www.venatorcorp.com
www.venatorcorp.com
2019 Annual Report
2019 Annual Report
Dear Shareholders
2019 was a challenging year highlighted by significant
macroeconomic uncertainty. Our team rose to the
challenge, making meaningful progress to strengthen
our business. We are confident in our strategy and ability
to execute on our initiatives to secure Venator’s future as
a premier global titanium dioxide producer.
In 2019, Venator delivered $194
million of adjusted EBITDA and
$0.24 of adjusted diluted earnings
per share. A slowdown in industry
conditions overshadowed the
enormous strides we achieved
with our self-help initiatives,
improvements in our cost
competitiveness and delivery of
enhanced value to our customers
through product innovation. To
that end, we accelerated our
Business Improvement Program
and grew our TiO2 volumes
through the successful launch
of multiple new specialty and
differentiated products.
We have implemented a broad
range of customer agreements
aimed at mitigating price
and margin cyclicality for our
customers. This customer-tailored
approach includes managing our
global production network and
inventories to align with customer
commitments.
We also made progress on the
transfer of our specialty and
differentiated TiO2 business from
Pori to other sites in our network.
Similarly, we have upgraded the
mix within our complementary
Performance Additives business.
The diversification into these
higher growth and higher value
products is enabled by our unique
asset base and facilitate ongoing
collaboration and partnerships
with our customers.
In 2019, we took meaningful
action to enhance our competitive
position and delivered $20 million
of adjusted EBITDA benefits
from our Business Improvement
Program, twice our original target.
We expect to deliver the remaining
$20 million cost and operational
efficiencies as promised. This
journey will continue, and
we anticipate implementing
additional actions to optimize
our manufacturing capabilities
and cost base, improving our
profitability throughout the TiO2
cycle.
We believe the most important
milestone that will increase
shareholder value is our ability to
generate an improvement in free
cash flow. We expect 2019 to have
been an inflection point for many
of our cash uses. We continue to
evaluate actions to reduce our
spend, without compromising the
integrity of our assets or the ability
to serve our customers.
Simon Turner
President and Chief Executive Officer
In 2020, our cash uses are
expected to significantly decline
compared to 2019 and we
will build on this momentum in
subsequent years.
Looking ahead, 2020 will be
another pivotal year for Venator
amid an increasingly difficult
business environment. Our
talented team is focused on
driving performance through
deliberate self-help initiatives,
remaining disciplined with
our financial resources and
improving our safety performance.
Collectively, our commitment and
capability to successfully execute
our strategic priorities gives
me confidence in our ability to
enhance shareholder value.
Simon Turner
President and Chief Executive Officer
Board of Directors
Peter R. Huntsman
Chairman
Sir Robert J. Margetts
Vice Chairman and Lead
Independent Director
Simon Turner
President and Chief
Executive Officer
Douglas D. Anderson
Independent Director
Daniele Ferrari
Independent Director
Kathy Patrick
Independent Director
Management Team
Simon Turner
President and Chief
Executive Officer
Mahomed Maiter
Executive Vice President,
Business Operations
Kurt Ogden
Russ Stolle
Executive Vice President
Executive Vice President,
and Chief Financial
Officer
General Counsel and
Chief Compliance Officer
Dr Rob Portsmouth
Senior Vice President
EHS, Innovation and
Technology
Investor Information
Global Headquarters
Titanium House, Hanzard Drive
Wynyard Park, Stockton-on-Tees
TS22 5FD, United Kingdom
Independent Registered Public
Accounting Firm
Deloitte LLP
Stockholder Inquiries
Inquiries from stockholders and other
interested parties regarding our company
are always welcome. Please direct your
request to Investor Relations at our Global
Headquarters address listed above, or
use the contact details below:
Jeffrey Schnell
Director, Investor Relations
Tel: +1 832-663-4656
Email: ir@venatorcorp.com
Stock Transfer Agent
By Regular Mail:
Computershare
P.O. Box 43078
Providence, RI 02940
By overnight delivery:
Computershare
250 Royall Street
Canton, MA 02021
Telephone inquiries:
TFN: 1-866-644-4127 (US, Canada,
Puerto Rico)
TN: 1-781-575-2906 (non-US)
TTY—Hearing Impaired Toll Free:
1-800-952-9245
TTY—Hearing Impaired International:
+1-781-575-4592
Website: www.computershare.com/
investor
Stock Listing
Our common stock is listed on the
New York Stock Exchange under
the symbol VNTR.
Annual General Meeting
Annual General Meeting
The 2020 Annual General Meeting of
The 2020 Annual General Meeting of
shareholders will take place on Thursday,
shareholders will take place on Thursday,
June 18, 2020 at 15:00 local time. Due
June 18, 2020 at 14:00 local time at the
to the COVID-19 pandemic, shareholder
offices of:
attendance may not be permitted.
Latham & Watkins LLP
99 Bishopsgate
Website
London EC2M 3XF
www.venatorcorp.com
United Kingdom
+44 (0) 20 7710 7000
Website
www.venatorcorp.com
2019 At-A-Glance
$ in millions, except per share amounts
Revenues
Net (loss) income attributable to Venator
Diluted (loss) earnings per share
Adjusted net income(1)
Adjusted diluted earnings per share(1)
Adjusted EBITDA(1)
Free cash flow(2)
Capital expenditures
$ in millions
Total assets
Net debt(3)
December 31,
2019
2018
2017
$2,130
$2,265
$2,209
$(175)
$(163)
$(1.64)
$(1.53)
$26
$0.24
$194
$(117)
$152
$235
$2.20
$436
$(38)
$326
$134
$1.26
$186
$1.74
$395
$212
$197
December 31,
2019
2018
2017
$2,265
$2,485
$2,847
$695
$583
$519
Reporting Segment Operating Results
Titanium Dioxide
Performance Additives
$ in millions
Revenue
Adjusted EBITDA(1)
EBITDA Margin %
2019
$ in millions
$1,614
Revenue
$197
Adjusted EBITDA(1)
12% EBITDA Margin %
2019
$516
$47
9%
(1) For a reconciliation see the Results of Operations included within Management’s Discussion and Analysis on pages 7–8.
(2) Free cash flow is defined as cash flows provided by (used in) operating activities from continuing operations and used in investing activities and may be adjusted for
items that affect comparability between periods.
(3) Net debt is defined as total debt excluding debt to affiliates, less total cash and cash equivalents.
1
2019 Financial Review and Form 10-K
Definitions and Note Regarding Forward-Looking Statements
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Quantitative and Qualitative Disclosures about Market Risk
Controls and Procedures
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive (Loss) Income
Consolidated Statements of Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Free Cash Flow Reconciliation
Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
Stock Performance Graph
Corporate Information
3
5
6
21
22
23
26
27
28
29
30
32
71
72
73
2
DEFINITIONS
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, 2019 which was filed with the Securities and Exchange Commission on March 12, 2020.
FORWARD-LOOKING STATEMENTS
Certain information set forth in this report contains "forward-looking statements" within the meaning the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities and
Exchange Act of 1934. All statements other than historical factual information are forward-looking statements, including
without limitation statements regarding: projections of revenue, expenses, profit, margins, tax rates, tax provisions, cash flows,
pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures;
management’s plans and strategies for future operations, including statements relating to anticipated operating performance,
cost reductions, construction cost estimates, restructuring activities, new product and service developments, competitive
strengths or market position, acquisitions, divestitures, spin-offs, or other distributions, strategic opportunities, securities
offerings, share repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into;
new or modified laws, regulations and accounting pronouncements; legal proceedings, environmental, health and safety
("EHS") matters, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in
those rates; general economic and capital markets conditions; the timing of any of the foregoing; assumptions underlying any of
the foregoing; and any other statements that address events or developments that we intend or believe will or may occur in the
future. In some cases, forward-looking statements can be identified by terminology such as "believes," "expects," "may," "will,"
"should," "anticipates," "estimates" or "intends" or the negative of such terms or other comparable terminology, or by
discussions of strategy. We may also make additional forward-looking statements from time to time. All such subsequent
forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary
statements.
Forward-looking statements are based on certain assumptions and expectations of future events which may not be
accurate or realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond our control.
Important factors that may materially affect such forward-looking statements and projections include:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
volatile global economic conditions;
cyclical and volatile TiO2 product applications;
highly competitive industries and the need to innovate and develop new products;
industry production capacity and operating rates;
high levels of indebtedness;
our ability to maintain sufficient working capital to fund our operations and capital expenditures, and service our debt;
our ability to obtain future capital on favorable terms;
planned and unplanned production shutdowns, turnarounds, outages and other disruptions at our or our suppliers'
manufacturing facilities;
any changes to the prices at which we purchase raw materials and energy, any interruptions in supply of raw materials
and energy, or any changes in regulations impacting raw materials and our supply chain;
increased manufacturing, labeling and waste disposal regulations associated with some of our products, including the
classification of TiO2 as a carcinogen in the European Union ("EU") or any increased regulatory scrutiny;
our ability to successfully grow and transform our business including by way of acquisitions, divestments and
restructuring activities;
our ability to successfully transfer production of certain specialty and differentiated products formerly produced at our
Pori, Finland manufacturing facility to other sites within our manufacturing network;
fluctuations in currency exchange rates and tax rates;
our ability to adequately protect our critical information technology systems;
impacts on the markets for our products and the broader global economy from the imposition of tariffs by the U.S. and
other countries;
our ability to realize financial and operational benefits from our business improvement plans and initiatives;
changes to laws, regulations or the interpretation thereof;
differences in views with our joint venture participants;
EHS laws and regulations;
our ability to successfully defend legal claims against us, or to pursue legal claims against third parties;
economic conditions and regulatory changes following the exit of the United Kingdom (the "U.K.") from the EU;
seasonal sales patterns in our product markets;
our ability to comply with expanding data privacy regulations;
failure to maintain effective internal controls over financial reporting and disclosure;
3
•
•
•
•
•
•
our indemnification of Huntsman and other commitments and contingencies;
financial difficulties and related problems experienced by our customers, vendors, suppliers and other business
partners;
failure to enforce our intellectual property rights;
our ability to effectively manage our labor force; and
the effects of public health crises, such as the COVID-19 coronavirus, on the global economy, our business,
employees, supply chain and customers
conflicts, military actions, terrorist attacks, public health crises, including the occurrence of a contagious disease or
illness, such as the COVID-19 coronavirus, cyber-attacks and general instability.
All forward-looking statements, including, without limitation, management’s examination of historical operating
trends, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are
expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that management’s
expectations, beliefs and projections will result or be achieved. All forward-looking statements apply only as of the date made.
We undertake no obligation to publicly update or revise forward-looking statements whether because of new information,
future events or otherwise, except as required by securities and other applicable law.
There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-
looking statements contained in or contemplated by this report. Any forward-looking statements should be considered in light
of the risks set forth in our annual report on Form 10-K filed on March 12, 2020.
4
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 and combined financial statements and accompanying
notes.
(in millions, except per share amounts)
Statements of Operations Data:
Revenues
(Loss) income from continuing operations
(Loss) income per share from continuing operations
attributable to Venator ordinary shareholders
Balance Sheet Data (at year end):
2019
2018
2017
2016
2015
$ 2,130
(170)
$ 2,265
(157)
$ 2,209
136
$ 2,139
(85)
$ 2,162
(362)
$
(1.64)
$
(1.53)
$
1.19
$
(0.89)
$ (3.47)
Total assets
Total long-term liabilities
Total assets from continuing operations(1)
Total long-term liabilities from continuing operations(2)
$ 2,265
1,104
2,265
1,104
$ 2,485
1,087
2,485
1,087
$ 2,847
1,083
2,847
1,083
$ 2,661
1,309
2,535
1,231
$ 3,413
1,477
3,205
1,359
(1) Defined as total assets less current assets of discontinued operations and noncurrent assets of discontinued operations.
(2) Defined as total long-term liabilities less noncurrent liabilities of discontinued operations.
5
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Recent Trends and Outlook
In 2020, we expect results in our Titanium Dioxide segment to reflect: (i) modest industry demand growth; (ii) TiO2
pricing to reflect regional supply and demand balances and increased competition for certain products; (iii) a soft economic
environment, primarily in China and Europe, including the direct and indirect effects of China-U.S. trade negotiations, COVID-
19 coronavirus and Brexit; (iv) manageable raw material (primarily ore), energy and other cost increases; (v) volume trends to
reflect historical seasonal patterns (vi) increased sales of new and recently introduced TiO2 products; and (vii) additional benefit
through cost and operational improvement actions as part of our 2019 Business Improvement Program and other cost and
operational improvement actions. We are exploring ways to optimize the remaining transfer of our business from Pori, which
may result in a lower total expected capital outlay and a lower associated EBITDA benefit than originally estimated.
In our Performance Additives segment, we expect business trends to be driven by: (i) a seasonal improvement in sales
volumes compared to the fourth quarter of 2019; (ii) a soft economic environment, primarily in China and Europe, including the
effects of China-U.S. trade negotiations, COVID-19 coronavirus and Brexit; (iii) challenging demand environment for certain
products primarily in the automotive, plastic and construction end-use applications; (iv) raw material and cost increases; (v)
benefits from portfolio optimization actions; (vi) additional benefit through cost and operational improvement actions including
our 2019 Business Improvement Program.
In the fourth quarter of 2018, we commenced our 2019 Business Improvement Program and are underway with the
implementation, having realized $20 million of savings in 2019. We continue to expect that when fully implemented, this cost
and operational improvement program will provide approximately $40 million of annual adjusted EBITDA benefit compared to
year-end 2018. We expect the program will be fully implemented in 2020, ending the year at the full run-rate level.
In 2020, we expect total capital expenditures to be $80 million to $90 million. This includes capital expenditures
relating to the transfer of our specialty and differentiated technology from our Pori, Finland manufacturing site to other sites in
our manufacturing network.
We expect our corporate and other costs will be approximately $55 million in 2020.
6
Results of Operations
The following table sets forth our consolidated and combined results of operations for the years ended December 31,
Year Ended December 31,
Percent Change
Year Ended
2019
$ 2,130
1,892
192
33
2018
$ 2,265
1,550
218
628
2017
$ 2,209
1,744
226
52
2019 vs. 2018
(6)%
22 %
(12)%
(95)%
2018 vs. 2017
3 %
(11)%
(4)%
1,108 %
13
(41)
8
(20)
(150)
(170)
—
(170)
41
150
110
(5)
(1)
(3)
—
—
1
4
14
20
33
194
33
(150)
7
(152)
(131)
(40)
6
(165)
8
(157)
—
(157)
40
(8)
132
(6)
20
2
—
—
2
—
15
(232)
628
436
282
(321)
(18)
(326)
$
187
(40)
39
186
(50)
136
8
144
40
50
127
(10)
5
7
(34)
(8)
—
1
17
4
52
395
$
NM
3 %
33 %
(88)%
NM
8 %
NM
8 %
3 %
NM
(17)%
(17)%
NM
— %
(85)%
NM
NM
NM
(100)%
NM
— %
NM
4 %
(40)%
(56)%
10 %
337
(11)
(123)
(197)
(88)%
(53)%
NM
(53)%
(16)%
2,818 %
(85)%
65 %
2019, 2018 and 2017.
(Dollars in millions)
Revenues
Cost of goods sold
Operating expenses(4)
Restructuring, impairment and plant closing and transition costs
Operating income (loss)
Interest expense, net
Other income
(Loss) income from continuing operations before income taxes
Income tax (expense) benefit from continuing operations
(Loss) income from continuing operations
Income from discontinued operations, net of tax
Net (loss) income
Reconciliation of net loss to adjusted EBITDA:
Interest expense, net
Income tax expense (benefit) from continuing operations
Depreciation and amortization
Net income attributable to noncontrolling interests
Other adjustments:
Business acquisition and integration (credits) expense
Separation (gain) expense, net
U.S. income tax reform
Net income of discontinued operations, net of tax
Loss on disposition of businesses/assets
Certain legal settlements and related expenses
Amortization of pension and postretirement actuarial losses
Net plant incident costs (credits)
Restructuring, impairment and plant closing and transition costs
Adjusted EBITDA(1)
$
Net cash provided by operating activities from continuing
operations
Net cash used in investing activities from continuing operations
Net cash provided by (used in) financing activities from continuing
operations
Capital expenditures
7
(Dollars in millions)
Reconciliation of net (loss) income to adjusted net income (loss)
attributable to Venator Materials PLC ordinary shareholders:
Net (loss) income
Net income attributable to noncontrolling interests
Other adjustments:
Business acquisition and integration (credits) expenses
Separation (gain) expense, net
U.S. income tax reform
Net income of discontinued operations
Loss on disposition of businesses/assets
Certain legal settlements and related expenses
Amortization of pension and postretirement actuarial losses
Net plant incident costs (credits)
Restructuring, impairment and plant closing and transition costs
Income tax adjustments(3)
Year Ended
December 31,
2019
Year Ended
December 31,
2018
Year Ended
December 31,
2017
$
$
(170)
(5)
$
(157)
(6)
(1)
(3)
—
—
1
4
14
20
33
133
20
2
—
—
2
—
15
(232)
628
(37)
Adjusted net income attributable to Venator Materials PLC ordinary
shareholders(2)
Weighted-average shares-basic
Weighted-average shares-diluted
Net loss attributable to Venator Materials PLC ordinary shareholders per
share:
Basic
Diluted
Other non-GAAP measures:
Adjusted net income attributable to Venator Materials PLC ordinary
shareholders per share:(2)
Basic
Diluted
$
$
$
$
$
26
$
235
$
106.5
106.5
(1.64)
(1.64)
0.24
0.24
$
$
$
$
106.4
106.7
(1.53)
(1.53)
2.21
2.20
$
$
$
$
144
(10)
5
7
(34)
(11)
—
1
17
4
52
11
186
106.3
106.7
1.26
1.26
1.75
1.74
NM—Not meaningful
(1) Our management uses adjusted EBITDA to assess financial performance. Adjusted EBITDA is defined as net income/loss
before interest income/expense, net, income tax expense/benefit, depreciation and amortization, and net income attributable
to noncontrolling interests, as well as eliminating the following adjustments: (a) business acquisition and integration
expenses/adjustments; (b) separation expense/gain, net; (c) U.S. income tax reform; (d) net income/loss of discontinued
operations, net of tax; (e) loss/gain on disposition of business/assets; (f) certain legal settlements and related
expenses/gains; (g) amortization of pension and postretirement actuarial losses/gains; (h) net plant incident costs/credits;
and (i) restructuring, impairment, and plant closing and transition costs/credits. We believe that net income is the
performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to adjusted
EBITDA.
We believe adjusted EBITDA is useful to investors in assessing our ongoing financial performance and provides improved
comparability between periods through the exclusion of certain items that management believes are not indicative of our
operational profitability and that may obscure underlying business results and trends. However, this measure should not be
considered in isolation or viewed as a substitute for net income or other measures of performance determined in accordance
with U.S. GAAP. Moreover, adjusted EBITDA as used herein is not necessarily comparable to other similarly titled
measures of other companies due to potential inconsistencies in the methods of calculation. Our management believes this
measure is useful to compare general operating performance from period to period and to make certain related management
decisions. Adjusted EBITDA is also used by securities analysts, lenders and others in their evaluation of different
companies because it excludes 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
8
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 limitations associated with the use of adjusted EBITDA in the
evaluation of us as compared to net income. Our management compensates for the limitations of using adjusted EBITDA
by using this measure to supplement U.S. GAAP results to provide a more complete understanding of the factors and
trends affecting the business rather than U.S. 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 amortization of pension and postretirement actuarial losses is a
recurring item, it is not indicative of ongoing operating results and trends or future results.
(2) Adjusted net income attributable to Venator Materials PLC ordinary shareholders is computed by eliminating the after-tax
amounts related to the following from net income/loss attributable to Venator Materials PLC ordinary shareholders: (a)
business acquisition and integration expenses/adjustments; (b) separation expense/gain, net; (c) U.S. income tax reform; (d)
net income/loss of discontinued operations, net of tax; (e) loss/gain on disposition of business/assets; (f) certain legal
settlements and related expenses/gains; (g) amortization of pension and postretirement actuarial losses/gains; (h) net plant
incident costs/credits; and (i) restructuring, impairment, and plant closing and transition costs/credits. Basic adjusted net
income per share excludes dilution and is computed by dividing adjusted net income by the weighted average number of
shares outstanding during the period. Adjusted diluted net income per share reflects all potential dilutive ordinary 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 net income per share amounts are presented solely as supplemental information. These
measures exclude similar non-cash item as adjusted EBITDA in order to assist our investors in comparing our performance
from period to period and as such, bear similar risks as adjusted EBITDA as documented in footnote (1) above. For that
reason, adjusted net income and the related per share amounts, should not be considered in isolation and should be
considered only to supplement analysis of U.S. GAAP results.
