, $8 million and $5 million in 2013, 2012 and 2011,
respectively, to meet the initial REACH requirements. We cannot provide assurance that these recent expenditures are indicative of future amounts that we may be required to spend for REACH compliance.
GREENHOUSE GAS REGULATION
Globally, our operations are increasingly subject to regulations that seek to reduce emissions of "greenhouse gases" ("GHGs"), such as
carbon dioxide and methane, which may be contributing to changes in the Earth's climate. At the Durban negotiations of the Conference of the Parties to the Kyoto Protocol in 2012, a limited group of
nations, including the European Union, agreed to a second commitment period for the Kyoto Protocol, an international treaty that provides for reductions in GHG emissions. More significantly, the
European Union GHG Emissions Trading System, established pursuant to the Kyoto Protocol to reduce GHG emissions in the European Union, continues in its third phase. The European Union parliament
continues with a process to formalized
"backloading"the withholding of GHG allowances to prop up carbon prices. In addition, the European Union has recently announced its intentions to cut GHG emissions to 40% below 1990
levels by 2040 and impose a 27% renewable energy requirement at the European Union level. In the U.S., California has commenced the first compliance period of its cap-and-trade program. In June 2013,
China implemented its first pilot carbon emissions exchange in Shenzhen, China. Pilot carbon emissions schemes have also begun in Beijing, Shanghai, Guangdong, and Tianjin. Further expansion of
China's regional cap-and-trade is planned, and ultimately it is expected that these regional systems will form the backbone of a national cap-and-trade program. As these programs have not been fully
implemented and have experienced significant price volatility on low early trading volumes, we are unable at this time to determine their impact on our operations.
50
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)
Federal
climate change legislation in the U.S. appears unlikely in the near-term. As a result, domestic efforts to curb GHG emissions will continue to be led by the U.S. Environmental
Protection Agency's (the "EPA's") GHG regulations and the efforts of states. To the extent that our domestic operations are subject to the EPA's GHG regulations, we may face increased capital and
operating costs associated with new or expanded facilities. Significant expansions of our existing facilities or construction of new facilities may be subject to the Clean Air Act's (the "CAA")
Prevention of Significant Deterioration requirements under the EPA's GHG "Tailoring Rule." Some of our facilities are also subject to the EPA's Mandatory Reporting of Greenhouse Gases rule, and any
further regulation may increase our operational costs.
Under
a consent decree with states and environmental groups, the EPA is due to propose new source performance standards for GHG emissions from refineries. These standards could
significantly increase the costs of constructing or adding capacity to refineries and may ultimately increase the costs or decrease the supply of refined products. Either of these events could have an
adverse effect on our business.
We
are already managing and reporting GHG emissions, to varying degrees, as required by law for our sites in locations subject to Kyoto Protocol obligations and/or European Union
emissions trading scheme requirements. Although these sites are subject to existing GHG legislation, few have experienced or anticipate significant cost increases as a result of these programs,
although it is possible that GHG emission restrictions may increase over time. Potential consequences of such restrictions include capital requirements to modify assets to meet GHG emission
restrictions and/or increases in energy costs above the level of general inflation, as well as direct compliance costs. Currently, however, it is not possible to estimate the likely financial impact
of potential future regulation on any of our sites.
Finally,
it should be noted that some scientists have concluded that increasing concentrations of GHGs in the earth's atmosphere may produce climate changes that have significant
physical effects, such as
increased frequency and severity of storms, droughts, and floods and other climatic events. If any of those effects were to occur, they could have an adverse effect on our assets and operations.
PORT NECHES FLARING MATTER
As part of the EPA's 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. 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. We
are currently unable to determine the likelihood or magnitude of potential penalty or injunctive relief that may be incurred in resolving this matter.
51
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
15. 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 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 June 30, 2014, we were
authorized to grant up to 37.2 million shares under the Stock Incentive Plan. As of June 30, 2014, we had 9 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.
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
June 30,
|
|
Six months
ended
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Huntsman Corporation compensation cost
|
|
$
|
8
|
|
$
|
6
|
|
$
|
16
|
|
$
|
14
|
|
Huntsman International compensation cost
|
|
|
8
|
|
|
6
|
|
|
15
|
|
|
13
|
|
The
total income tax benefit recognized in the statements of operations for us and Huntsman International for stock-based compensation arrangements was $3 million for each of the
six months ended June 30, 2014 and 2013.
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
52
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
15. STOCK-BASED COMPENSATION PLANS (Continued)
of
grant. The assumptions noted below represent the weighted average of the assumptions utilized for stock options granted during the periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Dividend yield
|
|
|
N/A
|
|
|
2.7
|
%
|
|
2.4
|
%
|
|
2.8
|
%
|
Expected volatility
|
|
|
N/A
|
|
|
61.6
|
%
|
|
60.3
|
%
|
|
62.5
|
%
|
Risk-free interest rate
|
|
|
N/A
|
|
|
1.3
|
%
|
|
1.7
|
%
|
|
1.0
|
%
|
Expected life of stock options granted during the period
|
|
|
N/A
|
|
|
5.6 years
|
|
|
5.7 years
|
|
|
5.6 years
|
|
During
the three months ended June 30, 2014, no stock options were granted.
