Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 20, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Venator Materials PLC | |
Entity Central Index Key | 1,705,682 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 106,401,124 | |
Document Fiscal Year Focus | 43,465 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED AND COMB
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | |
Current assets: | |||
Cash and cash equivalents | [1] | $ 354 | $ 238 |
Accounts receivable (net of allowance for doubtful accounts of $4 and $5, respectively) | [1] | 435 | 380 |
Accounts receivable from affiliates | 4 | 12 | |
Inventories | [1] | 491 | 454 |
Prepaid expenses | 10 | 19 | |
Other current assets | 77 | 66 | |
Total current assets | 1,371 | 1,169 | |
Property, plant and equipment, net | [1] | 1,316 | 1,367 |
Intangible assets, net | [1] | 18 | 20 |
Investment in unconsolidated affiliates | 82 | 86 | |
Deferred income taxes | 137 | 167 | |
Other noncurrent assets | 37 | 38 | |
Total assets | 2,961 | 2,847 | |
Current liabilities: | |||
Accounts payable | [1] | 378 | 385 |
Accounts payable to affiliates | 14 | 16 | |
Accrued liabilities | [1] | 191 | 244 |
Current portion of debt | [1] | 7 | 14 |
Total current liabilities | 590 | 659 | |
Long-term debt | 741 | 743 | |
Deferred income taxes | 2 | 0 | |
Other noncurrent liabilities | 260 | 306 | |
Noncurrent payable to affiliates | 34 | 34 | |
Total liabilities | 1,627 | 1,742 | |
Commitments and contingencies (Notes 11 and 12) | |||
Equity | |||
Ordinary shares $0.001 par value, 200 shares authorized, 106 issued and outstanding, each | 0 | 0 | |
Additional paid-in capital | 1,313 | 1,311 | |
Retained earnings | 341 | 67 | |
Accumulated other comprehensive loss | (329) | (283) | |
Total Venator Materials PLC shareholders' equity | 1,325 | 1,095 | |
Noncontrolling interest in subsidiaries | 9 | 10 | |
Total equity | 1,334 | 1,105 | |
Total liabilities and equity | $ 2,961 | $ 2,847 | |
[1] | At June 30, 2018 and December 31, 2017, $6 and $5 of cash and cash equivalents; $7 each of accounts receivable, net; $1 and $2 of inventories; $5 each of property, plant and equipment, net; $16 and $17 of intangible assets, net; $1 each of accounts payable; $3 and $4 of accrued liabilities; and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 5. Variable Interest Entities." |
CONDENSED CONSOLIDATED AND COM3
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | |
Accounts receivable, allowance for doubtful accounts | $ 4 | $ 5 | |
Ordinary shares, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Ordinary shares, authorized (in shares) | 200,000,000 | 200,000,000 | |
Ordinary shares, issued (in shares) | 106,000,000 | 106,000,000 | |
Ordinary shares, outstanding (in shares) | 106,000,000 | 106,000,000 | |
Variable Interest Entity | |||
Cash and cash equivalents | [1] | $ 354 | $ 238 |
Accounts receivable, net | [1] | 435 | 380 |
Inventories | [1] | 491 | 454 |
Property, plant and equipment, net | [1] | 1,316 | 1,367 |
Intangible assets, net | [1] | 18 | 20 |
Accounts payable | [1] | 378 | 385 |
Accrued liabilities | [1] | 191 | 244 |
Current portion of debt | [1] | 7 | 14 |
Consolidated VIE's | |||
Variable Interest Entity | |||
Cash and cash equivalents | 6 | 5 | |
Accounts receivable, net | 7 | 7 | |
Inventories | 1 | 2 | |
Property, plant and equipment, net | 5 | 5 | |
Intangible assets, net | 16 | 17 | |
Accounts payable | 1 | 1 | |
Accrued liabilities | 3 | 4 | |
Current portion of debt | $ 2 | $ 2 | |
[1] | At June 30, 2018 and December 31, 2017, $6 and $5 of cash and cash equivalents; $7 each of accounts receivable, net; $1 and $2 of inventories; $5 each of property, plant and equipment, net; $16 and $17 of intangible assets, net; $1 each of accounts payable; $3 and $4 of accrued liabilities; and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 5. Variable Interest Entities." |
CONDENSED CONSOLIDATED AND COM4
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Trade sales, services and fees, net | $ 626 | $ 562 | $ 1,248 | $ 1,099 |
Cost of goods sold | 193 | 480 | 647 | 945 |
Operating expenses: | ||||
Selling, general and administrative (includes corporate allocations from Huntsman Corporation of nil, $28, nil and $52, respectively) | 56 | 57 | 110 | 107 |
Restructuring, impairment, and plant closing and transition costs | 136 | 7 | 145 | 33 |
Other income, net | (10) | (40) | (13) | (30) |
Total operating expenses | 182 | 24 | 242 | 110 |
Operating income | 251 | 58 | 359 | 44 |
Interest expense | (14) | (10) | (27) | (24) |
Interest income | 4 | 1 | 7 | 3 |
Other income | 2 | 1 | 4 | 2 |
Income from continuing operations before income taxes | 243 | 50 | 343 | 25 |
Income tax expense | (45) | (16) | (65) | (12) |
Income from continuing operations | 198 | 34 | 278 | 13 |
Income from discontinued operations, net of tax | 0 | 0 | 0 | 8 |
Net income | 198 | 34 | 278 | 21 |
Net income attributable to noncontrolling interests | (2) | (3) | (4) | (6) |
Net income attributable to Venator | $ 196 | $ 31 | $ 274 | $ 15 |
Basic earnings per share: | ||||
Income from continuing operations attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | $ 1.84 | $ 0.29 | $ 2.58 | $ 0.06 |
Income from discontinued operations attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | 0 | 0 | 0 | 0.08 |
Net income attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | 1.84 | 0.29 | 2.58 | 0.14 |
Diluted earnings per share: | ||||
Income from continuing operations attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | 1.84 | 0.29 | 2.57 | 0.06 |
Income from discontinued operations attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | 0 | 0 | 0 | 0.08 |
Net income attributable to Venator Materials PLC ordinary shareholders (in dollars per share) | $ 1.84 | $ 0.29 | $ 2.57 | $ 0.14 |
CONDENSED CONSOLIDATED AND COM5
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Huntsman | Corporate allocations | ||||
Selling, general and administrative expenses | $ 0 | $ 28 | $ 0 | $ 52 |
CONDENSED CONSOLIDATED AND COM6
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 198 | $ 34 | $ 278 | $ 21 |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustment | (115) | 74 | (58) | 79 |
Pension and other postretirement benefits adjustments | 4 | 24 | 7 | 28 |
Hedging instruments | 12 | 0 | 5 | 0 |
Total other comprehensive (loss) income, net of tax | (99) | 98 | (46) | 107 |
Comprehensive income | 99 | 132 | 232 | 128 |
Comprehensive income attributable to noncontrolling interest | (2) | (3) | (4) | (6) |
Comprehensive income attributable to Venator | $ 97 | $ 129 | $ 228 | $ 122 |
CONDENSED CONSOLIDATED AND COM7
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Parent's Net Investment and Advances | Ordinary Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interest in Subsidiaries |
Balance at the beginning of the period at Dec. 31, 2016 | $ 177 | $ 588 | $ 0 | $ 0 | $ 0 | $ (423) | $ 12 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 21 | 15 | 6 | ||||
Net changes in other comprehensive loss | 107 | 107 | 0 | ||||
Dividends paid to noncontrolling interests | (6) | (6) | |||||
Net changes in parent’s net investment and advances | 806 | 807 | (1) | ||||
Balance at the end of the period at Jun. 30, 2017 | 1,105 | 1,410 | 0 | 0 | 0 | (316) | 11 |
Balance at the beginning of the period at Dec. 31, 2017 | 1,105 | 0 | 0 | 1,311 | 67 | (283) | 10 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 278 | 274 | 4 | ||||
Net changes in other comprehensive loss | (46) | (46) | 0 | ||||
Dividends paid to noncontrolling interests | (5) | (5) | |||||
Activity related to stock plans | 2 | 2 | |||||
Balance at the end of the period at Jun. 30, 2018 | $ 1,334 | $ 0 | $ 0 | $ 1,313 | $ 341 | $ (329) | $ 9 |
CONDENSED CONSOLIDATED AND COM8
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Activities: | ||
Net income | $ 278 | $ 21 |
Income from discontinued operations, net of tax | 0 | (8) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 69 | 59 |
Deferred income taxes | 28 | 1 |
Noncash restructuring and impairment charges | 133 | 6 |
Proceeds from Insurance Settlement, Operating Activities | 0 | 28 |
Noncash interest expense | 1 | 20 |
Noncash (loss) gain on foreign currency transactions | (3) | 6 |
Other, net | 4 | 4 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (56) | (156) |
Inventories | (46) | 12 |
Prepaid expenses | 9 | 2 |
Other current assets | (14) | (4) |
Other noncurrent assets | (1) | 2 |
Accounts payable | (17) | (7) |
Accrued liabilities | (59) | 0 |
Other noncurrent liabilities | (21) | (16) |
Net cash provided by (used in) operating activities from continuing operations | 305 | (30) |
Net cash provided by operating activities from discontinued operations | 0 | 1 |
Net cash provided by (used in) operating activities | 305 | (29) |
Investing Activities: | ||
Capital expenditures | (167) | (40) |
Insurance proceeds for recovery of property damage | 0 | 50 |
Net advances to affiliates | 0 | 91 |
Repayment of government grant | 0 | (5) |
Cash received from unconsolidated affiliates | 14 | 27 |
Investment in unconsolidated affiliates | (9) | (19) |
Net cash (used in) provided by investing activities from continuing operations | (162) | 104 |
Net cash used in investing activities from discontinued operations | 0 | (1) |
Net cash (used in) provided by investing activities | (162) | 103 |
Financing Activities: | ||
Repayment of third-party debt | (9) | (5) |
Net repayments on affiliate accounts payable | 0 | (60) |
Dividends paid to noncontrolling interests | (5) | (6) |
Net cash used in financing activities | (14) | (71) |
Effect of exchange rate changes on cash | (13) | 1 |
Net change in cash and cash equivalents, including discontinued operations | 116 | 4 |
Cash and cash equivalents at beginning of period, including discontinued operations | 238 | 30 |
Cash and cash equivalents at end of period, including discontinued operations | 354 | 34 |
Supplemental cash flow information: | ||
Cash paid for interest | 25 | 2 |
Cash paid for income taxes | 20 | 4 |
Supplemental disclosure of noncash activities: | ||
Capital expenditures included in accounts payable as of June 30, 2018 and 2017, respectively | 49 | 9 |
Settlement of long-term notes payable/notes receivable with affiliates | $ 0 | $ 792 |
General, Description of Busines
General, Description of Business, Recent Developments and Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General, Description of Business, Recent Developments and Basis of Presentation | Note 1. General, Description of Business, Recent Developments and Basis of Presentation General For convenience in this report, the terms “our,” “us,” “we” or “Venator” may be used to refer to Venator Materials PLC and, unless the context otherwise requires, its subsidiaries. Description of Business Venator operates in two segments: Titanium Dioxide and Performance Additives. The Titanium Dioxide segment manufactures and sells primarily TiO 2 , and operates eight TiO 2 manufacturing facilities across the globe, predominantly in Europe. The Performance Additives segment manufactures and sells functional additives, color pigments, timber treatment and water treatment chemicals. This segment operates 17 color pigments, functional additives, water treatment and timber treatment manufacturing and processing facilities in Europe, North America, Asia and Australia. In conjunction with our IPO completed on August 8, 2017, we entered into a separation agreement to effect the separation of the Titanium Dioxide and Performance Additives businesses from Huntsman. This arrangement is referred to herein as the "separation." Recent Developments Potential Ashtabula Complex Acquisition On July 16, 2018, we announced that we reached an agreement with Tronox Limited (“Tronox”) to purchase the European paper laminates business (the “8120 Grade”) from Tronox upon the closing of their proposed merger with The National Titanium Dioxide Company Limited ("Cristal"). In connection with the acquisition, Tronox would supply the 8120 Grade to us under a Transitional Supply Agreement until the transfer of the manufacturing of the 8120 Grade to our Greatham, U.K. facility has been completed. Additionally, we announced that we entered into an agreement with Tronox providing, among other things, that the parties will engage in exclusive negotiations until September 29, 2018 and use our respective best efforts to achieve a definitive agreement for the purchase by us of the Ashtabula, Ohio complex currently owned by Cristal if a divestiture of the Ashtabula complex is required for Tronox to obtain approval for its proposed merger with Cristal. Pori