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2015 ANNUAL REPORT
HUNTSMAN CORPORATION IS A PUBLICLY TRADED GLOBAL MANUFACTURER AND
MARKETER OF DIFFERENTIATED CHEMICALS. OUR CHEMICAL PRODUCTS NUMBER IN
THE THOUSANDS AND ARE SOLD WORLDWIDE TO MANUFACTURERS SERVING A
BROAD AND DIVERSE RANGE OF CONSUMER AND INDUSTRIAL END MARKETS.
5 BUSINESS DIVISIONS
POLYURETHANES
We are a global leader
in the manufacture of
PERFORMANCE
PRODUCTS
We manufacture prod-
ADVANCED
MATERIALS
Our technologically
TEXTILE EFFECTS
We are a major global
solutions provider for
PIGMENTS AND
ADDITIVES
We manufacture and
MDI-based polyure-
ucts primarily based on
advanced epoxy, acrylic
textile dyes, digital
market a broad range
thanes used to produce
amines, car bon ates,
and polyurethane-based
inks and chemicals that
of titanium dioxide pig-
energy-saving insula-
sur fac tants and maleic
polymer products are
enhance color and
ments, color pigments,
tion; comfort foam for
anhydride. End uses
replacing traditional
improve performance
functional additives and
automotive seating,
include agrochemicals,
materials in aircraft,
such as wrinkle resis-
timber and water treat-
bedding and furniture;
oil and gas and alter na-
automobiles and elec-
tance, UV-blocking
ment chemicals. Our
adhesives; coatings;
tive energy solutions,
trical power transmis-
and the ability to repel
pigments and additives
elastomers for footwear;
and composite wood
products.
home detergents and
per sonal care prod ucts,
adhesives and coatings,
sion. Our products are
also used in coatings,
construction materials,
water and stains in
apparel, home and
technical textiles.
mining, and polyurethane/
circuit boards and
epoxy curing agents.
sports equipment.
add performance and
color to thousands of
everyday items from
paints, inks and cosmet-
ics to plastics, pharma-
ceuticals and concrete.
HUNTSMAN CORPORATION 1
PETER R. HUNTSMAN: A LETTER TO OUR STOCKHOLDERS
2015 WAS A TRANSITION YEAR FOR OUR COMPANY, DURING WHICH WE MADE SIGNIFICANT
PROGRESS. WE SUCCESSFULLY EXECUTED A NUMBER OF INITIATIVES THAT POSITION
US FOR FUTURE LONG-TERM PROSPERITY, INCLUDING INCREASED CAPITAL
INVESTMENTS, SIGNIFICANT RESTRUCTURING AND MEANINGFUL ASSET MAINTENANCE.
NOTWITHSTANDING A CHALLENGING ECONOMIC BACKDROP, WE DELIVERED STRONG
FINANCIAL RESULTS AND OUR FINANCIAL CONDITION REMAINS SOLID.
Our business operated at two different speeds in 2015.
In 2016, we plan to decrease our capital expenditures
With the fall of crude prices, the North American gas
by $200 million, we’ll spend $100 million less in restruc-
advantage substantially diminished. This put downward
turing and $50 million less in operations, as we do not
pressure on margins for cyclical chemicals such as
have any large maintenance projects planned. As a
MTBE, olefins and other basic commodity chemicals.
result, we expect our free cash flow to improve by
Combined with lower global economic growth and
$350 million in 2016. We project further increases in
challenging industry conditions for titanium dioxide,
subsequent years as we remain focused on improving
earnings for our cyclical products decreased.
free cash flow.
Lower earnings from cyclical chemicals overshadowed
We continue to improve our personal and process
the tremendous strides we achieved improving our
safety. Our safety and environmental performance is
downstream differentiated businesses, such as MDI
rated among the best in our industry.
urethanes, epoxies and amines. In 2015, our downstream
differentiated businesses grew more than 10% and
Let me reiterate our objectives. Moving forward, we
generated more than 80% of our operational earnings.
will improve free cash flow generation, grow our down-
stream differentiated businesses and actively pursue a
This difference in performance underscores the need
separation of our titanium dioxide business. We are
for portfolio management. The earnings volatility we
well prepared to deliver on these objectives. Thank you
have seen in our titanium dioxide business is one of the
for your support.
primary reasons we continue to actively pursue a sepa-
ration of this business through a spinoff or other stra-
tegic transaction.
I believe that improving our free cash flow generation
profile is the single most significant objective we can
achieve to create stockholder value. In 2015, we spent
over $850 million completing our pigments restructur-
ing and integration, and a number of global projects,
including a once-every-five-year maintenance project.
PETER R. HUNTSMAN
President and
Chief Executive Officer
February 15, 2016
45489txt.indd 1
3/8/16 8:57 AM
2 HUNTSMAN CORPORATION
JON M. HUNTSMAN: SPECIAL NOTE TO STOCKHOLDERS
OUR FINANCIAL CONDITION REMAINS STRONG; WE HAVE MORE THAN $1 BILLION OF
LIQUIDITY. COMBINED WITH OUR STRONG EARNINGS, WE ARE WELL POSITIONED TO
CONTINUE TO REMUNERATE OUR STOCKHOLDERS THROUGH DIVIDENDS AND OTHER
STOCKHOLDER FRIENDLY ACTIONS.
In September of this past year, our Board of Directors
confidence in Peter Huntsman’s leadership. The strategy
authorized the repurchase of up to $150 million in shares
and corporate vision that he has outlined will undoubt-
of our common stock. In October, we entered into and
edly lead to a more representative reflection of the
funded an accelerated share repurchase agreement
underlying value of our business.
to repurchase $100 million of our common stock. The
accelerated share repurchase was completed in
Thank you for your investment. Please know that I remain
January 2016, with 8.6 million shares repurchased.
committed to relentlessly pursuing an increase in
stockholder value.
I, together with my foundation, remain the largest
stockholder of the company, and I am frustrated by the
low price of our shares, as I’m sure many of you are.
I’ve been involved with the chemical industry for more
than 50 years and have managed businesses through
a number of economic cycles. As our company’s
JON M. HUNTSMAN
Executive Chairman and Founder
Executive Chairman, I am actively engaged in strategic
February 15, 2016
oversight. On behalf of the board, I want to express our
HUNTSMAN CORPORATION 3
2015: AT-A-GLANCE
REVENUES BY DIVISION(1)
REVENUES BY DIVISION(1)
ADJUSTED EBITDA BY DIVISION(1)
37% Polyurethanes
24% Performance
Products
21% Pigments &
Additives
8% Textile Effects
10% Advanced Materials
37% Polyurethanes
42% Polyurethanes
24% Performance Products
33% Performance Products
10% Advanced Materials
8% Textile Effects
21% Pigments and Additives
16% Advanced Materials
5% Textile Effects
4% Pigments and Additives
FINANCIAL HIGHLIGHTS
$ in millions
Revenues
Gross profit
Interest expense, net
Net income
Adjusted net income(2)
Adjusted diluted income per share(2)
Adjusted EBITDA(2)
Capital expenditures(3)
$ in millions
Total assets
Net debt(4)
Year Ended December 31,
2015
2014
2013
$ 10,299
$ 11,578
$ 11,079
$ 1,848
$ 1,919
$ 1,753
$
$
$
205
126
492
$
$
$
205
345
478
$
$
$
190
149
390
$ 2.00
$ 1.94
$ 1.61
$ 1,221
$ 1,340
$ 1,213
$
648
$
564
$
467
December 31,
2015
2014
2013
$ 9,820
$ 10,923
$ 9,159
$ 4,526
$ 4,251
$ 3,352
(1) Segment allocation before Corporate and other unallocated items.
(2) For a reconciliation see pages 7–8 of the Financials section.
(3) Net of reimbursements of $15 million, $37 million and $4 million in 2015, 2014 and 2013, respectively.
(4) Net debt calculated as total debt excluding affiliates less cash.
4 HUNTSMAN CORPORATION
2015: FINANCIAL REVIEW AND FORM 10-K
5.
Definitions
6.
Selected Financial Data
7.
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
31.
Quantitative and Qualitative Disclosures about Market Risk
34.
Controls and Procedures
36.
Reports of Independent Registered Public Accounting Firm
38.
Consolidated Balance Sheets
39.
Consolidated Statements of Operations
40.
Consolidated Statements of Comprehensive (Loss) Income
41.
Consolidated Statements of Equity
42.
Consolidated Statements of Cash Flows
44.
Notes to Consolidated Financial Statements
114.
Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
IBC.
Corporate Information
Each capitalized term used without definition in this report has the meaning specified in the
Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the
Securities and Exchange Commission on February 16, 2016.
DEFINITIONS
5
SELECTED FINANCIAL DATA
The selected historical financial data set forth below presents our historical financial data as of and
for the dates and periods indicated. You should read the selected financial data in conjunction with
‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and our
consolidated financial statements and accompanying notes.
Year ended December 31,
2015
2014
2013
2012
2011
(in millions, except per share amounts)
Statements of Operations Data:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,299 $11,578 $11,079 $11,187 $11,221
1,840
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit
167
Restructuring, impairment and plant closing costs
. . . . . . . . . . .
606
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
251
Income from continuing operations . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations, net of tax(a) . . . . . . . . . . . .
(1)
Extraordinary gain on the acquisition of a business, net of tax of
1,848
302
405
130
(4)
1,919
158
633
353
(8)
1,753
151
510
154
(5)
2,034
92
845
378
(7)
nil(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Huntsman Corporation . . . . . . . . . . .
—
126
93
—
345
323
—
149
128
2
373
363
4
254
247
Basic income (loss) per common share:
Income from continuing operations attributable to Huntsman
Corporation common stockholders . . . . . . . . . . . . . . . . . . . . $
0.40 $ 1.36 $ 0.55 $ 1.55 $ 1.03
Loss from discontinued operations attributable to Huntsman
Corporation common stockholders, net of tax(a) . . . . . . . . . . .
Extraordinary gain on the acquisition of a business attributable to
Huntsman Corporation common stockholders, net of tax(b) . . .
Net income attributable to Huntsman Corporation common
(0.02)
(0.03)
(0.02)
(0.03)
—
—
—
—
0.01
0.01
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.38 $ 1.33 $ 0.53 $ 1.53 $ 1.04
Diluted income (loss) per common share:
Income from continuing operations attributable to Huntsman
Corporation common stockholders . . . . . . . . . . . . . . . . . . . . $
0.40 $ 1.34 $ 0.55 $ 1.53 $ 1.01
Loss from discontinued operations attributable to Huntsman
Corporation common stockholders, net of tax(a) . . . . . . . . . . .
Extraordinary gain on the acquisition of a business attributable to
Huntsman Corporation common stockholders, net of tax(b) . . .
Net income attributable to Huntsman Corporation common
(0.02)
(0.03)
(0.02)
(0.03)
—
—
—
—
0.01
0.01
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.38 $ 1.31 $ 0.53 $ 1.51 $ 1.02
Other Data:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . $
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance Sheet Data (at period end):
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,820 $10,923 $ 9,159 $ 8,862 $ 8,635
3,924
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,859
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
445 $
601
0.50
448 $
471
0.50
399 $
663
0.50
432 $
412
0.40
439
330
0.40
5,127
8,972
4,796
8,191
3,684
6,966
3,887
7,030
(a) Loss from discontinued operations represents the operating results and loss on disposal of our former
Australian styrenics business, our former U.S. base chemicals business, our former North American
polymers business, our former European base chemicals and polymers business and our former TDI
business. The U.S. base chemicals business was sold on November 5, 2007, the North American polymers
business was sold on August 1, 2007, the European base chemicals and polymers business was sold on
December 29, 2006 and the TDI business was sold on July 6, 2005.
(b) The extraordinary gain on the acquisition of a business relates to the June 30, 2006 acquisition of our
Textile Effects segment.
6
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
We are a global manufacturer of differentiated organic chemical products and of inorganic
chemical products. Our products comprise a broad range of chemicals and formulations, which we
market globally to a diversified group of consumer and industrial customers. Our products are used in
a wide range of applications, including those in the adhesives, aerospace, automotive, construction
products, personal care and hygiene, durable and non-durable consumer products, electronics, medical,
packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye
industries. We are a leading global producer in many of our key product lines, including MDI, amines,
surfactants, maleic anhydride, epoxy-based polymer formulations, textile chemicals, dyes, titanium
dioxide and color pigments. Our administrative, research and development and manufacturing
operations are primarily conducted at facilities located in 30 countries. We employed approximately
15,000 associates worldwide at December 31, 2015.
We operate in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile
Effects and Pigments and Additives. Our Polyurethanes, Performance Products, Advanced Materials
and Textile Effects segments produce differentiated organic chemical products and our Pigments and
Additives segment produces primarily inorganic chemical products. In a series of transactions beginning
in 2006, we have sold or shut down substantially all of our former Australian styrenics operations and
our North American polymers and base chemicals operations. We report the results from these
businesses as discontinued operations.
In our Performance Products segment, demand for our specialty products has generally continued
to grow at rates in excess of GDP, as overall demand is significantly influenced by new product and
application development. Demand for most of our intermediate products has grown in line with GDP
growth. Over time, demand for maleic anhydride has generally grown at rates that slightly exceed GDP
growth. However, maleic anhydride demand can be cyclical given its dependence on the UPR market,
which is influenced by construction end markets.
Growth in our Polyurethanes and Advanced Materials segments has been driven by the continued
substitution of our products for other materials across a broad range of applications, as well as by the
level of global economic activity. Historically, demand for many of these products has grown at rates in
excess of GDP growth. In Polyurethanes, this growth, driven largely by Asia, has in recent years
resulted in improved demand and higher industry capacity utilization rates for many of our key
products, including MDI. MDI does, however, experience some seasonality in its sales reflecting its
exposure to seasonal construction-related end markets. Sales generally peak during the spring and
summer months in the northern hemisphere, resulting in greater sales volumes during the second and
third quarters of the year.
Demand in our Textile Effects segment is driven primarily by consumer activity. Consumer
spending for goods incorporating our Textile Effects products is impacted significantly by a wide range
of economic factors, including personal incomes, housing and energy prices and other highly volatile
factors. Accordingly, demand for our Textile Effects products has been volatile and appears likely to
remain volatile.
Historically, demand for titanium dioxide pigments and additives has grown at rates approximately
equal to GDP growth. Pigment prices have historically reflected industry-wide operating rates but have
typically lagged behind movements in these rates by up to twelve months due to the effects of product
stocking and destocking by customers and producers, contract arrangements and seasonality. The
industry experiences some seasonality in its sales because sales of paints, the largest end use for
7
titanium dioxide, generally peak during the spring and summer months in the northern hemisphere.
This results in greater sales volumes in the second and third quarters of the year.
For further information regarding sales price and demand trends, see ‘‘—Results of Operations—
Segment Analysis—Year Ended December 31, 2015 Compared to Year Ended December 31, 2014’’ and
the tables captioned ‘‘Year ended December 31, 2015 vs. 2014, Period-Over-Period Increase
(Decrease)’’ and ‘‘Fourth Quarter 2015 vs. Third Quarter 2015, Period-Over-Period Increase
(Decrease)’’ below.
OUTLOOK
We expect our cyclical businesses, particularly MTBE, ethylene and titanium dioxide, to continue
to negatively impact our profitability in 2016. Our differentiated downstream businesses continue to
have an attractive growth profile and we expect profitability to continue to improve during 2016,
offsetting the impact from our cyclical businesses.
We have a number of initiatives underway that will improve the competitiveness and strength of
our entire Company and we are investing in growth projects that will improve our businesses over the
next few years.
Our earnings are subject to fluctuations due to exchange rate movements. Our revenues and
expenses are denominated in various currencies, including the primary European currencies which have
recently been volatile, while our reporting currency is the U.S. dollar. Generally, a decline in the value
of the euro relative to the U.S. dollar, will reduce the reported profitability of our Polyurethanes,
Performance Products, Advanced Materials and Pigments and Additives segments. A decline in the
value of the Pound Sterling relative to the U.S. dollar will increase the reported profitability of our
Pigments and Additives segment and an increase in the value of the Swiss Franc relative to the U.S.
dollar will reduce the reported profitability of our Advanced Materials and Textile Effects segments. We
are also exposed to other foreign currencies including the Chinese Renminbi, the Indian Rupiah, the
Brazilian Real and the Thai Baht. In general, a decline in the value of these currencies as compared to
the U.S. dollar will reduce our reported profitability.
Notwithstanding near term headwinds and shocks to the business landscape, such as meaningful
movements in foreign currency rates and lower priced oil, we believe we are well positioned to deliver
increased earnings, an improvement in free cash flow and increased stockholder value over the next
several years. The following is a summary of the key trends expected in our business segments:
Polyurethanes:
(cid:127) 2016 improving MDI urethane demand
(cid:127) 2016 adjusted EBITDA improvement
(cid:127) Low PO/MTBE margins
Performance Products:
(cid:127) Favorable downstream product margins
(cid:127) 2016 benefit of growth projects, such as ethylene oxide expansion in the U.S. and
polyetheramines expansion in Singapore
(cid:127) Lower oil prices reduce U.S. Gulf Coast cost advantage
(cid:127) 2016 adjusted EBITDA similar to 2015
8
Advanced Materials:
(cid:127) Strong aerospace market more than one-third of earnings
(cid:127) Moderate increase in 2016 adjusted EBITDA
Textile Effects:
(cid:127) Selective growth above underlying market demand
(cid:127) Moderate increase in 2016 adjusted EBITDA
Pigments and Additives:
(cid:127) More than $100 million of incremental synergy and restructuring savings
(cid:127) Stable additives business
(cid:127) Slightly positive 2016 adjusted EBITDA
We remain committed to a separation of our titanium dioxide business and are actively exploring
additional possibilities outside of an initial public offering or a spin-off. Our ability to effect such
separation is subject to, among other things, market conditions and the approval of our Board of
Directors.
In 2016, we expect to spend approximately $450 million on capital expenditures, net of
reimbursements.
We expect our full year 2016 tax rate to be approximately 30% and our full year adjusted effective
tax rate to be approximately 30%. We believe our long-term effective income tax rate will be
approximately 30%.
9
RESULTS OF OPERATIONS
The following tables set forth our consolidated results of operations for the years ended
December 31, 2015, 2014 and 2013 (dollars in millions, except per share amounts).
Year ended December 31,
Percent Change
2015
2014
2013
2015 vs. 2014
2014 vs. 2013
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,299
8,451
$11,578
9,659
$11,079
9,326
(11)%
(13)%
(4)%
1%
91%
(36)%
—
—
11%
NM
(56)%
(10)%
(63)%
(50)%
(63)%
50%
(71)%
—
(10)%
—
(10)%
(27)%
5%
4%
9%
3%
5%
24%
8%
(25)%
(45)%
NM
45%
(59)%
129%
60%
132%
5%
152%
8%
(59)%
—
(1)%
15%
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, impairment and plant closing costs . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in income of investment in unconsolidated affiliates . . .
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . .
Other income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations before income taxes . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . .
Loss from discontinued operations, net of tax . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . .
Net income attributable to noncontrolling interests
Net income attributable to Huntsman Corporation . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net
Income tax expense from continuing operations
. . . . . . . . . .
Income tax benefit from discontinued operations . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . .
EBITDA(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reconciliation of EBITDA to adjusted EBITDA:
EBITDA(1)
Acquisition and integration expenses and purchase accounting
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EBITDA from discontinued operations . . . . . . . . . . . . . . . .
Loss (gain) on disposition of businesses/assets . . . . . . . . . . . .
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . .
Certain legal settlements and related expenses . . . . . . . . . . .
Amortization of pension and postretirement actuarial losses . . .
Net plant incident remediation costs . . . . . . . . . . . . . . . . . .
Restructuring, impairment and plant closing and transition
costs(3):
Polyurethanes
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . .
Total restructuring, impairment and plant closing and
transition costs(3) . . . . . . . . . . . . . . . . . . . . . . . . .
1,848
1,141
302
405
(205)
6
(31)
1
176
(46)
130
(4)
126
(33)
93
205
46
(2)
399
1,919
1,128
158
633
(205)
6
(28)
(2)
404
(51)
353
(8)
345
(22)
323
205
51
(2)
445
$
$
741
$ 1,022
741
$ 1,022
$
$
67
10
(3)
28
3
51
—
19
28
11
28
60
16
53
6
2
31
4
74
4
15
11
12
38
219
11
306
1,753
1,092
151
510
(190)
8
(51)
2
279
(125)
154
(5)
149
(21)
128
190
125
(2)
448
889
889
21
5
—
51
9
74
—
2
18
34
87
4
19
162
164
Adjusted EBITDA(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,221
$ 1,340
$ 1,213
Net cash provided by operating activities . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . .
Net cash (used in) provided by financing activities . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
575
(600)
(562)
(663)
$
760
(1,606)
1,197
(601)
$
708
(566)
(6)
(471)
(24)%
(63)%
NM
10%
7%
184%
NM
28%
10
Reconciliation of net income to adjusted net income:
Net income attributable to Huntsman Corporation . . . . . . . . . . . . . . . . . . .
Acquisition and integration expenses and purchase accounting adjustments
net of tax of $(13), $(10) and $(5) in 2015, 2014 and 2013, respectively . . .
Impact of certain foreign tax credit elections . . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations, net of tax of $(2), $(2) and $(2) in 2015,
2014 and 2013, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discount amortization on settlement financing, net of tax of nil, nil and $(3)
in 2015, 2014 and 2013, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on disposition of businesses/assets, net of tax of nil, $1 and nil in
2015, 2014 and 2013, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt, net of tax of $(11), $(10) and $(19) in
2015, 2014 and 2013, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain legal settlements and related expenses, net of tax of $(1), nil and
$(2) in 2015, 2014 and 2013, respectively . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of pension and postretirement actuarial losses, net of tax of
$(17), $(10) and $(20) in 2015, 2014 and 2013, respectively . . . . . . . . . . . .
Net plant incident remediation costs, net of tax of $(1), nil and nil in 2015,
2014 and 2013, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, impairment and plant closing and transition costs(3), net of
Year ended December 31,
2015
2014
2013
$
93
$ 323
$ 128
40
—
4
—
2
20
3
57
3
57
(94)
8
—
(2)
18
3
41
—
16
—
5
6
—
32
7
54
—
tax of $(36), $(38) and $(22) in 2015, 2014 and 2013, respectively . . . . . . .
270
124
142
Adjusted net income(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 492
$ 478
$ 390
Weighted average shares—basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares—diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
242.8
245.4
242.1
246.0
239.7
242.4
Net income per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 0.38
0.38
$ 1.33
1.31
$ 0.53
0.53
Other non-GAAP measures:
Adjusted income per share(2):
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 2.03
2.00
$ 1.97
1.94
$ 1.63
1.61
Capital expenditures, net of reimbursements(4) . . . . . . . . . . . . . . . . . . . . . .
(648)
(564)
(467)
NM—Not meaningful
(1) EBITDA is defined as net income attributable to Huntsman Corporation before interest, income
taxes, depreciation and amortization. Because EBITDA excludes these items, EBITDA provides an
indicator of general economic performance that is not affected by debt restructurings, fluctuations
in interest rates or effective tax rates, or levels of depreciation and amortization. Adjusted
EBITDA is computed by eliminating the following from EBITDA: (a) acquisition and integration
expenses and purchase accounting adjustments; (b) EBITDA from discontinued operations; (c) loss
(gain) on disposition of businesses/assets; (d) loss on early extinguishment of debt; (e) certain legal
settlements and related expenses; (f) amortization of pension and postretirement actuarial losses;
(g) net plant incident remediation costs; and (h) restructuring, impairment, plant closing and
transition costs. We believe that net income attributable to Huntsman Corporation is the
performance measure calculated and presented in accordance with GAAP that is most directly
comparable to EBITDA and adjusted EBITDA.
11
We believe that EBITDA and adjusted EBITDA supplement an investor’s understanding of our
financial performance. However, these measures should not be considered in isolation or viewed as
substitutes for net income attributable to Huntsman Corporation or other measures of
performance determined in accordance with GAAP. Moreover, EBITDA and adjusted EBITDA as
used herein are not necessarily comparable to other similarly titled measures of other companies
due to potential inconsistencies in the methods of calculation. Our management believes these
measures are useful to compare general operating performance from period to period and to make
certain related management decisions. EBITDA and adjusted EBITDA are also used by securities
analysts, lenders and others in their evaluation of different companies because they exclude certain
items that can vary widely across different industries or among companies within the same
industry. For example, interest expense can be highly dependent on a company’s capital structure,
debt levels and credit ratings. Therefore, the impact of interest expense on earnings can vary
significantly among companies. In addition, the tax positions of companies can vary because of
their differing abilities to take advantage of tax benefits and because of the tax policies of the
various jurisdictions in which they operate. As a result, effective tax rates and tax expense can vary
considerably among companies. Finally, companies employ productive assets of different ages and
utilize different methods of acquiring and depreciating such assets. This can result in considerable
variability in the relative costs of productive assets and the depreciation and amortization expense
among companies.
Nevertheless, our management recognizes that there are material limitations associated with the
use of EBITDA and adjusted EBITDA in the evaluation of our Company as compared to net
income attributable to Huntsman Corporation, which reflects overall financial performance. For
example, we have borrowed money in order to finance our operations and interest expense is a
necessary element of our costs and ability to generate revenue. Our management compensates for
the limitations of using EBITDA and adjusted EBITDA by using these measures to supplement
GAAP results to provide a more complete understanding of the factors and trends affecting the
business rather than GAAP results alone.
In addition to the limitations noted above, adjusted EBITDA excludes items that may be recurring
in nature and should not be disregarded in the evaluation of performance. However, we believe it
is useful to exclude such items to provide a supplemental analysis of current results and trends
compared to other periods because certain excluded items can vary significantly depending on
specific underlying transactions or events, and the variability of such items may not relate
specifically to ongoing operating results or trends and certain excluded items, while potentially
recurring in future periods, may not be indicative of future results. For example, while EBITDA
from discontinued operations is a recurring item, it is not indicative of ongoing operating results
and trends or future results.
(2) Adjusted net income is computed by eliminating the after-tax amounts related to the following
from net income attributable to Huntsman Corporation: (a) acquisition and integration expenses
and purchase accounting adjustments; (b) impact of certain foreign tax credit elections; (c) loss
from discontinued operations; (d) discount amortization on settlement financing; (e) loss (gain) on
disposition of businesses/assets; (f) loss on early extinguishment of debt; (g) certain legal
settlements and related expenses; (h) amortization of pension and postretirement actuarial losses;
(i) net plant incident remediation costs; and (j) restructuring, impairment and plant closing and
transition costs. The income tax impacts, if any, of each adjusting item represent a ratable
allocation of the total difference between the unadjusted tax expense and the total adjusted tax
expense, computed without consideration of any adjusting items using a with and without
approach. We do not adjust for changes in tax valuation allowances because we do not believe it
provides more meaningful information than is provided under GAAP. Basic adjusted income per
share excludes dilution and is computed by dividing adjusted net income by the weighted average
12
number of shares outstanding during the period. Diluted adjusted income per share reflects all
potential dilutive common shares outstanding during the period and is computed by dividing
adjusted net income by the weighted average number of shares outstanding during the period
increased by the number of additional shares that would have been outstanding as dilutive
securities.
Adjusted net income and adjusted income per share amounts are presented solely as supplemental
disclosures to net income applicable to Huntsman Corporation and income per share because we
believe that these measures are indicative of our operating performance. These measures are also
used by securities analysts, lenders and others in their evaluation of different companies because
they exclude certain items that can vary widely across different industries or among companies
within the same industry. Nevertheless, our management recognizes that there are material
limitations associated with the use of adjusted net income and adjusted income per share in the
evaluation of our Company as compared to net income attributable to Huntsman Corporation,
which reflects overall financial performance. For example, adjusted net income and adjusted
income per share exclude items that may be recurring in nature and should not be disregarded in
the evaluation of performance. However, we believe it is useful to exclude such items to provide a
supplemental analysis of current results and trends compared to other periods because certain
excluded items can vary significantly depending on specific underlying transactions or events, and
the variability of such items may not relate specifically to current operating results or trends and
certain excluded items, while potentially recurring in future periods, may not be indicative of
future results. For example, while loss from discontinued operations is a recurring item, it is not
indicative of ongoing operating results and trends or future results.
(3) Includes cost associated with transition activities relating to the migration of our information data
centers and the transition of our Textile Effects segment’s production from Basel, Switzerland to a
tolling facility. These transition costs were included in either selling, general and administrative
expenses or cost of sales on our consolidated statements of operations.
(4) Capital expenditures, net of reimbursements, represent cash paid for capital expenditures less
payments received as reimbursements from customers and joint venture partners. During 2015,
2014 and 2013, capital expenditures of $663 million, $601 million and $471 million, respectively,
were reimbursed in part by $15 million, $37 million and $4 million, respectively.
Year Ended December 31, 2015 Compared with Year Ended December 31, 2014
For the year ended December 31, 2015, net income attributable to Huntsman Corporation was
$93 million on revenues of $10,299 million, compared with net income attributable to Huntsman
Corporation of $323 million on revenues of $11,578 million for 2014. The decrease of $230 million in
net income attributable to Huntsman Corporation was the result of the following items:
(cid:127) Revenues for the year ended December 31, 2015 decreased by $1,279 million, or 11%, as
compared with 2014. The decrease was due principally to lower sales volumes and lower average
selling prices in all our segments. See ‘‘—Segment Analysis’’ below.
(cid:127) Our gross profit for the year ended December 31, 2015 decreased by $71 million, or 4%, as
compared with 2014. The impact on gross profit resulted from lower gross margins in all of our
segments, except for our Advanced Materials segment. See ‘‘—Segment Analysis’’ below.
(cid:127) Our operating expenses increased by $13 million, or 1%, for the year ended December 31, 2015
as compared with 2014, primarily related to the consolidated expenses of the businesses acquired
from Rockwood Holdings, Inc. (‘‘Rockwood’’), offset in part by the foreign currency exchange
impacts of the strengthening U.S. dollar against other major international currencies.
13
(cid:127) Restructuring, impairment and plant closing costs for the year ended December 31, 2015
increased to $302 million from $158 million in 2014. For more information concerning
restructuring activities, see ‘‘Note 11. Restructuring, Impairment and Plant Closing Costs’’ to our
consolidated financial statements.
(cid:127) Loss on early extinguishment of debt for the year ended December 31, 2015 increased to
$31 million from $28 million in 2014. During 2015, we recorded a loss on early extinguishment
of debt of $30 million related to the redemption of our 8.625% senior subordinated notes due
2021 (‘‘2021 Senior Subordinated Notes’’). For more information, see ‘‘Note 14. Debt—Direct
and Subsidiary Debt—Redemption of Notes and Loss on Early Extinguishment of Debt’’ to our
consolidated financial statements.
(cid:127) Our income tax expense for the year ended December 31, 2015 decreased to $46 million from
$51 million in 2014. The change in income tax expense is impacted by the benefit in 2015 of
generating $14 million of excess U.S. foreign tax credits and in 2014 of utilizing U.S. foreign tax
credits which had been subject to a valuation allowance. Excluding the impact of the U.S.
foreign tax credits, our income tax expense decreased by $97 million as compared with 2014,
primarily due to lower pre-tax income and tax impacts of tax only foreign currency exchange
losses. Our tax expense is significantly affected by the mix of income and losses in the tax
jurisdictions in which we operate, as impacted by the presence of valuation allowances in certain
tax jurisdictions. For further information concerning taxes, see ‘‘Note 18. Income Taxes’’ to our
consolidated financial statements.
Segment Analysis
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Year ended
December 31,
2015
2014
Percent
Change
Favorable
(Unfavorable)
Revenues
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . .
Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3,811
2,501
1,103
804
2,160
(80)
$ 5,032
3,072
1,248
896
1,549
(219)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,299
$11,578
Segment EBITDA
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . .
