乐天堂fun88(中国区)官方网站

1. GENERAL

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CERTAIN DEFINITIONS

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For convenience in this report, the terms 鈥淐ompany,鈥� 鈥溊痔焯胒un88(中国区)官方网站,鈥� 鈥渙ur,鈥� 鈥渦s鈥� or 鈥渨e鈥� may be used to refer to 乐天堂fun88(中国区)官方网站 Corporation and, unless the context otherwise requires, its subsidiaries and predecessors. In this report, 鈥溊痔焯胒un88(中国区)官方网站 International鈥� refers to 乐天堂fun88(中国区)官方网站 International听LLC (our wholly owned subsidiary) and, unless the context otherwise requires, its subsidiaries; 鈥淐lariant鈥� refers to Clariant Ltd; 鈥溊痔焯胒un88(中国区)官方网站Clariant鈥� refers to the combined company following the consummation of the merger among the Company, Clariant and Merger Sub; and 鈥淰enator鈥� refers to Venator Materials PLC and its subsidiaries, which will contain our Pigments and Additives business assuming completion of the Separation.

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In this report, we may use, without definition, the common names of competitors or other industry participants. We may also use the common names or abbreviations for certain chemicals or products.

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INTERIM FINANCIAL STATEMENTS

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Our unaudited interim condensed consolidated financial statements and 乐天堂fun88(中国区)官方网站 International鈥檚 unaudited interim condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (鈥淕AAP鈥� or 鈥淯.S.听GAAP鈥�) and in management鈥檚 opinion reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results of operations, comprehensive income, financial position and cash flows for the periods presented. Results for interim periods are not necessarily indicative of those to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to consolidated financial statements included in the Annual Report on Form听10鈥慘 for the year ended December听31, 2016 for our Company and 乐天堂fun88(中国区)官方网站 International.

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DESCRIPTION OF BUSINESS

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We are a global manufacturer of differentiated organic chemical products and of inorganic chemical products. Our products comprise a broad range of chemicals and formulations, which we market globally to a diversified group of consumer and industrial customers. Our products are used in a wide range of applications, including those in the adhesives, aerospace, automotive, construction products, personal care and hygiene, durable and non-durable consumer products, digital inks, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dyes industries. We are a leading global producer in many of our key product lines, including MDI, amines, surfactants, maleic anhydride, epoxy-based polymer formulations, textile chemicals, dyes, titanium dioxide and color pigments.

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We operate in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments and Additives. Our Polyurethanes, Performance Products, Advanced Materials and Textile Effects segments produce differentiated organic chemical products and our Pigments and Additives segment produces inorganic chemical products. In a series of transactions beginning in 2006, we sold or shut down substantially all of our Australian styrenics operations and our North American polymers and base chemicals operations. We report the results of these businesses as discontinued operations.

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COMPANY

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Our Company, a Delaware corporation, was formed in 2004 to hold the 乐天堂fun88(中国区)官方网站 businesses. Jon听M. 乐天堂fun88(中国区)官方网站 founded the predecessor to our Company in 1970 as a small packaging company. Since then, we have grown through a series of acquisitions and now own a global portfolio of businesses.

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Currently, we operate all of our businesses through 乐天堂fun88(中国区)官方网站 International, our wholly-owned subsidiary. 乐天堂fun88(中国区)官方网站 International is a Delaware limited liability company and was formed in 1999.

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HUNTSMAN CORPORATION AND HUNTSMAN INTERNATIONAL FINANCIAL STATEMENTS

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Except where otherwise indicated, these notes relate to the condensed consolidated financial statements for both our Company and 乐天堂fun88(中国区)官方网站 International. The differences between our financial statements and 乐天堂fun88(中国区)官方网站 International鈥檚 financial statements relate primarily to the following:

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PRINCIPLES OF CONSOLIDATION

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Our condensed consolidated financial statements include the accounts of our wholly鈥憃wned and majority鈥憃wned subsidiaries and any variable interest entities for which we are the primary beneficiary. Intercompany accounts and transactions have been eliminated.

