UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2019~~2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-38176

Venator Materials PLC

(Exact name of registrant as specified in its charter)


England and Wales			98-1373159
(State or other jurisdiction			(I.R.S. Employer Identification No.)
of incorporation or organization)

Titanium House, Hanzard Drive, Wynyard Park,

Stockton-On-Tees, TS22 5FD, United Kingdom

+44 (0) 1740 608 001

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, $0.001 par value per share	VNTR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company," in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑☐

Accelerated filer

☐☑

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of ~~October 30, 2019,~~November 1, 2020, the registrant had outstanding ~~106,564,828~~106,741,653 ordinary shares, $0.001 par value per share.

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GENERAL

Except when the context otherwise requires or where otherwise indicated, (1) all references to "Venator," the "Company," "we," "us" and "our" refer to Venator Materials PLC and its subsidiaries, (2) all references to "Huntsman" refer to Huntsman Corporation and its subsidiaries, (3) all references to the "Titanium Dioxide" segment or business refer to the titanium dioxide ("TiO₂") business of Venator, (4) all references to the "Performance Additives" segment or business refer to the functional additives, color pigments, timber treatment and water treatment businesses of Venator, and (5) we refer to the internal reorganization prior to our initial public offering ("IPO"), the separation transactions initiated to separate the Venator business from Huntsman’s other businesses, including the entry into and effectiveness of the separation agreement and ancillary agreements, and the financing arrangements and debt, comprising the senior secured term loan facility (the "Term Loan Facility"), the asset-based revolving facility (the "ABL Facility" and, together with the Term Loan Facility, the "Senior Credit Facilities") and the 5.75% senior unsecured notes due 2025 (the "Senior Unsecured Notes"), including the use of the net proceeds of the Senior Credit Facilities and the Senior Unsecured Notes, which were used to repay intercompany debt we owed to Huntsman and to pay related fees and expenses, as the "separation," which occurred on August 8, 2017.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information set forth in this report contains "forward-looking statements" within the meaning of 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 (the "Exchange Act"). All statements other than historical or current 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:

•the impacts and duration of the global outbreak of the Coronavirus Disease 2019 ("COVID-19") pandemic on the global economy and all aspects of our business including our employees, customers, suppliers, partners' results of operations, financial condition and liquidity;

•the pending acquisition by funds advised by SK Capital Partners, L.P. (“SK Capital”) of the ordinary shares of the Company held by Huntsman;

•volatile global economic conditions;

•cyclical and volatile ~~TiO~~₂product ~~applications;~~application markets;

•highly competitive industries and the need to innovate and develop new products;

•industry production capacity and operating rates;

•~~our ability to successfully transfer production~~high levels of certain specialty and differentiated products from our Pori, Finland manufacturing facility to other sites within our manufacturing network and the costs associated with such transfer and the planned closure of the facility;indebtedness;

•~~economic conditions~~our ability to maintain sufficient working capital to fund our operations and ~~regulatory changes following the likely exit of the United Kingdom (the "U.K.") from the European Union ("EU");~~capital expenditures, and service our debt;

•~~increased manufacturing, labeling and waste disposal regulations associated with some of~~ our ~~products, including the outcome of the pending potential classification of TiO~~₂ ~~as a carcinogen in the EU, or any increased regulatory scrutiny;~~ability to obtain future capital on favorable terms;

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•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 ~~cover costs from~~successfully grow and transform our business including by way of acquisitions, divestitures and restructuring activities;

•our ability to successfully transfer production ~~disruptions, including construction costs~~of certain specialty and ~~lost revenue, with insurance proceeds;~~differentiated products formerly produced at our Pori, Finland manufacturing facility to other sites within our manufacturing network;

•our ability to develop new products or successfully transfer production of existing products within our manufacturing network;

•fluctuations in currency exchange rates and tax rates;

•our ability to adequately protect our information technology systems, some of which are critical to our business;

•impacts on the markets for our products and the broader global economy from the imposition of tariffs by the U.S. and other countries;

•~~price volatility or interruptions in supply of raw materials and energy;~~

•our ability to realize financial and operational benefits from our business improvement plans and initiatives;

•changes to laws, regulations or the interpretation thereof;

•~~our ability to successfully grow and transform our business, including by way of acquisitions, divestments and restructuring initiatives;~~

•differences in views with our joint venture participants;

•~~high levels of indebtedness;~~

•EHS laws and regulations;

•~~our ability to obtain future capital on favorable terms;~~

•~~seasonal sales patterns in our product markets;~~

•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 (often referred to as "Brexit");

•seasonal sales patterns in our ~~ability to adequately protect our critical information technology systems;~~product markets;

•our ability to comply with expanding data privacy regulations;

•failure to maintain effective internal controls over financial reporting and disclosure;

•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~~the effects of public health crises, including the occurrence of contagious disease or illness, on the global economy, our ~~intellectual property rights;~~

•~~our ability to effectively manage our labor force;~~business, employees, supply chain and customers;

•conflicts, military actions, terrorist attacks, cyber-attacks and general ~~instability.~~instability;

•failure to enforce our intellectual property rights; and

•our ability to effectively manage our labor force.

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 "Part II. Item 1A. Risk Factors."

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PART I – FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

VENATOR MATERIALS PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions, except par value)	(In millions, except par value)	September 30, 2019		December 31, 2018		(In millions, except par value)	September 30, 2020		December 31, 2019

ASSETS	ASSETS									ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents^(a)	Cash and cash equivalents^(a)	$	40	$	165	Cash and cash equivalents(a)	$	208	$	55
Accounts receivable (net of allowance for doubtful accounts of $4 and $5, respectively)^(a)		358		351
Accounts receivable from affiliates		8		—
Accounts receivable (net of allowance for doubtful accounts of $5 and $4, respectively)(a)						Accounts receivable (net of allowance for doubtful accounts of $5 and $4, respectively)(a)	306		321

Inventories^(a)	Inventories^(a)	496		538		Inventories(a)	438		513
Prepaid expenses	Prepaid expenses	24		20		Prepaid expenses	25		21
Other current assets	Other current assets	64		51		Other current assets	52		67
Total current assets	Total current assets	990		1,125		Total current assets	1,029		977
Property, plant and equipment, net^(a)	Property, plant and equipment, net^(a)	936		994		Property, plant and equipment, net(a)	940		989
Operating lease right-of-use assets^(a)		42		—
Operating lease right-of-use assets, net(a)						Operating lease right-of-use assets, net(a)	39		43
Intangible assets, net^(a)	Intangible assets, net^(a)	22		16		Intangible assets, net(a)	18		21
Investment in unconsolidated affiliates	Investment in unconsolidated affiliates	84		83		Investment in unconsolidated affiliates	98		92
Deferred income taxes	Deferred income taxes	181		178		Deferred income taxes	37		33
Other noncurrent assets	Other noncurrent assets	75		89		Other noncurrent assets	139		110
Total assets	Total assets	$	2,330	$	2,485	Total assets	$	2,300	$	2,265
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY									LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable^(a)	Accounts payable^(a)	$	273	$	382	Accounts payable(a)	$	212	$	334
Accounts payable to affiliates	Accounts payable to affiliates	14		18		Accounts payable to affiliates	3		17
Accrued liabilities^(a)	Accrued liabilities^(a)	108		135		Accrued liabilities(a)	99		116
Current operating lease liability^(a)	Current operating lease liability^(a)	8		—		Current operating lease liability(a)	8		8
Current portion of debt^(a)	Current portion of debt^(a)	16		8		Current portion of debt(a)	7		13
Total current liabilities	Total current liabilities	419		543		Total current liabilities	329		488
Long-term debt	Long-term debt	737		740		Long-term debt	950		737
Operating lease liability^(a)	Operating lease liability^(a)	35		—		Operating lease liability(a)	33		37

Other noncurrent liabilities	Other noncurrent liabilities	260		313		Other noncurrent liabilities	295		300
Noncurrent payable to affiliates	Noncurrent payable to affiliates	34		34		Noncurrent payable to affiliates	30		30
Total liabilities	Total liabilities	1,485		1,630		Total liabilities	1,637		1,592
Commitments and contingencies (Notes 12 and 13)
Commitments and contingencies (Notes 11 and 12)						Commitments and contingencies (Notes 11 and 12)
Equity	Equity					Equity
Ordinary shares $0.001 par value, 200 shares authorized, each, 107 and 106 issued and outstanding, respectively		—		—
Ordinary shares $0.001 par value, 200 shares authorized, each, 107 issued and outstanding, each						Ordinary shares $0.001 par value, 200 shares authorized, each, 107 issued and outstanding, each	0		0
Additional paid-in capital	Additional paid-in capital	1,321		1,316		Additional paid-in capital	1,328		1,322
Retained deficit	Retained deficit	(97)		(96)		Retained deficit	(325)		(271)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(387)		(373)		Accumulated other comprehensive loss	(347)		(385)
Total Venator Materials PLC shareholders' equity	Total Venator Materials PLC shareholders' equity	837		847		Total Venator Materials PLC shareholders' equity	656		666
Noncontrolling interest in subsidiaries	Noncontrolling interest in subsidiaries	8		8		Noncontrolling interest in subsidiaries	7		7
Total equity	Total equity	845		855		Total equity	663		673
Total liabilities and equity	Total liabilities and equity	$	2,330	$	2,485	Total liabilities and equity	$	2,300	$	2,265

^(a)At September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the following amounts from consolidated variable interest entities are included in the respective balance sheet captions above: ~~$5 each~~$4 and $2 of cash and cash equivalents; ~~$5 each~~$6 and $4 of accounts receivable, net; $1 ~~each~~and $2 of inventories; $5 each of property, plant and equipment, net; $1 ~~and nil~~each of operating lease right-of-use assets; ~~$12~~$9 and ~~$14~~$11 of intangible assets, net; $1 each of accounts payable; ~~$2 and $4~~$3 each of accrued liabilities; $1NaN and ~~nil~~$1 of operating lease liabilities; and $2 ~~each~~and NaN of current portion of debt. See "Note 6.5. Variable Interest Entities."

See notes to unaudited condensed consolidated financial statements.

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VENATOR MATERIALS PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


		Three months ended September 30,						Nine months ended September 30,							Three months ended September 30,				Nine months ended September 30,
(Dollars in millions, except per share amounts)	(Dollars in millions, except per share amounts)	2019		2018		2019		2018		(Dollars in millions, except per share amounts)	2020		2019		2020		2019
Trade sales, services and fees, net	Trade sales, services and fees, net	$	526	$	533	$	1,666	$	1,781	Trade sales, services and fees, net	$	474	$	526	$	1,462	$	1,666
Cost of goods sold	Cost of goods sold	464		463		1,461		1,110		Cost of goods sold	454		464		1,336		1,461
Operating expenses:	Operating expenses:									Operating expenses:
Selling, general and administrative	Selling, general and administrative	45		52		138		162		Selling, general and administrative	34		45		112		138
Restructuring, impairment, and plant closing and transition costs	Restructuring, impairment, and plant closing and transition costs	12		428		24		573		Restructuring, impairment, and plant closing and transition costs	13		12		25		24
Other operating expense (income), net		5		5		12		(8)
Other operating (income) expense, net										Other operating (income) expense, net	(1)		5		9		12
Total operating expenses	Total operating expenses	62		485		174		727		Total operating expenses	46		62		146		174
Operating (loss) income	Operating (loss) income	—		(415)		31		(56)		Operating (loss) income	(26)		0		(20)		31
Interest expense	Interest expense	(13)		(14)		(40)		(41)		Interest expense	(18)		(13)		(46)		(40)
Interest income	Interest income	3		4		9		11		Interest income	3		3		9		9
Other income	Other income	1		4		3		8		Other income	5		1		12		3
(Loss) income before income taxes	(Loss) income before income taxes	(9)		(421)		3		(78)		(Loss) income before income taxes	(36)		(9)		(45)		3
Income tax (expense) benefit		(8)		55		—		(10)
Income tax expense										Income tax expense	(3)		(8)		(3)		0
Net (loss) income	Net (loss) income	(17)		(366)		3		(88)		Net (loss) income	(39)		(17)		(48)		3
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(2)		(2)		(4)		(6)		Net income attributable to noncontrolling interests	(3)		(2)		(6)		(4)
Net loss attributable to Venator	Net loss attributable to Venator	$	(19)	$	(368)	$	(1)	$	(94)	Net loss attributable to Venator	$	(42)	$	(19)	$	(54)	$	(1)

Per Share Data:	Per Share Data:									Per Share Data:
Loss attributable to Venator Materials PLC ordinary shareholders, basic	Loss attributable to Venator Materials PLC ordinary shareholders, basic	$	(0.18)	$	(3.46)	$	(0.01)	$	(0.88)	Loss attributable to Venator Materials PLC ordinary shareholders, basic	$	(0.39)	$	(0.18)	$	(0.51)	$	(0.01)
Loss attributable to Venator Materials PLC ordinary shareholders, diluted	Loss attributable to Venator Materials PLC ordinary shareholders, diluted	$	(0.18)	$	(3.46)	$	(0.01)	$	(0.88)	Loss attributable to Venator Materials PLC ordinary shareholders, diluted	$	(0.39)	$	(0.18)	$	(0.51)	$	(0.01)

See notes to unaudited condensed consolidated financial statements.

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VENATOR MATERIALS PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME~~LOSS

(Unaudited)

Three months ended
September 30, Nine months ended
September 30,
(Dollars in millions) 2019 2018 2019 2018
Net (loss) income $ (17) $ (366) $ 3 $ (88)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment (34) 9 (36) (49)
Pension and other postretirement benefits adjustments 4 3 12 10
Hedging instruments 5 — 10 5
Total other comprehensive (loss) income, net of tax (25) 12 (14) (34)
Comprehensive loss (42) (354) (11) (122)
Comprehensive income attributable to noncontrolling interest (2) (2) (4) (6)
Comprehensive loss attributable to Venator $ (44) $ (356) $ (15) $ (128)


	Three months ended September 30,				Nine months ended September 30,
(Dollars in millions)	2020		2019		2020		2019
Net (loss) income	$	(39)	$	(17)	$	(48)	$	3
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	46		(34)		29		(36)
Pension and other postretirement benefits adjustments	3		4		10		12
Hedging instruments	(10)		5		(1)		10
Total other comprehensive income (loss), net of tax	39		(25)		38		(14)
Comprehensive loss	0		(42)		(10)		(11)
Comprehensive income attributable to noncontrolling interest	(3)		(2)		(6)		(4)
Comprehensive loss attributable to Venator	$	(3)	$	(44)	$	(16)	$	(15)

See notes to unaudited condensed consolidated financial statements.

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VENATOR MATERIALS PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


		Total Venator Materials PLC Equity																												Total Venator Materials PLC Equity
		Ordinary Shares					Additional Paid-in Capital			Retained Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest in Subsidiaries			Total		Ordinary Shares					Additional Paid-in Capital			Retained Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest in Subsidiaries			Total
(In millions)	(In millions)	Shares	Amount																				(In millions)				Shares									Noncontrolling Interest in Subsidiaries				Total
Balance, January 1, 2019		106	$	—	$	1,316		$	(96)		$	(373)		$	8		$	855
Balance, January 1, 2020																			Balance, January 1, 2020	107	$	0		$	1,322		$	(271)		$	(385)							$	7	$	673
Net income																			Net income	—	—			—			7			—			1			8
Other comprehensive loss, net of tax																			Other comprehensive loss, net of tax	—	—			—			—			(23)			—			(23)
Dividends paid to noncontrolling interests																			Dividends paid to noncontrolling interests	—	—			—			—			—			(1)			(1)
Activity related to stock plans																			Activity related to stock plans	—	—			2			—			—			—			2
Balance, March 31, 2020																			Balance, March 31, 2020	107	$	0		$	1,324		$	(264)		$	(408)		$	7		$	659
Net (loss) income	Net (loss) income	—	—		—			(3)			—			1			(2)		Net (loss) income	—	—			—			(19)			—			2			(17)
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—	—		—			—			19			—			19		Other comprehensive income, net of tax	—	—			—			—			22			—			22
Dividends paid to noncontrolling interests	Dividends paid to noncontrolling interests	—	—		—			—			—			(1)			(1)		Dividends paid to noncontrolling interests	—	—			—			—			—			(2)			(2)
Activity related to stock plans	Activity related to stock plans	1	—		1			—			—			—			1		Activity related to stock plans	—	—			2			—			—			—			2
Balance, March 31, 2019		107	$	—	$	1,317		$	(99)		$	(354)		$	8		$	872
Net income		—	—		—			21			—			1			22
Other comprehensive loss, net of tax		—	—		—			—			(8)			—			(8)
Balance, June 30, 2020																			Balance, June 30, 2020	107	$	0		$	1,326		$	(283)		$	(386)		$	7		$	664
Net (loss) income																			Net (loss) income	—	—			—			(42)			—			3			(39)
Other comprehensive income, net of tax																			Other comprehensive income, net of tax	—	—			—			—			39			—			39
Dividends paid to noncontrolling interests	Dividends paid to noncontrolling interests	—	—		—			—			—			(2)			(2)		Dividends paid to noncontrolling interests	—	—			—			—			—			(3)			(3)
Activity related to stock plans	Activity related to stock plans	—	—		2			—			—			—			2		Activity related to stock plans	—	—			2			—			—			—			2
Balance, June 30, 2019		107	$	—	$	1,319		$	(78)		$	(362)		$	7		$	886
Net (loss) income		—	—		—			(19)			—			2			(17)
Other comprehensive loss, net of tax		—	—		—			—			(25)			—			(25)
Dividends paid to noncontrolling interests		—	—		—			—			—			(1)			(1)
Activity related to stock plans		—	—		2			—			—			—			2
Balance, September 30, 2019		107	$	—	$	1,321		$	(97)		$	(387)		$	8		$	845
Balance, September 30, 2020																			Balance, September 30, 2020	107	$	0		$	1,328		$	(325)		$	(347)		$	7		$	663


		Total Venator Materials PLC Equity																												Total Venator Materials PLC Equity
		Ordinary Shares					Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interest in Subsidiaries			Total		Ordinary Shares					Additional Paid-in Capital			Retained Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest in Subsidiaries			Total
(In millions)	(In millions)	Shares	Amount																				(In millions)				Shares									Noncontrolling Interest in Subsidiaries				Total
Balance, January 1, 2018		106	$	—	$	1,311		$	67		$	(283)		$	10		$	1,105
Net income		—	—		—			78			—			2			80
Balance, January 1, 2019																			Balance, January 1, 2019	106	$	0		$	1,316		$	(96)		$	(373)							$	8	$	855
Net (loss) income																			Net (loss) income	—	—			—			(3)			—			1			(2)
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—	—		—			—			53			—			53		Other comprehensive income, net of tax	—	—			—			—			19			—			19
Dividends paid to noncontrolling interests	Dividends paid to noncontrolling interests	—	—		—			—			—			(2)			(2)		Dividends paid to noncontrolling interests	—	—			—			—			—			(1)			(1)
Activity related to stock plans	Activity related to stock plans	—	—		1			—			—			—			1		Activity related to stock plans	1	—			1			—			—			—			1
Balance, March 31, 2018		106	$	—	$	1,312		$	145		$	(230)		$	10		$	1,237
Balance, March 31, 2019																			Balance, March 31, 2019	107	$	0		$	1,317		$	(99)		$	(354)		$	8		$	872
Net income	Net income	—	—		—			196			—			2			198		Net income	—	—			—			21			—			1			22
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—	—		—			—			(99)			—			(99)		Other comprehensive loss, net of tax	—	—			—			—			(8)			—			(8)
Dividends paid to noncontrolling interests	Dividends paid to noncontrolling interests	—	—		—			—			—			(3)			(3)		Dividends paid to noncontrolling interests	—	—			—			—			—			(2)			(2)
Activity related to stock plans	Activity related to stock plans	—	—		1			—			—			—			1		Activity related to stock plans	—	—			2			—			—			—			2
Balance, June 30, 2018		106	$	—	$	1,313		$	341		$	(329)		$	9		$	1,334
Balance, June 30, 2019																			Balance, June 30, 2019	107	0			$	1,319		$	(78)		$	(362)		$	7		$	886
Net (loss) income	Net (loss) income	—	—		—			(368)			—			2			(366)		Net (loss) income	—	—			—			(19)			—			2			(17)
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—	—		—			—			12			—			12		Other comprehensive loss, net of tax	—	—			—			—			(25)			—			(25)
Dividends paid to noncontrolling interests	Dividends paid to noncontrolling interests	—	—		—			—			—			(2)			(2)		Dividends paid to noncontrolling interests	—	—			—			—			—			(1)			(1)
Activity related to stock plans	Activity related to stock plans	—	—		1			—			—			—			1		Activity related to stock plans	—	—			2			—			—			—			2
Balance, September 30, 2018		106	$	—	$	1,314		$	(27)		$	(317)		$	9		$	979
Balance, September 30, 2019																			Balance, September 30, 2019	107	$	0		$	1,321		$	(97)		$	(387)		$	8		$	845

See notes to unaudited condensed consolidated financial statements.