Corporate and other . . . . . . . . . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued Operations . . . . . . . . . . . . . . . . . . .
$
516
438
195
18
(223)
(197)
747
(6)
$
669
440
182
28
(59)
(228)
1,032
(10)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
741
$ 1,022
(24)%
(19)%
(12)%
(10)%
39%
63%
(11)%
(23)%
—
7%
(36)%
(278)%
14%
(28)%
40%
(27)%
14
Year ended December 31, 2015 vs. 2014
Average Selling Price(1)
Local
Currency
Foreign Currency
Mix &
Translation Impact Other(2)
Sales
Volumes(3)
Period-Over-Period Increase (Decrease)
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . . . . .
Total Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(12)%
(7)%
2%
1%
(10)%
(8)%
(5)%
(5)%
(8)%
(6)%
(8)%
(6)%
3%
(3)%
(1)%
2%
62%
10%
(10)%
(4)%
(5)%
(7)%
(5)%
(7)%
Fourth Quarter 2015 vs. Third Quarter 2015
Average Selling Price(1)
Local
Currency
Foreign Currency Mix &
Other
Translation Impact
Sales
Volumes(3)
Period-Over-Period Increase (Decrease)
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . . . . . .
Total Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8)%
(2)%
—
—
(3)%
(5)%
(1)%
(1)%
(2)%
(2)%
(1)%
(1)%
(2)%
—
(10)%
2%
(9)%
4%
—
(3)%
(1)% (12)%
(6)%
—
(1) Excludes revenues from tolling arrangements, byproducts and raw materials.
(2) Includes the impact from the Rockwood Acquisition.
(3) Excludes sales volumes of byproducts and raw materials.
NM—Not Meaningful
Polyurethanes
The decrease in revenues in our Polyurethanes segment for 2015 compared to 2014 was primarily
due to a planned maintenance outage at our PO/MTBE facility in Port Neches, Texas that commenced
in the first quarter of 2015 and extended into the second quarter of 2015, lower MDI average selling
prices and the foreign currency exchange impact of a stronger U.S. dollar against other key currencies.
PO/MTBE sales volumes decreased due to the planned maintenance outage at our PO/MTBE facility
in Port Neches, Texas. MDI sales volumes decreased slightly due to the market slowdown in China and
lower sales into commercial construction in the U.S. PO/MTBE average selling prices decreased
following lower pricing for high octane gasoline. MDI average selling prices decreased in response to
lower raw material costs and the foreign currency exchange impact of a stronger U.S. dollar against
major European currencies. The decrease in segment EBITDA was due to lower PO/MTBE earnings
and the foreign currency exchange impact of a stronger U.S. dollar against the euro. We estimate the
reduction to segment EBITDA resulting from the planned PO/MTBE maintenance outage was
approximately $90 million for 2015.
Performance Products
The decrease in revenues in our Performance Products segment for 2015 compared to 2014 was
primarily due to lower average selling prices and lower sales volumes. Average selling prices decreased
across all product lines primarily in response to lower raw material costs and the foreign currency
exchange impact of a stronger U.S. dollar against major European currencies. Sales volumes decreased
15
across most product lines, including the effect of the sale of our European commodity surfactants
business in the second quarter of 2014 partially offset by higher toll volumes in our upstream
intermediates business. The decrease in segment EBITDA was primarily due to lower margins on
produced ethylene, partially offset by higher amines margins and lower restructuring, impairment and
plant closing costs. During 2015 and 2014, our Performance Products segment recorded restructuring,
impairment and plant closing costs of $11 million and $28 million, respectively. For more information
concerning restructuring activities, see ‘‘Note 11. Restructuring, Impairment and Plant Closing Costs’’
to our consolidated financial statements.
Advanced Materials
The decrease in revenues in our Advanced Materials segment for 2015 compared to 2014 was due
to lower sales volumes and lower average selling prices. Sales volumes decreased globally primarily in
our coatings and construction and transportation and industrial markets due to the de-selection of
certain business and competitive pressure, partially offset by strong volume growth in our do-it-yourself
and wind markets in the Asia Pacific region. Average selling prices increased, in most markets, on a
local currency basis in the Americas and Asia Pacific regions due to certain price increase initiatives
and our focus on higher value markets; overall this was more than offset by the foreign currency
exchange impact of a stronger U.S. dollar against major international currencies. The increase in
segment EBITDA was primarily due to higher margins, resulting from lower raw material costs, and
our focus on higher value business as well as lower fixed costs.
Textile Effects
The decrease in revenues in our Textile Effects segment for 2015 compared to 2014 was due to
lower average selling prices and lower sales volumes. Average selling prices decreased in response to
lower raw material costs and the foreign currency exchange impact of a stronger U.S. dollar against
major international currencies. Sales volumes decreased primarily due to the de-selection of certain less
profitable business and challenging market conditions. The decrease in segment EBITDA was primarily
due to lower margins and higher restructuring, impairment and plant closing and transition costs,
partially offset by lower fixed costs. During 2015 and 2014, our Textile Effects segment recorded
restructuring, impairment and plant closing and transition costs of $38 million and $28 million,
respectively. For more information concerning restructuring activities, see ‘‘Note 11. Restructuring,
Impairment and Plant Closing Costs’’ to our consolidated financial statements.
Pigments and Additives
The increase in revenues in our Pigments and Additives segment for 2015 compared to 2014 was
primarily due to the impact of the Rockwood Acquisition. Other than the impact of the Rockwood
Acquisition, average selling prices decreased primarily as a result of high titanium dioxide industry
inventory levels and the foreign currency exchange impact of a stronger U.S. dollar against major
European currencies. Sales volumes decreased primarily as a result of lower end-use demand and the
impact of a nitrogen tank explosion owned and operated by a third party at our Uerdingen, Germany
facility, which disrupted our manufacturing during the third quarter of 2015. The decrease in segment
EBITDA was primarily due to lower contribution margin for titanium dioxide, higher acquisition
expenses and integration costs, higher restructuring, impairment and plant closing costs and the
negative impact from the manufacturing disruption at our Uerdingen, Germany facility. During 2015
and 2014, our Pigments and Additives segment recorded acquisition expenses and integration costs of
$44 million and $43 million, respectively. During 2015 and 2014, our Pigments and Additives segment
recorded restructuring, impairment and plant closing costs of $219 million and $60 million, respectively.
For more information concerning restructuring activities, see ‘‘Note 11. Restructuring, Impairment and
Plant Closing Costs’’ to our consolidated financial statements.
16
Corporate and other
Corporate and other includes unallocated corporate overhead, unallocated foreign exchange gains
and losses, last-in first-out (‘‘LIFO’’) inventory valuation reserve adjustments, loss on early
extinguishment of debt, unallocated restructuring, impairment and plant closing costs, nonoperating
income and expense, benzene sales and gains and losses on the disposition of corporate assets. For
2015, EBITDA from Corporate and other for Huntsman Corporation increased by $31 million to a loss
of $197 million from a loss of $228 million for 2014. The increase in EBITDA from Corporate and
other resulted primarily from a $28 million increase in LIFO inventory valuation income ($29 million of
income in 2015 compared to $1 million of income in 2014), a $11 million decrease in unallocated
corporate overhead ($178 million of expense in 2015 compared to $189 million of expense in 2014),
and a $5 million decrease in restructuring, impairment and plant closing costs ($8 million of expense in
2015 compared to $13 million of expense in 2014). For more information concerning restructuring
activities, see ‘‘Note 11. Restructuring, Impairment and Plant Closing Costs’’ to our consolidated
financial statements. The increase in EBITDA was partially offset by a $9 million decrease in EBITDA
from benzene sales ($9 million of loss in 2015 compared to nil of income in 2014), and a $3 million
increase in loss on early extinguishment of debt ($31 million of loss in 2015 compared to $28 million of
loss in 2014). For more information concerning the loss on early extinguishment of debt, see ‘‘Note 14.
Debt—Direct and Subsidiary Debt—Redemption of Notes and Loss on Early Extinguishment of Debt’’
to our consolidated financial statements.
Discontinued Operations
The operating results of our former polymers, base chemicals and Australian styrenics businesses
are classified as discontinued operations, and, accordingly, the revenues of these businesses are
excluded from revenues for all periods presented. The EBITDA of these former businesses are
included in discontinued operations for all periods presented. The loss from discontinued operations
represents the operating results, legal costs, restructuring, impairment and plant closing costs and gain
(loss) on disposal with respect to our former businesses.
Year Ended December 31, 2014 Compared with Year Ended December 31, 2013
For the year ended December 31, 2014, net income attributable to Huntsman Corporation was
$323 million on revenues of $11,578 million, compared with net income attributable to Huntsman
Corporation of $128 million on revenues of $11,079 million for 2013. The increase of $195 million in
net income attributable to Huntsman Corporation was the result of the following items:
(cid:127) Revenues for the year ended December 31, 2014 increased by $499 million, or 5%, as compared
with 2013. The increase was due principally to higher average selling prices in our Performance
Products, Advanced Materials and Textile Effects segments and higher sales volumes in our
Polyurethanes and Pigments and Additives segments. See ‘‘—Segment Analysis’’ below.
(cid:127) Our gross profit for the year ended December 31, 2014 increased by $166 million, or 9%, as
compared with 2013. The increase resulted from higher gross margins in all our segments, except
for our Pigments and Additives segment. See ‘‘—Segment Analysis’’ below.
(cid:127) Operating expenses for the year ended December 31, 2014 increased by $36 million, or 3%, as
compared with 2013, primarily related to higher acquisition and integration costs and higher
foreign currency losses.
(cid:127) Restructuring, impairment and plant closing costs for the year ended December 31, 2014
increased to $158 million from $151 million in 2013. For more information concerning
restructuring activities, see ‘‘Note 11. Restructuring, Impairment and Plant Closing Costs’’ to our
consolidated financial statements.
17
(cid:127) Our interest expense for 2014 increased by $15 million, or 8%, as compared with 2013. The
increase was due primarily to additional borrowings in 2014 that were used to fund the
Rockwood Acquisition.
(cid:127) Loss on early extinguishment of debt for the year ended December 31, 2014 decreased to
$28 million from $51 million in 2013. The loss in 2014 resulted from the redemption of our 2020
Senior Subordinated Notes. The loss in 2013 resulted primarily from the repurchase of the
remainder of our 5.50% senior notes due 2016 (‘‘2016 Senior Notes’’). For more information,
see ‘‘Note 14. Debt—Direct and Subsidiary Debt—Redemption of Notes and Loss on Early
Extinguishment of Debt’’ to our consolidated financial statements.
(cid:127) Our income tax expense decreased by $74 million as compared with 2013, primarily due to the
benefit of utilizing U.S. foreign tax credits, which had been subject to a valuation allowance.
Excluding the impact of the U.S. foreign tax credits, our income tax expense increased by
$40 million as compared with 2013. For the year ended December 31, 2014, excluding the impact
of the benefit of our U.S. foreign tax credits, our effective tax rate was 39%, which is lower than
our effective tax rate of 45% for 2013, primarily due to various valuation allowance releases in
2014 and because our Textile Effects segment’s restructuring charges in 2013 received nominal
tax benefit. Our tax expense is significantly affected by the mix of income and losses in the tax
jurisdictions in which we operate, as impacted by the presence of valuation allowances in certain
tax jurisdictions. For further information concerning taxes, see ‘‘Note 18. Income Taxes’’ to our
consolidated financial statements.
Segment Analysis
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Year ended
December 31,
2014
2013
Percent
Change
Favorable
(Unfavorable)
Revenues
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . .
Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,032
3,072
1,248
896
1,549
(219)
$ 4,964
3,019
1,267
811
1,269
(251)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11,578
$11,079
Segment EBITDA
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . .
Corporate and other . . . . . . . . . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued Operations . . . . . . . . . . . . . . . . . . .
$
$
669
440
182
28
(59)
(228)
1,032
(10)
696
372
86
(78)
79
(261)
894
(5)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,022
$
889
1%
2%
(1)%
10%
22%
13%
5%
(4)%
18%
112%
NM
NM
13%
15%
100%
15%
18
Year ended December 31, 2014 vs 2013
Average Selling Price(1)
Local
Currency
Foreign Currency
Mix &
Translation Impact Other(2)
Sales
Volumes(3)
Period-Over-Period Increase (Decrease)
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . . . . .
Total Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)%
4%
5%
15%
(6)%
2%
—
—
—
(1)%
2%
—
1%
(1)%
4%
—
26%
3%
2%
(1)%
(10)%
(4)%
—
—
(1) Excludes revenues from tolling arrangements, byproducts and raw materials.
(2) Includes full revenue impact from the Rockwood Acquisition.
(3) Excludes sales volumes of byproducts and raw materials.
NM—Not meaningful
Polyurethanes
The increase in revenues in our Polyurethanes segment for 2014 compared to 2013 was primarily
due to higher sales volumes and improved sales mix, partially offset by lower average selling prices.
MDI sales volumes increased due to improved demand in the Americas and Asian regions and across
most major markets. PO/MTBE sales volumes decreased primarily as a result of two manufacturing
disruptions at our Port Neches, Texas facility in the second and third quarters of 2014. PO/MTBE
average selling prices decreased primarily due to less favorable market conditions. MDI average selling
prices increased in the Americas and European regions, partially offset by lower component pricing in
China. The decrease in segment EBITDA was primarily due to lower PO/MTBE earnings, partially
offset by higher MDI sales margins. During 2014 and 2013, our Polyurethanes segment recorded
restructuring, impairment and plant closing costs of $19 million and $2 million, respectively. For more
information concerning restructuring activities, see ‘‘Note 11. Restructuring, Impairment and Plant
Closing Costs’’ to our consolidated financial statements.
Performance Products
The increase in revenues in our Performance Products segment for 2014 compared to 2013 was
primarily due to higher average selling prices, partially offset by lower sales volumes and unfavorable
changes in sales mix. Average selling prices increased in response to higher raw material costs and
continued strong market conditions for amines, maleic anhydride and specialty surfactants. Sales
volumes decreased primarily due to a decline in sales volumes of surfactants, which resulted from the
restructuring of our European surfactants business, partially offset by an increased demand for amines
and maleic anhydride. The increase in segment EBITDA was primarily due to the impact of our
scheduled maintenance in the first quarter of 2013, estimated at $55 million, and increased margins in
amines and maleic anhydride, partially offset by higher restructuring charges. During 2014 and 2013,
our Performance Products segment recorded restructuring, impairment and plant closing costs of
$28 million and $18 million, respectively. For more information concerning restructuring activities, see
‘‘Note 11. Restructuring, Impairment and Plant Closing Costs’’ to our consolidated financial statements.
Advanced Materials
The decrease in revenues in our Advanced Materials segment for 2014 compared to 2013 was
primarily due to lower sales volumes, partially offset by higher average selling prices and improved
19
sales mix. Sales volumes decreased primarily in our coatings and construction market due to our
restructuring efforts, partially offset by higher demand in the wind market in the Americas and Asia
Pacific regions. During the fourth quarter of 2013, we closed two of our base resins production units as
we focus on higher value markets, such as aerospace and transportation and industrial. During 2014, we
also experienced an unplanned production outage due to a raw materials supply disruption in the
Americas region. Average selling prices increased in all regions and across most markets primarily due
to certain price increase initiatives and a focus on higher value markets. The increase in segment
EBITDA was primarily due to higher margins, improved sales mix, lower restructuring, impairment and
plant closing costs and lower selling, general and administrative costs as a result of recent restructuring
efforts. During 2014 and 2013, our Advanced Materials segment recorded restructuring, impairment
and plant closing costs of $11 million and $34 million, respectively. For more information concerning
restructuring activities, see ‘‘Note 11. Restructuring, Impairment and Plant Closing Costs’’ to our
consolidated financial statements.
Textile Effects
The increase in revenues in our Textile Effects segment for 2014 compared to 2013 was primarily
due to higher average selling prices, partially offset by lower sales volumes. Average selling prices
increased primarily in response to higher raw material costs. Sales volumes decreased primarily due to
the de-selection of lower value business. The increase in segment EBITDA was primarily due to higher
margins, lower manufacturing costs and lower restructuring, impairment and plant closing and
transition costs, partially offset by higher selling, general and administrative costs. During 2014 and
2013, our Textile Effects segment recorded restructuring, impairment and plant closing and transition
costs of $28 million and $87 million, respectively. For more information concerning restructuring
activities, see ‘‘Note 11. Restructuring, Impairment and Plant Closing Costs’’ to our consolidated
financial statements.
Pigments and Additives
The increase in revenues in our Pigments and Additives segment for 2014 compared to 2013 was
primarily due to the impact of the Rockwood Acquisition. Other than the impact of the Rockwood
Acquisition, sales volumes remained flat as a result of higher end-use demand in the European and
North American regions, offset by lower demand in the Africa, Latin America and Middle East
regions. Average selling prices decreased primarily as a result of high industry inventory levels, partially
offset by the strength of the euro against the U.S. dollar. The decrease in segment EBITDA was
primarily due to lower margins, higher acquisition expenses and integration costs and higher
restructuring costs, partially offset by lower selling, general and administrative costs. During 2014 and
2013, our Pigments and Additives segment recorded acquisition expenses and integration costs of
$43 million and $8 million, respectively. During 2014 and 2013, our Pigments and Additives segment
recorded restructuring, impairment and plant closing costs of $60 million and $4 million, respectively.
For more information concerning restructuring activities, see ‘‘Note 11. Restructuring, Impairment and
Plant Closing Costs’’ to our consolidated financial statements.
Corporate and other
Corporate and other includes unallocated corporate overhead, unallocated foreign exchange gains
and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt,
unallocated restructuring, impairment and plant closing costs, nonoperating income and expense,
benzene sales and gains and losses on the disposition of corporate assets. For 2014, EBITDA from
Corporate and other for Huntsman Corporation increased by $33 million to a loss of $228 million from
a loss of $261 million for 2013. The increase in EBITDA from Corporate and other resulted primarily
from a decrease in loss on early extinguishment of debt of $23 million ($28 million loss in 2014
20
compared to $51 million loss in 2013). For more information regarding the loss on early extinguishment
of debt, see ‘‘Note 14. Debt—Direct and Subsidiary Debt—Redemption of Notes and Loss on Early
Extinguishment of Debt’’ to our consolidated financial statements. The increase in EBITDA also
resulted from a $7 million decrease in loss from benzene sales (nil in 2014 compared to $7 million loss
in 2013), a $6 million decrease in restructuring, impairment and plant closing costs ($13 million of
expense in 2014 compared to $19 million of expense in 2013) and a decrease in legal settlements of
$5 million (nil in 2014 compared to $5 million of expense in 2013). For more information concerning
restructuring activities see ‘‘Note 11. Restructuring, Impairment and Plant Closing Costs’’ to our
consolidated financial statements. The increase in EBITDA was partially offset by an increase in
unallocated foreign exchange losses of $5 million ($5 million loss in 2014 compared to nil in 2013) and
an increase in global information technology transition costs of $3 million ($3 million of expense in
2014 compared to nil in 2013).
Discontinued Operations
The operating results of our former polymers, base chemicals and Australian styrenics businesses
are classified as discontinued operations, and, accordingly, the revenues of these businesses are
excluded from revenues for all periods presented. The EBITDA of these former businesses are
included in discontinued operations for all periods presented. The loss from discontinued operations
represents the operating results, legal costs, restructuring, impairment and plant closing costs and gain
(loss) on disposal with respect to our former businesses.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows for Year Ended December 31, 2015 Compared to the Year Ended December 31, 2014
Net cash provided by operating activities for 2015 and 2014 was $575 million and $760 million,
respectively. The decrease in net cash provided by operating activities during 2015 compared with 2014
was primarily attributable to lower net income as described in ‘‘—Results of Operations’’ above and a
$24 million unfavorable variance in operating assets and liabilities for 2015 as compared with 2014.
Net cash used in investing activities for 2015 and 2014 was $600 million and $1,606 million,
respectively. During 2015 and 2014, we paid $663 million and $601 million, respectively, for capital
expenditures. During 2014, we paid $1.04 billion for the Rockwood Acquisition, and during 2015 and
2014, we received proceeds from a purchase price adjustment of $18 million and nil, respectively,
related to the Rockwood Acquisition. For further information, see ‘‘Note 3. Business Combinations’’ to
our consolidated financial statements. During 2015 and 2014, we made investments in Louisiana
Pigment Company, L.P. of $42 million and $37 million, respectively, in Nanjing Jinling Huntsman New
Materials Co., Ltd. of nil and $62 million, respectively, and in our BASF Huntsman Shanghai
Isocyanate Investment B.V. joint venture of $12 million and $9 million, respectively, and we received
dividends from Louisiana Pigment Company, L.P. of $48 million each. During 2015 and 2014, we
received $1 million and $15 million, respectively, from the sale of businesses and assets. During 2015
and 2014, we received $66 million and nil, respectively, from the termination of cross-currency interest
rate contracts.
Net cash (used in) provided by financing activities for 2015 and 2014 was $(562) million and
$1,197 million, respectively. The decrease in net cash provided by financing activities was primarily due
to higher net borrowings during 2014, primarily used to fund the Rockwood Acquisition and an
increase in repayments of long-term debt in 2015. On March 31, 2015, we issued A300 million
(approximately $326 million) aggregate principal amount of 4.25% senior notes due April 1, 2025
(‘‘2025 Senior Notes’’). On April 17, 2015, we used the net proceeds of this offering to redeem
$289 million ($294 million carrying value) of our 2021 Senior Subordinated Notes. In the third quarter
of 2015, we redeemed the remaining $195 million ($198 million carrying value) of our 2021 Senior
Subordinated Notes. During 2015, we repurchased $100 million of our common stock.
21
Cash Flows for Year Ended December 31, 2014 Compared to the Year Ended December 31, 2013
Net cash provided by operating activities for 2014 and 2013 was $760 million and $708 million,
respectively. The increase in net cash provided by operating activities during 2014 compared with 2013
was primarily attributable to an increase in net income as described in ‘‘—Results of Operations’’
above, offset in part by a $61 million unfavorable variance in operating assets and liabilities for 2014 as
compared with 2013.
Net cash used in investing activities for 2014 and 2013 was $1,606 million and $566 million,
respectively. During 2014 and 2013, we paid $601 million and $471 million, respectively, for capital
expenditures. During 2014, we paid $1.04 billion for Rockwood’s Performance Additives and Titanium
Dioxide businesses and during 2013 we paid $66 million for the acquisition of businesses. During 2014
and 2013, we made investments in Louisiana Pigment Company, L.P. of $37 million and $60 million,
respectively, and in Nanjing Jinling Huntsman New Materials Co., Ltd of $62 million and $37 million,
respectively, and we received dividends from Louisiana Pigment Company, L.P. of $48 million and
$71 million, respectively.
Net cash provided by (used in) financing activities for 2014 and 2013 was $1,197 million and
$(6) million, respectively. The increase in net cash provided by financing activities was due to higher
net borrowings during 2014, primarily used to fund the Rockwood Acquisition, as compared to 2013.
Changes in Financial Condition
The following information summarizes our working capital (dollars in millions):
December 31,
2015
December 31,
2014
Increase
(Decrease)
Percent
Change
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts and notes receivable, net . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of debt . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . .
$ 257
12
1,449
1,692
112
—
312
3,834
1,061
686
—
170
1,917
$ 860
10
1,707
2,025
62
62
313
5,039
1,275
739
51
267
2,332
$ (603)
2
(258)
(333)
50
(62)
(1)
(1,205)
(214)
(53)
(51)
(97)
(415)
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,917
$2,707
$ (790)
(70)%
20%
(15)%
(16)%
81%
NM
—
(24)%
(17)%
(7)%
NM
(36)%
(18)%
(29)%
Our working capital decreased by $790 million as a result of the net impact of the following
significant changes:
(cid:127) The decrease in cash and cash equivalents of $603 million resulted from the matters identified
on our consolidated statements of cash flows.
(cid:127) Accounts and notes receivable decreased by $258 million mainly due to lower revenues in the
three months ended December 31, 2015 compared to the three months ended December 31,
2014 and the appreciation in value of the U.S. dollar.
(cid:127) Inventories decreased by $333 million mainly due to lower raw material costs and the
appreciation in value of the U.S. dollar.
22
(cid:127) Prepaid expenses increased primarily due to the prepayment of $49 million of employee
termination and other restructuring costs related to the restructuring of our Pigments and
Additives, Textile Effects and Performance Products segments. For more information, see
‘‘Note 11. Restructuring, Impairment and Plant Closing Costs’’ to our consolidated financial
statements.
(cid:127) Effective October 1, 2015, we adopted Accounting Standard Update (‘‘ASU’’) No. 2015-17,
Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this
ASU require that deferred tax liabilities and assets be classified as noncurrent on the statement
of financial position. We adopted the amendments in this ASU on a prospective basis and
classified all deferred tax liabilities and assets as noncurrent on our balance sheet for 2015 only.
(cid:127) The decrease in accounts payable of $214 million was primarily due to lower purchases
consistent with the lower inventory balances noted above and the appreciation in value of the
U.S. dollar.
(cid:127) Current portion of debt decreased by $97 million primarily due to the 2015 reclassification of
loan commitments of Arabian Amines Company, our 50%-owned consolidated joint venture, as
long-term debt. These loan commitments were classified as current portion of debt at
December 31, 2014.
Direct and Subsidiary Debt
See ‘‘Note 14. Debt—Direct and Subsidiary Debt’’ to our consolidated financial statements.
Debt Issuance Costs
See ‘‘Note 14. Debt—Debt Issuance Costs’’ to our consolidated financial statements.
Senior Credit Facilities
See ‘‘Note 14. Debt—Senior Credit Facilities’’ to our consolidated financial statements.
Amendment to Credit Agreement
See ‘‘Note 14. Debt—Amendment to Credit Agreement’’ to our consolidated financial statements.
A/R Programs
See ‘‘Note 14. Debt—A/R Programs’’ to our consolidated financial statements.
Notes
See ‘‘Note 14. Debt—Notes’’ to our consolidated financial statements.
Redemption of Notes and Loss on Early Extinguishment of Debt
See ‘‘Note 14. Debt—Redemption of Notes and Loss on Early Extinguishment of Debt’’ to our
consolidated financial statements.
Variable Interest Entity Debt
See ‘‘Note 14. Debt—Variable Interest Entity Debt’’ to our consolidated financial statements.
Other Debt
See ‘‘Note 14. Debt—Other Debt’’ to our consolidated financial statements.
23
Compliance with Covenants
See ‘‘Note 14. Debt—Compliance with Covenants’’ to our consolidated financial statements.
Maturities
See ‘‘Note 14. Debt—Maturities’’ to our consolidated financial statements.
Short-Term and Long-Term Liquidity
We depend upon our cash, credit facilities, accounts receivable securitization programs (‘‘A/R
Programs’’) and other debt instruments to provide liquidity for our operations and working capital
needs. As of December 31, 2015, we had $1,023 million of combined cash and unused borrowing
capacity, consisting of $269 million in cash and restricted cash, $610 million in availability under our
revolving facility (‘‘Revolving Facility’’), and $144 million in availability under our A/R Programs. Our
liquidity can be significantly impacted by various factors. The following matters had, or are expected to
have, a significant impact on our liquidity:
(cid:127) Cash from our accounts receivable and inventory, net of accounts payable, was approximately
$143 million for 2015, as reflected in our consolidated statements of cash flows. We expect
volatility in our working capital components to continue.
(cid:127) During 2016, we expect to spend approximately $450 million on capital expenditures, net of
reimbursements. Our future expenditures include certain EHS maintenance and upgrades;
periodic maintenance and repairs applicable to major units of manufacturing facilities;
expansions of our existing facilities or construction of new facilities; certain cost reduction
projects; and certain information technology expenditures. We expect to fund this spending with
cash provided by operations.
(cid:127) During 2015, we made contributions to our pension and postretirement benefit plans of
$106 million. During 2016, we expect to contribute an additional amount of approximately
$75 million to these plans.
(cid:127) We are also involved in a number of cost reduction programs for which we have established
restructuring accruals. As of December 31, 2015, we had $167 million of accrued restructuring
costs from continuing operations, and we expect to incur and pay additional restructuring and
plant closing costs of approximately $9 million in 2016. For further discussion of these plans and
the costs involved, see ‘‘Note 11. Restructuring, Impairment and Plant Closing costs’’ to our
consolidated financial statements.
(cid:127) On September 29, 2015, our Board of Directors authorized our Company to repurchase up to
$150 million in shares of our common stock. On October 27, 2015, we entered into and funded
an accelerated share repurchase agreement to repurchase $100 million of our common stock.
The accelerated share repurchase agreement was completed in January 2016 with the purchase
of approximately 8.6 million shares of Huntsman Corporation common stock. For more
information, see ‘‘Note 21. Huntsman Corporation Stockholders’ Equity’’ to our consolidated
financial statements. Our Company has the remaining $50 million available under this
authorization to purchase additional shares.
As of December 31, 2015, we had $170 million classified as current portion of debt, including
$50 million of our term loan C facility (‘‘Term Loan C’’) due June 30, 2016, debt at our variable
interest entities of $14 million, a short term borrowing facility in China totaling $47 million, our
scheduled senior credit facilities (‘‘Senior Credit Facilities’’) amortization payments totaling $25 million,
our annual financing of various insurance premiums totaling $15 million, and certain other short-term
facilities and scheduled amortization payments totaling $19 million. Although we cannot provide
24
assurances, we intend to renew or extend the majority of these short-term facilities in the current
period.
As of December 31, 2015, we had approximately $217 million of cash and cash equivalents,
including restricted cash, held by our foreign subsidiaries, including our variable interest entities.
Additionally, we have material intercompany debt obligations owed to us by our non-U.S. subsidiaries.
We intend to use cash held in our foreign subsidiaries to fund our local operations. Nevertheless, we
could repatriate cash as dividends or as repayments of intercompany debt. If foreign cash were
repatriated as dividends, the dividends could be subject to U.S. federal and state income taxes without
any offsetting foreign tax credit relief. At present, we estimate that we will generate sufficient cash in
our U.S. operations, together with the payments of intercompany debt, if necessary, to meet our cash
needs in the U.S. and we do not expect to repatriate cash to the U.S. as dividends. Cash held by
certain foreign subsidiaries, including our variable interest entities, may also be subject to legal
restrictions, including those arising from the interests of our partners, which could limit the amounts
available for repatriation.
Contractual Obligations and Commercial Commitments
Our obligations under long-term debt (including the current portion), lease agreements and other
contractual commitments as of December 31, 2015 are summarized below (dollars in millions):
2016
2017 - 2018
2019 - 2020
After 2020
Total
Long-term debt, including current portion . . . . . .
Interest(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases(2) . . . . . . . . . . . . . . . . . . . . . .
Purchase commitments(3) . . . . . . . . . . . . . . . . . .
$ 170
211
87
1,455
Total(4)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,923
$ 815
369
145
1,483
$2,812
$1,479
299
119
457
$2,354
$2,331
156
202
871
$ 4,795
1,035
553
4,266
$3,560
$10,649
(1) Interest calculated using interest rates as of December 31, 2015 and contractual maturity dates
assuming no refinancing or extension of debt instruments.
(2) Future minimum lease payments have not been reduced by minimum sublease rentals of $2 million
due in the future under noncancelable subleases.
(3) We have various purchase commitments extending through 2029 for materials, supplies and
services entered into in the ordinary course of business. Included in the purchase commitments
table above are contracts which require minimum volume purchases that extend beyond one year
or are renewable annually and have been renewed for 2016. Certain contracts allow for changes in
minimum required purchase volumes in the event of a temporary or permanent shutdown of a
facility. To the extent the contract requires a minimum notice period, such notice period has been
included in the above table. The contractual purchase price for substantially all of these contracts
is variable based upon market prices, subject to annual negotiations. We have estimated our
contractual obligations by using the terms of our current pricing for each contract. We also have a
limited number of contracts which require a minimum payment even if no volume is purchased.