A
summary of stock option activity under the Stock Incentive Plan as of June 30, 2014 and changes during the six 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, 2014
|
|
|
10,019
|
|
$
|
15.39
|
|
|
|
|
|
|
|
Granted
|
|
|
1,116
|
|
|
21.22
|
|
|
|
|
|
|
|
Exercised
|
|
|
(1,369
|
)
|
|
20.22
|
|
|
|
|
|
|
|
Forfeited
|
|
|
(11
|
)
|
|
18.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at June 30, 2014
|
|
|
9,755
|
|
|
15.37
|
|
|
5.4
|
|
$
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at June 30, 2014
|
|
|
7,375
|
|
|
14.33
|
|
|
4.2
|
|
|
102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
weighted-average grant-date fair value of stock options granted during the six months ended June 30, 2014 was $9.63 per option. As of June 30, 2014, 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 2.0 years.
The
total intrinsic value of stock options exercised during the six months ended June 30, 2014 and 2013 was $8 million and $10 million, respectively.
NONVESTED SHARES
Nonvested shares granted under the Stock Incentive Plan consist of restricted stock, which is accounted for as an equity award, and
phantom stock, which is accounted for as a liability award
53
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
15. STOCK-BASED COMPENSATION PLANS (Continued)
because
it can be settled in either stock or cash. A summary of the status of our nonvested shares as of June 30, 2014 and changes during the six 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, 2014
|
|
|
1,830
|
|
$
|
15.31
|
|
|
574
|
|
$
|
16.03
|
|
Granted
|
|
|
730
|
|
|
21.22
|
|
|
237
|
|
|
21.22
|
|
Vested
|
|
|
(721
|
)(1)
|
|
16.09
|
|
|
(283
|
)
|
|
15.97
|
|
Forfeited
|
|
|
(13
|
)
|
|
17.38
|
|
|
(8
|
)
|
|
16.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested at June 30, 2014
|
|
|
1,826
|
|
|
17.35
|
|
|
520
|
|
|
18.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
As
of June 30, 2014, a total of 388,299 restricted stock units were vested but not yet issued, of which 44,534 vested during the six months ended
June 30, 2014. 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 June 30, 2014, there was $33 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 2.1 years. The value of share awards that vested during the six months ended June 30, 2014
and 2013 was $19 million and $17 million, respectively.
16. 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 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 six months ended June 30, 2014 and 2013, on a discrete basis, we
released a valuation allowance of $11 million and $2 million, respectively, on certain net deferred tax assets in Luxembourg as a result of significant changes in estimated future
taxable income resulting from increased intercompany debt and, therefore, increased interest income in Luxembourg. During the six months ended June 30, 2014, we
54
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
16. INCOME TAXES (Continued)
released
a valuation allowance of $1 million on certain net deferred tax assets in Italy as a result of the restructuring of our European surfactants business which caused our tax expense to be
$5 million lower than it would have been because we are also able to record a tax benefit for losses incurred during the six months ended June 30, 2014. During the six months ended
June 30, 2014, our US tax position changed and allowed us to release the valuation allowance on $8 million of US foreign tax credits.
During
the six months ended June 30, 2014 and 2013, for unrecognized tax benefits that impact tax expense, we recorded a net increase in unrecognized tax benefits with a
corresponding income tax expense of $4 million and $2 million, respectively. Additional decreases in unrecognized tax benefits were
offset by cash settlements or increase in net deferred tax assets and, therefore, did not affect income tax expense.
Huntsman Corporation
We recorded income tax expense of $79 million and $24 million for the six months ended June 30, 2014 and 2013,
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 $80 million and $26 million for the six months ended
June 30, 2014 and 2013, 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.
17. 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.
55
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
17. NET INCOME PER SHARE (Continued)
Basic
and diluted income per share is determined using the following information (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to Huntsman Corporation
|
|
$
|
119
|
|
$
|
47
|
|
$
|
180
|
|
$
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Huntsman Corporation
|
|
$
|
119
|
|
$
|
47
|
|
$
|
173
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares (denominator):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
241.8
|
|
|
239.7
|
|
|
241.3
|
|
|
239.4
|
|
Dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based awards
|
|
|
3.9
|
|
|
2.5
|
|
|
3.7
|
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total weighted average shares outstanding, including dilutive shares
|
|
|
245.7
|
|
|
242.2
|
|
|
245.0
|
|
|
242.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
stock-based awards of 1.1 million and 7.8 million weighted average equivalent shares of stock were outstanding during the three months ended June 30, 2014
and 2013, respectively, and additional stock-based awards of 1.1 million and 7.4 million weighted average equivalent shares of stock were outstanding during the six months ended
June 30, 2014 and 2013, respectively. However, these stock-based awards were not included in the computation of diluted earnings per share for the three and six months ended June 30,
2014 and 2013 because the effect would be anti-dilutive.
18. OPERATING SEGMENT INFORMATION
We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of differentiated chemical products. We have reported our operations through five
segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments. We have organized our business and derived our operating segments around differences in product lines.
