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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)    

ý

 

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

For the quarterly period ended June 30, 2015

OR

o

 

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

For the transition period from                  to                

 

Commission
File Number
  Exact Name of Registrant as Specified in its Charter, Principal Office
Address and Telephone Number
  State of Incorporation
or Organization
  I.R.S. Employer
Identification No.

001-32427

  Huntsman Corporation
500 Huntsman Way
Salt Lake City, Utah 84108
(801) 584-5700
  Delaware   42-1648585

333-85141

  Huntsman International LLC
500 Huntsman Way
Salt Lake City, Utah 84108
(801) 584-5700
  Delaware   87-0630358



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

Huntsman Corporation   YES ý   NO o
Huntsman International LLC   YES ý   NO o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Huntsman Corporation   YES ý   NO o
Huntsman International LLC   YES ý   NO o

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

  Huntsman Corporation   Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o
(Do not check if a
smaller reporting company)
  Smaller reporting company o
  Huntsman International LLC   Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

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

Huntsman Corporation   YES o   NO ý
Huntsman International LLC   YES o   NO ý



         On July 21, 2015, 245,443,816 shares of common stock of Huntsman Corporation were outstanding and 2,728 units of membership interests of Huntsman International LLC were outstanding. There is no trading market for Huntsman International LLC's units of membership interests. All of Huntsman International LLC's units of membership interests are held by Huntsman Corporation.



         This Quarterly Report on Form 10-Q presents information for two registrants: Huntsman Corporation and Huntsman International LLC. Huntsman International LLC is a wholly owned subsidiary of Huntsman Corporation and is the principal operating company of Huntsman Corporation. The information reflected in this Quarterly Report on Form 10-Q is equally applicable to both Huntsman Corporation and Huntsman International LLC, except where otherwise indicated. Huntsman International LLC meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and, to the extent applicable, is therefore filing this form with a reduced disclosure format.

   


Table of Contents


HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 2015

TABLE OF CONTENTS

 
   
  Page  

PART I

 

FINANCIAL INFORMATION

    3  

ITEM 1.

 

Financial Statements:

       

 

Huntsman Corporation and Subsidiaries:

       

 

Condensed Consolidated Balance Sheets (Unaudited)

    3  

 

Condensed Consolidated Statements of Operations (Unaudited)

    4  

 

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

    5  

 

Condensed Consolidated Statements of Equity (Unaudited)

    6  

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

    7  

 

Huntsman International LLC and Subsidiaries:

       

 

Condensed Consolidated Balance Sheets (Unaudited)

    9  

 

Condensed Consolidated Statements of Operations (Unaudited)

    10  

 

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

    11  

 

Condensed Consolidated Statements of Equity (Unaudited)

    12  

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

    13  

 

Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:

       

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

    15  

ITEM 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

    67  

ITEM 3.

 

Quantitative and Qualitative Disclosures About Market Risk

    91  

ITEM 4.

 

Controls and Procedures

    93  

PART II

 

OTHER INFORMATION

    94  

ITEM 1.

 

Legal Proceedings

    94  

ITEM 1A.

 

Risk Factors

    94  

ITEM 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

    94  

ITEM 6.

 

Exhibits

    95  

2


Table of Contents


PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

        


HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In Millions, Except Share and Per Share Amounts)

 
  June 30,
2015
  December 31,
2014
 

ASSETS

             

Current assets:

             

Cash and cash equivalents(a)

  $ 599   $ 860  

Restricted cash(a)

    9     10  

Accounts and notes receivable (net of allowance for doubtful accounts of $31 and $34, respectively), ($519 and $472 pledged as collateral, respectively)(a)

    1,721     1,665  

Accounts receivable from affiliates

    33     42  

Inventories(a)

    1,938     2,025  

Prepaid expenses

    46     62  

Deferred income taxes

    59     62  

Other current assets(a)

    190     313  

Total current assets

    4,595     5,039  

Property, plant and equipment, net(a)

    4,328     4,423  

Investment in unconsolidated affiliates

    350     350  

Intangible assets, net(a)

    92     95  

Goodwill

    119     122  

Deferred income taxes

    444     435  

Other noncurrent assets(a)

    650     538  

Total assets

  $ 10,578   $ 11,002  

LIABILITIES AND EQUITY

             

Current liabilities:

             

Accounts payable(a)

  $ 1,179   $ 1,218  

Accounts payable to affiliates

    30     57  

Accrued liabilities(a)

    737     739  

Deferred income taxes

    49     51  

Current portion of debt(a)

    127     267  

Total current liabilities

    2,122     2,332  

Long-term debt(a)

    4,920     4,933  

Notes payable to affiliates

    7     6  

Deferred income taxes

    339     333  

Other noncurrent liabilities(a)

    1,348     1,447  

Total liabilities

    8,736     9,051  

Commitments and contingencies (Notes 13 and 14)

             

Equity

             

Huntsman Corporation stockholders' equity:

             

Common stock $0.01 par value, 1,200,000,000 shares authorized, 249,457,421 and 248,893,036 issued and 244,168,343 and 243,416,979 outstanding in 2015 and 2014, respectively

    3     3  

Additional paid-in capital

    3,416     3,385  

Treasury stock, 4,043,526 shares at both June 30, 2015 and December 31, 2014

    (50 )   (50 )

Unearned stock-based compensation

    (24 )   (14 )

Accumulated deficit

    (528 )   (493 )

Accumulated other comprehensive loss

    (1,159 )   (1,053 )

Total Huntsman Corporation stockholders' equity

    1,658     1,778  

Noncontrolling interests in subsidiaries

    184     173  

Total equity

    1,842     1,951  

Total liabilities and equity

  $ 10,578   $ 11,002  

(a)
At June 30, 2015 and December 31, 2014, respectively, $28 and $46 of cash and cash equivalents, $9 and $10 of restricted cash, $42 and $41 of accounts and notes receivable (net), $51 and $68 of inventories, $5 and $6 of other current assets, $326 and $339 of property, plant and equipment (net), $38 and $40 of intangible assets (net), $28 and $27 of other noncurrent assets, $77 and $92 of accounts payable, $33 and $37 of accrued liabilities, $18 and $172 of current portion of debt, $147 and $36 of long-term debt, and $97 each of other noncurrent liabilities from consolidated variable interest entities are included in the respective Balance Sheet captions above. See "Note 5. Variable Interest Entities."

   

See accompanying notes to condensed consolidated financial statements (unaudited).

3


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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In Millions, Except Per Share Amounts)

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  2015   2014   2015   2014  

Revenues:

                         

Trade sales, services and fees, net

  $ 2,697   $ 2,921   $ 5,257   $ 5,614  

Related party sales

    43     67     72     129  

Total revenues

    2,740     2,988     5,329     5,743  

Cost of goods sold

    2,191     2,483     4,330     4,788  

Gross profit

    549     505     999     955  

Operating expenses:

                         

Selling, general and administrative

    249     244     495     473  

Research and development

    41     37     83     73  

Other operating income

    (1 )   (5 )   (9 )   (9 )

Restructuring, impairment and plant closing costs

    114     13     207     52  

Total expenses

    403     289     776     589  

Operating income

    146     216     223     366  

Interest expense

    (53 )   (51 )   (109 )   (99 )

Equity in income of investment in unconsolidated affiliates

    3     2     5     4  

Loss on early extinguishment of debt

    (20 )       (23 )    

Other (loss) income

    (1 )       (2 )   1  

Income from continuing operations before income taxes

    75     167     94     272  

Income tax expense

    (34 )   (43 )   (36 )   (79 )