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VENATOR MATERIALS PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Nine months ended September 30,							Nine months ended September 30,
(Dollars in millions)	(Dollars in millions)	2019		2018		(Dollars in millions)	2020		2019
Operating Activities:	Operating Activities:					Operating Activities:
Net income (loss)		$	3	$	(88)
Net (loss) income						Net (loss) income	$	(48)	$	3

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Adjustments to reconcile net (loss) income to net cash used in operating activities:						Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	Depreciation and amortization	82		102		Depreciation and amortization	85		82
Deferred income taxes	Deferred income taxes	(5)		(6)		Deferred income taxes	(3)		(5)
Noncash restructuring and impairment charges	Noncash restructuring and impairment charges	5		539		Noncash restructuring and impairment charges	14		5

Noncash loss (gain) on foreign currency transactions		4		(4)
Noncash loss on foreign currency transactions						Noncash loss on foreign currency transactions	4		4
Gain on disposal of businesses/assets, net						Gain on disposal of businesses/assets, net	(6)		0
Other, net	Other, net	7		7		Other, net	12		7
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(28)		(14)		Accounts receivable	20		(28)
Inventories	Inventories	27		(67)		Inventories	87		27
Prepaid expenses	Prepaid expenses	(5)		(9)		Prepaid expenses	(4)		(5)
Other current assets	Other current assets	(1)		(17)		Other current assets	4		(1)
Other noncurrent assets	Other noncurrent assets	(1)		(1)		Other noncurrent assets	(15)		(1)
Accounts payable	Accounts payable	(72)		(18)		Accounts payable	(113)		(72)
Accrued liabilities	Accrued liabilities	(16)		(94)		Accrued liabilities	(20)		(16)
Other noncurrent liabilities	Other noncurrent liabilities	(36)		(24)		Other noncurrent liabilities	(17)		(36)
Net cash (used in) provided by operating activities		(36)		306
Net cash used in operating activities						Net cash used in operating activities	0		(36)
Investing Activities:	Investing Activities:					Investing Activities:
Capital expenditures	Capital expenditures	(110)		(272)		Capital expenditures	(54)		(110)

Cash received from unconsolidated affiliates	Cash received from unconsolidated affiliates	33		25		Cash received from unconsolidated affiliates	28		33
Investment in unconsolidated affiliates	Investment in unconsolidated affiliates	(35)		(19)		Investment in unconsolidated affiliates	(35)		(35)
Cash received from notes receivable	Cash received from notes receivable	12		—		Cash received from notes receivable	12		12
Proceeds from sale of business/assets						Proceeds from sale of business/assets	6		0
Other, net	Other, net	(1)		—		Other, net	0		(1)
Net cash used in investing activities	Net cash used in investing activities	(101)		(266)		Net cash used in investing activities	(43)		(101)
Financing Activities:	Financing Activities:					Financing Activities:

Net borrowings on notes payable		9		—
Net proceeds from short-term debt						Net proceeds from short-term debt	3		0
Net (repayments) borrowings on notes payable						Net (repayments) borrowings on notes payable	(7)		9
Repayment of third-party debt	Repayment of third-party debt	(4)		(10)		Repayment of third-party debt	(4)		(4)

Proceeds from the termination of cross currency swap contracts	Proceeds from the termination of cross currency swap contracts	15		—		Proceeds from the termination of cross currency swap contracts	0		15
Dividends paid to noncontrolling interests	Dividends paid to noncontrolling interests	(4)		(7)		Dividends paid to noncontrolling interests	(6)		(4)

Proceeds from issuance of long-term debt						Proceeds from issuance of long-term debt	221		0
Debt issuance costs paid						Debt issuance costs paid	(7)		0
Other, net	Other, net	(3)		—		Other, net	(5)		(3)

Net cash provided by (used in) financing activities		13		(17)
Net cash provided by financing activities						Net cash provided by financing activities	195		13
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(1)		(10)		Effect of exchange rate changes on cash	1		(1)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	(125)		13		Net change in cash and cash equivalents	153		(125)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	165		238		Cash and cash equivalents at beginning of period	55		165
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	40	$	251	Cash and cash equivalents at end of period	$	208	$	40

Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Cash paid for interest		$	41	$	41
Cash paid for interest excluding hedging activity						Cash paid for interest excluding hedging activity	$	35	$	41
Cash paid for income taxes	Cash paid for income taxes	4		28		Cash paid for income taxes	0		4
Supplemental disclosure of noncash activities:	Supplemental disclosure of noncash activities:					Supplemental disclosure of noncash activities:
Capital expenditures included in accounts payable as of September 30, 2019 and 2018, respectively		$	28	$	50
Capital expenditures included in accounts payable as of September 30, 2020 and 2019, respectively						Capital expenditures included in accounts payable as of September 30, 2020 and 2019, respectively	$	21	$	28

See notes to unaudited condensed consolidated financial statements.

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VENATOR MATERIALS PLC AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. General, Description of Business, Recent Developments and Basis of Presentation

Description of Business

Venator became an independent publicly traded company following our IPO and separation from Huntsman Corporation in August 2017. Venator operates in 2 segments: Titanium Dioxide and Performance Additives. The Titanium Dioxide segment primarily manufactures and sells TiO₂, and operates 87 TiO₂ manufacturing facilities across the ~~globe.~~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

Our unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP" or "U.S. GAAP") and in management’s opinion reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results of operations, comprehensive ~~income,~~loss, financial ~~position~~condition and cash flows for the periods presented. Results for interim periods are not necessarily indicative of those to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated and combined financial statements and notes to consolidated and combined financial statements included in the Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 for our Company.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

In the notes to unaudited condensed consolidated financial statements, all dollar and share amounts, except per share amounts, in tabulations are in millions unless otherwise indicated.

COVID-19

The COVID-19 pandemic has caused a significant global economic slowdown which in turn has had a material impact on demand for our products in the three and nine months ended September 30, 2020. We expect that the COVID-19 pandemic will continue to have a negative impact on our future results of operations, financial condition and liquidity. The duration and severity of the outbreak and its long-term impacts on our business cannot be fully determined at this time.

Note 2. Recently Issued Accounting Pronouncements

Accounting Pronouncements Adopted During the Period

Effective January 1, ~~2019,~~2020, 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 condensed consolidated 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 unaudited condensed consolidated statement of comprehensive income.

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~~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~~losses for financial ~~statement users with more decision-useful information about~~assets, including trade receivables, held at the ~~expected credit losses~~reporting date, based on ~~financial instruments~~historical experience, current conditions, and ~~other commitments to extend credit held by a reporting entity at each reporting date.~~reasonable and supportable information. 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~~of this ASU did not ~~anticipate this will~~ have a material impact on our condensed consolidated financial statements.

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Effective April 1, 2020, we adopted ASU No. 2019-12, Income Taxes (Topic 740). The amendments in this ASU remove certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also clarifies and simplifies other areas of ASC Topic 740. Certain adjustments in this update must be applied on a prospective basis, certain amendments must be applied on a retrospective basis and certain amendments must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings in the period of adoption. The adoption of this ASU did not have a material impact on our unaudited condensed consolidated financial statements.

Accounting Pronouncements Pending Adoption in Future Periods

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~~We do not expect the adoption of this ASU ~~is related~~ to ~~disclosure requirements only, this adoption will not~~ have a material impact on our consolidated financial statements.

~~Note 3. Leases~~

In March 2020, the FASB issued ASU No. 2020-04,

~~We have leases~~Reference Rate Reform (Topic 848). The amendments in this ASU temporarily simplify the accounting for ~~warehouses, office space, land, office equipment, production equipment~~contract modifications, including hedging relationships, due to the transition from London Interbank Offering Rate ("LIBOR") and ~~automobiles. ROU assets and lease obligations are recognized~~other interbank offered rates to alternative reference interest rates. For example, entities can elect not to remeasure the contracts at the ~~lease commencement~~modification date ~~based on~~or reassess a previous accounting determination if certain conditions are met. Additionally, entities can elect to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain conditions are met. This standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. We are currently evaluating the ~~present value~~impact of ~~lease payments over~~ the ~~lease term. Operating lease ROU assets and liabilities are included in operating lease right-of-use assets, current operating lease liabilities, and operating lease liabilities~~transition from LIBOR to alternative reference interest rates on our condensed consolidated balance sheet. Finance leases ROU assets are included in property, plant and equipment, net, while finance lease liabilities are included in other non-current liabilities. 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.

financial statements.

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. As of September 30, 2019, we do not have leases initiated but not yet commenced which are expected to commence during the remainder of 2019.

~~The components of lease expense were as follows:~~

Lease Cost Three months ended September 30, 2019 Nine months ended September 30, 2019
Operating lease cost $ 3 $ 10
Finance lease cost:
Amortization of right-of-use assets — 1
Interest on lease liabilities — —
Short-term lease cost — 1

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~~Supplemental balance sheet information related to leases was as follows:~~


~~Leases~~	~~As of September 30, 2019~~
~~Assets~~
~~Operating Lease Right-of-Use Assets~~	$	42

~~Finance Lease Right-of-Use Assets, at cost~~	$	13
~~Accumulated Depreciation~~	~~(4)~~
~~Finance Lease Right-of-Use Assets, net~~	$	9

~~Liabilities~~
~~Operating Lease Obligation~~
~~Current~~	$	8
~~Non-Current~~	35
~~Total Operating Lease Liabilities~~	$	43

~~Finance Lease Obligation~~
~~Current~~	$	1
~~Non-Current~~	9
~~Total Finance Lease Liabilities~~	$	10

~~Cash paid for amounts included in the present value of operating lease liabilities were as follows:~~

Cash Flow Information Three months ended September 30, 2019 Nine months ended September 30, 2019
Operating cash flows from operating leases $ 3 $ 10
Operating cash flows from finance leases — 1
Financing cash flows from finance leases — —


~~Lease Term and Discount Rate~~	~~As of September 30, 2019~~
~~Weighted average remaining lease term (years)~~
~~Operating leases~~	~~12.7~~
~~Finance leases~~	~~7.1~~
~~Weighted average discount rate~~
~~Operating leases~~	~~7.1~~	%
~~Financing leases~~	~~5.2~~	%

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~~Maturities of lease liabilities were as follows:~~

September 30, 2019 Operating Leases Finance Leases Total
2019 (remaining) $ 3 $ — $ 3
2020 10 2 12
2021 9 1 10
2022 7 1 8
2023 4 1 5
After 2023 40 7 47
Total lease payments $ 73 $ 12 $ 85
Less: Interest 30 2 32
Present value of lease liabilities $ 43 $ 10 $ 53

~~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 leases as of December 31, 2018 were as follows:

December 31, Operating Leases Capital Leases
2019 $ 13 $ 1
2020 11 2
2021 9 1
2022 6 1
2023 4 1
Thereafter 40 7
Total $ 83 $ 13
Less: Amounts representing interest 3
Present value of minimum lease payments $ 10
Less: Current portion of capital leases 1
Long-term portion of capital leases $ 9

Note 4.3. Revenue

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 promise to transfer to the customer a distinct good. 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.

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The following table disaggregates our ~~revenue~~revenues by major geographical region for the three and nine months ended September 30, ~~2019~~2020 and ~~2018:~~2019:

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		Three Months Ended September 30, 2019										Nine Months Ended September 30, 2019											Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
		Titanium Dioxide		Performance Additives		Total		Titanium Dioxide		Performance Additives		Total			Titanium Dioxide		Performance Additives		Total		Titanium Dioxide		Performance Additives		Total
Europe	Europe	$	192	$	43	$	235	$	620	$	147	$	767	Europe	$	182	$	47	$	229	$	554	$	139	$	693
North America	North America	80		53		133		245		175		420		North America	70		61		131		220		173		393
Asia	Asia	85		23		108		269		66		335		Asia	64		20		84		212		58		270
Other	Other	39		11		50		126		18		144		Other	27		3		30		97		9		106
Total Revenues	Total Revenues	$	396	$	130	$	526	$	1,260	$	406	$	1,666	Total Revenues	$	343	$	131	$	474	$	1,083	$	379	$	1,462


		Three Months Ended September 30, 2018										Nine Months Ended September 30, 2018											Three Months Ended September 30, 2019				Nine Months Ended September 30, 2019
		Titanium Dioxide		Performance Additives		Total		Titanium Dioxide		Performance Additives		Total			Titanium Dioxide		Performance Additives		Total		Titanium Dioxide		Performance Additives		Total
Europe	Europe	$	192	$	48	$	240	$	661	$	165	$	826	Europe	$	192	$	43	$	235	$	620	$	147	$	767
North America	North America	73		68		141		225		223		448		North America	80		53		133		245		175		420
Asia	Asia	85		21		106		278		78		356		Asia	85		23		108		269		66		335
Other	Other	39		7		46		136		15		151		Other	39		11		50		126		18		144
Total Revenues	Total Revenues	$	389	$	144	$	533	$	1,300	$	481	$	1,781	Total Revenues	$	396	$	130	$	526	$	1,260	$	406	$	1,666

The following table disaggregates our ~~revenue~~revenues by major product line for the three and nine months ended September 30, ~~2019~~2020 and ~~2018:~~2019:


		Three Months Ended September 30, 2019										Nine Months Ended September 30, 2019											Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
		Titanium Dioxide		Performance Additives		Total		Titanium Dioxide		Performance Additives		Total			Titanium Dioxide		Performance Additives		Total		Titanium Dioxide		Performance Additives		Total
TiO₂	TiO₂	$	396	$	—	$	396	$	1,260	$	—	$	1,260	TiO2	$	343	$	0	$	343	$	1,083	$	0	$	1,083
Color Pigments	Color Pigments	—		65		65		—		205		205		Color Pigments	0		66		66		0		187		187
Functional Additives	Functional Additives	—		29		29		—		94		94		Functional Additives	0		24		24		0		80		80
Timber Treatment	Timber Treatment	—		31		31		—		91		91		Timber Treatment	0		36		36		0		97		97
Water Treatment	Water Treatment	—		5		5		—		16		16		Water Treatment	0		5		5		0		15		15
Total Revenues	Total Revenues	$	396	$	130	$	526	$	1,260	$	406	$	1,666	Total Revenues	$	343	$	131	$	474	$	1,083	$	379	$	1,462


		Three Months Ended September 30, 2018										Nine Months Ended September 30, 2018											Three Months Ended September 30, 2019				Nine Months Ended September 30, 2019
		Titanium Dioxide		Performance Additives		Total		Titanium Dioxide		Performance Additives		Total			Titanium Dioxide		Performance Additives		Total		Titanium Dioxide		Performance Additives		Total
TiO₂	TiO₂	$	389	$	—	$	389	$	1,300	$	—	$	1,300	TiO2	$	396	$	0	$	396	$	1,260	$	0	$	1,260
Color Pigments	Color Pigments	—		71		71		—		237		237		Color Pigments	0		65		65		0		205		205
Functional Additives	Functional Additives	—		34		34		—		114		114		Functional Additives	0		29		29		0		94		94
Timber Treatment	Timber Treatment	—		34		34		—		112		112		Timber Treatment	0		31		31		0		91		91
Water Treatment	Water Treatment	—		5		5		—		18		18		Water Treatment	0		5		5		0		16		16
Total Revenues	Total Revenues	$	389	$	144	$	533	$	1,300	$	481	$	1,781	Total Revenues	$	396	$	130	$	526	$	1,260	$	406	$	1,666

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 for 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 certain volume commitments are 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

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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.

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Note 5.4. 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 September 30, ~~2019~~2020 and December 31, ~~2018~~2019 consisted of the following:


		September 30, 2019		December 31, 2018			September 30, 2020		December 31, 2019
Raw materials and supplies	Raw materials and supplies	$	159	$	165	Raw materials and supplies	$	142	$	166
Work in process	Work in process	47		56		Work in process	45		49
Finished goods	Finished goods	290		317		Finished goods	251		298
Total	Total	$	496	$	538	Total	$	438	$	513

Note 6.5. 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, LLC ("Viance") is our 50%-owned joint venture with DuPont de Nemours, Inc. Viance markets timber treatment products for Venator. We have determined that the activity that most significantly impacts Viance’s 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.

Creditors of these entities have no recourse to Venator’s general credit. As the primary beneficiary of these variable interest entities at September 30, ~~2019,~~2020, the joint ventures’ assets, liabilities and results of operations are included in Venator’s unaudited condensed consolidated financial statements.

The revenues, income before income taxes and net cash provided by operating activities for our variable interest entities for the three and nine months ended September 30, ~~2019~~2020 and ~~2018~~2019 are as follows:


		Three months ended September 30,						Nine months ended September 30,							Three months ended September 30,				Nine months ended September 30,
		2019		2018		2019		2018			2020		2019		2020		2019
Revenues	Revenues	$	24	$	28	$	71	$	94	Revenues	$	29	$	24	$	79	$	71
Income before income taxes	Income before income taxes	2		3		7		11		Income before income taxes	5		2		11		7
Net cash provided by operating activities	Net cash provided by operating activities	4		2		10		14		Net cash provided by operating activities	5		4		12		10

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Note 7.6. 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 NaN for the three and nine months ended September 30, 2020, respectively, and $1 million and $5 million for the three and nine months ended September 30, 2019, respectively, all of which related to workforce reductions. We expect that additional costs related to this plan will be immaterial.