56
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
18. OPERATING SEGMENT INFORMATION (Continued)
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
|
|
epoxy resin compounds and formulations; cross-linking, matting and curing agents; epoxy, acrylic and polyurethane- based
adhesives and tooling resin formulations
|
Textile Effects
|
|
textile chemicals and dyes
|
Pigments
|
|
titanium dioxide
|
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
57
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
18. 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
June 30,
|
|
Six months
ended
June 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
|
1,310
|
|
$
|
1,246
|
|
$
|
2,510
|
|
$
|
2,428
|
|
Performance Products
|
|
|
833
|
|
|
777
|
|
|
1,598
|
|
|
1,499
|
|
Advanced Materials
|
|
|
324
|
|
|
321
|
|
|
643
|
|
|
657
|
|
Textile Effects
|
|
|
248
|
|
|
216
|
|
|
472
|
|
|
404
|
|
Pigments
|
|
|
340
|
|
|
334
|
|
|
658
|
|
|
664
|
|
Eliminations
|
|
|
(67
|
)
|
|
(64
|
)
|
|
(138
|
)
|
|
(120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,988
|
|
$
|
2,830
|
|
$
|
5,743
|
|
$
|
5,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
|
186
|
|
$
|
163
|
|
$
|
344
|
|
$
|
330
|
|
Performance Products
|
|
|
117
|
|
|
105
|
|
|
209
|
|
|
154
|
|
Advanced Materials
|
|
|
50
|
|
|
24
|
|
|
91
|
|
|
27
|
|
Textile Effects
|
|
|
14
|
|
|
(9
|
)
|
|
22
|
|
|
(36
|
)
|
Pigments
|
|
|
12
|
|
|
25
|
|
|
25
|
|
|
28
|
|
Corporate and other(2)
|
|
|
(50
|
)
|
|
(61
|
)
|
|
(94
|
)
|
|
(141
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
329
|
|
|
247
|
|
|
597
|
|
|
362
|
|
Discontinued Operations(3)
|
|
|
(2
|
)
|
|
2
|
|
|
(9
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
327
|
|
|
249
|
|
|
588
|
|
|
361
|
|
Interest expense
|
|
|
(51
|
)
|
|
(47
|
)
|
|
(99
|
)
|
|
(98
|
)
|
Income tax expensecontinuing operations
|
|
|
(43
|
)
|
|
(44
|
)
|
|
(79
|
)
|
|
(24
|
)
|
Income tax benefit (expense)discontinued operations
|
|
|
2
|
|
|
(2
|
)
|
|
2
|
|
|
|
|
Depreciation and amortization
|
|
|
(116
|
)
|
|
(109
|
)
|
|
(239
|
)
|
|
(216
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Huntsman Corporation
|
|
$
|
119
|
|
$
|
47
|
|
$
|
173
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman International:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
|
186
|
|
$
|
163
|
|
$
|
344
|
|
$
|
330
|
|
Performance Products
|
|
|
117
|
|
|
105
|
|
|
209
|
|
|
154
|
|
Advanced Materials
|
|
|
50
|
|
|
24
|
|
|
91
|
|
|
27
|
|
Textile Effects
|
|
|
14
|
|
|
(9
|
)
|
|
22
|
|
|
(36
|
)
|
Pigments
|
|
|
12
|
|
|
25
|
|
|
25
|
|
|
28
|
|
Corporate and other(2)
|
|
|
(51
|
)
|
|
(62
|
)
|
|
(95
|
)
|
|
(141
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
328
|
|
|
246
|
|
|
596
|
|
|
362
|
|
Discontinued Operations(3)
|
|
|
(2
|
)
|
|
2
|
|
|
(9
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
326
|
|
|
248
|
|
|
587
|
|
|
361
|
|
Interest expense
|
|
|
(52
|
)
|
|
(51
|
)
|
|
(103
|
)
|
|
(105
|
)
|
Income tax expensecontinuing operations
|
|
|
(43
|
)
|
|
(44
|
)
|
|
(80
|
)
|
|
(26
|
)
|
Income tax benefit (expense)discontinued operations
|
|
|
2
|
|
|
(2
|
)
|
|
2
|
|
|
|
|
Depreciation and amortization
|
|
|
(113
|
)
|
|
(102
|
)
|
|
(229
|
)
|
|
(204
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Huntsman International LLC
|
|
$
|
120
|
|
$
|
49
|
|
$
|
177
|
|
$
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(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.
58
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
18. OPERATING SEGMENT INFORMATION (Continued)
-
(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.
19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED)
The following condensed consolidating financial statements (unaudited) 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 June 30, 2014 and December 31, 2013 and for the three and six months
ended June 30, 2014 and 2013. There are no contractual restrictions limiting transfers of cash from the Guarantors to Huntsman International. Each of the Guarantors is 100% 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.