Income from continuing operations

    41     124     58     193  

Loss from discontinued operations

    (2 )       (4 )   (7 )

Net income

    39     124     54     186  

Net income attributable to noncontrolling interests

    (10 )   (5 )   (20 )   (13 )

Net income attributable to Huntsman Corporation

  $ 29   $ 119   $ 34   $ 173  

Basic income (loss) per share:

                         

Income from continuing operations attributable to Huntsman Corporation common stockholders

  $ 0.13   $ 0.49   $ 0.16   $ 0.75  

Loss from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax

    (0.01 )       (0.02 )   (0.03 )

Net income attributable to Huntsman Corporation common stockholders

  $ 0.12   $ 0.49   $ 0.14   $ 0.72  

Weighted average shares

    244.1     241.8     244.0     241.3  

Diluted income (loss) per share:

                         

Income from continuing operations attributable to Huntsman Corporation common stockholders

  $ 0.13   $ 0.48   $ 0.16   $ 0.74  

Loss from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax

    (0.01 )       (0.02 )   (0.03 )

Net income attributable to Huntsman Corporation common stockholders

  $ 0.12   $ 0.48   $ 0.14   $ 0.71  

Weighted average shares

    247.5     245.7     247.3     245.0  

Amounts attributable to Huntsman Corporation common stockholders:

                         

Income from continuing operations

  $ 31   $ 119   $ 38   $ 180  

Loss from discontinued operations, net of tax

    (2 )       (4 )   (7 )

Net income

  $ 29   $ 119   $ 34   $ 173  

Dividends per share

  $ 0.125   $ 0.125   $ 0.25   $ 0.25  

   

See accompanying notes to condensed consolidated financial statements (unaudited).

4


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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(In Millions)

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  2015   2014   2015   2014  

Net income

  $ 39   $ 124   $ 54   $ 186  

Other comprehensive income (loss), net of tax:

                         

Foreign currency translations adjustments, net of tax of $7 and $(2) for the three months ended, respectively, and $(20) and $(2) for the six months ended, respectively

    40     2     (142 )    

Pension and other postretirement benefits adjustments, net of tax of $(2) and $(3) for the three months ended, respectively, and $(6) each for the six months ended

    9     8     22     17  

Other, net

    10     1     9     1  

Other comprehensive income (loss), net of tax

    59     11     (111 )   18  

Comprehensive income (loss)

    98     135     (57 )   204  

Comprehensive (income) loss attributable to noncontrolling interests

    (12 )   2     (15 )   (10 )

Comprehensive income (loss) attributable to Huntsman Corporation

  $ 86   $ 137   $ (72 ) $ 194  

   

See accompanying notes to condensed consolidated financial statements (unaudited).

5


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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(In Millions, Except Share Amounts)

 
  Huntsman Corporation Stockholders' Equity    
   
 
 
  Shares    
   
   
   
   
   
   
   
 
 
   
   
   
   
   
  Accumulated
other
comprehensive
(loss) income
   
   
 
 
  Common
stock
  Common
stock
  Additional
paid-in
capital
  Treasury
stock
  Unearned
stock-based
compensation
  Accumulated
deficit
  Noncontrolling
interests in
subsidiaries
  Total
equity
 

Balance, January 1, 2015

    243,416,979   $ 3   $ 3,385   $ (50 ) $ (14 ) $ (493 ) $ (1,053 ) $ 173   $ 1,951  

Net income

                        34         20     54  

Other comprehensive loss

                            (106 )   (5 )   (111 )

Issuance of nonvested stock awards

            19         (19 )                

Vesting of stock awards

    1,006,871         5                         5  

Recognition of stock-based compensation

            5         9                 14  

Repurchase and cancellation of stock awards

    (304,079 )                   (7 )           (7 )

Stock options exercised

    48,572         1                         1  

Dividends paid to noncontrolling interests

                                (4 )   (4 )

Excess tax benefit related to stock-based compensation

            1                         1  

Dividends declared on common stock

                        (62 )           (62 )

Balance, June 30, 2015

    244,168,343   $ 3   $ 3,416   $ (50 ) $ (24 ) $ (528 ) $ (1,159 ) $ 184   $ 1,842  

Balance, January 1, 2014

    240,401,442   $ 2   $ 3,305   $ (50 ) $ (13 ) $ (687 ) $ (577 ) $ 149   $ 2,129  

Net income

                        173         13     186  

Other comprehensive income

                            21     (3 )   18  

Issuance of nonvested stock awards

            15         (15 )                

Vesting of stock awards

    1,003,482         7                         7  

Recognition of stock-based compensation

            5         8                 13  

Repurchase and cancellation of stock awards

    (296,925 )                   (7 )           (7 )

Stock options exercised

    1,368,603         28                         28  

Dividends paid to noncontrolling interests

                                (4 )   (4 )

Excess tax expense related to stock-based compensation

            (1 )                       (1 )

Accrued and unpaid dividends

                        (1 )           (1 )

Dividends declared on common stock

                        (60 )           (60 )

Balance, June 30, 2014

    242,476,602   $ 2   $ 3,359   $ (50 ) $ (20 ) $ (582 ) $ (556 ) $ 155   $ 2,308  

See accompanying notes to condensed consolidated financial statements (unaudited).

6


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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In Millions)

 
  Six months
ended June 30,
 
 
  2015   2014  

Operating Activities:

             

Net income

  $ 54   $ 186  

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

             

Equity in income of investment in unconsolidated affiliates

    (5 )   (4 )

Depreciation and amortization

    194     239  

Loss on early extinguishment of debt

    23      

Noncash interest expense

    8     5  

Noncash restructuring and impairment charges

    85     6  

Deferred income taxes

    (59 )   (32 )

Noncash (gain) loss on foreign currency transactions

    (4 )   4  

Stock-based compensation

    17     16  

Other, net

    4     (2 )

Changes in operating assets and liabilities:

             

Accounts and notes receivable

    (142 )   (300 )

Inventories

    7     (109 )

Prepaid expenses

    14     14  

Other current assets

    62     (19 )

Other noncurrent assets

    (99 )   (13 )

Accounts payable

    12     94  

Accrued liabilities

    31     (75 )

Other noncurrent liabilities

    (21 )   (27 )

Net cash provided by (used in) operating activities

    181     (17 )

Investing Activities:

             

Capital expenditures

    (296 )   (214 )

Cash received from unconsolidated affiliates

    25     30  

Investment in unconsolidated affiliates

    (32 )   (29 )

Acquisition of business, net of cash acquired

    (15 )    

Cash received from purchase price adjustment for business acquired

    18      

Proceeds from sale of businesses/assets

    1     14  

Cash received from termination of cross-currency interest rate contracts

    66      

Other, net

        (3 )

Net cash used in investing activities

    (233 )   (202 )

   

(Continued)

7


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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

(In Millions)

 
  Six months
ended June 30,
 
 
  2015   2014  

Financing Activities:

             

Net borrowings under revolving loan facilities

  $   $ (1 )

Net (repayments) borrowings on overdraft facilities

    (2 )   8  

Repayments of short-term debt

    (17 )   (8 )

Borrowings on short-term debt

        5  

Repayments of long-term debt

    (388 )   (35 )

Proceeds from issuance of long-term debt

    326     204  

Repayments of notes payable

    (15 )   (16 )

Borrowings on notes payable

    1     1  

Debt issuance costs paid

    (5 )   (4 )

Call premiums related to early extinguishment of debt

    (26 )    

Contingent consideration paid for acquisition

    (4 )   (6 )

Dividends paid to common stockholders

    (62 )   (60 )

Dividends paid to noncontrolling interests

    (4 )   (4 )

Repurchase and cancellation of stock awards

    (7 )   (7 )

Proceeds from issuance of common stock

    1     28  

Excess tax benefit related to stock-based compensation

    1     (1 )

Other, net

    (1 )   (1 )

Net cash (used in) provided by financing activities

    (202 )   103  

Effect of exchange rate changes on cash

    (7 )   (1 )

Decrease in cash and cash equivalents

    (261 )   (117 )

Cash and cash equivalents at beginning of period

    860     520  

Cash and cash equivalents at end of period

  $ 599   $ 403  

Supplemental cash flow information:

             

Cash paid for interest

  $ 115   $ 91  

Cash paid for income taxes

    30     143  

        As of June 30, 2015 and 2014, the amount of capital expenditures in accounts payable was $55 million and $40 million, respectively. During the six months ended June 30, 2015 and 2014, we acquired assets under capital leases of nil and $10 million, respectively.