(3) Prior to the second quarter of 2019, the income tax impacts, if any, of each adjusting item represented 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.
Beginning in the three and six-month periods ended June 30, 2019, income tax expense is adjusted by the amount of
additional tax expense or benefit that we would accrue if we used non-GAAP results instead of GAAP results in the
calculation of our tax liability, taking into consideration our tax structure. We use a normalized effective tax rate of 35%,
which reflects the weighted average tax rate applicable under the various jurisdictions in which we operate. This non-
GAAP tax rate eliminates the effects of non-recurring and period specific items which are often attributable to restructuring
and acquisition decisions and can vary in size and frequency. This rate is subject to change over time for various reasons,
including changes in the geographic business mix, valuation allowances, and changes in statutory tax rates.
We eliminate the effect of significant changes to income tax valuation allowances from our presentation of adjusted net
income to allow investors to better compare our ongoing financial performance from period to period. We do not adjust for
insignificant changes in tax valuation allowances because we do not believe it provides more meaningful information than
is provided under GAAP. We believe that this approach enables a clearer understanding of the long term impact of our tax
structure on post tax earnings.
(4) As presented within MD&A, operating expenses include selling, general and administrative expenses and other operating
expense/income.
9
Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018
For the year ended December 31, 2019, net loss was $170 million on revenues of $2,130 million, compared with a net
loss of $157 million on revenues of $2,265 million for the same period in 2018. The increase of $13 million in net loss was the
result of the following items:
•
•
•
•
•
Revenues for the year ended December 31, 2019 decreased by $135 million, or 6%, as compared with the same period
in 2018. The decrease was due to a $52 million, or 3%, decrease in revenue in our Titanium Dioxide segment and an
$83 million, or 14%, decrease in revenue in our Performance Additives segment. See "—Segment Analysis" below.
Our operating expenses for the year ended December 31, 2019 decreased by $26 million, or 12%, as compared to the
same period in 2018, primarily as a result lower overhead costs, lower depreciation expense, and a decrease in Pori
related expenses, partially offset by the impact of $14 million of carbon credit sales in 2018 and the negative impact of
foreign exchange.
Restructuring, impairment and plant closing and transition costs for the year ended December 31, 2019 decreased to
$33 million from $628 million for the same period in 2018. For more information concerning restructuring activities,
see "Note 13. Restructuring, Impairment and Plant Closing and Transition Costs" to our consolidated and combined
financial statements.
Other income for the year ended December 31, 2019 increased by $2 million primarily as a result of the recognition of
$4 million related to the change in the expected future payment to Huntsman pursuant to the tax matters agreement
entered into as part of our separation partially offset by a net decrease in pension related expense.
Income tax expense for the year ended December 31, 2019 was $150 million compared to $8 million of income tax
benefit for the same period in 2018. Our income 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. In 2019, we recorded a full valuation allowance against net deferred tax assets of $162 million. For
further information concerning taxes, see "Note 20. Income Taxes" to our consolidated and combined financial
statements.
Segment Analysis
(in millions)
Revenues
Titanium Dioxide
Performance Additives
Total
Adjusted EBITDA
Titanium Dioxide
Performance Additives
Corporate and other
Total
Period-Over-Period Increase (Decrease)
Titanium Dioxide
Performance Additives
Year Ended
December 31,
2019
2018
Percent
Change
Favorable
(Unfavorable)
$
$
$
$
1,614
516
2,130
197
47
244
(50)
194
$
$
$
$
1,666
599
2,265
417
62
479
(43)
436
Year Ended December 31, 2019 vs. 2018
(3)%
(14)%
(6)%
(53)%
(24)%
(49)%
(16)%
(56)%
Average Selling
Price(1)
Local
Currency
Foreign
Currency
Translation
Impact
Mix &
Other
Sales
Volumes(2)
(7)%
— %
(3)%
(2)%
— %
— %
7 %
(12)%
NM—Not meaningful
(1) Excludes revenues from tolling arrangements, by-products and raw materials.
(2) Excludes sales volumes of by-products and raw materials.
10
Titanium Dioxide
The Titanium Dioxide segment generated revenues of $1,614 million in the twelve months ended December 31, 2019,
a decrease of $52 million, or 3%, compared to the same period in 2018. The decrease was primarily due to a 7% decline in the
average TiO2 selling price and a 3% unfavorable impact of foreign currency translation, partially offset by a 7% increase in
sales volumes. The decline in the average TiO2 selling price was primarily a result of lower functional TiO2 prices in Europe
and Asia and more stable prices in North America. The average specialty TiO2 price was stable compared to the prior year.
Sales volumes increased due to sales of new products, increased product availability and improved demand for our products.
Adjusted EBITDA for the Titanium Dioxide segment was $197 million, a decline of $220 million in the twelve
months ended December 31, 2019 compared to the same period in 2018. This decrease is primarily a result of lower TiO2
margins due to a lower average TiO2 selling price, reduced contribution from specialty TiO2, higher raw material costs, $14
million of carbon credits sold in the twelve months ended December 31, 2018 and $41 million of lost earnings attributable to
our Pori, Finland TiO2 manufacturing facility, which were reimbursed through insurance proceeds in the comparable period of
2018. This decrease was partially offset by higher sales volumes, a $13 million benefit from our 2019 Business Improvement
Program and a $9 million benefit due to a change in plant utilization rates, which increased our overhead absorption and
corresponding inventory valuation at certain facilities.
Performance Additives
The Performance Additives segment generated revenues of $516 million in the twelve months ended December 31,
2019, a decline of $83 million, or 14%, compared to the same period in 2018. This decrease was a result of a 12% decline in
volumes and a 2% unfavorable impact of foreign currency translation. The average selling price was stable compared to the
prior year. The decline in volumes was primarily attributable to soft demand in automotive coatings, plastics and electronics
applications, lower sales into construction-related applications, including the effect of portfolio optimization and a
discontinuation of sales of a product to a timber treatment customer.
Adjusted EBITDA in the Performance Additives segment was $47 million, a decrease of $15 million, or 24%, for the
twelve months ended December 31, 2019 compared to the same period in 2018. This decrease was primarily a result of lower
sales volumes and product mix, partially offset by lower raw material and selling, general and administrative costs, a $5 million
benefit from our 2019 Business Improvement Program and a $2 million benefit due to a change in plant utilization which
increased our overhead absorption rates at certain facilities.
Corporate and other
Corporate and other represents expenses which are not allocated to our segments. Losses from Corporate and other
were $50 million, or $7 million higher for the twelve months ended December 31, 2019 than the same period in 2018 due to a
$9 million unfavorable impact of foreign currency exchange rates partially offset by a $2 million benefit from our 2019
Business Improvement Program.
Year Ended December 31, 2018 Compared to the Year Ended December 31, 2017
For the year ended December 31, 2018, net loss was $157 million on revenues of $2,265 million, compared with a net
income of $144 million on revenues of $2,209 million for the same period in 2017. The decrease of $301 million in net income
was the result of the following items:
•
•
•
•
Revenues for the year ended December 31, 2018 increased by $56 million, or 3%, as compared with the same period
in 2017. The increase was due to a $62 million, or 4%, increase in revenue in our Titanium Dioxide segment primarily
due to an increase in average selling price, partially offset by a $6 million, or 1%, decrease in revenue in our
Performance Additives segment due primarily to decreases in volumes. See "—Segment Analysis" below.
Our operating expenses for the year ended December 31, 2018 decreased by $8 million, or 4%, as compared to the
same period in 2017, primarily resulting from reduced overhead costs.
Restructuring, impairment and plant closing and transition costs for the year ended December 31, 2018 increased to
$628 million from $52 million for the same period in 2017. For more information concerning restructuring activities,
see "Note 13. Restructuring, Impairment and Plant Closing and Transition Costs" to our consolidated and combined
financial statements.
Other income for the year ended December 31, 2018 decreased by $33 million primarily as a result of the recognition
of income in 2017 related to the change in the future payment to Huntsman pursuant to the tax matters agreement
entered into as part of our separation. The change in future expected payment was due to the 2017 Tax Act’s reduction
of the U.S. federal corporate income tax rate from 35% to 21%.
11
•
Our income tax benefit for the year ended December 31, 2018 was $8 million compared to $50 million of income tax
expense for the same period in 2017. Our income 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 20. Income Taxes" to our consolidated and
combined financial statements.
Segment Analysis
(in millions)
Revenues
Titanium Dioxide
Performance Additives
Total
Segment adjusted EBITDA
Titanium Dioxide
Performance Additives
Corporate and other
Total
Period-Over-Period Increase (Decrease)
Titanium Dioxide
Performance Additives
Year Ended
December 31,
2018
2017
Percent
Change
Favorable
(Unfavorable)
$
$
$
$
1,666
599
2,265
417
62
479
(43)
436
$
$
$
$
1,604
605
2,209
387
72
459
(64)
395
Year Ended December 31, 2018 vs. 2017
4 %
(1)%
3 %
8 %
(14)%
4 %
33 %
10 %
Average Selling
Price(1)
Local
Currency
Foreign
Currency
Translation
Impact
Mix &
Other
Sales
Volumes(2)
13 %
3 %
3 %
2 %
1 %
(2)%
(13)%
(4)%
NM—Not meaningful
(1) Excludes revenues from tolling arrangements, by-products and raw materials.
(2) Excludes sales volumes of by-products and raw materials.
Titanium Dioxide
The Titanium Dioxide segment generated revenues of $1,666 million in the twelve months ended December 31, 2018,
an increase of $62 million, or 4%, compared to the same period in 2017. The increase was primarily due to a 13% increase in
average selling price, a 3% favorable impact from foreign currency translation, and a 1% increase due to mix and other, offset
by a 13% decrease in volumes. The increase in selling prices compared to the prior year reflects more favorable business
conditions allowing for an increase in prices globally. Sales volumes decreased primarily due to customer destocking and lower
availability of certain specialty product grades due, in part, to extended planned maintenance turnarounds, reduced operating
rates at our Pori, Finland manufacturing facility and other plant closures as part of our restructuring programs. Excluding the
impact of the fire at our Pori plant and the impact of plants closed as part of our restructuring programs, sales volumes
decreased by 9% compared to the prior year.
Adjusted EBITDA for the Titanium Dioxide segment increased by $30 million for the year ended December 31, 2018
compared to the same period in 2017. This increase is primarily a result of improvements in pricing, $19 million of benefits as a
result of our 2017 business improvement program, and the sale of $14 million of energy credits in 2018, offset by the impact of
higher raw materials and energy costs and the impact of insurance proceeds received in 2017 to reimburse lost earnings from
our Pori, Finland facility.
12
Performance Additives
The Performance Additives segment generated $599 million of revenue in the twelve months ended December 31,
2018, a decline of $6 million, or 1%, compared to the same period in 2017 resulting from a 4% decrease in volumes and a 2%
decrease due to the unfavorable impact of sales mix and other partially offset by a 3% increase in pricing and a 2%
improvement from the favorable impact of foreign currency translation. The decline in volumes was primarily as a result of
customer destocking in Functional Additives, the discontinuation of sales of certain Timber Treatment products to a large
customer, and plant shutdowns in the second quarter of 2018 as part of our restructuring plans, while the increase in selling
prices is as a result of price increases for certain products within Functional Additives, Color Pigments and Timber Treatment
to offset higher raw material and energy costs.
Adjusted EBITDA in the Performance Additives segment decreased by $10 million, or 14%, for the twelve months
ended December 31, 2018 compared to the same period in 2017, primarily due to higher raw materials and energy costs, offset
by higher average selling prices and $8 million of benefits from our 2017 business improvement program.
Corporate and other
Corporate and other represents expenses which are not allocated to our segments. Losses from Corporate and other
were $43 million, or $21 million lower for the twelve months ended December 31, 2018 than the same period in 2017 as our
costs to operate as a standalone company are lower than those costs historically allocated to us from Huntsman.
Liquidity and Capital Resources
We had cash and cash equivalents of $55 million and $165 million as of December 31, 2019 and 2018, respectively.
We expect to have adequate liquidity to meet our obligations over the next 12 months. We believe our future obligations,
including needs for capital expenditures will be met by available cash generated from operations and borrowings.
Our financing arrangements include $375 million of Senior Notes issued by our subsidiaries Venator Finance S.à r.l.
and Venator Materials LLC (the "Issuers"), and borrowings of $375 million under the Term Loan Facility. We have a related-
party note payable to Huntsman for a liability pursuant to the tax matters agreement entered into at the time of the separation
which has been presented as Noncurrent payable to affiliate within the consolidated balance sheets.
In addition to the Senior Notes and the Term Loan Facility, we have an ABL Facility. Availability to borrow under the
ABL Facility is subject to a borrowing base calculation comprising both accounts receivable and inventory in the U.S., Canada,
the U.K. and Germany and only accounts receivable in France and Spain. Thus, the base calculation may fluctuate from time to
time and may be further impacted by the lenders’ discretionary ability to impose reserves and availability blocks that might
otherwise incrementally increase borrowing availability. The borrowing base calculation as of December 31, 2019 is in excess
of $273 million, of which $252 million is available to be drawn, as a result of $21 million of letters of credit issued and
outstanding at December 31, 2019.
Items Impacting Short-Term and Long-Term Liquidity
Our liquidity can be significantly impacted by various factors. The following matters had, or are expected to have, a
significant impact on our liquidity:
•
•
Cash inflows from our accounts receivable and inventory, net of accounts payable, increased by $119 million for
the year ended December 31, 2019 as reflected in our consolidated and combined statements of cash flows. For 2020,
we expect to spend $80 million to $90 million on capital expenditures. Our future expenditures include certain EHS
maintenance and upgrades; periodic maintenance and repairs applicable to major units of manufacturing facilities;
certain cost reduction projects; and the cost to transfer our specialty and differentiated manufacturing from Pori,
Finland to other sites within our manufacturing network. We expect to fund this spending with cash on hand as well as
cash provided by operations and borrowings.
During the year ended December 31, 2019, we made contributions to our pension and postretirement benefit plans of
$40 million. During the first quarter of 2020, we expect to contribute an additional amount of approximately $7
million to these plans.
• We are involved in a number of cost reduction programs for which we have established restructuring accruals. As of
December 31, 2019, we had $16 million of accrued restructuring costs of which $9 million is classified as current. We
expect to incur approximately $19 million and pay approximately $30 million of restructuring and plant closing costs
13
during 2020. For further discussion of these plans and the costs involved, see "Note 13. Restructuring, Impairment and
Plant Closing and Transition Costs” to our consolidated and combined financial statements.
•
•
•
In the fourth quarter of 2018, we commenced our 2019 Business Improvement Program and are underway with the
implementation, having realized $20 million of savings in 2019. We continue to expect that when fully implemented,
this cost and operational improvement program will provide approximately $40 million of annual adjusted EBITDA
benefit compared to year-end 2018. We expect the program will be fully implemented in 2020, ending the year at the
full run-rate level.
On January 30, 2017, our TiO2 manufacturing facility in Pori, Finland, experienced fire damage. On September 12,
2018, following our review of the Pori facility and options within our manufacturing network, and as a result of
unanticipated cost escalation and extended timeline associated with reconstruction, we announced that we intend to
close our Pori, Finland, TiO2 manufacturing facility and transfer certain specialty and differentiated products to other
sites. We expect to continue to wind down the limited operations at the Pori facility through the transition period. We
are exploring ways to optimize the remaining transfer of our business from Pori, which may result in a lower total
expected capital outlay and a lower associated EBITDA benefit than originally estimated.
In the first quarter of 2020, we initiated consultations with employee representatives on a proposal to restructure our
manufacturing facility in Duisburg, Germany. Until the consultation process is concluded, the restructuring is not
considered probable, and the total potential costs associated with this contemplated proposal, which are expected to be
significant, cannot be determined. If the consultation process is successfully concluded, the Company would expect, at
that time, to record charges related to the program including employee severance costs, accelerated depreciation and
other costs associated with restructuring our manufacturing facility. The amount and timing of the recognition of these
charges and the related cash expenditures will depend on a number of factors, including the timing of the completion
of the consultation process and the negotiated elements of the associated plan.
• We have $732 million in aggregate principal outstanding, net of debt issuance costs of $14 million, under $371
million, 5.75% of Senior Notes due 2025, and a $361 million Term Loan Facility. As of December 31, 2019 and 2018,
we had $13 million and $8 million, respectively, classified as current portion of debt. See further discussion under
"Financing Arrangements."
As of December 31, 2019 and 2018, we had $16 million and $36 million, respectively, of cash and cash equivalents
held outside of the U.S. and Europe. In the first quarter of 2019, a non-U.K. subsidiary distributed $12 million to a U.K.
subsidiary subject to a 5% withholding tax. As of December 31, 2019, our non-U.K. subsidiaries have no plan to distribute
earnings in a manner that would cause them to be subject to material U.K., U.S., or other local country taxation. For the years
ended December 31, 2018 and 2017, our non-U.K. subsidiaries made no distribution of earnings that caused them to be subject
to material U.K., U.S., or other local country taxation.
Cash Flows for the Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018
Net cash provided by operating activities was $33 million for the twelve months ended December 31, 2019, compared
to net cash provided by operating activities of $282 million for the twelve months ended December 31, 2018. The decrease in
net cash provided by operating activities for the twelve months ended December 31, 2019 compared with the same period of
2018 was primarily attributable to changes in net income. The $13 million increase in net loss, as described in "—Results of
Operations" above, was offset by changes in non-cash elements of net income comprised primarily of a $583 million decrease
in non-cash restructuring and impairment charges and a $158 million increase in income tax expense primarily as the result of
the recognition of a full valuation allowance against the deferred tax assets held at our German businesses. The increase in net
loss, after giving effect to the non-cash restructuring and impairment charges and the increase in income tax expense, was
partially offset by an increase in cash flows due to changes in assets and liabilities of approximately $205 million.
Net cash used in investing activities was $150 million for the twelve months ended December 31, 2019, compared to
net cash used in investing activities of $321 million for the twelve months ended December 31, 2018. The decrease in net cash
used in investing activities for the twelve months ended December 31, 2019 compared with the same period of 2018 was
primarily attributable to a $174 million decrease in capital expenditures as a result of the unreimbursed Pori capital
expenditures in 2018.
Net cash provided by financing activities was $7 million for the twelve months ended December 31, 2019, compared
to net cash used in financing activities of $18 million for the twelve months ended December 31, 2018. The increase in net cash
provided by financing activities for the twelve months ended December 31, 2019 compared with the same period of 2018 was
14
primarily attributable to $15 million in proceeds from the termination of cross-currency swap contracts in 2019 and $13 million
favorable variance in net borrowings/repayments on notes payable.
Cash Flows for the Year Ended December 31, 2018 Compared to the Year Ended December 31, 2017
Net cash provided by operating activities from continuing operations was $282 million for the twelve months ended
December 31, 2018 while net cash provided by operating activities from continuing operations was $337 million for the
twelve months ended December 31, 2017. The decrease in net cash provided by operating activities from continuing operations
for the twelve months ended December 31, 2018 compared with the same period of 2017 was primarily attributable to the $301
million decrease in net income described in "—Results of Operations" above, a $263 million unfavorable variance in changes in
assets and liabilities, and an unfavorable decrease in deferred income taxes of $38 million, partially offset by an increase in
noncash restructuring and impairment charges of $584 million.
Net cash used in investing activities from continuing operations was $321 million for the twelve months ended
December 31, 2018, compared to net cash used in investing activities from continuing operations of $11 million for the
twelve months ended December 31, 2017. The increase in net cash used in investing activities from continuing operations for
the twelve months ended December 31, 2018 compared with the same period of 2017 was primarily attributable to a $205
million increase in capital expenditures, net of insurance proceeds for recovery of property damage, and a decrease in net
payments from affiliates of $121 million year over year, partially offset by a change of $10 million related to cash received and
cash invested in unconsolidated affiliates.
Net cash used in financing activities from continuing operations was $18 million for the twelve months ended
December 31, 2018, compared to net cash used in financing activities from continuing operations of $123 million for the
twelve months ended December 31, 2017. The decrease in net cash used in financing activities from continuing operations for
the twelve months ended December 31, 2018 compared with the same period of 2017 was primarily attributable to the $832
million final settlement and repayment of affiliate balances at separation reflected in our 2017 cash outflows from financing
activities, offset by a decrease in proceeds received from the issuance of the Senior Notes and Senior Credit facilities net of the
payment of debt issuance costs of $732 million in 2017.