Fire On January 30, 2017, our TiO 2 manufacturing facility in Pori, Finland experienced fire damage and we continue to repair the facility. The loss was covered by insurance for property damage as well as business interruption losses subject to retained deductibles of $15 million and 60 days , respectively. On April 13, 2018 we received a final payment from our insurers of €191 million , or $236 million , bringing our total insurance receipts to €468 million , or $551 million , which was the limit of our insurance proceeds. We elected to receive the insurance proceeds in Euro in order to match the currency of the related business interruption losses and capital expenditures resulting from the Pori fire. For the six months ended June 30, 2018, we received €243 million , or $298 million , of insurance proceeds, while €225 million , or $253 million , was received during 2017. During the second quarter of 2018, in conjunction with the receipt of the final payment from our insurers, we recorded $325 million of income in cost of goods sold in our consolidated statement of operations, which related to the losses incurred to date and yet to be incurred. We recorded $371 million of income related to property damage and business interruption insurance recoveries for the six months ended June 30, 2018 while $84 million was recognized for the six months ended June 30, 2017. Nil and $68 million was reported in accrued liabilities as of June 30, 2018 and December 31, 2017, respectively. We recorded a loss of $5 million and $17 million for cleanup and other non-capital reconstruction costs in cost of goods sold for the six months ended June 30, 2018 and 2017, respectively. We recorded a loss of $31 million for the write-off of fixed assets and lost inventory in cost of goods sold in our consolidated and combined statements of operations for the six months ended June 30, 2017. Basis of Presentation Venator’s unaudited condensed consolidated and combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP” or “U.S. GAAP”). Prior to the separation, Venator’s operations were included in Huntsman’s financial results in different legal forms, including but not limited to: (1) wholly-owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities which are comprised of other businesses and include the Titanium Dioxide and Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives and other businesses are the primary beneficiaries. The unaudited condensed consolidated and combined financial statements include all revenues, costs, assets, liabilities and cash flows directly attributable to Venator, as well as allocations of direct and indirect corporate expenses, which are based upon an allocation method that in the opinion of management is reasonable. Such corporate cost allocation transactions between Venator and Huntsman have been considered to be effectively settled for cash in the unaudited condensed consolidated and combined financial statements at the time the transaction is recorded and the net effect of the settlement of these intercompany transactions is reflected in the unaudited condensed consolidated and combined statements of cash flows as a financing activity. Because the historical unaudited condensed consolidated and combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical unaudited condensed consolidated and combined financial information includes the results of operations of other Huntsman businesses that are not a part of our operations after the separation. We report the results of those other businesses as discontinued operations. Please see “ Note 15. Discontinued Operations .” For purposes of these unaudited condensed consolidated and combined financial statements, all significant transactions with Huntsman International have been included in group equity. All intercompany transactions within the consolidated and combined business have been eliminated. Prior to the separation, Huntsman's executive, information technology, EHS and certain other corporate departments performed certain administrative and other services for Venator. Additionally, Huntsman performed certain site services for Venator. Expenses incurred by Huntsman and allocated to Venator were determined based on specific services provided or are allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of nil and $28 million for the three months ended June 30, 2018 and 2017 , respectively, and nil and $52 million for the six months ended June 30, 2018 and 2017 , respectively. In the notes to unaudited condensed consolidated and combined financial statements , all dollar and share amounts in tabulations are in millions unless otherwise indicated. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Pronouncements | Note 2. Recently Issued Accounting Pronouncements Accounting Pronouncements Adopted During the Period In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) . This ASU along with subsequently issued amendments, outline a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and supersedes most previously issued revenue recognition guidance. Under this guidance, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration received. These ASUs are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We adopted these ASUs effective January 1, 2018 and we have elected the modified retrospective approach as the transition method. As a result of the adoption of these amendments, we revised our accounting policy for revenue recognition as detailed in “ Note 3. Revenue ,” and, except for the changes noted in " Note 3. Revenue " no material changes have been made to our significant policies disclosed in "Note 1. Description of Business, Recent Developments, Basis of Presentation and Summary of Significant Accounting Policies" of our Annual Report on Form 10-K, filed on February 23, 2018, for the year ended December 31, 2017. The adoption of these ASUs did not have a significant impact on our unaudited condensed consolidated and combined financial statements . In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU clarify and include specific guidance to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. We adopted the amendments of this ASU effective January 1, 2018, and the initial adoption of the amendment in this ASU did not impact on our unaudited condensed consolidated and combined financial statements . In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The amendments in this ASU require that an employer report the service cost component of net periodic pension cost and net periodic postretirement benefit cost in the same line items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of income from operations. The amendments in this ASU also allow only the service cost component to be eligible for capitalization when applicable (for example, as a cost of internally manufactured inventory or a self-constructed asset). The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments in this ASU should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit cost in assets. We adopted the amendments of this ASU effective January 1, 2018, which impacted the presentation of our financial statements. Our historical presentation of service cost components was consistent with the amendments in this ASU. The other components of net periodic pension and postretirement benefit costs are presented within other nonoperating income, whereas we historically presented these within cost of goods sold and selling, general and administrative expenses. As a result of the retrospective adoption of this ASU, for the three and six months ending June 30, 2017, cost of goods sold increased by $1 million and $3 million , respectively, selling, general and administrative expenses decreased by nil and $1 million , respectively, and other income increased by $1 million and $2 million , respectively, within our unaudited condensed consolidated and combined statements of operations. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . The amendments in this ASU better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships as well as the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements to increase the understandability of the results of an entity’s intended hedging strategies. The amendments in this ASU also include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted in any interim period after the issuance of this ASU. Transition requirements and elections should be applied to hedging relationships existing on the date of adoption. For cash flow and net investment hedges, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness, and the amended presentation and disclosure guidance is required only prospectively. We adopted the amendments of this ASU effective January 1, 2018, and the initial adoption of the amendment in this ASU did not impact on our unaudited condensed consolidated and combined financial statements . Accounting Pronouncements Pending Adoption in Future Periods In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The amendments in this ASU will increase transparency and comparability among entities by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this ASU will require lessees to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application of the amendments in this ASU is permitted for all entities. Reporting entities are required to recognize and measure leases under these amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact of the adoption of the amendments in this ASU on our financial statements and believe, based on our preliminary assessment, that we will record significant additional right-of-use assets and lease obligations. In February 2018, the 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, and early adoption is permitted. We have not completed our assessment, but we do not anticipate this will have a material impact on our unaudited consolidated and combined statement of comprehensive income. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 3. Revenue We account for revenues from contracts with customers under ASC 606, Revenue from Contracts with Customers , which became effective January 1, 2018. As part of the adoption of ASC 606, we applied the new standard on a modified retrospective basis analyzing open contracts as of January 1, 2018. However, no cumulative effect adjustment to retained earnings was necessary as no revenue recognition differences were identified when comparing the revenue recognition criteria under ASC 606 to previous requirements. We generate substantially all of our revenues through sales of inventory in the open market and via long-term supply agreements. Revenue is recognized when the performance obligations under the terms of our contracts are satisfied. Generally, this occurs at the time of shipping at which point the control of the goods transfers to the customer. Further, in determining whether control has transferred, we consider if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. Revenue is measured as the amount of consideration we expect to receive in exchange for transferred goods. Sales, value-added, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. We have elected to account for all shipping and handling activities as fulfillment costs. We recognize these costs for shipping and handling when control over products have transferred to the customer as an expense in cost of goods sold. We have also elected to expense commissions when incurred as the amortization period of the commission asset that we would have otherwise recognized is less than one year. The following table disaggregates our revenue by major geographical region for the three and six months ended June 30, 2018 : For the Three Months Ended June 30, 2018 For the Six Months Ended June 30, 2018 Titanium Dioxide Performance Additives Total Titanium Dioxide Performance Additives Total North America $ 80 $ 78 $ 158 $ 151 $ 155 $ 306 Europe 229 59 288 470 117 587 Asia 96 30 126 192 57 249 Other 50 4 54 98 8 106 Total Revenues $ 455 $ 171 $ 626 $ 911 $ 337 $ 1,248 The following table disaggregates our revenue by major product line for the three and six months ended June 30, 2018 : For the Three Months Ended June 30, 2018 For the Six Months Ended June 30, 2018 Titanium Dioxide Performance Additives Total Titanium Dioxide Performance Additives Total TiO 2 $ 455 $ — $ 455 $ 911 $ — $ 911 Color Pigments — 84 84 — 166 166 Functional Additives — 39 39 — 80 80 Timber Treatment — 41 41 — 78 78 Water Treatment — 7 7 — 13 13 Total Revenues $ 455 $ 171 $ 626 $ 911 $ 337 $ 1,248 Substantially all of our revenue is generated through inventory sales in which revenue is recognized at a point in time. 