   

See accompanying notes to condensed consolidated financial statements (unaudited).

8


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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In Millions)

 
  June 30,
2015
  December 31,
2014
 

ASSETS

             

Current assets:

             

Cash and cash equivalents(a)

  $ 597   $ 710  

Restricted cash(a)

    9     10  

Accounts and notes receivable (net of allowance for doubtful accounts of $31 and $34, respectively), ($519 and $472 pledged as collateral, respectively)(a)

    1,721     1,665  

Accounts receivable from affiliates

    344     346  

Inventories(a)

    1,938     2,025  

Prepaid expenses

    45     61  

Deferred income taxes

    59     62  

Other current assets(a)

    190     306  

Total current assets

    4,903     5,185  

Property, plant and equipment, net(a)

    4,286     4,375  

Investment in unconsolidated affiliates

    350     350  

Intangible assets, net(a)

    93     96  

Goodwill

    119     122  

Deferred income taxes

    444     435  

Other noncurrent assets(a)

    650     538  

Total assets

  $ 10,845   $ 11,101  

LIABILITIES AND EQUITY

             

Current liabilities:

             

Accounts payable(a)

  $ 1,179   $ 1,218  

Accounts payable to affiliates

    51     74  

Accrued liabilities(a)

    742     736  

Deferred income taxes

    50     52  

Note payable to affiliate

    100     100  

Current portion of debt(a)

    127     267  

Total current liabilities

    2,249     2,447  

Long-term debt(a)

    4,920     4,933  

Notes payable to affiliates

    802     656  

Deferred income taxes

    333     326  

Other noncurrent liabilities(a)

    1,347     1,443  

Total liabilities

    9,651     9,805  

Commitments and contingencies (Notes 13 and 14)

             

Equity

             

Huntsman International LLC members' equity:

             

Members' equity, 2,728 units issued and outstanding

    3,183     3,166  

Accumulated deficit

    (983 )   (956 )

Accumulated other comprehensive loss

    (1,190 )   (1,087 )

Total Huntsman International LLC members' equity

    1,010     1,123  

Noncontrolling interests in subsidiaries

    184     173  

Total equity

    1,194     1,296  

Total liabilities and equity

  $ 10,845   $ 11,101  

(a)
At June 30, 2015 and December 31, 2014, respectively, $28 and $46 of cash and cash equivalents, $9 and $10 of restricted cash, $42 and $41 of accounts and notes receivable (net), $51 and $68 of inventories, $5 and $6 of other current assets, $326 and $339 of property, plant and equipment (net), $38 and $40 of intangible assets (net), $28 and $27 of other noncurrent assets, $77 and $92 of accounts payable, $33 and $37 of accrued liabilities, $18 and $172 of current portion of debt, $147 and $36 of long-term debt, and $97 each of other noncurrent liabilities from consolidated variable interest entities are included in the respective Balance Sheet captions above. See "Note 5. Variable Interest Entities."

   

See accompanying notes to condensed consolidated financial statements (unaudited).

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In Millions)

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  2015   2014   2015   2014  

Revenues:

                         

Trade sales, services and fees, net

  $ 2,697   $ 2,921   $ 5,257   $ 5,614  

Related party sales

    43     67     72     129  

Total revenues

    2,740     2,988     5,329     5,743  

Cost of goods sold

    2,191     2,482     4,328     4,782  

Gross profit

    549     506     1,001     961  

Operating expenses:

                         

Selling, general and administrative

    248     243     492     470  

Research and development

    41     37     83     73  

Other operating income

    (2 )   (5 )   (9 )   (9 )

Restructuring, impairment and plant closing costs

    114     13     207     52  

Total expenses

    401     288     773     586  

Operating income

    148     218     228     375  

Interest expense

    (56 )   (52 )   (114 )   (103 )

Equity in income of investment in unconsolidated affiliates

    3     2     5     4  

Loss on early extinguishment of debt

    (20 )       (23 )    

Other (loss) income

            (1 )   1  

Income from continuing operations before income taxes

    75     168     95     277  

Income tax expense

    (34 )   (43 )   (37 )   (80 )

Income from continuing operations

    41     125     58     197  

Loss from discontinued operations, net of tax

    (2 )       (4 )   (7 )

Net income

    39     125     54     190  

Net income attributable to noncontrolling interests

    (10 )   (5 )   (20 )   (13 )

Net income attributable to Huntsman International LLC

  $ 29   $ 120   $ 34   $ 177  

   

See accompanying notes to condensed consolidated financial statements (unaudited).

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(In Millions)

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  2015   2014   2015   2014  

Net income

  $ 39   $ 125   $ 54   $ 190  

Other comprehensive income (loss), net of tax:

                         

Foreign currency translations adjustments, net of tax of $7 and $(2) for the three months ended, respectively, and $(20) and $(2) for the six months ended, respectively

    39     3     (143 )    

Pension and other postretirement benefits adjustments, net of tax of $(3) each for the three months ended and $(7) each for the six months ended

    11     10     26     20  

Other, net

    10         9     1  

Other comprehensive income (loss), net of tax

    60     13     (108 )   21  

Comprehensive income (loss)

    99     138     (54 )   211  

Comprehensive (income) loss attributable to noncontrolling interests

    (12 )   2     (15 )   (10 )

Comprehensive income (loss) attributable to Huntsman International LLC

  $ 87   $ 140   $ (69 ) $ 201  

   

See accompanying notes to condensed consolidated financial statements (unaudited).

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(In Millions, Except Unit Amounts)

 
  Huntsman International LLC Members    
   
 
 
  Members' equity    
  Accumulated
other
comprehensive
(loss) income
   
   
 
 
  Accumulated
deficit
  Noncontrolling
interests in
subsidiaries
  Total
equity
 
 
  Units   Amount  

Balance, January 1, 2015

    2,728   $ 3,166   $ (956 ) $ (1,087 ) $ 173   $ 1,296  

Net income

            34         20     54  

Dividends paid to parent

            (61 )           (61 )

Other comprehensive loss

                (103 )   (5 )   (108 )

Contribution from parent

        16                 16  

Dividends paid to noncontrolling interests

                    (4 )   (4 )

Excess tax benefit related to stock-based compensation

        1                 1  

Balance, June 30, 2015

    2,728   $ 3,183   $ (983 ) $ (1,190 ) $ 184   $ 1,194  

Balance, January 1, 2014

    2,728   $ 3,138   $ (1,194 ) $ (618 ) $ 149   $ 1,475  

Net income

            177         13     190  

Dividends paid to parent

            (60 )           (60 )

Other comprehensive income

                24     (3 )   21  

Contribution from parent

        15                 15  

Dividends paid to noncontrolling interests

                    (4 )   (4 )

Excess tax expense related to stock-based compensation

        (1 )               (1 )

Balance, June 30, 2014

    2,728   $ 3,152   $ (1,077 ) $ (594 ) $ 155   $ 1,636  

   

See accompanying notes to condensed consolidated financial statements (unaudited).