Changes in Financial Condition
The following information summarizes our working capital as of December 31, 2019 and 2018:
(Dollars in millions)
Cash and cash equivalents
Accounts and notes receivable, net
Inventories
Prepaid expenses
Other current assets
Total current assets
Accounts payable
Accounts payable to affiliates
Accrued liabilities
Current operating lease liability
Current portion of debt
Total current liabilities
Working capital
NM—Not meaningful
December 31,
2019
December 31,
2018
Increase
(Decrease)
$
$
55
321
513
21
67
977
334
17
116
8
13
488
489
$
$
165
351
538
20
51
1,125
382
18
135
—
8
543
582
$
$
(110)
(30)
(25)
1
16
(148)
(48)
(1)
(19)
8
5
(55)
(93)
Percent Change
(67)%
(9)%
(5)%
5 %
31 %
(13)%
(13)%
(6)%
(14)%
NM
63 %
(10)%
(16)%
Our working capital decreased by $93 million as a result of the net impact of the following significant changes:
•
Cash and cash equivalents decreased by $110 million primarily due to cash outflows of $150 million from investing
activities, partially offset by inflows of $33 million from operating activities and $7 million from financing activities.
15
•
•
•
Accounts receivable decreased by $30 million primarily due to lower sales year over year.
Inventories decreased by $25 million primarily due to lower levels of finished goods at December 31, 2019 as
compared to the prior year as a result of seasonality and efforts across the organization to manage inventory levels
partially offset by an $11 million increase in inventory due to a change in plant utilization rates which increased our
overhead absorption and corresponding inventory valuation at certain facilities in 2019.
Accrued liabilities decreased by $19 million primarily due to a reduction of $9 million of accrued restructuring costs
and $7 million of current portion of ARO costs.
The following information summarizes our working capital as of December 31, 2018 and 2017:
(Dollars in millions)
Cash and cash equivalents
Accounts and notes receivable, net
Accounts receivable from affiliates
Inventories
Prepaid expenses
Other current assets
Total current assets from continuing operations
Accounts payable
Accounts payable to affiliates
Accrued liabilities
Current portion of debt
Total current liabilities from continuing
operations
Working capital
December 31,
2018
December 31,
2017
Increase
(Decrease)
Percent Change
$
$
$
165
351
—
538
20
51
1,125
382
18
135
8
$
238
380
12
454
19
66
1,169
385
16
244
14
543
582
$
659
510
$
(73)
(29)
(12)
84
1
(15)
(44)
(3)
2
(109)
(6)
(116)
72
(31)%
(8)%
(100)%
19 %
5 %
(23)%
(4)%
(1)%
13 %
(45)%
(43)%
(18)%
14 %
Our working capital increased by $72 million as a result of the net impact of the following significant changes:
•
•
•
•
Cash and cash equivalents decreased by $73 million primarily due to cash outflows of $321 million from investing
activities from continuing operations and outflows of $18 million from financing activities from continuing operations
partially offset by cash inflows of $282 million from operating activities from continuing operations.
Accounts receivable decreased by $29 million primarily due to lower sales year over year.
Inventories increased by $84 million primarily due to customer destocking during the year ended December 31, 2018.
Accrued liabilities decreased by $109 million primarily due to the decreased capital accruals for the Pori, Finland plant
rebuild.
Financing Arrangements
For a discussion of financing arrangements, see "Note 16. Debt" to our consolidated and combined financial
statements.
Cross-Currency Swap
For a discussion of cross-currency swaps, see "Note 18. Derivative Instruments and Hedging Activities" to our
consolidated and combined financial statements.
16
Contractual Obligations and Commercial Commitments
Our obligations under long-term debt (including the current portion), lease agreements and other contractual
commitments from continuing operations as of December 31, 2019 are summarized below:
(Dollars in millions)
2020
2021-2022
2023-2024
After 2024
Total
Long-term debt, including current portion(1)
Interest(2)
Finance leases
Operating leases
Purchase commitments(3)
Total(4)(5)
$
$
4
39
2
11
100
156
$
$
8
75
3
16
183
285
$
$
355
67
2
9
22
455
$
$
375
22
6
39
38
480
$
$
742
203
13
75
343
1,376
(1) For more information, see "—Financing Arrangements."
(2) Interest calculated using actual and forecasted interest rates as of December 31, 2019 and contractual maturity dates.
(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 2019. 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 each of the years ended
December 31, 2019, 2018 and 2017, we made minimum payments of $1 million, nil and $2 million, respectively, under
such take or pay contracts without taking the product.
(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
2020
2021-2022
2023-2024
Annual Average
of Next 5 Years
$
$
43
—
$
80
—
$
21
—
5
—
(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 20. Income Taxes" to our consolidated and combined financial statements.
Off-Balance-Sheet Arrangements
We are required to provide standby letters of credit primarily to collateralize our obligation to third parties for pension
liabilities and commercial obligations in the ordinary course of business. Although the letters of credit are off-balance sheet, the
obligations to which they relate are reflected as liabilities on the consolidated balance sheets. For a discussion of letters of
credit, see "Note 16. Debt" to our consolidated and combined financial statements.
Restructuring, Impairment and Plant Closing and Transition Costs
For further discussion of these and other restructuring plans and the costs involved, see "Note 13. Restructuring,
Impairment and Plant Closing and Transition Costs" to our consolidated and combined financial statements.
Legal Proceedings
For a discussion of legal proceedings, see "Note 23. Commitments and Contingencies—Legal Matters" to our
consolidated and combined financial statements.
17
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 EHS matters, see "Note 24. Environmental, Health and Safety Matters" to our consolidated and
combined financial statements.
Recently Issued Accounting Pronouncements
For a discussion of recently issued accounting pronouncements, see "Note 2. Recently Issued Accounting
Pronouncements" to our consolidated and combined financial statements.
Critical Accounting Estimates
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 and combined financial
statements. Our significant accounting policies are summarized in “Note 1. Description Of Business, Recent Developments and
Summary Of Significant Accounting Policies" to our consolidated and combined financial statements. Summarized below are
our critical accounting policies:
Employee Benefit Programs
We sponsor several contributory and non-contributory defined benefit plans, covering employees primarily in the U.S.,
the U.K., Germany and Finland, 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.
and Canada. Amounts recorded in our consolidated and combined financial statements are recorded based upon actuarial
valuations performed by various third-party 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. We evaluate these assumptions at least annually.
The discount rate is used to determine the present value of future benefit payments at the end of the year. For our U.S.
and non-U.S. plans, the discount rates were based on the results of matching expected plan benefit payments with cash flows
from a hypothetical yield curve constructed with high-quality corporate bond yields.
The following weighted-average discount rate assumptions were used for the defined benefit and other postretirement
plans for the year:
Defined benefit plans
Projected benefit obligation
Net periodic pension cost
Other postretirement benefit plans
Projected benefit obligation
Net periodic pension cost
December 31,
2019
December 31,
2018
December 31,
2017
1.60 %
2.38 %
3.27 %
3.51 %
2.38 %
2.21 %
3.50 %
3.30 %
2.21 %
1.86 %
3.38 %
3.72 %
The expected return on plan assets is determined based on asset allocations, historical portfolio results, historical asset
correlations and management's expected long-term return for each asset class. The expected rate of return on U.S. plan assets
was 7.75% in 2019 and 2018, each, and the expected rate of return on non-U.S. plans was 5.18% and 5.21% for 2019 and 2018,
respectively.
The expected increase in the compensation levels assumption reflects our long-term actual experience and future
expectations.
18
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
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
Statement of
Operations(1)
Balance Sheet
Impact(2)
$
$
(12)
18
(169)
200
(8)
8
2
(2)
—
—
12
(9)
(1) Estimated (decrease) increase on 2019 net periodic benefit cost
(2) Estimated (decrease) increase on December 31, 2019 pension and postretirement liabilities and accumulated other
comprehensive loss
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 limit 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, 2019, we had total
valuation allowances of $585 million. See "Note 20. Income Taxes" to our consolidated and combined financial statements for
more information regarding our valuation allowances.
As of December 31, 2019, our non-U.K. subsidiaries have no plan to distribute earnings in a manner that would cause
them to be subject to U.K., U.S., or other local country taxation.
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 and combined 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 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.
19
Management uses judgment to estimate the useful lives of our long-lived assets. At December 31, 2019, 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 2019 would have been approximately $11 million less or $14 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.
Restructuring and Plant Closing and Transition Costs
We 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 13. Restructuring, Impairment and Plant Closing and
Transition Costs" to our consolidated and combined 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. As of December 31, 2019 and 2018, we had recognized a liability of
$9 million and $12 million, respectively, related to these environmental matters. For further information, see "Note 24.
Environmental, Health and Safety Matters" to our consolidated and combined 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 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 23. Commitments and
Contingencies—Legal Proceedings" to our consolidated and combined financial statements.
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
regard 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. The factors management considers when determining if we have the
power to direct the activities that most significantly impact each of our variable interest entity’s economic performance include
supply arrangements, manufacturing arrangements, marketing arrangements and sales arrangements. We consolidate all
variable interest entities for which we have concluded that we are the primary beneficiary. For the years ended December 31,
2019, 2018 and 2017, the percentage of revenues from our consolidated variable interest entities in relation to total revenues
that will ultimately be attributable to Venator is 4.4%, 5.2% and 5.7%, respectively. For further information, see "Note 9.
Variable Interest Entities" to our consolidated and combined financial statements.
20
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks, such as changes in interest rates and foreign exchange rates. We manage these risks
through normal operating and financing activities and, when appropriate, through the use of derivative instruments. We do not
invest in derivative instruments for speculative purposes.
Interest Rate Risk
We are exposed to interest rate risk through the structure of our debt portfolio which includes a mix of fixed and
floating rates. Actions taken to reduce interest rate risk include managing the mix and rate characteristics of various interest-
bearing liabilities.
The carrying value of our floating rate debt is $361 million at December 31, 2019. A hypothetical 1% increase in
interest rates on our floating rate debt as of December 31, 2019 would increase our interest expense by approximately
$4 million on an annualized basis.
Foreign Exchange Rate Risk
We are exposed to market risks associated with foreign exchange risk. Our cash flows and earnings are subject to
fluctuations due to exchange rate variation. Our revenues and expenses are denominated in various foreign 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 foreign currency exposures in a manner that would eliminate the effect of changes in exchange rates on our cash
flows and earnings. At December 31, 2019 and 2018 we had $75 million and $89 million notional amount (in U.S. dollar
equivalents) outstanding in foreign currency contracts with a term of approximately one month.
In December 2017, we entered into three cross-currency swap agreements to convert a portion of our intercompany
fixed-rate, U.S. Dollar denominated notes, including the semi-annual interest payments and the payment of remaining principle
at maturity, to a fixed-rate, Euro denominated debt. The economic effect of the swap agreement was to eliminate the
uncertainty of the cash flows in U.S. Dollars associated with the notes by exchanging a notional amount of $200 million at a
fixed rate of 5.75% for €169 million with a fixed annual rate of 3.43%. These hedges were designated as cash flow hedges and
the critical terms of the cross-currency swap agreements correspond to the underlying hedged item. These swaps had a maturity
date of July 2022, which was the best estimate of the repayment date of the intercompany loans.
In August 2019, we terminated the three cross-currency swaps entered into in 2017, resulting in cash proceeds of $15
million. Concurrently, we entered into three new fixed to fixed cross-currency swaps which notionally exchanged $200 million
at a fixed rate of 5.75% for €181 million on which a weighted average rate of 3.73% is payable. The cross-currency swaps have
been designated as cash flow hedges of a fixed rate U.S. Dollar intercompany loan and the economic effect is to eliminate
uncertainty on the U.S. Dollar cash flows. The cross-currency swaps are set to mature July 2024, which is the best estimate of
the repayment date on the intercompany notes.
During 2019, the changes in accumulated other comprehensive loss associated with these cash flow hedging activities
was a gain of $6 million.
During 2020, the amount of accumulated other comprehensive loss at December 31, 2019 related to hedging
transactions that is expected to be reclassified to earnings is immaterial. The actual amount that will be reclassified to earnings
over the next twelve months may vary from this amount due to changing market conditions.
Commodity Price Risk
A portion of our products and raw materials are commodities whose prices fluctuate as market supply and demand
fundamentals change. Accordingly, product margins and the level of our profitability tend to fluctuate with the changes in the
business cycle. We try to protect against such instability through various business strategies. These include provisions in sales
contracts allowing us to pass on higher raw material costs through timely price increases and formula price contracts to transfer
or share commodity price risk. We did not have any commodity derivative instruments in place as of December 31, 2019 and
2018.
21
Evaluation of Disclosure Controls and Procedures
CONTROLS AND PROCEDURES
As required by rule 13-a 15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have
evaluated, under the supervision and with the participation of our management, including our principal executive officer and
principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this annual report. Based on this
evaluation, our principal executive officer and principal financial officer have concluded that, as of December 31, 2019, 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
principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required
disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes to our internal control over financial reporting during the three months ended December 31,
2019 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:
•
•
•
•
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of our Company;
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 of
our Company are being made only in accordance with authorizations of management and our Board of
Directors;
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
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, 2019, 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 LLP, with direct access to our Board of Directors through our
Audit Committee, have audited our consolidated and combined financial statements and have issued an attestation report on
internal control over financial reporting.
22
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Venator Materials PLC.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Venator Materials PLC and subsidiaries (the “Company”) as of
December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control —
Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended December 31, 2019, of the Company and our report
dated March 12, 2020 expressed an unqualified opinion on those financial statements.
Change in Accounting Principle
As discussed in Note 2 to the financial statements, the Company has changed its method of accounting for leases in 2019 due to
adoption of FASB ASC Topic 842, Leases, using the modified retrospective approach.
Basis for Opinion
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 are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. 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.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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 its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte LLP
Leeds, United Kingdom
March 12, 2020
23
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Venator Materials PLC.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Venator Materials PLC and subsidiaries (the "Company") as of
December 31, 2019 and 2018, the related consolidated and combined statements of operations, comprehensive (loss) income, equity,
and cash flows, for each of the two years in the period ended December 31, 2019, and the related notes and the schedule listed in the
Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its
cash flows for each of the two years in the period ended December 31, 2019, 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)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal
Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and
our report dated March 12, 2020, expressed an unqualified opinion on the Company's internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 2 to the financial statements, the Company has changed its method of accounting for leases in 2019 due to
adoption of FASB ASC Topic 842, Leases, using the modified retrospective approach.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the
Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or
fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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 its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte LLP
Leeds, United Kingdom
March 12, 2020
We have served as the Company's auditor since 2018.
24
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Venator Materials PLC
Opinion on the Financial Statements
We have audited the accompanying consolidated and combined statements of operations, comprehensive income, equity, and cash
flows of Venator Materials PLC and subsidiaries (the "Company") for the year ended December 31, 2017, and the related notes
listed in the Index for Item 8 and Schedule II – Valuation and Qualifying Accounts included in Item 15 (collectively referred to as
the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the results of the
Company’s operations and its cash flows for the year ended December 31, 2017, in conformity with accounting principles generally
accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the
Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or
fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the
purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we
express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audit provide a reasonable basis for our opinion.
Emphasis of a Matter
As discussed in Note 1 to the financial statements, the financial statements include allocations of direct and indirect corporate
expenses from Huntsman Corporation through the date of separation and are presented on a stand-alone basis as if Venator's
operations had been conducted independently from Huntsman Corporation; however, prior to Separation, Venator did not operate as
a separate, stand-alone entity for the period presented and, as such, the financial statements may not be fully indicative of Venator's
results of operations and cash flows as an unaffiliated company from Huntsman Corporation.
/s/ DELOITTE & TOUCHE LLP
Houston, Texas
February 23, 2018
We began serving as the Company’s auditor in 2016. In 2018, we became the predecessor auditor.
25
VENATOR MATERIALS PLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31,
2019
December 31,
2018
(In millions, except par value)
Current assets:
Cash and cash equivalents(a)
Accounts receivable (net of allowance for doubtful accounts of $4 and $5, respectively)
Inventories(a)
Prepaid expenses
Other current assets
Total current assets
Property, plant and equipment, net(a)
Operating lease right-of-use assets(a)
Intangible assets, net(a)
Investment in unconsolidated affiliates(a)
Deferred income taxes
Other noncurrent assets
Total assets
Current liabilities:
Accounts payable(a)
Accounts payable to affiliates
Accrued liabilities(a)
Current operating lease liability(a)
Current portion of debt(a)
Total current liabilities
Long-term debt
Operating lease liability(a)
Other noncurrent liabilities
Noncurrent payable to affiliates
Total liabilities
LIABILITIES AND EQUITY
Commitments and contingencies (Notes 23 and 24)
Equity
Ordinary shares $0.001 par value, 200 shares authorized, each, 107 and 106 issued and outstanding,
respectively
Additional paid-in capital
Retained deficit
Accumulated other comprehensive loss
Total Venator Materials PLC shareholders' equity
Noncontrolling interest in subsidiaries
Total equity
Total liabilities and equity
$
$
$
$
55
321
513
21
67
977
989
43
21
92
33
110
165
351
538
20
51
1,125
994
—
16
83
178
89
2,265
$
2,485
$
334
17
116
8
13
488
737
37
300
30
382
18
135
—
8
543
740
—
313
34
1,592
1,630
—
1,322
(271)
(385)
666
7
673
—
1,316
(96)
(373)
847
8
855
$
2,265
$
2,485
(a) At December 31, 2019 and December 31, 2018, the following amounts from consolidated variable interest entities are included in the respective balance
sheet captions above: $2 and $5 of cash and cash equivalents; $4 and $5 of accounts receivable, net; $2 and $1 of inventories; $5 each of property, plant
and equipment, net; $1 and nil of operating lease right-of-use assets; $11 and $14 of intangible assets, net; $1 each of accounts payable; $3 and $4 of
accrued liabilities; $1 and nil of operating lease liabilities; and nil and $2 of current portion of debt. See "Note 9. Variable Interest Entities."
See notes to consolidated and combined financial statements.
26
VENATOR MATERIALS PLC AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
Year ended December 31,
2019
2018
2017
$
$
2,130
1,892
$
2,265
1,550
2,209
1,744
(Dollars in millions, except per share amounts)
Trade sales, services and fees, net
Cost of goods sold
Operating expenses:
Selling, general and administrative (includes corporate allocations from
Huntsman of nil, nil and $62, respectively)
Restructuring, impairment and plant closing and transition costs
Other operating expense, net
Total operating expenses
Operating income (loss)
Interest expense
Interest income
Other income, net
(Loss) income from continuing operations before income taxes
Income tax (expense) benefit
(Loss) income from continuing operations
Income from discontinued operations, net of tax
Net (loss) income
Net income attributable to noncontrolling interests
Net (loss) income attributable to Venator
Basic (losses) earnings per share:
(Loss) income from continuing operations attributable to Venator
Materials PLC ordinary shareholders
Income from discontinued operations attributable to Venator Materials
PLC ordinary shareholders
Net (loss) income attributable to Venator Materials PLC ordinary
shareholders
Diluted (losses) earnings per share:
(Loss) income from continuing operations attributable to Venator
Materials PLC ordinary shareholders
Income from discontinued operations attributable to Venator Materials
PLC ordinary shareholders
Net (loss) income attributable to Venator Materials PLC ordinary
shareholders
$
$
$
$
$
182
33
10
225
13
(53)
12
8
(20)
(150)
(170)
—
(170)
(5)
(175)
$
212
628
6
846
(131)
(53)
13
6
(165)
8
(157)
—
(157)
(6)
(163)
$
(1.64)
$
(1.53)
$
—
—
(1.64)
$
(1.53)
$
(1.64)
$
(1.53)
$
—
—
(1.64)
$
(1.53)
$
216
52
10
278
187
(100)
60
39
186
(50)
136
8
144
(10)
134
1.19
0.07
1.26
1.18
0.08
1.26
See notes to consolidated and combined financial statements.
27
VENATOR MATERIALS PLC AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Dollars in millions)
Net (loss) income
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment
Pension and other postretirement benefits adjustments
Hedging instruments
Other comprehensive (loss) income, net of tax
Comprehensive (loss) income
Comprehensive income attributable to noncontrolling interest
2019
Year ended December 31,
2018
2017
$
(170)
$
(157)
$
(1)
(17)
6
(12)
(182)
(5)
(90)
(11)
11
(90)
(247)
(6)
Comprehensive (loss) income attributable to Venator
$
(187)
$
(253)
$
144
106
39
(5)
140
284
(10)
274
See notes to consolidated and combined financial statements.