59
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED)
AS OF JUNE 30, 2014
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International LLC
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
64
|
|
$
|
|
|
$
|
244
|
|
$
|
|
|
$
|
308
|
|
Restricted cash
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
9
|
|
Accounts and notes receivable, net
|
|
|
42
|
|
|
169
|
|
|
1,601
|
|
|
5
|
|
|
1,817
|
|
Accounts receivable from affiliates
|
|
|
1,828
|
|
|
4,285
|
|
|
157
|
|
|
(5,918
|
)
|
|
352
|
|
Inventories
|
|
|
123
|
|
|
297
|
|
|
1,434
|
|
|
(7
|
)
|
|
1,847
|
|
Prepaid expenses
|
|
|
39
|
|
|
17
|
|
|
33
|
|
|
(44
|
)
|
|
45
|
|
Deferred income taxes
|
|
|
12
|
|
|
|
|
|
59
|
|
|
(18
|
)
|
|
53
|
|
Other current assets
|
|
|
514
|
|
|
5
|
|
|
208
|
|
|
(514
|
)
|
|
213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
2,622
|
|
|
4,773
|
|
|
3,745
|
|
|
(6,496
|
)
|
|
4,644
|
|
Property, plant and equipment, net
|
|
|
393
|
|
|
977
|
|
|
2,351
|
|
|
1
|
|
|
3,722
|
|
Investment in unconsolidated affiliates
|
|
|
5,751
|
|
|
1,329
|
|
|
197
|
|
|
(6,987
|
)
|
|
290
|
|
Intangible assets, net
|
|
|
36
|
|
|
1
|
|
|
40
|
|
|
|
|
|
77
|
|
Goodwill
|
|
|
(17
|
)
|
|
82
|
|
|
65
|
|
|
|
|
|
130
|
|
Deferred income taxes
|
|
|
320
|
|
|
|
|
|
235
|
|
|
(316
|
)
|
|
239
|
|
Notes receivable from affiliates
|
|
|
22
|
|
|
650
|
|
|
|
|
|
(672
|
)
|
|
|
|
Other noncurrent assets
|
|
|
89
|
|
|
180
|
|
|
215
|
|
|
(1
|
)
|
|
483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
9,216
|
|
$
|
7,992
|
|
$
|
6,848
|
|
$
|
(14,471
|
)
|
$
|
9,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
49
|
|
$
|
255
|
|
$
|
809
|
|
$
|
4
|
|
$
|
1,117
|
|
Accounts payable to affiliates
|
|
|
3,099
|
|
|
666
|
|
|
2,210
|
|
|
(5,918
|
)
|
|
57
|
|
Accrued liabilities
|
|
|
144
|
|
|
610
|
|
|
499
|
|
|
(559
|
)
|
|
694
|
|
Deferred income taxes
|
|
|
|
|
|
57
|
|
|
9
|
|
|
(22
|
)
|
|
44
|
|
Note payable to affiliate
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
100
|
|
Current portion of debt
|
|
|
14
|
|
|
|
|
|
243
|
|
|
|
|
|
257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
3,406
|
|
|
1,588
|
|
|
3,770
|
|
|
(6,495
|
)
|
|
2,269
|
|
Long-term debt
|
|
|
3,474
|
|
|
|
|
|
335
|
|
|
|
|
|
3,809
|
|
Notes payable to affiliates
|
|
|
707
|
|
|
|
|
|
677
|
|
|
(672
|
)
|
|
712
|
|
Deferred income taxes
|
|
|
17
|
|
|
201
|
|
|
(1
|
)
|
|
42
|
|
|
259
|
|
Other noncurrent liabilities
|
|
|
131
|
|
|
138
|
|
|
631
|
|
|
|
|
|
900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
7,735
|
|
|
1,927
|
|
|
5,412
|
|
|
(7,125
|
)
|
|
7,949
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman International LLC members' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity
|
|
|
3,152
|
|
|
4,341
|
|
|
2,358
|
|
|
(6,699
|
)
|
|
3,152
|
|
Accumulated deficit
|
|
|
(1,077
|
)
|
|
285
|
|
|
(449
|
)
|
|
164
|
|
|
(1,077
|
)
|
Accumulated other comprehensive (loss) income
|
|
|
(594
|
)
|
|
1,439
|
|
|
(624
|
)
|
|
(815
|
)
|
|
(594
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Huntsman International LLC members' equity
|
|
|
1,481
|
|
|
6,065
|
|
|
1,285
|
|
|
(7,350
|
)
|
|
1,481
|
|
Noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
|
|
151
|
|
|
4
|
|
|
155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
1,481
|
|
|
6,065
|
|
|
1,436
|
|
|
(7,346
|
)
|
|
1,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
9,216
|
|
$
|
7,992
|
|
$
|
6,848
|
|
$
|
(14,471
|
)
|
$
|
9,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2013
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International LLC
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
308
|
|
$
|
|
|
$
|
207
|
|
$
|
|
|
$
|
515
|
|
Restricted cash
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
9
|
|
Accounts and notes receivable, net
|
|
|
28
|
|
|
130
|
|
|
1,384
|
|
|
|
|
|
1,542
|
|
Accounts receivable from affiliates
|
|
|
2,386
|
|
|
4,823
|
|
|
140
|
|
|
(7,024
|
)
|
|
325
|
|
Inventories
|
|
|
112
|
|
|
297
|
|
|
1,339
|
|
|
(7
|
)
|
|
1,741
|
|
Prepaid expenses
|
|
|
70
|
|
|
64
|
|
|
47
|
|
|
(120
|
)
|
|
61
|
|
Deferred income taxes
|
|
|
12
|
|
|
|
|
|
59
|
|
|
(18
|
)
|
|
53
|
|
Other current assets
|
|
|
379
|
|
|
4
|
|
|
199
|
|
|
(382
|
)
|
|
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
3,295
|
|
|
5,318
|
|
|
3,384
|
|
|
(7,551
|
)
|
|
4,446
|
|
Property, plant and equipment, net
|
|
|
390