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In Millions)

 
  Six months ended
June 30,
 
 
  2015   2014  

Operating Activities:

             

Net income

  $ 54   $ 190  

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

             

Equity in income of investment in unconsolidated affiliates

    (5 )   (4 )

Depreciation and amortization

    187     229  

Loss on early extinguishment of debt

    23      

Noncash interest expense

    12     9  

Noncash restructuring and impairment charges

    85     6  

Deferred income taxes

    (59 )   (31 )

Noncash (gain) loss on foreign currency transactions

    (4 )   4  

Noncash compensation

    16     15  

Other, net

    6     (2 )

Changes in operating assets and liabilities:

             

Accounts and notes receivable

    (142 )   (299 )

Inventories

    7     (109 )

Prepaid expenses

    15     15  

Other current assets

    55     (13 )

Other noncurrent assets

    (99 )   (13 )

Accounts payable

    8     89  

Accrued liabilities

    39     (80 )

Other noncurrent liabilities

    (17 )   (23 )

Net cash provided by (used in) operating activities

    181     (17 )

Investing Activities:

             

Capital expenditures

    (296 )   (214 )

Cash received from unconsolidated affiliates

    25     30  

Investment in unconsolidated affiliates

    (32 )   (29 )

Acquisition of business, net of cash acquired

    (15 )    

Cash received from purchase price adjustment for business acquired

    18      

Proceeds from sale of businesses/assets

    1     14  

Increase in receivable from affiliate

    (4 )   (5 )

Cash received from termination of cross-currency interest rate contracts

    66      

Other, net

        (3 )

Net cash used in investing activities

    (237 )   (207 )

   

(Continued)

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

(In Millions)

 
  Six months ended
June 30,
 
 
  2015   2014  

Financing Activities:

             

Net borrowings under revolving loan facilities

  $   $ (1 )

Net (repayments) borrowings on overdraft facilities

    (2 )   8  

Repayments of short-term debt

    (17 )   (8 )

Borrowings on short-term debt

        5  

Repayments of long-term debt

    (388 )   (35 )

Proceeds from issuance of long-term debt

    326     204  

Repayments of notes payable to affiliate

    (50 )   (65 )

Proceeds from issuance of notes payable from affiliate

    195      

Repayments of notes payable

    (15 )   (16 )

Borrowings on notes payable

    1     1  

Debt issuance costs paid

    (5 )   (4 )

Call premiums related to early extinguishment of debt

    (26 )    

Contingent consideration paid for acquisition

    (4 )   (6 )

Dividends paid to noncontrolling interests

    (4 )   (4 )

Dividends paid to parent

    (61 )   (60 )

Excess tax benefit related to stock-based compensation

    1     (1 )

Other, net

    (1 )    

Net cash (used in) provided by financing activities

    (50 )   18  

Effect of exchange rate changes on cash

    (7 )   (1 )

Decrease

    (113 )   (207 )

Cash and cash equivalents at beginning of period

    710     515  

Cash and cash equivalents at end of period

  $ 597   $ 308  

Supplemental cash flow information:

             

Cash paid for interest

  $ 115   $ 91  

Cash paid for income taxes

    30     143  

        As of June 30, 2015 and 2014, the amount of capital expenditures in accounts payable was $55 million and $40 million, respectively. During the six months ended June 30, 2015 and 2014, Huntsman Corporation contributed $16 million and $15 million, respectively, related to stock-based compensation. During the six months ended June 30, 2015 and 2014, we acquired assets under capital leases of nil and $10 million, respectively.

   

See accompanying notes to condensed consolidated financial statements (unaudited).

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. GENERAL

CERTAIN DEFINITIONS

        For convenience in this report, the terms "Company," "our," "us" or "we" may be used to refer to Huntsman Corporation and, unless the context otherwise requires, its subsidiaries and predecessors. In this report, "Huntsman International" refers to Huntsman International LLC (our 100% owned subsidiary) and, unless the context otherwise requires, its subsidiaries.

        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.

INTERIM FINANCIAL STATEMENTS

        Our interim condensed consolidated financial statements (unaudited) and Huntsman International's interim condensed consolidated financial statements (unaudited) were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP" or "U.S. GAAP") and in management's opinion reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results of operations, comprehensive income, 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 condensed consolidated financial statements (unaudited) should be read in conjunction with the audited consolidated financial statements and notes to consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2014 for our Company and Huntsman International.

DESCRIPTION OF BUSINESS

        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, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye 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.

        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 shutdown 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.

COMPANY

        Our Company, a Delaware corporation, was formed in 2004 to hold the Huntsman businesses. Jon M. Huntsman founded the predecessor to our Company in 1970 as a small packaging company.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

1. GENERAL (Continued)

Since then, we have grown through a series of acquisitions and now own a global portfolio of businesses.

        Currently, we operate all of our businesses through Huntsman International, our 100% owned subsidiary. Huntsman International is a Delaware limited liability company and was formed in 1999.

HUNTSMAN CORPORATION AND HUNTSMAN INTERNATIONAL FINANCIAL STATEMENTS

        Except where otherwise indicated, these notes relate to the condensed consolidated financial statements (unaudited) for both our Company and Huntsman International. The differences between our financial statements and Huntsman International's financial statements relate primarily to the following:

PRINCIPLES OF CONSOLIDATION

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

USE OF ESTIMATES

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

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Adopted During 2015

        In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, changing the criteria for reporting discontinued operations and enhancing reporting requirements for discontinued operations. A disposal of a component of an entity or a group of components of an entity will be required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. Further, the amendments in this ASU will require an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)

the asset and liability sections, respectively, of the statement of financial position. The amendments in this ASU are effective prospectively for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years, and for all businesses that, on acquisition, are classified as held for sale that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. We adopted the amendments in this ASU effective January 1, 2015, and the initial adoption of the amendments in this ASU did not have any impact on our condensed consolidated financial statements (unaudited).

Accounting Pronouncements Pending Adoption in Future Periods

        In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), outlining a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and supersedes most current revenue recognition guidance. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The amendments in this ASU should be applied retrospectively, and early application is permitted. We are currently evaluating the impact of the adoption of the amendments in this ASU on our condensed consolidated financial statements (unaudited).

        In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, providing guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. We do not expect the adoption of the amendments in this ASU to have a significant impact on our condensed consolidated financial statements (unaudited).

        In January 2015, the FASB issued ASU No. 2015-01, Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items, eliminating from US GAAP the concept of extraordinary items. Reporting entities will no longer have to assess whether a particular event or transaction event is extraordinary. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively or may also apply them retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We do not expect the adoption of the amendments in this ASU to have a significant impact on our condensed consolidated financial statements (unaudited).

        In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The amendments in this ASU change the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities by placing more emphasis on risk of loss when determining a controlling financial interest. These amendments affect areas specific to limited partnerships and similar legal entities, evaluating fees paid to a decision maker

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)

or service provider as a variable interest, the effects of both fee arrangements and related parties on the primary beneficiary determination and certain investment funds. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments retrospectively or using a modified retrospective approach. Early adoption is permitted, including adoption in an interim period provided that any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. We do not expect the adoption of the amendments in this ASU to have a significant impact on our condensed consolidated financial statements (unaudited).