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RECENT DEVELOPMENTS

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乐天堂fun88(中国区)官方网站 and Clariant Merger

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听On May 21, 2017,听乐天堂fun88(中国区)官方网站, Clariant Ltd, a Swiss corporation, (鈥淐lariant鈥�), and HurricaneCyclone Corporation, a Delaware听corporation and wholly owned subsidiary of Clariant (鈥淢erger Sub鈥�), entered into an Agreement and Plan of听Merger (the 鈥淢erger Agreement鈥�), pursuant to which, subject to the satisfaction or waiver of certain conditions,听Merger Sub will merge with and into 乐天堂fun88(中国区)官方网站, with 乐天堂fun88(中国区)官方网站 surviving as a wholly owned subsidiary of听Clariant, and Clariant will be renamed 乐天堂fun88(中国区)官方网站Clariant Ltd (鈥溊痔焯胒un88(中国区)官方网站Clariant鈥�). The merger is subject to the satisfaction or waiver of conditions set forth in the Merger Agreement, including, among other things, (i) the adoption of the Merger Agreement by the affirmative vote of 乐天堂fun88(中国区)官方网站 stockholders holding a majority of the outstanding 乐天堂fun88(中国区)官方网站 shares entitled to vote thereon at the 乐天堂fun88(中国区)官方网站 special meeting in favor of such adoption and (ii) the approval of Clariant shareholders of the increase in share capital of Clariant necessary to permit the issuance of 乐天堂fun88(中国区)官方网站Clariant shares in connection with the merger by the affirmative vote of two-thirds of the votes represented at its extraordinary general meeting. We have operated and,听until completion of the merger, will continue to operate independently of Clariant. As of the date of its听announcement, the merger had an enterprise value of approximately $20 billion, with more than 200 production sites around the world and approximately听28,000 associates. We are targeting completion of the merger near the end of this year. 听During the three and six months ended June 30, 2017 and 2016, we incurred merger-related costs of $6 million, $6 million, nil and nil, respectively.

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Separation of our Pigments and Additives Business

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We are in the process of separating our Pigments and Additives business, which is expected to be completed during the third quarter of 2017. During the third quarter of 2017, we expect to account for the Pigments and Additives business as assets held for sale and discontinued operations. For more information, see 鈥淣ote 4. Separation of Pigments and Additives Business.鈥�

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In connection with the separation, Venator Materials PLC (鈥淰enator鈥�) intends to enter into new financing arrangements and expects to incur up to $750 million of new debt, which will include (i) $375 million of senior unsecured notes and (ii) borrowings of $375 million under a new senior secured term loan facility. For further information, see 鈥淣ote 7. Debt鈥擠irect and Subsidiary Debt鈥擵enator Unsecured Notes and Venator Credit Facilities.鈥�

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Pori Fire

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On January 30, 2017, our titanium dioxide manufacturing facility in Pori, Finland experienced fire damage and is currently not fully operational. We are committed to repairing the facility as quickly as possible and a portion of our white end production became operational during the second quarter of 2017. During the first half of 2017, we recorded a loss of $32 million for the write-off of fixed assets and lost inventory in other operating income, net in our condensed consolidated statements of operations. In addition, we recorded a loss of $15 million of costs for cleanup of the facility in other operating income, net through June 30, 2017.

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The site is insured for property damage as well as business interruption losses subject to retained deductibles of $15 million and 60 days, respectively, with a limit of $500 million. The fire at our Pori facility did not have a material impact on our 2017 second quarter operating results as losses incurred were offset by insurance proceeds. On February 9, 2017 and May 2, 2017, we received $54 million and $76 million, respectively, as partial progress payments from our insurer. During the first six months of 2017, we recorded $84 million of income related to property damage and business interruption insurance recoveries in other operating income, net in our condensed consolidated statements of operations to offset property damage and business interruption losses recorded during the period. In addition, we recorded $46 million as deferred income in accrued liabilities as of June 30, 2017 for insurance proceeds received for costs not yet incurred.

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On July 10, 2017, we received an additional progress payment of $11 million from our insurer.

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Early Prepayment of Debt

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On July 26, 2017, we made an early prepayment of $100 million on our 2015 extended term loan B facility due 2019 (鈥�2015 Extended Term Loan B鈥�) from existing cash. For further information, see 鈥淣ote 7. Direct and Subsidiary Debt鈥擲enior Credit Facilities.鈥�

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USE OF ESTIMATES

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