|
|
|
954
|
|
|
2,414
|
|
|
1
|
|
|
3,759
|
|
Investment in unconsolidated affiliates
|
|
|
5,393
|
|
|
1,178
|
|
|
178
|
|
|
(6,464
|
)
|
|
285
|
|
Intangible assets, net
|
|
|
48
|
|
|
1
|
|
|
39
|
|
|
|
|
|
88
|
|
Goodwill
|
|
|
(17
|
)
|
|
82
|
|
|
66
|
|
|
|
|
|
131
|
|
Deferred income taxes
|
|
|
323
|
|
|
|
|
|
239
|
|
|
(319
|
)
|
|
243
|
|
Notes receivable from affiliates
|
|
|
22
|
|
|
658
|
|
|
1
|
|
|
(680
|
)
|
|
1
|
|
Other noncurrent assets
|
|
|
67
|
|
|
172
|
|
|
220
|
|
|
(1
|
)
|
|
458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
9,521
|
|
$
|
8,363
|
|
$
|
6,541
|
|
$
|
(15,014
|
)
|
$
|
9,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
50
|
|
$
|
267
|
|
$
|
750
|
|
$
|
|
|
$
|
1,067
|
|
Accounts payable to affiliates
|
|
|
3,655
|
|
|
1,476
|
|
|
1,946
|
|
|
(7,024
|
)
|
|
53
|
|
Accrued liabilities
|
|
|
138
|
|
|
517
|
|
|
590
|
|
|
(503
|
)
|
|
742
|
|
Deferred income taxes
|
|
|
|
|
|
57
|
|
|
8
|
|
|
(21
|
)
|
|
44
|
|
Note payable to affiliate
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
100
|
|
Current portion of debt
|
|
|
28
|
|
|
|
|
|
249
|
|
|
|
|
|
277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
3,971
|
|
|
2,317
|
|
|
3,543
|
|
|
(7,548
|
)
|
|
2,283
|
|
Long-term debt
|
|
|
3,290
|
|
|
|
|
|
343
|
|
|
|
|
|
3,633
|
|
Notes payable to affiliates
|
|
|
772
|
|
|
|
|
|
687
|
|
|
(680
|
)
|
|
779
|
|
Deferred income taxes
|
|
|
25
|
|
|
200
|
|
|
39
|
|
|
39
|
|
|
303
|
|
Other noncurrent liabilities
|
|
|
137
|
|
|
140
|
|
|
661
|
|
|
|
|
|
938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
8,195
|
|
|
2,657
|
|
|
5,273
|
|
|
(8,189
|
)
|
|
7,936
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman International LLC members' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity
|
|
|
3,138
|
|
|
4,354
|
|
|
2,215
|
|
|
(6,569
|
)
|
|
3,138
|
|
Accumulated deficit
|
|
|
(1,194
|
)
|
|
66
|
|
|
(450
|
)
|
|
384
|
|
|
(1,194
|
)
|
Accumulated other comprehensive (loss) income
|
|
|
(618
|
)
|
|
1,286
|
|
|
(645
|
)
|
|
(641
|
)
|
|
(618
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Huntsman International LLC members' equity
|
|
|
1,326
|
|
|
5,706
|
|
|
1,120
|
|
|
(6,826
|
)
|
|
1,326
|
|
Noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
|
|
148
|
|
|
1
|
|
|
149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
1,326
|
|
|
5,706
|
|
|
1,268
|
|
|
(6,825
|
)
|
|
1,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
9,521
|
|
$
|
8,363
|
|
$
|
6,541
|
|
$
|
(15,014
|
)
|
$
|
9,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS) (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2014
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International
LLC
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade sales, services and fees, net
|
|
$
|
311
|
|
$
|
850
|
|
$
|
1,760
|
|
$
|
|
|
$
|
2,921
|
|
Related party sales
|
|
|
79
|
|
|
127
|
|
|
371
|
|
|
(510
|
)
|
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
390
|
|
|
977
|
|
|
2,131
|
|
|
(510
|
)
|
|
2,988
|
|
Cost of goods sold
|
|
|
321
|
|
|
765
|
|
|
1,908
|
|
|
(512
|
)
|
|
2,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
69
|
|
|
212
|
|
|
223
|
|
|
2
|
|
|
506
|
|
Selling, general and administrative
|
|
|
52
|
|
|
40
|
|
|
151
|
|
|
|
|
|
243
|
|
Research and development
|
|
|
13
|
|
|
10
|
|
|
14
|
|
|
|
|
|
37
|
|
Other operating (income) expense
|
|
|
(7
|
)
|
|
(2
|
)
|
|
4
|
|
|
|
|
|
(5
|
)
|
Restructuring, impairment and plant closing costs
|
|
|
4
|
|
|
|
|
|
9
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
7
|
|
|
164
|
|
|
45
|
|
|
2
|
|
|
218
|
|
Interest (expense) income
|
|
|
(46
|
)
|
|
10
|
|
|
(16
|
)
|
|
|
|
|
(52
|
)
|
Equity in income of investment in affiliates and subsidiaries
|
|
|
137
|
|
|
15
|
|
|
2
|
|
|
(152
|
)
|
|
2
|
|
Other income
|
|
|
1
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
99
|
|
|
189
|
|
|
31
|
|
|
(151
|
)
|
|
168
|
|
Income tax benefit (expense)
|
|
|
19
|
|
|
(50
|
)
|
|
(12
|
)
|
|
|
|
|
(43
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
118
|
|
|
139
|
|
|
19
|
|
|
(151
|
)
|
|
125
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
2
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
120
|
|
|
139
|
|
|
17
|
|
|
(151
|
)
|
|
125
|
|
Net income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Huntsman International LLC
|
|
$
|
120
|
|
$
|
139
|
|
$
|
13
|
|
$
|
(152
|
)
|