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 good that is distinct. In substantially all cases, a contract has a single performance obligation to deliver a promised good to the customer. The amount of consideration we receive and revenue we recognize is based upon the terms stated in the sales contract, which may contain variable consideration such as discounts or rebates. We also give our customers a limited right to return products that have been damaged, do not satisfy their specifications, or other specific reasons. Payment terms on product sales to our customers typically range from 30 days to 90 days , although certain exceptions exist where standard payment terms are exceeded, these instances are infrequent and do not exceed one year. Discounts are allowed for some customers for early payment or if a certain volume is met. As our standard payment terms are less than one year, we have elected to not assess whether a contract has a significant financing component. In order to estimate the applicable variable consideration at the time of revenue recognition, we use historical and current trend information to estimate the amount of discounts, rebates, or returns to which customers are likely to be entitled. Historically, actual discount or rebate adjustments relative to those estimated and accrued at the point of which revenue is recognized have not materially differed. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 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 June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 December 31, 2017 Raw materials and supplies $ 159 $ 149 Work in process 58 46 Finished goods 274 259 Total $ 491 $ 454 |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2018 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Variable Interest Entities | Note 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 Dow Chemical Company. 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 June 30, 2018 , the joint ventures’ assets, liabilities and results of operations are included in Venator’s condensed consolidated and combined financial statements. The revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities for the three and six months ended June 30, 2018 and 2017 are as follows: Three months ended Six months ended 2018 2017 2018 2017 Revenues $ 35 $ 32 $ 66 $ 66 Income from continuing operations before income taxes 5 5 9 12 Net cash provided by operating activities 3 7 12 14 |
Restructuring, Impairment, and
Restructuring, Impairment, and Plant Closing and Transition Costs | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring, Impairment, and Plant Closing and Transition Costs | Note 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. As of June 30, 2018 and December 31, 2017 , accrued restructuring and plant closing and transition costs by type of cost and initiative consisted of the following: Workforce reductions (1) Other restructuring costs Total (2) Accrued liabilities as of December 31, 2017 $ 34 $ — $ 34 2018 charges for 2017 and prior initiatives 3 8 11 2018 charges for 2018 initiatives 1 — 1 2018 payments for 2017 and prior initiatives (10 ) (8 ) (18 ) 2018 payments for 2018 initiatives — — — Foreign currency effect on liability balance (1 ) — (1 ) Accrued liabilities as of June 30, 2018 $ 27 $ — $ 27 (1) The total workforce reduction reserves of $27 million relate to the termination of 174 positions, of which zero positions had been terminated as of June 30, 2018 . (2) Accrued liabilities remaining at June 30, 2018 and December 31, 2017 by year of initiatives were as follows: June 30, 2018 December 31, 2017 2016 initiatives and prior $ 7 $ 9 2017 initiatives 19 25 2018 initiatives 1 — Total $ 27 $ 34 Details with respect to our reserves for restructuring and plant closing and transition costs are provided below by segment and initiative: Titanium Dioxide Performance Additives Total Accrued liabilities as of December 31, 2017 $ 30 $ 4 $ 34 2018 charges for 2017 and prior initiatives 11 — 11 2018 charges for 2018 initiatives — 1 1 2018 payments for 2017 and prior initiatives (15 ) (3 ) (18 ) 2018 payments for 2018 initiatives — — — Foreign currency effect on liability balance (1 ) — (1 ) Accrued liabilities as of June 30, 2018 $ 25 $ 2 $ 27 Current portion of restructuring reserves 17 2 19 Long-term portion of restructuring reserve 8 — 8 Details with respect to cash and noncash restructuring charges and impairment of assets for the three and six months ended June 30, 2018 and 2017 by initiative are provided below: Three months ended Six months ended June 30, 2018 June 30, 2018 Cash charges $ 6 $ 12 Accelerated depreciation 129 132 Other noncash charges 1 1 Total 2018 Restructuring, Impairment and Plant Closing and Transition Costs $ 136 $ 145 Three months ended Six months ended June 30, 2017 June 30, 2017 Cash charges $ 4 $ 27 Impairment of assets 3 3 Other noncash charges — 3 Total 2017 Restructuring, Impairment and Plant Closing and Transition Costs $ 7 $ 33 Restructuring Activities In December 2014, we implemented a comprehensive restructuring program to improve the global competitiveness of our Titanium Dioxide and Performance Additives segments. As part of the program, we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, we recorded restructuring expense of nil for the three and six months ended June 30, 2018 , each. In July 2016, we announced plans to close our Umbogintwini, South Africa TiO 2 manufacturing facility. As part of the program, we recorded restructuring expense of approximately $1 million and $2 million for the three and six months ended June 30, 2018 , respectively. We expect to incur additional charges of approximately $12 million through the end of 2022. In March 2017, we announced a plan to close the white end finishing and packaging operation of our TiO 2 manufacturing facility at our Calais, France site. The announced plan follows the 2015 closure of the black end manufacturing operations and would result in the closure of the entire facility. In connection with this closure, we recorded restructuring expense of $4 million and $9 million for the three and six months ended June 30, 2018 , respectively. We expect to incur additional charges of approximately $44 million through the end of 2022. In September 2017, we announced a plan to close our St. Louis and Easton manufacturing facilities. As part of the program, we recorded restructuring expense of approximately $5 million and $8 million related to accelerated depreciation for the three and six months ended June 30, 2018 , respectively. We expect to incur $7 million of accelerated depreciation through the end of 2018. In May 2018, we implemented a plan to close portions of our Color Pigments manufacturing facility in Augusta, Georgia. As part of the program, we recorded restructuring expense of $127 million for the three and six months ended June 30, 2018 , each, of which $125 million related to accelerated depreciation, $1 million related to other noncash charges and $1 million related to cash charges. We expect to incur additional charges of approximately $2 million through the end of 2019. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Note 7. Debt Outstanding debt, net of debt issuance costs of $12 million , consisted of the following: June 30, 2018 December 31, 2017 Senior Notes $ 370 $ 370 Term Loan Facility 366 367 Other 12 20 Total debt 748 757 Less: short-term debt and current portion of long-term debt 7 14 Total long-term debt $ 741 $ 743 The estimated fair value of the Senior Notes was $359 million and $396 million as of June 30, 2018 and December 31, 2017 , respectively. The estimated fair value of the Term Loan Facility was $375 million and $378 million as of June 30, 2018 and December 31, 2017 , respectively. The estimated fair values of the Senior Notes and the Term Loan Facility are based upon quoted market prices (Level 1). The weighted average interest rate on our outstanding balances under the Senior Notes and Term Loan Facility as of June 30, 2018 and December 31, 2017 was approximately 5% each. 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 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 Senior Credit Facilities that provide for first lien senior secured financing of up to $675 million , consisting of: • the Term Loan Facility in an aggregate principal amount of $375 million , with a maturity of seven years ; and • the ABL Facility in an aggregate principal amount of up to $300 million , with a maturity of five years . The Term Loan Facility will amortize in aggregate annual amounts equal to 1% of the original principal amount of the Term Loan Facility, payable quarterly commencing in the fourth quarter of 2017. Availability to borrow under the $300 million of commitments under the ABL Facility is subject to a borrowing base calculation comprised of accounts receivable and inventory in U.S., Canada, the U.K., Germany and accounts receivable in France and Spain, that fluctuate from time to time and may be further impacted by the lenders’ discretionary ability to impose reserves and availability blocks that might otherwise incrementally increase borrowing availability. As a result, the aggregate amount available for extensions of credit under the ABL Facility at any time is the lesser of $300 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”) 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. 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. Cash Pooling Program Prior to the separation, Venator addressed cash flow needs by participating in a cash pooling program with Huntsman. Cash pooling transactions were recorded as either amounts receivable from affiliates or amounts payable to affiliates and are presented as “Net advances to affiliates” and “Net borrowings on affiliate accounts payable” in the investing and financing sections, respectively, in the unaudited condensed consolidated and combined statements of cash flows. Interest income was earned if an affiliate was a net lender to the cash pool and paid if an affiliate was a net borrower from the cash pool based on a variable interest rate determined historically by Huntsman. Venator exited the cash pooling program prior to the separation and all receivables and payables generated through the cash pooling program were settled in connection with the separation. Notes Receivable and Payable of Venator to Huntsman Substantially all Huntsman receivables or payables were eliminated in connection with the separation, other than a payable to Huntsman for a liability pursuant to the Tax Matters Agreement dated August 7, 2017, by and among Venator Materials PLC and Huntsman (the “Tax Matters Agreement”) entered into at the time of the separation which has been presented as “Noncurrent payable to affiliates” on our unaudited condensed consolidated and combined balance sheet. See “ Note 9. Income Taxes ” for further discussion. A/R Programs Certain of our entities participated in the accounts receivable securitization programs ("A/R Programs") sponsored by Huntsman International. Under the A/R Programs, such entities sold certain of their trade receivables to Huntsman International. Huntsman International granted an undivided interest in these receivables to a special purpose entity, which served as security for the issuance of debt of Huntsman International. On April 21, 2017, Huntsman International amended its accounts receivable securitization facilities, which, among other things, removed existing receivables sold into the program by Venator and at which time we discontinued our participation in the A/R Programs. The entities’ allocated losses on the A/R Programs for the three and six months ended June 30, 2017 was nil and $1 million , respectively. The allocation of losses on sale of accounts receivable is based upon the pro-rata portion of total receivables sold into the securitization program as well as other program and interest expenses associated with the A/R Programs. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Note 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. In December 2017 , we entered into three cross-currency swap agreements to convert a portion of our intercompany fixed-rate, U.S. dollar denominated notes, including the semi-annual interest payments and the payment of remaining principal at maturity, to a fixed-rate, Euro denominated debt. The economic effect of the swap agreement was to eliminate the uncertainty of the cash flows in U.S. Dollars associated with the notes by fixing the principle amount at €169 million with a fixed annual rate of 3.43% . These hedges have been 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 is our best estimate of the repayment date of these intercompany loans. The amount and timing of the semi-annual principle payments under the cross-currency swap also correspond with the terms of the intercompany loans. Gains and losses from these hedges offset the changes in the value of interest and principal payments as a result of changes in foreign exchange rates. 