Titanium Dioxide Segment

In July 2016, we implemented a plan to close our Umbogintwini, South Africa ~~Titanium Dioxide~~titanium dioxide manufacturing facility. As part of the program, we recorded restructuring expense of ~~nil and $1 million, respectively,~~NaN for the three and nine months ended September 30, ~~2019~~2020, respectively, and ~~$1 million~~NaN and $3$1 million for the three and nine months ended September 30, ~~2018,~~2019, respectively, all of which related to plant shutdown costs. We expect further charges as part of this program to be immaterial. In connection with this plan, in August 2020 we sold the Umbogintwini facility. Accordingly, during the third quarter of 2020 we received proceeds of $6 million related to this sale and recognized a corresponding gain on disposal of assets of $6 million. This gain is recorded in the "Other operating (income) expense, net" line item of our unaudited condensed consolidated statement of operations.

In March 2017, we implemented a plan to close the ~~white end~~white-end finishing and packaging operation of our ~~Titanium Dioxide~~titanium dioxide manufacturing facility at our Calais, France site. The announced plan follows the 2015 closure of the ~~black end~~black-end manufacturing operations and would result in the closure of the entire facility. As part of the program, we recorded restructuring expense of NaN and $4 million for the three and nine months ended September 30, 2020, respectively, and $3 million and $5 million for the three and nine months ended September 30, 2019, ~~respectively, and $3 million and $12 million for the three and nine months ended September 30, 2018,~~ respectively, all of which related to plant shutdown costs. We expect to incur additional plant shutdown costs for our Calais, France facility of approximately ~~$24~~$13 million through ~~2022.~~2023.

In September 2018, we implemented a plan to close our Pori, Finland ~~Titanium Dioxide~~titanium dioxide manufacturing facility. As part of the program, we recorded restructuring expense of $10 million for the three months ended September 30, 2020, of which $9 million was related to accelerated depreciation and $1 million related to plant shutdown costs. This restructuring expense consists of $1 million of cash expense and a noncash expense of $9 million. We recorded restructuring expense of $18 million for the nine months ended September 30, 2020 of which $11 million was related to accelerated depreciation, $2 million related to employee benefits and $5 million related to plant shutdown costs. This restructuring expense consists of $7 million of cash expense and a noncash expense of $11 million.

We recorded a restructuring expense related to our Pori facility of $8 million for the three months ended September 30, 2019, of which $6 million was related to accelerated depreciation, $1 million related to employee benefits, and $1 million related to plant ~~shutdown~~shut down costs. This restructuring expense ~~consists~~consisted of $2 million of cash expense and a noncash expense of $6 ~~million and $2 million of cash expense.~~million. We recorded restructuring expense of $11 million for the nine months ended September 30, 2019, of which ~~a gain of $14 million related to early settlement of contractual obligation was offset by~~ $17 million ofwas related to accelerated depreciation, $5 million related to employee benefits and $3 million related to plant shutdown ~~costs.~~costs, partially offset by a gain of $14 million related to early settlement of contractual obligation. This restructuring expense consists of $8 million of cash expense and a noncash net expense of $3 million and $8 million of cash expense. We recorded restructuring expense of approximately $415 million for the three and nine months ended September 30, 2018, each, of which $367 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 $30 million of cash and $385 million of noncash charges. million.

We expect to incur additional charges related to our Pori facility of approximately ~~$114~~$87 million through the end of 2024, of which ~~$19~~$7 million relates to accelerated depreciation, ~~$86~~$77 million relates to plant shut down costs, $7$1 million relates to other employee costs and $2 million relates to the write off of other assets. Future charges consist of ~~$21~~$9 million of noncash costs and ~~$93~~$78 million of cash costs.

~~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 for the three and nine months ended September 30, 2019. We recorded restructuring expense of $6 million and $13 million for the three and nine months ended September 30, 2018, respectively. We do not expect to incur any additional charges as part of this program.

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Performance Additives Segment

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 ~~nil~~NaN for the three and nine months ended September 30, 2020, each, and NaN and $2 million for the three and nine months ended September 30, 2019, respectively, all of which related to accelerated depreciation. ~~We recorded restructuring expense of nil for the three and nine months ended September 30, 2018. 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 for the three and nine months ended September 30, 2019. We recorded restructuring expense of nil and $127 million for the three and nine months ended September 30, 2018, respectively, of which $125 million related to accelerated depreciation, $1 million related to other noncash charges and $1 million related to cash charges. We do not expect to incur any additional charges as part of this program.

Accrued Restructuring and Plant Closing and Transition Costs

As of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, accrued restructuring and plant closing and transition costs by type of cost and year of initiative consisted of the following:

Workforce reductions⁽¹⁾
Other restructuring costs
Total⁽²⁾
Accrued liabilities as of December 31, 2018 $ 32 $ — $ 32
2019 charges for 2018 and prior initiatives 6 9 15
2019 charges for 2019 initiatives 4 — 4
2019 payments for 2018 and prior initiatives (22) (8) (30)
2019 payments for 2019 initiatives (4) — (4)
Foreign currency effect on liability balance (1) — (1)
Accrued liabilities as of September 30, 2019 $ 15 $ 1 $ 16
Current portion of restructuring reserves 8
Long-term portion of restructuring reserve 8


	Workforce reductions(1)		Other restructuring costs		Total(2)
Accrued liabilities as of December 31, 2019	$	15	$	1	$	16
2020 charges for 2019 and prior initiatives	4		7		11

2020 payments for 2019 and prior initiatives	(10)		(7)		(17)


Accrued liabilities as of September 30, 2020	$	9	$	1	$	10

⁽¹⁾The total workforce reduction reserves of ~~$15~~$9 million relate to the termination of ~~342~~121 positions, of which ~~133~~0 positions have been terminated but require future payment as of September 30, ~~2019.~~2020.

⁽²⁾Accrued liabilities ~~remaining at September 30,~~are related to 2019 initiatives and ~~December 31, 2018 by year of initiatives were as follows:~~prior for all periods presented.

September 30, 2019 December 31, 2018
2017 initiatives and prior $ 6 $ 18
2018 initiatives 9 14
2019 initiatives 1 —
Total $ 16 $ 32
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 December 31, 2019	$	16	$	0	$	16
2020 charges for 2019 and prior initiatives	10		1		11

2020 payments for 2019 and prior initiatives	(16)		(1)		(17)


Accrued liabilities as of September 30, 2020	$	10	$	0	$	10
Current portion of restructuring reserves	$	4	$	0	$	4
Long-term portion of restructuring reserve	$	6	$	0	$	6

~~Our restructuring accruals are all related to our Titanium Dioxide segment.~~

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Restructuring, Impairment and Plant Closing and Transition Costs

Details with respect to major cost type of restructuring charges and impairment of assets for the three and nine months ended September 30, ~~2019~~2020 and ~~2018~~2019 by initiative are provided below:

Three months ended Nine months ended
September 30, 2019 September 30, 2019
Cash charges $ 5 $ 19
Early settlement of contractual obligation — (14)
Accelerated depreciation 7 19
Total 2019 Restructuring, Impairment and Plant Closing and Transition Costs $ 12 $ 24

Three months ended Nine months ended
September 30, 2018 September 30, 2018
Cash charges $ 22 $ 34
Pension related charges 24 24
Accelerated depreciation 373 505
Other noncash charges 9 10
Total 2018 Restructuring, Impairment and Plant Closing and Transition Costs $ 428 $ 573


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Cash charges	$	1	$	5	$	11	$	19
Impairment of assets	3		0		3		0
Early settlement of contractual obligation	0		0		0		(14)
Accelerated depreciation	9		7		11		19

Total Restructuring, Impairment and Plant Closing and Transition Costs	$	13	$	12	$	25	$	24

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Note 8.7. Debt

Outstanding debt, net of ~~debt~~unamortized discount and issuance costs of ~~$14~~$25 million and ~~$13~~$14 million as of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, consisted of the following:


		September 30, 2019		December 31, 2018			September 30, 2020		December 31, 2019
Senior Notes		$	371	$	370
Term Loan Facility		362		365
Term Loan Facility due August 2024						Term Loan Facility due August 2024	$	359	$	361
Senior Secured Notes due July 2025						Senior Secured Notes due July 2025	215		0
Senior Unsecured Notes due July 2025						Senior Unsecured Notes due July 2025	371		371
Other	Other	20		13		Other	12		18
Total debt	Total debt	753		748		Total debt	957		750
Less: short-term debt and current portion of long-term debt	Less: short-term debt and current portion of long-term debt	16		8		Less: short-term debt and current portion of long-term debt	7		13
Long-term debt	Long-term debt	$	737	$	740	Long-term debt	$	950	$	737

~~The estimated fair value of the Senior Notes was $320 million and $300 million as of September 30, 2019 and December 31, 2018, respectively.~~ The estimated fair value of the Term Loan Facility was ~~$363~~$352 millionand ~~$355~~$365 million as of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. The estimated fair value of the Senior Secured Notes was$240 million as of September 30, 2020. The estimated fair value of the Senior Unsecured Notes was $325 millionand $346 million as of September 30, 2020 and December 31, 2019, respectively. The estimated fair values of the Term Loan Facility, Senior Secured Notes and ~~the Term Loan Facility~~Senior Unsecured Notes are based upon quoted market prices (Level 1).

~~We had 0~~The aggregate principal outstanding under our ABL Facility was NaN as of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, each.

~~The weighted average interest rate on our outstanding balances under the Senior Notes and Term Loan Facility as of September 30, 2019 was approximately 5%.~~

~~Senior Notes~~

On July 14, 2017, our subsidiaries Venator Finance S.à.r.l. and Venator Materials LLC (the "Issuers") entered into an indenture in connection with the issuance of the 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

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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 Venator 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~~Our Senior Credit Facilities ~~that~~ provide for first lien senior secured financing of up to ~~$675~~$725 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~~$350 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 the $350 million of commitments under the ABL Facility is subject to a borrowing base calculation comprised of accounts receivable and inventory in ~~the~~ 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~~decrease 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.

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")~~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.

The Senior Credit Facilities contain covenants that are usual and customary for facilities of this type, including events of default and financial, affirmative and negative covenants. In addition, the ABL Facility contains a springing financial covenant that requires the Company and its restricted subsidiaries to maintain a consolidated fixed charge coverage ratio of at least 1:1 for certain periods of time, if borrowing availability is

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~~Other Long-Term Obligations~~less than a specified threshold. The Senior Credit Facilities contain customary change of control provisions, the breach of which entitle the lenders to take various actions, including the acceleration of amounts due under the facility.

~~A note~~Senior Secured Notes

On May 22, 2020, we completed an offering of $225 million in aggregate principal amount of senior secured notes (the "Senior Secured Notes") due on July 1, 2025 at 98% of their face value. The Senior Secured Notes are obligations of our wholly owned subsidiaries, Venator Finance S.à r.l. and Venator Materials LLC (the "Issuers") and bear interest of 9.5% per year payable ~~for $8 million, resulting from~~semi-annually in arrears. The Senior Secured Notes are guaranteed on a senior secured basis by Venator and each of Venator's restricted subsidiaries (other than the ~~acquisition~~Issuers and certain other excluded subsidiaries) that is a guarantor under Venator's Term Loan Facility and ABL Facility. The Senior Secured Notes are secured on a first-priority basis by liens on all of the ~~intangible~~ assets that secure the Term Loan Facility on a first-priority basis and are secured on a second-priority basis in all inventory, accounts receivable, deposit accounts, securities accounts, certain related assets and other current assets that secure the ABL Facility on a first-priority basis and the Term Loan Facility on a second-priority basis, in each case, other than certain excluded assets. The Senior Secured Notes contain covenants that are usual and customary for facilities of this type, including events of default and financial, affirmative and negative covenants. Upon the occurrence of certain change of control events, holders of the Venator Senior Secured Notes will have the right to require that the Issuers purchase all or a portion of such holder’s Senior Secured 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 Unsecured Notes

Our Senior Unsecured 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 ~~paper laminates product line from Tronox Limited ("Tronox")~~Senior Unsecured Notes imposes certain limitations on ~~April 26, 2019, is included within~~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 Unsecured Notes bear interest of 5.75% per year payable semi-annually and will mature on July 15, 2025. The Senior Unsecured 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 ~~liabilities~~ and ~~other noncurrent liabilities on our unaudited condensed consolidated balance sheet~~unpaid interest, if any, up to, but not including, the redemption date. Upon the occurrence of certain change of control events (other than the separation), holders of the Venator Senior Unsecured Notes will have the right to require that the Issuers purchase all or a portion of such holder’s Senior Unsecured Notes in cash at ~~September 30, 2019. The note is payable in 2~~a purchase price equal ~~installments payable annually through 2021.~~to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase.

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 September 30, 2020 we had $75 million of 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 $26 million issued from our secured ABL Facility.

Note 9.8. 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.

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Cross-Currency Swaps

In December 2017, we entered into 3 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~~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 3 cross-currency interest rate swaps entered into in 2017, resulting in cash proceeds of $15 million. Concurrently, we entered into 3 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 income and subsequently recognized in other income in the unaudited condensed consolidated statement 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 $1~~were liabilities of $4 millionand $6$3 million at September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, and ~~was~~are recorded as other noncurrent ~~assets~~liabilities on our unaudited condensed consolidated balance sheets. 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.

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For the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, the change in accumulated other comprehensive loss associated with these cash flow hedging activities was a loss of $1 million and a gain of $10 ~~million and $5~~ million, respectively. As of September 30, ~~2019,~~2020, we do not expect to reclassify any 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 risks associated with foreign currency exposure. At September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, we had ~~$73~~$63 millionand ~~$89~~$75 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).

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Note ~~10.~~9. 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. 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 Venator and cumulative income or losses during the applicable period. Cumulative losses incurred over the period limits our ability to consider other subjective evidence such as our projections for the future. Changes in expected future income in applicable tax jurisdictions could affect the realization of deferred tax assets in those jurisdictions.

We recorded income tax expense of $8$3 million and ~~income tax benefit of $55~~$8 million for the three months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and income tax expense of ~~nil~~$3 million and ~~of $10 million~~NaN for the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Our tax expense is significantly affected by the mix of income and losses in tax jurisdictions in which we operate, as impacted by the presence of valuation allowances in certain tax jurisdictions.

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 $36 million that we recognized for the year ended December 31, 2017.

Pursuant to the Tax Matters Agreement dated August 7, 2017, entered into by and among Venator Materials PLC and Huntsman (the "Tax Matters Agreement") 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. It is currently 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 are expected to be approximately ~~$34~~$30 million. As of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, this "Noncurrent payable to affiliates" was ~~$34~~$30 million, each, on our unaudited condensed consolidated balance sheets. ~~Moreover, any~~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. However, due to a change of control limitation on certain Venator tax assets, including tax net operating losses, upon completion of SK Capital's acquisition of 42.5 million Venator shares from Huntsman, we expect to write off a significant portion of this liability along with any associated deferred tax assets in connection with the basis step up. Net deferred tax assets related to our U.S. business at September 30, 2020 and December 31, 2019 were $24 million and $25 million, respectively.

On March 27, 2020, President Trump signed into U.S. tax law the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss carryback periods, eliminating NOL limitations, alternative minimum tax credit refunds, and modifications to the net interest deduction limitations. The CARES Act did not have a material impact to our income tax provision for the three or nine months ended September 30, 2020.

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Note ~~11.~~10. Earnings Per Share

Basic earnings per share excludes dilution and is computed by dividing net income attributable to Venator ordinary shareholders by the weighted average number of shares outstanding during the period. Diluted earnings per share reflects all potential dilutive ordinary shares outstanding during the period and is computed by dividing net income 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.

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Basic and diluted earnings per share are determined using the following information:


		Three months ended September 30,						Nine months ended September 30,							Three months ended September 30,				Nine months ended September 30,
		2019		2018		2019		2018			2020		2019		2020		2019
Numerator:	Numerator:									Numerator:

Net loss attributable to Venator Materials PLC ordinary shareholders	Net loss attributable to Venator Materials PLC ordinary shareholders	$	(19)	$	(368)	$	(1)	$	(94)	Net loss attributable to Venator Materials PLC ordinary shareholders	$	(42)	$	(19)	$	(54)	$	(1)
Denominator:	Denominator:									Denominator:
Weighted average shares outstanding	Weighted average shares outstanding	106.6		106.4		106.5		106.4		Weighted average shares outstanding	106.7		106.6		106.7		106.5
Dilutive share-based awards	Dilutive share-based awards	—		0.3		—		0.4		Dilutive share-based awards	0		0		0		0
Total weighted average shares outstanding, including dilutive shares	Total weighted average shares outstanding, including dilutive shares	106.6		106.7		106.5		106.8		Total weighted average shares outstanding, including dilutive shares	106.7		106.6		106.7		106.5

For the three and nine months ended September 30, 2020, the number of anti-dilutive employee share-based awards excluded from the computation of diluted earnings per share was 4 million, each. For the three and nine months ended September 30, 2019, the number of anti-dilutive employee share-based awards excluded from the computation of ~~diluted~~dilutive earnings per share was 2 million, each. ~~For the three and nine months ended September 30, 2018, the number of anti-dilutive employee share-based awards excluded from the computation of dilutive earnings per share was nil, each.~~

Note ~~12.~~11. Commitments and Contingencies

Legal Proceedings

Shareholder Litigation

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, 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~~were 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~~

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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 we expect it to be consolidated with the case brought by the Cambria County Employees' Retirement Trust.

On May 8, 2019, we filed a ~~“special appearance”~~"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~~January 21, 2020, the Court of Appeals for the Fifth District of Texas ~~seeking relief~~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 certain 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. On March 19, 2020, plaintiffs from the Dallas District ~~Court’s denial of defendants’ Rule 91a motions to dismiss. We also intend to appeal~~Court case filed suit in New York State Court (New York County) against Venator and the ~~denial of our~~other defendants dismissed from the Dallas District Court case, making substantially the same allegations as were filed in the Dallas District Court. On July 31, 2020, Venator and the other defendants filed a motion to dismiss all claims in the New York State Court case. A decision on the motion to dismiss the claims has not been published.

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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 federal action filed a consolidated class action complaint. On February 18, 2020, all defendants joined in a motion to dismiss the consolidated complaint, which plaintiffs have opposed, and for which oral argument was heard on May 14, 2020. A decision on the motion to dismiss the consolidated complaint has not been published.

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. 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 The National Titanium Dioxide Company Limited (“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~~The parties have engaged in ~~this matter.~~discovery and the preparation of expert reports. 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~~In the arbitration ~~has not yet been set.~~ proceeding, our defense and counterclaim were filed on April 17, 2020. NES filed their reply and defense to counterclaim on September 18, 2020.

On July 2, 2019, NES separately instigated a lawsuit in Finland for €1.6 million of unpaid ~~invoices, which we also intend~~invoices. Effective October 21, 2020, the parties agreed to ~~contest. We are fully accrued~~settle this dispute for ~~these~~an amount less than the unpaid invoices and ~~they are~~an accrued liability for this settlement is reflected in our unaudited condensed consolidated balance sheet as of September 30, ~~2019.~~2020.

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Calais Pipeline Matter

The Region Hauts-de-France (the “Region”) has issued 2 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

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demand remains suspended, but in dispute. The parties have lodged various arguments and responses regarding the second demand with the court. The court hearing for this matter has been postponed.

