ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾

Quarterly report pursuant to Section 13 or 15(d)

VARIABLE INTEREST ENTITIES

v3.5.0.2
VARIABLE INTEREST ENTITIES
9 Months Ended
Sep. 30, 2016
VARIABLE INTEREST ENTITIES Ìý
VARIABLE INTEREST ENTITIES

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4. VARIABLE INTEREST ENTITIES

ÌýÌýÌýÌýÌýÌýÌýÌýWe 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:

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RubiconÌýLLC is our 50%-owned joint venture with Chemtura that manufactures products for our Polyurethanes and Performance Products segments. The structure of the joint venture is such that the total equity investment at risk is not sufficient to permit the joint venture to finance its activities without additional financial support. By virtue of the operating agreement with this joint venture, we purchase a majority of the output, absorb a majority of the operating costs and provide a majority of the additional funding.Ìý

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Pacific Iron Products Sdn Bhd is our 50%-owned joint venture with Coogee Chemicals that manufactures products for our Pigments and Additives segment. In this joint venture, we supply all the raw materials through a fixed cost supply contract, operate the manufacturing facility and market the products of the joint venture to customers. Through a fixed price raw materials supply contract with the joint venture, we are exposed to risk related to the fluctuation of raw material pricing.Ìý

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Arabian Amines Company is our 50%-owned joint venture with Zamil group that manufactures products for our Performance Products segment. As required in the operating agreement governing this joint venture, we purchase all of Arabian Amines Company's production and sell it to our customers. Substantially all of the joint venture's activities are conducted on our behalf.Ìý

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Sasol-ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ is our 50%-owned joint venture with Sasol that owns and operates a maleic anhydride facility in Moers, Germany. This joint venture manufactures products for our Performance Products segment. The joint venture uses our technology and expertise, and we bear a disproportionate amount of risk of loss due to a related-party loan to Sasol-ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ for which we bear the default risk.Ìý

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Viance,ÌýLLC ("Viance") is our 50%-owned joint venture with Dow Chemical. Viance markets timber treatment products for our Pigments and Additives segment. 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.

ÌýÌýÌýÌýÌýÌýÌýÌýCreditors of these entities have no recourse to our general credit. See "NoteÌý6. Debt—Direct and Subsidiary Debt." As the primary beneficiary of these variable interest entities at SeptemberÌý30, 2016, the joint ventures' assets, liabilities and results of operations are included in our condensed consolidated financial statements.

ÌýÌýÌýÌýÌýÌýÌýÌýThe following table summarizes the carrying amount of our variable interest entities' assets and liabilities included in our condensed consolidated balance sheets, before intercompany eliminations, as of SeptemberÌý30, 2016 and our consolidated balance sheets as of DecemberÌý31, 2015 (dollars in millions):

ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

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Ìý

SeptemberÌý30,
2016

Ìý

DecemberÌý31,
2015

Ìý

Current assets

Ìý

$

100Ìý

Ìý

$

121Ìý

Ìý

Property, plant and equipment, net

Ìý

Ìý

291Ìý

Ìý

Ìý

307Ìý

Ìý

Other noncurrent assets

Ìý

Ìý

101Ìý

Ìý

Ìý

95Ìý

Ìý

Deferred income taxes

Ìý

Ìý

35Ìý

Ìý

Ìý

35Ìý

Ìý

Intangible assets

Ìý

Ìý

32Ìý

Ìý

Ìý

36Ìý

Ìý

Goodwill

Ìý

Ìý

13Ìý

Ìý

Ìý

13Ìý

Ìý

�

�

â€� Ìý

â€� Ìý

�

â€� Ìý

â€� Ìý

�

Total assets

Ìý

$

572Ìý

Ìý

$

607Ìý

Ìý

�

�

â€� Ìý

â€� Ìý

�

â€� Ìý

â€� Ìý

�

�

�

â€� Ìý

â€� Ìý

�

â€� Ìý

â€� Ìý

�

Current liabilities

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$

155Ìý

Ìý

$

159Ìý

Ìý

Long-term debt

Ìý

Ìý

116Ìý

Ìý

Ìý

140Ìý

Ìý

Deferred income taxes

Ìý

Ìý

11Ìý

Ìý

Ìý

11Ìý

Ìý

Other noncurrent liabilities

Ìý

Ìý

56Ìý

Ìý

Ìý

54Ìý

Ìý

�

�

â€� Ìý

â€� Ìý

�

â€� Ìý

â€� Ìý

�

Total liabilities

Ìý

$

338Ìý

Ìý

$

364Ìý

Ìý

�

�

â€� Ìý

â€� Ìý

�

â€� Ìý

â€� Ìý

�

�

�

â€� Ìý

â€� Ìý

�

â€� Ìý

â€� Ìý

�

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