| DISCONTINUED OPERATIONS |
3. DISCONTINUED OPERATIONS
In 2017, we separated the P&A Business and conducted both an IPO and a secondary offering of ordinary shares of Venator, formerly a wholly-owned subsidiary of Huntsman. On January 3, 2018, the underwriters purchased an additional 1,948,955 Venator ordinary shares pursuant to the exercise of the underwriters’ option to purchase additional shares. All of the ordinary shares offered in the IPO and the secondary offering were sold by Huntsman, and Venator did not receive any proceeds from the offerings. As of March 31, 2018, we retained approximately 53% ownership in Venator. We intend to monetize our retained ownership in Venator at prevailing market conditions and expect to conduct multiple follow-on capital market or block transactions to permit the orderly distribution of our retained shares.
In August 2017, we entered into a separation agreement, a transition services agreement (“TSA”) and a registration rights agreement with Venator to effect the Separation and provide a framework for a short term set of transition services as well as a tax matters agreement and an employee matters agreement. Pursuant to the TSA, we will, for a limited time following the Separation, provide Venator with certain services and functions that the parties have historically shared. We may also provide Venator with additional services that Venator and Huntsman may identify from time to time in the future. In general, the services began following the Separation and cover a period not expected to exceed 24 months; however, Venator may terminate individual services provided by us under the TSA early, as it becomes able to operate its business without such services.
The following table summarizes the major classes of assets and liabilities constituting assets and liabilities held for sale (dollars in millions):
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March 31,
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December 31,
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2018
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2017
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Carrying amounts of major classes of assets held for sale:
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Accounts receivable
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$
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439
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$
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380
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Inventories
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482
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454
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Other current assets
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311
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318
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Property, plant and equipment, net
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1,534
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1,424
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Deferred income taxes
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153
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158
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Other noncurrent assets
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141
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146
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Total assets held for sale
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$
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3,060
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$
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2,880
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Carrying amounts of major classes of liabilities in held for sale:
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Accounts payable
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$
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387
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$
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385
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Accrued liabilities
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249
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236
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Other current liabilities
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19
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25
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Long term debt
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747
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746
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Other noncurrent liabilities
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319
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300
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Total liabilities held for sale
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$
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1,721
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$
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1,692
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(1)
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The assets and liabilities held for sale are classified as current as of March 31, 2018 and December 31, 2017 because it is probable that the sale of our controlling financial interest in Venator ordinary shares will occur and proceeds will be collected within one year.
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The following table summarizes major classes of line items constituting pretax and after-tax income of discontinued operations (dollars in millions):
Huntsman Corporation
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March 31,
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2018
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2017
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Major classes of line items constituting pretax income (loss) of discontinued operations:
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Trade sales, services and fees, net
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$
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627
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$
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543
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Cost of goods sold
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476
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470
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Selling, general and administrative
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51
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40
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Restructuring, impairment and plant closing costs
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9
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27
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Business separation expenses
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—
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9
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Interest expense
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9
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—
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Other operating income, net
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(50)
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—
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Other (income) loss, net
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(2)
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1
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Income (loss) from discontinued operations before income taxes
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134
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(4)
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Income tax expense
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(20)
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(3)
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Income (loss) from discontinued operations, net of tax
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114
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(7)
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Net income attributable to noncontrolling interests
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(2)
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(3)
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Net income (loss) attributable to discontinued operations
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$
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112
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$
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(10)
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Huntsman International
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March 31,
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2018
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2017
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Major classes of line items constituting pretax income (loss) of discontinued operations:
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Trade sales, services and fees, net
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$
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627
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$
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543
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Cost of goods sold
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476
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471
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Selling, general and administrative
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51
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40
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Restructuring, impairment and plant closing costs
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9
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27
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Business separation expenses
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—
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9
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Interest expense
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9
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—
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Other operating income, net
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(50)
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—
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Other (income) loss, net
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(2)
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1
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Income (loss) from discontinued operations before income taxes
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134
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(5)
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Income tax expense
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(20)
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(3)
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Income (loss) from discontinued operations, net of tax
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114
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(8)
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Net income attributable to noncontrolling interests
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(2)
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(3)
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Net income (loss) attributable to discontinued operations
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$
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112
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$
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(11)
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