28
VENATOR MATERIALS PLC AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY
Total Venator Materials PLC Equity
Ordinary Shares
Shares
Amount
Additional
Paid-In
Capital
Retained
(Deficit)
Earnings
Accumulated
Other
Comprehensive
Loss
(Dollars in millions)
Balance, January 1, 2017
Net income
Net changes in other comprehensive loss
Dividends paid to noncontrolling interests
Net changes in parent’s net investment and advances
Conversion of parent's net investment and advances
to paid-in capital
Activity related to stock plans
2
9
Balance, December 31, 2017
Net (loss) income
Net changes in other comprehensive loss
Dividends paid to noncontrolling interests
Activity related to stock plans
Balance, December 31, 2018
Net (loss) income
Net changes in other comprehensive loss
Dividends paid to noncontrolling interests
Activity related to stock plans
Balance, December 31, 2019
— $
—
—
—
—
106
—
106
—
—
—
—
106
—
—
—
1
107
$
$
$
Parent's Net
Investment
and
Advances
588
67
—
—
653
— $
—
—
—
—
$
— $
—
—
—
—
— $
67
—
—
—
—
—
— $
—
—
—
—
— $
—
—
—
—
— $
(1,308)
—
— $
—
—
—
—
— $
—
—
—
—
— $
1,308
3
1,311
—
—
—
5
1,316
—
—
—
6
1,322
$
$
$
—
—
67
(163)
—
—
—
(96)
(175)
—
—
—
(271)
$
$
$
$
Noncontrolling
Interest in
Subsidiaries
12
10
—
(12)
—
—
—
10
6
—
(8)
—
8
5
—
(6)
—
7
$
$
$
Total
177
144
140
(12)
653
—
3
1,105
(157)
(90)
(8)
5
855
(170)
(12)
(6)
6
673
$
$
$
$
(423)
—
140
—
—
—
—
(283)
—
(90)
—
—
(373)
—
(12)
—
—
(385)
See notes to consolidated and combined financial statements.
VENATOR MATERIALS PLC AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(Dollars in millions)
Operating Activities:
Net (loss) income
Income from discontinued operations, net of tax
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:
Depreciation and amortization
Deferred income taxes
Loss on disposal of assets
Noncash restructuring and impairment charges
Insurance proceeds for business interruption, net of gain on recovery
Noncash interest
Noncash loss (gain) on foreign currency transactions
Other, net
Changes in assets and liabilities:
Accounts receivable
Inventories
Prepaid expenses
Other current assets
Other noncurrent assets
Accounts payable
Accrued liabilities
Other noncurrent liabilities
Net cash provided by operating activities from continuing operations
Net cash provided by operating activities from discontinued operations
Net cash provided by operating activities
Investing Activities:
Capital expenditures
Insurance proceeds for recovery of property damage
Cash received from unconsolidated affiliates
Investment in unconsolidated affiliates
Cash received from notes receivable
Repayment of government grant
Net payments from affiliates
Other, net
Net cash used in investing activities from continuing operations
Net cash used in investing activities from discontinued operations
Net cash used in investing activities
Financing Activities:
(Payments on) proceeds from short-term debt
Net borrowing (repayments) on notes payable
Principal payments on long-term debt
Proceeds from issuance of long-term debt
30
Year ended December 31,
2019
2018
2017
$
$
(170)
—
$
(157)
—
110
143
—
8
—
3
4
2
22
21
(1)
(3)
(33)
(29)
(12)
(32)
33
—
33
(152)
—
41
(50)
12
—
—
(1)
(150)
—
(150)
(2)
7
(6)
—
132
(19)
—
591
—
1
(6)
9
25
(103)
(1)
(13)
(49)
(27)
(96)
(5)
282
—
282
(326)
—
34
(30)
—
—
—
1
(321)
—
(321)
—
(6)
(4)
—
144
(8)
127
19
1
7
21
18
1
13
(24)
8
(2)
(1)
9
51
13
(60)
337
1
338
(197)
76
44
(50)
—
(5)
121
—
(11)
(1)
(12)
1
—
(12)
750
Proceeds from the termination of cross-currency swap contracts
Dividends paid to noncontrolling interests
Net repayments from affiliate accounts payable
Final settlement of affiliate balances at separation
Debt issuance costs paid
Net cash provided by (used in) financing activities from continuing
operations
Net cash used in financing activities from discontinued operations
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash
(Decrease) increase in cash and cash equivalents, including discontinued
operations
Cash and cash equivalents at beginning of period, including discontinued
operations
Cash and cash equivalents at end of period
Supplemental cash flow information:
Cash paid for interest
Cash paid for income taxes
Noncash investing and financing activities:
The amount of capital expenditures in accounts payable
Received noncash settlements of notes receivable from affiliates
Settled noncash long-term debt to affiliates
$
$
$
15
(6)
—
—
(1)
7
—
7
—
(110)
165
55
41
8
46
—
—
$
$
$
See notes to consolidated and combined financial statements.
—
(8)
—
—
—
(18)
—
(18)
(16)
(73)
238
165
46
34
70
—
—
$
$
$
—
(12)
(100)
(732)
(18)
(123)
—
(123)
5
208
30
238
28
21
39
57
792
31
VENATOR MATERIALS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF BUSINESS, RECENT DEVELOPMENTS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Description of Business
For convenience in this report, the terms "our," "us," "we" or "Venator" may be used to refer to Venator Materials PLC
and, unless the context otherwise requires, its subsidiaries.
Venator became an independent publicly traded company following our IPO and separation from Huntsman
Corporation in August 2017. Venator operates in two segments: Titanium Dioxide and Performance Additives. The Titanium
Dioxide segment primarily manufactures and sells TiO2, and operates seven TiO2 manufacturing facilities across the globe,
excluding our plant in Pori, Finland, ongoing closure of which was announced in the third quarter of 2018. The Performance
Additives segment manufactures and sells functional additives, color pigments, timber treatment and water treatment chemicals.
This segment operates 16 manufacturing and processing facilities globally.
Basis of Presentation
Venator’s consolidated and combined financial statements have been prepared in accordance with U.S. GAAP. The
preparation of financial statements in conformity with U.S. 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.
Prior to our separation, Huntsman performed certain administrative and other services for Venator. These expenses
were incurred by Huntsman and allocated to Venator based on either specific services provided or based on Venator’s total
revenues, total assets, and total employees in proportion to those of Huntsman. Management believes that such expense
allocations were reasonable. Corporate allocations include allocated selling, general, and administrative expenses of $62 million
for the year ended December 31, 2017.
In the notes to consolidated and combined financial statements, all dollar and share amounts in tabulations are in
millions of dollars and shares, respectively, unless otherwise indicated.
Summary of Significant Accounting Policies
Asset Retirement Obligations
Venator accrues for asset retirement obligations, which consist primarily of asbestos abatement costs, demolition and
removal costs, leasehold remediation costs and landfill closure costs, in the period in which the obligations are incurred. Asset
retirement obligations are initially recorded at estimated fair value. When the related liability is initially recorded, Venator
capitalizes 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, Venator will recognize a gain or loss for any difference between the settlement amount and the liability recorded. See
"Note 14. Asset Retirement Obligations."
Carrying Value of Long-Lived Assets
Venator reviews long-lived 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 Venator recognizes 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.
Cash and Cash Equivalents
Venator considers cash in bank accounts and short-term highly liquid investments with remaining maturities of
three months or less at the date of purchase to be cash and cash equivalents.
32
Prior to the separation, Venator participated in Huntsman International’s cash pooling program. The cash pooling
program was an intercompany borrowing arrangement designed to reduce Venator’s dependence on external short-term
borrowing. See "Note 16. Debt."
Cost of Goods Sold
Venator classifies the costs of manufacturing and distributing its 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 include, among other things, plant site operating costs and overhead costs (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.
Derivative Transactions and Hedging Activities
All derivatives are recorded on Venator’s consolidated balance sheets at fair value. Gains and losses on derivative
instruments designated as cash flow hedges are recorded in accumulated other comprehensive income (loss) and recognized in
income (expense) when the hedged item impacts earnings. See "Note 18. Derivative Instruments and Hedging Activities."
Environmental Expenditures
Environmental-related restoration and remediation costs are recorded as liabilities when site restoration and
environmental remediation and cleanup 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 24. Environmental, Health and Safety
Matters."
Financial Instruments
The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, amounts
receivable from affiliates, accounts payable, current portion of amounts payable to affiliates, and accrued liabilities approximate
their fair value because of the immediate or short-term maturity of these financial instruments. The fair value of non-qualified
employee benefit plan investments is estimated using prevailing market prices. The estimated fair values of Venator’s long-
term debt are based on quoted market prices for the identical liability when traded as an asset in an active market.
Foreign Currency Translation
Venator is domiciled in the U.K. which uses the British pound sterling, however, we report in U.S. dollars. The
accounts of Venator’s operating subsidiaries outside of the U.S. 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.
Foreign currency transaction gains and losses are recorded in other expense (income), net in the consolidated and
combined statements of operations and were net losses of $4 million, net gains of $6 million, and net losses of $1 million for
the years ended December 31, 2019, December 31, 2018 and December 31, 2017, respectively.
Income Taxes
Venator uses 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.
Venator evaluates 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, Venator considers the
cyclicality of Venator and cumulative income or losses during the applicable period. Cumulative losses incurred over the period
limits Venator’s ability to consider other subjective evidence such as Venator’s projections for the future. Changes in expected
future income in applicable tax jurisdictions could affect the realization of deferred tax assets in those jurisdictions.
Venator is comprised of operations in various tax jurisdictions. Prior to the separation, Venator’s operations were
included in Huntsman’s financial results in different legal forms, including but not limited to wholly-owned subsidiaries for
33
which Venator was the sole business, components of legal entities in which Venator operated in conjunction with other
Huntsman businesses and variable interest entities in which Venator is the primary beneficiary.
The consolidated and combined financial statements have been prepared from Huntsman’s historical accounting
records through the separation and are presented on a stand-alone basis as if Venator’s operations had been conducted
separately from Huntsman; however, Venator did not operate as a separate, stand-alone entity for the periods presented prior to
the separation and, as such, the tax results and attributes presented prior to the separation in these consolidated and combined
financial statements would not be indicative of the income tax expense or benefit, income tax related assets and liabilities and
cash taxes had Venator been a stand-alone company.
Prior to the separation, the consolidated and combined financial statements were prepared under the anticipated legal
structure of Venator such that the historical results of legal entities are presented as follows: The historical tax results of legal
entities which file separate tax returns in their respective tax jurisdictions and which need no restructuring before being
contributed are included without adjustment, including the inclusion of any currently held subsidiaries. The historical tax results
of legal entities in which Venator operated in conjunction with other Huntsman businesses for which new legal entities were
formed for Venator operations are presented on a stand-alone basis as if their operations had been conducted separately from
Huntsman and any adjustments to current taxes payable have been treated as adjustments to parent’s net investment and
advances. The historical tax results of legal entities in which Venator operated in conjunction with other Huntsman businesses
for which the Huntsman business were transferred out have been presented without adjustment, including the historical results
of the Huntsman businesses which are unrelated to Venator operating businesses.
Prior to the separation, pursuant to tax-sharing agreements, subsidiaries of Huntsman were charged or credited, in
general, with an amount of income taxes as if they filed separate income tax returns. Adjustments to current income taxes
payable by Venator have been treated as adjustments to parent’s net investment and advances.
Prior to the separation, Venator included the U.S. Titanium Dioxide and Performance Additives subsidiaries of
Huntsman International which were treated for U.S. tax purposes as divisions of Huntsman International. Huntsman
International was included in the U.S. consolidated tax return of its parent, Huntsman. The U.S. tax expense, deferred tax
assets, and deferred tax liabilities in these financial statements do not necessarily reflect the tax expense, deferred tax assets, or
deferred tax liabilities that would have resulted had Venator not been operated as a U.S. income tax branch structure in
combination with Huntsman. A 2% U.S. state income tax rate (net of federal benefit) was estimated for Venator based upon the
estimated apportionment factors and actual income tax rates in state tax jurisdictions where it had nexus. U.S. foreign tax
credits relating to taxes paid by non-U.S. business entities were generated and utilized by Huntsman. On a separate entity basis,
these foreign tax credits would not have been generated or utilized, therefore, no additional allocation of Huntsman foreign tax
credits was necessary. Additionally, Huntsman had no U.S. net operating loss carryforward amounts ("NOLs") or similar
attributes to allocate. Venator believes this methodology is reasonable and complies with Staff Accounting Bulletin Topic 1B,
Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business
Components of Another Entity.
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. Venator is 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 Venator 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, Venator is required to make
judgments and apply assumptions in order to measure the amount of the tax benefits to recognize. The 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 the consolidated and combined financial statements.
See "Note 20. Income Taxes."
Intangible Assets
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, trademarks and technology
Other intangibles
5 - 30 years
5 - 15 years
34
Inventories
Inventories are stated at the lower of cost or market, with cost determined using the first-in, first-out and average costs
methods for different components of inventory.
Legal Costs
Venator expenses legal costs, including those legal costs incurred in connection with a loss contingency, as incurred.
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 leasehold improvements
Plant and equipment
5 - 50 years
3 - 30 years
Normal maintenance and repairs of plant and equipment are charged to expense as incurred. Renewals, betterments,
and major repairs that significantly extend the useful life of the assets are capitalized and the assets replaced, if any, are retired.
Research and Development
Research and development costs are expensed as incurred and recorded in selling, general and administrative expense.
Research and development costs charged to expense were $15 million, $17 million and $16 million for the years ended
December 31, 2019, December 31, 2018 and December 31, 2017, respectively.
Revenue Recognition
Venator generates substantially all of its revenues through sales of inventory in the open market and via long-term
supply agreements. Revenue is recognized when the performance obligations under the terms of our contracts are satisfied, at
which point the control of the goods transfers to the customer, there is a present right to payment and legal title, and the risks
and rewards of ownership have transferred to the customer. Revenues is measured as the amount of consideration we expect to
receive in exchange for transferred goods.
Share-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.
Reclassification
Certain amounts in the consolidated and combined financial statements for 2017 have been reclassified to conform
with the current presentation. These reclassifications were to record results of operations of other businesses of Huntsman to
discontinued operations. See "Note 17. Discontinued Operations."
Earnings (Losses) Per Share
Basic earnings (losses) per share excludes dilution and is computed by dividing net income (loss) attributable to
Venator Materials PLC ordinary shareholders by the weighted average number of shares outstanding during the period. Diluted
earnings (losses) per share reflects all potential dilutive ordinary shares outstanding during the period and is computed by
dividing net income (loss) attributable to Venator Materials PLC ordinary shareholders 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.
35
NOTE 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Accounting Pronouncements Adopted During the Period
Effective January 1, 2019, we adopted Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) using
the modified retrospective approach which applies the provisions of the standard at the effective date without adjusting the
comparative periods presented. The adoption of this ASU did not result in a cumulative effect adjustment to the opening
balance of retained earnings. This ASU requires substantially all leases to be recognized on the balance sheet as right-of-use
assets ("ROU assets") and lease obligations. Additional qualitative and quantitative disclosures are also required. Adoption of
the new standard resulted in the recording of an operating lease ROU asset of $47 million and a lease liability of $49 million.
The adoption of this ASU did not have a material impact on our consolidated and combined statements of operations or cash
flows. Our accounting for finance leases remained substantially unchanged.
We elected the following optional practical expedients allowed under the ASU: (i) we applied the package of practical
expedients permitting entities not to reassess under the new standard our prior conclusions about lease identification,
classification or initial direct costs for any leases existing prior to the effective date; (ii) we elected to account for lease and
associated non-lease components as a single lease component for all asset classes with the exception of buildings and (iii) we
do not recognize ROU assets and related lease obligations with lease terms of 12 months or less from the commencement date.
In February 2018, the Financial Accounting Standards Board ("FASB") issued ASU No. 2018-02, Income Statement—
Reporting Comprehensive Income (Topic 220). This standard provides an option to reclassify stranded tax effects within
accumulated other comprehensive income (loss) to retained earnings due to the U.S. federal corporate income tax rate change in
the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). This standard is effective for interim and annual reporting periods
beginning after December 15, 2018. The adoption of this ASU did not have a material impact on our consolidated and
combined statements of comprehensive income.
Accounting Pronouncements Pending Adoption in Future Periods
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of
Credit Losses on Financial Instruments. The amendments in this ASU replace the incurred loss impairment methodology with a
methodology that reflects expected credit losses. This update is intended to provide financial statement users with more
decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit
held by a reporting entity at each reporting date. The new standard is effective for fiscal years beginning after December 15,
2019, with early adoption permitted for fiscal years beginning after December 15, 2018. We have completed our assessment
and we do not anticipate this will have a material impact on our consolidated and combined financial statements.
In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—
General (Subtopic 715-20). The amendments in this ASU add, remove, and clarify disclosure requirements related to defined
benefit pension and other postretirement plans. This ASU eliminates the requirement to disclose the amounts in accumulated
other comprehensive income expected to be recognized as part of net periodic benefit cost over the next year. The ASU also
removes the disclosure requirements for the effects of a one-percentage-point change on the assumed health care costs and the
effect of this change in rates on service cost, interest cost and the benefit obligation for postretirement health care benefits. This
standard is effective for fiscal years ending after December 15, 2020, and must be applied on a retrospective basis. Since the
ASU is related to disclosure requirements only, this adoption will not have a material impact on our consolidated and combined
financial statements.
NOTE 3. LEASES
We have leases for warehouses, office space, land, office equipment, production equipment and automobiles. ROU
assets and lease obligations are recognized at the lease commencement date based on the present value of lease payments over
the lease term. We have elected to account for lease and associated non-lease components as a single lease component for all
asset classes with the exception of buildings and we do not recognize ROU assets and related lease obligations with lease terms
of 12 months or less from the commencement date. Operating lease ROU assets and liabilities are included in operating lease
right-of-use assets, current operating lease liabilities, and operating lease liabilities on our consolidated balance sheet. Finance
leases ROU assets are included in property, plant and equipment, net, while finance lease liabilities are included in long-term
debt. As the implicit rate is not readily determinable in most of our lease arrangements, we use our incremental borrowing rate
based on information available at the commencement date in order to determine the net present value of lease payments. We
give consideration to our recent debt issuances as well as publicly available data for instruments with similar characteristics
when calculating our incremental borrowing rates. We have lease agreements that contain lease and non-lease components.
36
We determine if an arrangement is a lease or contains a lease at inception. Certain leases contain renewal options that
can extend the term of the lease for one year or more. Our leases have remaining lease terms of up to 92 years, some of which
include options to extend the lease term for up to 20 years. Options are recognized as part of our ROU assets and lease
liabilities when it is reasonably certain that we will extend that option. Sublease arrangements and leases with residual value
guarantees, sale leaseback terms or material restrictive covenants, are immaterial. Lease payments include fixed and variable
lease components. Variable components are derived from usage or market-based indices, such as the consumer price index.
The components of lease expense were as follows:
Lease Cost
Operating lease cost
Finance lease cost:
Amortization of right-of-use assets
Interest on lease liabilities
Short-term lease cost
Supplemental balance sheet information related to leases was as follows:
Leases
Assets
Operating Lease Right-of-Use Assets
Finance Lease Right-of-Use Assets, at cost
Accumulated Depreciation
Finance Lease Right-of-Use Assets, net
Liabilities
Operating Lease Obligation
Current
Non-Current
Total Operating Lease Liabilities
Finance Lease Obligation
Current
Non-Current
Total Finance Lease Liabilities
Year Ended December 31, 2019
$
12
1
1
1
As of December 31, 2019
$
$
$
$
$
$
$
43
14
(5)
9
8
37
45
2
8
10
Cash paid for amounts included in the present value of operating lease liabilities were as follows:
Cash Flow Information
Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases
Year Ended December 31, 2019
$
12
1
1
37
Lease Term and Discount Rate
Weighted average remaining lease term (years)
Operating leases
Finance leases
Weighted average discount rate
Operating leases
Financing leases
Maturities of lease liabilities were as follows:
December 31,
2020
2021
2022
2023
2024
After 2024
Total lease payments
Less: Interest
Present value of lease liabilities
As of December 31, 2019
14.0
5.9
7.2 %
5.2 %
13
11
8
6
5
45
88
33
55
Total
Operating Leases
11
$
9
7
5
4
39
$
$
75
30
45
$
$
$
Finance Leases
2
2
1
1
1
6
13
3
10
$
$
$
Disclosures related to periods prior to adoption of the New Lease Standard
The total expense recorded under operating lease agreements in the consolidated and combined statements of
operations was $16 million for the year ended December 31, 2018. Future minimum lease payments under noncancelable
operating and capital leases as of December 31, 2018 were as follows:
December 31,
2019
2020
2021
2022
2023
Thereafter
Total
Less: Amounts representing interest
Present value of minimum lease payments
Less: Current portion of capital leases
Long-term portion of capital leases
NOTE 4. REVENUE
Operating Leases
13
$
11
9
6
4
40
83
$
Capital Leases
1
2
1
1
1
7
13
3
10
1
9
$
$
$
$
We account for revenues from contracts with customers under ASC 606, Revenue from Contracts with Customers,
which became effective January 1, 2018. As part of the adoption of ASC 606, we applied the new standard on a modified
retrospective basis analyzing open contracts as of January 1, 2018. However, no cumulative effect adjustment to retained
earnings was necessary as no revenue recognition differences were identified when comparing the revenue recognition criteria
under ASC 606 to previous requirements.