Gasum Arbitration

We entered into a natural gas supply agreement with Skangass Oy (now Gasum LNG Oy) in 2015 to supply natural gas to our Pori, Finland manufacturing facility. The initial fixed term of the agreement was ten years. We are entitled to terminate the agreement upon closure of the facility by giving 12 months’ notice of the closure. Upon such termination, a compensation fee would be payable to Gasum.

The agreement requires us to purchase a minimum annual quantity, subject to a mechanism for making up shortfalls. The minimum annual quantity can be reduced (even to zero) in the event of a "Force Majeure Event". We declared that the fire at our Pori facility in January 2017 was a Force Majeure Event under the agreement, reducing the minimum annual quantity to the actual quantity purchased. Gasum alleges that this Force Majeure Event subsequently ceased to apply, and that we were thereafter again obliged to purchase the original minimum annual quantity.

Gasum continues to ~~consider~~supply natural gas to the ~~matter~~Pori facility. On April 17, 2020, Gasum filed arbitration proceedings seeking declaratory relief to require us to take or pay the original minimum annual quantities of natural gas. In their request, Gasum estimated that the monetary value of declaratory relief to be approximately €27 million should we close the Pori facility by the end of 2022. Following a case management conference, a procedural order was issued on August 19, 2020. Gasum served their statement of claim on September 11, 2020. We are due to serve our statement of defense on November 27, 2020. Because of the early stage of this proceeding, we are unable to reasonably estimate any possible loss or range of loss and we ~~anticipate that a hearing on the matter might be held during the first half of 2020. We do~~have not ~~believe~~accrued for a loss ~~is probable and have not made an accrual~~contingency with ~~respect~~regard 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 unaudited condensed consolidated 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 ~~13.~~12. 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 nine months ended September 30, ~~2019~~2020 and September 30, ~~2018,~~2019, our capital expenditures for EHS matters totaled ~~$18~~$9 million and $5$18 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. A number of our EHS capital expenditures will be subject to extended timelines as a result of the COVID-19 pandemic. Changes to timelines may be related to regulatory orders or guidelines that cause suppliers or contractors to cease or slow down operational activities, including as a result of changes to social distancing rules, among other factors. The impacts may vary significantly between different jurisdictions.

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

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environmental liabilities do not include amounts recorded as asset retirement obligations. As of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, we had environmental reserves of $9$8 million and ~~$12~~$9 million, respectively.

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

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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).

Under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and similar state laws, a current or former owner or operator of real property in the U.S. may be liable for remediation costs regardless of whether the release or disposal of hazardous substances was in compliance with law at the time it occurred, and a current owner or operator may be liable regardless of whether it owned or operated the facility at the time of the release. Outside the U.S., analogous contaminated property laws, such as those in effect in France, 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.

Pori Remediation

In connection with our previously announced intention to close our TiO₂manufacturing 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, these costs could be material to our unaudited condensed consolidated financial statements.

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Note ~~14.~~13. Other Comprehensive Income

Other comprehensive income consisted of the following:

Foreign currency translation adjustment^(a)
Pension and other postretirement benefits adjustments net of tax^(b)
Other comprehensive loss of unconsolidated affiliates Hedging Instruments Total Amounts attributable to noncontrolling interests Amounts attributable to Venator
Beginning balance, January 1, 2019 $ (96) $ (278) $ (5) $ 6 $ (373) $ — $ (373)
Other comprehensive (loss) income before reclassifications, gross (36) — — 10 (26) — (26)
Tax benefit — — — — — — —
Amounts reclassified from accumulated other comprehensive loss, gross^(c)
— 12 — — 12 — 12
Tax expense — — — — — — —
Net current-period other comprehensive (loss) income (36) 12 — 10 (14) — (14)
Ending balance,
September 30, 2019
$ (132) $ (266) $ (5) $ 16 $ (387) $ — $ (387)


	Foreign currency translation adjustment(a)		Pension and other postretirement benefits adjustments net of tax(b)		Other comprehensive loss of unconsolidated affiliates		Hedging Instruments		Total		Amounts attributable to noncontrolling interests		Amounts attributable to Venator
Beginning balance, January 1, 2020	$	(97)	$	(295)	$	(5)	$	12	$	(385)	$	0	$	(385)
Other comprehensive income (loss) before reclassifications, gross	29		0		0		(1)		28		0		28
Tax expense	0		0		0		0		0		0		0
Amounts reclassified from accumulated other comprehensive loss, gross(c)	0		10		0		0		10		0		10
Tax expense	0		0		0		0		0		0		0
Net current-period other comprehensive income (loss)	29		10		0		(1)		38		0		38
Ending balance, September 30, 2020	$	(68)	$	(285)	$	(5)	$	11	$	(347)	$	0	$	(347)

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Foreign currency translation adjustment^(d)
Pension and other postretirement benefits adjustments net of tax^(e)
Other comprehensive loss of unconsolidated affiliates Hedging Instruments Total Amounts attributable to noncontrolling interests Amounts attributable to Venator
Beginning balance, January 1, 2018 $ (6) $ (267) $ (5) $ (5) $ (283) $ — $ (283)
Other comprehensive (loss) income before reclassifications, gross (49) — — 5 (44) — (44)
Tax benefit — — — — — — —
Amounts reclassified from accumulated other comprehensive loss, gross^(c)
— 10 — — 10 — 10
Tax expense — — — — — — —
Net current-period other (loss)
comprehensive income
(49) 10 — 5 (34) — (34)
Ending balance,
September 30, 2018
$ (55) $ (257) $ (5) $ — $ (317) $ — $ (317)


	Foreign currency translation adjustment(d)		Pension and other postretirement benefits adjustments net of tax(e)		Other comprehensive loss of unconsolidated affiliates		Hedging Instruments		Total		Amounts attributable to noncontrolling interests		Amounts attributable to Venator
Beginning balance, January 1, 2019	$	(96)	$	(278)	$	(5)	$	6	$	(373)	$	0	$	(373)


Other comprehensive (loss) income before reclassifications, gross	(36)		0		0		10		(26)		0		(26)
Tax expense	0		0		0		0		0		0		0
Amounts reclassified from accumulated other comprehensive loss, gross(c)	0		12		0		0		12		0		12
Tax expense	0		0		0		0		0		0		0
Net current-period other comprehensive (loss) income	(36)		12		0		10		(14)		0		(14)
Ending balance, September 30, 2019	$	(132)	$	(266)	$	(5)	$	16	$	(387)	$	0	$	(387)

^(a)Amounts are net of tax of ~~nil~~NaN as of September 30, 2020 and January 1, 2020, each.

(b)Amounts are net of tax of $50 million as of September 30, 2020 and January 1, 2020, each.

(c)See table below for details about the amounts reclassified from accumulated other comprehensive loss.

(d)Amounts are net of tax of NaN as of September 30, 2019 and January 1, 2019, each.

^(b)(e)Amounts are net of tax of $50 million as of September 30, 2019 and January 1, 2019, each.

^(c)~~See table below for details about the amounts reclassified from accumulated other comprehensive loss.~~

^(d)~~Amounts are net of tax of nil as of September 30, 2018 and January 1, 2018, each.~~

^(e)~~Amounts are net of tax of $52 million as of September 30, 2018 and January 1, 2018, each.~~

Three months ended
September 30, Nine months ended
September 30, Affected line item in the statement where net income is presented
2019 2018 2019 2018
Details about Accumulated Other Comprehensive Loss Components^(a):
Amortization of pension and other postretirement benefits:
Actuarial loss $ 3 $ 3 $ 11 $ 10 Other income
Prior service credit 1 — 1 — Other income
Total amortization 4 3 12 10 Total before tax
Income tax expense — — — — Income tax expense
Total reclassifications for the period $ 4 $ 3 $ 12 $ 10 Net of tax

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	Three months ended September 30,				Nine months ended September 30,				Affected line item in the statement where net income is presented
	2020		2019		2020		2019
Details about Accumulated Other Comprehensive Loss Components(a):
Amortization of pension and other postretirement benefits:
Actuarial loss	$	3	$	3	$	10	$	11	Other income
Prior service credit	0		1		0		1		Other income
Total before tax	3		4		10		12
Income tax expense	0		0		0		0		Income tax benefit (expense)
Total reclassifications for the period, net of tax	$	3	$	4	$	10	$	12

^(a)Pension and other postretirement benefit amounts in parentheses indicate credits on our unaudited condensed consolidated statements of operations.

Note ~~15.~~14. Operating Segment Information

We derive our revenues, earnings and cash flows from the manufacture and sale of TiO₂, functional additives, color pigments, timber treatment and water treatment chemicals. We have reported our operations through our 2 segments, Titanium Dioxide and Performance Additives, and organized our business and derived our operating segments around differences in product lines.

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The major product groups of each reportable operating segment are as follows:


Segment						Product Group
Titanium Dioxide						titanium dioxide
Performance Additives						functional additives, color pigments, timber treatment and water treatment chemicals

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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 2 reportable operating segments are as follows:


		Three months ended September 30,						Nine months ended September 30,							Three months ended September 30,				Nine months ended September 30,
		2019		2018		2019		2018			2020		2019		2020		2019
Revenues:	Revenues:									Revenues:
Titanium Dioxide	Titanium Dioxide	$	396	$	389	$	1,260	$	1,300	Titanium Dioxide	$	343	$	396	$	1,083	$	1,260
Performance Additives	Performance Additives	130		144		406		481		Performance Additives	131		130		379		406
Total	Total	$	526	$	533	$	1,666	$	1,781	Total	$	474	$	526	$	1,462	$	1,666
Adjusted EBITDA⁽¹⁾	Adjusted EBITDA⁽¹⁾									Adjusted EBITDA(1)
Titanium Dioxide	Titanium Dioxide	$	51	$	75	$	167	$	365	Titanium Dioxide	$	21	$	51	$	102	$	167
Performance Additives	Performance Additives	13		12		44		59		Performance Additives	5		13		40		44
		64		87		211		424			26		64		142		211
Corporate and Other		(14)		(10)		(40)		(33)
Corporate and other										Corporate and other	(9)		(14)		(31)		(40)
Total	Total	50		77		171		391		Total	17		50		111		171
Reconciliation of adjusted EBITDA to net income:
Reconciliation of adjusted EBITDA to net (loss) income:										Reconciliation of adjusted EBITDA to net (loss) income:
Interest expense	Interest expense	(13)		(14)		(40)		(41)		Interest expense	(18)		(13)		(46)		(40)
Interest income	Interest income	3		4		9		11		Interest income	3		3		9		9
Income tax (expense) benefit		(8)		55		—		(10)
Income tax expense										Income tax expense	(3)		(8)		(3)		0
Depreciation and amortization	Depreciation and amortization	(27)		(33)		(82)		(102)		Depreciation and amortization	(29)		(27)		(85)		(82)
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	2		2		4		6		Net income attributable to noncontrolling interests	3		2		6		4
Other adjustments:	Other adjustments:									Other adjustments:
Business acquisition and integration expenses	Business acquisition and integration expenses	(2)		(5)		(3)		(9)		Business acquisition and integration expenses	0		(2)		(1)		(3)
Separation expense, net		—		—		—		(1)

Loss on disposition of business/assets		(1)		—		(1)		(2)
Certain legal settlements and related expenses		(2)		—		(3)		—

Gain (loss) on disposition of business/assets										Gain (loss) on disposition of business/assets	6		(1)		4		(1)
Certain legal expenses/settlements										Certain legal expenses/settlements	0		(2)		(3)		(3)
Amortization of pension and postretirement actuarial losses	Amortization of pension and postretirement actuarial losses	(3)		(3)		(11)		(10)		Amortization of pension and postretirement actuarial losses	(3)		(3)		(10)		(11)
Net plant incident (costs) credits		(4)		(21)		(17)		252
Net plant incident costs										Net plant incident costs	(2)		(4)		(5)		(17)
Restructuring, impairment and plant closing and transition costs	Restructuring, impairment and plant closing and transition costs	(12)		(428)		(24)		(573)		Restructuring, impairment and plant closing and transition costs	(13)		(12)		(25)		(24)
Net (loss) income	Net (loss) income	$	(17)	$	(366)	$	3	$	(88)	Net (loss) income	$	(39)	$	(17)	$	(48)	$	3

⁽¹⁾Adjusted EBITDA is defined as net income/loss of Venator 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)~~ loss/gain on disposition of business/assets; ~~(d)~~(c) certain legal ~~settlements and related~~ expenses/~~gains; (e)~~settlements; (d) amortization of pension and postretirement actuarial losses/gains; ~~(f)~~(e) net plant incident costs/credits; and ~~(g)~~(f) restructuring, impairment, and plant closing and transition costs/credits.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included in Item 1 hereto.

This section contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in any forward-looking statement because of various factors, including those described in the section titled "Note Regarding Forward-Looking Statements" and "Part II. Item 1A. Risk Factors."

Executive Summary

We are a leading global manufacturer and marketer of chemical products that improve the quality of life for downstream consumers and promote a sustainable future. Our products comprise a broad range of innovative chemicals and formulations that bring color and vibrancy to buildings, protect and extend product life, and reduce energy consumption. We market our products globally to a diversified group of industrial customers through two segments: Titanium Dioxide, which consists of our TiO₂ business, and Performance Additives, which consists of our functional additives, color pigments, timber treatment and water treatment businesses. We are a leading global producer in many of our key product lines, including TiO₂, color pigments and functional additives, a leading North American producer of timber treatment products and a leading European producer of water treatment products.

COVID-19

The COVID-19 pandemic has created significant disruption to the global economy and has had an adverse effect on our business and the markets in which we operate. This is evidenced by a decrease in sales of 19% and 9% in the second and third quarters of 2020, respectively, as compared to the prior year periods.

We are actively managing our business through the pandemic and have enacted rigorous safety measures across our organization, including stopping non-essential business travel, increasing personal protective equipment requirements, requiring temperature checks at our sites, removing contractors from site where necessary, increasing cleaning and sanitizing measures, implementing social distancing protocols, requiring work-from-home arrangements as appropriate and reducing the amount of employees working at a site at any given time. We continue to evaluate the appropriate measures to have in place to safeguard our employees and our business and we may take further actions as government authorities require or recommend, or as we determine to be in the best interest of our employees, customers, partners and suppliers. We expect to continue these measures until we determine that COVID-19 is adequately contained at each relevant location for purposes of safeguarding our employees and our business.

We have not experienced significant impacts or interruptions to our supply chain as a result of the COVID-19 pandemic. However, certain of our suppliers have faced difficulties maintaining operations due to government-ordered restrictions and shelter-in-place mandates. While we have thus far been able to identify alternative sourcing arrangements without disrupting our supply chain, financial hardship on our suppliers caused by the COVID-19 pandemic could cause material disruptions in our raw material supply. We are proactively managing our supplier network by maintaining close contact and seeking alternative arrangements in case our primary suppliers are impacted by the COVID-19 pandemic.

We cannot currently predict the duration and severity of impacts to our business from the global economic slowdown caused by the COVID-19 pandemic. Because of this, we cannot reasonably estimate with any degree of certainty the future adverse impact the COVID-19 pandemic may have on our results of operations, financial position, or liquidity. See further discussion of the potential impact to our liquidity under "Liquidity and Capital Resources." See "Part II. Item 1A. Risk Factors" for further details of the risks that the COVID-19 pandemic may present to our business.

Recent Trends and Outlook

The COVID-19 pandemic introduced a period of decline in demand for our products across our business in the second quarter of 2020. We began to see signs of economic recovery from the COVID-19 pandemic during the third

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quarter across our business; however, the future impact of COVID-19 on our global demand will depend in part upon the extent to which governments continue or introduce restrictive measures to respond to COVID-19.

We also expect geopolitical events such as Brexit and ongoing trade negotiations between the U.S. and China to impact our near-term business ~~trends in~~outlook.

In our Titanium Dioxide segment, ~~over the next year~~we expect near-term business trends to be driven ~~by:~~by the following factors: (i) ~~a soft economic environment, primarily~~variability in ~~China and Europe, including the effects of China-U.S. trade negotiations and potential impacts from Brexit;~~demand for our products based on end-use application; (ii) TiO₂ pricing to reflect regional supply and demand balances, ~~and~~ increased competition in certain regions for certain ~~products;~~of our products and our customer-tailored approach; (iii) ~~raw material~~lower cost ~~increases, including~~of ore feedstocks and higher ~~ore costs;~~cost of energy; and (iv) ~~volume trends to reflect historical seasonal patterns; (v) increased sales of new TiO~~₂ ~~product grades; (vi) lower utilization rates; and (vii)~~ additional benefit ~~through~~from our 2020 Business Improvement Program which includes benefits from operational cost savings and ~~operational improvement actions as part~~improved manufacturing efficiencies we have taken in response to the COVID-19 pandemic and our plan to align capacity at one of our ~~2019 Business Improvement Program.~~German manufacturing facilities to the customers it serves.

In ~~the~~our Performance Additives segment, we expect near-term business trends ~~over the next year~~ to be driven ~~by:~~by the following factors: (i) ~~challenging~~a soft but improving demand environment for certain products, primarily those in the automotive, ~~plastic~~coatings, and certain construction end-use applications; (ii) ~~a soft economic environment, primarily in China~~portfolio optimization actions; and ~~Europe, including the effects of China-U.S. trade negotiations and the potential impacts from Brexit;~~ (iii) ~~raw material costs inflation; and (iv)~~ additional benefit ~~through~~from our 2020 Business Improvement Program which includes benefits from cost savings and manufacturing improvements we have taken in response to the COVID-19 pandemic and our plan to align capacity at one of our German manufacturing facilities to the customers it serves.

During 2020, in response to the adverse impact of the COVID-19 pandemic, we implemented our COVID-19 response program to reduce our costs, including non-recurring personnel cost reductions and operational ~~improvement~~cost savings at our manufacturing facilities. Personnel cost management actions included a temporary reduction in salaries, changes and reductions to bonus schemes and employee furloughs, as ~~part of our 2019 Business Improvement Program.~~well as reduced spending on other discretionary items.

In the fourth quarter of 2018, we commenced our $40 million, 2019 Business Improvement Program and ~~are underway with~~we delivered $20 million through December 31, 2019. We currently expect to end 2020 at the ~~implementation, having realized $15~~full $40 million ~~of savings through~~run-rate level.

During the third quarter of 2020, we announced our 2020 Business Improvement Program that will save approximately $55 million compared to 2019. This program is in addition to our 2019 Business Improvement Program and replaces our non-recurring COVID-19 cost savings initiatives delivered in 2020. 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~~by the ~~year at the full run-rate level.~~end of 2022.

In ~~2019,~~2020, total ~~expected~~ capital expenditures ~~have been reduced~~are expected to be approximately ~~$115~~$65 million. ~~This includes~~We do not expect any material capital expenditures relating to the transfer of our specialty ~~technology~~and differentiated business from our Pori, Finland manufacturing site to other sites in our manufacturing network during 2020. We intend to optimize the remaining transfer of our specialty and ~~excludes other~~differentiated business from our Pori, ~~site~~Finland TiO2 manufacturing facility, but the timing of this transfer will be elongated, due in part to the COVID-19 pandemic, and may result in a lower total expected capital ~~expenditures.~~outlay and a lower associated adjusted EBITDA benefit than originally estimated.