        In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and that amortization of debt issuance costs shall be reported as interest expense. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early application permitted. Entities would apply the new guidance retrospectively to all prior periods. We do not expect the adoption of the amendment in this ASU to have a significant impact on our condensed consolidated financial statements (unaudited).

        In April 2015, the FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The amendments in this ASU provide guidance that will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement, including whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license consistent with the acquisition of other software licenses; otherwise, the customer should account for the arrangement as a service contract. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Entities can elect to adopt the amendments either prospectively to all arrangements entered into after the effective date or retrospectively to all prior periods. We do not expect the adoption of the amendment in this ASU to have a significant impact on our condensed consolidated financial statements (unaudited).

        In July 2015, the FASB issued ASU No. 2015-011, Inventory (Topic 330): Simplifying the Measurement of Inventory. The amendments in this ASU do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method, but rather does apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments in this ASU should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect the adoption of the amendment

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)

in this ASU to have a significant impact on our condensed consolidated financial statements (unaudited).

3. BUSINESS COMBINATIONS

ROCKWOOD ACQUISITION

        On October 1, 2014, we completed the acquisition of the Performance Additives and Titanium Dioxide businesses (the "Rockwood Acquisition") of Rockwood Holdings, Inc. ("Rockwood"). We paid $1.02 billion in cash and assumed certain unfunded pension liabilities in connection with the Rockwood Acquisition. The acquisition was financed using a bank term loan. The majority of the acquired businesses have been integrated into our Pigments and Additives segment. Transaction costs charged to expense related to this acquisition were nil each for the three months ended June 30, 2015 and 2014, and nil and $5 million for the six months ended June 30, 2015 and 2014, respectively, and were recorded in selling, general and administrative expenses in our condensed consolidated statements of operations (unaudited).

        The following businesses were acquired from Rockwood:

        In connection with securing certain regulatory approvals required to complete the Rockwood Acquisition, we sold our TiO2 TR52 product line used in printing inks to Henan Billions Chemicals Co., Ltd. ("Henan") in December 2014. The sale did not include any manufacturing assets but does include an agreement to supply TR52 product to Henan during a transitional period.

        We have accounted for the Rockwood Acquisition using the acquisition method. As such, we analyzed the fair value of tangible and intangible assets acquired and liabilities assumed. The

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

3. BUSINESS COMBINATIONS (Continued)

preliminary allocation of acquisition cost to the assets acquired and liabilities assumed is summarized as follows (dollars in millions):

Cash paid for Rockwood Acquisition in 2014

  $ 1,038  

Purchase price adjustment received in 2015

    (18 )

Remaining expected purchase price adjustment receivable

    (1 )

Expected net acquisition cost

  $ 1,019  

Fair value of assets acquired and liabilities assumed:

       

Cash

  $ 78  

Accounts receivable, net

    220  

Inventories

    400  

Prepaid expenses and other current assets

    46  

Property, plant and equipment

    597  

Intangible assets

    33  

Deferred income taxes, non-current

    126  

Other assets

    9  

Accounts payable

    (146 )

Accrued expenses and other current liabilities

    (80 )

Long-term debt, non-current

    (3 )

Pension and related liabilities

    (233 )

Deferred income taxes, non-current

    (10 )

Other liabilities

    (18 )

Total fair value of net assets acquired

  $ 1,019  

        During the second quarter of 2015, we received $18 million related to the settlement of certain purchase price adjustments. The acquisition cost allocation is preliminary pending final determination of the fair value of assets acquired and liabilities assumed, including final valuation of property, plant and equipment, intangible assets, asset retirement obligations, and environmental and other legal reserves, and finalizing the remaining expected purchase price adjustment receivable. None of the fair value of this acquisition was allocated to goodwill. It is possible that changes to this allocation could occur. If the Rockwood Acquisition were to have occurred on January 1, 2013, the following estimated

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

3. BUSINESS COMBINATIONS (Continued)

pro forma revenues and net income attributable to Huntsman Corporation and Huntsman International would have been reported (dollars in millions, except per share amounts):

Huntsman Corporation

 
  Pro Forma   Pro Forma  
 
  Three months
ended
June 30, 2014
(Unaudited)
  Six months
ended
June 30, 2014
(Unaudited)
 

Revenues

  $ 3,395   $ 6,528  

Net income attributable to Huntsman Corporation

    142     211  

Income per share:

   
 
   
 
 

Basic

  $ 0.59   $ 0.87  

Diluted

    0.58     0.86  

Huntsman International

 
  Pro Forma   Pro Forma  
 
  Three months
ended
June 30, 2014
(Unaudited)
  Six months
ended
June 30, 2014
(Unaudited)
 

Revenues

  $ 3,395   $ 6,528  

Net income attributable to Huntsman International

    143     215  

4. INVENTORIES

        Inventories are stated at the lower of cost or market, with cost determined using last-in first-out ("LIFO"), first-in first-out, and average costs methods for different components of inventory. Inventories consisted of the following (dollars in millions):

 
  June 30,
2015
  December 31,
2014
 

Raw materials and supplies

  $ 482   $ 508  

Work in progress

    109     96  

Finished goods

    1,397     1,494  

Total

    1,988     2,098  

LIFO reserves

    (50 )   (73 )

Net inventories

  $ 1,938   $ 2,025  

        For June 30, 2015 and December 31, 2014, approximately 9% and 11%, respectively, of inventories were recorded using the LIFO cost method.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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:

        Creditors of these entities have no recourse to our general credit. See "Note 7. Debt—Direct and Subsidiary Debt." As the primary beneficiary of these variable interest entities at June 30, 2015, the joint ventures' assets, liabilities and results of operations are included in our condensed consolidated financial statements (unaudited).

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

5. VARIABLE INTEREST ENTITIES (Continued)

        The following table summarizes the carrying amount of our variable interest entities' assets and liabilities included in our condensed consolidated balance sheets (unaudited), before intercompany eliminations, as of June 30, 2015 and December 31, 2014 (dollars in millions):

 
  June 30,
2015
  December 31,
2014
 

Current assets

  $ 145   $ 186  

Property, plant and equipment, net

    326     340  

Other noncurrent assets

    86     70  

Deferred income taxes

    52     50  

Intangible assets

    38     39  

Goodwill

    13     14  

Total assets

  $ 660   $ 699  

Current liabilities

  $ 194   $ 356  

Long-term debt

    154     42  

Deferred income taxes

    8     9  

Other noncurrent liabilities

    97     97  

Total liabilities

  $ 453   $ 504  

        For more information regarding the Rockwood Acquisition, see "Note 3. Business Combinations—Rockwood Acquisition."