We generate substantially all of our revenues through sales of inventory in the open market and via long-term supply
agreements. At contract inception, we assess the goods promised in our contracts and identify a performance obligation for each
38
promise to transfer to the customer a good that is distinct. In substantially all cases, a contract has a single performance
obligation to deliver a promised good to the customer. Revenue is recognized when the performance obligations under the
terms of our contracts are satisfied. Generally, this occurs at the time of shipping, at which point the control of the goods
transfers to the customer. Further, in determining whether control has transferred, we consider if there is a present right to
payment and legal title, along with risks and rewards of ownership having transferred to the customer. Revenue is measured as
the amount of consideration we expect to receive in exchange for transferred goods. Sales, value-added, and other taxes we
collect concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the
context of the contract are recognized as expense. We have elected to account for all shipping and handling activities as
fulfillment costs. We recognize these costs for shipping and handling when control over products have transferred to the
customer as an expense in cost of goods sold. We have also elected to expense commissions when incurred as the amortization
period of the commission asset that we would have otherwise recognized is less than one year.
The following table disaggregates our revenue by major geographical region for the years ended December 31, 2019,
2018 and 2017:
Europe
North America
Asia
Other
Total
$
Titanium
Dioxide
786
320
343
165
$
2019
Performance
Additives
182
226
87
21
$
Total
968
546
430
186
$
Titanium
Dioxide
828
296
368
174
$
2018
Performance
Additives
206
277
98
18
Total
$ 1,034
573
466
192
$
Titanium
Dioxide
794
281
349
180
$
2017
Performance
Additives
194
301
97
13
$
Total
988
582
446
193
$ 1,614
$
516
$ 2,130
$ 1,666
$
599
$ 2,265
$ 1,604
$
605
$ 2,209
The following table disaggregates our revenue by major product line for the years ended December 31, 2019, 2018 and
2017:
Titanium
Dioxide
$ 1,614
—
—
—
—
$ 1,614
2019
Performance
Additives
Total
$
$
— $ 1,614
258
118
118
22
$ 2,130
258
118
118
22
516
Titanium
Dioxide
$ 1,666
—
—
—
—
$ 1,666
2018
Performance
Additives
Total
$
$
— $ 1,666
294
140
142
23
$ 2,265
294
140
142
23
599
Titanium
Dioxide
$ 1,604
—
—
—
—
$ 1,604
2017
Performance
Additives
Total
$
$
— $ 1,604
302
302
130
130
151
151
22
22
$ 2,209
605
TiO2
Color Pigments
Functional
Addi i
Timber Treatment
Water Treatment
Total Revenues
The amount of consideration we receive and revenue we recognize is based upon the terms stated in the sales contract,
which may contain variable consideration such as discounts or rebates. We also give our customers a limited right to return
products that have been damaged, do not satisfy their specifications, or other specific reasons. Payment terms on product sales
to our customers typically range from 30 days to 90 days. Although certain exceptions exist where standard payment terms are
exceeded, these instances are infrequent and do not exceed one year. Discounts are allowed for some customers for early
payment or if a certain volume is met. As our standard payment terms are less than one year, we have elected to not assess
whether a contract has a significant financing component. In order to estimate the applicable variable consideration at the time
of revenue recognition, we use historical and current trend information to estimate the amount of discounts, rebates, or returns
to which customers are likely to be entitled. Historically, actual discount or rebate adjustments relative to those estimated and
accrued at the point of which revenue is recognized have not materially differed.
NOTE 5. EARNINGS (LOSSES) PER SHARE
Basic earnings (losses) per share excludes dilution and is computed by dividing net (loss) income attributable to
Venator ordinary shareholders by the weighted average number of shares outstanding during the period. Diluted earnings
(losses) per share reflects all potential dilutive ordinary shares outstanding during the period and is computed by dividing net
income (loss) available to Venator ordinary shareholders 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. For the periods
prior to our IPO, the average number of ordinary shares outstanding used to calculate basic and diluted earnings (losses) per
share was based on the ordinary shares that were outstanding at the time of our IPO.
39
Basic and diluted earnings (losses) per share is determined using the following information:
Numerator:
Basic and diluted (loss) income from continuing operations:
(Loss) income from continuing operations attributable to Venator
Materials PLC ordinary shareholders
Basic and diluted income from discontinued operations:
Income from discontinued operations attributable to Venator Materials
PLC ordinary shareholders
Basic and diluted net (loss) income:
Net (loss) income attributable to Venator Materials PLC ordinary
shareholders
$
$
$
Denominator:
Weighted average shares outstanding
Dilutive share-based awards
Total weighted average shares outstanding, including dilutive shares
For the years ended December 31,
2019
2018
2017
(175)
$
(163)
$
126
— $
— $
8
(175)
$
(163)
$
134
106.5
—
106.5
106.4
0.3
106.7
106.3
0.4
106.7
The number of anti-dilutive employee share-based awards excluded from the computation of diluted EPS was
2 million for the year ended December 31, 2019, 1 million for the year ended December 31, 2018 and not significant for the
year ended December 31, 2017.
NOTE 6. INVENTORIES
Inventories are stated at the lower of cost or market, with cost determined using first-in, first-out and average cost
methods for different components of inventory. Inventories at December 31, 2019 and December 31, 2018 consisted of the
following:
Raw materials and supplies
Work in process
Finished goods
Total
December 31,
2019
2018
166
49
298
513
$
$
165
56
317
538
$
$
NOTE 7. PROPERTY, PLANT AND EQUIPMENT
The cost and accumulated depreciation of property, plant and equipment at December 31, 2019 and December 31,
2018 were as follows:
Land and land improvements
Buildings
Plant and equipment
Construction in progress
Total
Less accumulated depreciation
Property, plant, and equipment—net
$
December 31,
2019
2018
$
97
241
1,974
180
2,492
98
236
1,926
144
2,404
(1,503)
(1,410)
$
989
$
994
Depreciation expense for the years ended December 31, 2019, December 31, 2018 and December 31, 2017 was $106
million, $129 million and $124 million, respectively.
40
NOTE 8. INVESTMENT IN UNCONSOLIDATED AFFILIATES
Investments in companies in which we exercise significant influence, but do not control, are accounted for using the
equity method.
Tioxide Americas Inc., a wholly-owned subsidiary of Venator, has a 50% interest in LPC. Located in Lake Charles,
Louisiana, LPC is a joint venture that produces TiO2 for the exclusive benefit of each of the joint venture partners. In
accordance with the joint venture agreement, this plant operates on a break-even basis. This investment is accounted for using
the equity method and totaled $92 million and $83 million at December 31, 2019 and December 31, 2018, respectively.
NOTE 9. 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:
•
•
Pacific Iron Products Sdn Bhd is our 50%-owned joint venture with Coogee Chemicals that manufactures products for
Venator. It was determined that the activities that most significantly impact its economic performance are raw material
supply, manufacturing and sales. 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. As a result, we concluded that we are the primary beneficiary.
Viance is our 50%-owned joint venture with DuPont. Viance markets timber treatment products for Venator. Our joint
venture interest in Viance was acquired as part of the Rockwood acquisition. It was determined that the activity that
most significantly impacts its economic performance is manufacturing. 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 Venator’s general credit. As the primary beneficiary of these variable
interest entities at December 31, 2019, the joint ventures’ assets, liabilities and results of operations are included in Venator’s
consolidated and combined financial statements.
The revenues, income from continuing operations before income taxes and net cash provided by operating activities
for our variable interest entities are as follows:
Revenues
Income from continuing operations before income taxes
Net cash provided by operating activities
NOTE 10. INTANGIBLE ASSETS
Year ended December 31,
2019
2018
2017
$
$
93
10
12
$
117
13
16
127
21
25
The cost and accumulated amortization of intangible assets at December 31, 2019 and December 31, 2018 were as
follows:
Patents, trademarks and
technology
Other intangibles
Total
December 31, 2019
December 31, 2018
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Accumulated
Amortization
Net
$
$
27
14
41
$
$
10
10
20
$
$
17
4
21
$
$
18
14
32
$
$
9
7
16
$
$
9
7
16
Amortization expense was $4 million, $3 million and $3 million for the years ended December 31, 2019, December
31, 2018 and December 31, 2017, respectively.
41
Our estimated future amortization expense for intangible assets over the next five years is as follows:
Year ending December 31,
2020
2021
2022
2023
2024
Amount
$
4
5
4
4
1
NOTE 11. OTHER NONCURRENT ASSETS
Other noncurrent assets at December 31, 2019 and December 31, 2018 consisted of the following:
Pension assets
Spare parts inventory
Debt issuance costs
Notes receivable
Other
Total
December 31,
2019
2018
79
27
4
—
—
110
$
$
$
$
NOTE 12. ACCRUED LIABILITIES
Accrued liabilities at December 31, 2019 and December 31, 2018 consisted of the following:
Payroll and benefits
Rebate accrual
Restructuring and plant closing costs
Asset retirement obligation
Pension liabilities
Taxes other than income taxes
Other miscellaneous accruals
Total
December 31,
2019
2018
$
$
49
19
9
3
1
—
35
116
$
$
46
25
4
10
4
89
49
19
18
10
1
2
36
135
NOTE 13. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING AND TRANSITION COSTS
Venator has initiated various restructuring programs in an effort to reduce operating costs and maximize operating
efficiency.
Restructuring Activities
Company-wide Restructuring
In January 2019, we implemented a plan to reduce costs and improve efficiency of certain company-wide functions.
As part of the program, we recorded restructuring expense of $5 million for the year ended December 31, 2019, all of which
related to workforce reductions. We expect that additional costs related to this plan will be immaterial.
42
Titanium Dioxide Segment
In July 2016, we implemented a plan to close our Umbogintwini, South Africa Titanium Dioxide manufacturing
facility. As part of the program, we recorded restructuring expense of $1 million, $3 million and $4 million for the years ended
December 31, 2019, 2018 and 2017, respectively, all of which related to plant shutdown costs. We expect further charges as
part of this program to be immaterial.
In March 2017, we implemented a plan to close the white end finishing and packaging operation of our Titanium
Dioxide manufacturing facility at our Calais, France site. The announced plan follows the 2015 closure of the black end
manufacturing operations and would result in the closure of the entire facility. As part of the program, we recorded
restructuring expense of $8 million, $15 million and $34 million for the years ended December 31, 2019, 2018 and 2017,
respectively, all of which related to plant shutdown costs. We expect to incur additional plant shutdown costs of approximately
$13 million through 2023.
In September 2018, we implemented a plan to close our Pori, Finland Titanium Dioxide manufacturing facility. As
part of the program, we recorded restructuring expense of $17 million for the year ended December 31, 2019, of which
$20 million of accelerated depreciation, $6 million related to plant shutdown costs, and $5 million related to employee benefits
was partly offset by a gain of $14 million related to early settlement of contractual obligations. This restructuring expense
consists of $11 million of cash expense and a net noncash expense of $6 million. We expect to incur additional charges of
approximately $101 million through the end of 2024, of which $15 million relates to accelerated depreciation, $82 million
relates to plant shut down costs, $2 million relates to other employee costs and $2 million related to the write off of other assets.
Future charges consist of $17 million of noncash costs and $84 million of cash costs.
We recorded restructuring expense of $465 million for the year ended December 31, 2018, of which $417 million was
related to accelerated depreciation, $39 million was related to employee benefits, and $9 million was related to the write-off of
other assets. This restructuring expense consisted of $39 million of cash and $426 million related of noncash charges.
Performance Additives Segment
In September 2017, we implemented a plan to close our Performance Additives manufacturing facilities in St. Louis,
Missouri and Easton, Pennsylvania. As part of the program, we recorded restructuring expense of nil, $16 million and $7
million for the years ended December 31, 2019, 2018 and 2017, respectively. We do not expect to incur any additional charges
as part of this program.
In May 2018, we implemented a plan to close portions of our Performance Additives manufacturing facility in
Augusta, Georgia. As part of the program, we recorded restructuring expense of nil and $129 million for the years ended
December 31, 2019 and 2018, respectively. We do not expect to incur any additional charges as part of this program.
In August 2018, we implemented a plan to close our Performance Additives manufacturing site in Beltsville,
Maryland. As part of the program, we recorded restructuring expense of $2 million and nil for the year ended December 31,
2019 and 2018, respectively, all of which related to accelerated depreciation. We do not expect to incur any additional charges
as part of this program.
43
Accrued Restructuring and Plant Closing and Transition Costs
As of December 31, 2019, December 31, 2018 and December 31, 2017, accrued restructuring and plant closing costs
by type of cost and initiative consisted of the following:
Workforce
reductions(1)
Other
restructuring
costs
Total(2)
Accrued liabilities as of January 1, 2017
2017 charges for 2016 and prior initiatives
2017 charges for 2017 initiatives
Reversal of reserves no longer required
2017 payments for 2016 and prior initiatives
2017 payments for 2017 initiatives
Foreign currency effect on liability balance
Accrued liabilities as of December 31, 2017
2018 charges for 2017 and prior initiatives
2018 charges for 2018 initiatives
Reversal of reserves no longer required
2018 payments for 2017 and prior initiatives
2018 payments for 2018 initiatives
Foreign currency effect on liability balance
Accrued liabilities as of December 31, 2018
2019 charges for 2018 and prior initiatives
2019 charges for 2019 initiatives
2019 payments for 2018 and prior initiatives
2019 payments for 2019 initiatives
Accrued liabilities as of December 31, 2019
$
$
$
$
21
—
33
(1)
(12)
(8)
1
34
2
17
—
(17)
(2)
(2)
32
7
5
(24)
(5)
15
$
$
$
$
— $
8
4
—
(8)
(4)
—
— $
16
2
—
(16)
(2)
—
— $
13
—
(12)
—
1
$
21
8
37
(1)
(20)
(12)
1
34
18
19
—
(33)
(4)
(2)
32
20
5
(36)
(5)
16
(1) The total workforce reduction reserves of $15 million relate to the termination of 315 positions, of which 134 positions had
been terminated but not yet paid as of December 31, 2019.
(2) Accrued liabilities remaining at December 31, 2019, December 31, 2018 and December 31, 2017 by year of initiatives
were as follows:
2017 initiatives and prior
2018 initiatives
2019 initiatives
Total
2019
December 31,
2018
2017
$
$
7
9
—
16
$
$
18
14
—
32
$
$
34
—
—
34
44
Details with respect to our reserves for restructuring, impairment and plant closing and transition costs are provided
below by segment and initiative:
Titanium
Dioxide
Performance
Additives
Total
Accrued liabilities as of January 1, 2017
2017 charges for 2016 and prior initiatives
2017 charges for 2017 initiatives
Reversal of reserves no longer required
2017 payments for 2016 and prior initiatives
2017 payments for 2017 initiatives
Foreign currency effect on liability balance
Accrued liabilities as of December 31, 2017
2018 charges for 2017 and prior initiatives
2018 charges for 2018 initiative
Reversal of reserves no longer required
2018 payments for 2017 and prior initiatives
2018 payments for 2018 initiatives
Foreign currency effect on liability balance
Accrued liabilities as of December 31, 2018
2019 charges for 2018 and prior initiatives
2019 charges for 2019 initiative
2019 payments for 2018 and prior initiatives
2019 payments for 2019 initiatives
Accrued liabilities as of December 31, 2019
Current portion of restructuring reserves
Long-term portion of restructuring reserve
$
$
$
$
$
$
12
4
34
(1)
(9)
(10)
—
30
18
15
—
(28)
(1)
(2)
32
20
5
(36)
(5)
16
9
7
$
$
$
$
$
$
$
$
9
4
3
—
(11)
(2)
1
4
—
4
—
(5)
(3)
—
— $
—
—
—
—
— $
— $
— $
21
8
37
(1)
(20)
(12)
1
34
18
19
—
(33)
(4)
(2)
32
20
5
(36)
(5)
16
9
7
Restructuring, Impairment and Plant Closing and Transition Costs
Details with respect to cash and noncash restructuring charges for the years ended December 31, 2019, December 31,
2018 and December 31, 2017 are provided below:
Cash charges
Early Settlement of contractual obligations
Accelerated depreciation
Total 2019 Restructuring, Impairment of Plant Closing and Transition Costs
Cash charges
Pension-related charges
Accelerated depreciation
Other non-cash charges
Total 2018 Restructuring, Impairment of Plant Closing and Transition Costs
Cash charges
Accelerated depreciation
Impairment of assets
Other non-cash charges
Total 2017 Restructuring, Impairment and Plant Closing and Transition Costs
45
$
$
$
$
$
$
25
(14)
22
33
37
25
556
10
628
45
3
3
1
52
NOTE 14. ASSET RETIREMENT OBLIGATIONS
Asset retirement obligations consist primarily of asbestos abatement costs, demolition and removal costs, leasehold
remediation costs and landfill closure costs. Venator is legally required to perform capping and closure and post-closure care on
the landfills and asbestos abatement on certain of its premises. For each asset retirement obligation, Venator 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 Venator’s asset retirement obligation liabilities:
Asset retirement obligations at beginning of year
Accretion expense
Liabilities incurred
Liabilities settled
Foreign currency effect on reserve balance
Asset retirement obligations at end of year
NOTE 15. OTHER NONCURRENT LIABILITIES
December 31,
2019
2018
$
$
37
1
1
(7)
—
32
$
$
Other noncurrent liabilities at December 31, 2019 and December 31, 2018 consisted of the following:
Pension liabilities
Asset retirement obligations
Environmental reserves
Restructuring and plant closing costs
Employee benefit accrual
Other postretirement benefits
Other
Total
NOTE 16. DEBT
December 31,
2019
2018
$
$
244
29
8
7
3
3
6
300
$
$
45
2
—
(8)
(2)
37
253
27
11
14
4
3
1
313
Outstanding debt, excluding finance leases and net of issuance costs of $14 million and $13 million as of December
31, 2019 and December 31, 2018, respectively, consisted of the following:
Senior notes
Term loan facility
Other
Total debt
Less: short-term debt and current portion of long-term debt
Total long-term debt
December 31,
2019
2018
371
361
8
740
11
729
$
$
$
370
365
3
738
7
731
$
$
$
The estimated fair value of the Senior Notes was $346 million and $300 million as of December 31, 2019 and
December 31, 2018, respectively. The estimated fair value of the Term Loan Facility was $365 million and $355 million as of
December 31, 2019 and December 31, 2018, respectively. The estimated fair values of the Senior Notes and the Term Loan
Facility are based upon quoted market prices (Level 1).
46
The weighted average interest rate on our outstanding balances under the Senior Notes, Term Loan Facility and cross-
currency swaps as of December 31, 2019 is approximately 5%.
Senior Notes
The Senior Notes are general unsecured senior obligations of the Issuers and are guaranteed on a general unsecured
senior basis by Venator and certain of Venator’s subsidiaries. The indenture related to the Senior Notes imposes certain
limitations on the ability of Venator and certain of its subsidiaries to, among other things, incur additional indebtedness secured
by any principal properties, incur indebtedness of non-guarantor 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. The Senior Notes bear interest of 5.75% per year payable semi-annually and will
mature on July 15, 2025. The Issuers may redeem the Senior Notes in whole or in part at any time prior to July 15, 2020 at a
price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, and an early redemption premium,
calculated on an agreed percentage of the outstanding principal amount, providing compensation on a portion of foregone
future interest payables. The Senior Notes will be redeemable in whole or in part at any time on or after July 15, 2020 at the
redemption prices set forth in the indenture, plus accrued and unpaid interest, if any, up to, but not including, the redemption
date. In addition, at any time prior to July 15, 2020, the Issuers may redeem up to 40% of the aggregate principal amount of the
Senior Notes with an amount not greater than the net cash proceeds of certain equity offerings or contributions to Venator’s
equity at 105.75% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the
redemption date. Upon the occurrence of certain change of control events (other than the separation), holders of the Senior
Notes will have the right to require that the Issuers purchase all or a portion of such holder’s Senior Notes in cash at a purchase
price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase.