We expect our corporate and other costs will be approximately ~~$55~~$45 million in ~~2019.~~2020.

~~In addition, within our German business~~On August 28, 2020, we ~~continue~~announced that funds advised by SK Capital have agreed to ~~evaluate whether sufficient positive evidence exists~~purchase approximately 42.5 million shares, representing just under 40% of Venator’s outstanding shares, from Huntsman for a purchase price of approximately $100 million, including a 30-month option for the sale of Huntsman’s remaining approximate 9.5 million shares it holds at $2.15 per share. While Venator is not a party to ~~support~~ the ~~recognition of its associated deferred tax assets without a valuation allowance. If we conclude there~~agreement, it is ~~insufficient positive evidence this could result~~cooperating in the ~~recognition~~preparation of regulatory filings necessary to complete the transaction. The transaction received prior approval under article 134 of Venator’s Articles of Association by the nonconflicted independent members of Venator’s board of directors. The transaction is subject to regulatory approvals and is expected to close near year-end.

Pursuant to the Tax Matters Agreement, we are required to make a ~~valuation allowance against net deferred~~future payment to Huntsman for any actual U.S. federal income tax savings we recognize as a result of any basis step up we received in U.S. assets for tax years through December 31, 2028. We recognized a noncurrent payable to affiliates of up$30 million for this payment as of September 30, 2020 and December 31, 2019. However, due to ~~approximately $140 million in the next 12 months.~~

a change of control limitation on certain Venator tax

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assets, including tax net operating losses, upon completion of SK Capital’s acquisition of 42.5 million Venator shares from Huntsman, we expect to write off a significant portion of this liability along with any associated deferred tax assets in connection with the basis step up. Net deferred tax assets related to our U.S. business at September 30, 2020 and December 31, 2019 were $24 million and $25 million, respectively.

Results of Operations

The following table sets forth our consolidated results of operations for the three and nine months ended September 30, ~~2019~~2020 and ~~2018:~~2019:

Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in millions) 2019 2018 % Change 2019 2018 % Change
Revenues $ 526 $ 533 (1 %) $ 1,666 $ 1,781 (6 %)
Cost of goods sold 464 463 — % 1,461 1,110 32 %
Operating expenses⁽⁴⁾
50 57 (12 %) 150 154 (3 %)
Restructuring, impairment and plant closing and transition costs 12 428 (97 %) 24 573 (96 %)
Operating income — (415) (100 %) 31 (56) NM
Interest expense, net (10) (10) — % (31) (30) (3 %)
Other income 1 4 (75 %) 3 8 (63 %)
Income before income taxes (9) (421) (98 %) 3 (78) NM
Income tax (expense) benefit (8) 55 NM — (10) (100 %)
Net (loss) income (17) (366) (95 %) 3 (88) NM
Reconciliation of net (loss) income to adjusted EBITDA:
Interest expense, net 10 10 — % 31 30 3 %
Income tax expense (benefit) 8 (55) NM — 10 (100 %)
Depreciation and amortization 27 33 (18 %) 82 102 (20 %)
Net income attributable to noncontrolling interests (2) (2) — % (4) (6) 33 %
Other adjustments:
Business acquisition and integration expenses 2 5 3 9
Separation expense, net — — — 1
Loss on disposition of business/assets 1 — 1 2
Certain legal settlements and related expenses 2 — 3 —
Amortization of pension and postretirement actuarial losses 3 3 11 10
Net plant incident costs (credits) 4 21 17 (252)
Restructuring, impairment and plant closing and transition costs 12 428 24 573
Adjusted EBITDA⁽¹⁾
$ 50 $ 77 $ 171 $ 391
Net cash (used in) provided by operating activities $ (36) $ 306 NM
Net cash used in investing activities (101) (266) (62 %)
Net cash provided by (used in) financing activities 13 (17) NM
Capital expenditures (110) (272) (60 %)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in millions)	2020		2019		% Change		2020		2019		% Change
Revenues	$	474	$	526	(10	%)	$	1,462	$	1,666	(12	%)
Cost of goods sold	454		464		(2	%)	1,336		1,461		(9	%)
Operating expenses(4)	33		50		(34	%)	121		150		(19	%)
Restructuring, impairment and plant closing and transition costs	13		12		8	%	25		24		4	%
Operating (loss) income	(26)		—		NM		(20)		31		NM
Interest expense, net	(15)		(10)		(50	%)	(37)		(31)		(19	%)
Other income	5		1		400	%	12		3		300	%
(Loss) income before income taxes	(36)		(9)		300	%	(45)		3		NM
Income tax expense	(3)		(8)		(63	%)	(3)		—		NM
Net (loss) income	(39)		(17)		129	%	(48)		3		NM
Reconciliation of net (loss) income to adjusted EBITDA:
Interest expense, net	15		10		50	%	37		31		19	%
Income tax expense	3		8		(63	%)	3		—		NM
Depreciation and amortization	29		27		7	%	85		82		4	%
Net income attributable to noncontrolling interests	(3)		(2)		(50	%)	(6)		(4)		(50	%)
Other adjustments:
Business acquisition and integration expenses	—		2				1		3

(Gain) loss on disposition of business/assets	(6)		1				(4)		1
Certain legal expenses/settlements	—		2				3		3
Amortization of pension and postretirement actuarial losses	3		3				10		11
Net plant incident costs	2		4				5		17
Restructuring, impairment and plant closing and transition costs	13		12				25		24
Adjusted EBITDA(1)	$	17	$	50			$	111	$	171

Net cash used in operating activities							$	—	$	(36)	(100	%)
Net cash used in investing activities							(43)		(101)		(57	%)
Net cash provided by financing activities							195		13		1,400	%
Capital expenditures							(54)		(110)		(51	%)

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Three Months Ended Three Months Ended
(Dollars in millions, except per share amounts) September 30, 2019 September 30, 2018
Reconciliation of net income to adjusted net income attributable to Venator Materials PLC ordinary shareholders:
Net loss $ (17) $ (366)
Net income attributable to noncontrolling interests (2) (2)
Other adjustments:
Business acquisition and integration expenses 2 5
Loss on disposition of business/assets 1 —
Certain legal settlements and related expenses 2 —
Amortization of pension and postretirement actuarial losses 3 3
Net plant incident costs 4 21
Restructuring, impairment and plant closing and transition costs 12 428
Income tax adjustments⁽³⁾
3 (55)
Adjusted net income attributable to Venator Materials PLC ordinary shareholders⁽²⁾
$ 8 $ 34
Weighted-average shares-basic 106.6 106.4
Weighted-average shares-diluted 106.6 106.7
Net loss attributable to Venator Materials PLC ordinary shareholders per share:
Basic $ (0.18) $ (3.46)
Diluted $ (0.18) $ (3.46)
Other non-GAAP measures:
Adjusted net income per share⁽²⁾:
Basic $ 0.08 $ 0.32
Diluted $ 0.08 $ 0.32


	Three Months Ended		Three Months Ended
(Dollars in millions, except per share amounts)	September 30, 2020		September 30, 2019

Reconciliation of net loss to adjusted net (loss) income attributable to Venator Materials PLC ordinary shareholders:
Net loss	$	(39)	$	(17)
Net income attributable to noncontrolling interests	(3)		(2)
Other adjustments:
Business acquisition and integration adjustments	—		2


(Gain) loss on disposition of business/assets	(6)		1
Certain legal expenses/settlements	—		2
Amortization of pension and postretirement actuarial losses	3		3
Net plant incident costs	2		4
Restructuring, impairment and plant closing and transition costs	13		12
Income tax adjustments(3)	12		3
Adjusted net (loss) income attributable to Venator Materials PLC ordinary shareholders(2)	$	(18)	$	8

Weighted-average shares - basic	106.7		106.6
Weighted-average shares - diluted	106.7		106.6

Net loss attributable to Venator Materials PLC ordinary shareholders per share:
Basic	$	(0.39)	$	(0.18)
Diluted	$	(0.39)	$	(0.18)

Other non-GAAP measures:
Adjusted net (loss) income per share(2):
Basic	$	(0.17)	$	0.08
Diluted	$	(0.17)	$	0.08

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		Nine months ended		Nine months ended			Nine Months Ended		Nine Months Ended
(Dollars in millions, except per share amounts)	(Dollars in millions, except per share amounts)	September 30, 2019		September 30, 2018		(Dollars in millions, except per share amounts)	September 30, 2020		September 30, 2019

Reconciliation of net income to adjusted net income attributable to Venator Materials PLC ordinary shareholders:
Net income (loss)		$	3	$	(88)
Reconciliation of net (loss) income to adjusted net (loss) income attributable to Venator Materials PLC ordinary shareholders:						Reconciliation of net (loss) income to adjusted net (loss) income attributable to Venator Materials PLC ordinary shareholders:
Net (loss) income						Net (loss) income	$	(48)	$	3
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(4)		(6)		Net income attributable to noncontrolling interests	(6)		(4)
Other adjustments:	Other adjustments:					Other adjustments:
Business acquisition and integration expenses	Business acquisition and integration expenses	3		9		Business acquisition and integration expenses	1		3
Separation expense, net		—		1

Loss on disposition of business/assets		1		2
Certain legal settlements and related expenses		3		—

(Gain) loss on disposition of business/assets						(Gain) loss on disposition of business/assets	(4)		1
Certain legal expenses/settlements						Certain legal expenses/settlements	3		3
Amortization of pension and postretirement actuarial losses	Amortization of pension and postretirement actuarial losses	11		10		Amortization of pension and postretirement actuarial losses	10		11
Net plant incident costs (credits)		17		(252)
Net plant incident costs						Net plant incident costs	5		17
Restructuring, impairment and plant closing and transition costs	Restructuring, impairment and plant closing and transition costs	24		573		Restructuring, impairment and plant closing and transition costs	25		24
Income tax adjustments⁽³⁾	Income tax adjustments⁽³⁾	(22)		(33)		Income tax adjustments(3)	$	5	$	(22)
Adjusted net income attributable to Venator Materials PLC ordinary shareholders⁽²⁾		$	36	$	216
Adjusted net (loss) income attributable to Venator Materials PLC ordinary shareholders(2)						Adjusted net (loss) income attributable to Venator Materials PLC ordinary shareholders(2)	$	(9)	$	36

Weighted-average shares-basic		106.5		106.4
Weighted-average shares-diluted		106.5		106.8
Weighted-average shares - basic						Weighted-average shares - basic	106.7		106.5
Weighted-average shares - diluted						Weighted-average shares - diluted	106.7		106.5

Net income attributable to Venator Materials PLC ordinary shareholders per share:
Net loss attributable to Venator Materials PLC ordinary shareholders per share:						Net loss attributable to Venator Materials PLC ordinary shareholders per share:
Basic	Basic	$	(0.01)	$	(0.88)	Basic	(0.51)		(0.01)
Diluted	Diluted	$	(0.01)	$	(0.88)	Diluted	(0.51)		(0.01)

Other non-GAAP measures:	Other non-GAAP measures:					Other non-GAAP measures:
Adjusted net income per share⁽²⁾:
Adjusted net (loss) income per share(2):						Adjusted net (loss) income per share(2):
Basic	Basic	$	0.34	$	2.03	Basic	(0.08)		0.34
Diluted	Diluted	$	0.34	$	2.02	Diluted	(0.08)		0.34

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)~~ loss/gain on disposition of business/assets; ~~(d)~~(c) certain legal ~~settlements and related~~ expenses/~~gains; (e)~~settlements; (d) amortization of pension and postretirement actuarial losses/gains; ~~(f)~~(e) net plant incident costs/credits; and ~~(g)~~(f) restructuring, impairment, and plant closing and transition costs/credits. We believe that net income is the performance measure calculated and presented in accordance with ~~generally accepted accounting principles in the United States ("~~U.S. ~~GAAP" or "GAAP")~~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

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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 credit ratings. Therefore, the

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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~~it 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.

⁽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 attributable to Venator Materials PLC ordinary shareholders: (a) business acquisition and integration expenses/adjustments; (b) ~~separation expense/gain, net; (c)~~ loss/gain on disposition of business/assets; ~~(d)~~(c) certain legal ~~settlements and related~~ expenses/~~gains; (e)~~settlements; (d) amortization of pension and postretirement actuarial losses/gains; ~~(f)~~(e) net plant incident costs/credits; and ~~(g)~~(f) 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 (loss) and adjusted net income (loss) per share amounts are presented solely as supplemental information. These measures exclude similar noncash items 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

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information than is provided under GAAP. We believe that our revised approach enables a clearer understanding of the long-term impact of our tax structure on post tax earnings.

³¹

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(4)As presented within Item 2, operating expenses includes selling, general and administrative expenses and other operating expense (income), net.

Three Months Ended September 30, ~~2019~~2020 Compared to the Three Months Ended September 30, ~~2018~~2019

For the three months ended September 30, ~~2019,~~2020, net loss was $39 million on revenues of $474 million, compared with net loss of $17 million on revenues of $526 million ~~compared with net loss of $366 million on revenues of $533 million~~ for the same period in ~~2018.~~2019. The ~~decrease~~increase in net loss of ~~$349~~$22 million was the result of the following items:

•Revenues for the three months ended September 30, ~~2019~~2020 decreased by $7$52 million, or 1%10%, as compared with the same period in ~~2018.~~2019. The decrease was due to a ~~$14~~$53 million decrease in revenue in our ~~Performance Additives~~Titanium Dioxide segment partially offset by a $7$1 million increase in revenue in our ~~Titanium Dioxide~~Performance Additives segment. See "—Segment Analysis" below.

•Our operating expenses for the three months ended September 30, ~~2019~~2020 decreased by $7$17 million, or ~~12%~~34%, as compared with the same period in ~~2018,~~2019, primarily related to a $7 million decrease in selling, general and administrative ~~expenses which is comprised of decreases in depreciation expense, personnel expense, and~~ costs ~~related~~primarily due to cost savings from our COVID-19 response program, a $6 million gain on the ~~planned closure~~sale of our ~~Pori plant incurred~~property in Umbogintwini, South Africa during the ~~prior year period.~~quarter, and a $2 million benefit from the favorable impact of foreign exchange rates.

•Restructuring, impairment and plant closing and transition costs for the three months ended September 30, ~~2019 decreased~~2020 increased to ~~$12~~$13 million from ~~$428~~$12 million for the same period in ~~2018 primarily as a result of the planned closure of our Pori, Finland plant which commenced in the third quarter of 2018.~~2019. For more information concerning restructuring and plant closing activities, see "Note 7.6. Restructuring, Impairment, and Plant Closing and Transition Costs" of the notes to unaudited condensed consolidated financial statements.

•Our income tax expense for the three months ended September 30, ~~2019~~2020 was $8$3 million compared to ~~income tax benefit of $55~~$8 million for the same period in ~~2018.~~2019. Our income taxes are 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 ~~10.~~9. Income Taxes" of the notes to unaudited condensed consolidated financial statements.

Segment Analysis


		Three Months Ended								Percent Change Favorable (Unfavorable)		Three Months Ended						Percent Change Favorable (Unfavorable)
		September 30,												September 30,					Percent Change Favorable (Unfavorable)
(Dollars in millions)	(Dollars in millions)	2019		2018				Percent Change Favorable (Unfavorable)			2020			2019			Percent Change Favorable (Unfavorable)
Revenues	Revenues
Titanium Dioxide	Titanium Dioxide	$	396	$	389	2	%			343		$	396		(13	%)
Performance Additives	Performance Additives	130		144		(10	%)	Performance Additives	131			130			1	%
Total	Total	$	526	$	533	(1	%)	Total	$	474		$	526		(10	%)
Adjusted EBITDA	Adjusted EBITDA							Adjusted EBITDA
Titanium Dioxide	Titanium Dioxide	$	51	$	75	(32	%)	Titanium Dioxide	$	21		$	51		(59	%)
Performance Additives	Performance Additives	13		12		8	%	Performance Additives	5			13			(62	%)
		64		87		(26	%)		26			64			(59	%)
Corporate and Other		(14)		(10)		(40	%)
Corporate and other								Corporate and other	(9)			(14)			36	%
Total	Total	$	50	$	77	(35	%)	Total	$	17		$	50		(66	%)

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Three Months Ended September 30, 2019 vs. 2018
Average Selling Price⁽¹⁾
Local Currency Foreign Currency Translation Impact Mix & Other
Sales Volumes⁽²⁾
Period-Over-Period Increase (Decrease)
Titanium Dioxide (7 %) (2 %) (1 %) 12 %
Performance Additives 2 % (2 %) (2 %) (8 %)


	Three Months Ended September 30, 2020 vs. 2019
	Average Selling Price(1)
	Local Currency		Foreign Currency Translation Impact		Mix & Other		Sales Volumes(2)
Period-Over-Period Increase (Decrease)
Titanium Dioxide	(2	%)	2	%	(2	%)	(11	%)
Performance Additives	2	%	1	%	2	%	(4	%)

⁽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 ~~$396~~$343 million infor the three months ended September 30, ~~2019, an increase~~2020, a decrease of $7$53 million, or 2%13%, compared to the same period in ~~2018.~~2019. The ~~increase~~decrease was primarily due to ~~a 12% increase~~an 11% decline in TiO2 sales volumes, a 2% decrease in average local currency selling prices and a 2% unfavorable impact due to Mix and Other, partially offset by a ~~7% decline in the average TiO~~₂ ~~selling price, a~~ 2% ~~unfavorable~~favorable impact from foreign currency ~~translation~~translation. TiO2 sales volumes declined across all product categories and ~~a 1% unfavorable impact~~regions, most notably in Europe, primarily due to ~~mix and other. Sales volumes increased compared to the prior year quarter~~lower demand as a result of ~~higher sales~~the impact of ~~new products, increased product availability at certain manufacturing sites~~COVID-19 and ~~increased demand. The decline~~ in North America due to the ~~average TiO~~₂ ~~selling price was primarily attributable to lower global average functional TiO~~₂ ~~prices with regional variations.~~impact of Hurricane Laura.

Adjusted EBITDA for the Titanium Dioxide segment was ~~$51~~$21 million for the three months ended September 30, ~~2019,~~2020, a decrease of ~~$24~~$30 million compared to the same period in ~~2018.~~2019. The ~~decline~~decrease was primarily ~~as a result~~attributable to lower revenue and lower plant utilization resulting in higher production costs of ~~lower TiO~~₂ ~~margins driven by a lower average TiO~~₂ ~~selling price, higher raw material costs and unfavorable fixed cost absorption related~~approximately $18 million compared to ~~planned maintenance. This was partially offset by higher TiO~~₂ ~~sales volumes and a $5 million benefit from our 2019 Business Improvement Program. In~~ the third quarter of ~~2019, we had~~2019. The comparison was also impacted by a ~~$6 million~~ benefit in the third quarter of 2019 due to a change in plant utilization ~~rates, which increased~~rates. These unfavorable impacts on our ~~overhead absorption~~adjusted EBITDA were partially offset by benefits from our 2020 Business Improvement Program and ~~corresponding inventory valuation at certain facilities.~~non-recurring benefits from our COVID-19 response program.

