Huntsman Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 4 - Discontinued Operations and Business Dispositions

Note 4 - Discontinued Operations and Business Dispositions

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

4. DISCONTINUED OPERATIONS AND BUSINESS DISPOSITIONS

DISCONTINUED OPERATIONS

Sale of Textile Effects Business

On February 28, 2023, we completed the sale of our Textile Effects Business to Archroma for a purchase price of $593 million, which includes estimated adjustments to the purchase price for working capital plus the assumption of underfunded pension liabilities. The final purchase price is subject to customary post-closing adjustments. Upon the completion of the sale, we received net proceeds of $530 million, determined as the purchase price less $5 million for certain costs paid by Archroma on our behalf, $30 million of estimated net working capital adjustments and $28 million of cash that will be reimbursed to us as part of the final post-closing adjustments anticipated in the first quarter of 2024. In connection with the sale, we recognized a pre-tax gain of $154 million in 2023. During 2023, we have paid cash taxes of approximately $23 million, and we expect to pay additional cash taxes of approximately $15 million.

The following table reconciles the carrying amounts of major classes of assets and liabilities of discontinued operations to total assets and liabilities of discontinued operations that are classified as held for sale in our consolidated balance sheets (dollars in millions):

	*December 31,*
	*2022*
Carrying amounts of major classes of assets held for sale:
Accounts receivable	$	133
Inventories		151
Other current assets		11
Property, plant and equipment, net		134
Deferred income taxes		13
Operating lease right-of-use assets		15
Other noncurrent assets		15
Total assets held for sale⁽¹⁾	$	472
Carrying amounts of major classes of liabilities held for sale:
Accounts payable	$	63
Accrued liabilities		47
Current operating lease liabilities		2
Noncurrent operating lease liabilities		17
Other noncurrent liabilities		65
Total liabilities held for sale⁽¹⁾	$	194

(1)	Held for sale assets and liabilities are those of our Textile Effects Business. Total assets and liabilities held for sale as of December 31, 2022 are classified as current as we completed the sale of our Textile Effects Business on February 28, 2023.

The following table reconciles major line items constituting pretax income of discontinued operations to after-tax income of discontinued operations, primarily related to our Textile Effects Business, as presented in our consolidated statements of operations (dollars in millions):

	*Year ended December 31,*
	*2023*			*2022*			*2021*
Major line items constituting pretax income of discontinued operations:
Trade sales, services and fees, net⁽¹⁾	$	88		$	692		$	783
Cost of goods sold⁽¹⁾		(69	)		(531	)		(592	)
Gain on sale of the Textile Effects Business		154			—			—
Other expense items, net		(38	)		(130	)		(121	)
Income from discontinued operations before income taxes		135			31			70
Income tax expense		(17	)		(19	)		(21	)
Income from discontinued operations, net of tax		118			12			49
Net income attributable to noncontrolling interests		—			(3	)		—
Net income attributable to discontinued operations	$	118		$	9		$	49

(1)	Includes eliminations of trade sales, services and fees, net and cost of goods sold between continuing operations and discontinued operations.

Sale of India-Based Do-It-Yourself Consumer Adhesives Business

On November 3, 2020, we completed the sale of the India-based do-it-yourself (“DIY”) business to Pidilite Industries Ltd. and received cash of approximately $257 million. In the second quarter of 2021, we received the full payment of $28 million pursuant to an earnout provision based on the DIY business’s achievement of certain sales revenue targets in line with its 2019 performance. As a result, we recognized an additional pretax gain of $28 million in the second quarter of 2021, which was recorded in gain on sale of India-based DIY business in our consolidated statements of operations.

Separation and Deconsolidation of Venator

On December 23, 2020, we completed the sale of approximately 42.4 million ordinary shares of Venator Materials PLC (“Venator”). Concurrent with the sale of ordinary shares, we entered into an option agreement, pursuant to which we granted an option to funds advised by SK Capital Partners, LP to purchase the remaining approximate 9.7 million ordinary shares we held in Venator at $2.15 per share. The option expired on June 23, 2023; however, prior to its expiration, we recorded this option at fair value with changes in fair value reported in earnings. We account for our remaining ownership interest in Venator as an investment in equity securities that are marked to fair value with changes in fair value reported in earnings. For the years ended December 31, 2023, 2022 and 2021, we recorded net losses of $5 million, $12 million and $28 million, respectively, to record our investment in Venator and related option at fair value. These net losses were recorded in “Fair value adjustments to Venator investment, net” in our consolidated statements of operations.