Senior Credit Facilities
On August 8, 2017, we entered into the Senior Credit Facilities that provide for first lien senior secured financing of
up to $675 million, consisting of:
•
•
the Term Loan Facility in an aggregate principal amount of $375 million, with a maturity of seven years; and
the ABL Facility in an aggregate principal amount of up to $300 million, with a maturity of five years.
The Term Loan Facility amortizes in aggregate annual amounts equal to 1% of the original principal amount of the
Term Loan Facility, and is paid quarterly.
On June 20, 2019 the ABL facility was increased to an aggregate principal amount of up to $350 million, with no
change to the maturity dates.
Availability to borrow under the $350 million of commitments under the ABL Facility is subject to a borrowing base
calculation comprised of accounts receivable and inventory in U.S., Canada, the U.K., Germany and accounts receivable in
France and Spain, that fluctuate from time to time and may be further impacted by the lenders’ discretionary ability to impose
reserves and availability blocks that might otherwise incrementally increase borrowing availability. As a result, the aggregate
amount available for extensions of credit under the ABL Facility at any time is the lesser of $350 million and the borrowing
base calculated according to the formula described above minus the aggregate amount of extensions of credit outstanding under
the ABL Facility at such time. The borrowing base calculation as of December 31, 2019 is in excess of $273 million, of which
$252 million is available to be drawn, as a result of $21 million of letters of credit issued and outstanding at December 31,
2019.
Borrowings under the Term Loan Facility bear interest at a rate equal to, at Venator’s option, either (a) a London
Interbank Offering Rate ("LIBOR") based rate determined by reference to the costs of funds for Eurodollar deposits for the
interest period relevant to such borrowing, adjusted for certain additional costs subject to an interest rate floor to be agreed or
(b) a base rate determined by reference to the highest of (i) the rate of interest per annum determined from time to time by
JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City, (ii) the federal funds rate plus
0.50% per annum and (iii) the one-month adjusted LIBOR plus 1.00% per annum, in each case plus an applicable margin to be
agreed upon. Borrowings under the ABL Facility bear interest at a variable rate equal to an applicable margin based on the
applicable quarterly average excess availability under the ABL Facility plus either a LIBOR or a base rate. The applicable
margin percentage is calculated and established once every three calendar months and varies from 150 to 200 basis points for
LIBOR loans depending on the quarterly average excess availability under the ABL Facility for the immediately preceding
three-month period.
47
Guarantees
All obligations under the Senior Credit Facilities are guaranteed by Venator and substantially all of our subsidiaries
(the "Guarantors"), and are secured by substantially all of the assets of Venator and the Guarantors, in each case subject to
certain exceptions. Lien priority as between the Term Loan Facility and the ABL Facility with respect to the collateral will be
governed by an intercreditor agreement.
Letters of Credit
As of December 31, 2019 we had $70 million issued and outstanding letters of credit and bank guarantees to third
parties. Of this amount, $49 million were issued by various banks on an unsecured basis with the remaining $21 million issued
from our secured ABL facility.
Cash Pooling Program
Prior to the separation, Venator addressed cash flow needs by participating in a cash pooling program with Huntsman.
Cash pooling transactions were recorded as either amounts receivable from affiliates or amounts payable to affiliates and are
presented as "Net advances to affiliates" and "Net borrowings on affiliate accounts payable" in the investing and financing
sections, respectively, in the consolidated and combined statements of cash flows. Interest income was earned if an affiliate was
a net lender to the cash pool and paid if an affiliate was a net borrower from the cash pool based on a variable interest rate
determined historically by Huntsman. Venator exited the cash pooling program prior to the separation and all receivables and
payables generated through the cash pooling program were settled in connection with the separation.
Notes Receivable and Payable of Venator to Subsidiaries of Huntsman International
Substantially all Huntsman receivables or payable were eliminated in connection with the separation, other than a
payable to Huntsman for a liability pursuant to the tax matters agreement entered into at the time of the separation, which has
been presented as "Noncurrent payable to affiliates" on our consolidated balance sheets. See "Note 20. Income Taxes" for
further discussion.
Maturities
The scheduled maturities of our debt (excluding debt to affiliates) by year as of December 31, 2019 are as follows:
Year ended December 31,
2020
2021
2022
2023
2024
Thereafter
Total
Amount
4
4
4
4
351
375
742
$
$
NOTE 17. DISCONTINUED OPERATIONS
The Titanium Dioxide, Performance Additives and other businesses were included in Huntsman’s financial results in
different legal forms, including, but not limited to: (1) wholly-owned subsidiaries for which the Titanium Dioxide and
Performance Additives businesses were the sole businesses; (2) legal entities that are comprised of other businesses and include
the Titanium Dioxide and/or Performance Additives businesses; and (3) variable interest entities in which the Titanium
Dioxide, Performance Additives and other businesses are the primary beneficiaries. Because the historical consolidated and
combined financial information for the periods indicated reflect the combination of these legal entities under common control,
the historical consolidated and combined financial information includes the results of operations of other Huntsman businesses
that are not a part of our operations after the separation. The legal entity structure of Huntsman was reorganized during the
fourth quarter of 2016 and the second quarter of 2017 such that the other businesses would not be included in Venator’s legal
entity structure and as such, the discontinued operations presented below reflect financial results of the other businesses through
the date of such reorganization.
48
The following table summarizes the operations data for discontinued operations:
Revenues:
Trade sales, services and fees, net
Related party sales
Total revenues
Cost of goods sold
Operating expenses:
Selling, general, and administrative (includes corporate allocations from Huntsman of $1)
Restructuring, impairment and plant closing costs
Other income, net
Total operating expenses
Income from discontinued operations before tax
Income tax expense
Net income from discontinued operations
Year ended
December 31, 2017
$
$
15
17
32
26
(7)
1
1
(5)
11
(3)
8
NOTE 18. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
To reduce cash flow volatility from foreign currency fluctuations, we enter into forward and swap contracts to hedge
portions of cash flows of certain foreign currency transactions. We do not use derivative financial instruments for trading or
speculative purposes.
Cross-Currency Swaps
In December 2017, we entered into three cross-currency swap agreements to convert a portion of our intercompany
fixed-rate, U.S. Dollar denominated notes, including the semi-annual interest payments and the payment of remaining principal
at maturity, to a fixed-rate, Euro denominated debt. The economic effect of the swap agreement was to eliminate the
uncertainty of the cash flows in U.S. Dollars associated with the notes by exchanging a notional amount of $200 million at a
fixed rate of 5.75% for €169 million with a fixed annual rate of 3.43%. These hedges were designated as cash flow hedges and
the critical terms of the cross-currency swap agreements correspond to the underlying hedged item. These swaps mature in July
2022, which was the best estimate of the repayment date of the intercompany loans.
In August 2019, we terminated the three cross-currency interest rate swaps entered into in 2017, resulting in cash
proceeds of $15 million. Concurrently, we entered into three new cross-currency interest rate swaps which notionally
exchanged $200 million at a fixed rate of 5.75% for €181 million on which a weighted average rate of 3.73% is payable. The
cross-currency swaps have been designated as cash flow hedges of a fixed rate U.S. Dollar intercompany loan and the economic
effect is to eliminate uncertainty on the U.S. Dollar cash flows. The cross-currency swaps are set to mature in July 2024, which
is the best estimate of the repayment date on the intercompany loan.
We formally assessed the hedging relationship at the inception of the hedge in order to determine whether the
derivatives that are used in the hedging transactions are highly effective in offsetting cash flows of the hedged item and we will
continue to assess the relationship on an ongoing basis. We use the hypothetical derivative method in conjunction with
regression analysis to measure effectiveness of our cross-currency swap agreement.
The changes in the fair value of the swaps are deferred in other comprehensive loss and subsequently recognized in
other income in the audited consolidated and combined statements of operations when the hedged item impacts earnings. Cash
flows related to our cross-currency swap that relate to our periodic interest settlement will be classified as operating activities
and the cash flows that relates to principal balances will be designated as financing activities. The fair value of these hedges
was a liability of $3 million and an asset of $6 million at December 31, 2019 and December 31, 2018, respectively, and was
recorded as other long-term liabilities and other long-term assets on our consolidated balance sheets, respectively. We estimate
the fair values of our cross-currency swaps by taking into consideration valuations obtained from a third-party valuation service
that utilizes an income-based industry standard valuation model for which all significant inputs are observable either directly or
indirectly. These inputs include foreign currency exchange rates, credit default swap rates and cross-currency basis swap
spreads. The cross-currency swap has been classified as Level 2 because the fair value is based upon observable market-based
inputs or unobservable inputs that are corroborated by market data.
49
During 2019 and 2018 the changes in accumulated other comprehensive loss associated with these cash flow hedging
activities was a gain of $6 million and $11 million, respectively. As of December 31, 2019, accumulated other comprehensive
loss of nil is expected to be reclassified to earnings during the next twelve months. 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 continually monitor our position and the credit rating of our counterparties, and we do not anticipate
nonperformance by the counterparties.
Forward Currency Contracts Not Designated as Hedges
We transact business in various foreign currencies and we enter into currency forward contracts to offset the risk
associated with the risks of foreign currency exposure. At December 31, 2019 and December 31, 2018 we had $75 million and
$89 million, respectively, notional amount (in U.S. dollar equivalents) outstanding in foreign currency contracts with a term of
approximately one month. The contracts are valued using observable market rates (Level 2).
NOTE 19. SHARE-BASED COMPENSATION PLAN
On August 1, 2017, our compensation committee and board of directors adopted the Venator Materials 2017 Stock
Incentive Plan (the "LTIP") to provide for the granting of non-qualified stock options, incentive stock options, stock
appreciation rights, restricted stock, phantom shares, 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, 2019, we were authorized
to grant up to 12.8 million shares under the LTIP. As of December 31, 2019, we had 9.5 million shares remaining under the
LTIP available for grant. Stock 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 Venator’s ordinary shares on the date the stock option award is granted.
Share-based awards generally vest over a three-year period; certain performance awards vest over a two-year period and awards
to Venator’s directors vest on the grant date.
Awards granted by Huntsman prior to the separation (referred to as "Huntsman awards"), which consisted of stock
options, restricted stock, performance awards and phantom shares, were generally treated as follows in connection with the
separation:
•
•
•
•
•
All vested Huntsman awards remained as Huntsman awards.
After the separation, unvested Huntsman awards were converted to Venator awards. Huntsman stock options were
converted to Venator stock options and Huntsman restricted stock, performance awards and phantom shares were
converted to Venator restricted stock units.
39 employees were affected by the conversion.
Each Huntsman award was converted to approximately 1.33 Venator awards.
The converted awards are generally subject to the same vesting, expiration and other terms and conditions as applied
to the underlying Huntsman awards immediately prior to the separation.
The compensation cost from continuing operations under the Huntsman Stock Incentive Plan ("Huntsman Plan")
allocated to Venator was nil, nil and $2 million for the years ended December 31, 2019, December 31, 2018 and December 31,
2017, respectively. The allocation was determined annually based upon the outstanding number of shares of each type of award
granted to individuals employed by Venator. After the separation, we incurred $7 million, $6 million and $3 million in
compensation cost related to the converted awards and new awards granted under the LTIP for the years ended December 31,
2019, December 31, 2018 and December 31, 2017, respectively. The total income tax benefit recognized in the consolidated
and combined statement of operations for stock-based compensation arrangements was $1 million for the years ended
December 31, 2019, December 31, 2018 and December 31, 2017, each.
Stock Options
Huntsman Plan
Under the Huntsman Plan, the fair value of each stock option award was estimated on the date of grant using the
Black-Scholes valuation model that uses the assumptions noted in the following table. Expected volatilities were based on the
historical volatility of Huntsman’s common stock through the grant date. The expected term of stock options granted was
estimated based on the contractual term of the instruments and employees’ expected exercise and post-vesting employment
50
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 until the separation.
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of stock options granted during the period
Converted Awards
Year ended December 31,
2017
2016
2.4 %
56.9 %
2.0 %
5.9 years
5.6 %
57.9 %
1.4 %
5.9 years
After the separation, the unvested Huntsman stock option awards were converted to Venator stock option awards. On
the date of conversion, the fair value of the stock option awards was revalued using the Black-Scholes valuation model that uses
the assumptions noted in the following table. Expected volatilities were based on the historical volatility of Huntsman’s
common stock through the conversion date. The expected term of stock options converted was estimated based on the safe
harbor approach calculated as the vesting period plus remaining contractual term divided by two. The risk-free rate for periods
within the expected life of the option was based on the U.S. Treasury yield curve in effect at the time of conversion. The
assumptions noted below represent the weighted averages of assumptions utilized for all unvested stock options that were
converted after the separation.
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of stock options granted during the period
New Grants
Year ended December 31,
2017
2016
—
39.6 %
1.9 %
5.5 years
—
39.2 %
1.8 %
4.7 years
After the separation, stock option awards were granted under the LTIP. The fair value of the stock option awards were
estimated using the Black-Scholes valuation model that uses the assumptions noted in the following table. Expected volatilities
were based on the historical volatility of Huntsman’s common stock through the grant date. The expected term of stock options
granted was estimated on the safe harbor approach calculated as the vesting period plus remaining contractual term divided by
two. The risk-free rate for the periods within the expected 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 average of assumptions utilized for stock options
granted during 2019, 2018 and 2017 under the LTIP.
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of stock options granted during the period
Year ended December 31,
2019
2018
2017
—
41.8 %
2.6 %
6.0 years
—
38.8 %
2.8 %
6.0 years
—
41.0 %
2.0 %
6.0 years
51
The table below presents the changes in stock option awards for our ordinary shares from December 31, 2018 through
December 31, 2019.
Outstanding at December 31, 2018
Granted
Exercised
Forfeited
Expired
Outstanding at December 31, 2019
Exercisable at December 31, 2019
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(in years)
(in millions)
16.10
5.75
—
15.46
11.30
10.83
13.91
8.5 $
7.8
—
—
$
Shares
(in thousands)
1,003
980
—
(57)
(95)
1,831
554
Intrinsic value is the difference between the market value of our common stock and the exercise price of each stock
option multiplied by the number of stock options outstanding for those stock options where the market value exceeds their
exercise price. During the years ended December 31, 2019, December 31, 2018 and December 31, 2017, the total intrinsic value
of stock options exercised was nil, each.
The weighted-average grant-date fair value of stock options granted during December 31, 2019, December 31, 2018
and December 31, 2017 was $2.52, $9.12 and $7.68 per option, respectively. As of December 31, 2019, there was $3 million of
total unrecognized compensation cost related to nonvested stock option arrangements granted under the LTIP and Huntsman
Plans. That cost is expected to be recognized over a weighted-average period of 1.7 years.
Restricted Stock Units
Huntsman Plan
Nonvested shares granted under the Huntsman Plan consisted of restricted stock and performance shares, which are
accounted for as equity awards, and phantom stock, which is accounted for as a liability award because it can be settled in
either stock or cash.
The fair value of each performance share unit award was 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, 2016,
the weighted-average expected volatility rate was 39.3% and the weighted average risk-free interest rate was 0.9%. For the
performance awards granted during the year ended December 31, 2016, the number of shares earned varies based upon
Huntsman achieving certain performance criteria over two-year and three-year performance periods. The performance criteria
are total stockholder return of Huntsman’s common stock relative to the total stockholder return of a specified industry peer-
group for the two-year and three-year performance periods.
Converted Awards
After the separation, the unvested Huntsman restricted stock, performance awards and phantom shares were converted
to Venator restricted stock units. On the date of conversion, the fair value of the restricted stock and phantom share awards was
revalued based on Venator’s closing share price, and the performance awards were revalued using the Monte Carlo valuation.
New Grants
After the separation, restricted stock and performance unit awards were granted under the LTIP. The fair value of the
restricted stock is based on the closing share price on the date of grant. The fair value of each performance unit award was
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, 2019, the weighted-average expected volatility rate was 42.5% and the
weighted-average risk-free interest rate was 2.5%. For the performance unit awards granted during the year ended December
31, 2019, the number of shares earned varies based on the Company achieving certain performance criteria over a three-year
performance period. The performance criteria are total stockholder return of our common stock relative to the total stockholder
52
return of a specified industry peer-group for the three-year performance period. No performance unit awards were granted
during the year ended December 31, 2018.
The table below presents the changes in nonvested awards for our ordinary shares from December 31, 2018 through
December 31, 2019.
Nonvested at December 31, 2018
Granted
Vested(1)
Forfeited
Nonvested at December 31, 2019
$
Shares
(in thousands)
448
968
(216)
(27)
1,173
Weighted
Average
Grant-Date
Fair Value
18.71
6.48
16.15
16.03
9.16
(1) As of December 31, 2019, a total of 158,129 restricted stock units were vested but not yet issued. These shares have not
been reflected as vested shares in the table because, in accordance with the restricted stock unit agreements, these shares
are not issued for vested restricted stock until termination of employment.
As of December 31, 2019, there was $6 million of total unrecognized compensation cost related to nonvested share
compensation arrangements granted under the LTIP and the Huntsman Plan. That cost is expected to be recognized over a
weighted-average period of 1.8 years.
NOTE 20. INCOME TAXES
Our income tax basis of presentation is summarized in "Note 1. Description Of Business, Recent Developments and
Summary Of Significant Accounting Policies."
The components of income (loss) before income taxes were as follows:
U.K.
Non-U.K.
Total
Year ended December 31,
2019
2018
2017
$
$
(1)
(19)
(20)
$
$
80
(245)
(165)
$
$
76
110
186
A summary of the provisions for current and deferred income taxes is as follows:
Income tax expense (benefit):
U.K.
Current
Deferred
Non-U.K.
Current
Deferred
Total
Year ended December 31,
2019
2018
2017
$
$
— $
—
7
143
150
$
2
—
9
(19)
(8)
$
$
—
—
30
20
50
53
The reconciliation of the differences between the U.K. income taxes at the U.K. statutory rate to Venator’s provision
for income taxes is as follows:
(Loss) income from continuing operations before income taxes
Expected tax (benefit) expense at U.K. statutory rate of 19%, 19%
and 20%, respectively
Change resulting from:
Non-U.K. tax rate differentials
Other non-U.K. tax effects, including nondeductible expenses, tax
effect of rate changes and transfer pricing adjustments
Unrealized currency exchange gains and losses
Tax authority audits and dispute resolutions
Change in valuation allowance
Effects of U.S. tax reform
Other, net
Total income tax expense (benefit)
$
$
$
Year ended December 31,
2019
2018
(20)
(4)
(4)
—
—
—
158
—
—
150
$
$
$
(165)
(31)
$
$
(7)
(5)
—
—
39
—
(4)
(8)
$
2017
186
35
(1)
—
7
1
3
3
2
50
Venator operates in over 20 non-U.K. tax jurisdictions with no specific country earning a predominant amount of its
off-shore earnings. Some of these countries have income tax rates that are approximately the same as the U.K. statutory rate,
while other countries have rates that are higher or lower than the U.K. statutory rate. Losses earned in countries with higher
average statutory rates than the U.K., resulted in higher tax benefit of $4 million and $7 million, respectively, for the years
ended December 31, 2019 and 2018. Income earned in countries with lower average statutory rates than the U.K., resulted in
lower tax expense of $1 million, for the year ended December 31, 2017, reflected in the reconciliation above.
Components of deferred income tax assets and liabilities at December 31, 2019 and December 31, 2018 were as
follows:
Deferred income tax assets:
Net operating loss carryforwards
Pension and other employee compensation
Property, plant and equipment
Other, net
Total
Total deferred income tax liabilities:
Property, plant and equipment
Pension and other employee compensation
Lease liability
Other, net
Total
Net deferred tax assets before valuation allowance
Valuation allowance
Net deferred tax assets
Non-current deferred tax assets
Non-current deferred tax liabilities
Net deferred tax assets
December 31,
2019
2018
$
$
$
$
$
$
$
519
53
34
77
683
(35)
(13)
(13)
(4)
(65)
618
(585)
33
33
—
33
$
$
$
$
$
$
$
313
48
28
49
438
(32)
(4)
—
(4)
(40)
398
(220)
178
178
—
178
Venator has NOLs of $2,107 million in various jurisdictions, principally located in Finland, France, Germany, Italy,
Luxembourg, Spain, South Africa, U.S. and the U.K., all of which have no expiration dates except for $226 million which
expires on December 31, 2028 and is subject to a valuation allowance.
54
Included in the $2,107 million of gross NOLs is $864 million attributable to our Luxembourg entity. As of December
31, 2019, due to the uncertainty surrounding the realization of the benefits of these losses, there is a full valuation allowance of
$197 million against these net tax effected NOLs.