Performance Additives

The Performance Additives segment generated ~~$130 million~~revenues of revenues in the three months ended September 30, 2019, a decline of $14 million, or 10%, compared to the same period in 2018. The decline was primarily due to an 8% decrease in sales volumes, a 2% unfavorable impact of foreign currency translation and a 2% unfavorable impact of mix and other, partially offset by a 2% increase in the average selling price. The decline in volumes was primarily attributable to lower sales into construction-related applications, softer demand in coatings and plastics, principally related to automotive and electronics end-use applications and a discontinuation of sales of a product to a timber treatment customer. The average selling price increased due to the mix of sales within our functional additives, timber treatment and color pigments businesses.

~~Adjusted EBITDA in the Performance Additives segment was $13 million, an increase of $1~~$131 million for the three months ended September 30, ~~2019~~2020, an increase of $1 million, or 1%, compared to the same period in ~~2018. A higher~~2019. The increase was primarily attributable to a 2% increase in the average local currency selling price, ~~lower overhead costs~~a 2% favorable impact of Mix and Other and a ~~$2 million benefit from our 2019 Business Improvement Program was~~1% favorable impact of foreign currency translation, partially offset by ~~lower~~a 4% decrease in sales volumes. InThe decline in sales volumes was primarily a result of lower demand in our functional additives businesses due to the impact of the COVID-19 pandemic. The average selling price increased primarily as a result of favorable mix within our color pigments and timber treatment businesses while the favorable impact of Mix and Other reflects higher sales of timber treatment products.

Adjusted EBITDA for the Performance Additives segment was $5 million for the three months ended September 30, 2020, a decrease of $8 million compared to the same period in 2019. The decrease was primarily attributable to lower plant utilization in our functional additives business resulting in higher production costs of approximately $5 million compared to the third quarter of ~~2019, we had~~2019. The comparison was also impacted by a ~~$2 million~~ benefit in the third quarter of 2019 due to a change in plant utilization rates, ~~which increased~~and a non-recurring benefit included in operating income in 2019 related to finalization of asset retirement obligations, partially offset by benefits from our ~~overhead absorption~~2020 Business Improvement Program and ~~corresponding inventory valuation at certain facilities.~~non-recurring benefits from our COVID-19 response program.

Corporate and ~~Other~~other

Corporate and ~~Other~~other represents expenses which are not allocated to our segments. Losses from Corporate and ~~Other~~other were ~~$14~~$9 million ~~or $4 million higher~~ in the three months ended September 30, ~~2019~~2020, or $5 million lower compared to the same period in ~~2018. This was primarily as a result of the unfavorable impact of foreign currency translation, partially offset by a $1 million benefit from our 2019 Business Improvement Program.~~

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2019. This was primarily cost savings from actions taken in response to the COVID-19 pandemic and a favorable variance in foreign exchange rates compared to the prior year.

Nine Months Ended September 30, ~~2019~~2020 Compared to the Nine Months Ended September 30, ~~2018~~2019

For the nine months ended September 30, ~~2019,~~2020, net loss was $48 million on revenues of $1,462 million, compared with net income ~~was~~of $3 million on revenues of $1,666 million ~~compared with net loss of $88 million on revenues of $1,781 million~~ for the same period in ~~2018.~~2019. The ~~increase~~decrease of ~~$91~~$51 million in net income was the result of the following items:

•Revenues for the nine months ended September 30, ~~2019~~2020 decreased by ~~$115~~$204 million, or 6%12%, as compared with the same period in ~~2018.~~2019. The decrease was due to a ~~$40~~$177 million, or 3%14%, decline in revenue in our Titanium Dioxide segment ~~primarily related to lower average TiO~~₂ ~~selling prices partially offset by higher volumes,~~ and a ~~$75~~$27 million, or ~~16%~~7%, decline in revenue in our Performance Additives ~~segment, primarily due to lower sales volumes.~~segment. See “—Segment Analysis” below.

•Cost of goods sold for the nine months ended September 30, 2019 increased by $351 million from the same period in the prior year primarily as a result of the recognition of $325 million of insurance proceeds which was a credit to cost of goods sold in 2018.

•Our operating expenses for the nine months ended September 30, ~~2019~~2020 decreased by $4$29 million, or 3%19%, as compared with the same period in ~~2018,~~2019, primarily related to a ~~$16~~$21 million savings from ~~personnel reductions, a $4 million decrease in other operating expenses,~~selling, general and administrative expense due to cost savings from our COVID-19 response program, and a $7$6 million ~~decline~~gain on the sale of our property in ~~depreciation expense, partially offset by a $14 million increase as a result of carbon credits sold in 2018 and an $8 million increase due to~~Umbogintwini, South Africa during the ~~negative impacts of foreign exchange rates.~~quarter.

•Restructuring, impairment and plant closing and transition costs for the nine months ended September 30, ~~2019 decreased~~2020 was $25 million compared to $24 ~~million from $573~~ million for the same period in 2018 primarily as a result of the closure of a portion of our Augusta, Georgia plant in the second quarter of 2018 and the planned closure of our plant in Pori, Finland beginning in the third quarter of 2018.2019. For more information concerning restructuring activities, see "Note 7.6. Restructuring, Impairment, and Plant Closing and Transition Costs" of the notes to unaudited condensed consolidated financial statements.

•Our income tax expense for the nine months ended September 30, ~~2019~~2020 was ~~nil~~$3 million compared to ~~$10 million~~nil for the same period in ~~2018.~~2019. Our income tax expense is significantly affected by the mix of income and losses in the tax jurisdictions in which we ~~operated,~~operate, as impacted by the presence of valuation allowances in certain tax jurisdictions. For further information concerning taxes, see "Note ~~10.~~9. Income Taxes" of the notes to unaudited condensed consolidated financial statements.

~~Segment Analysis~~

Nine Months Ended Percent Change Favorable (Unfavorable)
September 30,
(Dollars in millions) 2019 2018
Revenues
Titanium Dioxide $ 1,260 $ 1,300 (3 %)
Performance Additives 406 481 (16 %)
Total $ 1,666 $ 1,781 (6 %)
Segment adjusted EBITDA
Titanium Dioxide $ 167 $ 365 (54 %)
Performance Additives 44 59 (25 %)
211 424 (50 %)
Corporate and Other (40) (33) (21 %)
Total $ 171 $ 391 (56 %)

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Nine Months Ended September 30, 2019 vs. 2018
Average Selling Price⁽¹⁾
Local Currency Foreign Currency Translation Impact Mix & Other
Sales Volumes⁽²⁾
Period-Over-Period Increase (Decrease)
Titanium Dioxide (7 %) (4 %) — % 8 %
Performance Additives — % (2 %) — % (14 %)
Segment Analysis


	Nine Months Ended				Percent Change Favorable (Unfavorable)
	September 30,
(Dollars in millions)	2020		2019
Revenues
Titanium Dioxide	$	1,083	$	1,260	(14	%)
Performance Additives	379		406		(7	%)
Total	$	1,462	$	1,666	(12	%)
Segment adjusted EBITDA
Titanium Dioxide	$	102	$	167	(39	%)
Performance Additives	40		44		(9	%)
	142		211		(33	%)
Corporate and other	(31)		(40)		23	%
Total	$	111	$	171	(35	%)


	Nine Months Ended September 30, 2020 vs. 2019
	Average Selling Price(1)
	Local Currency		Foreign Currency Translation Impact		Mix & Other		Sales Volumes(2)
Period-Over-Period Increase (Decrease)
Titanium Dioxide	(2	%)	—	%	(1	%)	(11	%)
Performance Additives	2	%	(1	%)	—	%	(8	%)

⁽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 ~~$1,260 million in the nine months ended September 30, 2019, a decrease of $40 million, or 3%, compared to the same period in 2018. The decline was primarily due to a 7% decrease in the average TiO~~₂ selling price and a 4% unfavorable impact of foreign exchange rates, partially offset by an 8% increase in sales volumes. The decrease in the average selling price was primarily attributable to lower European prices and softer business conditions in Asia Pacific. Sales volumes increased in both functional and specialty TiO₂ ~~due to higher availability of certain products, increased sales of new products and higher demand.~~

~~Adjusted EBITDA for our Titanium Dioxide segment decreased $198~~$1,083 million for the nine months ended September 30, ~~2019~~2020, a decrease of $177 million, or 14%, compared to the same period in ~~2018.~~2019. The decrease was primarily attributable to an 11% decline in TiO2 sales volumes, a 2% decrease in the average TiO2 selling price, and a 1% unfavorable impact due to Mix and Other. The decline in TiO2 sales volumes was primarily a result of ~~lower~~the impact of the COVID-19 pandemic on demand in the second and third quarters of 2020 and as a result of the impact of Hurricane Laura in the third quarter of 2020. The decline in demand was broadly across all regions and for functional, differentiated and specialty TiO₂ ~~margins, due to a lower average TiO~~₂ ~~selling price,~~products, and partially offset by higher ~~raw material costs, $14~~demand for new products and for plastics applications.

Adjusted EBITDA for the Titanium Dioxide segment was $102 million ~~of carbon credits sold in~~for the nine months ended September 30, ~~2018 and $41~~2020, a decrease of $65 million, ~~of lost earnings~~or 39%, compared to the same period in 2019. The decrease was primarily attributable to ~~our Pori, Finland TiO~~₂ ~~manufacturing facility, which were reimbursed through insurance proceeds~~lower revenue, lower plant utilization resulting in higher production costs of approximately $12 million compared to the third quarter of 2019, higher ore costs, and the impact of a benefit in the ~~comparable period~~third quarter of ~~2018. The decline was partially offset by higher sales volumes, a $6 million benefit~~2019 due to a change in plant utilization ~~which increased~~rates. These unfavorable impacts on our ~~overhead absorption rates at certain facilities and a $10 million benefit from our 2019 Business Improvement Program.~~

~~Performance Additives~~

The Performance Additives segment generated $406 million of revenue in the nine months ended September 30, 2019, which is $75 million, or 16%, lower compared to the same period in 2018 resulting from a 14% decrease in volumes, and a 2% unfavorable impact of foreign exchange rates. Sales volumes reflect lower construction activity in North America, softer demand for products used in automotive, electronics, plastics and coatings applications, the impact of plant shutdowns as part of prior restructuring actions and a discontinuation of sales of a product to a timber treatment customer. The average selling price remained stable compared to the prior year period due to the composition of sales within our functional additives, timber treatment and color pigments businesses.

~~Adjusted~~adjusted EBITDA ~~in our Performance Additives segment decreased by $15 million, or 25%, for the nine months ended September 30, 2019 compared to the same period in 2018, primarily due lower sales volumes and~~were partially offset by ~~lower costs, a $2 million benefit due to a change in plant utilization which increased our overhead absorption rates at certain facilities and a $4 million benefit~~benefits from our Business Improvement ~~Program.~~Programs and non-recurring benefits from our COVID-19 response program.

~~Corporate and Other~~

Corporate and Other represents expenses which are not allocated to our segments. Losses from Corporate and Other were $40 million, or $7 million higher for the nine months ended September 30, 2019 than the same period in 2018 primarily as a result the timing of the unfavorable impact of foreign currency translation arising from weakness in the Euro versus the U.S. Dollar, partially offset by a $1 million benefit from our 2019 Business Improvement Program.

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Performance Additives

The Performance Additives segment generated revenue of $379 million for the nine months ended September 30, 2020, a decline of $27 million, or 7%, compared to the same period in 2019. The decline was primarily due to an 8% decrease in sales volumes and a 1% unfavorable impact of foreign currency translation, partially offset by a 2% increase in the average local currency selling price. The decline in sales volumes was primarily a result of lower demand for color pigments and functional additives products due to the impact of COVID-19 on demand for construction, coatings and automotive end-use applications. The average selling price increased primarily as a result of favorable mix within our color pigments and timber treatment businesses.

Adjusted EBITDA in the Performance Additives segment was $40 million, a decrease of $4 million, or 9%, for the nine months ended September 30, 2020 compared to the same period in 2019. The decrease was primarily attributable to a decrease in sales, lower plant utilization resulting in higher production costs in our functional additives business of approximately $7 million compared to the third quarter of 2019, and the impact of non-recurring benefits in the third quarter of 2019, partially offset by benefits from our Business Improvement Programs, and non-recurring benefits from our COVID-19 response program.

Corporate and other

Corporate and other represents expenses which are not allocated to our segments. Losses from Corporate and other were $31 million, or $9 million lower for the nine months ended September 30, 2020 than the same period in 2019. This was primarily a result of savings related to actions taken in response to the COVID-19 pandemic and the favorable impact of foreign exchange rates.

Liquidity and Capital Resources

We had cash and cash equivalents of ~~$40~~$208 millionand ~~$165~~$55 million as of September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. We ~~expect to~~ have adequate liquidity to meet our obligations over the next 12 months. Additionally, we believe our future obligations, including needs for capital expenditures, will be met by available cash generated from operations and borrowings.

On August 8, 2017, in connection with our IPO and the separation, we entered into new financing arrangements and incurred new debt, including $375 million of Senior Notes issued by our subsidiaries Venator Finance S.à~~.r.l. and Venator Materials LLC, as Issuers, and borrowings of $375 million under the Term Loan Facility.~~ ~~A payable to Huntsman for a liability pursuant to the Tax Matters Agreement has been presented as "Noncurrent payable to affiliates" on our unaudited condensed consolidated balance sheets.~~

~~In addition to the Senior Notes and the Term Loan Facility, we entered into the ABL Facility.~~ ~~On June 20, 2019 the~~an ABL Facility ~~was increased to~~with an available aggregate principal amount of up to $350 ~~million with no change to the maturity dates.~~ million. 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~~fluctuates 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 September 30, ~~2019~~2020 is ~~in excess of~~ ~~$295~~approximately $291 million, of which ~~$285~~$264 million is available to be drawn.

As we cannot predict the duration or scope of the COVID-19 pandemic and its impact on our customers and suppliers, the potential adverse financial impact to our results cannot be reasonably estimated, but could be material. We are actively managing the business to improve cash flow and ensure adequate liquidity, which we believe will help us emerge from this environment a stronger and more resilient company. Such measures include our COVID-19 response program, our 2020 Business Improvement Program, managing our production network to align with customer demand, managing our inventories and reducing planned capital expenditures. In addition, various governments in the countries and localities in which we operate have established economic relief and stimulus programs to support their economies during the COVID-19 pandemic. We are participating in certain smaller-value programs and we continue to assess the potential for the impact that other programs may have on our liquidity as they become available. We may also seek to take advantage of opportunities to raise or refinance capital through debt financing, and may, from time to time, discuss such opportunities with potential lenders or investors.

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On May 22, 2020, we completed an offering of $225 million in aggregate principal amount of Senior Secured Notes due on July 1, 2025 at 98% of their face value. The Senior Secured Notes are obligations of our wholly owned subsidiaries, Venator Finance S.à r.l. and Venator Materials LLC and bear interest of 9.5% per year payable semi-annually in arrears. The Senior Secured Notes are guaranteed on a senior secured basis by Venator and each of Venator's restricted subsidiaries (other than the Issuers and certain other excluded subsidiaries) that is a guarantor under Venator's Term Loan Facility and ABL Facility. The Senior Secured Notes are secured on a first-priority basis by liens on all of the assets that secure the Term Loan Facility on a first-priority basis and are secured on a second-priority basis in all inventory, accounts receivable, deposit accounts, securities accounts, certain related assets and other current assets that secure the ABL Facility on a first-priority basis and the Term Loan Facility on a second-priority basis, in each case, other than certain excluded assets. Upon the occurrence of certain change of control events, holders of the Venator Senior Secured Notes will have the right to require that the Issuers purchase all or a portion of such holder’s Senior Secured 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.

Items Impacting Short-Term and Long-Term Liquidity

Our liquidity can be significantly impacted by various ~~factors.~~factors in addition to those described below. The following matters had, or are expected to have, a significant impact on our liquidity:

•Cash invested in our accounts receivable and inventory, net of accounts payable, as reflected in our unaudited condensed consolidated statements of cash flows decreased by ~~$26~~$67 million for the nine months ended September 30, ~~2019~~2020 as compared to the same period in the prior year. We expect ~~volatility in~~ our working capital ~~components~~ to ~~continue due~~be a source of liquidity in 2020 as we take measures to ~~seasonal changes~~respond to the impact of the COVID-19 pandemic, which are incremental to efforts already in ~~working capital throughout the year.~~place, including managing our production network and inventory levels to align with customer demand.

•We expect to spend approximately ~~$115~~$65 million on capital expenditures during ~~2019.~~ 2020, which reflects a decrease from the expected 2020 capital expenditures of $80 million to $90 million reported in the fourth quarter of 2019, primarily as a result of actions we expect to take to preserve liquidity in response to the impact of the COVID-19 pandemic.

•Our future capital expenditures include certain EHS maintenance and upgrades, planned periodic maintenance and repairs applicable to major units of manufacturing ~~facilities; expansions of our existing facilities or construction of new~~ facilities; certain cost reduction projects; and the cost to transfer specialty and differentiated manufacturing from Pori, Finland to other sites within our manufacturing network. This excludes other Pori site capital expenditures. We expect to fund this spending with cash on hand as well as cash provided by operations and borrowings.

•During the nine months ended September 30, ~~2019,~~2020, we made contributions to our pension and postretirement benefit plans of ~~$27~~$23 million. During the remainder of ~~2019,~~2020, we expect to contribute an additional amount of approximately ~~$10~~$19 million to these plans.

•We are involved in a number of cost reduction programs for which we have established restructuring accruals. As of September 30, ~~2019~~,2020, we had ~~$16~~$10 million of accrued restructuring costs of which $8$4 million is classified as current. We expect to incur additional restructuring and plant closing costs of approximately ~~$14~~$6 million, ~~including $5 million~~none of which are for noncash charges, and pay approximately ~~$12~~$6 million through the remainder of ~~2019.~~2020. For further discussion of these plans and the costs involved, see "Note 7.6. Restructuring, Impairment, and Plant Closing and Transition Costs" of the notes to unaudited condensed consolidated financial statements.

•During 2020, in response to the adverse impact of the COVID-19 pandemic, we implemented our COVID-19 response program to reduce our costs, including non-recurring personnel cost reductions and operational cost savings at our manufacturing facilities. Personnel cost management actions included a temporary reduction in salaries, changes and reductions to bonus schemes and employee furloughs, as well as reduced spending on other discretionary items. We realized approximately $23 million of non-recurring savings from our COVID-19 response program in 2020 which will be replaced by savings from our 2020 Business Improvement Program.

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•InDuring the ~~fourth~~third quarter of ~~2018~~2020, we ~~commenced additional cost reduction initiatives which are expected to provide~~announced our 2020 Business Improvement Program that will save approximately ~~$40~~$55 million ~~of annual adjusted EBITDA benefit~~ compared to ~~2018. $5 million has been paid through September 30,~~2019. This program is in addition to our 2019 ~~to implement these~~Business Improvement Program and replaces our non-recurring COVID-19 cost savings initiatives ~~and is included~~delivered in ~~the restructuring expenditures discussed above.~~2020. We expect ~~to pay an additional $8 million of restructuring and capital expenditures to implement~~that this ~~program. We expect actions~~program will be ~~complete in 2020, ending~~fully implemented by the ~~year at the full run-rate level.~~end of 2022.

