Huntsman Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

3 Months Ended

Mar. 31, 2015

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

As of March 31, 2015 and December 31, 2014, accrued restructuring costs by type of cost and initiative consisted of the following (dollars in millions):

	Workforce reductions(1)			Demolition and decommissioning			Non-cancelable lease and contract termination costs			Other restructuring costs			Total(2)
Accrued liabilities as of January 1, 2015	$	87		$	—		$	48		$	3		$	138
2015 charges for 2014 and prior initiatives		31			2			—			9			42
2015 charges for 2015 initiatives		24			—			—			—			24
Reversal of reserves no longer required		(1	)		—			—			—			(1	)
2015 payments for 2014 and prior initiatives		(16	)		(2	)		(1	)		(8	)		(27	)
Foreign currency effect on liability balance		(8	)		—			1			—			(7	)

Accrued liabilities as of March 31, 2015	$	117		$	—		$	48		$	4		$	169

(1)	The workforce reduction reserves relate to the termination of 1,572 positions, of which 1,479 positions had not been terminated as of March 31, 2015.
(2)	Accrued liabilities by initiatives were as follows (dollars in millions):

	March 31, 2015		December 31, 2014
2013 and prior initiatives	$	66	$	75
2014 initiatives		79		63
2015 initiatives		24		—

Total	$	169	$	138

Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative (dollars in millions):

	Polyurethanes			Performance Products			Advanced Materials			Textile Effects			Pigments and Additives			Discontinued Operations		Corporate and Other			Total
Accrued liabilities as of January 1, 2015	$	6		$	9		$	5		$	54		$	59		$	1	$	4		$	138
2015 charges for 2014 and prior initiatives		2			1			—			3			34			—		2			42
2015 charges for 2015 initiatives		—			—			—			1			23			—		—			24
Reversal of reserves no longer required		—			—			—			—			—			—		(1	)		(1	)
2015 payments for 2014 and prior initiatives		(3	)		(3	)		(1	)		(4	)		(13	)		—		(3	)		(27	)
Foreign currency effect on liability balance		(1	)		(1	)		—			1			(6	)		—		—			(7	)

Accrued liabilities as of March 31, 2015	$	4		$	6		$	4		$	55		$	97		$	1	$	2		$	169


Current portion of restructuring reserves	$	1		$	6		$	2		$	11		$	97		$	1	$	2		$	120
Long-term portion of restructuring reserves		3			—			2			44			—			—		—			49

Details with respect to cash and noncash restructuring charges for the three months ended March 31, 2015 and 2014 by initiative are provided below (dollars in millions):

	Three months ended March 31, 2015
Cash charges:
2015 charges for 2014 and prior initiatives	$	42
2015 charges for 2015 initiatives		24
Reversal of reserves no longer required		(1	)
Accelerated depreciation		28

Total 2015 Restructuring, Impairment and Plant Closing Costs	$	93

	Three months ended March 31, 2014
Cash charges:
2014 charges for 2013 and prior initiatives	$	41
Pension related charges		1
Reversal of reserves no longer required		(4	)
Non-cash charges		1

Total 2014 Restructuring, Impairment and Plant Closing Costs	$	39

2015 RESTRUCTURING ACTIVITIES

On December 1, 2014, we announced that we are taking significant action to improve the global competitiveness of our Pigments and Additives segment. As part of a comprehensive restructuring program, we plan to reduce our workforce by approximately 900 positions. In connection with this restructuring program, we recorded restructuring expense of $34 million in the three months ended March 31, 2015 related primarily to workforce reductions. We expect to complete this program by the middle of 2016.

On February 12, 2015, we announced a plan to close the 'black end' manufacturing operations and ancillary activities at our Calais, France site, which will reduce our titanium dioxide capacity by approximately 100 kilotons, or 13% of our European titanium dioxide capacity. In connection with this announcement, we began to accelerate depreciation on the affected assets and recorded incremental accelerated depreciation in the three months ended March 31, 2015 of $28 million as restructuring, impairment and plant closing costs. In addition, we recorded restructuring expense of $22 million in the three months ended March 31, 2015 related primarily to workforce reductions. We expect to complete this program by the end of 2016.

On March 4, 2015, we announced plans to restructure our color pigments business, another step in our previously announced plan to significantly restructure our global Pigments and Additives segment, and recorded restructuring expense of approximately $1 million in the three months ended March 31, 2015 related to workforce reductions. We expect to complete this program by the end of 2015.

2014 RESTRUCTURING ACTIVITIES

During 2013, our Performance Products segment initiated a restructuring program to refocus our surfactants business in Europe. During the three months ended March 31, 2014, we recorded charges of $23 million primarily related to workforce reductions and a charge of $1 million for the impairment of long-lived assets relating to the announced agreement to purchase our Lavera, France manufacturing facility by Wilmar Europe Holdings B.V.

During the three months ended March 31, 2014, our Advanced Materials segment recorded charges of $7 million primarily related to workforce reductions related to our global transformational change program designed to improve the segment's manufacturing efficiencies, enhance commercial excellence and improve its long-term global competitiveness. Our Advanced Materials segment also reversed charges of $3 million related to this initiative.

On September 27, 2011, we announced plans to implement a significant restructuring of our Textile Effects segment, including the closure of our production facilities and business support offices in Basel, Switzerland, as part of an ongoing strategic program aimed at improving the Textile Effects segment's long-term global competitiveness. In connection with this plan, during the three months ended March 31, 2014, our Textile Effects segment recorded charges of $2 million for long-term contract termination costs and $2 million for decommissioning associated with this initiative. Additionally, we recorded charges of $2 million for long-term contract termination costs for other initiatives.

During the three months ended March 31, 2014, our Pigments and Additives segment recorded charges of $3 million primarily related to the workforce reductions at our Huelva, Spain facility.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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