We believe that all of our purchase obligations will be utilized in our normal operations. For the
years ended December 31, 2015, 2014 and 2013, we made minimum payments of nil, nil and
$7 million, respectively, under such take or pay contracts without taking the product.
25
(4) Totals do not include commitments pertaining to our pension and other postretirement obligations.
Our estimated future contributions to our pension and postretirement plans are as follows (dollars
in millions):
Pension plans . . . . . . . . . . . . . . . . . . . . . . . .
Other postretirement obligations . . . . . . . . . .
$67
9
$227
16
$235
16
2016
2017 - 2018
2019 - 2020
5-Year
Average
Annual
$113
8
(5) The above table does not reflect expected tax payments and unrecognized tax benefits due to the
inability to make reasonably reliable estimates of the timing and amount of payments. For
additional discussion on unrecognized tax benefits, see ‘‘Note 18. Income Taxes’’ to our
consolidated financial statements.
Off-Balance Sheet Arrangements
No off-balance sheet arrangements exist at this time.
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS
Since the Rockwood Acquisition, our Pigments and Additives segment has been involved in a cost
reduction program expected to reduce costs by approximately $140 million and improve its global
competitiveness. In addition, we have announced a capacity reduction at our titanium dioxide
manufacturing facility in Calais, France expected to generate approximately $35 million of annual
savings. These cost savings are expected to be achieved by the middle of 2016.
For a discussion of restructuring, impairment and plant closing costs, see ‘‘Note 11. Restructuring,
Impairment and Plant Closing Costs’’ to our consolidated financial statements.
LEGAL PROCEEDINGS
For a discussion of legal proceedings, see ‘‘Note 19. Commitments and Contingencies—Legal
Matters’’ to our consolidated financial statements.
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
We are subject to extensive environmental regulations, which may impose significant additional
costs on our operations in the future. While we do not expect any of these enactments or proposals to
have a material adverse effect on us in the near term, we cannot predict the longer-term effect of any
of these regulations or proposals on our future financial condition. For a discussion of environmental,
health and safety matters, see ‘‘Note 20. Environmental, Health and Safety Matters’’ to our
consolidated financial statements.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
For a discussion of recently issued accounting pronouncements, see ‘‘Note 2. Summary of
Significant Accounting Policies—Recently Issued Accounting Pronouncements’’ to our consolidated
financial statements.
CRITICAL ACCOUNTING POLICIES
The preparation of financial statements and related disclosures in conformity with U.S. GAAP
requires management to make judgments, estimates and assumptions that affect the reported amounts
in our consolidated financial statements. Our significant accounting policies are summarized in ‘‘Note 2.
Summary of Significant Accounting Policies’’ to our consolidated financial statements. Summarized
below are our critical accounting policies:
26
Employee Benefit Programs
We sponsor several contributory and non-contributory defined benefit plans, covering employees
primarily in the U.S., the U.K., The Netherlands, Belgium and Switzerland, but also covering
employees in a number of other countries. We fund the material plans through trust arrangements (or
local equivalents) where the assets are held separately from us. We also sponsor unfunded
postretirement plans which provide medical and, in some cases, life insurance benefits covering certain
employees in the U.S., Canada and South Africa. Amounts recorded in our consolidated financial
statements are recorded based upon actuarial valuations performed by various independent actuaries.
Inherent in these valuations are numerous assumptions regarding expected long-term rates of return on
plan assets, discount rates, compensation increases, mortality rates and health care cost trends. These
assumptions are described in ‘‘Note 17. Employee Benefit Plans’’ to our consolidated financial
statements.
Management, with the advice of actuaries, uses judgment to make assumptions on which our
employee pension and postretirement benefit plan obligations and expenses are based. The effect of a
1% change in three key assumptions is summarized as follows (dollars in millions):
Assumptions
Statement of
Operations(1)
Balance Sheet
Impact(2)
Discount rate
—1% increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—1% decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected long-term rates of return on plan assets
—1% increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—1% decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase
—1% increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—1% decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(42)
43
(41)
41
12
(14)
$(544)
678
—
—
94
(86)
(1) Estimated increase (decrease) on 2015 net periodic benefit cost
(2) Estimated increase (decrease) on December 31, 2015 pension and postretirement
liabilities and accumulated other comprehensive loss
Goodwill
We test our goodwill for impairment at least annually (at the beginning of the third quarter) and
when events and circumstances change that would more likely than not reduce the fair value of a
reporting unit below its carrying amount. Goodwill has been assigned to reporting units for purposes of
impairment testing. Approximately 68% of our goodwill balance relates to our Advanced Materials
reporting unit. The remaining goodwill relates to three other reporting units.
Fair value is estimated using the market approach, as well as the income approach based on
discounted cash flow projections. The estimated fair values of our reporting units are dependent on
several significant assumptions including, among others, market information, operating results, earnings
projections and anticipated future cash flows.
We tested goodwill for impairment at the beginning of the third quarter of 2015 as part of the
annual impairment testing procedures and determined that no goodwill impairment existed. Our most
recent fair value determination resulted in an amount that exceeded the carrying amounts of all
reporting units by a significant margin.
27
Income Taxes
We use the asset and liability method of accounting for income taxes. Deferred income taxes
reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial and tax reporting purposes. We evaluate deferred tax assets to determine
whether it is more likely than not that they will be realized. Valuation allowances are reviewed on a tax
jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support a
change in judgment about the realizability of the related deferred tax assets for each jurisdiction. These
conclusions require significant judgment. In evaluating the objective evidence that historical results
provide, we consider the cyclicality of businesses and cumulative income or losses during the applicable
period. Cumulative losses incurred over the period limits our ability to consider other subjective
evidence such as our projections for the future. Changes in expected future income in applicable
jurisdictions could affect the realization of deferred tax assets in those jurisdictions. As of
December 31, 2015, we had total valuation allowances of $784 million. See ‘‘Note 18. Income Taxes’’ to
our consolidated financial statements for more information regarding our valuation allowances.
For non-U.S. entities that were not treated as branches for U.S. tax purposes, we do not provide
for income taxes on the undistributed earnings of these subsidiaries that are reinvested and, in the
opinion of management, will continue to be reinvested indefinitely. We have material intercompany
debt obligations owed by our non-U.S. subsidiaries to the U.S. We do not intend to repatriate earnings
to the U.S. via dividend based on estimates of future domestic cash generation, combined with the
ability to return cash to the U.S. through payments of intercompany debt owed by our non-U.S.
subsidiaries to the U.S. To the extent that cash is required in the U.S., rather than repatriate earnings
to the U.S. via dividend we will utilize our intercompany debt. If any earnings were repatriated via
dividend, we may need to accrue and pay taxes on the distributions. As discussed in ‘‘Note 18. Income
Taxes’’ to our consolidated financial statements, we made a distribution of a portion of our earnings in
2015 and 2013 when the amount of foreign tax credits associated with the distribution was greater than
the amount of tax otherwise due. The undistributed earnings of foreign subsidiaries with positive
earnings that are deemed to be permanently invested were approximately $354 million at December 31,
2015. It is not practicable to determine the unrecognized deferred tax liability on those earnings
because of the significant assumptions necessary to compute the tax.
Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. The application of income tax law is inherently complex. We are required
to determine if an income tax position meets the criteria of more-likely-than-not to be realized based
on the merits of the position under tax law, in order to recognize an income tax benefit. This requires
us to make significant judgments regarding the merits of income tax positions and the application of
income tax law. Additionally, if a tax position meets the recognition criteria of more-likely-than-not we
are required to make judgments and apply assumptions in order to measure the amount of the tax
benefits to recognize. These judgments are based on the probability of the amount of tax benefits that
would be realized if the tax position was challenged by the taxing authorities. Interpretations and
guidance surrounding income tax laws and regulations change over time. As a consequence, changes in
assumptions and judgments can materially affect amounts recognized in our consolidated financial
statements.
Long-Lived Assets
The useful lives of our property, plant and equipment are estimated based upon our historical
experience, engineering estimates and industry information and are reviewed when economic events
indicate that we may not be able to recover the carrying value of the assets. The estimated lives of our
property range from 3 to 50 years and depreciation is recorded on the straight-line method. Inherent in
our estimates of useful lives is the assumption that periodic maintenance and an appropriate level of
28
annual capital expenditures will be performed. Without on-going capital improvements and
maintenance, the productivity and cost efficiency declines and the useful lives of our assets would be
shorter.
Management uses judgment to estimate the useful lives of our long-lived assets. At December 31,
2015, if the estimated useful lives of our property, plant and equipment had either been one year
greater or one year less than their recorded lives, then depreciation expense for 2015 would have been
approximately $35 million less or $41 million greater, respectively.
We are required to evaluate the carrying value of our long-lived tangible and intangible assets
whenever events indicate that such carrying value may not be recoverable in the future or when
management’s plans change regarding those assets, such as idling or closing a plant. We evaluate
impairment by comparing undiscounted cash flows of the related asset groups that are largely
independent of the cash flows of other asset groups to their carrying values. Key assumptions in
determining the future cash flows include the useful life, technology, competitive pressures, raw
material pricing and regulations. In connection with our asset evaluation policy, we reviewed all of our
long-lived assets for indicators that the carrying value may not be recoverable. During 2015, we
recorded an impairment charge of $19 million related to the impairment of our Pigments and Additives
South African asset group. See ‘‘Note 11. Restructuring, Impairment and Plant Closing Costs’’ to our
consolidated financial statements.
Restructuring and Plant Closing Costs
We have recorded restructuring charges in recent periods in connection with closing certain plant
locations, workforce reductions and other cost savings programs in each of our business segments.
These charges are recorded when management has committed to a plan and incurred a liability related
to the plan. Estimates for plant closing costs include the write-off of the carrying value of the plant,
any necessary environmental and/or regulatory costs, contract termination and demolition costs.
Estimates for workforce reductions and other costs savings are recorded based upon estimates of the
number of positions to be terminated, termination benefits to be provided and other information, as
necessary. Management evaluates the estimates on a quarterly basis and will adjust the reserve when
information indicates that the estimate is above or below the currently recorded estimate. For further
discussion of our restructuring activities, see ‘‘Note 11. Restructuring, Impairment and Plant Closing
Costs’’ to our consolidated financial statements.
Contingent Loss Accruals
Environmental remediation costs for our facilities are accrued when it is probable that a liability
has been incurred and the amount can be reasonably estimated. Estimates of environmental reserves
require evaluating government regulation, available technology, site-specific information and
remediation alternatives. We accrue an amount equal to our best estimate of the costs to remediate
based upon the available information. The extent of environmental impacts may not be fully known and
the processes and costs of remediation may change as new information is obtained or technology for
remediation is improved. Our process for estimating the expected cost for remediation considers the
information available, technology that can be utilized and estimates of the extent of environmental
damage. Adjustments to our estimates are made periodically based upon additional information
received as remediation progresses. For further information, see ‘‘Note 20. Environmental, Health and
Safety Matters’’ to our consolidated financial statements.
We are subject to legal proceedings and claims arising out of our business operations. We routinely
assess the likelihood of any adverse outcomes to these matters, as well as ranges of probable losses. A
determination of the amount of the reserves required, if any, for these contingencies is made after
analysis of each known claim. We have an active risk management program consisting of numerous
29
insurance policies secured from many carriers. These policies often provide coverage that is intended to
minimize the financial impact, if any, of the legal proceedings. The required reserves may change in the
future due to new developments in each matter. For further information, see ‘‘Note 19. Commitments
and Contingencies—Legal Matters’’ to our consolidated financial statements.
Revenue Recognition
We generate substantially all of our revenues through sales in the open market and long-term
supply agreements. We recognize revenue when it is realized or realizable and earned. Revenue for
product sales is recognized when a sales arrangement exists, risk and title to the product transfer to the
customer, collectability is reasonably assured and pricing is fixed or determinable. The transfer of risk
and title to the product to the customer usually occurs at the time shipment is made.
Variable Interest Entities—Primary Beneficiary
We evaluate each of our variable interest entities on an on-going basis to determine whether we
are the primary beneficiary. Management assesses, on an on-going basis, the nature of our relationship
to the variable interest entity, including the amount of control that we exercise over the entity as well
as the amount of risk that we bear and rewards we receive in regards to the entity, to determine if we
are the primary beneficiary of that variable interest entity. Management judgment is required to assess
whether these attributes are significant. We consolidate all variable interest entities for which we have
concluded that we are the primary beneficiary.
30
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks, such as changes in interest rates, foreign exchange rates and
commodity prices. From time to time, we enter into transactions, including transactions involving
derivative instruments, to manage certain of these exposures. We also hedge our net investment in
certain European operations. Changes in the fair value of the hedge in the net investment of certain
European operations are recorded in accumulated other comprehensive loss.
INTEREST RATE RISKS
Through our borrowing activities, we are exposed to interest rate risk. Such risk arises due to the
structure of our debt portfolio, including the mix of fixed and floating interest rates. Actions taken to
reduce interest rate risk include managing the mix and rate characteristics of various interest bearing
liabilities, as well as entering into interest rate derivative instruments.
From time to time, we may purchase interest rate swaps and/or other derivative instruments to
reduce the impact of changes in interest rates on our floating-rate long-term debt. Under interest rate
swaps, we agree with other parties to exchange, at specified intervals, the difference between fixed-rate
and floating-rate interest amounts calculated by reference to an agreed notional principal amount.
We have entered into several interest rate contracts to hedge the variability caused by monthly
changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities. These
swaps are designated as cash flow hedges and the effective portion of the changes in the fair value of
the swaps are recorded in other comprehensive (loss) income (dollars in millions):
Notional
Value
Effective Date
Maturity
Fixed
Rate
Fair Value
$50
50
December 2014 April 2017
January 2015 April 2017
2.5% $1 noncurrent liability
2.5% 1 noncurrent liability
December 31, 2015
Notional
Value
Effective Date
Maturity
December 31, 2014
Fixed
Rate
Fair Value
$50
50
50
January 2010
December 2014
January 2015
January 2015
April 2017
April 2017
2.8% less than $1 current liability
2.5% 2 noncurrent liability
2.5% 2 noncurrent liability
Beginning in 2009, Arabian Amines Company entered into a 12-year floating to fixed interest rate
contract providing for a receipt of LIBOR interest payments for a fixed payment of 5.02%. In
connection with the consolidation of Arabian Amines Company as of July 1, 2010, the interest rate
contract is now included in our consolidated results. See ‘‘Note 7. Variable Interest Entities’’ to our
consolidated financial statements. The notional amount of the swap as of December 31, 2015 was
$24 million, and the interest rate contract is not designated as a cash flow hedge. As of December 31,
2015 and 2014, the fair value of the swap was $2 million and $3 million, respectively, and was recorded
as other current liabilities on our consolidated balance sheets. For 2015 and 2014, we recorded a
reduction of interest expense of $1 million and $1 million, respectively, due to changes in fair value of
the swap.
For the years ended December 31, 2015 and 2014, the changes in accumulated other
comprehensive gain (loss) associated with these cash flow hedging activities were gains of approximately
$1 million and $2 million, respectively.
During 2016, accumulated other comprehensive loss of nil is expected to be reclassified to
earnings. The actual amount that will be reclassified to earnings over the next twelve months may vary
31
from this amount due to changing market conditions. We would be exposed to credit losses in the event
of nonperformance by a counterparty to our derivative financial instruments. We anticipate, however,
that the counterparties will be able to fully satisfy their obligations under the contracts. Market risk
arises from changes in interest rates.
FOREIGN EXCHANGE RATE RISK
Our cash flows and earnings are subject to fluctuations due to exchange rate variation. Our
revenues and expenses are denominated in various currencies. We enter into foreign currency derivative
instruments to minimize the short-term impact of movements in foreign currency rates. Where
practicable, we generally net multicurrency cash balances among our subsidiaries to help reduce
exposure to foreign currency exchange rates. Certain other exposures may be managed from time to
time through financial market transactions, principally through the purchase of spot or forward foreign
exchange contracts (generally with maturities of three months or less). We do not hedge our currency
exposures in a manner that would eliminate the effect of changes in exchange rates on our cash flows
and earnings. As of December 31, 2015 and 2014, we had approximately $176 million and $179 million
notional amount (in U.S. dollar equivalents) outstanding, respectively, in foreign currency contracts
with a term of approximately one month.
In November 2014, we entered into two five year cross-currency interest rate contracts and one
eight year cross-currency interest rate contract to swap an aggregate notional $200 million for an
aggregate notional A161 million. The swap is designated as a hedge of net investment for financial
reporting purposes. Under the cross-currency interest rate contract, we will receive fixed U.S. dollar
payments of $5 million semiannually on May 15 and November 15 (equivalent to an annual rate of
5.125%) and make interest payments of approximately A3 million (equivalent to an annual rate of
approximately 3.6%). As of December 31, 2015 the fair value of this swap was $28 million and was
recorded in noncurrent assets.
On March 17, 2010, we entered into three five year cross-currency interest rate contracts to swap
an aggregate notional $350 million for an aggregate notional A255 million. This swap was designated as
a hedge of net investment for financial reporting purposes. As of December 31, 2014, the fair value of
this swap was $43 million, and was recorded in current assets. During the three months ended
March 31, 2015, we terminated these cross-currency interest rate contracts and received $66 million in
payments from the counterparties.
A portion of our debt is denominated in euros. We also finance certain of our non-U.S.
subsidiaries with intercompany loans that are, in many cases, denominated in currencies other than the
entities’ functional currency. We manage the net foreign currency exposure created by this debt through
various means, including cross-currency swaps, the designation of certain intercompany loans as
permanent loans because they are not expected to be repaid in the foreseeable future and the
designation of certain debt and swaps as net investment hedges.
Foreign currency transaction gains and losses on intercompany loans that are not designated as
permanent loans are recorded in earnings. Foreign currency transaction gains and losses on
intercompany loans that are designated as permanent loans are recorded in other comprehensive (loss)
income. From time to time, we review such designation of intercompany loans.
We review our non-U.S. dollar denominated debt and derivative instruments to determine the
appropriate amounts designated as hedges. As of December 31, 2015, we have designated
approximately A751 million (approximately $821 million) of euro-denominated debt and cross-currency
interest rate contracts as a hedge of our net investment. For the years ended December 31, 2015, 2014
and 2013, the amount of gain (loss) recognized on the hedge of our net investment was $68 million,
$97 million and $(22) million, respectively, and was recorded in other comprehensive (loss) income. As
32
of December 31, 2015, we had approximately A1,213 million (approximately $1,325 million) in net euro
assets.
COMMODITY PRICES RISK
Inherent in our business is exposure to price changes for several commodities. However, our
exposure to changing commodity prices is somewhat limited since the majority of our raw materials are
acquired at posted or market related prices, and sales prices for many of our finished products are at
market related prices which are largely set on a monthly or quarterly basis in line with industry
practice. Consequently, we do not generally hedge our commodity exposures.
33
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
CONTROLS AND PROCEDURES
Our management, with the participation of our chief executive officer and chief financial officer,
has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act) as of December 31, 2015. Based on this evaluation, our chief
executive officer and chief financial officer have concluded that, as of December 31, 2015, our
disclosure controls and procedures were effective, in that they ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is (1) recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms, and
(2) accumulated and communicated to our management, including our chief executive officer and chief
financial officer, as appropriate to allow timely decisions regarding required disclosure.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
No changes to our internal control over financial reporting occurred during the quarter ended
December 31, 2015 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act).
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal control over
financial reporting. Our internal control framework and processes are designed to provide reasonable
assurance to management and our Board of Directors regarding the reliability of financial reporting
and the preparation of our consolidated financial statements in accordance with accounting principles
generally accepted in the United States of America.
Our internal control over financial reporting includes those policies and procedures that:
(cid:127) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of our Company;
(cid:127) provide reasonable assurance that transactions are recorded properly to allow for the
preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures are being made only in accordance with authorizations of
management and Directors of our Company;
(cid:127) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on our consolidated
financial statements; and
(cid:127) provide reasonable assurance as to the detection of fraud.
Because of its inherent limitations, a system of internal control over financial reporting can provide
only reasonable assurance and may not prevent or detect misstatements. Further, because of changing
conditions, effectiveness of internal control over financial reporting may vary over time.
Our management assessed the effectiveness of our internal control over financial reporting and
concluded that, as of December 31, 2015, such internal control is effective. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control—Integrated Framework (2013) (‘‘COSO’’).
Our independent registered public accountants, Deloitte & Touche LLP, with direct access to our
Board of Directors through our Audit Committee, have audited our consolidated financial statements
prepared by us and have issued attestation reports on internal control over financial reporting for our
Company.
34
MANAGEMENT’S PROCESS TO ASSESS THE EFFECTIVENESS OF
INTERNAL CONTROL OVER FINANCIAL REPORTING
To comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we completed
a comprehensive compliance process to evaluate our internal control over financial reporting for our
Company. We involved employees at all levels of our Company during 2015 in training, performing and
evaluating our internal controls.
Our management’s conclusion on the effectiveness of internal control over financial reporting is
based on a comprehensive evaluation and analysis of the five elements of COSO. Our management
considered information from multiple sources as the basis its conclusion—including self-assessments of
the control activities within each work process, assessments of division-level and entity-level controls
and internal control attestations from key external service providers, as well as from key management.
In addition, our internal control processes contain self-monitoring mechanisms, and proactive steps are
taken to correct deficiencies as they are identified. We also maintain an internal auditing program that
independently assesses the effectiveness of internal control over financial reporting within each of the
five COSO elements.
/s/ PETER R. HUNTSMAN
Peter R. Huntsman
President and Chief Executive Officer
/s/ J. KIMO ESPLIN
J. Kimo Esplin
Executive Vice President and Chief Financial Officer
February 16, 2016
35
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Huntsman Corporation and subsidiaries
We have audited the internal control over financial reporting of Huntsman Corporation and
subsidiaries (the ‘‘Company’’) as of December 31, 2015, based on criteria established in Internal
Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission. The Company’s management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of internal control over
financial reporting, included in the accompanying Management’s Report on Internal Control Over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over
financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed by, or under the
supervision of, the company’s principal executive and principal financial officers, or persons performing
similar functions, and effected by the company’s board of directors, management, and other personnel
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the
possibility of collusion or improper management override of controls, material misstatements due to
error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation
of the effectiveness of the internal control over financial reporting to future periods are subject to the
risk that the controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2015, based on the criteria established in Internal Control—
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission.
We have also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the consolidated financial statements as of and for the year ended
December 31, 2015 of the Company and our report dated February 16, 2016 expressed an unqualified
opinion on those financial statements.
/s/ DELOITTE & TOUCHE LLP
Houston, Texas
February 16, 2016
36
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Huntsman Corporation and subsidiaries
We have audited the accompanying consolidated balance sheets of Huntsman Corporation and
subsidiaries (the ‘‘Company’’) as of December 31, 2015 and 2014, and the related consolidated
statements of operations, comprehensive (loss) income, equity, and cash flows for each of the three
years in the period ended December 31, 2015. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on the financial statements based
on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the
financial position of Huntsman Corporation and subsidiaries as of December 31, 2015 and 2014, and
the results of their operations and their cash flows for each of the three years in the period ended
December 31, 2015, in conformity with accounting principles generally accepted in the United States of
America.
We have also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the Company’s internal control over financial reporting as of
December 31, 2015, based on the criteria established in Internal Control—Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report
dated February 16, 2016 expressed an unqualified opinion on the Company’s internal control over
financial reporting.
/s/ DELOITTE & TOUCHE LLP
Houston, Texas
February 16, 2016
37
HUNTSMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Millions, Except Share and Per Share Amounts)
ASSETS
Current assets:
Cash and cash equivalents(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash(a)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts and notes receivable (net of allowance for doubtful accounts of $26 and $34, respectively),
($438 and $472 pledged as collateral, respectively)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable from affiliates
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets(a)
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in unconsolidated affiliates
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net(a)
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent assets(a)
December 31,
2015
December 31,
2014
$
257
12
$
860
10
1,420
29
1,692
112
—
312
3,834
4,446
347
86
116
418
573
1,665
42
2,025
62
62
313
5,039
4,423
350
95
122
435
459
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 9,820
$10,923
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of debt(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent liabilities(a)
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies (Notes 19 and 20)
Equity
Huntsman Corporation stockholders’ equity:
Common stock $0.01 par value, 1,200,000,000 shares authorized, 249,483,541 and 248,893,036 issued
and 237,080,026 and 243,416,979 outstanding in 2015 and 2014, respectively . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, 11,162,454 and 4,043,526 shares
in 2015 and 2014, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unearned stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated deficit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Huntsman Corporation stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,034
27
686
—
170
1,917
4,625
1
422
1,226
8,191
3
3,407
(135)
(17)
(528)
(1,288)
1,442
187
1,629
$ 1,218
57
739
51
267
2,332
4,854
6
333
1,447
8,972
3
3,385
(50)
(14)
(493)
(1,053)
1,778
173
1,951
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 9,820
$10,923
(a) At December 31, 2015 and December 31, 2014, respectively, $34 and $46 of cash and cash equivalents, $12 and $10 of restricted
cash, $26 and $41 of accounts and notes receivable (net), $54 and $68 of inventories, $5 and $6 of other current assets, $307 and
$339 of property, plant and equipment (net), $36 and $40 of intangible assets (net), $38 and $27 of other noncurrent assets, $82 and
$92 of accounts payable, $27 and $37 of accrued liabilities, $15 and $172 of current portion of debt, $137 and $36 of long-term
debt, and $54 and $97 of other noncurrent liabilities from consolidated variable interest entities are included in the respective
Balance Sheet captions above. See ‘‘Note 7. Variable Interest Entities.’’
See accompanying notes to consolidated financial statements.
38
HUNTSMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Millions, Except Per Share Amounts)
Year ended December 31,
2015
2014
2013
Revenues:
Trade sales, services and fees, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Related party sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,168
131
$11,317
261
$10,847
232
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses:
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other operating (income) expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, impairment and plant closing costs . . . . . . . . . . . . . . . . . . . . . . . . . .
10,299
8,451
1,848
11,578
9,659
1,919
11,079
9,326
1,753
982
160
(1)
302
974
158
(4)
158
942
140
10
151
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,443
1,286
1,243
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in income of investment in unconsolidated affiliates . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt
Other income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations before income taxes . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . .
405
(205)
6
(31)
1
176
(46)
130
(4)
126
(33)
633
(205)
6
(28)
(2)
404
(51)
353
(8)
345
(22)
510
(190)
8
(51)
2
279
(125)
154
(5)
149
(21)
Net income attributable to Huntsman Corporation . . . . . . . . . . . . . . . . . . . . . . . . . .
$
93
$
323
$
128
Basic income (loss) per share:
Income from continuing operations attributable to Huntsman Corporation common
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 0.40
$
1.36
$
0.55
Loss from discontinued operations attributable to Huntsman Corporation common
stockholders, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.02)
(0.03)
(0.02)
Net income attributable to Huntsman Corporation common stockholders . . . . . . . . . . . .
$
0.38
$
1.33
$
0.53
Weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
242.8
242.1
239.7
Diluted income (loss) per share:
Income from continuing operations attributable to Huntsman Corporation common
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 0.40
$
1.34
$
0.55
Loss from discontinued operations attributable to Huntsman Corporation common
stockholders, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.02)
(0.03)
(0.02)
Net income attributable to Huntsman Corporation common stockholders . . . . . . . . . . . .
$
0.38
$
1.31
$
0.53
Weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
245.4
246.0
242.4
Amounts attributable to Huntsman Corporation common stockholders:
Income from continuing operations
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
97
(4)
93
Dividends per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 0.50
$
$
$
331
(8)
323
0.50
$
$
$
133
(5)
128
0.50
See accompanying notes to consolidated financial statements.
39
HUNTSMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In Millions)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive (loss) income, net of tax:
Year ended December 31,
2015
2014
2013
$ 126
$ 345
$149
Foreign currency translations adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other postretirement benefits adjustments . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net
(313)
66
7
(221)
(271)
1
(23)
185
10
Other comprehensive (loss) income, net of tax . . . . . . . . . . . . . . . . . . . . . . . . .
(240)
(491)
172
Comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comprehensive income attributable to noncontrolling interests . . . . . . . . . . . . .
(114)
(28)
(146)
(7)
321
(26)
Comprehensive (loss) income attributable to Huntsman Corporation . . . . . . . .
$(142) $(153) $295
See accompanying notes to consolidated financial statements.
40
HUNTSMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(In Millions, Except Share Amounts)
Huntsman Corporation Stockholders’ Equity
Shares
Common
stock
Common
stock
Additional
paid-in
capital
Treasury
stock
Unearned
stock-based
compensation
Accumulated
other
Accumulated comprehensive
deficit
loss
Noncontrolling
interests in
subsidiaries
Total
equity
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Balance, January 1, 2013 .
.
Net income
.
.
.
.
Other comprehensive income .
.
Issuance of nonvested stock awards
Vesting of stock awards .
.
.
Recognition of stock-based
.
awards .
compensation .
.
Repurchase and cancellation of stock
.
.
.
.
.
Stock options exercised .
.
Excess tax benefit related to stock-
.
.
.
.
Accrued and unpaid dividends .
.
Dividends declared on common stock .
based compensation .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Balance, December 31, 2013 .
.
.
Net income
.
.
.
.
.
Other comprehensive loss .
Issuance of nonvested stock awards
Vesting of stock awards .
.
.
Recognition of stock-based
.
.
Repurchase and cancellation of stock
.
.
.
.
.
Stock options exercised .
.
Dividends paid to noncontrolling
.
.
compensation .
interests .
awards .
.
.
.
based compensation .
.
.
Excess tax benefit related to stock-
.
.
.
Accrued and unpaid dividends .
Cash received for a noncontrolling
.
.
.
interest of a subsidiary .
Acquisition of a business .
.
Dividends declared on common stock .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
compensation .
.
Balance, December 31, 2014 .
.
.
Net income
.
.
.
Other comprehensive loss .
.
.
Issuance of nonvested stock awards
Vesting of stock awards .
.
.
Recognition of stock-based
.
.
Repurchase and cancellation of stock
.
.
.
.
.
Stock options exercised .
.
Dividends paid to noncontrolling
.
.
.
.
Excess tax benefit related to stock-
.
interests .
awards .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
based compensation .
.
.
.
Cash paid for noncontrolling interest
Treasury stock repurchased .
.
.
Dividends declared on common stock .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
. 238,273,422
—
.
—
.
.
—
1,067,888
.
.
.
.
—
(304,209)
1,364,341
—
—
—
. 240,401,442
—
.
—
.
.
—
1,018,050
.
—
(302,200)
2,299,687
—
—
—
—
—
—
. 243,416,979
—
.
—
.
.
—
1,037,743
.
—
(304,340)
48,572
—
—
(7,118,928)
—
2
—
—
—
—
—
—
—
—
—
—
2
—
—
—
—
—
—
1
—
—
—
—
—
—
3
—
—
—
—
—
—
—
—
—
—
—
3,264
—
—
14
5
8
—
13
1
—
—
3,305
—
—
15
7
10
—
47
—
1
—
—
—
—
3,385
—
—
19
7
10
—
1
—
1
(1)
(15)
—
(50)
—
—
—
—
—
—
—
—
—
—
(50)
—
—
—
—
—
—
—
—
—
—
—
—
—
(50)
—
—
—
—
—
—
—
—
—
(85)
—
(12)
—
—
(14)
—
13
—
—
—
—
—
(13)
—
—
(15)
—
14
—
—
—
—
—
—
—
—
(14)
—
—
(19)
—
16
—
—
—
—
—
—
Balance, December 31, 2015 .
.
.
.
.