•On January 30, 2017, our TiO₂ manufacturing facility in Pori, Finland, experienced fire damage. We are in the process of closing our Pori, Finland, TiO₂ manufacturing facility and transferring ~~the production of~~our specialty and differentiated ~~product grades~~business to other sites ~~within~~in our ~~existing~~manufacturing network. ~~In the first nine months of 2019, we had capital expenditures of $37 million related to project wind-down and closure costs.~~ We intend to operate the Pori facility at reduced production rates through the transition period, ~~which is expected to last through at least 2022,~~ subject to economic and other factors. We do not expect any material capital expenditures relating to the transfer during 2020. We intend to optimize the remaining transfer of our specialty and differentiated business from our Pori, Finland manufacturing site to other sites in our manufacturing network, but the timing of this transfer will be elongated, due in part to the COVID-19 pandemic, and may result in a lower total expected capital outlay and a lower associated adjusted EBITDA benefit than originally estimated.

•In ~~August 2019,~~the first quarter of 2020, we ~~terminated~~initiated consultations with employee representatives on a proposal to restructure our manufacturing facility at our German operations. Until the ~~three cross-currency swaps entered into in 2017, resulting in~~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 ~~proceeds~~expenditures will depend on a number of ~~$15 million.~~factors, including the timing of the completion of the consultation process and the negotiated elements of the associated plan. We expect the cash benefit of this potential restructuring to more than offset cash expenditures to be incurred for its implementation.

•We have ~~$733~~$945 million in ~~aggregate principal~~debt outstanding ~~consisting~~under our $359 million Term Loan Facility, $215 million of 9.5% Senior Secured Notes due 2025 and $371 million of 5.75% Senior Unsecured Notes due ~~2025,~~2025. Through September 30, 2020, we are in compliance with all applicable financial covenants included in the terms of our Senior Credit Facility, Senior Secured Notes and Senior Unsecured Notes. In July 2017, the U.K.'s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. We are currently evaluating the potential effect of the eventual replacement of LIBOR on our financial statements. Accounting guidance has been recently issued to ease the transition to alternative reference rates from a ~~$362 million Term Loan Facility.~~financial reporting perspective. See "Note 2. Recently Issued Accounting Pronouncements" of the notes to unaudited condensed consolidated financial statements. See further discussion under "Financing Arrangements."

As of September 30, ~~2019~~2020 and December 31, ~~2018~~2019, we had ~~$16~~$7 million and $8$13 million, respectively, classified as current portion of debt.

As of September 30, ~~2019~~2020 and December 31, ~~2018~~2019, we had ~~$14~~$11 million and ~~$36~~$16 million, respectively, of cash and cash equivalents held outside of the U.S. and Europe, including our variable interest entities. As of September 30, ~~2019~~2020, our non-U.K. subsidiaries have no plan to distribute funds in a manner that would cause them to be subject to U.K., or other local country taxation. 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.

Cash Flows for the Nine Months Ended September 30, ~~2019~~2020 Compared to the Nine Months Ended September 30, ~~2018~~2019

Net cash used in operating activities was nil for the nine months ended September 30, 2020, compared to $36 million for the nine months ended September 30, ~~2019 while net cash provided by operating activities was $306 million for the nine months ended September 30, 2018.~~2019. The ~~unfavorable~~favorable variance in net cash ~~from~~used in operating activities for the nine months ended September 30, ~~2019~~2020 compared with the same period in ~~2018~~2019 was primarily attributable to a ~~$534~~$74 million ~~decrease~~favorable variance in operating assets and liabilities and a $9 million favorable variance in noncash restructuring

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and impairment charges for 2020 as ~~a result of~~compared with the ~~closure of a portion of our Augusta, Georgia plant and the planned closure of our Pori, Finland facility both announced~~same period in ~~2018 and a $20 million decrease in depreciation and amortization,~~2019, partially offset by a ~~$91~~$51 million ~~increase~~decrease in net income as described in "—Results of Operations" ~~above and a $112 million favorable variance in operating assets and liabilities for 2019 as compared with the same period in 2018.~~above.

Net cash used in investing activities was $43 million for the nine months ended September 30, 2020, compared to $101 million for the nine months ended September 30, ~~2019, compared to $266 million for the nine months ended September 30, 2018.~~2019. The decrease in net cash used in investing activities was primarily attributable to a decrease in capital expenditures of ~~$162 million as a result of higher capital expenditures related to our TiO~~₂ ~~manufacturing facility in Pori, Finland in the prior year period.~~$56 million.

Net cash provided by financing activities was $195 million for the nine months ended September 30, 2020, compared to $13 million for the nine months ended September 30, ~~2019, compared to $17 million used~~2019. The increase in net cash provided by financing activities for the nine months ended September 30, ~~2018. The decrease in net cash used in financing activities for the nine months ended September 30, 2019~~2020 compared with the same period in ~~2018~~2019 was primarily attributable to ~~$15 million received from the termination of a cash flow hedge derivative, $9~~$221 million of proceeds from issuance of ~~short-term~~long-term debt, ~~and~~partially offset by a $7$16 million decrease in ~~repayment~~net borrowings under notes payable and a $15 million decrease in proceeds from the termination of ~~long-term debt.~~cross currency swap contracts received in 2019.

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Changes in Financial Condition

The following information summarizes our working capital as of September 30, ~~2019~~2020 and December 31, ~~2018~~2019:


(Dollars in millions)	(Dollars in millions)	September 30, 2019		December 31, 2018		Increase (Decrease)		Percent Change		(Dollars in millions)	September 30, 2020		December 31, 2019		Increase (Decrease)		Percent Change
Cash and cash equivalents	Cash and cash equivalents	$	40	$	165	$	(125)	(76	%)	Cash and cash equivalents	$	208	$	55	$	153	278	%
Accounts receivable, net	Accounts receivable, net	358		351		7		2	%	Accounts receivable, net	306		321		(15)		(5	%)
Accounts receivable from affiliates		8		—		8		NM

Inventories	Inventories	496		538		(42)		(8	%)	Inventories	438		513		(75)		(15	%)
Prepaid expenses	Prepaid expenses	24		20		4		20	%	Prepaid expenses	25		21		4		19	%
Other current assets	Other current assets	64		51		13		25	%	Other current assets	52		67		(15)		(22	%)
Total current assets	Total current assets	$	990	$	1,125	$	(135)	(12	%)	Total current assets	$	1,029	$	977	$	52	5	%
Accounts payable	Accounts payable	273		382		(109)		(29	%)	Accounts payable	212		334		(122)		(37	%)
Accounts payable to affiliates	Accounts payable to affiliates	14		18		(4)		(22	%)	Accounts payable to affiliates	3		17		(14)		(82	%)
Accrued liabilities	Accrued liabilities	108		135		(27)		(20	%)	Accrued liabilities	99		116		(17)		(15	%)
Current operating lease liability	Current operating lease liability	8		—		8		NM		Current operating lease liability	8		8		—		—
Current portion of debt	Current portion of debt	16		8		8		100	%	Current portion of debt	7		13		(6)		(46	%)
Total current liabilities	Total current liabilities	$	419	$	543	$	(124)	(23	%)	Total current liabilities	$	329	$	488	$	(159)	(33	%)
Working capital	Working capital	$	571	$	582	$	(11)	(2	%)	Working capital	$	700	$	489	$	211	43	%

Our working capital ~~decreased~~increased by ~~$11~~$211 million as a result of the net impact of the following significant changes:

•Cash and cash equivalents ~~decreased~~increased by ~~$125~~$153 million primarily due to inflows of $195 million provided by financing activities, and was partially offset by outflows of ~~$36 million from operating activities, and $101~~$43 million from investing activities ~~partially offset by inflows~~as a result of ~~$13 million provided by financing activities.~~a decrease in capital expenditures in the current year.

•Accounts receivable ~~increased~~decreased by $7$15 million, ~~primarily due~~or 5%, from December 31, 2019 to ~~seasonally higher revenues~~September 30, 2020. Collections on accounts receivable during 2020 have not been materially impacted by COVID-19, although we cannot currently predict the impact that the pandemic will have in ~~the third quarter of 2019 compared to the fourth quarter of 2018.~~future periods.

•Inventory decreased ~~$42~~$75 million ~~reflecting lower levels of finished goods~~ at September 30, ~~2019~~2020 as compared to the prior ~~year end~~year-end, reflecting a decrease in raw materials and finished goods as a result of ~~seasonality and efforts across~~plant moderation during the ~~organization~~quarter in order to manage our inventory levels ~~partially offset by an $8 million increase~~to respond to reductions in ~~inventory due to a change in plant utilization rates which increased our overhead absorption and corresponding inventory valuation at certain facilities in~~customer demand during the ~~third quarter of 2019.~~COVID-19 pandemic.

•Accounts payable decreased by ~~$113~~$136 million primarily as a result of ~~the timing of cash payments versus receipt of raw materials and a $42~~$25 million ~~reduction~~less in capital ~~accruals.~~accruals and due to inventory reductions during 2020.

•Accrued liabilities decreased by ~~$27~~$17 million primarily due to a ~~reduction~~decrease in accrued ~~interest and accrued payroll which is a reflection of the timing of the payments versus the amounts accrued at September 30, 2019 as compared to December 31, 2018.~~

•~~Current operating lease liability increased by $8 million as a result of the adoption of ASU No. 2016-02,~~ ~~Leases (Topic 842)~~ in the first quarter of 2019. See "Note 2. Recently Issued Accounting Pronouncements" of the notes to unaudited condensed consolidated financial statements for further discussion of the implementation of this accounting standard.compensation costs.

•Current portion of debt ~~increased~~decreased by $8$6 million primarily due to ~~the issuance of short-term debt~~net payments on notes payable during ~~2019.~~2020.

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Financing Arrangements

For a discussion of financing arrangements see "Note 8.7. Debt" of the notes to unaudited condensed consolidated financial statements.

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Restructuring, Impairment and Plant Closing and Transition Costs

For a discussion of our restructuring plans and the costs involved, see "Note 7.6. Restructuring, Impairment, and Plant Closing and Transition Costs" of the notes to unaudited condensed consolidated financial statements.

Legal Proceedings

For a discussion of legal proceedings, see "Note ~~12.~~11. Commitments and Contingencies—Legal Matters" of the notes to unaudited condensed consolidated financial statements.

Environmental, Health and Safety Matters

As noted in the ~~2018~~2019 Form 10-K, specifically within "Part I. Item 1. Business—Environmental, Health and Safety Matters" and "Part I. Item 1A. Risk Factors," 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 ~~13.~~12. Environmental, Health and Safety Matters" of the notes to unaudited condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, see "Note 2. Recently Issued Accounting Pronouncements" of the notes to unaudited condensed consolidated financial statements.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in our unaudited condensed consolidated financial statements. There have been no changes to our critical accounting policies or estimates. See the Company’s critical accounting policies in "Part 2. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies" in the ~~2018~~2019 Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks, such as changes in interest rates, foreign exchange rates, and commodity prices. 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 ~~$362~~$359 million at September 30, ~~2019.~~2020. A hypothetical 1% increase in interest rates on our floating rate debt as of September 30, ~~2019~~2020, would increase our interest expense by approximately $4 million on an annualized basis.

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Foreign Exchange Rate Risk

We are exposed to market risks associated with foreign ~~exchange.~~exchange, including the impact of the COVID-19 pandemic. 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

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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 September 30, ~~2019~~2020 and December 31, ~~2018,~~2019, we had ~~$73~~$63 millionand ~~$89~~$75 million, respectively, 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 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 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 loan.

During ~~2019,~~2020, the changes in accumulated other comprehensive loss associated with these cash flow hedging activities was a ~~gain~~loss of ~~$10~~$1 million.

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 September 30, ~~2019~~2020 and December 31, ~~2018.~~2019.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13-a 15(b) under 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 Quarterly Report. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of September 30, ~~2019,~~2020, 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 Security and Exchange Commission’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.

Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting during the three months ended September 30, ~~2019~~2020 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). However, we can only give reasonable assurance that our internal control over financial reporting will prevent or detect material misstatements on a timely

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basis. Ineffective internal control over financial reporting could cause investors to lose confidence in our reported financial information and could result in a lower trading price for our securities.

We have determined that no material

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changes to our internal controls over financial reporting are required in response to the measures we have taken related to the COVID-19 pandemic, including remote working arrangements for many of our employees. We are continually monitoring and assessing the impact of COVID-19 on our internal controls in an effort to ensure that our internal controls respond to any changes in our operating environment.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~Other than~~Except as ~~described~~set forth below, ~~during the three months ended September 30, 2019,~~ there have been no material developments with respect to ~~material~~the legal proceedings referenced in ~~“Part I.~~Part I, Item ~~3. Legal Proceedings”~~3 of our ~~2018~~Annual Report on Form 10-K ~~and in "Part II. Item 1. Legal Proceedings" of our quarterly report on Form 10-Q~~ for the ~~quarter~~year ended ~~June 30,~~December 31, 2019.

Shareholder Litigation

~~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~~were 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 we expect it to be consolidated with the case brought by the Cambria County Employees' Retirement Trust.

An additional case was filed on July 31, 2019, in the U.S. District Court for the Southern District of New York by the City of Miami General Employees' & Sanitation Employees' Retirement Trust, making substantially the same allegations, adding claims under sections 10(b) and 20(a) of the U.S. Exchange Act, and naming all of our directors as additional defendants. A case also was filed in the U.S. District Court for the Southern District of Texas ~~Citizens Participation Act.~~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. 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 federal action filed a consolidated class action complaint. On February 18, 2020, all defendants joined in a motion to dismiss the consolidated complaint, which plaintiffs have opposed, and for which oral argument was heard on May 14, 2020. A decision on the motion to dismiss the consolidated complaint has not been published.

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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~~The National Titanium Dioxide Company Limited (“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.

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ITEM 1A. RISK FACTORS

As of the date of this filing, the Company and its operations continue to be subject to the risk factors previously disclosed in "Part I. Item 1A. Risk Factors" of our ~~2018~~2019 Form 10-K and ~~in "Part II. Item 1A. Risk Factors" to of~~ our ~~quarterly report on Form~~Forms 10-Q for the ~~quarter~~periods ended March 31, 2020 and June 30, ~~2019.~~2020. In addition to these risk factors, the following risk factors are applicable to us:

~~The classification of TiO~~₂Declines in worldwide economic conditions as a ~~Category 2 Carcinogen in~~result of the ~~EU, or any increased regulatory scrutiny, could decrease~~COVID-19 pandemic have caused demand for our products to decrease and ~~subject us~~have adversely affected our business and we expect to continue to experience lower demand.

The COVID-19 pandemic has caused a significant global economic slowdown. Demand for our products has declined and our business has been adversely affected. Sales volumes decreased by approximately 19% in the second quarter of 2020 and 9% in the third quarter of 2020, each compared to the prior year period. Our products are used in housing, construction and "quality of life" end-use applications for which demand historically has been linked to global, regional and local gross domestic product and discretionary spending, which can be negatively impacted by regional and world events or economic conditions such as the COVID-19 pandemic, and we have previously experienced significant revenue deterioration due to downturns in the global economy.

We are unable to predict the duration or severity of the current economic downturn, nor are we able to predict the timing, duration or severity of any future downturns in the chemical industry or our customers’ industries. During downturns and periods of decreasing demand, including the current downturn, our revenues are reduced, and we typically experience greater pricing pressure and shifts in product demand and mix. In particular, greater substitution of product imports from China may occur. Uncertain and volatile economic, political, public health or business conditions in any of the regions in which we operate can impact demand for our products. These conditions can cause material adverse changes in our results of operations and financial condition, including:

•a decline in demand for our products, which has an immediate impact on our revenues;

•lower utilization of our manufacturing facilities as a result of measures taken to respond to such conditions, the health and well-being of our employees, availability of goods and services necessary to operate our plant, and other factors that could influence our plant utilization, which lead to lower margins;

•potential impairment charges relating to manufacturing equipment or other long-lived assets, to the extent that any downturn indicates that the carrying amount of the asset may not be recoverable;

•greater challenges in forecasting results of operations, making business decisions, and ~~waste disposal regulations that~~identifying and prioritizing business risks;

•additional cost reduction efforts, including additional restructuring activities, which may adversely affect our ability to capitalize on opportunities;

•an increase in reserves for accounts receivable due to our customers' inability to pay us; and

•higher financing costs which could ~~significantly increase~~impact our ~~costs.~~ability to invest in our business.

The EUCOVID-19 pandemic has ~~adopted~~caused us to experience lower demand and we expect to experience additional adverse impacts, but we cannot predict the ~~Globally Harmonised System of~~degree to which they will occur. For the ~~United Nations for~~three months ended June 30, 2020, we experienced a ~~uniform system for~~decline in orders across our business reflecting the ~~classification, labelling~~economic downturn and packaging of chemical substances in Regulation (EC) No 1272/2008 (the "CLP"). Pursuant to the CLP, an EU Member State can propose a classification for a substance to the European Chemicals Agency ("ECHA"), which upon review by ECHA’s Committee for Risk Assessment (the "RAC"), can be submitted to the European Commission for adoption by regulation. On May 31, 2016, the French Agency for Food, Environmental and Occupational Health and Safety ("ANSES") submitted a proposal to ECHA that would classify TiO₂ as a Category 1B Carcinogen presumed to have carcinogenic potential for humans by inhalation. On June 8, 2017, the RAC announced its preliminary conclusion that certain evidence meets the criteria under CLP to classify TiO₂ as a Category 2 Carcinogen (described by the EU regulation as appropriate for "suspected human carcinogens") for humans by inhalation. The RAC published their final opinion on September 14, 2017, which proposed that TiO₂ be classified as a Category 2 carcinogen by inhalation. In addition, the RAC proposed a note in their opinion to the effect that coated particles must be evaluated to assess whether a higher category (Category 1B or 1A) should be applied and additional routes of exposure (oral or dermal) should be included. After discussion with Member States and stakeholders, the European Commission concluded without a vote of the Member States that the classification of TiO₂~~as a Category 2 Carcinogen under the CLP Regulation is an appropriate measure. The European Commission first presented the proposed wording for the Entry of TiO~~₂ in Annex VI to the CLP Regulation on June 12, 2018, and this wording has since been further amended. The latest version was published in the draft Commission Delegated Regulation on October 4, 2019 and would apply to TiO₂ in powder form meeting the size criteria in the proposed note. This classification is subject to further clarification. The regulation has been sent for scrutiny by the European Parliament and the Council of the EU, and the scrutiny period will come to an end in early December 2019. Until the final regulation enters into effect, the text of the proposed entry, and in particular the proposed notes, may be changed and such changes may affect the impact of government ordered restrictions. During the ~~classification~~three months ended September 30, 2020, we experienced lower orders compared to the prior year for most of our businesses, reflecting the continuing impact of the pandemic. We cannot reasonably estimate with any degree of certainty the future adverse impacts the COVID-19 pandemic, including the severity or impacts of a “second wave” or other additional periods of increases or spikes in the number of COVID-19 cases in areas in which we operate, may have on ~~various downstream use applications~~our results of operations, financial position or liquidity; however, the impacts could be material. Furthermore, to remain competitive, we must invest in our infrastructure and maintain the ability to respond to any increases in demand, and our ~~manufacturing operations, including the~~inability to respond appropriately to significant changes in demand may impact ~~on the disposal of waste from~~ our facilities. If no objections are raised, it will enter into force 20 days after its publication in the Official Journal of the European Union and will apply as of the date 18 months after its publication. Member States, however, may choose to apply the regulation at any time after publication.profitability.