$
|
120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
120
|
|
$
|
139
|
|
$
|
17
|
|
$
|
(151
|
)
|
$
|
125
|
|
Other comprehensive income
|
|
|
19
|
|
|
56
|
|
|
14
|
|
|
(76
|
)
|
|
13
|
|
Comprehensive income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
3
|
|
|
(1
|
)
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to Huntsman International LLC
|
|
$
|
139
|
|
$
|
195
|
|
$
|
34
|
|
$
|
(228
|
)
|
$
|
140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS) (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2013
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International
LLC
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade sales, services and fees, net
|
|
$
|
273
|
|
$
|
820
|
|
$
|
1,681
|
|
$
|
|
|
$
|
2,774
|
|
Related party sales
|
|
|
187
|
|
|
123
|
|
|
304
|
|
|
(558
|
)
|
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
460
|
|
|
943
|
|
|
1,985
|
|
|
(558
|
)
|
|
2,830
|
|
Cost of goods sold
|
|
|
405
|
|
|
735
|
|
|
1,793
|
|
|
(559
|
)
|
|
2,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
55
|
|
|
208
|
|
|
192
|
|
|
1
|
|
|
456
|
|
Selling, general and administrative
|
|
|
39
|
|
|
36
|
|
|
157
|
|
|
|
|
|
232
|
|
Research and development
|
|
|
15
|
|
|
10
|
|
|
9
|
|
|
|
|
|
34
|
|
Other operating expense (income)
|
|
|
2
|
|
|
(2
|
)
|
|
14
|
|
|
|
|
|
14
|
|
Restructuring, impairment and plant closing costs
|
|
|
8
|
|
|
4
|
|
|
17
|
|
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(9
|
)
|
|
160
|
|
|
(5
|
)
|
|
1
|
|
|
147
|
|
Interest (expense) income, net
|
|
|
(46
|
)
|
|
11
|
|
|
(16
|
)
|
|
|
|
|
(51
|
)
|
Equity in income (loss) of investment in affiliates and subsidiaries
|
|
|
185
|
|
|
(9
|
)
|
|
2
|
|
|
(176
|
)
|
|
2
|
|
Other income
|
|
|
1
|
|
|
|
|
|
1
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
131
|
|
|
162
|
|
|
(18
|
)
|
|
(175
|
)
|
|
100
|
|
Income tax (expense) benefit
|
|
|
(83
|
)
|
|
27
|
|
|
12
|
|
|
|
|
|
(44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
48
|
|
|
189
|
|
|
(6
|
)
|
|
(175
|
)
|
|
56
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
49
|
|
|
188
|
|
|
(6
|
)
|
|
(175
|
)
|
|
56
|
|
Net income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(7
|
)
|
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Huntsman International LLC
|
|
$
|
49
|
|
$
|
188
|
|
$
|
(13
|
)
|
$
|
(175
|
)
|
$
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
49
|
|
$
|
188
|
|
$
|
(6
|
)
|
$
|
(175
|
)
|
$
|
56
|
|
Other comprehensive loss
|
|
|
(7
|
)
|
|
(78
|
)
|
|
(27
|
)
|
|
102
|
|
|
(10
|
)
|
Comprehensive income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to Huntsman International LLC
|
|
$
|
42
|
|
$
|
110
|
|
$
|
(37
|
)
|
$
|
(73
|
)
|
$
|
42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2014
(In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International
LLC
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade sales, services and fees, net
|
|
$
|
571
|
|
$
|
1,616
|
|
$
|
3,427
|
|
$
|
|
|
$
|
5,614
|
|
Related party sales
|
|
|
176
|
|
|
257
|
|
|
712
|
|
|
(1,016
|
)
|
|
129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
747
|
|
|
1,873
|
|
|
4,139
|
|
|
(1,016
|
)
|
|
5,743
|
|
Cost of goods sold
|
|
|
621
|
|
|
1,474
|
|
|
3,704
|
|
|
(1,017
|
)
|
|
4,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
126
|
|
|
399
|
|
|
435
|
|
|
1
|
|
|
961
|
|
Selling, general and administrative
|
|
|
83
|
|
|
78
|
|
|
309
|
|
|
|
|
|
470
|
|
Research and development
|
|
|
24
|
|
|
19
|
|
|
30
|
|
|
|
|
|
73
|
|
Other operating (income) expense
|
|
|
(10
|
)
|
|
(7
|
)
|
|
8
|
|
|
|
|
|
(9
|
)
|
Restructuring, impairment and plant closing costs
|
|
|
2
|
|
|
2
|
|
|
48
|
|
|
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
27
|
|
|
307
|
|
|
40
|
|
|
1
|
|
|
375
|
|
Interest (expense) income
|
|
|
(93
|
)
|
|
18
|
|
|
(28
|
)
|
|
|
|
|
(103
|
)
|
Equity in income of investment in affiliates and subsidiaries
|
|
|
216
|
|
|
2
|
|
|
4
|
|
|
(218
|
)
|
|
4
|
|
Other income
|
|
|
2
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
152
|
|
|
327
|
|
|
16
|
|
|
(218
|
)
|
|
277
|
|
Income tax benefit (expense)
|
|
|
23
|
|
|
(106
|
)
|
|
3
|
|
|
|
|
|
(80
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
175
|
|
|
221
|
|
|
19
|
|
|
(218
|
)
|
|
197
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
2
|
|
|
|
|
|
(9
|
)
|
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
