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

Quarterly report pursuant to Section 13 or 15(d)

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2018

4. 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 June 30, 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 one or more 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”), a tax matters agreement and an employee matters agreement with Venator to effect the Separation and provide a framework for a short term set of transition services. 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):


	June 30,		December 31,
	2018		2017
Carrying amounts of major classes of assets held for sale:
Accounts receivable	$	435	$	380
Inventories		491		454
Other current assets		431		318
Property, plant and equipment, net		1,568		1,424
Deferred income taxes		88		158
Other noncurrent assets		145		146
Total assets held for sale	$	3,158	$	2,880
Carrying amounts of major classes of liabilities held for sale:
Accounts payable	$	378	$	385
Accrued liabilities		176		236
Other current liabilities		16		25
Long-term debt		745		746
Other noncurrent liabilities		263		300
Total liabilities held for sale	$	1,578	$	1,692

(1)

The assets and liabilities held for sale are classified as current as of June 30, 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.

The following table summarizes major classes of line items constituting pretax and after-tax income of discontinued operations (dollars in millions):

Huntsman Corporation


	Three months				Six months
	ended				ended
	June 30,				June 30,
	2018		2017		2018		2017
Major classes of line items constituting pretax income of discontinued operations:
Trade sales, services and fees, net	$	630	$	568	$	1,257	$	1,111
Cost of goods sold		118		481		594		951
Other expense items, net that are not major		94		19		111		96
Income from discontinued operations before income taxes		418		68		552		64
Income tax expense		(84)		(23)		(104)		(26)
Income from discontinued operations, net of tax		334		45		448		38
Net income attributable to noncontrolling interests		(2)		(3)		(4)		(6)
Net income attributable to discontinued operations	$	332	$	42	$	444	$	32

Huntsman International


	Three months				Six months
	ended				ended
	June 30,				June 30,
	2018		2017		2018		2017
Major classes of line items constituting pretax income of discontinued operations:
Trade sales, services and fees, net	$	630	$	568	$	1,257	$	1,111
Cost of goods sold		118		480		594		951
Other expense items, net that are not major		94		22		111		99
Income from discontinued operations before income taxes		418		66		552		61
Income tax expense		(84)		(22)		(104)		(25)
Income from discontinued operations, net of tax		334		44		448		36
Net income attributable to noncontrolling interests		(2)		(3)		(4)		(6)
Net income attributable to discontinued operations	$	332	$	41	$	444	$	30