. 237,080,026
$ 3
$3,407
$(135)
$(17)
(687)
128
—
—
—
—
(6)
—
—
(2)
(120)
(687)
323
—
—
—
—
(7)
—
—
—
(1)
—
—
(121)
(493)
93
—
—
—
—
(7)
—
—
—
—
(121)
$(528)
(744)
—
167
—
—
—
—
—
—
—
—
(577)
—
(476)
—
—
—
—
—
—
—
—
—
—
—
(1,053)
—
(235)
—
—
—
—
—
—
—
—
—
123
21
5
—
—
—
—
—
—
—
—
149
22
(15)
—
—
—
—
—
(4)
—
—
5
16
—
173
33
(5)
—
—
—
—
—
(14)
—
—
—
1,896
149
172
—
5
21
(6)
13
1
(2)
(120)
2,129
345
(491)
—
7
24
(7)
48
(4)
1
(1)
5
16
(121)
1,951
126
(240)
—
7
26
(7)
1
(14)
1
(1)
(100)
(121)
$(1,288)
$187
$1,629
See accompanying notes to consolidated financial statements.
41
HUNTSMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
Operating Activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating
activities:
Equity in income of investment in unconsolidated affiliates . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for losses on accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of businesses/assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncash interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncash restructuring and impairment charges . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncash loss on foreign currency transactions . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts and notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent liabilities
Year ended December 31,
2015
2014
2013
$ 126
$
345
$ 149
(6)
399
1
4
31
11
112
(25)
7
30
3
121
179
(52)
(64)
(98)
(157)
(9)
(38)
(6)
445
—
4
28
11
37
(51)
15
28
(2)
2
(20)
(2)
(44)
(44)
86
11
(83)
(8)
448
2
5
51
11
13
10
31
29
—
(11)
77
(11)
23
(113)
(12)
(39)
53
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . .
575
760
708
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investing Activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash received from unconsolidated affiliates . . . . . . . . . . . . . . . . . . . . . . . .
Investment in unconsolidated affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of businesses, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . .
Cash received from purchase price adjustment for business acquired . . . . . . .
Proceeds from sale of businesses/assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash received from termination of cross-currency interest rate contracts . . . .
Change in restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(663)
48
(54)
(14)
18
1
66
(3)
1
(601)
51
(108)
(960)
—
15
—
—
(3)
(471)
71
(104)
(66)
—
2
—
—
2
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(600)
(1,606)
(566)
See accompanying notes to consolidated financial statements.
42
HUNTSMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In Millions)
Financing Activities:
Net repayments under revolving loan facilities . . . . . . . . . . . . . . . . . . . . . . .
Net repayments on overdraft facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings on short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of long-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings on notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt issuance costs paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call premiums related to early extinguishment of debt . . . . . . . . . . . . . . . . .
Contingent consideration paid for acquisition . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase and cancellation of stock awards . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit related to stock-based compensation . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year ended December 31,
2015
2014
2013
$
(1) $
(8)
—
12
(604)
326
(33)
34
(8)
(35)
(4)
(121)
(14)
(7)
1
(100)
1
(1)
(1) $
(5)
(8)
15
(418)
1,792
(34)
33
(67)
(24)
(6)
(121)
(4)
(7)
47
—
1
4
(4)
(9)
(18)
15
(840)
979
(40)
35
(11)
(4)
—
(120)
—
(6)
13
—
1
3
Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . .
(562)
1,197
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of period
Supplemental cash flow information:
(16)
(603)
860
$ 257
$
(11)
340
520
860
(6)
(3)
133
387
$ 520
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 225
126
$
208
165
$ 187
78
As of December 31, 2015, 2014 and 2013, the amount of capital expenditures in accounts payable
was $79 million, $88 million and $73 million, respectively.
See accompanying notes to consolidated financial statements.
43
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
DEFINITIONS
For convenience in this report, the terms ‘‘Company,’’ ‘‘our’’ or ‘‘we’’ may be used to refer to
Huntsman Corporation and, unless the context otherwise requires, its subsidiaries and predecessors.
Any references to our ‘‘Company’’ ‘‘we’’ ‘‘us’’ or ‘‘our’’ as of a date prior to October 19, 2004 (the date
of our Company’s formation) are to Huntsman Holdings, LLC and its subsidiaries (including their
respective predecessors). In this report, ‘‘Huntsman International’’ refers to Huntsman
International LLC (our 100% owned subsidiary) and, unless the context otherwise requires, its
subsidiaries; ‘‘HPS’’ refers to Huntsman Polyurethanes Shanghai Ltd. (our consolidated splitting joint
venture with Shanghai Chlor-Alkali Chemical Company, Ltd); and ‘‘SLIC’’ refers to Shanghai
Liengheng Isocyanate Company (our unconsolidated manufacturing joint venture with BASF and three
Chinese chemical companies).
In this report, we may use, without definition, the common names of competitors or other industry
participants. We may also use the common names or abbreviations for certain chemicals or products.
Each capitalized term used without definition in this report has the meaning specified in the Annual
Report on Form 10-K for the year ended December 31, 2015, which was filed with the Securities and
Exchange Commission on February 16, 2016.
DESCRIPTION OF BUSINESS
We are a global manufacturer of differentiated organic chemical products and of inorganic
chemical products. Our products comprise a broad range of chemicals and formulations, which we
market globally to a diversified group of consumer and industrial customers. Our products are used in
a wide range of applications, including those in the adhesives, aerospace, automotive, construction
products, personal care and hygiene, durable and non-durable consumer products, electronics, medical,
packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye
industries. We are a leading global producer in many of our key product lines, including MDI, amines,
surfactants, maleic anhydride, epoxy-based polymer formulations, textile chemicals, dyes, titanium
dioxide and color pigments.
We operate in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile
Effects and Pigments and Additives. Our Polyurethanes, Performance Products, Advanced Materials
and Textile Effects segments produce differentiated organic chemical products and our Pigments and
Additives segment produces inorganic chemical products. In a series of transactions beginning in 2006,
we sold or shutdown substantially all of our Australian styrenics operations and our North American
polymers and base chemicals operations. We report the results of these businesses as discontinued
operations.
COMPANY
Our Company, a Delaware corporation, was formed in 2004 to hold the Huntsman businesses.
Jon M. Huntsman founded the predecessor to our Company in 1970 as a small packaging company.
Since then, we have grown through a series of acquisitions and now own a global portfolio of
businesses.
Currently, we operate all of our businesses through Huntsman International, our 100% owned
subsidiary. Huntsman International is a Delaware limited liability company and was formed in 1999.
44
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ASSET RETIREMENT OBLIGATIONS
We accrue for asset retirement obligations, which consist primarily of landfill capping, closure and
post-closure costs, asbestos abatement costs, demolition and removal costs and leasehold remediation
costs, in the period in which the obligations are incurred. Asset retirement obligations are accrued at
estimated fair value. When the liability is initially recorded, we capitalize the cost by increasing the
carrying amount of the related long-lived asset. Over time, the liability is accreted to its estimated
settlement value and the capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, we will recognize a gain or loss for any difference between the settlement
amount and the liability recorded.
CARRYING VALUE OF LONG-LIVED ASSETS
We review long-lived assets and all amortizable intangible assets for impairment whenever events
or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.
Recoverability is based upon current and anticipated undiscounted cash flows, and we recognize an
impairment when such estimated cash flows are less than the carrying value of the asset. Measurement
of the amount of impairment, if any, is based upon the difference between carrying value and fair
value. Fair value is generally estimated by discounting estimated future cash flows using a discount rate
commensurate with the risks involved or selling price of assets held for sale. See ‘‘Note 11.
Restructuring, Impairment and Plant Closing Costs.’’
CASH AND CASH EQUIVALENTS
We consider cash in checking accounts and cash in short-term highly liquid investments with
remaining maturities of three months or less at the date of purchase, to be cash and cash equivalents.
Cash flows from discontinued operations are not presented separately in our consolidated statements of
cash flows.
COST OF GOODS SOLD
We classify the costs of manufacturing and distributing our products as cost of goods sold.
Manufacturing costs include variable costs, primarily raw materials and energy, and fixed expenses
directly associated with production. Manufacturing costs also include, among other things, plant site
operating costs and overhead (including depreciation), production planning and logistics costs, repair
and maintenance costs, plant site purchasing costs, and engineering and technical support costs.
Distribution, freight and warehousing costs are also included in cost of goods sold.
DERIVATIVES AND HEDGING ACTIVITIES
All derivatives, whether designated in hedging relationships or not, are recorded on our balance
sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of
the derivative and the hedged items are recognized in earnings. If the derivative is designated as a cash
flow hedge, changes in the fair value of the derivative are recorded in accumulated other
comprehensive loss, to the extent effective, and will be recognized in the income statement when the
hedged item affects earnings. Changes in the fair value of the hedge in the net investment of certain
international operations are recorded in other comprehensive income (loss), to the extent effective. The
effectiveness of a cash flow hedging relationship is established at the inception of the hedge, and after
45
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
inception we perform effectiveness assessments at least every three months. A derivative designated as
a cash flow hedge is determined to be effective if the change in value of the hedge divided by the
change in value of the hedged item is within a range of 80% to 125%. Hedge ineffectiveness in a cash
flow hedge occurs only if the cumulative gain or loss on the derivative hedging instrument exceeds the
cumulative change in the expected future cash flows on the hedged transaction. For a derivative that
does not qualify or has not been designated as a hedge, changes in fair value are recognized in
earnings.
ENVIRONMENTAL EXPENDITURES
Environmental related restoration and remediation costs are recorded as liabilities when site
restoration and environmental remediation and clean-up obligations are either known or considered
probable and the related costs can be reasonably estimated. Other environmental expenditures that are
principally maintenance or preventative in nature are recorded when expended and incurred and are
expensed or capitalized as appropriate. See ‘‘Note 20. Environmental, Health and Safety Matters.’’
FOREIGN CURRENCY TRANSLATION
The accounts of our operating subsidiaries outside of the U.S., unless they are operating in highly
inflationary economic environments, consider the functional currency to be the currency of the
economic environment in which they operate. Accordingly, assets and liabilities are translated at rates
prevailing at the balance sheet date. Revenues, expenses, gains and losses are translated at a weighted
average rate for the period. Cumulative translation adjustments are recorded to equity as a component
of accumulated other comprehensive loss.
If a subsidiary operates in an economic environment that is considered to be highly inflationary
(100% cumulative inflation over a three-year period), the U.S. dollar is considered to be the functional
currency and gains and losses from remeasurement to the U.S. dollar from the local currency are
included in the statement of operations. Where a subsidiary’s operations are effectively run, managed,
financed and contracted in U.S. dollars, such as certain finance subsidiaries outside of the U.S., the
U.S. dollar is considered to be the functional currency.
Foreign currency transaction gains and losses are recorded in other operating (income) expense in
our consolidated statements of operations and were net losses of $7 million, $15 million and
$11 million for the years ended December 31, 2015, 2014 and 2013, respectively.
INCOME TAXES
We use the asset and liability method of accounting for income taxes. Deferred income taxes
reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial and tax reporting purposes. We evaluate deferred tax assets to determine
whether it is more likely than not that they will be realized. Valuation allowances are reviewed on a tax
jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support a
change in judgment about the realizability of the related deferred tax assets for each jurisdiction. These
conclusions require significant judgment. In evaluating the objective evidence that historical results
provide, we consider the cyclicality of businesses and cumulative income or losses during the applicable
period. Cumulative losses incurred over the period limits our ability to consider other subjective
46
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
evidence such as our projections for the future. Changes in expected future income in applicable
jurisdictions could affect the realization of deferred tax assets in those jurisdictions.
We do not provide for income taxes or benefits on the undistributed earnings of our non-U.S.
subsidiaries that are reinvested and, in the opinion of management, will continue to be reinvested
indefinitely.
Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. The application of income tax law is inherently complex. We are required
to determine if an income tax position meets the criteria of more-likely-than-not to be realized based
on the merits of the position under tax law, in order to recognize an income tax benefit. This requires
us to make significant judgments regarding the merits of income tax positions and the application of
income tax law. Additionally, if a tax position meets the recognition criteria of more-likely-than-not we
are required to make judgments and apply assumptions to measure the amount of the tax benefits to
recognize. These judgments are based on the probability of the amount of tax benefits that would be
realized if the tax position was challenged by the taxing authorities. Interpretations and guidance
surrounding income tax laws and regulations change over time. As a consequence, changes in
assumptions and judgments can materially affect amounts recognized in our consolidated financial
statements.
INTANGIBLE ASSETS AND GOODWILL
Intangible assets are stated at cost (fair value at the time of acquisition) and are amortized using
the straight-line method over the estimated useful lives or the life of the related agreement as follows:
Patents and technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Licenses and other agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 - 30 years
9 - 30 years
5 - 15 years
5 - 15 years
Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired
businesses. Goodwill is not subject to any method of amortization, but is tested for impairment
annually (at the beginning of the third quarter) and when events and circumstances change that would
more likely than not reduce the fair value of a reporting unit below its carrying amount. When the fair
value is less than the carrying value of the related reporting unit, we are required to reduce the amount
of goodwill through a charge to earnings. Fair value is estimated using the market approach, as well as
the income approach based on discounted cash flow projections. Goodwill has been assigned to
reporting units for purposes of impairment testing. The net change to goodwill in response to changes
in foreign currency exchange rates during 2015 was $6 million.
INVENTORIES
Inventories are stated at the lower of cost or market, with cost determined using LIFO, first-in
first-out, and average costs methods for different components of inventory.
47
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
LEGAL COSTS
We expense legal costs, including those legal costs incurred in connection with a loss contingency,
as incurred.
NET INCOME PER SHARE ATTRIBUTABLE TO HUNTSMAN CORPORATION
Basic income per share excludes dilution and is computed by dividing net income attributable to
Huntsman Corporation common stockholders by the weighted average number of shares outstanding
during the period. Diluted income per share reflects all potential dilutive common shares outstanding
during the period and is computed by dividing net income available to Huntsman Corporation common
stockholders by the weighted average number of shares outstanding during the period increased by the
number of additional shares that would have been outstanding as dilutive securities.
Basic and diluted income per share is determined using the following information (in millions):
Numerator:
Basic and diluted income from continuing operations:
Income from continuing operations attributable to
Huntsman Corporation . . . . . . . . . . . . . . . . . . . . . . . .
Basic and diluted net income:
Net income attributable to Huntsman Corporation . . . . . .
Shares (denominator):
Weighted average shares outstanding . . . . . . . . . . . . . . . .
Dilutive securities:
Stock-based awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total weighted average shares outstanding, including
Year Ended December 31,
2015
2014
2013
$
$
97
$ 331
$ 133
93
$ 323
$ 128
242.8
242.1
239.7
2.6
3.9
2.7
dilutive shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
245.4
246.0
242.4
Additional stock-based awards of 6.1 million, 1.0 million and 7.3 million weighted average
equivalent shares of stock were outstanding during the years ended December 31, 2015, 2014 and 2013,
respectively. However, these stock-based awards were not included in the computation of diluted
earnings per share for the respective periods mentioned because the effect would be anti-dilutive.
OTHER NONCURRENT ASSETS
Other noncurrent assets consist primarily of spare parts, the overfunded portion related to defined
benefit plans for employees and capitalized turnaround costs.
PRINCIPLES OF CONSOLIDATION
Our consolidated financial statements include the accounts of our wholly owned and majority
owned subsidiaries and any variable interest entities for which we are the primary beneficiary. All
intercompany accounts and transactions have been eliminated.
48
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost less accumulated depreciation. Depreciation is
computed using the straight-line method over the estimated useful lives or lease term as follows:
Buildings and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture, fixtures and leasehold improvements . . . . . . . . . . . . . . . . . .
5 - 50 years
3 - 30 years
5 - 20 years
Interest expense capitalized as part of plant and equipment was $22 million, $16 million and
$7 million for the years ended December 31, 2015, 2014 and 2013, respectively.
Periodic maintenance and repairs applicable to major units of manufacturing facilities (a
‘‘turnaround’’) are accounted for on the deferral basis by capitalizing the costs of the turnaround and
amortizing the costs over the estimated period until the next turnaround. Normal maintenance and
repairs of plant and equipment are charged to expense as incurred. Renewals, betterments and major
repairs that materially extend the useful life of the assets are capitalized, and the assets replaced, if
any, are retired.
RECLASSIFICATIONS
Certain amounts in the consolidated financial statements for prior periods have been reclassified to
conform with the current presentation. Effective October 1, 2015, we retroactively applied, and
information in this report reflects, the presentation and disclosure requirements of ASU No. 2015-03,
Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. See
‘‘—Recently Issued Accounting Pronouncements.’’
REVENUE RECOGNITION
We generate substantially all of our revenues through sales in the open market and long-term
supply agreements. We recognize revenue when it is realized or realizable and earned. Revenue for
product sales is recognized when a sales arrangement exists, risk and title to the product transfer to the
customer, collectability is reasonably assured and pricing is fixed or determinable. The transfer of risk
and title to the product to the customer usually occurs at the time shipment is made.
SECURITIZATION OF ACCOUNTS RECEIVABLE
Under our A/R Programs, we grant an undivided interest in certain of our trade receivables to the
U.S. SPE and the EU SPE. This undivided interest serves as security for the issuance of debt. The A/R
Programs provide for financing in both U.S. dollars and euros. The amounts outstanding under our
A/R Programs are accounted for as secured borrowings. See ‘‘Note 14. Debt—Direct and Subsidiary
Debt—A/R Programs.’’
STOCK-BASED COMPENSATION
We measure the cost of employee services received in exchange for an award of equity instruments
based on the grant-date fair value of the award. That cost will be recognized over the period during
which the employee is required to provide services in exchange for the award. See ‘‘Note 22. Stock-
Based Compensation Plan.’’
49
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Accounting Pronouncements Adopted During 2015
In April 2014, the Financial Accounting Standards Board (‘‘FASB’’) issued ASU No. 2014-08,
Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360):
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, changing the
criteria for reporting discontinued operations and enhancing reporting requirements for discontinued
operations. A disposal of a component of an entity or a group of components of an entity will be
required to be reported in discontinued operations if the disposal represents a strategic shift that has
(or will have) a major effect on an entity’s operations and financial results. Further, the amendments in
this ASU will require an entity to present, for each comparative period, the assets and liabilities of a
disposal group that includes a discontinued operation separately in the asset and liability sections,
respectively, of the statement of financial position. The amendments in this ASU are effective
prospectively for all disposals (or classifications as held for sale) of components of an entity that occur
within annual periods beginning on or after December 15, 2014, and interim periods within those years,
and for all businesses that, on acquisition, are classified as held for sale that occur within annual
periods beginning on or after December 15, 2014, and interim periods within those years. We adopted
the amendments in this ASU effective January 1, 2015, and the initial adoption of the amendments in
this ASU did not have a significant impact on our consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU
require that debt issuance costs related to a recognized debt liability be presented in the balance sheet
as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and
that amortization of debt issuance costs shall be reported as interest expense. The recognition and
measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The
amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2015, with early application permitted. Entities would apply the new
guidance retrospectively to all prior periods. We adopted the amendments in this ASU effective
October 1, 2015 and have presented debt issuance costs as a direct deduction from the carrying amount
of debt in our consolidated financial statements retrospectively to all prior periods. Debt issuance costs
were previously presented as other noncurrent assets in our consolidated financial statements.
In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805):
Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this ASU require
that an acquirer recognize adjustments to provisional amounts that are identified during the
measurement period in the current reporting period in which the adjustment amounts are determined
and calculated as if the accounting had been completed at the acquisition date. The amendments in
this ASU also require an entity to present separately on the face of the income statement or disclose in
the notes the portion of the amount recorded in current-period earnings by line item that would have
50
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
been recorded in previous reporting periods if the adjustment to the provisional amounts had been
recognized as of the acquisition date. The amendments in this ASU are effective for fiscal years, and
interim periods within those fiscal years, beginning after December 15, 2015. The amendments in this
ASU should be applied prospectively to adjustments to provisional amounts that occur after the
effective date of this ASU with earlier application permitted for financial statements that have not been
issued. We adopted the amendments in this ASU effective October 1, 2015, and the initial adoption of
the amendments in this ASU did not have a significant impact on our consolidated financial statements.
In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet
Classification of Deferred Taxes. The amendments in this ASU require that deferred tax liabilities and
assets be classified as noncurrent in a classified statement of financial position. The amendments in this
ASU are effective for financial statements issued for annual periods beginning after December 15,
2016, and interim periods within those annual periods. Earlier application is permitted for all entities as
of the beginning of an interim or annual reporting period. The amendments in this ASU may be
applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods
presented. We adopted the amendments in this ASU effective October 1, 2015 and have classified, on a
prospective basis, all deferred tax liabilities and assets as noncurrent on our consolidated financial
statements.
Accounting Pronouncements Pending Adoption in Future Periods
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606), outlining a single comprehensive model for entities to use in accounting for revenues
arising from contracts with customers and supersedes most current revenue recognition guidance. In
August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606):
Deferral of the Effective Date, deferring the effective date of ASU No. 2014-09 for all entities by one
year. The amendments in these ASUs are effective for annual reporting periods beginning after
December 15, 2017, including interim periods within that reporting period. The amendments in ASU
No. 2014-09 should be applied retrospectively, and early application is permitted. We are currently
evaluating the impact of the adoption of the amendments in ASU No. 2014-09 on our consolidated
financial statements.
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going
Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going
Concern, providing guidance about management’s responsibility to evaluate whether there is substantial
doubt about an entity’s ability to continue as a going concern and to provide related footnote
disclosures. The amendments in this ASU are effective for the annual period ending after
December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted.
We do not expect the adoption of the amendments in this ASU to have a significant impact on our
consolidated financial statements.
In January 2015, the FASB issued ASU No. 2015-01, Income Statement—Extraordinary and Unusual
Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of
Extraordinary Items, eliminating from US GAAP the concept of extraordinary items. Reporting entities
will no longer have to assess whether a particular event or transaction event is extraordinary. The
amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2015. A reporting entity may apply the amendments prospectively or may
51
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
also apply them retrospectively to all prior periods presented in the financial statements. Early adoption
is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We
do not expect the adoption of the amendments in this ASU to have a significant impact on our
consolidated financial statements.
In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to
the Consolidation Analysis. The amendments in this ASU change the analysis that a reporting entity
must perform to determine whether it should consolidate certain types of legal entities by placing more
emphasis on risk of loss when determining a controlling financial interest. These amendments affect
areas specific to limited partnerships and similar legal entities, evaluating fees paid to a decision maker
or service provider as a variable interest, the effects of both fee arrangements and related parties on
the primary beneficiary determination and certain investment funds. The amendments in this ASU are
effective for fiscal years, and interim periods within those fiscal years, beginning after December 15,
2015. A reporting entity may apply the amendments retrospectively or using a modified retrospective
approach. Early adoption is permitted, including adoption in an interim period provided that any
adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.
We do not expect the adoption of the amendments in this ASU to have a significant impact on our
consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use
Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The
amendments in this ASU provide guidance that will help entities evaluate the accounting for fees paid
by a customer in a cloud computing arrangement, including whether a cloud computing arrangement
includes a software license. If a cloud computing arrangement includes a software license, then the
customer should account for the software license consistent with the acquisition of other software
licenses; otherwise, the customer should account for the arrangement as a service contract. The
amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2015. Entities can elect to adopt the amendments either prospectively to
all arrangements entered into after the effective date or retrospectively to all prior periods. We do not
expect the adoption of the amendments in this ASU to have a significant impact on our consolidated
financial statements.
In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement
of Inventory. The amendments in this ASU do not apply to inventory that is measured using last-in,
first-out (LIFO) or the retail inventory method, but rather does apply to all other inventory, which
includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should
measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the
estimated selling prices in the ordinary course of business, less reasonably predictable costs of
completion, disposal, and transportation. Subsequent measurement is unchanged for inventory
measured using LIFO or the retail inventory method. The amendments in this ASU are effective for
fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The
amendments in this ASU should be applied prospectively with earlier application permitted as of the
beginning of an interim or annual reporting period. We do not expect the adoption of the amendments
in this ASU to have a significant impact on our consolidated financial statements.
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall
(Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The
52
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
amendments in this ASU require equity investments (except those accounted for under the equity
method of accounting or those that result in consolidation of the investee) to be measured at fair value
with changes in fair value recognized in net income. The amendments allow equity investments that do
not have readily determinable fair values to be remeasured at fair value either upon the occurrence of
an observable price change or upon identification of an impairment. The amendments in this ASU are
effective for fiscal years beginning after December 15, 2017, including interim periods within those
fiscal years. Early adoption of the amendments in the ASU is not permitted. An entity should apply the
amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of
the fiscal year of adoption. The amendments related to equity securities without readily determinable
fair values (including disclosure requirements) should be applied prospectively to equity investments
that exist as of the date of adoption. We do not expect the adoption of the amendments in this ASU to
have a significant impact on our consolidated financial statements.
3. BUSINESS COMBINATIONS
ROCKWOOD ACQUISITION
On October 1, 2014, we completed the acquisition of the Performance Additives and Titanium
Dioxide businesses of Rockwood Holdings, Inc. We paid $1.02 billion in cash and assumed certain
unfunded pension liabilities in connection with the Rockwood Acquisition. The acquisition was financed
using a bank term loan. The majority of the acquired businesses have been integrated into our
Pigments and Additives segment. Transaction costs charged to expense related to this acquisition were
approximately nil, $24 million and $8 million for the years ended December 31, 2015, 2014 and 2013,
respectively, and were recorded in selling, general and administrative expenses in our consolidated
statements of operations.
The following businesses were acquired from Rockwood:
(cid:127) titanium dioxide, a white pigment derived from titanium bearing ores with strong specialty
business in fibers, inks, pharmaceuticals, food and cosmetics;
(cid:127) functional additives made from barium and zinc based inorganics used to make colors more
brilliant, primarily in plastics, coatings, films, food, cosmetics, pharmaceuticals and paper;
(cid:127) color pigments made from synthetic iron-oxide and other non-TiO2 inorganic pigments used by
manufacturers of coatings and colorants;
(cid:127) timber treatment wood protection chemicals used primarily in residential and commercial
applications;
(cid:127) water treatment products used to improve water purity in industrial, commercial and municipal
applications; and
(cid:127) specialty automotive molded components.
In connection with securing certain regulatory approvals required to complete the Rockwood
Acquisition, we sold our TiO2 TR52 product line used in printing inks to Henan in December 2014.
The sale did not include any manufacturing assets but does include an agreement to supply TR52
product to Henan during a transitional period.
53
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. BUSINESS COMBINATIONS (Continued)
We have accounted for the Rockwood Acquisition using the acquisition method. As such, we
analyzed the fair value of tangible and intangible assets acquired and liabilities assumed. The allocation
of acquisition cost to the assets acquired and liabilities assumed is summarized as follows (dollars in
millions):
Cash paid for Rockwood Acquisition in 2014 . . . . . . . . . . . . . . . . . . . . . . .
Purchase price adjustment received in 2015 . . . . . . . . . . . . . . . . . . . . . . . .
$1,038
(18)
Net acquisition cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,020
Fair value of assets acquired and liabilities assumed:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other current liabilities . . . . . . . . . . . . . . . . . . . . .
Long-term debt, non-current
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and related liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
77
220
401
55
665
31
106
8
(146)
(106)
(3)
(233)
(9)
(30)
Total fair value of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,036
Noncontrolling interest
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(16)
Total
$1,020
During the second quarter of 2015, we received $18 million related to the settlement of certain
purchase price adjustments. As a result of the finalization of the valuation of the assets and liabilities,
reallocations were made in certain property, plant and equipment, deferred tax, accrued liability and
other long-term liability balances. None of the fair value of this acquisition was allocated to goodwill.
Intangible assets acquired consist primarily of developed technology, trademarks and customer
relationships, all of which are being amortized over nine years. The noncontrolling interest primarily
relates to Viance, a 50%-owned joint venture with Dow Chemical acquired as part of the Rockwood
Acquisition. The noncontrolling interest was valued at 50% of the fair value of the net assets of Viance
as of October 1, 2014, as dictated by the ownership interest percentages. If the Rockwood Acquisition
were to have occurred on January 1, 2013, the following estimated pro forma revenues and net income
54
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. BUSINESS COMBINATIONS (Continued)
attributable to Huntsman Corporation would have been reported (dollars in millions, except per share
amounts):
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Huntsman Corporation . . . . . . . . . . .
Income per share:
Pro Forma
Year ended
December 31,
(Unaudited)
2014
2013
$12,724
398
$12,599
100
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1.64
1.62
$
0.42
0.41
OXID ACQUISITION
On August 29, 2013, we completed the acquisition of the chemical business of Oxid L.P. (the ‘‘Oxid
Acquisition’’). The acquisition cost of approximately $76 million consisted of cash payments of
approximately $66 million and contingent consideration of $10 million. The contingent consideration
related to an earn-out agreement which would be paid over two years if certain conditions were met.
Related to this earn-out agreement, $6 million was paid during 2014 and the balance has been paid in
2015. The acquired business has been integrated into our Polyurethanes segment. Transaction costs
charged to expense related to this acquisition were not significant.
We have accounted for the Oxid Acquisition using the acquisition method. As such, we analyzed
the fair value of tangible and intangible assets acquired and liabilities assumed. The allocation of
acquisition cost to the assets acquired and liabilities assumed is summarized as follows (dollars in
millions):
Cash paid for acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of assets acquired and liabilities assumed:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$66
10
$76
$ 9
14
22
36
(4)
(1)
Total fair value of net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$76
Intangible assets acquired consist primarily of developed technology and customer relationships,
both of which are being amortized over 15 years. If the Oxid Acquisition were to have occurred on
55
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. BUSINESS COMBINATIONS (Continued)
January 1, 2013, the following estimated pro forma revenues and net income attributable to Huntsman
Corporation would have been reported (dollars in millions, except per share amounts):
Pro Forma
Year ended December 31, 2013
(Unaudited)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Huntsman Corporation . . . . . .
Income per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11,142
135
$
0.56
0.56
4. INVENTORIES
Inventories consisted of the following (dollars in millions):
December 31,
2015
2014
Raw materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 389
125
1,221
$ 508
96
1,494
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIFO reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,735
(43)
2,098
(73)
Net inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,692
$2,025
For both December 31, 2015 and 2014, approximately 9% of inventories were recorded using the
LIFO cost method.
5. PROPERTY, PLANT AND EQUIPMENT
The cost and accumulated depreciation of property, plant and equipment were as follows (dollars
in millions):
December 31,
2015
2014
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
208
793
6,981
935
$
227
799
6,889
869
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . .
8,917
(4,471)
8,784
(4,361)
Net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 4,446
$ 4,423
56
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. PROPERTY, PLANT AND EQUIPMENT (Continued)
Depreciation expense for 2015, 2014 and 2013 was $377 million, $413 million and $415 million,
respectively, of which nil, nil and $2 million was related to discontinued operations in 2015, 2014 and
2013, respectively.
6. INVESTMENT IN UNCONSOLIDATED AFFILIATES
Investments in companies in which we exercise significant influence, but do not control, are
accounted for using the equity method. Investments in companies in which we do not exercise
significant influence are accounted for using the cost method.
Our ownership percentage and investment in unconsolidated affiliates were as follows (dollars in
millions):
Equity Method:
Louisiana Pigment Company, L.P. (50%) . . . . . . . . . . . . . . . . . . . . . .
BASF Huntsman Shanghai Isocyanate Investment BV (50%)(1) . . . . .
Nanjing Jinling Huntsman New Material Co., Ltd. (49%) . . . . . . . . . .
Jurong Ningwu New Materials Development Co., Ltd. (30%) . . . . . . .
Nippon Aqua Co., Ltd (15%)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2015
2014
$ 84
116
120
18
—
$ 91
100
122
16
12
Total equity method investments . . . . . . . . . . . . . . . . . . . . . . . . . . .
338
341
Cost Method:
International Diol Company (4%) . . . . . . . . . . . . . . . . . . . . . . . . . . .