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

        As of June 30, 2015 and December 31, 2014, accrued restructuring costs by type of cost and initiative consisted of the following (dollars in millions):

 
  Workforce
reductions(1)
  Demolition and
decommissioning
  Non-cancelable
lease and contract
termination costs
  Other
restructuring
costs
  Total(2)  

Accrued liabilities as of January 1, 2015

  $ 87   $   $ 48   $ 3   $ 138  

2015 charges for 2014 and prior initiatives

    55     3     6     12     76  

2015 charges for 2015 initiatives

    44                 44  

Reversal of reserves no longer required

    (1 )               (1 )

2015 payments for 2014 and prior initiatives

    (25 )   (3 )   (3 )   (11 )   (42 )

2015 payments for 2015 initiatives

    (4 )               (4 )

Net activity of discontinued operations

            (1 )       (1 )

Foreign currency effect on liability balance

    (6 )       3         (3 )

Accrued liabilities as of June 30, 2015

  $ 150   $   $ 53   $ 4   $ 207  

(1)
The workforce reduction reserves relate to the termination of 1,344 positions, of which 1,268 positions had not been terminated as of June 30, 2015.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)

(2)
Accrued liabilities by initiatives were as follows (dollars in millions):

 
  June 30,
2015
  December 31,
2014
 

2013 and prior initiatives

  $ 68   $ 75  

2014 initiatives

    98     63  

2015 initiatives

    41      

Total

  $ 207   $ 138  

        Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative (dollars in millions):

 
  Polyurethanes   Performance
Products
  Advanced
Materials
  Textile
Effects
  Pigments and
Additives
  Discontinued
Operations
  Corporate
and Other
  Total  

Accrued liabilities as of January 1, 2015

  $ 6   $ 9   $ 5   $ 54   $ 59   $ 1   $ 4   $ 138  

2015 charges for 2014 and prior initiatives

    2     1     1     12     57         3     76  

2015 charges for 2015 initiatives

    13         3     1     27             44  

Reversal of reserves no longer required

                            (1 )   (1 )

2015 payments for 2014 and prior initiatives

    (4 )   (4 )   (2 )   (9 )   (19 )       (4 )   (42 )

2015 payments for 2015 initiatives

                    (4 )           (4 )

Net activity of discontinued operations

                        (1 )       (1 )

Foreign currency effect on liability balance

        (1 )       2     (4 )           (3 )

Accrued liabilities as of June 30, 2015

  $ 17   $ 5   $ 7   $ 60   $ 116   $   $ 2   $ 207  

Current portion of restructuring reserves

  $ 15   $ 5   $ 5   $ 23   $ 116   $   $ 2   $ 166  

Long-term portion of restructuring reserves

    2         2     37                 41  

        Details with respect to cash and noncash restructuring charges for the three and six months ended June 30, 2015 and 2014 by initiative are provided below (dollars in millions):

 
  Three months
ended
June, 2015
  Six months
ended
June 30, 2015
 

Cash charges:

             

2015 charges for 2014 and prior initiatives

  $ 34   $ 76  

2015 charges for 2015 initiatives

    20     44  

Pension related charges

    3     3  

Reversal of reserves no longer required

        (1 )

Accelerated depreciation

    47     75  

Non-cash charges

    10     10  

Total 2015 Restructuring, Impairment and Plant Closing Costs

  $ 114   $ 207  

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)


 
  Three months
ended
June 30, 2014
  Six months
ended
June 30, 2014
 

Cash charges:

             

2014 charges for 2013 and prior initiatives

  $ 10   $ 51  

2014 charges for 2014 initiatives

    6     6  

Pension related charges

    1     2  

Reversal of reserves no longer required

    (4 )   (8 )

Non-cash charges

        1  

Total 2014 Restructuring, Impairment and Plant Closing Costs

  $ 13   $ 52  

2015 RESTRUCTURING ACTIVITIES

        In June 2015, our Polyurethanes segment announced a restructuring program in Europe. In connection with this restructuring program, we recorded restructuring expense of $13 million in the six months ended June 30, 2015 related primarily to workforce reductions.

        In June 2015, our Advanced Materials segment initiated a restructuring program in Europe. In connection with this restructuring program, we recorded restructuring expense of $6 million in the six months ended June 30, 2015 related primarily to workforce reductions and accelerated depreciation recorded as restructuring, impairment and plant closing costs.

        On September 27, 2011, we announced plans to implement a significant restructuring of our Textile Effects segment, including the closure of our production facilities and business support offices in Basel, Switzerland, as part of an ongoing strategic program aimed at improving the Textile Effects segment's long-term global competitiveness. In connection with this plan, during the six months ended June 30, 2015, our Textile Effects segment recorded charges of $5 million for non-cancelable long-term contract termination costs, $3 million for decommissioning and $2 million in other restructuring costs associated with this initiative.

        On December 1, 2014, we announced that we are taking significant action to improve the global competitiveness of our Pigments and Additives segment. As part of a comprehensive restructuring program, we plan to reduce our workforce by approximately 900 positions. In connection with this restructuring program, during the six months ended June 30, 2015, our Pigments and Additives segment recorded charges of $50 million for workforce reductions, $3 million for pension related charges and $7 million in other restructuring costs associated with this initiative. We expect to complete this program by the middle of 2016.

        On February 12, 2015, we announced a plan to close the 'black end' manufacturing operations and ancillary activities at our Calais, France site, which will reduce our titanium dioxide capacity by approximately 100 kilotons, or 13% of our European titanium dioxide capacity. In connection with this announcement, we began to accelerate depreciation on the affected assets and recorded accelerated depreciation in the six months ended June 30, 2015 of $73 million as restructuring, impairment and plant closing costs. In addition, during the six months ended June 30, 2015, we recorded charges of

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)

$23 million for workforce reductions and non-cash charges of $10 million. We expect to complete this program by the end of 2016.

        On March 4, 2015, we announced plans to restructure our color pigments business, another step in our previously announced plan to significantly restructure our global Pigments and Additives segment, and recorded restructuring expense of approximately $4 million in the six months ended June 30, 2015 related to workforce reductions. We expect to complete this program by the end of 2015.

2014 RESTRUCTURING ACTIVITIES

        During 2013, our Performance Products segment initiated a restructuring program to refocus our surfactants business in Europe. In connection with this program, on June 25, 2014 we completed the sale of our European commodity surfactants business, including the ethoxylation facility in Lavera, France to Wilmar. In addition, Wilmar entered into a multi-year arrangement to purchase certain sulphated surfactant products from our facilities in St. Mihiel, France and Castiglione delle Stiviere, Italy. Additionally, we ceased production at our Patrica, Italy surfactants facility in 2014. During the six months ended June 30, 2014, we recorded charges of $23 million primarily related to workforce reductions.

        During the six months ended June 30, 2014, our Advanced Materials segment recorded charges of $9 million primarily related to workforce reductions with our global transformational change program designed to improve the segment's manufacturing efficiencies, enhance its commercial excellence and improve its long-term global competitiveness. Our Advanced Materials segment also reversed reserves of $4 million related to this initiative that were no longer required.

        On September 27, 2011, we announced plans to implement a significant restructuring of our Textile Effects segment, including the closure of our production facilities and business support offices in Basel, Switzerland, as part of an ongoing strategic program aimed at improving the Textile Effects segment's long-term global competitiveness. In connection with this plan, during the six months ended June 30, 2014, our Textile Effects segment recorded charges of $2 million for long-term contract termination costs, $4 million for decommissioning, $1 million for workforce reduction and $1 million in other restructuring costs associated with this initiative. Additionally, we reversed reserves of $2 million related to this initiative that were no longer required. In June 2014, we announced plans for the closure our Qingdao, China plant to be completed by December 2015. During the six months ended June 30, 2014, we recorded charges of $5 million primarily related to workforce reductions related to this initiative. Additionally, we recorded charges of $1 million for long-term contract termination costs and $1 million for workforce reductions for other restructuring initiatives.

