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, 2013

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

As of March 31, 2013 and December 31, 2012, 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, 2013	$	90		$	—		$	15		$	—		$	105
2013 charges for 2011 initiatives		—			4			16			1			21
2013 charges for 2012 initiatives		17			—			—			6			23
2013 charges for 2013 initiatives		2			—			—			—			2
Reversal of reserves no longer required		(7	)		—			—			—			(7	)
2013 payments for 2011 initiatives		(4	)		(4	)		—			(1	)		(9	)
2013 payments for 2012 initiatives		(4	)		—			—			(6	)		(10	)
Foreign currency effect on liability balance		(3	)		—			(1	)		—			(4	)

Accrued liabilities as of March 31, 2013	$	91		$	—		$	30		$	—		$	121

(1): The total workforce reduction reserves of $91 million relate to the termination of 817 positions, of which 738 positions had not been terminated as of March 31, 2013.

(2): Accrued liabilities by initiatives were as follows (dollars in millions):

	March 31, 2013		December 31, 2012

2008 and prior initiatives	$	2	$	2
2009 initiatives		6		7
2010 initiatives		9		9
2011 initiatives		44		34
2012 initiatives		58		53
2013 initiatives		2		—

Total	$	121	$	105

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, 2013	$	27		$	—	$	27		$	42		$	1	$	6	$	2	$	105
2013 charges for 2011 initiatives		—			—		—			21			—		—		—		21
2013 charges for 2012 initiatives		—			—		23			—			—		—		—		23
2013 charges for 2013 initiatives		—			2		—			—			—		—		—		2
Reversal of reserves no longer required		(4	)		—		(2	)		(1	)		—		—		—		(7	)
2013 payments for 2011 initiatives		—			—		—			(9	)		—		—		—		(9	)
2013 payments for 2012 initiatives		(2	)		—		(8	)		—			—		—		—		(10	)
Foreign currency effect on liability balance		(1	)		—		(1	)		(2	)		—		—		—		(4	)

Accrued liabilities as of March 31, 2013	$	20		$	2	$	39		$	51		$	1	$	6	$	2	$	121

Current portion of restructuring reserves	$	20		$	2	$	38		$	26		$	1	$	6	$	2	$	95
Long-term portion of restructuring reserves		—			—		1			25			—		—		—		26
Estimated additional future charges for current restructuring projects
Estimated additional charges within one year		—			3		13			65			—		—		—		81
Estimated additional charges beyond one year		—			—		—			—			—		—		—		—

Details with respect to cash and non-cash restructuring charges for the periods ended March 31, 2013 and 2012 by initiative are provided below (dollars in millions):

	Three months ended March 31, 2013

Cash charges:
2013 charges for 2011 initiatives	$	21
2013 charges for 2012 initiatives		23
2013 charges for 2013 initiatives		2
Pension-related charges		4
Reversal of reserves no longer required		(7	)
Non-cash charges		1

Total 2013 Restructuring, Impairment and Plant Closing Costs	$	44

	Three months ended March 31, 2012

Cash charges:
2012 charges for 2008 and prior initiatives	$	2
2012 charges for 2009 initiatives		1
2012 charges for 2011 initiatives		3
2012 charges for 2012 initiatives		5
Reversal of reserves no longer required		(12	)
Non-cash charges		1

Total 2012 Restructuring, Impairment and Plant Closing Costs	$	—

2013 RESTRUCTURING ACTIVITIES

During the three months ended March 31, 2013, our Polyurethanes segment reversed charges of $4 million related to workforce reductions in association with our program to reduce annualized fixed costs by approximately $75 million. Our Polyurethanes segment also recorded pension-related settlement charges of $5 million related to this program.

During the three months ended March 31, 2013, our Advanced Materials segment recorded charges of $23 million primarily related to workforce reductions related to our global transformational change program designed to improve the segment's manufacturing efficiencies, enhance commercial excellence and ensure its long-term global competitiveness. Our Advanced Materials segment also reversed charges of $2 million related to this initiative. We expect to incur additional charges of $13 million through March 2014, also related to this initiative.

On September 27, 2011, we announced plans to implement a significant restructuring of our Textile Effects segment, including the closure of our production facilities and business support offices in Basel, Switzerland, as part of an ongoing strategic program aimed at improving the Textile Effects segment's long-term global competitiveness. In connection with this plan, during the three months ended March 2013, our Textile Effects segment recorded charges of $16 million for non-cancelable long-term contract termination costs, $4 million for decommissioning and $1 million for other restructuring and reversed charges of $1 million related to workforce reductions associated with this initiative. We expect to incur additional charges of $65 million through March 2014, also related to this initiative.

2012 RESTRUCTURING ACTIVITIES

During the three months ended March 31, 2012, our Polyurethanes segment recorded charges of $5 million primarily related to cost reduction programs.

During the three months ended March 31, 2012, our Advanced Materials segment recorded charges of $1 million primarily related to the reorganization of our global business structure and the relocation of our divisional headquarters from Basel, Switzerland to The Woodlands, Texas.

On September 27, 2011, we announced plans to implement a significant restructuring of our Textile Effects segment, including the closure of our production facilities and business support offices in Basel, Switzerland, as part of an ongoing strategic program aimed at improving the Textile Effects segment's long-term global competitiveness. In connection with this plan, during the first quarter of 2012, we recorded a charge of $1 million primarily for workforce reductions. In addition, during the three months ended March 31, 2012, our Textile Effects segment recorded charges of $3 million primarily related to the closure of our St. Fons, France facility and a global transfer pricing initiative. Also during the three months ended March 31, 2012, we reversed $12 million of reserves that were no longer required for workforce reductions at our production facility in Langweid, Germany, the consolidation of manufacturing activities and processes at our site in Basel, Switzerland and closure of our production facilities in Basel, Switzerland.

During the three months ended March 31, 2012, our Pigments segment recorded charges of $1 million related to the closure of our Grimsby, U.K. plant.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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