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 portion of the hedge that is ineffective will be recorded in earnings in other income. We did not record any ineffectiveness during 2018 . The effective portion of the changes in the fair value of the swaps are deferred in other comprehensive loss and subsequently recognized in other income, net in the unaudited condensed consolidated and combined statements of operations when the hedged item impacts earnings. Cash flows related to our cross currency swap that relate to our periodic interest settlement will be classified as operating activities and the cash flows that relates to principal balances will be designated as financing activities. The fair value of these hedges was nil and $5 million at June 30, 2018 and December 31, 2017 , respectively, and was recorded as other long-term liabilities on our unaudited condensed consolidated and combined 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. For the six months ended June 30, 2018 , the change in accumulated other comprehensive loss associated with these cash flow hedging activities was a gain of approximately $5 million . As of June 30, 2018 , accumulated comprehensive loss of nil is expected to be reclassified to earnings during the next twelve months. The actual amount that will be reclassified to earnings over the next twelve months may vary from this amount due to changing market conditions. We would be exposed to credit losses in the event of nonperformance by a counterparty to our derivative financial instruments. We continually monitor our position and the credit rating of our counterparties, and we do not anticipate nonperformance by the counterparties. Forward Currency Contracts Not Designated as Hedges We transact business in various foreign currencies and we enter into currency forward contracts to offset the risk associated with the risks of foreign currency exposure. At June 30, 2018 and December 31, 2017 we had approximately $93 million and $109 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). |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 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 $45 million and $16 million for the three months ended June 30, 2018 and 2017 , respectively, and income tax expense of $65 million and $12 million for the six months ended June 30, 2018 and 2017 , 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 will recognize a gain as a result of the internal restructuring and IPO 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 has 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 entered into at the time of the separation, we are required to make a future payment to Huntsman for any actual U.S. federal income tax savings we recognize as a result of any such basis increase for tax years through December 31, 2028. 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 million . We recognized a noncurrent liability for this amount at December 31, 2017 . Moreover, 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. On December 22, 2017, the U.S. government enacted the Tax Act into law. The Tax Act made broad and complex changes to the U.S. tax code that will impact the Company, including but not limited to (1) a reduction of the U.S. federal corporate income tax rate from 35% to 21%, (2) immediate expensing of certain qualified property, (3) limitations on the deductibility of interest expense and (4) the creation of the base erosion anti-abuse tax, a new minimum tax. The Securities and Exchange Commission (the "SEC") staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. For the year ended December 31, 2017 we recorded a provisional decrease to our net deferred tax assets of $3 million , with a corresponding net deferred tax expense of $3 million . While we were able to make a reasonable estimate of the impact of the reduction in corporate rate, it may be affected by other analyses related to the Tax Act, including, but not limited to, return to accrual adjustments including completion of computations and analysis of 2017 expenditures that qualify for immediate expensing. For the period ended June 30, 2018 we have not made any additional measurement-period adjustments related to deferred taxes during the quarter as we have not yet completed our accounting for the income tax effects of certain elements of the Tax Act. As we complete our analysis of the Tax Act, collect and prepare necessary data, and interpret any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may adjust the provisional amounts. Those adjustments may materially impact our provision for income taxes in the period in which the adjustments are made. We expect to complete our accounting within the prescribed measurement period. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 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. For the periods prior to our IPO, the average number of ordinary shares outstanding used to calculate basic and diluted earnings per share was based on the ordinary shares that were outstanding at the time of our IPO. Basic and diluted earnings per share are determined using the following information: Three months ended Six months ended 2018 2017 2018 2017 Numerator: Basic and diluted income from continuing operations: Income from continuing operations attributable to Venator Materials PLC ordinary shareholders $ 196 $ 31 $ 274 $ 7 Basic and diluted income from discontinued operations: Income from discontinued operations attributable to Venator Materials PLC ordinary shareholders $ — $ — $ — $ 8 Basic and diluted net income: Net income attributable to Venator Materials PLC ordinary shareholders $ 196 $ 31 $ 274 $ 15 Denominator: Weighted average shares outstanding 106.4 106.3 106.4 106.3 Dilutive share-based awards 0.3 — 0.4 — Total weighted average shares outstanding, including dilutive shares 106.7 106.3 106.8 106.3 For each of the three and six months ended June 30, 2018 and 2017 , the number of anti-dilutive employee share-based awards excluded from the computation of diluted EPS was not significant. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11. Commitments and Contingencies Legal Proceedings Antitrust Matters In the past, we were named as a defendant in multiple civil antitrust suits alleging that we, our co-defendants and other alleged co-conspirators conspired to fix prices of TiO 2 sold in the U.S. We settled litigation involving both direct purchasers of TiO 2 and purchasers who opted out of the direct purchaser litigation for amounts immaterial to our unaudited condensed consolidated and combined financial statements . We were also named as a defendant in a class action civil antitrust suit filed on March 15, 2013 in the U.S. District Court for the Northern District of California by purchasers of products made from TiO 2 (the “Indirect Purchasers”) making essentially the same allegations as did the direct purchasers. On October 14, 2014, plaintiffs filed their Second Amended Class Action Complaint narrowing the class of plaintiffs to those merchants and consumers of architectural coatings containing TiO 2 . On August 11, 2015, the court granted our motion to dismiss the Indirect Purchasers litigation with leave to amend the complaint. A Third Amended Class Action Complaint was filed on September 29, 2015 further limiting the class to consumers of architectural paints. Plaintiffs have raised state antitrust claims under the laws of 15 states, consumer protection claims under the laws of nine states, and unjust enrichment claims under the laws of 16 states. On November 4, 2015, we and our co-defendants filed another motion to dismiss. On June 13, 2016, the court substantially denied the motion to dismiss except as to consumer protection claims in one state. We have agreed to settle this matter for an amount immaterial to our unaudited condensed consolidated and combined financial statements. The court preliminarily approved the settlement on December 13, 2017 and the final approval hearing is expected to occur in the fourth quarter of 2018. The Indirect Purchasers sought to recover injunctive relief, treble damages or the maximum damages allowed by state law, costs of suit and attorneys’ fees. We are not aware of any illegal conduct by us or any of our employees. Other Proceedings We are a party to various other proceedings instituted by private plaintiffs, governmental authorities and others arising under provisions of applicable laws, including various environmental, products liability and other laws. Except as otherwise disclosed in these consolidated and combined financial statements, we do not believe that the outcome of any of these matters will have a material effect on our financial condition, results of operations or liquidity. |
Environmental, Health and Safet
Environmental, Health and Safety Matters | 6 Months Ended |
Jun. 30, 2018 | |
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | |
Environmental, Health and Safety Matters | Note 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 six months ended June 30, 2018 and 2017 , our capital expenditures for EHS matters totaled $3 million , each. Because capital expenditures for these matters are subject to evolving regulatory requirements and depend, in part, on the timing, promulgation and enforcement of specific requirements, our capital expenditures for EHS matters have varied significantly from year to year and we cannot provide assurance that our recent expenditures are indicative of future amounts we may spend related to EHS and other applicable laws. Environmental Matters We have incurred and we may in the future incur, liability 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. 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, such as France and Italy. Environmental Reserves We accrue liabilities relating to anticipated environmental cleanup obligations, site reclamation and closure costs, and known penalties. Liabilities are recorded when potential liabilities are either known or considered probable and can be reasonably estimated. Our liability estimates are calculated using present value techniques as appropriate and are based upon requirements placed upon us by regulators, available facts, existing technology, and past experience. The environmental liabilities do not include amounts recorded as asset retirement obligations. As of June 30, 2018 and December 31, 2017 , we had environmental reserves of $11 million and $12 million , respectively. We may incur losses for environmental remediation. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2018 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |
Other Comprehensive Income (Loss) | Note 13. Other Comprehensive Income (Loss) Other comprehensive income (loss) 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, 2018 $ (6 ) $ (267 ) $ (5 ) $ (5 ) $ (283 ) $ — $ (283 ) Other comprehensive loss before reclassifications (58 ) — — 5 (53 ) — (53 ) Tax benefit — — — — — — — Amounts reclassified from accumulated other comprehensive loss, gross (c) — 7 — — 7 — 7 Tax expense — — — — — — — Net current-period other comprehensive (loss) income (58 ) 7 — 5 (46 ) — (46 ) Ending balance, June 30, 2018 $ (64 ) $ (260 ) $ (5 ) $ — $ (329 ) $ — $ (329 ) Foreign currency translation adjustment (d) Pension and other postretirement benefits adjustments net of tax (e) Other comprehensive loss of unconsolidated affiliates Total Amounts attributable to noncontrolling interests Amounts attributable to Venator Beginning balance, January 1, 2017 $ (112 ) $ (306 ) $ (5 ) $ (423 ) $ — $ (423 ) Adjustments due to discontinued operations 5 24 — 29 — 29 Tax expense — (3 ) — (3 ) — (3 ) Other comprehensive income before reclassifications 72 — — 72 — 72 Tax expense 2 — — 2 — 2 Amounts reclassified from accumulated other comprehensive loss, gross (c) — 7 — 7 — 7 Tax benefit — — — — — — Net current-period other comprehensive income 79 28 — 107 — 107 Ending balance, June 30, 2017 $ (33 ) $ (278 ) $ (5 ) $ (316 ) $ — $ (316 ) (a) Amounts are net of tax of nil as of June 30, 2018 and January 1, 2018, each. (b) Amounts are net of tax of $52 million as of June 30, 2018 and January 1, 2018, each. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts are net of tax of $2 million and nil as of June 30, 2017 and January 1, 2017, respectively. (e) Amounts are net of tax of $53 million and $56 million as of June 30, 2017 and January 1, 2017, respectively. Three months ended Six months ended Affected line item in the statement 2018 2017 2018 2017 where net income is presented Details about Accumulated Other Comprehensive Loss Components (a) : Amortization of pension and other postretirement benefits: Actuarial loss $ 4 $ 4 $ 7 $ 8 (b) Prior service credit — (1 ) — (1 ) (b) Total amortization 4 3 7 7 Total before tax Income tax expense — — — — Income tax expense Total reclassifications for the period $ 4 $ 3 $ 7 $ 7 Net of tax (a) Pension and other postretirement benefit amounts in parentheses indicate credits on our consolidated statements of operations. (b) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. |