White Mountain Titanium Corporation (3%) . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
3
1
5
3
1
Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$347
$350
(1) We own 50% of BASF Huntsman Shanghai Isocyanate Investment BV. BASF Huntsman
Shanghai Isocyanate Investment BV owns a 70% interest in SLIC, thus giving us an
indirect 35% interest in SLIC.
(2) As of April 1, 2015, we no longer exercise significant influence in our investment in
Nippon Aqua Co., Ltd., for which we previously accounted using the equity method.
Consequently, we now account for this investment at fair value as an available-for-sale
equity security. See ‘‘Note 16. Fair Value.’’
In November 2012, we entered into an agreement to form a joint venture with Sinopec (Nanjing
Jingling). The joint venture involves the construction and operation of a PO/MTBE facility in China.
Under the joint venture agreement, we hold a 49% interest in the joint venture and Sinopec holds a
51% interest. Our total equity investment is anticipated to be approximately $85 million, net of license
fees from the joint venture. At the end of 2015, cumulative capital contributions were approximately
$85 million, net of license fees from the joint venture. Construction on the project is expected to be
completed in the second half of 2016, with start-up expected in the first half of 2017.
57
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. VARIABLE INTEREST ENTITIES
We evaluate our investments and transactions to identify variable interest entities for which we are
the primary beneficiary. We hold a variable interest in the following joint ventures for which we are the
primary beneficiary:
(cid:127) Rubicon LLC manufactures products for our Polyurethanes and Performance Products segments.
The structure of the joint venture is such that the total equity investment at risk is not sufficient
to permit the joint venture to finance its activities without additional financial support. By virtue
of the operating agreement with this joint venture, we purchase a majority of the output, absorb
a majority of the operating costs and provide a majority of the additional funding.
(cid:127) Pacific Iron Products Sdn Bhd manufactures products for our Pigments and Additives segment.
In this joint venture we supply all the raw materials through a fixed cost supply contract, operate
the manufacturing facility and market the products of the joint venture to customers. Through a
fixed price raw materials supply contract with the joint venture we are exposed to the risk
related to the fluctuation of raw material pricing.
(cid:127) Arabian Amines Company manufactures products for our Performance Products segment. As
required in the operating agreement governing this joint venture, we purchase all of Arabian
Amines Company’s production and sell it to our customers. Substantially all of the joint
venture’s activities are conducted on our behalf.
(cid:127) Sasol-Huntsman is our 50%-owned joint venture with Sasol that owns and operates a maleic
anhydride facility in Moers, Germany. This joint venture manufactures products for our
Performance Products segment. The joint venture uses our technology and expertise, and we
bear a disproportionate amount of risk of loss due to a related-party loan to Sasol-Huntsman for
which we bear the default risk.
(cid:127) Viance is our 50%-owned joint venture with Dow Chemical. Viance markets timber treatment
products for our Pigments and Additives segment. Our joint venture interest in Viance was
acquired as part of the Rockwood Acquisition on October 1, 2014. The joint venture sources all
of its products through a contract manufacturing arrangement at our Harrisburg, North Carolina
facility, and we bear a disproportionate amount of working capital risk of loss due to the supply
arrangement whereby we control manufacturing on Viance’s behalf. As a result, we concluded
that we are the primary beneficiary and began consolidating Viance upon the Rockwood
Acquisition on October 1, 2014.
Creditors of these entities have no recourse to our general credit. See ‘‘Note 14. Debt—Direct and
Subsidiary Debt.’’ As the primary beneficiary of these variable interest entities at December 31, 2015,
the joint ventures’ assets, liabilities and results of operations are included in our consolidated financial
statements.
58
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. VARIABLE INTEREST ENTITIES (Continued)
The following table summarizes the carrying amount of our variable interest entities’ assets and
liabilities included in our consolidated balance sheets, before intercompany eliminations, as of
December 31, 2015 and 2014 (dollars in millions):
December 31,
2015
2014
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
$121
307
95
35
36
13
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$607
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$159
140
11
54
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$364
$186
340
70
50
39
14
$699
$356
42
9
97
$504
8. INTANGIBLE ASSETS
The gross carrying amount and accumulated amortization of intangible assets were as follows
(dollars in millions):
December 31, 2015
December 31, 2014
Carrying
Amount
Accumulated
Amortization
Patents, trademarks and technology . . . . . . .
Licenses and other agreements . . . . . . . . . . .
Non-compete agreements . . . . . . . . . . . . . . .
Other intangibles . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$369
38
3
82
$492
$327
22
2
55
$406
Net
$42
16
1
27
$86
Carrying
Amount
Accumulated
Amortization
$371
37
4
87
$499
$328
19
2
55
$404
Net
$43
18
2
32
$95
Amortization expense was $8 million, $19 million and $21 million for the years ended
December 31, 2015, 2014 and 2013, respectively.
Our estimated future amortization expense for intangible assets over the next five years is as
follows (dollars in millions):
Year ending December 31,
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$12
9
9
9
9
59
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. OTHER NONCURRENT ASSETS
Other noncurrent assets consisted of the following (dollars in millions):
December 31,
2015
2014
Capitalized turnaround costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Spare parts inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Catalyst assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in available for sale securities . . . . . . . . . . . . . . . . . . . . . .
Pension assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$248
95
45
44
18
35
88
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$573
$191
96
43
28
—
8
93
$459
Amortization expense of catalyst assets for the years ended December 31, 2015, 2014 and 2013 was
$14 million, $13 million and $12 million, respectively.
10. ACCRUED LIABILITIES
Accrued liabilities consisted of the following (dollars in millions):
December 31,
2015
2014
Payroll and related costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Volume and rebate accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring and plant closing costs . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes other than income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Environmental accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset retirement obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other miscellaneous accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$183
72
117
65
18
22
11
9
6
18
165
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$686
$204
79
89
65
35
32
13
9
7
—
206
$739
60
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS
As of December 31, 2015, 2014 and 2013, accrued restructuring, impairment and plant closing
costs by type of cost and initiative consisted of the following (dollars in millions):
Workforce
reductions(1)
Demolition and
decommissioning
Non-cancelable
lease costs
Other
restructuring
costs
Accrued liabilities as of January 1, 2013 . . . .
2013 charges for 2012 and prior initiatives . . .
2013 charges for 2013 initiatives . . . . . . . . . .
Reversal of reserves no longer required . . . . .
2013 payments for 2012 and prior initiatives
.
2013 payments for 2013 initiatives . . . . . . . . .
Net activity of discontinued operations . . . . .
Foreign currency effect on liability balance . .
Accrued liabilities as of December 31, 2013 . .
Adjustment to Pigments & Additives opening
balance sheet liabilities . . . . . . . . . . . . . . .
2014 charges for 2013 and prior initiatives . . .
2014 charges for 2014 initiatives . . . . . . . . . .
Reversal of reserves no longer required . . . . .
.
2014 payments for 2013 and prior initiatives
2014 payments for 2014 initiatives . . . . . . . . .
Net activity of discontinued operations . . . . .
Foreign currency effect on liability balance . .
Accrued liabilities as of December 31, 2014 . .
Adjustment to Pigments & Additives opening
balance sheet liabilities . . . . . . . . . . . . . . .
2015 charges for 2014 and prior initiatives . . .
2015 charges for 2015 initiatives . . . . . . . . . .
Reversal of reserves no longer required . . . . .
2015 payments for 2014 and prior initiatives
.
2015 payments for 2015 initiatives . . . . . . . . .
Foreign currency effect on liability balance . .
$ 90
32
28
(22)
(66)
(10)
—
—
52
1
37
64
(4)
(58)
(1)
—
(4)
87
1
71
58
(7)
(68)
(26)
(7)
$ —
16
—
—
(16)
—
—
—
—
—
7
—
—
(7)
—
—
—
—
—
24
1
—
(8)
(1)
—
$ 15
53
—
(4)
(3)
—
(3)
2
60
—
4
—
—
(8)
—
(2)
(6)
48
—
15
—
(6)
(17)
—
(2)
$ —
20
8
—
(19)
(8)
—
—
1
—
17
—
(1)
(13)
(1)
—
—
3
—
23
8
—
(21)
(8)
—
Total(2)
$ 105
121
36
(26)
(104)
(18)
(3)
2
113
1
65
64
(5)
(86)
(2)
(2)
(10)
138
1
133
67
(13)
(114)
(35)
(9)
Accrued liabilities as of December 31, 2015 . .
$109
$ 16
$ 38
$ 5
$ 168
(1) The total workforce reduction reserves of $109 million relate to the termination of 1,057 positions, of
which 972 positions had not been terminated as of December 31, 2015.
(2)
In December 2015, we prepaid $49 million of severance and other restructuring costs related to
restructuring programs in our Pigments and Additives, Textile Effects and Performance Products
segments. Certain of the severance costs were prepaid to a third party who will distribute the severance
payments to affected employees when they are terminated in 2016.
61
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)
(3) Accrued liabilities remaining at December 31, 2015 and 2014 by year of initiatives were as follows
(dollars in millions):
2013 initiatives and prior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 68
75
25
$ 75
63
—
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$168
$138
December 31,
2015
2014
62
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)
Details with respect to our reserves for restructuring, impairment and plant closing costs are
provided below by segment and initiative (dollars in millions):
Accrued liabilities as of January 1,
Polyurethanes
Performance Advanced Textile Pigments and Discontinued Corporate
& Other
Products Materials Effects
Operations
Additives
Total
2013 . . . . . . . . . . . . . . . . . . . . .
$ 27
$ —
$ 27
$ 42
$ 1
$ 6
$ 2
$ 105
2013 charges for 2012 and prior
initiatives . . . . . . . . . . . . . . . . . .
2013 charges for 2013 initiatives . . . .
Reversal of reserves no longer
required . . . . . . . . . . . . . . . . . .
2013 payments for 2012 and prior
initiatives . . . . . . . . . . . . . . . . . .
2013 payments for 2013 initiatives . . .
Net activity of discontinued
operations . . . . . . . . . . . . . . . . .
Foreign currency effect on liability
balance . . . . . . . . . . . . . . . . . . .
Accrued liabilities as of December 31,
2013 . . . . . . . . . . . . . . . . . . . . .
Adjustment to Pigments & Additives
opening balance sheet liabilities . . .
2014 charges for 2013 and prior
initiatives . . . . . . . . . . . . . . . . . .
2014 charges for 2014 initiatives . . . .
Reversal of reserves no longer
required . . . . . . . . . . . . . . . . . .
2014 payments for 2013 and prior
initiatives . . . . . . . . . . . . . . . . . .
2014 payments for 2014 initiatives . . .
Net activity of discontinued
operations . . . . . . . . . . . . . . . . .
Foreign currency effect on liability
balance . . . . . . . . . . . . . . . . . . .
Accrued liabilities as of December 31,
2014 . . . . . . . . . . . . . . . . . . . . .
Adjustment to Pigments & Additives
opening balance sheet liabilities . . .
2015 charges for 2014 and prior
initiatives . . . . . . . . . . . . . . . . . .
2015 charges for 2015 initiatives . . . .
Reversal of reserves no longer
required . . . . . . . . . . . . . . . . . .
2015 payments for 2014 and prior
initiatives . . . . . . . . . . . . . . . . . .
2015 payments for 2015 initiatives . . .
Foreign currency effect on liability
balance . . . . . . . . . . . . . . . . . . .
Accrued liabilities as of December 31,
2015 . . . . . . . . . . . . . . . . . . . . .
Current portion of restructuring
5
—
(9)
(14)
—
—
—
9
—
2
—
(1)
(3)
—
—
(1)
6
—
2
17
(4)
(4)
(11)
(1)
—
18
—
—
(7)
—
(1)
10
—
23
—
—
(22)
—
—
(2)
9
—
3
8
(1)
(8)
(1)
(1)
38
—
73
1
(8)
(9)
(45)
—
(41)
—
—
—
12
—
10
1
—
2
68
—
13
6
(2)
(1)
(14)
(1)
—
(1)
5
—
1
5
—
(2)
(5)
—
(25)
(1)
—
(6)
54
—
42
2
(7)
(34)
(1)
(1)
4
—
—
(3)
(1)
—
1
2
1
3
57
—
(4)
—
—
—
59
1
77
34
—
(59)
(16)
(6)
$ 5
$ 9
$ 4
$ 55
$ 90
reserves . . . . . . . . . . . . . . . . . . .
$ 4
$ 9
$ — $ 16
$ 83
Long-term portion of restructuring
reserve . . . . . . . . . . . . . . . . . . .
1
—
4
39
7
63
—
—
—
—
—
(3)
—
3
—
—
—
—
—
—
(2)
—
1
—
—
—
—
—
—
—
1
17
—
121
36
(26)
(1)
(10)
(104)
(18)
—
—
9
—
14
—
(1)
(18)
—
—
—
4
—
8
1
(1)
(7)
(1)
—
(3)
2
113
1
65
64
(5)
(86)
(2)
(2)
(10)
138
1
133
67
(13)
(114)
(35)
(9)
$ 1
$ 1
—
$ 4
$ 168
$ 4
$ 117
—
51
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)
Details with respect to cash and noncash restructuring charges for the years ended December 31,
2015, 2014 and 2013 by initiative are provided below (dollars in millions):
Cash charges:
2015 charges for 2014 and prior initiatives . . . . . . . . . . . . . . . . . . . . . . . . .
2015 charges for 2015 initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of reserves no longer required . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension-related settlement charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accelerated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-cash charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$133
67
(13)
3
74
38
Total 2015 Restructuring, Impairment and Plant Closing Costs . . . . . . . . . . . .
$302
Cash charges:
2014 charges for 2013 and prior initiatives . . . . . . . . . . . . . . . . . . . . . . . . .
2014 charges for 2014 initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of reserves no longer required . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension-related settlement charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 65
64
(5)
2
32
Total 2014 Restructuring, Impairment and Plant Closing Costs . . . . . . . . . . . .
$158
Cash charges:
2013 charges for 2012 and prior initiatives . . . . . . . . . . . . . . . . . . . . . . . . .
2013 charges for 2013 initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of reserves no longer required . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension-related settlement charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$121
36
(26)
7
13
Total 2013 Restructuring, Impairment and Plant Closing Costs . . . . . . . . . . . .
$151
2015 RESTRUCTURING ACTIVITIES
In June 2015, our Polyurethanes segment initiated a restructuring program in Europe. In
connection with this restructuring program, we recorded restructuring expense of $13 million during
2015 related primarily to workforce reductions. All expected charges have been incurred as of the end
of 2015.
In December 2015, our Performance Products segment announced plans for a reorganization of its
commercial and technical functions and a refocused divisional business strategy to better position the
segment for growth in coming years. During 2015, we recorded cash charges of $8 million primarily
related to workforce reductions. We expect to incur charges through the first quarter of 2016 associated
with this initiative.
In June 2015, our Advanced Materials segment initiated a restructuring program in Europe. In
connection with this restructuring program, we recorded restructuring expense of $11 million during
2015 related primarily to workforce reductions and accelerated depreciation recorded as restructuring,
impairment and plant closing costs. All expected charges have been incurred as of the end of 2015.
64
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)
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 2015, we recorded charges of
$9 million for non-cancelable long-term contract termination costs, $21 million for decommissioning
and $1 million of other restructuring charges associated with this initiative. During the fourth quarter
of 2015, we settled certain of our obligations under these long-term contracts and recorded a
restructuring charge of $14 million. In addition, we recorded charges of $6 million associated with other
initiatives.
On December 1, 2014, we announced that we are taking significant action to improve the global
competitiveness of our Pigments and Additives segment. As part of a comprehensive restructuring
program, we are reducing our workforce by approximately 900 positions. In connection with this
restructuring program, during 2015, our Pigments and Additives segment recorded charges of
$61 million for workforce reductions, $3 million for pension related charges and $15 million in other
restructuring costs associated with this initiative. We expect to incur charges related to this program
through the middle of 2016.
On February 12, 2015, we announced a plan to close the ‘black end’ manufacturing operations and
ancillary activities at our Calais, France site, which will reduce our titanium dioxide capacity by
approximately 100 kilotons, or 13% of our European titanium dioxide capacity. In connection with this
announcement, we began to accelerate depreciation on the affected assets and recorded accelerated
depreciation in 2015 of $68 million as restructuring, impairment and plant closing costs. In addition,
during 2015, we recorded charges of $30 million primarily for workforce reductions and non-cash
charges of $17 million. We expect to incur charges related to this program through the end of 2016.
On March 4, 2015, we announced plans to restructure our color pigments business, another step in
our previously announced plan to significantly restructure our global Pigments and Additives segment,
and recorded restructuring expense of approximately $4 million during 2015 primarily related to
workforce reductions. We expect to incur charges related to this program through 2016.
During the fourth quarter of 2015, we determined that the South African asset group of our
Pigments and Additives segment was impaired and recorded an impairment charge of $19 million.
During 2015, our Corporate and other segment recorded charges of $8 million primarily related to
a reorganization of our global information technology organization. We expect to incur charges related
to these initiatives through the end of 2016.
2014 RESTRUCTURING ACTIVITIES
In connection with a September 2014 announcement of a feasibility study into a MDI production
expansion at our Geismar, Louisiana facility, we concluded that certain capitalized engineering costs
associated with a previously planned MDI production expansion at our Rotterdam, The Netherlands
facility were impaired and our Polyurethanes segment recorded a noncash impairment charge of
$16 million during 2014.
During 2013, our Performance Products segment initiated a restructuring program to refocus its
surfactants business in Europe. In connection with this program, in 2014 we completed the sale of our
European commodity surfactants business, including the ethoxylation facility in Lavera, France to
65
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)
Wilmar. In addition, Wilmar has entered into a multi-year arrangement to purchase certain sulfated
surfactant products from our facilities in St. Mihiel, France and Castiglione delle Stiviere, Italy.
Additionally, in 2014 we ceased production at our Patrica, Italy surfactants facility. During 2014, we
recorded charges of $23 million primarily related to workforce reductions.
During 2014, our Advanced Materials segment recorded charges of $11 million primarily related to
workforce reductions with our global transformational change program designed to improve the
segment’s manufacturing efficiencies, enhance its commercial excellence and improve its long-term
global competitiveness.
During 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 program, during 2014, our Textile Effects
segment recorded charges of $19 million, including a $9 million noncash charge for a pension
settlement loss. In June 2014, we announced plans for the closure of our Qingdao, China plant, which
was completed during 2015. During 2014, we recorded charges of $6 million primarily related to
workforce reductions related to this initiative.
On December 1, 2014, we announced that we are taking significant action to improve the global
competitiveness of our Pigments and Additives segment. As part of a comprehensive restructuring
program, we are reducing our workforce by approximately 900 positions. In connection with this
restructuring program, we recorded restructuring expense of $57 million in the fourth quarter of 2014
related primarily to workforce reductions.
On February 12, 2015, we announced plans to reduce our titanium dioxide capacity by
approximately 100 kilotons by closing specific operations at our Calais, France facility, subject to
consultation with employees and appropriate representative groups. This plan is in addition to that
announced on December 1, 2014.
During 2014, our Corporate and other segment recorded charges of $13 million primarily related
to the reorganization of our global information technology organization.
2013 RESTRUCTURING ACTIVITIES
During 2012, our Polyurethanes segment began implementing a restructuring program to reduce
annualized fixed costs. In connection with this program, we recorded cash charges of $5 million and
reversed charges of $9 million during 2013 primarily for workforce reductions. Our Polyurethanes
segment also recorded pension-related charges of $6 million during 2013 related to this program.
During 2013, our Performance Products segment recorded charges of $13 million primarily related
to workforce reductions in association with plans to refocus our surfactants business in Europe and
$5 million primarily related to workforce reductions in our Australian operation.
During the fourth quarter of 2012, our Advanced Materials segment began implementing a global
transformational change program, subject to consultation with relevant employee representatives,
designed to improve the segment’s manufacturing efficiencies, enhance commercial excellence and
improve its long-term global competitiveness. During 2013, we recorded cash charges of $38 million
and noncash charges of $4 million and reversed charges of $8 million.
66
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)
During 2011, our Textile Effects segment began implementing a significant restructuring program,
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 segment’s long-term global
competitiveness. In connection with this program, during 2013, we recorded cash charges of
$73 million, a noncash charge of $9 million for a pension settlement loss and reversed charges of
$5 million.
During 2013, our Corporate and other segment recorded charges of $18 million primarily related
to workforce reductions in association with a reorganization of our global information technology
organization.
12. ASSET RETIREMENT OBLIGATIONS
Asset retirement obligations consist primarily of landfill capping, closure and post-closure costs,
asbestos abatement costs, demolition and removal costs and leasehold remediation costs. We are legally
required to perform capping and closure and post-closure care on the landfills and asbestos abatement
on certain of our premises. For each asset retirement obligation we recognized the estimated fair value
of a liability and capitalized the cost as part of the cost basis of the related asset.
The following table describes changes to our asset retirement obligation liabilities (dollars in
millions):
December 31,
2015
2014
$26
Asset retirement obligations at beginning of year . . . . . . . . . . . . . . . . .
Accretion expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Liabilities incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
30
Liabilities assumed in connection with the Rockwood Acquisition . . . . .
(1)
Liabilities settled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)
Foreign currency effect on reserve balance . . . . . . . . . . . . . . . . . . . . .
Asset retirement obligations at end of year . . . . . . . . . . . . . . . . . . . . .
$52
$29
2
—
—
(2)
(3)
$26
67
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. OTHER NONCURRENT LIABILITIES
Other noncurrent liabilities consisted of the following (dollars in millions):
December 31,
2015
2014
Pension liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Environmental accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring and plant closing costs . . . . . . . . . . . . . . . . . . . . . . .
Employee benefit accrual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset retirement obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 842
84
32
51
36
34
147
$ 965
134
53
49
39
26
181
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,226
$1,447
14. DEBT
Outstanding debt, net of debt issuance costs, of consolidated entities consisted of the following
(dollars in millions):
December 31,
2015
2014
Senior Credit Facilities:
Term loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts outstanding under A/R programs . . . . . . . . . . . . . . . . . .
Senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior subordinated notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variable interest entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,454
215
1,850
—
151
125
$2,468
229
1,582
526
207
109
Total debt—excluding debt to affiliates . . . . . . . . . . . . . . . . . . . . .
$4,795
$5,121
Total current portion of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 170
4,625
$ 267
4,854
Total debt—excluding debt to affiliates . . . . . . . . . . . . . . . . . . . . .
$4,795
$5,121
Total debt—excluding debt to affiliates . . . . . . . . . . . . . . . . . . . . .
Notes payable to affiliates-noncurrent . . . . . . . . . . . . . . . . . . . . . .
$4,795
1
$5,121
6
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,796
$5,127
DIRECT AND SUBSIDIARY DEBT
Our direct debt and guarantee obligations consist of a guarantee of certain indebtedness incurred
from time to time to finance certain insurance premiums. Substantially all of our other debt, including
the facilities described below, has been incurred by our subsidiaries (primarily Huntsman International);
we are not a guarantor of such subsidiary debt.
68
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. DEBT (Continued)
Certain of our subsidiaries are designated as nonguarantor subsidiaries and have third-party debt
agreements. These debt agreements contain certain restrictions with regard to dividends, distributions,
loans or advances. In certain circumstances, the consent of a third party would be required prior to the
transfer of any cash or assets from these subsidiaries to us.
Debt Issuance Costs
We record debt issuance costs related to a debt liabillty on the balance sheet as a reduction in the
face amount of that debt liability. As of December 31, 2015 and 2014, the amount of debt issuance
costs directly reducing the debt liability was $67 million and $79 million, respectively. We record the
amortization of debt issuance costs as interest expense.
Senior Credit Facilities
As of December 31, 2015, our Senior Credit Facilities consisted of our Revolving Facility, our
extended term loan B facility (‘‘Extended Term Loan B’’), our extended term loan B facility—series 2
(‘‘Extended Term Loan B—Series 2’’), our 2015 extended term loan B facility (‘‘2015 Extended Term
Loan B’’), our 2014 new term loan facility (‘‘2014 New Term Loan’’), and Term Loan C as follows
(dollars in millions):
Facility
Committed
Amount
Principal
Outstanding
Unamortized
Discounts and
Debt Issuance Carrying
Costs
Value
Interest Rate(3)
Maturity
Revolving Facility . . . . . . . .
$625
$ —(1)
$ —(1)
$ —(1) USD LIBOR plus
2017
Extended Term Loan B . . . .
NA
Extended Term Loan
B—Series 2 . . . . . . . . . . .
NA
2015 Extended Term
Loan B . . . . . . . . . . . . . .
2014 New Term Loan . . . . .
Term Loan C . . . . . . . . . . .
NA
NA
NA
312
192
773
(1)
311
—
192
(5)
768
1,188
(55)
1,133
50
—
50
2.75%
USD LIBOR plus
2.75%
USD LIBOR plus
3.00%
USD LIBOR plus
3.00%
USD LIBOR plus
3.00%(2)
USD LIBOR plus
2.25%
2017
2017
2019
2021
2016
(1) We had no borrowings outstanding under our Revolving Facility; we had approximately $15 million
(U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our
Revolving Facility.
(2) The 2014 New Term Loan is subject to a 0.75% LIBOR floor.
(3) The applicable interest rate of the Senior Credit Facilities is subject to certain secured leverage
ratio thresholds. As of December 31, 2015, the weighted average interest rate on our outstanding
balances under the Senior Credit Facilities was approximately 3%.
69
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. DEBT (Continued)
Our obligations under the Senior Credit Facilities are guaranteed by our Guarantors, and are
secured by a first priority lien on substantially all of our domestic property, plant and equipment, the
stock of all of our material domestic subsidiaries and certain foreign subsidiaries, and pledges of
intercompany notes between certain of our subsidiaries.
Amendment to the Credit Agreement
On August 10, 2015 we entered into a fourteenth amendment to the agreement governing the
Senior Credit Facilities (the ‘‘Credit Agreement’’). The amendment extends the stated maturity date of
$773 million aggregate principal amount of our Extended Term Loan B and Extended Term Loan B—
Series 2 from April 19, 2017 to April 19, 2019 and increases the interest rate margin with respect to the
2015 Extended Term Loan B to LIBOR plus 3.00%.
On October 1, 2014, the 2014 New Term Loan in an aggregate principal amount of $1.2 billion was
used to fund the Rockwood Acquisition. See ‘‘Note 3. Business Combinations and Dispositions—
Rockwood Acquisition.’’ The 2014 New Term Loan matures on October 1, 2021 and has amoritzed in
aggregate annual amounts equal to 1% of the original principal amount of the 2014 New Term Loan,
payable quarterly as of March 31, 2015. The 2014 New Term Loan bears interest at an interest rate
margin of LIBOR plus 3.00% (subject to a 0.75% floor).
On October 1, 2014, we entered into a further amendment to the Credit Agreement. The
amendment increased revolving commitments in an aggregate principal amount of $25 million to an
aggregate amount of $625 million.
A/R Programs
Our A/R Programs are structured so that we grant a participating undivided interest in certain of
our trade receivables to the U.S. SPE and the EU SPE. We retain the servicing rights and a retained
interest in the securitized receivables. Information regarding our A/R Programs as of December 31,
2015 was as follows (monetary amounts in millions):
Facility
Maturity
Maximum Funding
Availability(1)
Amount
Outstanding
U.S. A/R Program . . . . March 2018
EU A/R Program . . . . . March 2018
$250
A225
(approximately
$246)
$90(3)
A114
(approximately
$125)
Interest Rate(2)
Applicable rate plus 0.95%
Applicable rate plus 1.10%
(1) The amount of actual availability under our A/R Programs may be lower based on the level of
eligible receivables sold, changes in the credit ratings of our customers, customer concentration
levels and certain characteristics of the accounts receivable being transferred, as defined in the
applicable agreements.
(2) Applicable rate for our U.S. A/R Program is defined by the lender as USD LIBOR. Applicable
rate for our EU A/R Program is either GBP LIBOR, USD LIBOR or EURIBOR.
(3) As of December 31, 2015, we had approximately $7 million (U.S. dollar equivalents) of letters of
credit issued and outstanding under our U.S. A/R Program.
70
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. DEBT (Continued)
During the three months ended March 31, 2015, we entered into amendments to our A/R
Programs that, among other things, extend the scheduled commitment termination dates and reduce
the applicable borrowing margins. As of December 31, 2015 and 2014, $438 million and $472 million,
respectively, of accounts receivable were pledged as collateral under our A/R Programs.
Notes
As of December 31, 2015, we had outstanding the following notes (monetary amounts in millions):
Notes
Maturity
Interest
Rate
Amount Outstanding
2020 Senior Notes . . . . . November 2020
2021 Senior Notes . . . . .
2022 Senior Notes . . . . . November 2022
2025 Senior Notes . . . . .
4.875%
5.125% A445 (A443 carrying value ($484))
5.125%
4.25% A300 (A297 carrying value ($324))
On March 31, 2015, Huntsman International completed a A300 million (approximately
$650 ($646 carrying value)
$400 ($396 carrying value)
April 2021
April 2025
Unamortized
Discounts
and Debt
Issuance Costs
$(4)
$(2)
$(4)
$(4)
$326 million) offering of 2025 Senior Notes. On April 17, 2015, we applied the net proceeds of this
offering to redeem $289 million ($294 million carrying value) of its 2021 Senior Subordinated Notes.
The 2025 Senior Notes bear interest at 4.25% per year, payable semi-annually on April 1 and
October 1, and are due on April 1, 2025. We may redeem the 2025 Senior Notes in whole or in part at
any time prior to January 1, 2025 at a price equal to 100% of the principal amount thereof plus a
‘‘make-whole’’ premium and accrued and unpaid interest.
The 2020, 2021, 2022 and 2025 Senior Notes are general unsecured senior obligations of Huntsman
International and are guaranteed on a general unsecured senior basis by the Guarantors. The
indentures impose certain limitations on the ability of Huntsman International and its subsidiaries to,
among other things, incur additional indebtedness secured by any principal properties, incur
indebtedness of nonguarantor subsidiaries, enter into sale and leaseback transactions with respect to
any principal properties and consolidate or merge with or into any other person or lease, sell or
transfer all or substantially all of its properties and assets. Upon the occurrence of certain change of
control events, holders of the 2020, 2021, 2022 and 2025 Senior Notes will have the right to require
that Huntsman International purchase all or a portion of such holder’s notes in cash at a purchase
price equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of
repurchase.
71
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. DEBT (Continued)
Redemption of Notes and Loss on Early Extinguishment of Debt
During the years ended December 31, 2015 and 2014, we redeemed or repurchased the following
notes (dollars in millions):
Date of Redemption
Notes
Principal Amount
of Notes Redeemed
Amount Paid
(Excluding
Accrued
Interest)
Loss on Early
Extinguishment
of Debt
September 2015 . . . . .
April 2015 . . . . . . . . .
January 2015 . . . . . . .
December 2014 . . . . .
November 2014 . . . . .
2021 Senior Subordinated Notes
2021 Senior Subordinated Notes
2021 Senior Subordinated Notes
2021 Senior Subordinated Notes
2020 Senior Subordinated Notes
$195
289
37
8
350
$204
311
40
9
374
$ 7
20
3
—
28
Variable Interest Entity Debt
As of December 31, 2015, Arabian Amines Company, our consolidated 50%-owned joint venture,
had $143 million outstanding under its loan commitments and debt financing arrangements. On
April 29, 2015, Arabian Amines Company obtained a waiver of certain financial covenants from the
lender as well as a waiver of prior noncompliance under the debt financing agreements. As of
December 31, 2015, Arabian Amines Company is in compliance with its debt financing arrangements
and we have classified $11 million as current debt and $132 million as long-term debt on our
consolidated balance sheets. We do not guarantee these loan commitments, and Arabian Amines
Company is not a guarantor of any of our other debt obligations.