The COVID-19 pandemic and related economic repercussions have created significant disruptions to the global economy and have adversely affected our business. The duration of the pandemic and its ultimate impacts on the global economy and our business remain unknown and we may not be able to effectively mitigate such impacts, any of which could have a material adverse effect on our results of operations, financial condition and liquidity.

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~~Adoption~~

On March 11, 2020, the World Health Organization designated the COVID-19 outbreak as a global pandemic. As a result of the ~~Category 2 Carcinogen classification will require~~COVID-19 pandemic, governmental authorities have implemented and are continuing to implement numerous and constantly evolving measures to try to contain the virus, such as travel bans and restrictions, limits on gatherings, quarantines, shelter-in-place orders, and business shutdowns. We have manufacturing and other operations that ~~many end-use products manufactured~~are important to our company in areas significantly affected by the outbreak. Measures providing for business shutdowns generally exclude certain essential services, and those essential services commonly include critical infrastructure and the businesses that support that critical infrastructure. To date during the COVID-19 pandemic, our manufacturing facilities generally have been considered essential services, and while all of our facilities remain operational, these measures have impacted and may further impact our workforce and operations, as well as those of our customers, partners and suppliers.

While governments have relaxed measures initially put in place, there remains considerable uncertainty regarding the duration of those measures currently in place and potential future measures, including with ~~TiO~~₂ ~~be classified and labeled as containing~~respect to a ~~potentially carcinogenic component, which could negatively impact public perception~~“second wave” or other additional periods of ~~products containing TiO~~₂~~. Such classification would also affect~~increases or spikes in the number of COVID-19 cases. Existing or future restrictions on our manufacturing, operations ~~by subjecting us~~or employees, or similar limitations for our customers, partners and suppliers, could limit our ability to new workplace safety requirements that could significantly increase costs. In addition, any classification, use restriction, or authorization requirement for use imposed by ECHA could trigger heightened regulatory scrutiny in countries outside the EU based on health or safety grounds, whichmeet customer demand and could have a ~~wider~~material adverse ~~impact geographically on market demand for and prices of TiO~~₂ ~~or other products containing TiO~~₂ ~~and increase our compliance obligations outside the EU. Any increased regulatory scrutiny could affect consumer sentiment or limit the marketability of and demand for TiO~~₂ ~~or products containing TiO~~₂, which could have spill-over, restrictive effects under other EU laws, e.g., those affecting medical and pharmaceutical applications, cosmetics, food packaging and food additives. Pursuant to the proposed regulation, the classification could also require that all waste meeting the powder specifications in the proposed note be handled as hazardous waste, as separately determined by each Member State, which could result in significant impactseffect on our ~~customers’ products, wastes from our~~results of operations and ~~the implementation~~financial condition. Furthermore, restrictions or disruptions of ~~Circular Economy efforts within the EU. It is also possible that heightened regulatory scrutiny could lead to claims by consumers~~transportation, such as reduced availability of ~~such products alleging adverse health impacts. Finally, the classification of TiO~~₂ ~~as a Category 2 Carcinogen could lead the ECHA to evaluate other products with similar particle characteristics (such as iron oxides~~air transport, port closures and increased border controls or ~~functional additives) for human carcinogenic potential by inhalation, which may ultimately~~closures, have ~~similar negative impacts on other products within our portfolio.~~

~~Sales of TiO~~₂ ~~in the EU represented 44% of our revenues for the year ended December 31, 2018.~~

~~Restrictions on disposal of waste from our manufacturing processes could result~~resulted in higher costs and ~~negatively~~delays, which harm our profitability, and could make our products less competitive or cause our customers to seek alternative suppliers as these restrictions remain in place or become more restrictive in future periods. In addition, restrictions in certain countries could result in delays in obtaining needed approvals by governmental and regulatory authorities, including approvals for applications, renewals or extensions of waste disposal permits at our sulfate manufacturing sites.

We are actively managing our business through the pandemic. In response to the pandemic, we enacted rigorous safety measures across our organization, including stopping non-essential business travel, increasing the personal protective equipment requirements at our manufacturing sites, removing non-essential contractors from our sites, increasing cleaning and sanitizing measures, implementing social distancing protocols, requiring work-from-home arrangements as appropriate, and reducing the amount of employees working at a site at any given time. Many of these measures remain in place and we continue to evaluate the appropriate measures to have in place to safeguard our employees and our business. We may take further actions as government authorities require or recommend, or as we determine to be in the best interest of our employees, customers, partners and suppliers. While we are following the requirements of governmental authorities and taking additional preventative and protective measures to ensure the safety of our workforce, we cannot be certain that these measures will be successful in ensuring the health of our workforce. For example, if an employee at one of our sites were to contract COVID-19, this could result in temporary closures, reduced production hours, and increased cleaning and logistical costs. Workforce disruptions of this nature could significantly impact our ability to ~~operate~~maintain our ~~manufacturing facilities.~~

~~Our manufacturing processes generate byproducts, some of which are saleable~~operations and others of which are not and must be reused or disposed of as waste. Storage, transportation, reuse and disposal of waste are generally regulated by governmental authorities in the jurisdictions in which we operate. If existing arrangements for reuse or disposal of waste cease to be available to us,adversely affect our financial results. In addition, as a result of new rules, regulations or interpretations thereof, exhaustion of reclamation activities, landfill closures, or otherwise, we will need to find new arrangements for reuse or disposal, which could resultthe pandemic and the related increase in ~~increased costs to us and negatively impact our consolidated financial statements. For example, gypsum is generated~~remote working by our ~~TiO~~₂ ~~manufacturing facilities that use~~personnel and personnel of other companies, the ~~sulfate process,~~risk of cyber-attacks, breaches or similar events, whether through our systems or those of third parties on which we rely, has increased. Further risks associated with the increase in remote working by our personnel may include a diminished ability to deter and detect any unlawful activity by our personnel, such as ~~those at Scarlino, Italy and Teluk Kalong, Malaysia. The gypsum from our Scarlino facility is currently used in~~noncompliance with the ~~reclamation of a nearby former quarry. We received an extension of our existing permit, which will allow~~United States Foreign Corrupt Practices Act or the facility to continue to use the material to reclaim the site for approximately 13 months and we are seeking an additional extension to the extent physical capacity remains available. We are also currently pursuing replacement options for sale, reuse and/or disposal of gypsum produced at the Scarlino facility. Such options generally require governmental approval and there can be no assurance that such approvals will be received in a timely manner or at all. Any classification of our waste material as hazardous is likely to have an adverse impact on obtaining such approvals. Failure to find viable new disposal arrangements for our manufacturing byproducts, including those originating at our Scarlino, Italy site, could significantly impact our manufacturing operations, up to and including the temporary or permanent closure of related manufacturing facilities.U.K. Bribery Act.

~~In addition, in connection with the classification in the European Union of TiO~~₂We have not yet experienced significant impacts or interruptions to our supply chain as a ~~Category 2 Carcinogen, Member States could require that all waste mixtures in a powder form meeting~~result of the ~~specifications in the proposed note be classified as hazardous waste. This could result in significant changes~~COVID-19 pandemic. However, certain of our suppliers have faced difficulties maintaining operations due to ~~how wastes from~~government-ordered restrictions and shelter-in-place mandates. While we have thus far been able to identify alternative sourcing arrangements without disrupting our operations in Europe (including at our Scarlino, Italy site and elsewhere) are handled, including additional or more stringent manufacturing regulations, labelling requirements, transportation logistics, and other requirements regarding the ability to reuse or sell byproducts, or otherwise dispose of such materials. Any such regulations could have a significant impactsupply chain, financial hardship on our ~~manufacturing operations~~suppliers caused by the COVID-19 pandemic could cause material disruptions in our raw material supply. While we are proactively managing our supplier network by maintaining close contact and ~~results~~seeking alternative arrangements in case our primary suppliers are impacted by the COVID-19 pandemic, some of ~~operations.~~

our suppliers are sole-source suppliers for which we may have no alternative source of supply. Further, if we, our suppliers or customers are unable to perform our contractual obligations due to the COVID-19 pandemic, a force majeure event may be declared, rendering us, our suppliers or our customers unable to deliver all, or a portion of, any impacted orders or other contractual arrangements. If this were to occur, we may be

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forced to limit production and our customers could choose to discontinue or decrease the purchase of our products as a result of these measures. Such force majeure events could have significant negative impacts on our business.

We cannot be certain that the measures we have taken to mitigate the impact of COVID-19 will be effective nor that these measures will not have unintended consequences. For example, in response to COVID-19, we have reduced our capital expenditure budget for 2020, part of which is used on facility upgrades and maintenance. This reduction in capital expenditures could result in a decrease in reliability at our manufacturing sites. While we continue to fund capital expenditures for essential maintenance and safety matters, the reduction in capital expenditures at our facilities could result in an increased likelihood of process safety incidents or other hazards. In addition, in response to COVID-19, we have made workforce reductions and reduced working hours for many positions across the Company. We have taken steps to mitigate against increased risk as a result of these actions. However, it is possible that these actions could result in decreased effectiveness in our internal controls, which could result in significant deficiencies or material weaknesses. As the COVID-19 pandemic continues, we may experience additional adverse impacts on our results of operations, including our ability to access capital on favorable terms. Although the duration and ultimate impact of the COVID-19 pandemic is unknown at this time, the continued reduced level of economic activity or a further decline in economic conditions as a result of the COVID-19 pandemic may further materially adversely impact our business, results of operations, financial condition and liquidity. As the northern hemisphere heads into winter, additional actions by health or other governmental authorities requiring the closure of our facilities or recommending other measures could create additional negative impacts on all aspects of our business, including our employees, customers, suppliers, partners, results of operations, financial condition and liquidity.

A prolonged period of generating lower financial results and cash flows from operations as a result of the economic impacts from the COVID-19 pandemic and related measures could adversely affect our ability to maintain compliance with our financial covenants, to draw under the ABL Facility, and could also adversely affect our financial condition, including with respect to satisfying both required and voluntary pension funding requirements, and could otherwise negatively affect our ability to achieve our strategic objectives. Our debt instruments contain covenants that are usual and customary, including events of default and financial, affirmative and negative covenants. Our 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 decrease borrowing availability. In addition, the ABL Facility contains a springing financial covenant that requires the Company and its restricted subsidiaries to maintain a consolidated fixed charge coverage ratio of at least 1:1 for certain periods of time, if borrowing availability is less than a specified threshold.

Our operations involve risks that may increase our operating costs, which could reduce our profitability.

Although we take precautions to enhance the safety of our operations and minimize the risk of disruptions, our operations are subject to hazards inherent in the manufacturing and marketing of chemical and other products. These hazards include chemical spills, pipeline leaks and ruptures, storage tank leaks, discharges or releases of toxic or hazardous substances or gases and other hazards incident to the manufacturing, processing, handling, transportation and storage of dangerous chemicals. We are also potentially subject to other hazards, including natural disasters and severe weather; explosions and fires; transportation problems, including interruptions, spills and leaks; mechanical failures; unscheduled downtimes; labor difficulties; remediation complications; and other risks. In addition, some equipment and operations at our facilities are owned or controlled by third parties who may not be fully integrated into our safety programs and over whom we are able to exercise only limited control. Many potential hazards can cause bodily injury and loss of life, severe damage to or destruction of property and equipment and environmental damage, and may result in suspension of operations and the imposition of civil or criminal penalties and liabilities. Furthermore, we are subject to present and future claims with respect to workplace exposure, exposure of contractors on our premises as well as other persons located nearby, workers’ compensation and other matters.

As a result of and in response to the COVID-19 pandemic, we have taken a number of cost saving measures, including reducing our capital expenditures. Capital expenditures are used on facility maintenance, including EHS maintenance, among other items. This reduction in capital expenditures could result in a decrease in reliability at our manufacturing sites. While we continue to fund capital expenditures for essential maintenance and safety matters, the

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reduction in capital expenditures at our facilities could result in an increased likelihood of process safety incidents or other hazards to our sites, associates and surrounding communities.

We maintain property, business interruption, products liability and casualty insurance policies that we believe are in accordance with customary industry practices, as well as insurance policies covering other types of risks, including pollution legal liability insurance, but we are not fully insured against all potential hazards and risks incident to our business. Each of these insurance policies is subject to customary exclusions, deductibles and coverage limits, in accordance with industry standards and practices. As a result of market conditions, our loss history and other factors, our premiums and deductibles for certain insurance policies can increase substantially and, in some instances, certain insurance may become unavailable or available to us only for reduced amounts of coverage. If an incident were to occur or we were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Huntsman has agreed to sell its ownership interest to funds advised by SK Capital and SK Capital’s interests may conflict with yours.

On August 28, 2020, we announced that funds advised by SK Capital agreed to purchase approximately 42.5 million shares, representing just under 40% of our outstanding shares, from Huntsman for a purchase price of approximately $100 million, and further acquired a 30-month option for the purchase of Huntsman’s remaining approximate 9.5 million shares it holds. We are not a party to this agreement. The transaction is subject to regulatory approvals and is expected to close near year-end. If the transaction closes, SK Capital may exert significant influence over our business objectives and policies, including whether to continue as a publicly listed company, the composition of our board of directors and any action requiring the approval of our shareholders, such as the adoption of amendments to our articles of association, and the approval of mergers or a sale of substantially all of our assets. This concentration of ownership may also make some transactions, including mergers or other changes in control, more difficult or impossible without the support of SK Capital and could discourage others from making tender offers, which could prevent shareholders from receiving a premium for their shares. SK Capital’s interests may conflict with your interests as a shareholder.

Table of Contents

ITEM 6. EXHIBITS

Each exhibit identified below is filed as a part of this report. Exhibits designated with an "*" are filed as an exhibit to this Quarterly Report on Form ~~10-Q and Exhibits designated with an "+" indicates a management contract or compensatory plan.~~10-Q.

~~Incorporated by Reference~~

~~Exhibit~~

~~Number~~

~~Description~~

~~Schedule~~

~~Form~~

~~Exhibit~~

~~Filing Date~~

31.1*

~~Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

31.2*

~~Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

32.1*

~~Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

32.2*

~~Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

~~101.INS~~

~~XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.~~

101.SCH*

~~XBRL Taxonomy Extension Schema Document~~

101.CAL*

~~XBRL Taxonomy Extension Calculation Linkbase Document~~

101.DEF*

~~XBRL Taxonomy Definition Linkbase Document~~

101.LAB*

~~XBRL Taxonomy Extension Labels Linkbase Document~~

101.PRE*

~~XBRL Taxonomy Extension Presentation Linkbase Document~~

Incorporated by Reference

Exhibit

Number

Description

Schedule

Form

Exhibit

Filing Date

4.1

First Supplemental Indenture, dated as of August 19, 2020, by and among the guarantors party thereto and Wilmington Trust, National Association, as trustee and notes collateral agent.

8-K

4.1

August 19, 2020

4.2

Second Supplemental Indenture, dated as of August 19, 2020, by and between the guarantor party thereto and Wilmington Trust, National Association, as trustee and notes collateral agent.

8-K

4.2

August 19, 2020

31.1*

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*

Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*

XBRL Taxonomy Extension Schema Document

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

XBRL Taxonomy Definition Linkbase Document

101.LAB*

XBRL Taxonomy Extension Labels Linkbase Document

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

104*

The cover page to this Quarterly Report on Form 10-Q, formatted in XBRL

4549

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

VENATOR MATERIALS PLC
(Registrant)

Date:

November ~~6, 2019~~5, 2020

By:

/s/ Kurt D. Ogden

Kurt D. Ogden

Executive Vice President and Chief Financial Officer

Date:

November ~~6, 2019~~5, 2020

By:

/s/ Stephen Ibbotson

Stephen Ibbotson

Vice President and Controller

4650


		Page
~~GENERAL~~General			2

~~NOTE REGARDING FORWARD-LOOKING STATEMENTS~~Note Regarding Forward-looking Statements			2

PART I	FINANCIAL INFORMATION	4

ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)	4

	Condensed Consolidated Balance Sheets	4

	Condensed Consolidated Statements of Operations	5

	Condensed Consolidated Statements of Comprehensive Income	6

	Condensed Consolidated Statements of Equity	7

	Condensed Consolidated Statements of Cash Flows	8

	Notes to Unaudited Condensed Consolidated Financial Statements	9

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2726

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3940

ITEM 4.	Controls and Procedures	4041

PART II	OTHER INFORMATION	4243

ITEM 1.	Legal Proceedings	4243

ITEM 1A.	Risk Factors	4344

ITEM 6.	Exhibits	4549

Signatures		4650


Lease Cost	Three months ended September 30, 2019		Nine months ended September 30, 2019
Operating lease cost	$	3	$	10
Finance lease cost:
Amortization of right-of-use assets	—		1
Interest on lease liabilities	—		—
Short-term lease cost	—		1


Cash Flow Information	Three months ended September 30, 2019		Nine months ended September 30, 2019
Operating cash flows from operating leases	$	3	$	10
Operating cash flows from finance leases	—		1
Financing cash flows from finance leases	—		—


September 30, 2019	Operating Leases		Finance Leases		Total
2019 (remaining)	$	3	$	—	$	3
2020	10		2		12
2021	9		1		10
2022	7		1		8
2023	4		1		5
After 2023	40		7		47
Total lease payments	$	73	$	12	$	85
Less: Interest	30		2		32
Present value of lease liabilities	$	43	$	10	$	53


December 31,	Operating Leases		Capital Leases
2019	$	13	$	1
2020	11		2
2021	9		1
2022	6		1
2023	4		1
Thereafter	40		7
Total	$	83	$	13
Less: Amounts representing interest			3
Present value of minimum lease payments			$	10
Less: Current portion of capital leases			1
Long-term portion of capital leases			$	9


	Workforce reductions⁽¹⁾		Other restructuring costs		Total⁽²⁾
Accrued liabilities as of December 31, 2018	$	32	$	—	$	32
2019 charges for 2018 and prior initiatives	6		9		15
2019 charges for 2019 initiatives	4		—		4
2019 payments for 2018 and prior initiatives	(22)		(8)		(30)
2019 payments for 2019 initiatives	(4)		—		(4)
Foreign currency effect on liability balance	(1)		—		(1)
Accrued liabilities as of September 30, 2019	$	15	$	1	$	16
Current portion of restructuring reserves					8
Long-term portion of restructuring reserve					8


	September 30, 2019		December 31, 2018
2017 initiatives and prior	$	6	$	18
2018 initiatives	9		14
2019 initiatives	1		—
Total	$	16	$	32


	Three Months Ended September 30, 2019 vs. 2018
	Average Selling Price⁽¹⁾
	Local Currency		Foreign Currency Translation Impact		Mix & Other		Sales Volumes⁽²⁾
Period-Over-Period Increase (Decrease)
Titanium Dioxide	(7	%)	(2	%)	(1	%)	12	%
Performance Additives	2	%	(2	%)	(2	%)	(8	%)