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, 2016

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

5. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

As of March 31, 2016 and December 31, 2015, 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, 2016	$	109		$	16		$	38		$	5		$	168
2016 charges for 2015 and prior initiatives		2			1			1			5			9
Reversal of reserves no longer required		—			—			(1	)		—			(1	)
Distribution of prefunded restructuring costs		(38	)		(2	)		—			—			(40	)
2016 payments for 2015 and prior initiatives		(14	)		(1	)		—			(5	)		(20	)
Foreign currency effect on liability balance		1			—			1			—			2

Accrued liabilities as of March 31, 2016	$	60		$	14		$	39		$	5		$	118


(1)	The workforce reduction reserves relate to the termination of 773 positions, of which 702 positions had not been terminated as of March 31, 2016.
(2)	Accrued liabilities by initiatives were as follows (dollars in millions):

	March 31, 2016		December 31, 2015
2014 and prior initiatives	$	98	$	143
2015 initiatives		20		25

Total	$	118	$	168

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			Discontinued Operations		Corporate and Other			Total
Accrued liabilities as of January 1, 2016	$	5		$	9		$	4	$	55		$	90		$	1	$	4		$	168
2016 charges for 2015 and prior initiatives		—			—			—		2			6			—		1			9
Reversal of reserves no longer required		—			—			—		(1	)		—			—		—			(1	)
Distribution of prefunded restructuring costs		—			(2	)		—		(2	)		(36	)		—		—			(40	)
2016 payments for 2015 and prior initiatives		(1	)		(1	)		—		(1	)		(16	)		—		(1	)		(20	)
Foreign currency effect on liability balance		—			—			—		1			1			—		—			2

Accrued liabilities as of March 31, 2016	$	4		$	6		$	4	$	54		$	45		$	1	$	4		$	118


Current portion of restructuring reserves	$	4		$	6		$	—	$	14		$	38		$	1	$	4		$	67
Long-term portion of restructuring reserves		—			—			4		40			7			—		—			51

Details with respect to cash and noncash restructuring charges for the three months ended March 31, 2016 and 2015 by initiative are provided below (dollars in millions):

	Three months ended March 31, 2016
Cash charges:
2016 charges for 2015 and prior initiatives	$	9
Reversal of reserves no longer required		(1	)
Accelerated depreciation		4
Other non-cash charges		1

Total 2016 Restructuring, Impairment and Plant Closing Costs	$	13

	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

2016 RESTRUCTURING ACTIVITIES

On December 1, 2014, we announced a comprehensive restructuring program to improve the global competitiveness of our Pigments and Additives segment. As part of the program, we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, we recorded restructuring expense of $3 million in the three months ended March 31, 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 recorded restructuring expense of $1 million in the three months ended March 31, 2016.

On March 4, 2015, we announced plans to restructure our color pigments business, another step in our comprehensive restructuring program in our Pigments and Additives segment, and recorded restructuring expense of approximately $3 million in the three months ended March 31, 2016.

In connection with planned restructuring activities, our Pigments and Additives segment recorded accelerated depreciation as restructuring expense of $4 million during the three months ended March 31, 2016.

2015 RESTRUCTURING ACTIVITIES

As part of the comprehensive restructuring program in our Pigments and Additives segment announced in December 2014, we recorded restructuring expense of $34 million in the three months ended March 31, 2015 related primarily to workforce reductions.

In connection with the closure of the 'black end' at our Calais, France site announced in February 2015, 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.

In connection with our plans announced in March 2015 to restructure our color pigments business within our Pigments and Additives segment, we recorded restructuring expense of approximately $1 million in the three months ended March 31, 2015 related to workforce reductions.