Other Debt
On July 24, 2015, HPS entered into a financing arrangement to fund the construction of our MDI
plant in China. As part of the financing, HPS has secured commitments of a RMB 669 million
(approximately $103 million) term loan and a RMB 423 million (approximately $65 million) working
capital facility. These facilities are unsecured, and we do not provide a guarantee of these loan
commitments. As of December 31, 2015 we had nil borrowed on these facilities.
COMPLIANCE WITH COVENANTS
We believe that we are in compliance with the covenants contained in the agreements governing
our material debt instruments, including our Senior Credit Facilities, our A/R Programs and our notes.
Our material financing arrangements contain certain covenants with which we must comply. A
failure to comply with a covenant could result in a default under a financing arrangement unless we
obtained an appropriate waiver or forbearance (as to which we can provide no assurance). A default
under these material financing arrangements generally allows debt holders the option to declare the
underlying debt obligations immediately due and payable. Furthermore, certain of our material
financing arrangements contain cross-default and cross-acceleration provisions under which a failure to
comply with the covenants in one financing arrangement may result in an event of default under
another financing arrangement.
72
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. DEBT (Continued)
Our Senior Credit Facilities are the Leverage Covenant which applies only to the Revolving
Facility and is calculated at the Huntsman International level. The Leverage Covenant is applicable
only if borrowings, letters of credit or guarantees are outstanding under the Revolving Facility (cash
collateralized letters of credit or guarantees are not deemed outstanding). The Leverage Covenant is a
net senior secured leverage ratio covenant which requires that Huntsman International’s ratio of senior
secured debt to EBITDA (as defined in the applicable agreement) is not more than 3.75 to 1.
If in the future Huntsman International fails to comply with the Leverage Covenant, then we may
not have access to liquidity under our Revolving Facility. If Huntsman International failed to comply
with the Leverage Covenant at a time when we had uncollateralized loans or letters of credit
outstanding under the Revolving Facility, Huntsman International would be in default under the Senior
Credit Facilities, and, unless Huntsman International obtained a waiver or forbearance with respect to
such default (as to which we can provide no assurance), Huntsman International could be required to
pay off the balance of the Senior Credit Facilities in full, and we may not have further access to such
facilities.
The agreements governing our A/R Programs also contain certain receivable performance metrics.
Any material failure to meet the applicable A/R Programs’ metrics in the future could lead to an early
termination event under the A/R Programs, which could require us to cease our use of such facilities,
prohibiting us from additional borrowings against our receivables or, at the discretion of the lenders,
requiring that we repay the A/R Programs in full. An early termination event under the A/R Programs
would also constitute an event of default under our Senior Credit Facilities, which could require us to
pay off the balance of the Senior Credit Facilities in full and could result in the loss of our Senior
Credit Facilities.
MATURITIES
The scheduled maturities of our debt (excluding debt to affiliates) by year as of December 31,
2015 are as follows (dollars in millions):
Year ending December 31,
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 170
546
269
786
693
2,331
$4,795
15. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
We are exposed to market risks, such as changes in interest rates, foreign exchange rates and
commodity prices. From time to time, we enter into transactions, including transactions involving
derivative instruments, to manage certain of these exposures. We also hedge our net investment in
certain European operations. Changes in the fair value of the hedge in the net investment of certain
European operations are recorded in accumulated other comprehensive loss.
73
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
INTEREST RATE RISKS
Through our borrowing activities, we are exposed to interest rate risk. Such risk arises due to the
structure of our debt portfolio, including the mix of fixed and floating interest rates. Actions taken to
reduce interest rate risk include managing the mix and rate characteristics of various interest bearing
liabilities, as well as entering into interest rate derivative instruments.
From time to time, we may purchase interest rate swaps and/or other derivative instruments to
reduce the impact of changes in interest rates on our floating-rate long-term debt. Under interest rate
swaps, we agree with other parties to exchange, at specified intervals, the difference between fixed-rate
and floating-rate interest amounts calculated by reference to an agreed notional principal amount.
We have entered into several interest rate contracts to hedge the variability caused by monthly
changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities. These
swaps are designated as cash flow hedges and the effective portion of the changes in the fair value of
the swaps are recorded in other comprehensive (loss) income (dollars in millions):
Notional
Value
Effective Date
Maturity
Fixed
Rate
Fair Value
$50
50
December 2014 April 2017
January 2015 April 2017
2.5% $1 noncurrent liability
2.5% 1 noncurrent liability
December 31, 2015
Notional
Value
Effective Date
Maturity
December 31, 2014
Fixed
Rate
Fair Value
$50
50
50
January 2010
December 2014
January 2015
January 2015
April 2017
April 2017
2.8% less than $1 current liability
2.5% 2 noncurrent liability
2.5% 2 noncurrent liability
Beginning in 2009, Arabian Amines Company entered into a 12-year floating to fixed interest rate
contract providing for a receipt of LIBOR interest payments for a fixed payment of 5.02%. In
connection with the consolidation of Arabian Amines Company as of July 1, 2010, the interest rate
contract is now included in our consolidated results. See ‘‘Note 7. Variable Interest Entities.’’ The
notional amount of the swap as of December 31, 2015 was $24 million, and the interest rate contract is
not designated as a cash flow hedge. As of December 31, 2015 and 2014, the fair value of the swap was
$2 million and $3 million, respectively, and was recorded as other current liabilities on our consolidated
balance sheets. For 2015 and 2014, we recorded a reduction of interest expense of $1 million and
$1 million, respectively, due to changes in fair value of the swap.
For the years ended December 31, 2015 and 2014, the changes in accumulated other
comprehensive gain (loss) associated with these cash flow hedging activities were gains of approximately
$1 million and $2 million, respectively.
During 2016, accumulated other comprehensive loss of nil is expected to be reclassified to
earnings. The actual amount that will be reclassified to earnings over the next twelve months may vary
from this amount due to changing market conditions. We would be exposed to credit losses in the event
of nonperformance by a counterparty to our derivative financial instruments. We anticipate, however,
74
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
that the counterparties will be able to fully satisfy their obligations under the contracts. Market risk
arises from changes in interest rates.
FOREIGN EXCHANGE RATE RISK
Our cash flows and earnings are subject to fluctuations due to exchange rate variation. Our
revenues and expenses are denominated in various currencies. We enter into foreign currency derivative
instruments to minimize the short-term impact of movements in foreign currency rates. Where
practicable, we generally net multicurrency cash balances among our subsidiaries to help reduce
exposure to foreign currency exchange rates. Certain other exposures may be managed from time to
time through financial market transactions, principally through the purchase of spot or forward foreign
exchange contracts (generally with maturities of three months or less). We do not hedge our currency
exposures in a manner that would eliminate the effect of changes in exchange rates on our cash flows
and earnings. As of December 31, 2015 and 2014, we had approximately $176 million and $179 million
notional amount (in U.S. dollar equivalents) outstanding, respectively, in foreign currency contracts
with a term of approximately one month.
In November 2014, we entered into two five year cross-currency interest rate contracts and one
eight year cross-currency interest rate contract to swap an aggregate notional $200 million for an
aggregate notional A161 million. The swap is designated as a hedge of net investment for financial
reporting purposes. Under the cross-currency interest rate contract, we will receive fixed U.S. dollar
payments of $5 million semiannually on May 15 and November 15 (equivalent to an annual rate of
5.125%) and make interest payments of approximately A3 million (equivalent to an annual rate of
approximately 3.6%). As of December 31, 2015 the fair value of this swap was $28 million and was
recorded in noncurrent assets.
On March 17, 2010, we entered into three five year cross-currency interest rate contracts to swap
an aggregate notional $350 million for an aggregate notional A255 million. This swap was designated as
a hedge of net investment for financial reporting purposes. As of December 31, 2014, the fair value of
this swap was $43 million, and was recorded in current assets. During the three months ended
March 31, 2015, we terminated these cross-currency interest rate contracts and received $66 million in
payments from the counterparties.
A portion of our debt is denominated in euros. We also finance certain of our non-U.S.
subsidiaries with intercompany loans that are, in many cases, denominated in currencies other than the
entities’ functional currency. We manage the net foreign currency exposure created by this debt through
various means, including cross-currency swaps, the designation of certain intercompany loans as
permanent loans because they are not expected to be repaid in the foreseeable future and the
designation of certain debt and swaps as net investment hedges.
Foreign currency transaction gains and losses on intercompany loans that are not designated as
permanent loans are recorded in earnings. Foreign currency transaction gains and losses on
intercompany loans that are designated as permanent loans are recorded in other comprehensive (loss)
income. From time to time, we review such designation of intercompany loans.
We review our non-U.S. dollar denominated debt and derivative instruments to determine the
appropriate amounts designated as hedges. As of December 31, 2015, we have designated
approximately A751 million (approximately $821 million) of euro-denominated debt and cross-currency
75
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
interest rate contracts as a hedge of our net investment. For the years ended December 31, 2015, 2014
and 2013, the amount of gain (loss) recognized on the hedge of our net investment was $68 million,
$97 million and $(22) million, respectively, and was recorded in other comprehensive (loss) income. As
of December 31, 2015, we had approximately A1,213 million (approximately $1,325 million) in net euro
assets.
COMMODITY PRICES RISK
Inherent in our business is exposure to price changes for several commodities. However, our
exposure to changing commodity prices is somewhat limited since the majority of our raw materials are
acquired at posted or market related prices, and sales prices for many of our finished products are at
market related prices which are largely set on a monthly or quarterly basis in line with industry
practice. Consequently, we do not generally hedge our commodity exposures.
16. FAIR VALUE
The fair values of our financial instruments were as follows (dollars in millions):
December 31,
2015
2014
Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Non-qualified employee benefit plan investments . . . . . . . . . .
Investments in equity securities . . . . . . . . . . . . . . . . . . . . . . .
Cross-currency interest rate contacts . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt (including current portion) . . . . . . . . . . . . . .
$
26
18
28
(4)
(4,795)
$
26
18
28
(4)
(4,647)
$
22
—
48
(7)
(5,121)
$
22
—
48
(7)
(5,210)
The carrying amounts reported in the balance sheets of cash and cash equivalents, accounts
receivable and accounts payable approximate fair value because of the immediate or short-term
maturity of these financial instruments. The fair values of non-qualified employee benefit plan
investments and investments in equity securities are obtained through market observable pricing using
prevailing market prices. The estimated fair values of our long-term debt are based on quoted market
prices for the identical liability when traded as an asset in an active market (Level 1).
The fair value estimates presented herein are based on pertinent information available to
management as of December 31, 2015 and 2014. Although management is not aware of any factors that
would significantly affect the estimated fair value amounts, such amounts have not been
comprehensively revalued for purposes of these financial statements since December 31, 2015, and
current estimates of fair value may differ significantly from the amounts presented herein.
76
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. FAIR VALUE (Continued)
The following assets and liabilities are measured at fair value on a recurring basis (dollars in
millions):
Description
Assets:
Fair Value Amounts Using
Quoted prices in active Significant other
Significant
December 31, markets for identical
observable inputs unobservable inputs
2015
assets (Level 1)(4)
(Level 2)(4)
(Level 3)
Available-for sale equity securities:
Equity mutual funds . . . . . . . . . .
Investments in equity securities(1)
Derivatives:
Cross-currency interest rate
contracts(2) . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . .
$26
18
28
$72
Liabilities:
Derivatives:
Interest rate contracts(3) . . . . . . .
$ (4)
$26
18
—
$44
$—
$ —
—
—
$ —
$ (4)
$—
—
28
$28
$—
Description
Assets:
Fair Value Amounts Using
Quoted prices in active Significant other
Significant
December 31, markets for identical
observable inputs unobservable inputs
2014
assets (Level 1)(4)
(Level 2)(4)
(Level 3)
Available-for sale equity securities:
Equity mutual funds . . . . . . . . . .
$22
Derivatives:
Cross-currency interest rate
contracts(2) . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . .
48
$70
Liabilities:
Derivatives:
Interest rate contracts(3) . . . . . . .
$ (7)
$22
—
$22
$—
$—
43
$43
$ (7)
$—
5
$ 5
$—
(1) As of April 1, 2015, we no longer exercise significant influence in our investment in Nippon
Aqua Co., Ltd., for which we previously accounted using the equity method. Consequently, we now
account for this investment at fair value as an available-for-sale equity security.
(2) The income approach is used to calculate the fair value of these instruments. Fair value represents
the present value of estimated future cash flows, calculated using relevant interest rates, exchange
rates, and yield curves at stated intervals. There were no material changes to the valuation
methods or assumptions used to determine the fair value during the current period.
In November 2014, we entered into two five year cross-currency interest rate contracts and one
eight year cross-currency interest rate contract. These instruments have been categorized by us as
Level 3 within the fair value hierarchy due to unobservable inputs associated with the credit
77
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. FAIR VALUE (Continued)
valuation adjustment, which we deemed to be significant inputs to the overall measurement of fair
value at inception.
(3) The income approach is used to calculate the fair value of these instruments. Fair value represents
the present value of estimated future cash flows, calculated using relevant interest rates and yield
curves at stated intervals. There were no material changes to the valuation methods or assumptions
used to determine the fair value during the current period.
(4) There were no transfers between Levels 1 and 2 within the fair value hierarchy for the years ended
December 31, 2015 and 2014.
The following tables show reconciliations of beginning and ending balances for the years ended
December 31, 2015 and 2014 for instruments measured at fair value on a recurring basis using
significant unobservable inputs (Level 3) (dollars in millions).
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Beginning balance, January 1, 2015 . . . . . . . . . . . . . . . . . . .
Transfers into Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfers out of Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total gains (losses):
Included in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in other comprehensive income (loss) . . . . . . . . .
Purchases, sales, issuances and settlements . . . . . . . . . . . . . . .
Ending balance, December 31, 2015 . . . . . . . . . . . . . . . . . . . .
The amount of total gains (losses) for the period included in
earnings attributable to the change in unrealized gains
(losses) relating to assets still held at December 31, 2015 . . .
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Beginning balance, January 1, 2014 . . . . . . . . . . . . . . . . . . .
Transfers into Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfers out of Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total gains (losses):
Included in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in other comprehensive income (loss) . . . . . . . . .
Purchases, sales, issuances and settlements . . . . . . . . . . . . . . .
Ending balance, December 31, 2014 . . . . . . . . . . . . . . . . . . . .
The amount of total gains (losses) for the period included in
earnings attributable to the change in unrealized gains
(losses) relating to assets still held at December 31, 2014 . . .
Cross-Currency Interest
Rate Contracts
$ 5
—
—
—
23
—
$28
$—
Cross-Currency Interest
Rate Contracts
$—
—
—
—
5
—
$ 5
$—
78
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. FAIR VALUE (Continued)
Gains and losses (realized and unrealized) included in earnings for instruments measured at fair
value on a recurring basis using significant unobservable inputs (Level 3) are reported in interest
expense and other comprehensive income (loss) as follows (dollars in millions):
2015
Total net gains included in earnings . . . . . . . . . . . . . . .
Changes in unrealized gains relating to assets still held
at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . .
$—
—
$—
23
Interest expense
Other
comprehensive
income (loss)
Interest expense
Other
comprehensive
income (loss)
2014
Total net gains included in earnings . . . . . . . . . . . . . . .
Changes in unrealized gains relating to assets still held
at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . .
$—
—
$—
5
We also have assets that under certain conditions are subject to measurement at fair value on a
non-recurring basis. These assets include property, plant and equipment and those associated with
acquired businesses, including goodwill and intangible assets. For these assets, measurement at fair
value in periods subsequent to their initial recognition is applicable if one or more is determined to be
impaired. During 2015 and 2014, we recorded charges of $19 million and $26 million, respectively, for
the impairment of long-lived assets. See ‘‘Note 11. Restructuring, Impairment and Plant Closing Costs.’’
17. EMPLOYEE BENEFIT PLANS
DEFINED BENEFIT AND OTHER POSTRETIREMENT BENEFIT PLANS
Our employees participate in a trusteed, non-contributory defined benefit pension plan (the
‘‘Plan’’) that covers substantially all of our full-time U.S. employees. Effective July 1, 2004, the Plan
formula for employees not covered by a collective bargaining agreement was converted to a cash
balance design. For represented employees, participation in the cash balance design is subject to the
terms of negotiated contracts. For participating employees, benefits accrued under the prior formula
were converted to opening cash balance accounts. The new cash balance benefit formula provides
annual pay credits from 4% to 12% of eligible pay, depending on age and service, plus accrued
interest. Participants in the plan on July 1, 2004 may be eligible for additional annual pay credits from
1% to 8%, depending on their age and service as of that date, for up to five years. The conversion to
the cash balance plan did not have a significant impact on the accrued benefit liability, the funded
status or ongoing pension expense.
We sponsor defined benefit plans in a number of countries outside of the U.S. The availability of
these plans, and their specific design provisions, are consistent with local competitive practices and
regulations.
We also sponsor unfunded postretirement benefit plans other than pensions, which provide medical
and life insurance benefits.
79
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. EMPLOYEE BENEFIT PLANS (Continued)
Our postretirement benefit plans provide a fully insured Medicare Part D plan including
prescription drug benefits affected by the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 (the ‘‘Act’’). We cannot determine whether the medical benefits provided by
our postretirement benefit plans are actuarially equivalent to those provided by the Act. We do not
collect a subsidy and our net periodic postretirement benefits cost, and related benefit obligation, do
not reflect an amount associated with the subsidy.
Beginning July 1, 2014, the Huntsman Defined Benefit Pension Plan was closed to new non-union
entrants and as of April 1, 2015, it was closed to new union entrants. In addition, as of January 1, 2015,
Rubicon LLC also closed its defined benefit plan to new entrants. Following the closure of these plans,
new hires have been provided with a defined contribution plan with a non-discretionary employer
contribution of 6% of pay and a company match of up to 4% of pay, for a total company contribution
of up to 10% of pay.
In connection with the Rockwood Acquisition, we assumed certain pension and other
postretirement benefit liabilities in the amount of approximately $233 million as of October 1, 2014.
80
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. EMPLOYEE BENEFIT PLANS (Continued)
The following table sets forth the funded status of the plans and the amounts recognized in our
consolidated balance sheets at December 31, 2015 and 2014 (dollars in millions):
Defined Benefit Plans
Other Postretirement Benefit Plans
2015
2014
2015
2014
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Change in benefit obligation
Benefit obligation at beginning
of year . . . . . . . . . . . . . . .
Service cost
. . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . .
Participant contributions . . . . .
Plan amendments
. . . . . . . . .
Acquisitions/divestitures . . . . . .
Foreign currency exchange rate
changes
. . . . . . . . . . . . . .
Curtailments . . . . . . . . . . . . .
Special termination benefits . . .
Actuarial (gain) loss . . . . . . . .
Benefits paid . . . . . . . . . . . .
$1,001
32
43
—
—
—
—
—
—
(65)
(50)
$3,317
40
79
6
(31)
—
(210)
(4)
3
(65)
(125)
$ 877
27
45
—
—
9
—
—
—
129
(86)
$2,859
32
102
7
(6)
333
(294)
(1)
3
458
(176)
$137
4
5
3
(40)
—
—
—
—
(9)
(12)
$ 6
—
—
—
—
—
(1)
—
—
—
—
$ 105
3
5
3
—
3
—
—
—
30
(12)
$ 5
—
—
—
—
—
—
—
—
1
—
Benefit obligation at end of year
.
$ 961
$3,010
$1,001
$3,317
$ 88
$ 5
$ 137
$ 6
Change in plan assets
Fair value of plan assets at
beginning of year . . . . . . . .
Actual return on plan assets . . .
Foreign currency exchange rate
changes
. . . . . . . . . . . . . .
Participant contributions . . . . .
Acquisitions/divestitures . . . . . .
Company contributions . . . . . .
Benefits paid . . . . . . . . . . . .
Fair value of plan assets at end of
year . . . . . . . . . . . . . . . . . .
Funded status
Fair value of plan assets . . . . . . .
Benefit obligation . . . . . . . . . . .
$ 761
(10)
$2,587
40
$ 755
41
$2,443
337
$ —
—
—
—
—
21
(50)
(153)
6
—
76
(125)
—
—
6
45
(86)
(235)
7
106
105
(176)
—
3
—
9
(12)
$—
—
—
—
—
—
—
$ —
—
—
3
—
9
(12)
$—
—
—
—
—
—
—
$ 722
$2,431
$ 761
$2,587
$ —
$—
$ —
$—
$ 722
961
$2,431
3,010
$ 761
1,001
$2,587
3,317
$ —
88
Accrued benefit cost . . . . . . . . .
$ (239)
$ (579)
$ (240)
$ (730)
$ (88)
Amounts recognized in balance
sheet:
Noncurrent asset
. . . . . . . . . . .
Current liability . . . . . . . . . . . .
Noncurrent liability . . . . . . . . . .
$ —
(6)
(233)
$
35
(5)
(609)
$ —
(6)
(234)
$
8
(7)
(731)
$ (239)
$ (579)
$ (240)
$ (730)
$ —
(9)
(79)
$ (88)
81
$—
5
$ (5)
$—
—
(5)
$ (5)
$ —
137
$(137)
$ —
(9)
(128)
$(137)
$—
6
$ (6)
$—
—
(6)
$ (6)
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. EMPLOYEE BENEFIT PLANS (Continued)
Defined Benefit Plans
Other Postretirement Benefit Plans
2015
2014
2015
2014
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Amounts recognized in
accumulated other
comprehensive loss:
Net actuarial loss . . . . . . . . . . .
. . . . . . . . . . .
Prior service cost
$359
(22)
$337
$906
(34)
$872
$390
(29)
$361
$916
(2)
$914
$ 38
(58)
$(20)
$ 1
—
$ 1
$ 50
(23)
$ 27
$ 1
—
$ 1
The amounts in accumulated other comprehensive loss that are expected to be recognized as
components of net periodic benefit cost during the next fiscal year are as follows (dollars in millions):
Actuarial loss . . . . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . .
Total
Defined Benefit Plans
Other Postretirement
Benefit Plans
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
$24
(5)
$19
$43
(4)
$39
$ 2
(7)
$(5)
$—
—
$—
Components of net periodic benefit costs for the years ended December 31, 2015, 2014 and 2013
were as follows (dollars in millions):
Defined Benefit Plans
U.S. plans
Non-U.S. plans
2015
2014
2013
2015
2014
2013
Service cost . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . .
Amortization of prior service cost . . . . .
Amortization of actuarial loss . . . . . . . .
Settlement loss . . . . . . . . . . . . . . . . . .
Special termination benefits . . . . . . . . .
$ 32
43
(57)
(6)
32
—
—
$ 27
45
(56)
(6)
19
—
—
$ 31
40
(50)
(7)
35
—
—
$ 40
79
(143)
—
43
—
3
$ 32
102
(138)
—
34
13
3
$ 38
90
(124)
1
43
12
9
Net periodic benefit cost . . . . . . . . . . .
$ 44
$ 29
$ 49
$ 22
$ 46
$ 69
82
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. EMPLOYEE BENEFIT PLANS (Continued)
Other Postretirement Benefit Plans
U.S. plans
Non-U.S. plans
2015
2014
2013
2015
2014
2013
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost
. . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost . . . . . . . . . .
Amortization of actuarial loss . . . . . . . . . . . . .
$ 4
5
(5)
3
$ 3
5
(4)
1
$ 4
$— $— $—
5 — — —
(2) — — —
2 — — —
Net periodic benefit cost
. . . . . . . . . . . . . . . .
$ 7
$ 5
$ 9
$— $— $—
The amounts recognized in net periodic benefit cost and other comprehensive income (loss) as of
December 31, 2015, 2014 and 2013 were as follows (dollars in millions):
Defined Benefit Plans
U.S. plans
Non-U.S. plans
2015
2014
2013
2015
2014
2013
Current year actuarial loss (gain) . . . . . . . . . . . . . . . . . . . .
Amortization of actuarial loss . . . . . . . . . . . . . . . . . . . . . .
Current year prior service (credits) cost . . . . . . . . . . . . . . .
Amortization of prior service cost (credits) . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total recognized in other comprehensive loss (income) . . . .
Net periodic benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 2
(32)
—
6
—
(24)
44
$144
(19)
—
6
—
131
29
$257
$(149) $ 33
(34)
(35)
(43)
(6)
— (32)
—
—
7
— (13)
—
(177)
49
(42)
22
204
46
$(40)
(43)
1
(1)
(12)
(95)
69
Total recognized in net periodic benefit cost and other
comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . .
$ 20
$160
$(128) $(20) $250
$(26)
Other Postretirement Benefit Plans
U.S. plans
Non-U.S. plans
2015
2014
2013
2015
2014
2013
Current year actuarial loss (gain) . . . . . . . . . . . . . . . . . . . .
Amortization of actuarial loss . . . . . . . . . . . . . . . . . . . . . .
Current year prior service credit . . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost . . . . . . . . . . . . . . . . . . .
$ (9) $ 30
(1)
(3)
(40) —
4
5
$
(8) $ — $
(2) —
(22) —
—
2
Total recognized in other comprehensive loss (income) . . . .
Net periodic benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . .
(47)
7
33
5
(30) —
—
9
1
—
—
—
1
—
$ (1)
—
—
—
(1)
—
Total recognized in net periodic benefit cost and other
comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . .
$(40) $ 38
$ (21) $ — $
1
$ (1)
83
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. EMPLOYEE BENEFIT PLANS (Continued)
The following weighted-average assumptions were used to determine the projected benefit
obligation at the measurement date and the net periodic pension cost for the year:
Defined Benefit Plans
U.S. plans
Non-U.S. plans
2015
2014
2013
2015
2014
2013
Projected benefit obligation
Discount rate . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . .
4.90% 4.25% 5.13% 2.53% 2.48% 3.62%
4.17% 4.16% 4.17% 3.23% 3.23% 3.37%
Net periodic pension cost
Discount rate . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . .
Expected return on plan assets . . . . .
4.25% 5.13% 4.18% 2.48% 3.62% 3.38%
4.16% 4.17% 4.19% 3.23% 3.37% 3.34%
7.74% 7.75% 7.75% 5.79% 5.82% 5.75%
Other Postretirement Benefit Plans
U.S. plans
Non-U.S. plans
2015
2014
2013
2015
2014
2013
Projected benefit obligation
Discount rate . . . . . . . . . . . . . . . . .
4.68% 4.17% 4.79% 7.25% 6.44% 6.49%
Net periodic pension cost
Discount rate . . . . . . . . . . . . . . . . .
4.20% 4.79% 3.89% 6.44% 6.49% 5.79%
At December 31, 2015 and 2014, the health care trend rate used to measure the expected increase
in the cost of benefits was assumed to be 7.0% and 6.5%, respectively, decreasing to 5% after 2024.
Assumed health care cost trend rates can have a significant effect on the amounts reported for the
postretirement benefit plans. A one-percent point change in assumed health care cost trend rates would
have the following effects (dollars in millions):
Asset category
Effect on total of service and interest cost . . . . . . . . . . . . . . . . . .
Effect on postretirement benefit obligation . . . . . . . . . . . . . . . . .
$—
2
$—
(2)
Increase
Decrease
The projected benefit obligation and fair value of plan assets for the defined benefit plans with
projected benefit obligations in excess of plan assets as of December 31, 2015 and 2014 were as follows
(dollars in millions):
Projected benefit obligation in excess of plan
assets
Projected benefit obligation . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . .
$961
722
$1,002
761
$2,129
1,514
$2,945
2,206
U.S. plans
Non-U.S. plans
2015
2014
2015
2014
84
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. EMPLOYEE BENEFIT PLANS (Continued)
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for
the defined benefit plans with an accumulated benefit obligation in excess of plan assets as of
December 31, 2015 and 2014 were as follows (dollars in millions):
U.S. plans
Non-U.S. plans
2015
2014
2015
2014
Accumulated benefit obligation in excess of plan
assets
Projected benefit obligation . . . . . . . . . . . . . . . . .
Accumulated benefit obligation . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . .
$961
941
722
$1,002
980
761
$1,403
1,312
823
$2,253
2,108
1,554
Expected future contributions and benefit payments are as follows (dollars in millions):
U.S. Plans
Non-U.S. Plans
Defined
Benefit
Plans
Other
Postretirement
Benefit
Plans
Defined
Benefit
Plans
Other
Postretirement
Benefit
Plans
2016 expected employer contributions
To plan trusts . . . . . . . . . . . . . . . . .
$
6
$ 9
$ 60
$—
Expected benefit payments
2016 . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . .
2021 - 2025 . . . . . . . . . . . . . . . . . .
67
71
62
65
65
354
9
7
7
7
7
37
111
112
116
118
121
650
—
—
—
—
—
2
Our investment strategy with respect to pension assets is to pursue an investment plan that, over
the long term, is expected to protect the funded status of the plan, enhance the real purchasing power
of plan assets, and not threaten the plan’s ability to meet currently committed obligations. Additionally,
our investment strategy is to achieve returns on plan assets, subject to a prudent level of portfolio risk.
Plan assets are invested in a broad range of investments. These investments are diversified in terms of
domestic and international equities, both growth and value funds, including small, mid and large
capitalization equities; short-term and long-term debt securities; real estate; and cash and cash
equivalents. The investments are further diversified within each asset category. The portfolio
diversification provides protection against a single investment or asset category having a
disproportionate impact on the aggregate performance of the plan assets.
Our pension plan assets are managed by outside investment managers. The investment managers
value our plan assets using quoted market prices, other observable inputs or unobservable inputs. For
certain assets, the investment managers obtain third-party appraisals at least annually, which use
valuation techniques and inputs specific to the applicable property, market, or geographic location.
During 2015, there were no transfers into or out of Level 3 assets.
We have established target allocations for each asset category. Our pension plan assets are
periodically rebalanced based upon our target allocations.
85
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. EMPLOYEE BENEFIT PLANS (Continued)
The fair value of plan assets for the pension plans was $3.2 billion and $3.3 billion at
December 31, 2015 and 2014, respectively. The following plan assets are measured at fair value on a
recurring basis (dollars in millions):
Asset category
U.S. pension plans:
Fair Value Amounts Using
Quoted prices in active Significant other
Significant
December 31, markets for identical
observable inputs unobservable inputs
2015
assets (Level 1)
(Level 2)
(Level 3)
Equities . . . . . . . . . . . . . . . . . . . . .
Fixed income . . . . . . . . . . . . . . . . .
Real estate/other . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . .
$ 387
277
58
—
Total U.S. pension plan assets . . .
$ 722
Non-U.S. pension plans:
Equities . . . . . . . . . . . . . . . . . . . . .
Fixed income . . . . . . . . . . . . . . . . .
Real estate/other . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . .
$ 830
1,113
477
11
$ 279
211
—
—
$ 490
$ 446
514
84
10
Total Non-U.S. pension plan
assets . . . . . . . . . . . . . . . . . . .
$2,431
$1,054
$ 108
66
—
—
$ 174
$ 384
599
339
1
$1,323
$—
—
58
—
$58
$—
—
54
—
$54
Asset category
U.S. pension plans:
Fair Value Amounts Using
Quoted prices in active Significant other
Significant
December 31, markets for identical
observable inputs unobservable inputs
2014
assets (Level 1)
(Level 2)
(Level 3)
Equities . . . . . . . . . . . . . . . . . . . . .
Fixed income . . . . . . . . . . . . . . . . .
Real estate/other . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . .
$ 454
216
85
6
Total U.S. pension plan assets . . .
$ 761
Non-U.S. pension plans:
Equities . . . . . . . . . . . . . . . . . . . . .
Fixed income . . . . . . . . . . . . . . . . .
Real estate/other . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . .
$ 933
1,207
383
64
$ 268
83
34
6
$ 391
$ 487
821
28
59
Total Non-U.S. pension plan
assets . . . . . . . . . . . . . . . . . . .