Operating Segment Information
Operating Segment Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Operating Segment Information | Note 14. Operating Segment Information We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of commodity chemical products. We have reported our operations through our two segments, Titanium Dioxide and Performance Additives, and organized our business and derived our operating segments around differences in product lines. We have historically conducted other business within components of legal entities we operated in conjunction with Huntsman businesses, and such businesses are included within the corporate and other line item below. The major product groups of each reportable operating segment are as follows: Segment Product Group Titanium Dioxide titanium dioxide Performance Additives functional additives, color pigments, timber treatment and water treatment chemicals Sales between segments are generally recognized at external market prices and are eliminated in consolidation. Adjusted EBITDA is presented as a measure of the financial performance of our global business units and for reporting the results of our operating segments. The revenues and adjusted EBITDA for each of the two reportable operating segments are as follows: Three months ended Six months ended 2018 2017 2018 2017 Revenues: Titanium Dioxide $ 455 $ 401 $ 911 $ 786 Performance Additives 171 161 337 313 Total $ 626 $ 562 $ 1,248 $ 1,099 Segment adjusted EBITDA (1) Titanium Dioxide $ 147 $ 93 $ 290 $ 141 Performance Additives 23 21 47 42 170 114 337 183 Corporate and other (13 ) (20 ) (23 ) (40 ) Total 157 94 314 143 Reconciliation of adjusted EBITDA to net income: Interest expense (14 ) (10 ) (27 ) (24 ) Interest income 4 1 7 3 Income tax expense - continuing operations (45 ) (16 ) (65 ) (12 ) Depreciation and amortization (35 ) (29 ) (69 ) (59 ) Net income attributable to noncontrolling interests 2 3 4 6 Other adjustments: Business acquisition and integration expenses (2 ) — (4 ) — Separation expense, net — — (1 ) — Net income of discontinued operations, net of tax — — — 8 Loss on disposition of business/assets (2 ) — (2 ) — Amortization of pension and postretirement actuarial losses (4 ) (4 ) (7 ) (8 ) Net plant incident credits (costs) 273 2 273 (3 ) Restructuring, impairment and plant closing and transition costs (136 ) (7 ) (145 ) (33 ) Net income $ 198 $ 34 $ 278 $ 21 (1) Adjusted EBITDA is defined as net income of Venator before interest, income tax from continuing operations, depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following adjustments from net income: (a) business acquisition and integration expenses; (b) separation expense, net; (c) net income of discontinued operations, net of tax; (d) loss on disposition of business/assets; (e) amortization of pension and postretirement actuarial losses; (f) net plant incident credits (costs); and (g) restructuring, impairment, and plant closing and transition costs. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 15. Discontinued Operations The Titanium Dioxide, Performance Additives and other businesses were included in Huntsman's financial results in different legal forms, including, but not limited to: (1) wholly-owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities that were comprised of other businesses and include the Titanium Dioxide and/or Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide, Performance Additives and other businesses are the primary beneficiaries. Because the historical unaudited condensed consolidated and combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical condensed consolidated and combined financial information includes the results of operations of other Huntsman businesses that are not a part of our operations after the separation. The legal entity structure of Huntsman was reorganized during the second quarter of 2017 such that the other businesses would not be included in Venator’s legal entity structure and as such, the discontinued operations presented below reflect financial results of the other businesses through the date of such reorganization. The following table summarizes the operations data for discontinued operations: Three months ended Six months ended 2018 2017 2018 2017 Revenues: Trade sales, services and fees, net $ — $ — $ — $ 15 Related party sales — — — 17 Total revenues — — — 32 Cost of goods sold — — — 26 Operating expenses: Selling, general and administrative (includes corporate allocations of nil, nil, nil and $2, respectively) — — — (7 ) Restructuring, impairment and plant closing costs — — — 1 Other income, net — — — 1 Total operating expenses — — — (5 ) Income from discontinued operations before tax — — — 11 Income tax expense — — — (3 ) Net income from discontinued operations $ — $ — $ — $ 8 |
General, Description of Busin24
General, Description of Business, Recent Developments and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Venator’s unaudited condensed consolidated and combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP” or “U.S. GAAP”). Prior to the separation, Venator’s operations were included in Huntsman’s financial results in different legal forms, including but not limited to: (1) wholly-owned subsidiaries for which the Titanium Dioxide and Performance Additives businesses were the sole businesses; (2) legal entities which are comprised of other businesses and include the Titanium Dioxide and Performance Additives businesses; and (3) variable interest entities in which the Titanium Dioxide and Performance Additives and other businesses are the primary beneficiaries. The unaudited condensed consolidated and combined financial statements include all revenues, costs, assets, liabilities and cash flows directly attributable to Venator, as well as allocations of direct and indirect corporate expenses, which are based upon an allocation method that in the opinion of management is reasonable. Such corporate cost allocation transactions between Venator and Huntsman have been considered to be effectively settled for cash in the unaudited condensed consolidated and combined financial statements at the time the transaction is recorded and the net effect of the settlement of these intercompany transactions is reflected in the unaudited condensed consolidated and combined statements of cash flows as a financing activity. Because the historical unaudited condensed consolidated and combined financial information for the periods indicated reflect the combination of these legal entities under common control, the historical unaudited condensed consolidated and combined financial information includes the results of operations of other Huntsman businesses that are not a part of our operations after the separation. We report the results of those other businesses as discontinued operations. Please see “ Note 15. Discontinued Operations .” For purposes of these unaudited condensed consolidated and combined financial statements, all significant transactions with Huntsman International have been included in group equity. All intercompany transactions within the consolidated and combined business have been eliminated. Prior to the separation, Huntsman's executive, information technology, EHS and certain other corporate departments performed certain administrative and other services for Venator. Additionally, Huntsman performed certain site services for Venator. Expenses incurred by Huntsman and allocated to Venator were determined based on specific services provided or are allocated based on Venator’s total revenues, total assets, and total employees in proportion to those of Huntsman. Management believes that such expense allocations are reasonable. Corporate allocations include allocated selling, general, and administrative expenses of nil and $28 million for the three months ended June 30, 2018 and 2017 , respectively, and nil and $52 million for the six months ended June 30, 2018 and 2017 , respectively. In the notes to unaudited condensed consolidated and combined financial statements , all dollar and share amounts in tabulations are in millions unless otherwise indicated. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates our revenue by major geographical region for the three and six months ended June 30, 2018 : For the Three Months Ended June 30, 2018 For the Six Months Ended June 30, 2018 Titanium Dioxide Performance Additives Total Titanium Dioxide Performance Additives Total North America $ 80 $ 78 $ 158 $ 151 $ 155 $ 306 Europe 229 59 288 470 117 587 Asia 96 30 126 192 57 249 Other 50 4 54 98 8 106 Total Revenues $ 455 $ 171 $ 626 $ 911 $ 337 $ 1,248 The following table disaggregates our revenue by major product line for the three and six months ended June 30, 2018 : For the Three Months Ended June 30, 2018 For the Six Months Ended June 30, 2018 Titanium Dioxide Performance Additives Total Titanium Dioxide Performance Additives Total TiO 2 $ 455 $ — $ 455 $ 911 $ — $ 911 Color Pigments — 84 84 — 166 166 Functional Additives — 39 39 — 80 80 Timber Treatment — 41 41 — 78 78 Water Treatment — 7 7 — 13 13 Total Revenues $ 455 $ 171 $ 626 $ 911 $ 337 $ 1,248 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of components of inventory | 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 June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 December 31, 2017 Raw materials and supplies $ 159 $ 149 Work in process 58 46 Finished goods 274 259 Total $ 491 $ 454 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Schedule of financial information of VIE's | The revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities for the three and six months ended June 30, 2018 and 2017 are as follows: Three months ended Six months ended 2018 2017 2018 2017 Revenues $ 35 $ 32 $ 66 $ 66 Income from continuing operations before income taxes 5 5 9 12 Net cash provided by operating activities 3 7 12 14 |
Restructuring, Impairment, an28
Restructuring, Impairment, and Plant Closing and Transition Costs (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of accrued restructuring, impairment and plant closing costs by type of cost and initiative | As of June 30, 2018 and December 31, 2017 , accrued restructuring and plant closing and transition costs by type of cost and initiative consisted of the following: Workforce reductions (1) Other restructuring costs Total (2) Accrued liabilities as of December 31, 2017 $ 34 $ — $ 34 2018 charges for 2017 and prior initiatives 3 8 11 2018 charges for 2018 initiatives 1 — 1 2018 payments for 2017 and prior initiatives (10 ) (8 ) (18 ) 2018 payments for 2018 initiatives — — — Foreign currency effect on liability balance (1 ) — (1 ) Accrued liabilities as of June 30, 2018 $ 27 $ — $ 27 (1) The total workforce reduction reserves of $27 million relate to the termination of 174 positions, of which zero positions had been terminated as of June 30, 2018 . (2) Accrued liabilities remaining at June 30, 2018 and December 31, 2017 by year of initiatives were as follows: |
Schedule of accrued liabilities by year of initiatives | June 30, 2018 December 31, 2017 2016 initiatives and prior $ 7 $ 9 2017 initiatives 19 25 2018 initiatives 1 — Total $ 27 $ 34 |
Schedule of details with respect to reserves for restructuring, impairment and plant closing costs, provided by segment and initiative | Details with respect to our reserves for restructuring and plant closing and transition costs are provided below by segment and initiative: Titanium Dioxide Performance Additives Total Accrued liabilities as of December 31, 2017 $ 30 $ 4 $ 34 2018 charges for 2017 and prior initiatives 11 — 11 2018 charges for 2018 initiatives — 1 1 2018 payments for 2017 and prior initiatives (15 ) (3 ) (18 ) 2018 payments for 2018 initiatives — — — Foreign currency effect on liability balance (1 ) — (1 ) Accrued liabilities as of June 30, 2018 $ 25 $ 2 $ 27 Current portion of restructuring reserves 17 2 19 Long-term portion of restructuring reserve 8 — 8 |