177
|
|
|
221
|
|
|
10
|
|
|
(218
|
)
|
|
190
|
|
Net income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
(3
|
)
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Huntsman International LLC
|
|
$
|
177
|
|
$
|
221
|
|
$
|
|
|
$
|
(221
|
)
|
$
|
177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
177
|
|
$
|
221
|
|
$
|
10
|
|
$
|
(218
|
)
|
$
|
190
|
|
Other comprehensive income
|
|
|
23
|
|
|
153
|
|
|
19
|
|
|
(174
|
)
|
|
21
|
|
Comprehensive income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(7
|
)
|
|
(3
|
)
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to Huntsman International LLC
|
|
$
|
200
|
|
$
|
374
|
|
$
|
22
|
|
$
|
(395
|
)
|
$
|
201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2013
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International
LLC
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade sales, services and fees, net
|
|
$
|
515
|
|
$
|
1,604
|
|
$
|
3,290
|
|
$
|
|
|
$
|
5,409
|
|
Related party sales
|
|
|
385
|
|
|
239
|
|
|
635
|
|
|
(1,136
|
)
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
900
|
|
|
1,843
|
|
|
3,925
|
|
|
(1,136
|
)
|
|
5,532
|
|
Cost of goods sold
|
|
|
793
|
|
|
1,483
|
|
|
3,582
|
|
|
(1,135
|
)
|
|
4,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
107
|
|
|
360
|
|
|
343
|
|
|
(1
|
)
|
|
809
|
|
Selling, general and administrative
|
|
|
75
|
|
|
73
|
|
|
308
|
|
|
|
|
|
456
|
|
Research and development
|
|
|
26
|
|
|
19
|
|
|
25
|
|
|
|
|
|
70
|
|
Other operating expense (income)
|
|
|
8
|
|
|
4
|
|
|
(5
|
)
|
|
|
|
|
7
|
|
Restructuring, impairment and plant closing costs
|
|
|
7
|
|
|
11
|
|
|
55
|
|
|
|
|
|
73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(9
|
)
|
|
253
|
|
|
(40
|
)
|
|
(1
|
)
|
|
203
|
|
Interest (expense) income, net
|
|
|
(94
|
)
|
|
21
|
|
|
(32
|
)
|
|
|
|
|
(105
|
)
|
Equity in income (loss) of investment in affiliates and subsidiaries
|
|
|
207
|
|
|
(87
|
)
|
|
3
|
|
|
(120
|
)
|
|
3
|
|
Loss on early extinguishment of debt
|
|
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
(35
|
)
|
Other income
|
|
|
1
|
|
|
|
|
|
1
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
70
|
|
|
187
|
|
|
(68
|
)
|
|
(121
|
)
|
|
68
|
|
Income tax (expense) benefit
|
|
|
(44
|
)
|
|
19
|
|
|
(1
|
)
|
|
|
|
|
(26
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
26
|
|
|
206
|
|
|
(69
|
)
|
|
(121
|
)
|
|
42
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
26
|
|
|
206
|
|
|
(71
|
)
|
|
(121
|
)
|
|
40
|
|
Net income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(14
|
)
|
|
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Huntsman International LLC
|
|
$
|
26
|
|
$
|
206
|
|
$
|
(85
|
)
|
$
|
(121
|
)
|
$
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
26
|
|
$
|
206
|
|
$
|
(71
|
)
|
$
|
(121
|
)
|
$
|
40
|
|
Other comprehensive loss
|
|
|
(39
|
)
|
|
(179
|
)
|
|
(43
|
)
|
|
219
|
|
|
(42
|
)
|
Comprehensive income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income attributable to Huntsman International LLC
|
|
$
|
(13
|
)
|
$
|
27
|
|
$
|
(125
|
)
|
$
|
98
|
|
$
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2014
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International LLC
|
|
Net cash (used in) provided by operating activities
|
|
$
|
(128
|
)
|
$
|
74
|
|
$
|
38
|
|
$
|
(1
|
)
|
$
|
(17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(30
|
)
|
|
(68
|
)
|
|
(116
|
)
|
|
|
|
|
(214
|
)
|
Cash received from unconsolidated affiliates
|
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
30
|
|
Investment in affiliate
|
|
|
(122
|
)
|
|
(6
|
)
|
|
|
|
|
128
|
|
|
|
|
Investment in unconsolidated affiliates
|
|
|
|
|
|
(17
|
)
|
|
(12
|
)
|
|
|
|
|
(29
|
)
|
Proceeds from sale of businesses/assets
|
|
|
3
|
|
|
|
|
|
11
|
|
|
|
|
|
14
|
|
Increase in receivable from affiliate
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
Other, net
|
|
|
(1
|
)
|
|
|
|
|
(2
|
)
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(155
|
)
|
|
(61
|
)
|
|
(119
|
)
|
|
128
|
|
|
(207
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net repayments under revolving loan facilities
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
(1
|
)
|
Net borrowings on overdraft facilities
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
8
|
|
Repayments of short-term debt
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
|
|