$2,587
$1,395
$ 186
133
—
—
$ 319
$ 446
386
310
5
$1,147
$—
—
51
—
$51
$—
—
45
—
$45
86
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. EMPLOYEE BENEFIT PLANS (Continued)
The following table reconciles the beginning and ending balances of plan assets measured at fair
value using unobservable inputs (Level 3) (dollars in millions):
Fair Value Measurements of Plan Assets
Using Significant Unobservable Inputs (Level 3)
Real Estate/Other
Year ended
December 31,
2015
Year ended
December 31,
2014
Balance at beginning of period . . . . . . . . . . . . . . . . . . . .
Return on pension plan assets . . . . . . . . . . . . . . . . . . . . .
Purchases, sales and settlements . . . . . . . . . . . . . . . . . . .
Transfers (out of) into Level 3 . . . . . . . . . . . . . . . . . . . . .
Acquisition date fair value of pension plan assets acquired
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . .
$ 96
4
12
—
—
$112
$76
5
6
—
9
$96
Based upon historical returns, the expectations of our investment committee and outside advisors,
the expected long-term rate of return on the pension assets is estimated to be between 5.75% and
7.75%. The asset allocation for our pension plans at December 31, 2015 and 2014 and the target
allocation for 2016, by asset category are as follows:
Asset category
U.S. pension plans:
Target
Allocation
2016
Allocation at
December 31,
2015
Allocation at
December 31,
2014
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed income . . . . . . . . . . . . . . . . . . . . . . .
Real estate/other . . . . . . . . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53%
40%
7%
—
54%
38%
8%
—
60%
28%
11%
1%
Total U.S. pension plans . . . . . . . . . . . . . .
100%
100%
100%
Non-U.S. pension plans:
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed income . . . . . . . . . . . . . . . . . . . . . . .
Real estate/other . . . . . . . . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36%
44%
11%
9%
34%
46%
20%
—
36%
47%
15%
2%
Total non-U.S. pension plans
. . . . . . . . . .
100%
100%
100%
Equity securities in our pension plans did not include any direct investments in equity securities of
our Company or our affiliates at the end of 2015.
DEFINED CONTRIBUTION PLANS—U.S.
We have a money purchase pension plan covering substantially all of our domestic employees who
were hired prior to January 1, 2004. Employer contributions are made based on a percentage of
employees’ earnings (ranging up to 8%). During 2014, we closed this plan to non-union participants,
continuing to provide equivalent benefits to those covered under this plan into their salary deferral
account.
87
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. EMPLOYEE BENEFIT PLANS (Continued)
We also have a salary deferral plan covering substantially all U.S. employees. Plan participants may
elect to make voluntary contributions to this plan up to a specified amount of their compensation. We
contribute an amount equal to one-half of the participant’s contribution, not to exceed 2% of the
participant’s compensation.
Along with the introduction of the cash balance formula within our defined benefit pension plan,
the money purchase pension plan was closed to new hires. At the same time, our match in the salary
deferral plan was increased, for new hires, to a 100% match, not to exceed 4% of the participant’s
compensation, once the participant has achieved six years of service with our Company.
Our total combined expense for the above defined contribution plans for each of the years ended
December 31, 2015, 2014 and 2013 was $23 million, $15 million and $14 million, respectively.
DEFINED CONTRIBUTION PLANS—NON-U.S.
We have defined contribution plans in a variety of non-U.S. locations.
Our total combined expense for these defined contribution plans for the years ended
December 31, 2015, 2014 and 2013 was $13 million, $14 million and $14 million, respectively, primarily
related to the Huntsman UK Pension Plan.
All UK associates are eligible to participate in the Huntsman UK Pension Plan, a contract-based
arrangement with a third party. Company contributions vary by business during a five year transition
period. Plan participants elect to make voluntary contributions to this plan up to a specified amount of
their compensation. We contribute a matching amount not to exceed 12% of the participant’s salary for
new hires and 15% of the participant’s salary for all other participants.
SUPPLEMENTAL SALARY DEFERRAL PLAN AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Huntsman Supplemental Savings Plan (‘‘Huntsman SSP’’) is a non-qualified plan covering key
management employees and allows participants to defer amounts that would otherwise be paid as
compensation. The participant can defer up to 75% of their salary and bonus each year. This plan also
provides benefits that would be provided under the Huntsman Salary Deferral Plan if that plan were
not subject to legal limits on the amount of contributions that can be allocated to an individual in a
single year. The Huntsman SSP was amended and restated effective as of January 1, 2005 to allow
eligible executive employees to comply with Section 409A of the Internal Revenue Code of 1986.
The SERP is an unfunded non-qualified pension plan established to provide certain executive
employees with benefits that could not be provided, due to legal limitations, under the Huntsman
Defined Benefit Pension Plan, a qualified defined benefit pension plan, and the Huntsman Money
Purchase Pension Plan, a qualified money purchase pension plan.
Assets of these plans are included in other noncurrent assets and as of December 31, 2015 and
2014 were $26 million and $24 million, respectively. During each of the years ended December 31,
2015, 2014 and 2013, we expensed a total of $1 million as contributions to the Huntsman SSP and the
SERP.
88
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. EMPLOYEE BENEFIT PLANS (Continued)
STOCK-BASED INCENTIVE PLAN
In connection with the initial public offering of common and preferred stock on February 16, 2005,
we adopted the Huntsman Stock Incentive Plan (the ‘‘Stock Incentive Plan’’). The Stock Incentive Plan
permits the grant of non-qualified stock options, incentive stock options, stock appreciation rights,
nonvested stock, phantom stock, performance awards and other stock-based awards to our employees,
directors and consultants and to employees and consultants of our subsidiaries, provided that incentive
stock options may be granted solely to employees. As of December 31, 2015 we are authorized to grant
up to 37.2 million shares under the Stock Incentive Plan. See ‘‘Note 22. Stock-Based Compensation
Plan.’’
INTERNATIONAL PLANS
International employees are covered by various post-employment arrangements consistent with
local practices and regulations. Such obligations are included in other long-term liabilities in our
consolidated balance sheets.
18. INCOME TAXES
The following is a summary of U.S. and non-U.S. provisions for current and deferred income taxes
(dollars in millions):
Year ended
December 31,
2015
2014
2013
Income tax expense (benefit):
U.S.
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 48
21
$ 55
(4)
75
79
Non-U.S.
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
(47)
48
(48)
42
(71)
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 46
$ 51
$125
89
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. INCOME TAXES (Continued)
The following schedule reconciles the differences between the U.S. federal income taxes at the
U.S. statutory rate to our provision for income taxes (dollars in millions):
Year ended
December 31,
2015
2014
2013
Income from continuing operations before income taxes . . . . . .
$176
$404
$279
Expected tax expense at U.S. statutory rate of 35% . . . . . . . . .
Change resulting from:
$ 62
$142
$ 98
State tax expense net of federal benefit . . . . . . . . . . . . . . . .
Non-U.S. tax rate differentials . . . . . . . . . . . . . . . . . . . . . . .
Effects of non-U.S. operations . . . . . . . . . . . . . . . . . . . . . . .
U.S. domestic manufacturing deduction . . . . . . . . . . . . . . . .
Currency exchange gains and losses . . . . . . . . . . . . . . . . . . .
Effect of tax holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. foreign tax credits, net of associated income and taxes . .
Tax benefit of losses with valuation allowances as a result of
other comprehensive income . . . . . . . . . . . . . . . . . . . . . .
Tax authority audits and dispute resolutions . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
(3)
(7)
4
3
(6)
(14)
(7)
(58)
(7)
(6) —
(2)
(22)
(3)
10
75
—
(7)
3
(76)
6
11
10
1
(14)
14
—
(86)
(22)
9
100
4
Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 46
$ 51
$125
During 2013, we declared a dividend from our non-U.S. operations to the U.S., which included
bringing onshore certain U.S. foreign tax credits. The foreign tax credits brought onshore significantly
exceeded the amount needed to offset the cash tax impact of the dividend. A full valuation allowance
was placed on the remaining foreign tax credits since it was more likely than not that the credits would
expire unused due to the application of specific foreign tax credit limitations. In early 2014, the amount
of foreign tax credits brought onshore was adjusted downward by $10 million, to $104 million, which
was fully offset by a valuation allowance.
After extensive research and analysis, in September 2014, we made certain elections and filed
amended U.S. tax returns for tax years 2008 through 2012, along with our original U.S. tax return for
tax year 2013. These new tax elections and amended tax returns allowed us to utilize U.S. foreign tax
credits. The net result was $104 million of income tax benefit recognized during 2014 for the release of
the associated valuation allowance, including a discrete income tax benefit of $94 million in the third
quarter of 2014.
During 2015, we declared a dividend from our non-U.S. operations to the U.S. which included
bringing onshore certain U.S. foreign tax credits. The foreign tax credits brought onshore exceeded the
amount needed to offset the cash tax impact of the dividend, as well as enough to allow us to carry
$14 million of foreign tax credits back to a prior year and claim a refund.
Included in the non-U.S. deferred tax expense are income tax benefits of $3 million in 2015,
$7 million in 2014 and $22 million in 2013 for losses from continuing operations for certain
jurisdictions with valuation allowances to the extent that income was recorded in other comprehensive
income in that same jurisdiction. The benefits in 2015 and 2014 were largely attributable to the U.K
90
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. INCOME TAXES (Continued)
and the benefit in 2013 was largely attributable to Switzerland. In both years, foreign currency gains
and changes in pension related items resulted in income in other comprehensive income where we have
a full valuation allowance against the net deferred tax asset. An offsetting income tax expense was
recognized in accumulated other comprehensive loss.
We operate in over 40 non-U.S. tax jurisdictions with no specific country earning a predominant
amount of our off-shore earnings. The vast majority of these countries have income tax rates that are
lower than the U.S. statutory rate. The average statutory rate for countries with pre-tax losses was
lower than the average statutory rate for countries with pre-tax income, resulting in a net expense as
compared to the U.S. statutory rate. For the year ended December 31, 2015, the tax rate differential
resulted in higher tax expense of $4 million, reflected in the reconciliation above.
In certain non-U.S. tax jurisdictions, our U.S. GAAP functional currency is different than the local
tax currency. As a result, foreign exchange gains and losses will impact our effective tax rate. For 2015,
this resulted in a $33 million tax benefit ($58 million, net of $25 million of contingent liabilities and
valuation allowances). During 2015, a number of our intercompany liabilities that were denominated in
U.S. dollars were owed by entities whose tax currency was the euro. As a result of the depreciation in
the euro opposite the U.S. dollar, these entities recorded a tax only foreign exchange loss. Most of the
intercompany receivables associated with these same U.S. dollar denominated intercompany debts were
held by entities with a tax currency of the U.S. dollar which, therefore, resulted in no taxable gain.
During 2015, we were granted an extension of a tax holiday from 2015 to 2022 on certain of our
manufacturing operations in Singapore. During 2015, pursuant to the Singapore tax holiday, we
recorded a benefit of $6 million. We will continue to enjoy this benefit to the extent of continuing
profits in this manufacturing endeavor.
We calculate deferred tax assets and liabilities related to U.S. state income taxes based on
projected apportionment factors. During 2015, we experienced a decrease in our projected
apportionment factors, which decreased our deferred tax liability for U.S. state income taxes. The
amount of our deferred tax liability for U.S. state income taxes is significant, and therefore, the change
in apportionment factors for 2015 decreased our net deferred tax liabilities by $5 million. Also during
2015, we changed the legal entity location of certain of our U.S. operations. These changes had the
effect of reducing our state tax expense by approximately $3 million.
The components of income (loss) from continuing operations before income taxes were as follows
(dollars in millions):
U.S.
Non-U.S.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$243
(67)
$435
(31)
$ 419
(140)
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$176
$404
$ 279
Year ended December 31,
2015
2014
2013
91
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. INCOME TAXES (Continued)
Components of deferred income tax assets and liabilities were as follows (dollars in millions):
December 31,
2015
2014
Deferred income tax assets:
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other employee compensation . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 871
280
97
131
14
100
$ 875
313
109
46
17
100
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,493
$1,460
Deferred income tax liabilities:
Property, plant and equipment
. . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other employee compensation . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (577) $ (540)
(2)
(103)
(8)
(128)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (713) $ (645)
Net deferred tax asset before valuation allowance . . . . . . . . . . . . .
Valuation allowance—net operating losses and other . . . . . . . . . . .
$ 780
(784)
$ 815
(702)
Net deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(4) $ 113
Current deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . .
$ — $
—
418
(422)
62
(51)
435
(333)
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(4) $ 113
We have gross NOLs of $3,347 million in various non-U.S. jurisdictions. While the majority of the
non-U.S. NOLs have no expiration date, $852 million have a limited life (of which $489 million are
subject to a valuation allowance) and $29 million are scheduled to expire in 2016 (all of which are
subject to a valuation allowance). We had no NOLs expire unused in 2015.
Included in the $3,347 million of gross non-U.S. NOLs is $919 million attributable to our
Luxembourg entities. As of December 31, 2015, due to the uncertainty surrounding the realization of
the benefits of these losses, there is a valuation allowance of $216 million against these net tax-effected
NOLs of $265 million.
We evaluate deferred tax assets to determine whether it is more likely than not that they will be
realized. Valuation allowances are reviewed each period on a tax jurisdiction by jurisdiction basis to
analyze whether there is sufficient positive or negative evidence to support a change in judgment about
the realizability of the related deferred tax assets. These conclusions require significant judgment. In
evaluating the objective evidence that historical results provide, we consider the cyclicality of businesses
and cumulative income or losses during the applicable period. Cumulative losses incurred over the
period limits our ability to consider other subjective evidence such as our projections for the future.
92
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. INCOME TAXES (Continued)
Our judgments regarding valuation allowances are also influenced by the costs and risks associated with
any tax planning idea.
During 2015, we established valuation allowances of $35 million and released valuation allowances
of $3 million. In the U.S., we established $14 million of valuation allowance on U.S. foreign tax credits
due to the application of specific foreign tax credit limitations, in The Netherlands we established
$7 million of valuation allowance on losses which are scheduled to expire after 2016, and in Italy we
established $12 million of valuation allowances on certain net deferred tax assets as a result of
cumulative losses.
During 2014, we released valuation allowances of $111 million and established valuation allowances
of $3 million. In the U.S., we released $94 million of valuation allowance on U.S. foreign tax credits as
a result of making certain tax elections and filing amended U.S. tax returns and in Luxembourg we
released a valuation allowance on $6 million of certain net deferred tax assets as a result of significant
changes in estimated future taxable income resulting from increased intercompany receivables and,
therefore, increased interest income in Luxembourg, our primary treasury center outside of the U.S.
During 2013, we established valuation allowances of $95 million primarily on U.S. foreign tax
credits as a result of insufficient foreign source income and we released valuation allowances on
$16 million of certain net deferred tax assets as a result of significant changes in estimated future
taxable income resulting from increased intercompany receivables and, therefore, increased interest
income.
Uncertainties regarding expected future income in certain jurisdictions could affect the realization
of deferred tax assets in those jurisdictions and result in additional valuation allowances in future
periods, or, in the case of unexpected pre-tax earnings, the release of valuation allowances in future
periods.
93
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. INCOME TAXES (Continued)
The following is a summary of changes in the valuation allowance (dollars in millions):
2015
2014
2013
Valuation allowance as of January 1 . . . . . . . . . . . . . . . . . . . .
Valuation allowance as of December 31 . . . . . . . . . . . . . . . . .
$702
784
$814
702
$ 736
814
Net (increase) decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency movements . . . . . . . . . . . . . . . . . . . . . . . . .
(Decrease) increase to deferred tax assets with no impact on
operating tax expense, including an offsetting (decrease)
increase to valuation allowances . . . . . . . . . . . . . . . . . . . . .
(82)
(22)
112
(49)
(78)
16
29
13
(38)
Change in valuation allowance per rate reconciliation . . . . . . .
$ (75) $ 76
$(100)
Components of change in valuation allowance affecting tax
expense:
Pre-tax losses in jurisdictions with valuation allowances
resulting in no tax expense or benefit
. . . . . . . . . . . . . . .
Releases of valuation allowances in various jurisdictions . . . .
Establishments of valuation allowances in various
$ (43) $ (32) $ (21)
16
111
3
jurisdictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(35)
(3)
(95)
Change in valuation allowance per rate reconciliation . . . . . . .
$ (75) $ 76
$(100)
The following is a reconciliation of our unrecognized tax benefits (dollars in millions):
Unrecognized tax benefits as of January 1 . . . . . . . . . . . . . . . . . . . . . .
Gross increases and decreases—tax positions taken during a prior
2015
2014
$68
$ 96
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
(18)
Gross increases and decreases—tax positions taken during the current
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decreases related to settlements of amounts due to tax authorities . . . .
Reductions resulting from the lapse of statutes of limitation . . . . . . . . .
Foreign currency movements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
(2)
(8)
(4)
1
(5)
(2)
(4)
Unrecognized tax benefits as of December 31 . . . . . . . . . . . . . . . . . . .
$62
$ 68
As of December 31, 2015 and 2014, the amount of unrecognized tax benefits which, if recognized,
would affect the effective tax rate is $50 million and $36 million, respectively.
During 2015, 2014, and 2013, for unrecognized tax benefits that impact tax expense, we recorded a
net increase in unrecognized tax benefits with a corresponding income tax expense (not including
interest and penalty expense) of $19 million, $1 million and $8 million, respectively. Additional
decreases in unrecognized tax benefits were offset by cash settlements or by a decrease in net deferred
tax assets and, therefore, did not affect income tax expense.
94
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. INCOME TAXES (Continued)
In accordance with our accounting policy, we continue to recognize interest and penalties accrued
related to unrecognized tax benefits in income tax expense.
Interest expense included in tax expense . . . . . . . . . . . . . .
$ (9)
Penalties expense included in tax expense . . . . . . . . . . . . . . —
2015
2014
$ 2
—
2013
$ 2
(1)
December 31,
Year ended December 31,
$ 4
Accrued liability for interest
Accrued liability for penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015
2014
$14
—
We conduct business globally and, as a result, we file income tax returns in U.S. federal, various
U.S. state and various non-U.S. jurisdictions. The following table summarizes the tax years that remain
subject to examination by major tax jurisdictions:
Tax Jurisdiction
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Open Tax Years
2011 and later
2002 and later
2004 and later
2010 and later
2003 and later
2009 and later
2010 and later
2012 and later
2009 and later
Certain of our U.S. and non-U.S. income tax returns are currently under various stages of audit by
applicable tax authorities and the amounts ultimately agreed upon in resolution of the issues raised
may differ materially from the amounts accrued.
We estimate that it is reasonably possible that certain of our non-U.S. unrecognized tax benefits
could change within 12 months of the reporting date with a resulting decrease in the unrecognized tax
benefits within a reasonably possible range of $4 million to $24 million. For the 12-month period from
the reporting date, we would expect that a substantial portion of the decrease in our unrecognized tax
benefits would result in a corresponding benefit to our income tax expense.
During 2015, we concluded and effectively settled tax examinations in the U.S. (both federal and
various states) and various non-U.S. jurisdictions including, but not limited to China and France.
During 2014, we concluded and settled tax examinations in the U.S. (both federal and various states)
and various non-U.S. jurisdictions including, but not limited to, China, France and Spain. During 2013,
we concluded and settled tax examinations in the U.S. (both federal and various states) and various
non-U.S. jurisdictions including, but not limited to, China, France and Italy.
For non-U.S. entities that were not treated as branches for U.S. tax purposes, we do not provide
for income taxes on the undistributed earnings of these subsidiaries that are reinvested and, in the
95
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. INCOME TAXES (Continued)
opinion of management, will continue to be reinvested indefinitely. We have material intercompany
debt obligations owed by our non-U.S. subsidiaries to the U.S. We do not intend to repatriate earnings
to the U.S. via dividend based on estimates of future domestic cash generation and our ability to return
cash to the U.S. through payments of intercompany debt owned by our non-U.S. subsidiaries to the
U.S. To the extent that cash is required in the U.S., rather than repatriate earnings to the U.S. via
dividend, we expect to utilize our intercompany debt. If any earnings were repatriated via dividend, we
may need to accrue and pay taxes on the distributions.
As discussed, we made a distribution of a portion of our earnings in 2015 and 2013 when the
amount of foreign tax credits associated with the distribution was greater than the amount of tax
otherwise due. The undistributed earnings of foreign subsidiaries with positive earnings that are
deemed to be permanently invested were approximately $354 million at December 31, 2015. It is not
practicable to determine the unrecognized deferred tax liability on those earnings because of the
significant assumptions necessary to compute the tax.
19. COMMITMENTS AND CONTINGENCIES
PURCHASE COMMITMENTS
We have various purchase commitments extending through 2029 for materials, supplies and
services entered into in the ordinary course of business. Included in the purchase commitments table
below are contracts which require minimum volume purchases that extend beyond one year or are
renewable annually and have been renewed for 2016. Certain contracts allow for changes in minimum
required purchase volumes in the event of a temporary or permanent shutdown of a facility. To the
extent the contract requires a minimum notice period, such notice period has been included in the
table below. The contractual purchase prices for substantially all of these contracts are variable based
upon market prices, subject to annual negotiations. We have estimated our contractual obligations by
using the terms of our current pricing for each contract. We also have a limited number of contracts
which require a minimum payment even if no volume is purchased. We believe that all of our purchase
obligations will be utilized in our normal operations. For the years ended December 31, 2015, 2014 and
2013, we made minimum payments of nil, nil and $7 million, respectively, under such take or pay
contracts without taking the product.
Total purchase commitments as of December 31, 2015 are as follows (dollars in millions):
Year ending December 31,
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,455
876
607
338
119
871
$4,266
96
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
19. COMMITMENTS AND CONTINGENCIES (Continued)
OPERATING LEASES
We lease certain railcars, aircraft, equipment and facilities under long-term lease agreements. The
total expense recorded under operating lease agreements in our consolidated statements of operations
is approximately $94 million, $97 million and $80 million for 2015, 2014 and 2013, respectively, net of
sublease rentals of approximately $3 million, $3 million and $4 million for the years ended
December 31, 2015, 2014 and 2013, respectively.
Future minimum lease payments under operating leases as of December 31, 2015 are as follows
(dollars in millions):
Year ending December 31,
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 87
75
70
62
57
202
$553
Future minimum lease payments have not been reduced by minimum sublease rentals of $2 million
due in the future under noncancelable subleases.
LEGAL MATTERS
Antitrust Matters
We were named as a defendant in consolidated class action civil antitrust suits filed on February 9
and 12, 2010 in the U.S. District Court for the District of Maryland alleging that we and our
co-defendants and other alleged co-conspirators conspired to fix prices of titanium dioxide sold in the
U.S. between at least March 1, 2002 and the present. The other defendants named in this matter were
DuPont, Kronos and Cristal (formerly Millennium). On August 28, 2012, the court certified a class
consisting of all U.S. customers who purchased titanium dioxide directly from the defendants (the
‘‘Direct Purchasers’’) since February 1, 2003. On December 13, 2013, we and all other defendants
settled the Direct Purchasers litigation and the court approved the settlement. We paid the settlement
in an amount immaterial to our consolidated financial statements.
On November 22, 2013, we were named as a defendant in a civil antitrust suit filed in the U.S.
District Court for the District of Minnesota brought by a Direct Purchaser who opted out of the Direct
Purchasers class litigation (the ‘‘Opt-Out Litigation’’). On April 21, 2014, the court severed the claims
against us from the other defendants sued and ordered our case transferred to the U.S. District Court
for the Southern District of Texas. Subsequently, Kronos, another defendant, was also severed from the
Minnesota case and claims against it were transferred and consolidated for trial with our case in the
Southern District of Texas. The trial previously scheduled to begin February 22, 2016 has been
rescheduled to begin September 26, 2016. It is possible that additional claims will be filed by other
Direct Purchasers who opted out of the class litigation.
97
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
19. COMMITMENTS AND CONTINGENCIES (Continued)
We were also named as a defendant in a class action civil antitrust suit filed on March 15, 2013 in
the U.S. District Court for the Northern District of California by the purchasers of products made from
titanium dioxide (the ‘‘Indirect Purchasers’’) making essentially the same allegations as did the Direct
Purchasers. On October 14, 2014, plaintiffs filed their Second Amended Class Action Complaint
narrowing the class of plaintiffs to those merchants and consumers of architectural coatings containing
titanium dioxide. On August 11, 2015, the court granted our motion to dismiss the Indirect Purchasers
litigation with leave to amend the complaint. A Third Amended Class Action Complaint was filed on
September 29, 2015 further limiting the class to consumers of architectural paints. Plaintiffs have raised
state antitrust claims under the laws of 15 states, consumer protection claims under the laws of 9 states,
and unjust enrichment claims under the laws of 16 states. On November 4, 2015, we and our
co-defendants filed another motion to dismiss, which remains pending. The Opt-Out Litigation and
Indirect Purchasers plaintiffs seek to recover injunctive relief, treble damages or the maximum damages
allowed by state law, costs of suit and attorneys’ fees. We are not aware of any illegal conduct by us or
any of our employees. Nevertheless, we have incurred costs relating to these claims and could incur
additional costs in amounts which in the aggregate could be material to us. Because of the overall
complexity of these cases, we are unable to reasonably estimate any possible loss or range of loss
associated with these claims and we have made no accruals with respect to these claims.
Product Delivery Claim
We have been notified by a customer of potential claims related to our alleged delivery of a
different product than the one the customer had ordered. Our customer claims that it was unaware that
the different product had been delivered until after that product had been used to manufacture
materials which were subsequently sold. Originally, the customer stated that it had been notified of
claims by its customers of up to an aggregate of A153 million (approximately $167 million) relating to
this matter and claimed that we may be responsible for all or a portion of these potential claims. Our
customer has since resolved some of these claims and the aggregate amount of the current claims is
now approximately A113 million (approximately $123 million). Based on the facts currently available, we
believe that we are insured for any liability we may ultimately have in excess of $10 million. However,
no assurance can be given regarding our ultimate liability or costs. We believe our range of possible
loss in this matter is between A0 and A113 million (approximately $123 million), and we have made no
accrual with respect to this matter.
Indemnification Matters
On July 3, 2012, Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC (‘‘the
Banks’’) demanded that we indemnify them for claims brought against them by certain MatlinPatterson
entities that were formerly our stockholders (‘‘MatlinPatterson’’) in litigation filed by MatlinPatterson
on June 19, 2012 in the 9th District Court in Montgomery County, Texas (the ‘‘Texas Litigation’’). The
Banks assert that they are entitled to indemnification pursuant to the Agreement of Compromise and
Settlement between the Banks and our Company, dated June 22, 2009, wherein the Banks and our
Company settled claims that we filed relating to the failed acquisition by and merger with Hexion.
MatlinPatterson claims that the Banks knowingly made materially false representations about the
nature of the financing for the acquisition of our Company by Hexion and that they suffered substantial
loss in value to their 19 million shares of our common stock as a result thereof. MatlinPatterson is
asserting statutory fraud, common law fraud and aiding and abetting statutory fraud and are seeking
98
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
19. COMMITMENTS AND CONTINGENCIES (Continued)
actual damages, exemplary damages, costs and attorney’s fees and pre-judgment and post-judgment
interest. On December 21, 2012, the court dismissed the Texas Litigation, a decision which was affirmed
by the Ninth Court of Appeals of Texas on May 15, 2014. A subsequent motion for rehearing by
MatlinPatterson was denied by the same appellate court on June 12, 2014. A petition for discretionary
review in the Texas Supreme Court was denied by final order entered January 7, 2016.
On July 14, 2014, the Banks demanded that we indemnify them for additional claims brought
against them by certain other former Company stockholders in litigation filed June 14, 2014 in the
United States District Court for the Eastern District of Wisconsin (the ‘‘Wisconsin Litigation’’). The
stockholders in the Wisconsin Litigation have made essentially the same allegations as MatlinPatterson
made in the Texas Litigation and, additionally, have named Apollo Global Management LLC and
Apollo Management Holdings, L.P. as defendants. Stockholder plaintiffs in the Wisconsin Litigation
assert claims for misrepresentation and conspiracy to defraud. On April 9, 2015, the court denied the
Banks’ motions to dismiss the Wisconsin Litigation, which were on the same grounds asserted in the
Texas Litigation, as moot. We expect the Banks to refile these motions once limited discovery related to
jurisdiction is complete. We denied the Banks’ indemnification demand for both the Texas Litigation
and the Wisconsin Litigation.
Other Proceedings
We are a party to various other proceedings instituted by private plaintiffs, governmental
authorities and others arising under provisions of applicable laws, including various environmental,
products liability and other laws. Except as otherwise disclosed in this report, we do not believe that
the outcome of any of these matters will have a material effect on our financial condition, results of
operations or liquidity.
20. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
EHS CAPITAL EXPENDITURES
We may incur future costs for capital improvements and general compliance under EHS laws,
including costs to acquire, maintain and repair pollution control equipment. For the years ended
December 31, 2015, 2014 and 2013, our capital expenditures for EHS matters totaled $141 million,
$125 million, and $92 million, respectively. Because capital expenditures for these matters are subject to
evolving regulatory requirements and depend, in part, on the timing, promulgation and enforcement of
specific requirements, our capital expenditures for EHS matters have varied significantly from year to
year and we cannot provide assurance that our recent expenditures are indicative of future amounts we
may spend related to EHS and other applicable laws.
ENVIRONMENTAL RESERVES
We have accrued liabilities relating to anticipated environmental cleanup obligations, site
reclamation and closure costs and known penalties. Liabilities are recorded when potential liabilities
are either known or considered probable and can be reasonably estimated. Our liability estimates are
calculated using present value techniques as appropriate and are based upon requirements placed upon
us by regulators, available facts, existing technology and past experience. The environmental liabilities
do not include amounts recorded as asset retirement obligations. We had accrued $38 million and
$60 million for environmental liabilities as of December 31, 2015 and 2014, respectively. Of these
99
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
20. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)
amounts, $6 million and $7 million were classified as accrued liabilities in our consolidated balance
sheets as of December 31, 2015 and 2014, respectively, and $32 million and $53 million were classified
as other noncurrent liabilities in our consolidated balance sheets as of December 31, 2015 and 2014,
respectively. In certain cases, our remediation liabilities may be payable over periods of up to 30 years.
We may incur losses for environmental remediation in excess of the amounts accrued; however, we are
not able to estimate the amount or range of such potential excess.
ENVIRONMENTAL MATTERS
Under the Comprehensive Environmental Response, Compensation, and Liability Act
(‘‘CERCLA’’) and similar state laws, a current or former owner or operator of real property in the U.S.
may be liable for remediation costs regardless of whether the release or disposal of hazardous
substances was in compliance with law at the time it occurred, and a current owner or operator may be
liable regardless of whether it owned or operated the facility at the time of the release. Outside the
U.S., analogous contaminated property laws, such as those in effect in France and Australia, can hold
past owners and/or operators liable for remediation at former facilities. Currently, there are
approximately 10 former facilities or third-party sites in the U.S. for which we have been notified of
potential claims against us for cleanup liabilities, including, but not limited to, sites listed under
CERCLA. Based on current information and past experiences at other CERCLA sites, we do not
expect these third-party claims to have a material impact on our consolidated financial statements.
Under the Resource Conservation and Recovery Act (‘‘RCRA’’) in the U.S. and similar state laws,
we may be required to remediate contamination originating from our properties as a condition to our
hazardous waste permit. Some of our manufacturing sites have an extended history of industrial
chemical manufacturing and use, including on-site waste disposal. We are aware of soil, groundwater or
surface contamination from past operations at some of our sites, and we may find contamination at
other sites in the future. For example, our Port Neches, Texas, and Geismar, Louisiana, facilities are
the subject of ongoing remediation requirements imposed under RCRA. Similar laws exist in a number
of locations in which we currently operate, or previously operated, manufacturing facilities, such as
Australia, India, France, Hungary and Italy.