Schedule of cash and noncash restructuring charges by initiative | Details with respect to cash and noncash restructuring charges and impairment of assets for the three and six months ended June 30, 2018 and 2017 by initiative are provided below: Three months ended Six months ended June 30, 2018 June 30, 2018 Cash charges $ 6 $ 12 Accelerated depreciation 129 132 Other noncash charges 1 1 Total 2018 Restructuring, Impairment and Plant Closing and Transition Costs $ 136 $ 145 Three months ended Six months ended June 30, 2017 June 30, 2017 Cash charges $ 4 $ 27 Impairment of assets 3 3 Other noncash charges — 3 Total 2017 Restructuring, Impairment and Plant Closing and Transition Costs $ 7 $ 33 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding debt | Outstanding debt, net of debt issuance costs of $12 million , consisted of the following: June 30, 2018 December 31, 2017 Senior Notes $ 370 $ 370 Term Loan Facility 366 367 Other 12 20 Total debt 748 757 Less: short-term debt and current portion of long-term debt 7 14 Total long-term debt $ 741 $ 743 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings (loss) per share | Basic and diluted earnings per share are determined using the following information: Three months ended Six months ended 2018 2017 2018 2017 Numerator: Basic and diluted income from continuing operations: Income from continuing operations attributable to Venator Materials PLC ordinary shareholders $ 196 $ 31 $ 274 $ 7 Basic and diluted income from discontinued operations: Income from discontinued operations attributable to Venator Materials PLC ordinary shareholders $ — $ — $ — $ 8 Basic and diluted net income: Net income attributable to Venator Materials PLC ordinary shareholders $ 196 $ 31 $ 274 $ 15 Denominator: Weighted average shares outstanding 106.4 106.3 106.4 106.3 Dilutive share-based awards 0.3 — 0.4 — Total weighted average shares outstanding, including dilutive shares 106.7 106.3 106.8 106.3 |
Other Comprehensive Income (L31
Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |
Schedule of other comprehensive income (loss) | Other comprehensive income (loss) 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, 2018 $ (6 ) $ (267 ) $ (5 ) $ (5 ) $ (283 ) $ — $ (283 ) Other comprehensive loss before reclassifications (58 ) — — 5 (53 ) — (53 ) Tax benefit — — — — — — — Amounts reclassified from accumulated other comprehensive loss, gross (c) — 7 — — 7 — 7 Tax expense — — — — — — — Net current-period other comprehensive (loss) income (58 ) 7 — 5 (46 ) — (46 ) Ending balance, June 30, 2018 $ (64 ) $ (260 ) $ (5 ) $ — $ (329 ) $ — $ (329 ) Foreign currency translation adjustment (d) Pension and other postretirement benefits adjustments net of tax (e) Other comprehensive loss of unconsolidated affiliates Total Amounts attributable to noncontrolling interests Amounts attributable to Venator Beginning balance, January 1, 2017 $ (112 ) $ (306 ) $ (5 ) $ (423 ) $ — $ (423 ) Adjustments due to discontinued operations 5 24 — 29 — 29 Tax expense — (3 ) — (3 ) — (3 ) Other comprehensive income before reclassifications 72 — — 72 — 72 Tax expense 2 — — 2 — 2 Amounts reclassified from accumulated other comprehensive loss, gross (c) — 7 — 7 — 7 Tax benefit — — — — — — Net current-period other comprehensive income 79 28 — 107 — 107 Ending balance, June 30, 2017 $ (33 ) $ (278 ) $ (5 ) $ (316 ) $ — $ (316 ) (a) Amounts are net of tax of nil as of June 30, 2018 and January 1, 2018, each. (b) Amounts are net of tax of $52 million as of June 30, 2018 and January 1, 2018, each. (c) See table below for details about the amounts reclassified from accumulated other comprehensive loss. (d) Amounts are net of tax of $2 million and nil as of June 30, 2017 and January 1, 2017, respectively. (e) Amounts are net of tax of $53 million and $56 million as of June 30, 2017 and January 1, 2017, respectively. |
Schedule of details about reclassifications from other comprehensive loss | Three months ended Six months ended Affected line item in the statement 2018 2017 2018 2017 where net income is presented Details about Accumulated Other Comprehensive Loss Components (a) : Amortization of pension and other postretirement benefits: Actuarial loss $ 4 $ 4 $ 7 $ 8 (b) Prior service credit — (1 ) — (1 ) (b) Total amortization 4 3 7 7 Total before tax Income tax expense — — — — Income tax expense Total reclassifications for the period $ 4 $ 3 $ 7 $ 7 Net of tax (a) Pension and other postretirement benefit amounts in parentheses indicate credits on our consolidated statements of operations. (b) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. |
Operating Segment Information (
Operating Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segments | The revenues and adjusted EBITDA for each of the two reportable operating segments are as follows: Three months ended Six months ended 2018 2017 2018 2017 Revenues: Titanium Dioxide $ 455 $ 401 $ 911 $ 786 Performance Additives 171 161 337 313 Total $ 626 $ 562 $ 1,248 $ 1,099 Segment adjusted EBITDA (1) Titanium Dioxide $ 147 $ 93 $ 290 $ 141 Performance Additives 23 21 47 42 170 114 337 183 Corporate and other (13 ) (20 ) (23 ) (40 ) Total 157 94 314 143 Reconciliation of adjusted EBITDA to net income: Interest expense (14 ) (10 ) (27 ) (24 ) Interest income 4 1 7 3 Income tax expense - continuing operations (45 ) (16 ) (65 ) (12 ) Depreciation and amortization (35 ) (29 ) (69 ) (59 ) Net income attributable to noncontrolling interests 2 3 4 6 Other adjustments: Business acquisition and integration expenses (2 ) — (4 ) — Separation expense, net — — (1 ) — Net income of discontinued operations, net of tax — — — 8 Loss on disposition of business/assets (2 ) — (2 ) — Amortization of pension and postretirement actuarial losses (4 ) (4 ) (7 ) (8 ) Net plant incident credits (costs) 273 2 273 (3 ) Restructuring, impairment and plant closing and transition costs (136 ) (7 ) (145 ) (33 ) Net income $ 198 $ 34 $ 278 $ 21 (1) Adjusted EBITDA is defined as net income of Venator before interest, income tax from continuing operations, depreciation and amortization and net income attributable to noncontrolling interests, as well as eliminating the following adjustments from net income: (a) business acquisition and integration expenses; (b) separation expense, net; (c) net income of discontinued operations, net of tax; (d) loss on disposition of business/assets; (e) amortization of pension and postretirement actuarial losses; (f) net plant incident credits (costs); and (g) restructuring, impairment, and plant closing and transition costs. 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 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summarizes the financial data for discontinued operations | The following table summarizes the operations data for discontinued operations: Three months ended Six months ended 2018 2017 2018 2017 Revenues: Trade sales, services and fees, net $ — $ — $ — $ 15 Related party sales — — — 17 Total revenues — — — 32 Cost of goods sold — — — 26 Operating expenses: Selling, general and administrative (includes corporate allocations of nil, nil, nil and $2, respectively) — — — (7 ) Restructuring, impairment and plant closing costs — — — 1 Other income, net — — — 1 Total operating expenses — — — (5 ) Income from discontinued operations before tax — — — 11 Income tax expense — — — (3 ) Net income from discontinued operations $ — $ — $ — $ 8 |
General, Description of Busin34
General, Description of Business, Recent Developments and Basis of Presentation - Description of Business (Details) | 6 Months Ended |
Jun. 30, 2018facilitysegment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | segment | 2 |
Number of titanium dioxide manufacturing facilities | 8 |
Number of manufacturing and processing facilities | 17 |
General, Description of Busin35
General, Description of Business, Recent Developments and Basis of Presentation - Pori Fire (Details) € in Millions | Apr. 13, 2018USD ($) | Apr. 13, 2018EUR (€) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2018EUR (€) | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017EUR (€) |
Description of Business | |||||||||
Loss from write-off of fixed assets and lost inventory | $ 2,000,000 | $ 0 | $ 2,000,000 | $ 0 | |||||
Fire at titanium manufacturing facility in Pori, Finland | |||||||||
Description of Business | |||||||||
Retained deductibles for physical damage due to fire accident | $ 15,000,000 | ||||||||
Retained deductibles for number of business interruption days | 60 days | 60 days | |||||||
Payment received from insurer | $ 236,000,000 | € 191 | $ 551,000,000 | € 468 | 84,000,000 | ||||
Insurance proceeds for business interruption, net of gain on recovery | 298,000,000 | € 243 | $ 253,000,000 | € 225 | |||||
Loss due to cleanup costs of facility | 5,000,000 | 17,000,000 | |||||||
Loss from write-off of fixed assets and lost inventory | $ 31,000,000 | ||||||||
Fire at titanium manufacturing facility in Pori, Finland | Accrued Liabilities | |||||||||
Description of Business | |||||||||
Deferred income for costs not yet incurred | 0 | 0 | $ 68,000,000 | ||||||
Fire at titanium manufacturing facility in Pori, Finland | Cost of Goods Sold | |||||||||
Description of Business | |||||||||
Payment received from insurer | $ 325,000,000 | $ 371,000,000 |
General, Description of Busin36
General, Description of Business, Recent Developments and Basis of Presentation - Basis of Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Huntsman Corporation | Corporate allocations | ||||
RELATED PARTY TRANSACTIONS | ||||
Selling, general and administrative expenses | $ 0 | $ 28 | $ 0 | $ 52 |
Recently Issued Accounting Pr37
Recently Issued Accounting Pronouncements (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Increase in cost of goods sold | $ 193,000,000 | $ 480,000,000 | $ 647,000,000 | $ 945,000,000 |
Decrease in selling, general and administrative (includes corporate allocations from Huntsman Corporation of nil and $24, respectively) | (56,000,000) | (57,000,000) | (110,000,000) | (107,000,000) |
Increase in operating income | $ 2,000,000 | 1,000,000 | $ 4,000,000 | 2,000,000 |
ASU No. 2017 07 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Increase in cost of goods sold | 1,000,000 | 3,000,000 | ||
Decrease in selling, general and administrative (includes corporate allocations from Huntsman Corporation of nil and $24, respectively) | 0 | 1,000,000 | ||
Increase in operating income | $ 1,000,000 | $ 2,000,000 |
Revenue (Disaggregation of Reve
Revenue (Disaggregation of Revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 626 | $ 1,248 |
TiO2 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 455 | 911 |
Color Pigments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 84 | 166 |
Functional Additives | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 39 | 80 |
Timber Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 41 | 78 |
Water Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7 | 13 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 158 | 306 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 288 | 587 |
Asia | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 126 | 249 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 54 | 106 |
Titanium Dioxide | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 455 | 911 |
Titanium Dioxide | TiO2 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 455 | 911 |
Titanium Dioxide | Color Pigments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Titanium Dioxide | Functional Additives | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Titanium Dioxide | Timber Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Titanium Dioxide | Water Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Titanium Dioxide | North America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 80 | 151 |
Titanium Dioxide | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 229 | 470 |
Titanium Dioxide | Asia | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 96 | 192 |
Titanium Dioxide | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 50 | 98 |
Performance Additives | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 171 | 337 |
Performance Additives | TiO2 | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Performance Additives | Color Pigments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 84 | 166 |
Performance Additives | Functional Additives | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 39 | 80 |