|
(8
|
)
|
Borrowings on short-term debt
|
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
5
|
|
Repayments of long-term debt
|
|
|
(13
|
)
|
|
|
|
|
(22
|
)
|
|
|
|
|
(35
|
)
|
Proceeds from issuance of long-term debt
|
|
|
204
|
|
|
|
|
|
|
|
|
|
|
|
204
|
|
Repayments of notes payable to affiliate
|
|
|
(65
|
)
|
|
|
|
|
|
|
|
|
|
|
(65
|
)
|
Repayments of notes payable
|
|
|
(15
|
)
|
|
|
|
|
(1
|
)
|
|
|
|
|
(16
|
)
|
Borrowings on notes payable
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
1
|
|
Debt issuance costs paid
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
Contingent consideration paid for acquisition
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
Contribution from parent
|
|
|
|
|
|
6
|
|
|
139
|
|
|
(145
|
)
|
|
|
|
Distribution to parent
|
|
|
|
|
|
(17
|
)
|
|
|
|
|
17
|
|
|
|
|
Dividends paid to parent
|
|
|
(60
|
)
|
|
(1
|
)
|
|
|
|
|
1
|
|
|
(60
|
)
|
Excess tax expense related to stock-based compensation
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
Other, net
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
39
|
|
|
(13
|
)
|
|
119
|
|
|
(127
|
)
|
|
18
|
|
Effect of exchange rate changes on cash
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents
|
|
|
(244
|
)
|
|
|
|
|
37
|
|
|
|
|
|
(207
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
308
|
|
|
|
|
|
207
|
|
|
|
|
|
515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
64
|
|
$
|
|
|
$
|
244
|
|
$
|
|
|
$
|
308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66
Table of Contents
HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2013
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Company
|
|
Guarantors
|
|
Nonguarantors
|
|
Eliminations
|
|
Consolidated
Huntsman
International LLC
|
|
Net cash (used in) provided by operating activities
|
|
$
|
(72
|
)
|
$
|
60
|
|
$
|
7
|
|
$
|
(1
|
)
|
$
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(23
|
)
|
|
(48
|
)
|
|
(110
|
)
|
|
|
|
|
(181
|
)
|
Cash received from unconsolidated affiliates
|
|
|
|
|
|
34
|
|
|
|
|
|
|
|
|
34
|
|
Investment in affiliate
|
|
|
(84
|
)
|
|
(6
|
)
|
|
|
|
|
90
|
|
|
|
|
Investment in unconsolidated affiliates
|
|
|
|
|
|
(20
|
)
|
|
(12
|
)
|
|
|
|
|
(32
|
)
|
Acquisition of a business
|
|
|
|
|
|
|
|
|
(7
|
)
|
|
|
|
|
(7
|
)
|
Proceeds from sale of businesses/assets
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
2
|
|
Other, net
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(107
|
)
|
|
(40
|
)
|
|
(125
|
)
|
|
90
|
|
|
(182
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net repayments under revolving loan facilities
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
(2
|
)
|
Net borrowings on overdraft facilities
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
10
|
|
Repayments of short-term debt
|
|
|
|
|
|
|
|
|
(18
|
)
|
|
|
|
|
(18
|
)
|
Borrowings on short-term debt
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
13
|
|
Repayments of long-term debt
|
|
|
(393
|
)
|
|
|
|
|
(25
|
)
|
|
|
|
|
(418
|
)
|
Proceeds from issuance of long-term debt
|
|
|
470
|
|
|
|
|
|
3
|
|
|
|
|
|
473
|
|
Proceeds from notes payable to affiliate
|
|
|
177
|
|
|
|
|
|
|
|
|
|
|
|
177
|
|
Repayments of notes payable
|
|
|
(15
|
)
|
|
|
|
|
(6
|
)
|
|
|
|
|
(21
|
)
|
Borrowings on notes payable
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
1
|
|
Debt issuance costs paid
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
Call premiums and other costs related to early extinguishment of debt
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
Contribution from parent
|
|
|
|
|
|
6
|
|
|
107
|
|
|
(113
|
)
|
|
|
|
Distribution to parent
|
|
|
|
|
|
(23
|
)
|
|
|
|
|
23
|
|
|
|
|
Dividends paid to parent
|
|
|
(60
|
)
|
|
(1
|
)
|
|
|
|
|
1
|
|
|
(60
|
)
|
Excess tax benefit related to stock-based compensation
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
Other, net
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
177
|
|
|
(18
|
)
|
|
83
|
|
|
(89
|
)
|
|
153
|
|
Effect of exchange rate changes on cash
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents
|
|
|
(2
|
)
|
|
2
|
|
|
(39
|
)
|
|
|
|
|
(39
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
7
|
|
|
2
|
|
|
201
|
|
|
|
|
|
210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
5
|
|
$
|
4
|
|
$
|
162
|
|
$
|
|
|
$
|
171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67
Table of Contents