West Footscray Remediation
By letter dated March 7, 2006, our former Base Chemicals and Polymers facility in West Footscray,
Australia was issued a cleanup notice by the Environmental Protection Authority Victoria (‘‘EPA
Victoria’’) due to concerns about soil and groundwater contamination emanating from the site. On
August 23, 2010, EPA Victoria revoked a second cleanup notice and issued a revised notice that
included a requirement for financial assurance for the remediation. As of December 31, 2015, we had
an accrued liability of approximately $17 million related to estimated environmental remediation costs
at this site. We can provide no assurance that the authority will not seek to institute additional
requirements for the site or that additional costs will not be required for the cleanup.
North Maybe Mine Remediation
The North Maybe Canyon Mine site is a CERCLA site and involves a former phosphorous mine
near Soda Springs, Idaho, which is believed to have been operated by several companies, including a
predecessor company to us. In 2004, the U.S. Forest Service notified us that we are a CERCLA PRP
100
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
20. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)
for contamination originating from the site. In February 2010, we and Wells Cargo (another PRP)
agreed to conduct a Remedial Investigation/Feasibility Study of a portion of the site and are currently
engaged in that process. At this time, we are unable to reasonably estimate our potential liabilities at
this site.
Port Neches Flaring Matter
As part of the EPA’s national enforcement initiative on flaring operations and by letter dated
October 12, 2012, the U.S. Department of Justice (the ‘‘DOJ’’) notified us that we were in violation of
the CAA based on our response to a 2010 CAA Section 114 Information Request. The EPA has used
the enforcement initiative to bring similar actions against refiners and other chemical manufacturers
and has sought to collect civil penalties in excess of $100,000. Specifically, the EPA alleged violations at
our Port Neches, Texas facility from 2007-2012 for flare operations not consistent with good pollution
control practice and not in compliance with certain flare-related regulations. As a result of these
findings, the EPA referred this matter to the DOJ. We provided a formal response to the DOJ and the
EPA with a supplemental data submission on April 29, 2013. We have been engaged in discussions with
the DOJ and the EPA regarding these alleged violations and conducted field trials on an alternate flare
monitoring method beginning in September 2014. We are currently unable to determine the likelihood
or magnitude of any potential penalty or injunctive relief that may be incurred in resolving this matter.
21. HUNTSMAN CORPORATION STOCKHOLDERS’ EQUITY
SHARE REPURCHASE PROGRAM
On September 29, 2015, our Board of Directors authorized our Company to repurchase up to
$150 million in shares of our common stock. Repurchases under this program may be made through
open market transactions, in privately negotiated transactions, accelerated share repurchase programs
or by other means. The timing and actual number of any shares repurchased depends on a variety of
factors, including market conditions. The share repurchase authorization does not have an expiration
date and repurchases may be commenced, suspended or discontinued from time to time without prior
notice. On October 27, 2015, we entered into and funded an accelerated share repurchase agreement
with Citibank, N.A. to repurchase $100 million of our common stock. Citibank, N.A. made an initial
delivery of approximately 7.1 million shares of Huntsman Corporation common stock based on the
closing price of $11.94 on October 27, 2015. The accelerated share repurchase agreement was
completed in January 2016 with the delivery of an additional approximately 1.5 million shares of
Huntsman Corporation common stock. The final number of shares repurchased and the aggregate cost
per share was based on the Company’s daily volume-weighted average stock price during the term of
the transaction, less a discount.
101
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
21. HUNTSMAN CORPORATION STOCKHOLDERS’ EQUITY (Continued)
DIVIDENDS ON COMMON STOCK
The following tables represent dividends on common stock for our Company for the years ended
December 31, 2015 and 2014 (dollars in millions, except per share payment amounts):
Quarter ended
2015
Per share
payment
amount
Approximate
amount
paid
March 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$0.125
0.125
0.125
0.125
$31
31
31
30
Quarter ended
2014
Per share
payment
amount
Approximate
amount
paid
March 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$0.125
0.125
0.125
0.125
$30
30
31
30
22. STOCK-BASED COMPENSATION PLAN
Under the Stock Incentive Plan, a plan approved by stockholders, we may grant non-qualified
stock options, incentive stock options, stock appreciation rights, restricted stock, phantom stock,
performance awards and other stock-based awards to our employees, directors and consultants and to
employees and consultants of our subsidiaries, provided that incentive stock options may be granted
solely to employees. The terms of the grants are fixed at the grant date. As of December 31, 2015 we
were authorized to grant up to 37.2 million shares under the Stock Incentive Plan. As of December 31,
2015, we had 7 million shares remaining under the Stock Incentive Plan available for grant. Option
awards have a maximum contractual term of 10 years and generally must have an exercise price at least
equal to the market price of our common stock on the date the option award is granted. Stock-based
awards generally vest over a three-year period; certain performance awards vest over a two-year period
and awards to our directors vest on the grant date.
The compensation cost from continuing operations under the Stock Incentive Plan was as follows
(dollars in millions):
Compensation cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$30
$28
$29
The total income tax benefit recognized in the statement of operations for stock-based
compensation arrangements was $6 million, $6 million and $7 million for the years ended
December 31, 2015, 2014 and 2013, respectively.
Year ended
December 31,
2015
2014
2013
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HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
22. STOCK-BASED COMPENSATION PLAN (Continued)
STOCK OPTIONS
The fair value of each stock option award is estimated on the date of grant using the Black-
Scholes valuation model that uses the assumptions noted in the following table. Expected volatilities are
based on the historical volatility of our common stock through the grant date. The expected term of
options granted was estimated based on the contractual term of the instruments and employees’
expected exercise and post-vesting employment termination behavior. The risk-free rate for periods
within the contractual life of the option was based on the U.S. Treasury yield curve in effect at the time
of grant. The assumptions noted below represent the weighted averages of the assumptions utilized for
all stock options granted during the year.
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . .
Expected life of stock options granted during the
Year ended December 31,
2015
2014
2013
2.3%
57.6%
1.4%
2.4%
60.3%
1.7%
2.8%
62.5%
1.0%
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.9 years
5.7 years
5.6 years
A summary of stock option activity under the Stock Incentive Plan as of December 31, 2015 and
changes during the year then ended is presented below:
Option Awards
Outstanding at January 1, 2015 . . . .
Granted . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . .
Outstanding at December 31, 2015 .
Exercisable at December 31, 2015 . .
Shares
(in thousands)
8,781
1,011
(49)
(199)
9,544
7,449
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(years)
(in millions)
$14.84
22.21
16.43
19.70
15.51
13.95
4.8
3.7
$17
17
The weighted-average grant-date fair value of stock options granted during 2015, 2014 and 2013
was $9.81, $9.63 and $7.93 per option, respectively. As of December 31, 2015, there was $11 million of
total unrecognized compensation cost related to nonvested stock option arrangements granted under
the Stock Incentive Plan. That cost is expected to be recognized over a weighted-average period of
approximately 1.8 years.
During the years ended December 31, 2015, 2014 and 2013, the total intrinsic value of stock
options exercised was approximately nil, $14 million and $14 million, respectively.
103
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
22. STOCK-BASED COMPENSATION PLAN (Continued)
NONVESTED SHARES
Nonvested shares granted under the Stock Incentive Plan consist of restricted stock, which is
accounted for as an equity award, and phantom stock, which is accounted for as a liability award
because it can be settled in either stock or cash.
During the first quarter of 2015, we began issuing performance awards to certain employees. The
fair value of each performance award is estimated using a Monte Carlo simulation model that uses
various assumptions, including an expected volatility rate and a risk-free interest rate. For the year
ended December 31, 2015 the weighted-average expected volatility rate was 30.0% and the weighted
average risk-free interest rate was 0.7%. For the performance awards granted during the year ended
December 31, 2015, the number of shares earned varies based upon the Company achieving certain
performance criteria over two-year and three-year performance periods. The performance criteria are
total stockholder return of our common stock relative to the total stockholder return of a specified
industry peer-group for the two-year and three-year performance periods.
A summary of the status of our nonvested shares as of December 31, 2015 and changes during the
year then ended is presented below:
Equity Awards
Liability Awards
Nonvested at January 1, 2015 . . .
Granted . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . .
Shares
(in thousands)
1,821
855
(779)(1)
(43)
Nonvested at December 31, 2015
1,854
Weighted
Average
Grant-Date
Fair Value
$17.37
23.25
17.30
21.37
19.97
Weighted
Average
Grant-Date
Fair Value
$18.50
22.60
17.09
21.22
21.37
Shares
(in thousands)
492
261
(259)
(19)
475
(1) As of December 31, 2015, a total of 393,952 restricted stock units were vested but not yet
issued, of which 29,645 vested during 2015. These shares have not been reflected as
vested shares in this table because, in accordance with the restricted stock unit
agreements, shares of common stock are not issued for vested restricted stock units until
termination of employment. This table does reflect 29,921 vested restricted stock units for
which shares of common stock were issued in 2015.
As of December 31, 2015, there was $20 million of total unrecognized compensation cost related
to nonvested share compensation arrangements granted under the Stock Incentive Plan. That cost is
expected to be recognized over a weighted-average period of approximately 1.8 years. The value of
share awards that vested during the years ended December 31, 2015, 2014 and 2013 was $20 million,
$19 million and $18 million, respectively.
104
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
23. OTHER COMPREHENSIVE (LOSS) INCOME
Other comprehensive (loss) income consisted of the following (dollars in millions):
Foreign
currency
translation
Pension and
other
postretirement
benefits
adjustment(a) adjustments(b)
Other
comprehensive
income of
unconsolidated
affiliates
Other, net
Total
Amounts
Amounts
attributable to attributable to
noncontrolling
interests
Huntsman
Corporation
Beginning balance,
January 1, 2015 . . . .
$ 25
$(1,122)
$10
$11
$(1,076)
$23
$(1,053)
Other comprehensive
(loss) income
before
reclassifications,
gross . . . . . . . . . .
Tax expense . . . . . . .
Amounts reclassified
from accumulated
other
comprehensive
loss, gross(c) . . . .
Tax expense . . . . . . .
Net current-period
other comprehensive
(loss) income . . . . . .
Ending balance,
(271)
(42)
—
—
44
(33)
69
(14)
(313)
66
1
—
—
—
1
6
—
—
—
(220)
(75)
69
(14)
5
—
—
—
(215)
(75)
69
(14)
6
(240)
5
(235)
December 31, 2015 .
$(288)
$(1,056)
$11
$17
$(1,316)
$28
$(1,288)
(a) Amounts are net of tax of $90 and $47 as of December 31, 2015 and January 1, 2015, respectively.
(b) Amounts are net of tax of $135 and $182 as of December 31, 2015 and January 1, 2015, respectively.
(c) See table below for details about these reclassifications.
105
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
23. OTHER COMPREHENSIVE (LOSS) INCOME (Continued)
Foreign
currency
translation
Pension and
other
postretirement
benefits
adjustment(a) adjustments(b)
Other
comprehensive
income of
unconsolidated
affiliates
Other, net
Total
Amounts
Amounts
attributable to attributable to
noncontrolling
interests
Huntsman
Corporation
Beginning balance,
January 1, 2014 . . . .
$ 246
$ (851)
$12
$ 8
$ (585)
$ 8
$ (577)
Other comprehensive
(loss) income
before
reclassifications,
gross . . . . . . . . . .
Tax (expense) benefit
Amounts reclassified
from accumulated
other
comprehensive
loss, gross(c) . . . .
Tax benefit . . . . . . .
Net current-period
other comprehensive
(loss) income . . . . . .
Ending balance,
(187)
(34)
(311)
88
—
—
(59)
11
(2)
—
—
—
4
(1)
(496)
53
—
—
(59)
11
15
—
—
—
(481)
53
(59)
11
(221)
(271)
(2)
3
(491)
15
(476)
December 31, 2014 .
$ 25
$(1,122)
$10
$11
$(1,076)
$23
$(1,053)
(a) Amounts are net of tax of $47 and $13 as of December 31, 2014 and January 1, 2014, respectively.
(b) Amounts are net of tax of $182 and $83 as of December 31, 2014 and January 1, 2014, respectively.
(c) See table below for details about these reclassifications.
Year ended
Year ended
December 31, 2015 December 31, 2014 December 31, 2013
Year ended
Amount reclassified Amount reclassified Amount reclassified
from
accumulated other
comprehensive loss
from
accumulated other
comprehensive loss
from
accumulated other
comprehensive loss
Affected line
item in the
statement where net
income is presented
Details about Accumulated Other
Comprehensive Loss Components(a):
Amortization of pension and
other postretirement benefits:
Prior service credit . . . . . . . . .
Actuarial loss . . . . . . . . . . . . .
Settlement loss . . . . . . . . . . . . .
Total reclassifications for the
period . . . . . . . . . . . . . . . . . .
$(55)
$ 10
(79)
—
(69)
14
$ 9
(55)
(13)
(59)
11
$(48)
$ 8
(80)
(12)
(84)
23
$(61)
(b)
(b)(c)
(b)
Total before tax
Income tax expense
Net of tax
(a) Pension and other postretirement benefits amounts in parentheses indicate credits on our consolidated
statements of operations.
106
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
23. OTHER COMPREHENSIVE (LOSS) INCOME (Continued)
(b) These accumulated other comprehensive loss components are included in the computation of net
periodic pension costs. See ‘‘Note 17. Employee Benefit Plans.’’
(c) Amounts contain approximately $6 million, $4 million and $6 million of actuarial losses related to
discontinued operations for the years ended December 31, 2015, 2014 and 2013, respectively.
Items of other comprehensive income (loss) of our Company and our consolidated affiliates have
been recorded net of tax, with the exception of the foreign currency translation adjustments related to
subsidiaries with earnings permanently reinvested. The tax effect is determined based upon the
jurisdiction where the income or loss was recognized and is net of valuation allowances.
24. RELATED PARTY TRANSACTIONS
Our consolidated financial statements include the following transactions with our affiliates not
otherwise disclosed (dollars in millions):
Year ended
December 31,
2015
2014
2013
Sales to:
Unconsolidated affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . .
$131
$261
$232
Inventory purchases from:
Unconsolidated affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . .
487
614
597
Our subsidiary Airstar Corporation (‘‘Airstar’’) subleases a Gulfstream IV-SP Aircraft (the
‘‘Aircraft’’) from Jstar Corporation (‘‘Jstar’’), a corporation wholly owned by Jon M. Huntsman pursuant
to a lease arrangement that expires in 2021. Jon M. Huntsman is the Executive Chairman and the
father of our Chief Executive Officer, Peter R. Huntsman and our Division President, Advanced
Materials, James H. Huntsman. Under this arrangement, monthly sublease payments from Airstar to
Jstar are approximately $120,000, and an aggregate of $8 million is payable through the end of the
remaining six year lease term. These monthly sublease payments are equal to the financing costs paid
by Jstar to a leasing company and the arrangement does not result in a financial benefit to Jstar.
We occupy and use a portion of an office building owned by the Huntsman Foundation, a private
charitable foundation established by Jon M. and Karen H. Huntsman to further the charitable interests
of the Huntsman family, under a lease pursuant to which we make annual lease payments of
approximately $2 million. During each of the years ended 2015, 2014 and 2013, we made payments of
approximately $2 million to the Huntsman Foundation under the lease. The lease expires on
December 31, 2018, subject to a five-year extension, at our option.
Through May 2002, we paid the premiums on various life insurance policies for Jon M. Huntsman.
These policies have been liquidated, and the cash values have been paid to Mr. Huntsman.
Mr. Huntsman is indebted to us in the amount of approximately $2 million with accrued interest, which
represents the insurance premiums paid on his behalf through May 2002. This amount is included in
other noncurrent assets in our consolidated balance sheets.
107
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
24. RELATED PARTY TRANSACTIONS (Continued)
Effective August 31, 2015, we entered into a new Consulting Agreement with Jon M.
Huntsman, Jr., one of our former directors and the former governor of Utah and U.S. Ambassador to
Singapore and China. Pursuant to the new Consulting Agreement, Jon M. Huntsman, Jr. agreed to:
provide strategic advice to senior management and the board of the Company on political, economic
and business matters; support development and continued maintenance of the Company’s high value
customers and significant business relationships across all regions; support development and continued
maintenance of governmental and business relationships in developing economic regions, particularly in
connection with markets and opportunities in India, China and Southeast Asia; participate in
negotiations and discussions with business executives and leaders, government officials and/or
dignitaries; and participate in such other meetings or discussions as may be requested by senior
management of the Company upon reasonable notice. In exchange for these services, we agree to pay
Jon M. Huntsman, Jr. $50,000 per month through the term of the Consulting Agreement and up to
$200,000 in additional compensation based on achievement of designated results as determined by the
board. The new Consulting Agreement expires on August 31, 2016, subject to our right to extend the
agreement for one year terms. Jon M. Huntsman, Jr. is the son of our Executive Chairman,
Jon M. Huntsman and the brother of our Chief Executive Officer, Peter R. Huntsman, and Division
President, Advanced Materials, James Huntsman.
25. OPERATING SEGMENT INFORMATION
We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety
of differentiated and commodity chemical products. We have reported our operations through five
segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments and
Additives. We have organized our business and derived our operating segments around differences in
product lines.
The major products of each reportable operating segment are as follows:
Segment
Products
Polyurethanes . . . . . . . . . . MDI, PO, polyols, PG, TPU, aniline and MTBE
Performance Products . . . .
amines, surfactants, LAB, maleic anhydride, other performance
chemicals, EG, olefins and technology licenses
Advanced Materials . . . . . Basic liquid and solid epoxy resins; specialty resin compounds; cross-
Textile Effects . . . . . . . . . .
Pigments and Additives . . .
linking, matting and curing agents; epoxy, acrylic and polyurethane-based
formulations
textile chemicals, dyes and inks
titanium dioxide, functional additives, color pigments, timber treatment
and water treatment chemicals
Sales between segments are generally recognized at external market prices and are eliminated in
consolidation. We use EBITDA to measure the financial performance of our global business units and
for reporting the results of our operating segments. This measure includes all operating items relating
to the businesses. The EBITDA of operating segments excludes items that principally apply to our
Company as a whole. The revenues and EBITDA for each of our reportable operating segments are as
follows (dollars in millions):
108
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
25. OPERATING SEGMENT INFORMATION (Continued)
Year ended December 31,
2015
2014
2013
Revenues:
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . . .
Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3,811
2,501
1,103
804
2,160
(80)
$ 5,032
3,072
1,248
896
1,549
(219)
$ 4,964
3,019
1,267
811
1,269
(251)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,299
$11,578
$11,079
Segment EBITDA(1):
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . . .
Corporate and other(2) . . . . . . . . . . . . . . . . . . . . .
$
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued Operations(3) . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense—continuing operations . . . . . . . . .
Income tax benefit—discontinued operations . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . .
$
516
438
195
18
(223)
(197)
747
(6)
741
(205)
(46)
2
(399)
$
669
440
182
28
(59)
(228)
1,032
(10)
1,022
(205)
(51)
2
(445)
696
372
86
(78)
79
(261)
894
(5)
889
(190)
(125)
2
(448)
Net income attributable to Huntsman Corporation
$
93
$
323
$
128
Depreciation and Amortization:
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and other(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtotal
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued Operations . . . . . . . . . . . . . . . . . . . . . . .
Year ended
December 31,
2015
2014
2013
$100
119
38
17
93
32
399
—
$131
138
42
16
78
40
445
—
$156
121
38
17
73
41
446
2
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$399
$445
$448
109
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
25. OPERATING SEGMENT INFORMATION (Continued)
Year ended
December 31,
2015
2014
2013
Capital Expenditures:
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$181
205
25
24
202
26
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$663
$174
181
46
38
136
26
$601
$132
115
73
31
98
22
$471
December 31,
2015
2014
2013
Total Assets:
Polyurethanes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Products . . . . . . . . . . . . . . . . . . . . . . . .
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . . . . .
Textile Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pigments and Additives . . . . . . . . . . . . . . . . . . . . . . .
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . .
$2,779
2,264
822
562
2,494
899
$ 2,859
2,326
828
574
2,640
1,696
$2,839
2,320
918
653
1,469
960
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$9,820
$10,923
$9,159
(1) Segment EBITDA is defined as net income attributable to Huntsman Corporation before
interest, income tax, depreciation and amortization, and certain Corporate and other
items.
(2) Corporate and other includes unallocated corporate overhead, unallocated foreign
exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early
extinguishment of debt, unallocated restructuring, impairment and plant closing costs,
non-operating income and expense, benzene sales and gains and losses on the disposition
of corporate assets.
(3) The operating results of our former polymers, base chemicals and Australian styrenics
businesses are classified as discontinued operations, and, accordingly, the revenues of
these businesses are excluded for all periods presented. The EBITDA of our former
polymers, base chemicals and Australian styrenics businesses are included in discontinued
operations for all periods presented.
110
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
25. OPERATING SEGMENT INFORMATION (Continued)
Year ended December 31,
2015
2014(2)
2013
By Geographic Area
Revenues(1):
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other nations
$ 3,228
1,110
475
714
4,772
$ 3,540
1,200
825
677
5,336
$ 3,319
1,081
853
586
5,240
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,299
$11,578
$11,079
December 31,
2015
2014
2013
Long-lived assets(3):
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other nations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,938
362
304
320
217
229
1,076
$1,748
381
314
311
221
211
1,237
$1,422
200
356
312
202
197
1,135
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,446
$4,423
$3,824
(1) Geographic information for revenues is based upon countries into which product is sold.
(2) Subsequent to the issuance of the Company’s 2014 financial statements, revenues by
geographic area were corrected to properly reflect intercompany sales eliminations.
(3) Long-lived assets consist of property, plant and equipment, net.
111
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
26. SELECTED UNAUDITED QUARTERLY FINANCIAL DATA
A summary of selected unaudited quarterly financial data for the years ended December 31, 2015
and 2014 is as follows (dollars in millions, except per share amounts):
Three months ended
March 31, June 30, September 30, December 31,
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, impairment and plant closing costs . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Huntsman Corporation . . . . . . . .
Basic income per share(3):
Income from continuing operations attributable to
2015
2015
2015
$2,589
450
93
17
15
5
$2,740
549
114
41
39
29
$2,638
473
14
63
63
55
Huntsman Corporation common stockholders . . . . . . . .
0.03
0.13
Net income attributable to Huntsman Corporation
common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . .
0.02
0.12
Diluted income per share(3):
Income from continuing operations attributable to
Huntsman Corporation common stockholders . . . . . . . .
0.03
0.13
Net income attributable to Huntsman Corporation
common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . .
0.02
0.12
0.23
0.23
0.22
0.22
2015(1)
$2,332
376
81
9
9
4
0.02
0.02
0.02
0.02
Three months ended
March 31, June 30, September 30, December 31,
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, impairment and plant closing costs . . . . . . . . .
Income (loss) from continuing operations . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to Huntsman Corporation . . .
Basic income (loss) per share(3):
Income (loss) from continuing operations attributable to
2014
2014
$2,755
450
39
69
62
54
$2,988
505
13
124
124
119
2014(2)
$2,884
515
39
194
194
188
Huntsman Corporation common stockholders . . . . . . . .
0.25
0.49
Net income (loss) attributable to Huntsman Corporation
common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . .
0.22
0.49
Diluted income (loss) per share(3):
Income (loss) from continuing operations attributable to
Huntsman Corporation common stockholders . . . . . . . .
0.25
0.48
Net income (loss) attributable to Huntsman Corporation
common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . .
0.22
0.48
0.77
0.77
0.76
0.76
2014
$2,951
449
67
(34)
(35)
(38)
(0.16)
(0.16)
(0.16)
(0.16)
(1) During the three months ended December 31, 2015, we declared a dividend from our non-U.S.
operations to the U.S., which included bringing onshore certain U.S. foreign tax credits. The
112
HUNTSMAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
26. SELECTED UNAUDITED QUARTERLY FINANCIAL DATA (Continued)
foreign tax credits brought onshore exceeded the amount needed to offset the cash tax impact of
the dividend, as well as enough to allow us to carry $14 million of foreign tax credits back to a
prior year and claim a refund. During 2015, a number of our intercompany liabilities that were
denominated in U.S. dollars were owed by entities whose tax currency was the euro. As a result of
the depreciation in the euro opposite the U.S. dollar, these entities recorded a tax only foreign
exchange loss. Most of the intercompany receivables associated with these same U.S. dollar
denominated intercompany debts were held by entities with a tax currency of the U.S. dollar
which, therefore, resulted in no taxable gain. This resulted in a $33 million tax benefit ($58 million,
net of $25 million of contingent liabilities and valuation allowances) in the fourth quarter of 2015.
(2) During the three months ended September 30, 2014, as a result of extensive research and analysis,
we filed amended U.S. tax returns for tax years 2008 through 2012, along with our original U.S. tax
return for tax year 2013, and made elections which allowed us to utilize U.S. foreign tax credits. As
a result of utilizing these assets that had been subject to a valuation allowance, we recognized a
discrete income tax benefit of $94 million in the third quarter of 2014.
(3) Basic and diluted income per share are computed independently for each of the quarters presented
based on the weighted average number of common shares outstanding during that period.
Therefore, the sum of quarterly basic and diluted per share information may not equal annual
basic and diluted earnings per share.
******
113
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION AND HOLDERS
Our common stock is listed on the New York Stock Exchange under the symbol ‘‘HUN.’’ As of
February 8, 2016, there were approximately 59 stockholders of record and the closing price of our
common stock on the New York Stock Exchange was $8.54 per share.
The reported high and low sale prices of our common stock on the New York Stock Exchange for
each of the periods set forth below are as follows:
Period
2015
High
Low
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$24.62
23.83
22.40
14.02
$21.01
21.46
9.27
9.84
Period
2014
High
Low
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$25.81
28.87
29.32
27.15
$20.79
23.55
25.64
20.36
DIVIDENDS
The following tables represent dividends on common stock for our Company for the years ended
December 31, 2015 and 2014 (dollars in millions, except per share payment amounts):
Quarter ended
2015
Per share
payment
amount
Approximate
amount
paid
March 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$0.125
0.125
0.125
0.125
$31
31
31
30
Quarter ended
2014
Per share
payment
amount
Approximate
amount
paid
March 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$0.125
0.125
0.125
0.125
$30
30
31
30
The payment of dividends is a business decision made by our Board of Directors from time to
time based on our earnings, financial position and prospects, and such other considerations as our
Board of Directors considers relevant. Accordingly, while management currently expects that the
Company will continue to pay the quarterly cash dividend, its dividend practice may change at any
time.
114
PURCHASES OF EQUITY SECURITIES BY THE COMPANY
The following table provides information with respect to shares of our common stock that we
repurchased as part of our share repurchase program during the three months ended December 31,
2015. There were no shares of restricted stock granted under our stock incentive plan that we withheld
upon vesting to satisfy our tax withholding obligations during the three months ended December 31,
2015.
Total number of
shares purchased
October . . . . . . . . . . . . . . . . . . . .
November . . . . . . . . . . . . . . . . . .
December . . . . . . . . . . . . . . . . . .
7,118,928
—
—
Total . . . . . . . . . . . . . . . . . . . . .
7,118,928
Total number of
shares purchased
as part of publicly
announced plans
or programs(1)
Maximum number (or
approximate dollar value)
of shares that may
yet be purchased
under the plans
or programs(1)
7,118,928
—
—
—
$50,000,000
50,000,000
50,000,000
Average
price paid
per share
$11.94
—
—
$11.94
(1) On September 29, 2015, our Board of Directors authorized our Company to repurchase up to
$150 million in shares of our common stock. The share repurchase authorization does not have an
expiration date and repurchases may be commenced, suspended or discontinued from time to time
without prior notice. On October 27, 2015, we entered into and funded an accelerated share
repurchase agreement with Citibank, N.A. to repurchase $100 million of our common stock.
Citibank, N.A. made an initial delivery of approximately 7.1 million shares of Huntsman
Corporation common stock based on the closing price of $11.94 on October 27, 2015. The
accelerated share repurchase agreement was completed in January 2016 with the delivery of an
additional approximately 1.5 million shares of Huntsman Corporation common stock. The final
number of shares repurchased and the aggregate cost per share was based on the Company’s daily
volume-weighted average stock price during the term of the transaction, less a discount. For more
information, see ‘‘Note 21. Huntsman Corporation Stockholders’ Equity—Share Repurchase
Program’’ to our consolidated financial statements.
STOCK PERFORMANCE GRAPH
Comparison of Cumulative Five Year Total Return
$200
$150
$100
$50
$0
12/31/10
12/31/11
12/31/12
12/31/13
12/31/14
12/31/15
Huntsman Corporation
S&P 500 Index
S&P 500 Chemicals
17FEB201620400297
115
Total Return To Shareholders
(Includes reinvestment of dividends)
ANNUAL RETURN PERCENTAGE
Years Ending
Company / Index
12/31/11
Huntsman Corporation . . . . . . . . . . . . . . . . . . . . . . . . (cid:1)33.90
S&P 500 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.11
S&P 500 Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . (cid:1)1.26
12/31/12
63.47
16.00
23.61
12/31/13
12/31/14
12/31/15
58.69 (cid:1)5.55 (cid:1)48.31
13.69
32.39
1.38
10.70 (cid:1)4.18
31.80
Company / Index
Base
Period
12/31/10
INDEXED RETURNS
Years Ending
12/31/11
12/31/12
12/31/13
12/31/14
12/31/15
Huntsman Corporation . . . . . . . . . . . . . . . . . .
S&P 500 Index . . . . . . . . . . . . . . . . . . . . . . . .
S&P 500 Chemicals . . . . . . . . . . . . . . . . . . . . .
100
100
100
66.10
102.11
98.74
108.05
118.45
122.05
171.46
156.82
160.87
161.95
178.29
178.09
83.72
180.75
170.65
116
CORPORATE INFORMATION
GLOBAL HEADQUARTERS
STOCK TRANSFER AGENT
STOCK LISTING
10003 Woodloch Forest Drive
By Regular Mail:
Our common stock is listed on the
The Woodlands, Texas 77380
Tel.: +1-281-719-6000
Computershare
P.O. Box 30170
New York Stock Exchange under the
symbol HUN.
INDEPENDENT REGISTERED
United States of America
College Station, TX 77842
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
STOCKHOLDER INQUIRIES
Inquiries from stockholders and
other interested parties regarding
our company are always welcome.
By Overnight Delivery:
Computershare
211 Quality Circle
Suite 210
College Station, TX 77845
United States of America
Please direct your requests to:
Toll Free: 1-866-210-6997
Investor Relations
International: +1-201-680-6578
10003 Woodloch Forest Drive
Website:
The Woodlands, Texas 77380
www.computershare.com/investor
Tel.: +1-801-584-5959
Email: ir@huntsman.com
ANNUAL MEETING
The 2016 annual meeting of
stock holders will take place on
Thursday, May 5, 2016 at 8:30 a.m.,
local time, at the following location:
The Westin The Woodlands
2 Waterway Square Place
The Woodlands, TX 77380
Tel.: +1-281-419-4300
WEBSITE
www.huntsman.com
FORWARD-LOOKING STATEMENTS
Statements in this report that are not historical are forward-looking statements. These statements are based on management’s cur-
rent belief and expectations. The forward-looking statements in this report are subject to uncertainty and changes in circumstances
and involve risks and uncertainties that may affect our operations, markets, products, services, prices and other factors as discussed
in our filings with the Securities and Exchange Commission. Significant risks and uncertainties may relate to, but are not limited to,
financial, economic, competitive, environmental, political, legal, regulatory and technological factors. We assume no obligation to pro-
vide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other
applicable laws.
Annual Report Design by Curran & Connors, Inc.
www.curran-connors.com
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Global Headquarters
Huntsman Corporation
10003 Woodloch Forest Drive
The Woodlands, Texas 77380 USA
Telephone +1-281-719-6000
www.huntsman.com
Copyright © 2015 Huntsman Corporation or an affiliate thereof. All rights reserved.
The use of the symbol ® herein signifies the registration of the associated trademark in one or more, but not all, countries.