Performance Additives | Timber Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 41 | 78 |
Performance Additives | Water Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7 | 13 |
Performance Additives | North America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 78 | 155 |
Performance Additives | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 59 | 117 |
Performance Additives | Asia | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 30 | 57 |
Performance Additives | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 4 | $ 8 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2018 | |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue payment term | 30 days |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue payment term | 90 days |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |||
Raw materials and supplies | $ 159 | $ 149 | |
Work in process | 58 | 46 | |
Finished goods | 274 | 259 | |
Total | [1] | $ 491 | $ 454 |
[1] | At June 30, 2018 and December 31, 2017, $6 and $5 of cash and cash equivalents; $7 each of accounts receivable, net; $1 and $2 of inventories; $5 each of property, plant and equipment, net; $16 and $17 of intangible assets, net; $1 each of accounts payable; $3 and $4 of accrued liabilities; and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 5. Variable Interest Entities." |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities | ||||
Revenues | $ 626 | $ 562 | $ 1,248 | $ 1,099 |
Income from continuing operations before income taxes | 243 | 50 | 343 | 25 |
Net cash provided by operating activities | 305 | (29) | ||
Consolidated VIE's | ||||
Revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities | ||||
Revenues | 35 | 32 | 66 | 66 |
Income from continuing operations before income taxes | 5 | 5 | 9 | 12 |
Net cash provided by operating activities | $ 3 | $ 7 | $ 12 | $ 14 |
Pacific Iron Products | ||||
Identification of variable interest entities through investments and transactions | ||||
Variable interest entity ownership percentage | 50.00% | |||
Viance | ||||
Identification of variable interest entities through investments and transactions | ||||
Variable interest entity ownership percentage | 50.00% |
Restructuring, Impairment, an42
Restructuring, Impairment, and Plant Closing and Transition Costs - Accrued Restructuring and Plant Closing and Transition Costs by Type of Cost and Initiative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)position | Jun. 30, 2017USD ($) | |
Accrued restructuring costs roll forward | ||||
Accrued liabilities as of December 31, 2017 | $ 34 | |||
Restructuring charges | $ 6 | $ 4 | 12 | $ 27 |
Foreign currency effect on liability balance | (1) | |||
Accrued liabilities at the end of the period | 27 | 27 | ||
2018 charges for 2017 and prior initiatives | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | 11 | |||
Restructuring payments | (18) | |||
2018 charges for 2018 initiatives | ||||
Accrued restructuring costs roll forward | ||||
Accrued liabilities as of December 31, 2017 | 0 | |||
Restructuring charges | 1 | |||
Restructuring payments | 0 | |||
Accrued liabilities at the end of the period | 1 | 1 | ||
Workforce reductions | ||||
Accrued restructuring costs roll forward | ||||
Accrued liabilities as of December 31, 2017 | 34 | |||
Foreign currency effect on liability balance | (1) | |||
Accrued liabilities at the end of the period | 27 | $ 27 | ||
Number of positions terminated | position | 174 | |||
Number of positions not terminated | position | 0 | |||
Workforce reductions | 2018 charges for 2017 and prior initiatives | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | $ 3 | |||
Restructuring payments | (10) | |||
Workforce reductions | 2018 charges for 2018 initiatives | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | 1 | |||
Restructuring payments | 0 | |||
Other restructuring costs | ||||
Accrued restructuring costs roll forward | ||||
Accrued liabilities as of December 31, 2017 | 0 | |||
Foreign currency effect on liability balance | 0 | |||
Accrued liabilities at the end of the period | $ 0 | 0 | ||
Other restructuring costs | 2018 charges for 2017 and prior initiatives | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | 8 | |||
Restructuring payments | (8) | |||
Other restructuring costs | 2018 charges for 2018 initiatives | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | 0 | |||
Restructuring payments | $ 0 |
Restructuring, Impairment, an43
Restructuring, Impairment, and Plant Closing and Transition Costs - Accrued Liabilities by Initiatives (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Accrued liabilities by initiatives | ||
Accrued liabilities | $ 27 | $ 34 |
2016 initiatives and prior | ||
Accrued liabilities by initiatives | ||
Accrued liabilities | 7 | 9 |
2017 initiatives | ||
Accrued liabilities by initiatives | ||
Accrued liabilities | 19 | 25 |
2018 charges for 2018 initiatives | ||
Accrued liabilities by initiatives | ||
Accrued liabilities | $ 1 | $ 0 |
Restructuring, Impairment, an44
Restructuring, Impairment, and Plant Closing and Transition Costs - Reserves for Restructuring, Impairment and Plant Closing and Transition Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accrued restructuring costs roll forward | ||||
Accrued liabilities as of December 31, 2017 | $ 34 | |||
Restructuring charges | $ 6 | $ 4 | 12 | $ 27 |
Foreign currency effect on liability balance | (1) | |||
Accrued liabilities at the end of the period | 27 | 27 | ||
Current portion of restructuring reserves | 19 | 19 | ||
Long-term portion of restructuring reserve | 8 | 8 | ||
2018 charges for 2017 and prior initiatives | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | 11 | |||
Restructuring payments | (18) | |||
2018 charges for 2018 initiatives | ||||
Accrued restructuring costs roll forward | ||||
Accrued liabilities as of December 31, 2017 | 0 | |||
Restructuring charges | 1 | |||
Restructuring payments | 0 | |||
Accrued liabilities at the end of the period | 1 | 1 | ||
Titanium Dioxide | ||||
Accrued restructuring costs roll forward | ||||
Accrued liabilities as of December 31, 2017 | 30 | |||
Foreign currency effect on liability balance | (1) | |||
Accrued liabilities at the end of the period | 25 | 25 | ||
Current portion of restructuring reserves | 17 | 17 | ||
Long-term portion of restructuring reserve | 8 | 8 | ||
Titanium Dioxide | 2018 charges for 2017 and prior initiatives | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | 11 | |||
Restructuring payments | (15) | |||
Titanium Dioxide | 2018 charges for 2018 initiatives | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | 0 | |||
Restructuring payments | 0 | |||
Performance Additives | ||||
Accrued restructuring costs roll forward | ||||
Accrued liabilities as of December 31, 2017 | 4 | |||
Foreign currency effect on liability balance | 0 | |||
Accrued liabilities at the end of the period | 2 | 2 | ||
Current portion of restructuring reserves | 2 | 2 | ||
Long-term portion of restructuring reserve | $ 0 | 0 | ||
Performance Additives | 2018 charges for 2017 and prior initiatives | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | 0 | |||
Restructuring payments | (3) | |||
Performance Additives | 2018 charges for 2018 initiatives | ||||
Accrued restructuring costs roll forward | ||||
Restructuring charges | 1 | |||
Restructuring payments | $ 0 |
Restructuring, Impairment, an45
Restructuring, Impairment, and Plant Closing and Transition Costs - Cash and Noncash Restructuring Charges (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)position | Jun. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2014position | |
Restructuring, impairment and plant closing costs | ||||||
Cash charges | $ 6,000,000 | $ 4,000,000 | $ 12,000,000 | $ 27,000,000 | ||
Accelerated depreciation | 129,000,000 | 132,000,000 | ||||
Impairment of assets | 3,000,000 | 3,000,000 | ||||
Other noncash charges | 1,000,000 | 0 | 1,000,000 | 3,000,000 | ||
Total restructuring, impairment and plant closing and Transition costs | 136,000,000 | $ 7,000,000 | 145,000,000 | $ 33,000,000 | ||
St. Louis And Easton | ||||||
Restructuring, impairment and plant closing costs | ||||||
Cash charges | 5,000,000 | 8,000,000 | ||||
St. Louis And Easton | Forecast | ||||||
Restructuring, impairment and plant closing costs | ||||||
Accelerated depreciation | $ 7,000,000 | |||||
Augusta, Georgia | ||||||
Restructuring, impairment and plant closing costs | ||||||
Cash charges | 1,000,000 | |||||
Accelerated depreciation | 125,000,000 | |||||
Other noncash charges | 1,000,000 | |||||
Total restructuring, impairment and plant closing and Transition costs | 127,000,000 | 127,000,000 | ||||
Additional restructuring charges remaining | 2,000,000 | 2,000,000 | ||||
Titanium Dioxide | South Africa | ||||||
Restructuring, impairment and plant closing costs | ||||||
Cash charges | 1,000,000 | 2,000,000 | ||||
Additional restructuring charges remaining | 12,000,000 | 12,000,000 | ||||
Titanium Dioxide | Calais, France | ||||||
Restructuring, impairment and plant closing costs | ||||||
Cash charges | 4,000,000 | 9,000,000 | ||||
Additional restructuring charges remaining | 44,000,000 | $ 44,000,000 | ||||
Workforce reductions | ||||||
Restructuring, impairment and plant closing costs | ||||||
Number of positions terminated | position | 174 | |||||
Workforce reductions | Titanium Dioxide And Performance Additives | ||||||
Restructuring, impairment and plant closing costs | ||||||
Cash charges | $ 0 | $ 0 | ||||
Number of positions terminated | position | 900 |
Debt - Outstanding Debt (Detail
Debt - Outstanding Debt (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | |
Debt | |||
Debt issuance costs | $ 12 | ||
Total debt | 748 | $ 757 | |
Less: short-term debt and current portion of long-term debt | [1] | 7 | 14 |
Total long-term debt | 741 | 743 | |
Senior Notes | |||
Debt | |||
Total debt | 370 | 370 | |
Term Loan Facility | |||
Debt | |||
Total debt | 366 | 367 | |
Other | |||
Debt | |||
Total debt | $ 12 | $ 20 | |
[1] | At June 30, 2018 and December 31, 2017, $6 and $5 of cash and cash equivalents; $7 each of accounts receivable, net; $1 and $2 of inventories; $5 each of property, plant and equipment, net; $16 and $17 of intangible assets, net; $1 each of accounts payable; $3 and $4 of accrued liabilities; and $2 each of current portion of debt, respectively, from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 5. Variable Interest Entities." |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Aug. 08, 2017 | Jul. 14, 2017 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 |
Huntsman International | A/R Programs | ||||||
Debt | ||||||
Losses on the A/R Programs | $ 0 | $ 1,000,000 | ||||
Senior Notes | ||||||
Debt | ||||||
Fair value of debt instruments | $ 359,000,000 | $ 396,000,000 | ||||
Stated interest rate as a percentage | 5.75% | |||||
Senior Notes | Prior to July 15 2020 | ||||||
Debt | ||||||
Redemption price as a percentage | 100.00% | |||||
Maximum aggregate principal amount not greater than net cash proceeds of certain equity offerings | 40.00% | |||||
Net cash proceeds of equity offerings as a percentage of principal amount | 105.75% | |||||
Senior Notes | Occurrence Certain Change Of Control Events | ||||||
Debt | ||||||
Redemption price as a percentage | 101.00% | |||||
Senior Credit Facilities | ||||||
Debt | ||||||
Aggregate principal amount | $ 675,000,000 | |||||
Term Loan Facility | ||||||
Debt | ||||||
Fair value of debt instruments | $ 375,000,000 | $ 378,000,000 | ||||
Aggregate principal amount | $ 375,000,000 | |||||
Maturity term | 7 years | |||||
Amortization of line of credit facility as a percentage of principal amount | 1.00% | |||||
Term Loan Facility | Federal funds rate | ||||||
Debt | ||||||
Interest rate basis as a percentage | 0.50% | |||||
Term Loan Facility | LIBOR | ||||||
Debt | ||||||
Interest rate basis as a percentage | 1.00% | |||||
Reference rate | one-month adjusted LIBOR | |||||
ABL facility | ||||||
Debt | ||||||
Maturity term | 5 years | |||||
Maximum borrowing capacity commitment | $ 300,000,000 | |||||
ABL facility | LIBOR | Minimum | ||||||
Debt | ||||||
Interest rate basis as a percentage | 150.00% | |||||
ABL facility | LIBOR | Maximum | ||||||
Debt | ||||||
Interest rate basis as a percentage | 200.00% | |||||
Senior Notes and Term Loan Facility | ||||||
Debt | ||||||
Weighted average interest rate (as a percent) | 5.00% | 5.00% |
Derivative Instruments and He48
Derivative Instruments and Hedging Activities (Details) € in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)DerivativeInstrument | Dec. 31, 2017EUR (€)DerivativeInstrument | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||