Venator has total net deferred tax assets, before valuation allowance, of $618 million, including $519 million of tax-
effected NOLs. After taking into account deferred tax liabilities, Venator has recognized valuation allowance on net deferred
tax assets of $585 million, including valuation allowances in the following countries: Finland, France, Germany, Hong Kong,
Italy, Luxembourg (as discussed above), South Africa, Spain and the U.K. Venator also has net deferred tax assets of
$33 million, not subject to valuation allowances, primarily in Malaysia, and the U.S.
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. 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.
Based on management’s ongoing analysis of positive and negative evidence within our German business we have
concluded at December 31, 2019 there is insufficient positive evidence to overcome a history of losses. As a result, we believe
it is more likely than not that deferred tax assets will not be realized and we have recognized a full valuation allowance against
net deferred tax assets of $162 million. In future periods we will continue to evaluate whether sufficient objective positive
evidence of future taxable income exists, which would provide a basis for the recognition of deferred tax assets without a
valuation allowance.
The following is a reconciliation of the unrecognized tax benefits:
Unrecognized tax benefits as of January 1,
Gross increases and decreases- tax positions taken during prior period
Gross increases and decreases—tax positions taken during the current
Decreases related to settlements of amounts due to tax authorities
Reductions resulting from the lapse of statutes of limitation
Foreign currency movements
i d
Unrecognized tax benefits as of December 31,
$
$
2019
2018
2017
17
1
—
—
(2)
—
16
$
$
23
2
—
—
(7)
(1)
17
$
$
20
—
1
—
—
2
23
As of December 31, 2019, December 31, 2018 and December 31, 2017, the amount of unrecognized tax benefits that,
if recognized, would affect the effective tax rate is $1 million, $14 million and $13 million, respectively.
In accordance with Venator’s accounting policy, it recognizes interest and penalties accrued related to unrecognized
tax benefits in income tax expense, which were insignificant for each of the years ended December 31, 2019, 2018 and 2017.
Venator conducts business globally and, as a result, files income tax returns in the 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
France
Germany
Italy
Malaysia
Spain
United Kingdom
United States federal
Open Tax Years
2016 and later
2011 and later
2014 and later
2014 and later
2015 and later
2015 and later
2016 and later
55
Certain of Venator’s 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.
Venator estimates that it is reasonably possible that no change of its unrecognized tax benefits could occur within 12
months of the reporting date.
For U.S. federal income tax purposes Huntsman recognized a gain as a result of the IPO and the separation to the
extent the fair market value of the assets associated with our U.S. businesses exceeded the basis of such assets for U.S. federal
income tax purposes at the time of the separation. As a result of such gain recognized, the basis of the assets associated with our
U.S. businesses was increased. This basis step-up gave rise to a deferred tax asset of $77 million that we recognized for
the quarter ended September 30, 2017. Due to the 2017 Tax Act’s reduction of the U.S. federal corporate income tax rate from
35% to 21%, the deferred tax asset associated with the basis step-up was reduced to $36 million as of the date of enactment,
reflected as part of the $3 million Effects of U.S. tax reform in the effective tax rate reconciliation above. Pursuant to the tax
matters agreement entered into at the time of the separation, we are required to make a future payment to Huntsman for any
actual U.S. federal income tax savings we recognize as a result of any such basis increase for tax years through December 31,
2028. For the quarter ended September 30, 2017 we estimated (based on a value of our U.S. businesses derived from the IPO
price of our ordinary shares and current tax rates) that the aggregate future payments required by this provision were expected
to be approximately $73 million. Due to the 2017 Tax Act’s reduction of the U.S. federal corporate income tax rate, we
estimated that the aggregate future payments required by this provision were expected to be approximately $34 million and we
recognized a noncurrent liability for this amount as of December 31, 2017 and 2018. During 2019 we reduced the liability to
$30 million due to a decrease in the expectation of future payments. Any subsequent adjustment asserted by U.S. taxing
authorities could increase the amount of gain recognized and the corresponding basis increase, and could result in a higher
liability for us under the tax matters agreement.
In the first quarter of 2019 a non-U.K. subsidiary distributed $12 million to a U.K. subsidiary subject to 5%
withholding tax. As of December 31, 2019, our non-U.K. subsidiaries have no plan to distribute earnings in a manner that
would cause them to be subject to material U.K., U.S., or other local country taxation.
NOTE 21. EMPLOYEE BENEFIT PLANS
Defined Benefit and Other Postretirement Benefit Plans
Venator sponsors defined benefit plans in a number of countries outside of the U.S. in which employees of Venator
participate. The availability of these plans and their specific design provisions are consistent with local competitive practices
and regulations.
The disclosures for the defined benefit and other postretirement benefit plans within the U.S. are combined with the
disclosures of the plans outside of the U.S. Of the total projected benefit obligations for Venator as of December 31, 2019 and
December 31, 2018, the amount related to the U.S. benefit plans was $11 million and $10 million, respectively, or 1% each. Of
the total fair value of plan assets for Venator, the amount related to the U.S. benefit plans for December 31, 2019 and December
31, 2018 was $8 million and $7 million, respectively, or 1% each.
56
The following table sets forth the funded status of the plans for Venator and the amounts recognized in the
consolidated balance sheets at December 31, 2019 and December 31, 2018:
Defined Benefit
Plans
Other
Postretirement
Benefit Plans
2019
2018
2019
2018
Change in benefit obligation
Benefit obligation at beginning of year
Service cost
Interest cost
Actuarial loss (gain)
Gross benefits paid
Plan amendments
Exchange rates
Curtailments
Benefit obligation at end of year
$
$
1,021
3
24
108
(52)
—
17
(21)
$
1,136
5
25
(60)
(58)
6
(56)
23
$
1,100
$
1,021
$
Accumulated benefit obligation at end of year
1,076
Change in plan assets
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contribution
Gross benefits paid
Exchange rates
Other
Fair value of plan assets at end of year
Funded status
Fair value of plan assets
Benefit obligation
Accrued benefit cost
Amounts recognized in balance sheet:
Noncurrent asset
Current liability
Noncurrent liability
Total
Amounts recognized in accumulated other comprehensive loss:
Net actuarial loss (gain)
Prior service cost (credit)
Total
$
$
$
$
$
$
$
$
813
108
40
(52)
24
1
934
934
(1,100)
(166)
79
(1)
(244)
(166)
321
5
326
983
906
(34)
47
(58)
(48)
—
813
813
(1,021)
(208)
46
(1)
(253)
(208)
302
11
313
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
3
—
—
1
(1)
—
—
—
3
$
$
— $
—
—
—
—
—
— $
— $
(3)
(3)
$
— $
—
(3)
(3)
(3)
—
(3)
$
$
$
3
—
—
—
—
—
—
—
3
—
—
—
—
—
—
—
—
(3)
(3)
—
—
(3)
(3)
(4)
(1)
(5)
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:
Actuarial loss
Prior service cost
Total
Defined
Benefit Plans
13
1
14
$
$
Other
Postretirement
Benefit Plans
—
—
—
$
$
57
Components of net periodic benefit costs for the years ended December 31, 2019, December 31, 2018 and December
31, 2017 were as follows:
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Curtailments
Net periodic benefit cost
Amortization of actuarial loss
Amortization of prior service credit
Curtailments
Net periodic benefit cost
Defined Benefit Plans
2019
2018
2017
3
24
(42)
14
1
(9)
(9)
$
$
5
25
(47)
15
3
23
24
$
$
Other Postretirement Benefit Plans
2019
2018
2017
— $
—
(1)
(1)
$
— $
—
—
— $
5
25
(43)
16
1
(4)
—
1
(3)
—
(2)
$
$
$
$
The amounts recognized in net periodic benefit cost and other comprehensive loss for the years ended December 31,
2019, December 31, 2018 and December 31, 2017 were as follows:
Defined Benefit Plans
2019
2018
2017
Current year actuarial gain (loss)
Amortization of actuarial loss
Current year prior service cost
Amortization of prior service cost
Curtailments
Other
Total recognized in other comprehensive loss
Net periodic benefit cost
$
$
21
(14)
—
(1)
9
—
15
(9)
Total recognized in net periodic benefit cost and other comprehensive loss
$
6
$
45
(15)
5
(3)
(23)
—
9
24
33
$
$
(24)
(16)
—
(1)
4
(3)
(40)
—
(40)
Current year actuarial loss
Amortization of actuarial loss
Amortization of prior service credit
Curtailments
Total recognized in other comprehensive loss
Net periodic benefit cost
$
Total recognized in net periodic benefit cost and other comprehensive loss
$
Other Postretirement Benefit Plans
2019
2018
2017
1
—
—
1
2
(1)
1
$
— $
—
—
—
—
—
$
— $
(1)
(1)
3
—
1
(2)
(1)
58
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:
Projected benefit obligation:
Discount rate
Rate of compensation increase
Net periodic pension cost:
Discount rate
Rate of compensation increase
Expected return on plan assets
Projected benefit obligation:
Discount rate
Net periodic pension cost:
Discount rate
Rate of compensation increase
Defined Benefit Plans
2019
2018
2017
1.60 %
2.56 %
2.38 %
3.69 %
5.23 %
2.38 %
3.69 %
2.21 %
3.74 %
5.23 %
2.21 %
3.74 %
1.86 %
3.53 %
5.71 %
Other Postretirement Benefit Plans
2019
2018
2017
3.27 %
3.50 %
3.38 %
3.51 %
4.35 %
3.30 %
— %
3.72 %
— %
At December 31, 2019 and December 31, 2018, the health care trend rate used to measure the expected increase in the
cost of benefits was assumed to be 5.80% and 4.90%, respectively, decreasing to 4.53% after 2030. 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 not have a significant effect.
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 were as follows:
Projected benefit obligation
Fair value of plan assets
December 31,
2019
2018
$
$
407
162
385
131
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, 2019 and December 31, 2018 were as
follows:
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
December 31,
2019
2018
$
$
386
383
142
385
375
131
59
Expected future contributions and benefit payments are as follows:
2020 expected employer contributions:
To plan trusts
Expected benefit payments:
2020
2021
2022
2023
2024
2025 - 2029
Defined
Benefit Plans
Other
Postretirement
Benefit Plans
$
43
$
54
43
44
47
48
241
—
—
—
—
—
—
1
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. We have established target allocations for each asset category. Venator’s pension plan assets are
periodically rebalanced based upon our target allocations.
The fair value of plan assets for the pension plans was $934 million and $813 million at December 31, 2019 and
December 31, 2018, respectively. The following plan assets are measured at fair value on a recurring basis:
Asset Category
Pension plans:
Equities
Fixed income
Real estate/other
Cash and cash equivalents
Total pension plan assets
Asset Category
Pension plans:
Equities
Fixed income
Real estate/other
Cash and cash equivalents
Total pension plan assets
Fair Value
Amounts Using
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
December 31,
2019
$
$
$
$
196
692
40
6
934
$
$
179
42
—
6
227
Fair Value
Amounts Using
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
December 31,
2018
213
547
34
19
813
$
$
202
39
—
19
260
60
$
$
$
$
17
643
14
—
674
Significant
Other
Observable
Inputs
(Level 2)
11
501
6
—
518
$
$
$
$
—
7
26
—
33
Significant
Unobservable
Inputs
(Level 3)
—
7
28
—
35
Fair Value Measurements of Plan Assets Using Significant Unobservable Inputs
(Level 3)
Balance at the beginning of the period
Return on pension plan assets
Purchases, sales and settlements
Transfers (out of) into Level 3
Disposals
Balance at the end of the period
Fair Value Measurements of Plan Assets Using Significant Unobservable Inputs
(Level 3)
Balance at the beginning of the period
Return on pension plan assets
Purchases, sales and settlements
Transfers (out of) into Level 3
Balance at the end of the period
Real Estate/Other
Year ended December 31,
2019
2018
$
$
$
$
28
(1)
(1)
—
—
26
$
$
Fixed Income
Year ended December 31,
2019
2018
7
—
—
—
7
$
$
30
(1)
(1)
—
—
28
7
—
—
—
7
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 5.71% and 5.23%. The asset allocation for our pension plans
at December 31, 2019 and December 31, 2018 and the target allocation for 2019, by asset category, are as follows:
Asset category
Pension plans:
Equities
Fixed income
Real estate/other
Cash
Total pension plans
Target allocation
2020
Allocated at
December 31,
2019
Allocated at
December 31,
2018
20 %
72 %
1 %
7 %
100 %
19 %
73 %
1 %
7 %
100 %
26 %
64 %
1 %
9 %
100 %
Equity securities in Venator’s pension plans did not include any equity securities of Huntsman Corporation or Venator
and its affiliates at the end of 2019.
U.S. Benefit Plans
Venator’s U.S. employees participated in a trusteed, non-contributory defined benefit pension plan (the "Plan") that
covered substantially all of Huntsman International’s full-time U.S. employees. In July 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 was 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 as of July 1, 2004 were eligible for additional annual pay credits from 1% to 8%, depending on their age and service as
of that date, for up to 5 years. 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. After closure, new hires were 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
61
pay, for a total company contribution of up to 10% of pay. In connection with the separation, Venator adopted a non-
contributory defined benefit pension plan for union entrants prior to April 2015.
Our eligible employees (who were employed by Huntsman prior to August 1, 2015) also participate in an unfunded
postretirement benefit plan, which provides medical and life insurance benefits. This plan is sponsored by Venator.
Our U.S. employees participate in a postretirement benefit plan that provides 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"). Venator has not determined whether the medical benefits provided by these postretirement benefit plans are
actuarially equivalent to those provided by the Act. Venator does not collect a subsidy, and our net periodic postretirement
benefits cost, and related benefit obligation, do not reflect an amount associated with the subsidy.
Non-U.S. Defined Contribution Plans
We have defined contribution plans in a variety of non-U.S. locations. Venator’s combined expense for these defined
contribution plans for the years ended December 31, 2019, December 31, 2018 and December 31, 2017 was $9 million, $8
million and $8 million, respectively, primarily related to the U.K. Pension Plan.
All U.K. associates are eligible to participate in the Huntsman U.K. Pension Plan, a contract-based arrangement with a
third party. Company contributions vary by business during a 5 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.
U.S. Defined Contribution Plans
Huntsman provided a money purchase pension plan covering substantially all of its domestic employees who were
hired prior to January 1, 2004. Employer contributions were made based on a percentage of employees’ earnings (ranging up to
8%). During 2014, Huntsman closed this plan to non-union participants and in 2015 Huntsman closed this plan to union
associates. We continue to provide equivalent benefits to those who were covered under this plan into their salary deferral
accounts.
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. New hires are provided 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.
Along with the introduction of the cash balance formula within the defined benefit pension plan, the money purchase
pension plan was closed to new hires. At the same time, the employer match in the salary deferral plan was increased, for new
hires, to a 100% match, not to exceed 4% of the participant’s compensation.
Our total combined expense for the above defined contribution plans was $2 million, $3 million and $3 million for
the years ended December 31, 2019, December 31, 2018 and December 31, 2017, respectively.
NOTE 22. RELATED PARTY TRANSACTIONS
Transactions with Huntsman
We are party to a variety of transactions and agreements with Huntsman, our former parent and largest shareholder.
Prior to the separation, Huntsman’s executive, information technology, EHS and certain other corporate departments
performed certain administrative and other services for Venator. Additionally, Huntsman performed certain site services for
Venator. Expenses incurred by Huntsman and allocated to Venator were determined based on specific services provided or
were allocated based on our total revenues, total assets, and total employees in proportion to those of Huntsman. Management
believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and
administrative expenses of nil, nil and $62 million for the years ended December 31, 2019, December 31, 2018 and December
31, 2017, respectively.
On August 11, 2017, we entered into a separation agreement with Huntsman to effect the separation and to provide a
framework for the relationship with Huntsman. This agreement governs the relationship between Venator and Huntsman
subsequent to the completion of the separation and provides for the allocation between Venator and Huntsman of assets,
62
liabilities and obligations attributable to periods prior to the separation. Because these agreements were entered into in the
context of a related party transaction, the terms may not be comparable to terms that would be obtained in a transaction between
unaffiliated parties.
See description of our financing arrangements with Huntsman before and after the separation in "Note 16. Debt" and
"Note 18. Derivative Instruments and Hedging Activities." See description of our arrangement with Huntsman as part of the
separation in "Note 20. Income Taxes."
Other Related Party Transactions
We also conduct transactions in the normal course of business with parties under common ownership. Sales of raw
materials to LPC as part of a sourcing arrangement were $87 million, $65 million and $64 million for the years ended
December 31, 2019, December 31, 2018 and December 31, 2017, respectively. Proceeds from this arrangement are recorded as
a reduction of cost of goods sold in Venator’s consolidated and combined statements of operations. Related to this same
arrangement, purchases of finished goods from LPC were $177 million, $167 million and $158 million for the years ended
December 31, 2019, December 31, 2018 and December 31, 2017, respectively. The related accounts receivable from affiliates
and accounts payable to affiliates as of December 31, 2019 and December 31, 2018 are recognized in the consolidated balance
sheets.
NOTE 23. 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 2020. 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, 2019, December 31, 2018
and December 31, 2017, we made minimum payments under such take or pay contracts without taking the product of $1
million, nil and $2 million, respectively. Total purchase commitments as of December 31, 2019 were as follows:
Year ended December 31,
2020
2021
2022
2023
2024
Thereafter
Legal Proceedings
Shareholder Litigation
$
Amount
100
98
85
11
11
38
On February 8, 2019 we, certain of our executive officers, Huntsman and certain banks who acted as underwriters in
connection with our IPO and secondary offering were named as defendants in a proposed class action civil suit filed in the
District Court for the State of Texas, Dallas County (the "Dallas District Court"), by an alleged purchaser of our ordinary shares
in connection with our IPO on August 3, 2017 and our secondary offering on November 30, 2017. The plaintiff, Macomb
County Employees’ Retirement System, alleges that inaccurate and misleading statements were made regarding the impact to
our operations, and prospects for restoration thereof, resulting from the fire that occurred at our Pori, Finland manufacturing
facility, among other allegations. Additional complaints making substantially the same allegations were filed in the Dallas
District Court by the Firemen's Retirement System of St. Louis on March 4, 2019 and by Oscar Gonzalez on March 13, 2019,
with the third case naming two of our directors as additional defendants. A fourth case was filed in the U.S. District Court for
the Southern District of New York by the City of Miami General Employees' & Sanitation Employees' Retirement Trust on July
31, 2019, making substantially the same allegations, adding claims under sections 10(b) and 20(a) of the U.S. Exchange Act,
63
and naming all of our directors as additional defendants. A fifth case, filed by Bonnie Yoon Bishop in the U.S. District Court
for the Southern District of New York, was voluntarily dismissed without prejudice on October 7, 2019. A sixth case was filed
in the U.S. District Court for the Southern District of Texas by the Cambria County Employees Retirement System on
September 13, 2019, making substantially the same allegations as those made by the plaintiff in the case pending in the
Southern District of New York.
The plaintiffs in these cases seek to determine that the proceedings should be certified as class actions and to obtain
alleged compensatory damages, costs, rescission and equitable relief.
The cases filed in the Dallas District Court have been consolidated into a single action, In re Venator Materials PLC
Securities Litigation. On October 29, 2019, the U.S. District Court for the Southern District of New York entered an order
transferring the case brought by the city of Miami General Employees' & Sanitation Employees' Retirement Trust to the U.S.
District Court for the Southern District of Texas, where it was consolidated into a single action with the case brought by the
Cambria County Employees' Retirement Trust and is now known as In re: Venator Materials PLC Securities Litigation. On
January 17, 2020, plaintiffs in the consolidated action filed a consolidated class action complaint.
On May 8, 2019, we filed a "special appearance" in the Dallas District Court action contesting the court’s jurisdiction
over the Company and a motion to transfer venue to Montgomery County, Texas and on June 7, 2019 we and certain
defendants filed motions to dismiss. On July 9, 2019, a hearing was held on certain of these motions, which were subsequently
denied. On October 3, 2019, a hearing was held on our motion to dismiss under the Texas Citizens Participation Act, which was
subsequently denied. On October 22, 2019, we and other defendants filed a Petition for Writ of Mandamus in the Court of
Appeals for the Fifth District of Texas seeking relief from the Dallas District Court’s denial of defendants’ Rule 91a motions to
dismiss. On November 22, 2019, we also filed a notice of appeal regarding the denial of our motion to dismiss under the Texas
Citizens Participation Act. On January 21, 2020, the Court of Appeals for the Fifth District of Texas reversed the Dallas District
Court’s order that denied the special appearances of Venator and certain other defendants, and rendered judgment dismissing
the claims against Venator and those other defendants for lack of jurisdiction. The Court of Appeals also remanded the case for
the Dallas District Court to enter an order transferring the claims against Huntsman to the Montgomery County District Court.
