DISCONTINUED OPERATIONS AND BUSINESS DISPOSITIONS |
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||
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| DISCONTINUED OPERATIONS AND BUSINESS DISPOSITIONS |
4. DISCONTINUED OPERATIONS AND BUSINESS DISPOSITIONS
Separation and Deconsolidation of Venator In August 2017, we separated the P&A Business and conducted an IPO of ordinary shares of Venator, formerly a wholly-owned subsidiary of Huntsman. Additionally, in December 2017, we conducted a secondary offering of Venator ordinary shares. All of such ordinary shares were sold by Huntsman, and Venator did not receive any proceeds from the offerings. On January 3, 2018, the underwriters purchased an additional 1,948,955 Venator ordinary shares pursuant to their over-allotment option, which reduced Huntsman’s ownership interest in Venator to approximately 53%. Beginning in the third quarter of 2017, we reported the results of operations of Venator as discontinued operations.
During the third quarter of 2018, we recognized a net after tax valuation allowance of $270 million to adjust the carrying amount of the assets and liabilities held for sale and the amount of accumulated comprehensive income recorded in equity related to Venator to the lower of cost or estimated fair value, less cost to sell.
On December 3, 2018, we sold an aggregate of 4,334,389, or 4%, of Venator ordinary shares to Bank of America N.A. at a price determined based on the average of the daily volume weighted average price of Venator ordinary shares over an agreed period. Over this agreed period, we received aggregate proceeds of $19 million, $16 million of which was received in the first quarter of 2019. This transaction allowed us to deconsolidate Venator beginning in December 2018. Furthermore, in connection with the December 3, 2018 sale of Venator ordinary shares, we recorded a forward swap. During the first quarter of 2019, we recorded a gain of $1 million to record the forward swap at fair value. Following this transaction, we retained approximately 49% ownership in Venator. We elected the fair value option to account for our equity method investment in Venator post deconsolidation. Accordingly, for the three months ended March 31, 2019, we recorded a gain of $75 million to record our investment in Venator at fair value. These gains were recorded in “Fair value adjustments to Venator investment” on our condensed consolidated statements of operations.
The following table summarizes major classes of line items constituting pretax and after-tax income of discontinued operations (dollars in millions):
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