        During the six months ended June 30, 2014, our Corporate and other segment recorded charges of $6 million and reversed reserves of $1 million primarily related to workforce reductions in association with a reorganization of our global information technology organization. Additionally, we recorded charges of $1 million for other restructuring initiatives.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. DEBT

        Outstanding debt consisted of the following (dollars in millions):

Huntsman Corporation

 
  June 30,
2015
  December 31,
2014
 

Senior Credit Facilities:

             

Term loans

  $ 2,509   $ 2,528  

Amounts outstanding under A/R programs

    217     229  

Senior notes

    1,884     1,596  

Senior subordinated notes

    198     531  

Variable interest entities

    165     207  

Other

    74     109  

Total debt—excluding debt to affiliates

  $ 5,047   $ 5,200  

Total current portion of debt

  $ 127   $ 267  

Long-term portion

    4,920     4,933  

Total debt—excluding debt to affiliates

  $ 5,047   $ 5,200  

Total debt—excluding debt to affiliates

  $ 5,047   $ 5,200  

Notes payable to affiliates-noncurrent

    7     6  

Total debt

  $ 5,054   $ 5,206  

Huntsman International

 
  June 30,
2015
  December 31,
2014
 

Senior Credit Facilities:

             

Term loans

  $ 2,509   $ 2,528  

Amounts outstanding under A/R programs

    217     229  

Senior notes

    1,884     1,596  

Senior subordinated notes

    198     531  

Variable interest entities

    165     207  

Other

    74     109  

Total debt—excluding debt to affiliates

  $ 5,047   $ 5,200  

Total current portion of debt

  $ 127   $ 267  

Long-term portion

    4,920     4,933  

Total debt—excluding debt to affiliates

  $ 5,047   $ 5,200  

Total debt—excluding debt to affiliates

  $ 5,047   $ 5,200  

Notes payable to affiliates-current

    100     100  

Notes payable to affiliates-noncurrent

    802     656  

Total debt

  $ 5,949   $ 5,956  

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. DEBT (Continued)

DIRECT AND SUBSIDIARY DEBT

        Huntsman Corporation's direct debt and guarantee obligations consist of a guarantee of certain indebtedness incurred from time to time to finance certain insurance premiums. Substantially all of our other debt, including the facilities described below, has been incurred by our subsidiaries (primarily Huntsman International). Huntsman Corporation is not a guarantor of such subsidiary debt.

        Certain of our subsidiaries are designated as nonguarantor subsidiaries and have third-party debt agreements. These debt agreements contain certain restrictions with regard to dividends, distributions, loans or advances. In certain circumstances, the consent of a third party would be required prior to the transfer of any cash or assets from these subsidiaries to us.

Senior Credit Facilities

        As of June 30, 2015, our senior credit facilities ("Senior Credit Facilities") consisted of our revolving credit facility ("Revolving Facility"), our extended term loan B facility ("Extended Term Loan B"), our extended term loan B facility—series 2 ("Extended Term Loan B—Series 2"), our 2014 term loan facility ("2014 Term Loan") and our term loan C facility ("Term Loan C") as follows (dollars in millions):

Facility
  Committed
Amount
  Principal
Outstanding
  Carrying
Value
  Interest Rate(3)   Maturity  

Revolving Facility

  $ 625   $ (1) $ (1) USD LIBOR plus 2.50%     2017  

Extended Term Loan B

    NA     943     942   USD LIBOR plus 2.50%     2017  

Extended Term Loan B—Series 2

    NA     335     335   USD LIBOR plus 3.00%     2017  

2014 Term Loan

    NA     1,194     1,183   USD LIBOR plus 3.00%(2)     2021  

Term Loan C

    NA     50     49   USD LIBOR plus 2.25%     2016  

(1)
We had no borrowings outstanding under our Revolving Facility; we had approximately $16 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving Facility.

(2)
The 2014 Term Loan is subject to a 0.75% LIBOR floor.

(3)
The applicable interest rate of the Senior Credit Facilities is subject to certain secured leverage ratio thresholds. As of June 30, 2015, the weighted average interest rate on our outstanding balances under the Senior Credit Facilities was approximately 3%.

        Our obligations under the Senior Credit Facilities are guaranteed by substantially all of our domestic subsidiaries and certain of our foreign subsidiaries (collectively, the "Guarantors"), and are secured by a first priority lien on substantially all of our domestic property, plant and equipment, the stock of all of our material domestic subsidiaries and certain foreign subsidiaries, and pledges of intercompany notes between certain of our subsidiaries.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. DEBT (Continued)

        We are launching an offer to certain of our Term Loan B holders to extend the maturity of their loans to 2019 in exchange for an upfront fee and a higher interest margin. If a significant aggregate amount of the Term Loan B holders accept this offer, the modifications to the maturity and interest margin would become effective in the third quarter of 2015.

A/R Programs

        Our U.S. accounts receivable securitization program ("U.S. A/R Program") and our European accounts receivable securitization program ("EU A/R Program" and collectively with the U.S. A/R Program, "A/R Programs") are structured so that we transfer certain of our trade receivables to the U.S. special purpose entity ("U.S. SPE") and the European special purpose entity ("EU SPE") in transactions intended to be true sales or true contributions. The receivables collateralize debt incurred by the U.S. SPE and the EU SPE. Information regarding our A/R Programs as of June 30, 2015 was as follows (monetary amounts in millions):

Facility(5)
  Maturity   Maximum Funding
Availability(1)
  Amount
Outstanding
  Interest Rate(2)(3)

U.S. A/R Program

  March 2018   $250   $90(4)   Applicable rate plus 0.95%

EU A/R Program

  March 2018   €225   €114   Applicable rate plus 1.10%

      (approximately $252)   (approximately $127))    

(1)
The amount of actual availability under our A/R Programs may be lower based on the level of eligible receivables sold, changes in the credit ratings of our customers, customer concentration levels and certain characteristics of the accounts receivable being transferred, as defined in the applicable agreements.

(2)
Each interest rate is defined in the applicable agreements. In addition, the U.S. SPE and the EU SPE are obligated to pay unused commitment fees to the lenders based on the amount of each lender's commitment.

(3)
Applicable rate for our U.S. A/R Program is defined by the lender as either USD LIBOR or CP rate. Applicable rate for our EU A/R Program is either GBP LIBOR, USD LIBOR or EURIBOR.

(4)
As of June 30, 2015, we had approximately $7 million (U.S. dollar equivalents) of letters of credit issued and outstanding under our U.S. A/R Program.

(5)
During the three months ended March 31, 2015, we entered into amendments to our A/R Programs that, among other things, extend the scheduled commitment termination dates and reduce the applicable borrowing margins.

        As of June 30, 2015 and December 31, 2014, $519 million and $472 million, respectively, of accounts receivable were pledged as collateral under our A/R Programs.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. DEBT (Continued)

Notes

        As of June 30, 2015, we had outstanding the following notes (monetary amounts in millions):

Notes
  Maturity   Interest
Rate
  Amount Outstanding

2020 Senior Notes

  November 2020     4.875 % $650 ($647 carrying value)

2021 Senior Notes

  April 2021     5.125 % €445 (€449 carrying value ($502))

2022 Senior Notes

  November 2022     5.125 % $400

2025 Senior Notes

  April 2025     4.25 % €300 ($335)

2021 Senior Subordinated Notes

  March 2021     8.625 % $195 ($198 carrying value)

        On March 31, 2015, Huntsman International completed a €300 million (approximately $326 million) offering of 4.25% senior notes due April 1, 2025 ("2025 Senior Notes"). On April 17, 2015, Huntsman International applied the net proceeds of this offering to redeem $289 million ($294 million carrying value) of its 8.625% senior subordinated notes due 2021 ("2021 Senior Subordinated Notes").

        The 2025 Senior Notes bear interest at 4.25% per year, payable semi-annually on April 1 and October 1, and are due on April 1, 2025. Huntsman International may redeem the 2025 Senior Notes in whole or in part at any time prior to January 1, 2025 at a price equal to 100% of the principal amount thereof plus a "make-whole" premium and accrued and unpaid interest.