We may be required to indemnify our executive officers and directors, Huntsman, and the banks who acted as
underwriters in our IPO and secondary offerings, for losses incurred by them in connection with these matters pursuant to our
agreements with such parties. Because of the early stage of this litigation, we are unable to reasonably estimate any possible
loss or range of loss and we have not accrued for a loss contingency with regard to these matters.
Tronox Litigation
On April 26, 2019, we acquired intangible assets related to the European paper laminates product line from Tronox. A
separate agreement with Tronox entered into on July 14, 2018 requires that Tronox promptly pay us a "break fee" of
$75 million upon the consummation of Tronox’s merger with Cristal once the sale of the European paper laminates business to
us was consummated, if the sale of Cristal’s Ashtabula manufacturing complex to us was not completed. The deadline for such
payment was May 13, 2019. On April 26, 2019, Tronox publicly stated that it believes it is not obligated to pay the break fee.
On May 14, 2019, we commenced a lawsuit in the Delaware Superior Court against Tronox arising from Tronox's
breach of its obligation to pay the break fee. We are seeking a judgment for $75 million, plus pre- and post-judgment interest,
and reasonable attorneys' fees and costs. On June 17, 2019, Tronox filed an answer denying that it is obligated to pay the break
fee and asserting affirmative defenses and counterclaims of approximately $400 million, alleging that we failed to negotiate the
purchase of the Ashtabula complex in good faith. Discovery is ongoing in this matter. Because of the early stage of this
litigation, we are unable to reasonably estimate any possible gain, loss or range of gain or loss and we have not made any
accrual with regard to this matter.
Neste Engineering Services Matter
We are party to an arbitration proceeding initiated by Neste Engineering Services Oy ("NES") on December 19, 2018
for payment of invoices allegedly due of approximately €14 million in connection with the delivery of services by NES to the
Company in respect of the Pori site rebuild project. We are contesting the validity of these invoices and filed counterclaims
against NES on March 8, 2019. The timetable for arbitration has been provisionally set with a hearing date to occur in early
fourth quarter 2021. On July 2, 2019, NES separately instigated a lawsuit in Finland for €1.6 million of unpaid invoices. We are
contesting the Finnish lawsuit and filed our defense on October 31, 2019. A hearing is anticipated in the fourth quarter of 2020.
We are fully accrued for these invoices and they are reflected in our consolidated balance sheets as of December 31, 2019.
64
Calais Pipeline Matter
The Region Hauts-de-France (the "Region") has issued two duplicate title perception demands against us requiring
repayment of €12 million. This sum was previously paid to us by the Region under a settlement agreement, pursuant to which
we were required to move an effluent pipeline at our Calais site. We filed claims with the Administrative Court in Lille, France
on February 14, 2018 and April 12, 2018, requesting orders that the demands be set aside, which suspended enforcement of the
demands. On July 12, 2018, the court set aside the first demand. The second demand remains suspended, but in dispute. The
parties have lodged various arguments and responses regarding the second demand with the court. The court has set a hearing
date on the matter for March 17, 2020. We do not believe a loss is probable and have not made an accrual with respect to this
matter.
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 these consolidated and combined financial statements, 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.
NOTE 24. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
Environmental, Health and Safety 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, 2019, December 31, 2018 and
December 31, 2017, our capital expenditures for EHS matters totaled $35 million, $9 million and $10 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 accrue 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. As of December 31, 2019 and December 31, 2018,
we had environmental reserves of $9 million and $12 million, respectively. We may incur additional losses for environmental
remediation.
Environmental Matters
We have incurred, and we may in the future incur, liabilities to investigate and clean up waste or contamination at our
current or former facilities or facilities operated by third parties at which we may have disposed of waste or other materials.
Similarly, we may incur costs for the cleanup of waste that was disposed of prior to the purchase of our businesses. Under some
circumstances, the scope of our liability may extend to damages to natural resources.
In the EU, the Environmental Liability Directive (Directive 2004/35/EC) has established a framework based on the
"polluter pays" principle for the prevention and remediation of environmental damage, which establishes measures to prevent
and remedy environmental damage. The directive defines "environmental damage" as damage to protected species and natural
habitats, damage to water and damage to soil. Operators carrying out dangerous activities listed in the Directive are strictly
liable for remediation, even if they are not at fault or negligent.
Under EU Directive 2010/75/EU on industrial emissions, permitted facility operators may be liable for significant
pollution of soil and groundwater over the lifetime of the activity concerned. We are in the process of plant closures at facilities
in the EU and liability to investigate and clean up waste or contamination may arise during the surrender of operators' permits
at these locations under the directive and associated legislation such as the Water Framework Directive (Directive 2000/60/EC)
and the Groundwater Directive (Directive 2006/118/EC).
65
Under 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 the EU, can hold past
owners and/or operators liable for remediation at former facilities. We have not been notified by third parties of claims against
us for cleanup liabilities at former facilities or third-party sites, including, but not limited to, sites listed under CERCLA.
Under the Resource Conservation and Recovery Act 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
and we have made accruals for related remediation activity. We are aware of soil, groundwater or surface contamination from
past operations at some of our sites and have made accruals for related remediation activity, and we may find contamination at
other sites in the future. Similar laws exist in a number of locations in which we currently operate, or previously operated,
manufacturing facilities, such as France and Italy.
Pori Remediation
In connection with our previously announced intention to close our TiO2 manufacturing facility in Pori, Finland, we
expect to incur environmental costs related to the cleanup of the facility upon its eventual closure, including remediation and
closure costs. While we do not currently have enough information to be able to estimate the range of potential costs for the
closure of this facility, the environmental assessment and related discussions with the Finnish environmental authorities are
ongoing, and these costs could be material to our consolidated and combined financial statements.
NOTE 25. OTHER COMPREHENSIVE LOSS
Other comprehensive loss consisted of the following:
Foreign
currency
translation
adjustment(1)
Pension and
other
postretirement
benefits
adjustments,
net of tax(2)
Other
comprehensive
income of
unconsolidated
affiliates
Hedging
instruments
Beginning balance, January 1, 2018
Tax expense
Other comprehensive (loss) income
before reclassifications
Tax expense
Amounts reclassified from accumulated
other comprehensive loss, gross(3)
Tax expense
Net current-period other
comprehensive (loss) income
Ending balance, December 31, 2018
Tax expense
Other comprehensive (loss) income
before reclassifications
Tax expense
Amounts reclassified from accumulated
other comprehensive loss, gross(3)
Tax expense
Net current-period other
comprehensive (loss) income
(6)
—
(90)
—
—
—
(90)
(96)
—
(1)
—
—
—
(1)
(267)
—
(27)
(2)
18
—
(11)
(278)
—
(32)
—
15
—
(17)
Ending balance, December 31, 2019
$
(97)
$
(295)
$
(5)
—
—
—
—
—
—
(5)
—
—
—
—
—
—
(5)
$
(5)
—
11
—
—
—
11
6
—
6
—
—
—
6
12
Total
(283)
—
(106)
(2)
18
—
(90)
(373)
—
(27)
—
15
—
(12)
Amounts
attributable to
noncontrolling
interests
Amounts
attributable
to
Venator
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(283)
—
(106)
(2)
18
—
(90)
(373)
—
(27)
—
15
—
(12)
(385)
$ (385)
$
— $
(1) Amounts are net of tax of nil each as of January 1, 2018, December 31, 2018 and December 31, 2019.
(2) Amounts are net of tax of $52 million, $50 million and $50 million as of January 1, 2018, December 31, 2018 and
December 31, 2019, respectively.
(3) See table below for details about the amounts reclassified from accumulated other comprehensive loss.
66
Details about Accumulated Other Comprehensive Loss
Components:
Amortization of pension and other postretirement benefits:
Actuarial loss
Prior service cost
Total before tax
Income tax expense
Total reclassifications for the period, net of tax
Year ended December 31,
2019
2018
Affected line item in the statement
where net income is presented
$
$
14
1
15
—
15
$
$
15
3
18
(a)
(a)
— Income tax (expense) benefit
18
(a) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs.
See "Note 21. Employee Benefit Plans."
NOTE 26. OPERATING SEGMENT INFORMATION
We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of commodity
chemical products. We have reported our operations through our two segments, Titanium Dioxide and Performance Additives,
and organized our business and derived our operating segments around differences in product lines. We have historically
conducted other business within components of legal entities we operated in conjunction with Huntsman businesses, and such
businesses are included within the corporate and other line item below.
The major product groups of each reportable operating segment are as follows:
Segment
Titanium Dioxide
Performance Additives
Product Group
titanium dioxide
functional additives, color pigments, timber treatment and water treatment chemicals
67
Sales between segments are generally recognized at external market prices and are eliminated in consolidation.
Adjusted EBITDA is presented as a measure of the financial performance of our global business units and for reporting the
results of our operating segments. The revenues and adjusted EBITDA for each of the two reportable operating segments are as
follows:
Year ended December 31,
2019
2018
2017
Revenues:
Titanium Dioxide
Performance Additives
Total
Adjusted EBITDA(1):
Titanium Dioxide
Performance Additives
Corporate and other
Total
Reconciliation of adjusted EBITDA to net (loss) income:
Interest expense
Interest income
Income tax (expense) benefit—continuing operations
Depreciation and amortization
Net income attributable to noncontrolling interests
Other adjustments:
Business acquisition and integration expenses
Separation gain (expense), net
U.S. income tax reform
Net income of discontinued operations, net of tax
(Loss) gain on disposition of business/assets
Certain legal settlements and related expenses
Amortization of pension and postretirement actuarial losses
Net plant incident (costs) credits
Restructuring, impairment and plant closing and transition costs
Net (loss) income
Depreciation and Amortization:
Titanium Dioxide
Performance Additives
Corporate and other
Total
$
$
$
$
$
$
$
$
$
$
$
1,614
516
2,130
197
47
244
(50)
194
(53)
12
(150)
(110)
5
1
3
—
—
(1)
(4)
(14)
(20)
(33)
$
$
$
$
1,666
599
2,265
417
62
479
(43)
436
(53)
13
8
(132)
6
(20)
(2)
—
—
(2)
—
(15)
232
(628)
(170)
$
(157)
$
79
27
4
110
$
$
93
27
12
132
$
$
1,604
605
2,209
387
72
459
(64)
395
(100)
60
(50)
(127)
10
(5)
(7)
34
8
—
(1)
(17)
(4)
(52)
144
85
36
6
127
68
Capital Expenditures:
Titanium Dioxide
Performance Additives
Corporate and other
Total
Total Assets:
Titanium Dioxide
Performance Additives
Corporate and other
Total
2019
Year ended December 31,
2018
2017
$
$
178
17
2
197
$
$
$
$
133
18
1
152
1,670
540
55
2,265
$
$
$
$
301
24
1
326
1,631
592
262
2,485
(1) Adjusted EBITDA is defined as net (loss) income before interest expense, interest income, income tax expense/benefit,,
depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following
adjustments: (a) business acquisition and integration expenses/adjustments; (b) separation expense/gain, net; (c) U.S.
income tax reform; (d) net income of discontinued operation, net of tax; (e) loss/gain on disposition of business/assets; (f)
certain legal settlements and related expenses/gains; (g) amortization of pension and postretirement actuarial losses/gains;
(h) net plant incident costs/credits; and (i) restructuring, impairment, and plant closing and transition costs/credits.
By Geographic Area
Revenues(1):
United States
Germany
China
Italy
United Kingdom
Spain
France
India
Other nations
Total
Long Lived Assets:
Germany
United Kingdom
Italy
United States
Finland
Other nations
Total
Year ended December 31,
2019
2018
2017
$
$
526
230
112
126
114
86
94
63
858
2,209
$
$
$
$
500
234
126
111
110
92
78
62
817
2,130
279
189
163
104
46
208
989
$
$
$
$
518
257
131
126
116
96
89
65
867
2,265
263
180
164
111
69
207
994
(1) Geographic information for revenues is based upon countries into which product is sold.
69
NOTE 27. SELECTED UNAUDITED QUARTERLY FINANCIAL DATA
2019
Revenue
Cost of goods sold
Restructuring, impairment and plant closing and transition costs
Net (loss) income
Net (loss) income attributable to Venator
Basic income (loss) per share:
Net (loss) income attributable to Venator Materials PLC ordinary
shareholders
Diluted income (loss) per share:
Net (loss) income per share attributable to Venator Materials PLC
ordinary shareholders
2018
Revenue
Cost of goods sold
Restructuring, impairment and plant closing and transition costs
Income (loss) from continuing operations
Net income (loss)
Net income (loss) attributable to Venator
Basic (loss) income per share:
Net income (loss) per share attributable to Venator Materials PLC
ordinary shareholders
Diluted (loss) income per share:
Net income (loss) per share attributable to Venator Materials PLC
ordinary shareholders
$
First
Quarter
562
486
12
(2)
(3)
$
Second
Quarter
578
511
—
22
21
$
Third
Quarter
526
464
12
(17)
(19)
$
Fourth
Quarter
464
431
9
(173)
(174)
(0.03)
0.20
(0.18)
(1.63)
(0.03)
0.20
(0.18)
(1.63)
622
454
9
80
80
78
626
193
136
198
198
196
533
463
428
(366)
(366)
(368)
484
440
55
(69)
(69)
(69)
0.73
1.84
(3.46)
(0.65)
0.73
1.84
(3.46)
(0.65)
70
FREE CASH FLOW RECONCILIATION
Free cash flow(a):
Net cash provided by operating activities
Capital expenditures
Other investing activities
Non-recurring separation costs(b)
Total free cash flow
Adjusted EBITDA
Capital expenditures excluding cash paid for Pori rebuild
Cash paid for interest
Cash paid for income taxes
Primary working capital change
Restructuring
Maintenance & other
Net cash flows associated with Pori
Total free cash flow(a)
$
$
$
$
33
$
(152)
2
—
(117)
194
(115)
(41)
(8)
14
(26)
(71)
(64)
(117)
$
$
$
282
(326)
4
2
(38)
436
(114)
(46)
(34)
(105)
(37)
(78)
(60)
(38)
(a) Management internally uses a free cash flow measure: (a) to evaluate the Company’s liquidity, (b) to evaluate strategic
investments, (c) to evaluate the Company’s ability to incur and service debt. Free cash flow is not a defined term under U.S.
GAAP, and it should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The
Company defines free cash flow as cash flows provided by (used in) operating activities from continuing operations and used in
investing activities. Free cash flow is typically derived directly from the Company’s consolidated and combined statement of
cash flows; however, it may be adjusted for items that affect comparability between periods. Free cash flow is presented as
supplemental information.
(b) Represents payments associated with our separation from Huntsman
71
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
Market Information and Holders
Our ordinary shares, $0.001 par value per share, are listed on the NYSE under the symbol "VNTR." As of March 10,
2020, there were three shareholders of record and the closing price of our ordinary shares on the New York Stock Exchange
was $2.38 per share.
Dividend Policy
For the foreseeable future, we do not expect to pay dividends. However, we anticipate that our board of directors will
consider the payment of dividends from time to time to return a portion of our profits to our shareholders when we experience
adequate levels of profitability and associated reduced debt leverage. If our board of directors determines to pay any dividend in
the future, there can be no assurance that we will continue to pay such dividends or the amount of such dividends.
72
STOCK PERFORMANCE GRAPH
The following graph presents the cumulative total shareholder return for Venator common stock compared with the
Standard & Poor’s (S&P) 500 Chemicals index and the S&P MidCap 400 index since August 3, 2017, the effective date that
Venator’s common stock began trading on the New York Stock Exchange.
The graph assumes that the values of Venator’s common stock, the S&P 500 Chemicals index and the S&P MidCap
400 index were each $100 on August 3, 2017, and that all dividends were reinvested.
73
Dear Shareholders
2019 was a challenging year highlighted by significant
macroeconomic uncertainty. Our team rose to the
challenge, making meaningful progress to strengthen
our business. We are confident in our strategy and ability
to execute on our initiatives to secure Venator’s future as
a premier global titanium dioxide producer.
In 2019, Venator delivered $194
The diversification into these
In 2020, our cash uses are
million of adjusted EBITDA and
higher growth and higher value
expected to significantly decline
$0.24 of adjusted diluted earnings
products is enabled by our unique
compared to 2019 and we
per share. A slowdown in industry
asset base and facilitate ongoing
will build on this momentum in
conditions overshadowed the
collaboration and partnerships
subsequent years.
enormous strides we achieved
with our customers.
with our self-help initiatives,
improvements in our cost
In 2019, we took meaningful
another pivotal year for Venator
Looking ahead, 2020 will be
competitiveness and delivery of
action to enhance our competitive
amid an increasingly difficult
enhanced value to our customers
position and delivered $20 million
business environment. Our
through product innovation. To
of adjusted EBITDA benefits
talented team is focused on
that end, we accelerated our
from our Business Improvement
driving performance through
Business Improvement Program
Program, twice our original target.
deliberate self-help initiatives,
and grew our TiO2 volumes
through the successful launch
We expect to deliver the remaining
remaining disciplined with
$20 million cost and operational
our financial resources and
of multiple new specialty and
efficiencies as promised. This
improving our safety performance.
differentiated products.
journey will continue, and
we anticipate implementing
Collectively, our commitment and
capability to successfully execute
We have implemented a broad
additional actions to optimize
our strategic priorities gives
range of customer agreements
our manufacturing capabilities
me confidence in our ability to
aimed at mitigating price
and margin cyclicality for our
customers. This customer-tailored
cycle.
approach includes managing our
global production network and
We believe the most important
inventories to align with customer
milestone that will increase
commitments.
shareholder value is our ability to
generate an improvement in free
We also made progress on the
cash flow. We expect 2019 to have
transfer of our specialty and
differentiated TiO2 business from
Pori to other sites in our network.
been an inflection point for many
of our cash uses. We continue to
evaluate actions to reduce our
Similarly, we have upgraded the
spend, without compromising the
mix within our complementary
integrity of our assets or the ability
Performance Additives business.
to serve our customers.
Simon Turner
President and Chief Executive Officer
Board of Directors
President and Chief Executive Officer
Simon Turner
Peter R. Huntsman
Chairman
Sir Robert J. Margetts
Vice Chairman and Lead
Independent Director
Simon Turner
President and Chief
Executive Officer
Douglas D. Anderson
Independent Director
and cost base, improving our
enhance shareholder value.
profitability throughout the TiO2
Management Team
Daniele Ferrari
Independent Director
Kathy Patrick
Independent Director
Simon Turner
President and Chief
Executive Officer
Mahomed Maiter
Executive Vice President,
Business Operations
Kurt Ogden
Executive Vice President
and Chief Financial
Officer
Russ Stolle
Executive Vice President,
General Counsel and
Chief Compliance Officer
Dr Rob Portsmouth
Senior Vice President
EHS, Innovation and
Technology
Investor Information
Global Headquarters
Titanium House, Hanzard Drive
Wynyard Park, Stockton-on-Tees
TS22 5FD, United Kingdom
Independent Registered Public
Accounting Firm
Deloitte LLP
Stockholder Inquiries
Inquiries from stockholders and other
interested parties regarding our company
are always welcome. Please direct your
request to Investor Relations at our Global
Headquarters address listed above, or
use the contact details below:
Jeffrey Schnell
Director, Investor Relations
Tel: +1 832-663-4656
Email: ir@venatorcorp.com
Stock Transfer Agent
By Regular Mail:
Computershare
P.O. Box 43078
Providence, RI 02940
By overnight delivery:
Computershare
250 Royall Street
Canton, MA 02021
Telephone inquiries:
TFN: 1-866-644-4127 (US, Canada,
Puerto Rico)
TN: 1-781-575-2906 (non-US)
TTY—Hearing Impaired Toll Free:
1-800-952-9245
TTY—Hearing Impaired International:
+1-781-575-4592
Website: www.computershare.com/
investor
Stock Listing
Our common stock is listed on the
New York Stock Exchange under
the symbol VNTR.
Annual General Meeting
Annual General Meeting
The 2020 Annual General Meeting of
The 2020 Annual General Meeting of
shareholders will take place on Thursday,
shareholders will take place on Thursday,
June 18, 2020 at 15:00 local time. Due
June 18, 2020 at 14:00 local time at the
to the COVID-19 pandemic, shareholder
offices of:
attendance may not be permitted.
Latham & Watkins LLP
99 Bishopsgate
Website
London EC2M 3XF
www.venatorcorp.com
United Kingdom
+44 (0) 20 7710 7000
Website
www.venatorcorp.com
www.venatorcorp.com
www.venatorcorp.com
2019 Annual Report
2019 Annual Report