Hedging instruments | $ 12,000,000 | $ 0 | $ 5,000,000 | $ 0 | ||
Designated as Hedges | ||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||
Accumulated other comprehensive loss expected to be reclassified to earnings | 0 | 0 | ||||
Cross currency interest rate contracts | Designated as Hedges | ||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||
Number of derivative instruments held | DerivativeInstrument | 3 | 3 | ||||
Notional amounts | € | € 169 | |||||
Fixed percentage to be paid under the hedge | 3.43% | 3.43% | ||||
Hedging instruments | 5,000,000 | |||||
Cross currency interest rate contracts | Designated as Hedges | Other long-term liabilities | ||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||
Fair value of the hedge | 0 | 0 | $ 5,000,000 | |||
Forward foreign currency contracts | Not Designated as Hedges | ||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||
Notional amounts | $ 93,000,000 | $ 93,000,000 | $ 109,000,000 | |||
Maturity period of spot or forward exchange rate contracts | 1 month |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Tax | |||||
Income tax (expense) benefit | $ 45 | $ 16 | $ 65 | $ 12 | |
Aggregate income tax future payments required per Tax Matters Agreement, Tax Cuts and Jobs Act of 2017 | $ 34 | ||||
Net deferred tax asset, Tax Cuts and Jobs Act of 2017 | 3 | ||||
United States | |||||
Income Tax | |||||
Deferred tax asset due to basis step up | $ 36 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Basic and diluted income from continuing operations: | ||||
Income from continuing operations attributable to Venator Materials PLC ordinary shareholders | $ 196 | $ 31 | $ 274 | $ 7 |
Basic and diluted income from discontinued operations: | ||||
Income from discontinued operations attributable to Venator Materials PLC ordinary shareholders | 0 | 0 | 0 | 8 |
Basic and diluted net income: | ||||
Net income attributable to Venator | $ 196 | $ 31 | $ 274 | $ 15 |
Denominator: | ||||
Weighted average shares outstanding (shares) | 106.4 | 106.3 | 106.4 | 106.3 |
Dilutive share-based awards (shares) | 0.3 | 0 | 0.4 | 0 |
Total weighted average shares outstanding, including dilutive shares (shares) | 106.7 | 106.3 | 106.8 | 106.3 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - state | Jun. 13, 2016 | Jun. 30, 2018 |
State Antitrust Claims | ||
LEGAL MATTERS | ||
Number of states in which Plaintiffs have raised claims | 15 | |
Consumer Protection Claims | ||
LEGAL MATTERS | ||
Number of states in which Plaintiffs have raised claims | 9 | |
Number of states in which claim was dismissed | 1 | |
Unjust Enrichment Claims | ||
LEGAL MATTERS | ||
Number of states in which Plaintiffs have raised claims | 16 |
Environmental, Health and Saf52
Environmental, Health and Safety Matters (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS | |||
Capital expenditures for EHS matters | $ 3 | $ 3 | |
Environmental reserves | $ 11 | $ 12 |
Other Comprehensive Income (L53
Other Comprehensive Income (Loss) - Other Comprehensive Income (Loss) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | $ 1,105,000,000 | $ 177,000,000 | $ 177,000,000 | |||
Amounts attributable to noncontrolling interests | 10,000,000 | |||||
Amounts attributable to Venator | 1,095,000,000 | |||||
Amounts reclassified from accumulated other comprehensive loss, gross | $ 4,000,000 | $ 3,000,000 | 7,000,000 | 7,000,000 | ||
Tax expense (benefit) | 0 | 0 | 0 | 0 | ||
Total other comprehensive (loss) income, net of tax | (99,000,000) | 98,000,000 | (46,000,000) | 107,000,000 | ||
Amounts attributable to noncontrolling interests | 9,000,000 | 9,000,000 | 10,000,000 | |||
Amounts attributable to Venator | 1,325,000,000 | 1,325,000,000 | 1,095,000,000 | |||
Balance at the end of the period | 1,334,000,000 | 1,105,000,000 | 1,334,000,000 | 1,105,000,000 | 1,105,000,000 | $ 177,000,000 |
Total | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (283,000,000) | (423,000,000) | (423,000,000) | |||
Adjustments due to discontinued operations | 29,000,000 | |||||
Tax expense | 0 | (3,000,000) | ||||
Other comprehensive income before reclassifications | (53,000,000) | 72,000,000 | ||||
Tax expense | 2,000,000 | |||||
Amounts reclassified from accumulated other comprehensive loss, gross | 7,000,000 | 7,000,000 | ||||
Tax expense (benefit) | 0 | 0 | ||||
Total other comprehensive (loss) income, net of tax | (46,000,000) | 107,000,000 | ||||
Balance at the end of the period | (329,000,000) | (316,000,000) | (329,000,000) | (316,000,000) | (283,000,000) | (423,000,000) |
Foreign currency translation adjustment | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (6,000,000) | (112,000,000) | (112,000,000) | |||
Adjustments due to discontinued operations | 5,000,000 | |||||
Tax expense | 0 | 0 | ||||
Other comprehensive income before reclassifications | (58,000,000) | 72,000,000 | ||||
Tax expense | 2,000,000 | |||||
Amounts reclassified from accumulated other comprehensive loss, gross | 0 | 0 | ||||
Tax expense (benefit) | 0 | 0 | ||||
Total other comprehensive (loss) income, net of tax | (58,000,000) | 79,000,000 | ||||
Balance at the end of the period | (64,000,000) | (33,000,000) | (64,000,000) | (33,000,000) | (6,000,000) | (112,000,000) |
Foreign currency translation adjustment, tax | 0 | 2,000,000 | 0 | 0 | ||
Pension and other postretirement benefits adjustments, net of tax | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (267,000,000) | (306,000,000) | (306,000,000) | |||
Adjustments due to discontinued operations | 24,000,000 | |||||
Tax expense | 0 | (3,000,000) | ||||
Other comprehensive income before reclassifications | 0 | 0 | ||||
Tax expense | 0 | |||||
Amounts reclassified from accumulated other comprehensive loss, gross | 7,000,000 | 7,000,000 | ||||
Tax expense (benefit) | 0 | 0 | ||||
Total other comprehensive (loss) income, net of tax | 7,000,000 | 28,000,000 | ||||
Balance at the end of the period | (260,000,000) | (278,000,000) | (260,000,000) | (278,000,000) | (267,000,000) | (306,000,000) |
Pension and other postretirement benefits adjustments, tax | 52,000,000 | 53,000,000 | 52,000,000 | 56,000,000 | ||
Other comprehensive loss of unconsolidated affiliates | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (5,000,000) | (5,000,000) | (5,000,000) | |||
Adjustments due to discontinued operations | 0 | |||||
Tax expense | 0 | 0 | ||||
Other comprehensive income before reclassifications | 0 | 0 | ||||
Tax expense | 0 | |||||
Amounts reclassified from accumulated other comprehensive loss, gross | 0 | 0 | ||||
Tax expense (benefit) | 0 | 0 | ||||
Total other comprehensive (loss) income, net of tax | 0 | 0 | ||||
Balance at the end of the period | (5,000,000) | (5,000,000) | (5,000,000) | (5,000,000) | (5,000,000) | (5,000,000) |
Hedging Instruments | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (5,000,000) | |||||
Tax expense | 0 | |||||
Other comprehensive income before reclassifications | 5,000,000 | |||||
Amounts reclassified from accumulated other comprehensive loss, gross | 0 | |||||
Tax expense (benefit) | 0 | |||||
Total other comprehensive (loss) income, net of tax | 5,000,000 | |||||
Balance at the end of the period | 0 | 0 | (5,000,000) | |||
Amounts attributable to noncontrolling interests | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | 10,000,000 | 12,000,000 | 12,000,000 | |||
Amounts attributable to noncontrolling interests | 0 | 0 | 0 | |||
Adjustments due to discontinued operations | 0 | |||||
Tax expense | 0 | 0 | ||||
Other comprehensive income before reclassifications | 0 | 0 | ||||
Tax expense | 0 | |||||
Amounts reclassified from accumulated other comprehensive loss, gross | 0 | 0 | ||||
Tax expense (benefit) | 0 | 0 | ||||
Total other comprehensive (loss) income, net of tax | 0 | 0 | ||||
Amounts attributable to noncontrolling interests | 0 | 0 | 0 | 0 | 0 | 0 |
Balance at the end of the period | 9,000,000 | 11,000,000 | 9,000,000 | 11,000,000 | 10,000,000 | 12,000,000 |
Amounts attributable to Venator | ||||||
Components of other comprehensive loss | ||||||
Balance at the beginning of the period | (283,000,000) | (423,000,000) | (423,000,000) | |||
Amounts attributable to Venator | (283,000,000) | (423,000,000) | (423,000,000) | |||
Adjustments due to discontinued operations | 29,000,000 | |||||
Tax expense | 0 | (3,000,000) | ||||
Other comprehensive income before reclassifications | (53,000,000) | 72,000,000 | ||||
Tax expense | 2,000,000 | |||||
Amounts reclassified from accumulated other comprehensive loss, gross | 7,000,000 | 7,000,000 | ||||
Tax expense (benefit) | 0 | 0 | ||||
Total other comprehensive (loss) income, net of tax | (46,000,000) | 107,000,000 | ||||
Amounts attributable to Venator | (329,000,000) | (316,000,000) | (329,000,000) | (316,000,000) | (283,000,000) | (423,000,000) |
Balance at the end of the period | $ (329,000,000) | $ (316,000,000) | $ (329,000,000) | $ (316,000,000) | $ (283,000,000) | $ (423,000,000) |
Other Comprehensive Income (L54
Other Comprehensive Income (Loss) - Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reclassification from accumulated other comprehensive loss | ||||
Total before tax | $ 4 | $ 3 | $ 7 | $ 7 |
Income tax expense | 0 | 0 | 0 | 0 |
Net of tax | 4 | 3 | 7 | 7 |
Pension and other postretirement benefits adjustments, net of tax | ||||
Reclassification from accumulated other comprehensive loss | ||||
Total before tax | 7 | 7 | ||
Income tax expense | 0 | 0 | ||
Actuarial loss | ||||
Reclassification from accumulated other comprehensive loss | ||||
Total before tax | 4 | 4 | 7 | 8 |
Prior service credit | ||||
Reclassification from accumulated other comprehensive loss | ||||
Total before tax | $ 0 | $ (1) | $ 0 | $ (1) |
Operating Segment Information55
Operating Segment Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | |
OPERATING SEGMENT INFORMATION | ||||
Number of reportable segments | segment | 2 | |||
Revenues: | ||||
Revenues | $ 626 | $ 562 | $ 1,248 | $ 1,099 |
Segment Adjusted EBITDA | ||||
Segment adjusted EBITDA | 157 | 94 | 314 | 143 |
Reconciliation of adjusted EBITDA to net income: | ||||
Interest expense | (14) | (10) | (27) | (24) |
Interest income | 4 | 1 | 7 | 3 |
Income tax expense - continuing operations | (45) | (16) | (65) | (12) |
Depreciation and amortization | (35) | (29) | (69) | (59) |
Net income attributable to noncontrolling interests | 2 | 3 | 4 | 6 |
Other adjustments: | ||||
Business acquisition and integration expenses | (2) | 0 | (4) | 0 |
Separation expense, net | 0 | 0 | (1) | 0 |
Net income of discontinued operations, net of tax | 0 | 0 | 0 | 8 |
Loss on disposition of business/assets | (2) | 0 | (2) | 0 |
Amortization of pension and postretirement actuarial losses | (4) | (4) | (7) | (8) |
Net plant incident credits (costs) | 273 | 2 | 273 | (3) |
Restructuring, impairment and plant closing and transition costs | (136) | (7) | (145) | (33) |
Net income | 198 | 34 | 278 | 21 |
Titanium Dioxide | ||||
Revenues: | ||||
Revenues | 455 | 401 | 911 | 786 |
Performance Additives | ||||
Revenues: | ||||
Revenues | 171 | 161 | 337 | 313 |
Corporate and other | ||||
Segment Adjusted EBITDA | ||||
Segment adjusted EBITDA | (13) | (20) | (23) | (40) |
Operating segments | ||||
Segment Adjusted EBITDA | ||||
Segment adjusted EBITDA | 170 | 114 | 337 | 183 |
Operating segments | Titanium Dioxide | ||||
Segment Adjusted EBITDA | ||||
Segment adjusted EBITDA | 147 | 93 | 290 | 141 |
Operating segments | Performance Additives | ||||
Segment Adjusted EBITDA | ||||
Segment adjusted EBITDA | $ 23 | $ 21 | $ 47 | $ 42 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Net income from discontinued operations | $ 0 | $ 0 | $ 0 | $ 8 |
Other businesses | Discontinued Operations, Disposed of by Means Other than Sale | ||||
Revenues: | ||||
Trade sales, services and fees, net | 0 | 0 | 0 | 15 |
Related party sales | 0 | 0 | 0 | 17 |
Total revenues | 0 | 0 | 0 | 32 |
Cost of goods sold | 0 | 0 | 0 | 26 |
Selling, general and administrative (includes corporate allocations of nil, nil, nil and $2, respectively) | 0 | 0 | 0 | (7) |
Restructuring, impairment and plant closing costs | 0 | 0 | 0 | 1 |
Other income, net | 0 | 0 | 0 | 1 |
Total operating expenses | 0 | 0 | 0 | (5) |
Income from discontinued operations before tax | 0 | 0 | 0 | 11 |
Income tax expense | 0 | 0 | 0 | (3) |
Net income from discontinued operations | 0 | 0 | 0 | 8 |
Other businesses | Discontinued Operations, Disposed of by Means Other than Sale | Corporate allocations | ||||
Revenues: | ||||
Selling, general and administrative (includes corporate allocations of nil, nil, nil and $2, respectively) | $ 0 | $ 0 | $ 0 | $ 2 |