        The 2020, 2021, 2022 and 2025 Senior Notes are general unsecured senior obligations of Huntsman International and are guaranteed on a general unsecured senior basis by the Guarantors. The indentures impose certain limitations on the ability of Huntsman International and its subsidiaries to, among other things, incur additional indebtedness secured by any principal properties, incur indebtedness of nonguarantor 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. Upon the occurrence of certain change of control events, holders of the 2020, 2021, 2022 and 2025 Senior Notes will have the right to require that Huntsman International purchase all or a portion of such holder's notes in cash at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of repurchase.

Redemption of Notes and Loss on Early Extinguishment of Debt

        During the six months ended June 30, 2015, we redeemed or repurchased the following notes (monetary amounts in millions):

Date of Redemption
  Notes   Principal
Amount of
Notes
Redeemed
  Amount Paid
(Excluding
Accrued Interest)
  Loss on
Early
Extinguishment
of Debt
 

January 2015

  2021 Senior Subordinated Notes   $ 37   $ 40   $ 3  

April 2015

  2021 Senior Subordinated Notes   $ 289   $ 311   $ 20  

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. DEBT (Continued)

        Approximately $195 million ($198 carrying value) amount of our 85/8% Senior Subordinated Notes due 2021 remain outstanding. By their terms, these remaining notes can be redeemed at 104.3125% of par beginning on September 15, 2015. It is our current intention to exercise our right to redeem these notes.

Variable Interest Entity Debt

        As of June 30, 2015, Arabian Amines Company, our consolidated 50%-owned joint venture, had $156 million outstanding under its loan commitments and debt financing arrangements. On April 29, 2015, Arabian Amines Company obtained a waiver of certain financial covenants from the lender as well as a waiver of prior noncompliance under the debt financing agreements. As of June 30, 2015, Arabian Amines Company is in compliance with its debt financing arrangements and we have classified $16 million as current debt and $140 million as long-term debt on our condensed consolidated balance sheets (unaudited). We do not guarantee these loan commitments and Arabian Amines Company is not a guarantor of any of our other debt obligations.

Other Debt

        On July 24, 2015, Huntsman Polyurethanes Shanghai ("HPS"), our consolidated splitting joint venture, entered into a financing arrangement to fund the construction of our MDI plant in China. As part of the financing, HPS has secured commitments of a RMB 669 million (approximately $110 million) term loan and a RMB 423 million (approximately $69 million) working capital facility. These facilities are unsecured, and we do not provide a guarantee of these loan commitments. We expect to begin drawing down on these facilities in the coming quarters.

Note Payable from Huntsman International to Huntsman Corporation

        As of June 30, 2015, we have a loan of $895 million to our subsidiary, Huntsman International (the "Intercompany Note"). The Intercompany Note is unsecured and $100 million of the outstanding amount is classified as current as of June 30, 2015 on our condensed consolidated balance sheets (unaudited). As of June 30, 2015, under the terms of the Intercompany Note, Huntsman International promises to pay us interest on the unpaid principal amount at a rate per annum based on the previous monthly average borrowing rate obtained under our U.S. A/R Program, less 10 basis points (provided that the rate shall not exceed an amount that is 25 basis points less than the monthly average borrowing rate obtained for the U.S. LIBOR-based borrowings under our Revolving Facility).

COMPLIANCE WITH COVENANTS

        We believe that we are in compliance with the covenants contained in the agreements governing our material debt instruments, including our Senior Credit Facilities, our A/R Programs and our notes.

        Our material financing arrangements contain certain covenants with which we must comply. A failure to comply with a covenant could result in a default under a financing arrangement unless we obtained an appropriate waiver or forbearance (as to which we can provide no assurance). A default under these material financing arrangements generally allows debt holders the option to declare the

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. DEBT (Continued)

underlying debt obligations immediately due and payable. Furthermore, certain of our material financing arrangements contain cross-default and cross-acceleration provisions under which a failure to comply with the covenants in one financing arrangement may result in an event of default under another financing arrangement.

        Our Senior Credit Facilities are subject to a single financial covenant (the "Leverage Covenant") which applies only to the Revolving Facility and is calculated at the Huntsman International level. The Leverage Covenant is applicable only if borrowings, letters of credit or guarantees are outstanding under the Revolving Facility (cash collateralized letters of credit or guarantees are not deemed outstanding). The Leverage Covenant is a net senior secured leverage ratio covenant which requires that Huntsman International's ratio of senior secured debt to EBITDA (as defined in the applicable agreement) is not more than 3.75 to 1.

        If in the future Huntsman International fails to comply with the Leverage Covenant, then we may not have access to liquidity under our Revolving Facility. If Huntsman International failed to comply with the Leverage Covenant at a time when we had uncollateralized loans or letters of credit outstanding under the Revolving Facility, Huntsman International would be in default under the Senior Credit Facilities, and, unless Huntsman International obtained a waiver or forbearance with respect to such default (as to which we can provide no assurance), Huntsman International could be required to pay off the balance of the Senior Credit Facilities in full, and we may not have further access to such facilities.

        The agreements governing our A/R Programs also contain certain receivable performance metrics. Any material failure to meet the applicable A/R Programs' metrics in the future could lead to an early termination event under the A/R Programs, which could require us to cease our use of such facilities, prohibiting us from additional borrowings against our receivables or, at the discretion of the lenders, requiring that we repay the A/R Programs in full. An early termination event under the A/R Programs would also constitute an event of default under our Senior Credit Facilities, which could require us to pay off the balance of the Senior Credit Facilities in full and could result in the loss of our Senior Credit Facilities.

8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

        We are exposed to market risks, such as changes in interest rates, foreign exchange rates and commodity pricing risks. From time to time, we enter into transactions, including transactions involving derivative instruments, to manage certain of these exposures.

        All derivatives, whether designated in hedging relationships or not, are recorded on our balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and the hedged items are recognized in earnings. If the derivative is designated as a cash flow hedge, changes in the fair value of the derivative are recorded in accumulated other comprehensive loss, to the extent effective, and will be recognized in the income statement when the hedged item affects earnings. To the extent applicable, we perform effectiveness assessments in order to use hedge accounting at each reporting period. For a derivative that does not qualify as a hedge, changes in fair value are recognized in earnings.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

        We also hedge our net investment in certain European operations. Changes in the fair value of the hedge in the net investment of certain European operations are recorded as an unrealized currency translation adjustment in accumulated other comprehensive loss.

        Our cash flows and earnings are subject to fluctuations due to exchange rate variation. Our revenues and expenses are denominated in various foreign currencies. From time to time, we may enter into foreign currency derivative instruments to minimize the short-term impact of movements in foreign currency rates. Where practicable, we generally net multicurrency cash balances among our subsidiaries to help reduce exposure to foreign currency exchange rates. Certain other exposures may be managed from time to time through financial market transactions, principally through the purchase of spot or forward foreign exchange contracts (generally with maturities of one year or less). We do not hedge our foreign currency exposures in a manner that would eliminate the effect of changes in exchange rates on our cash flows and earnings. As of June 30, 2015, we had approximately $223 million in notional amount (in U.S. dollar equivalents) outstanding in forward foreign currency contracts.

        Huntsman International has entered into several interest rate contracts to hedge the variability caused by monthly changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities. These swaps are designated as cash flow hedges and the effective portion of the changes in the fair value of the swaps are recorded in other comprehensive income (loss) (dollars in millions):

June 30, 2015
Notional
Value
  Effective Date   Maturity   Fixed
Rate
  Fair Value
$ 50   December 2014   April 2017     2.5 % $2 noncurrent liability
  50   January 2015   April 2017     2.5 % 2 noncurrent liability

        Beginning in 2009, Arabian Amines Company entered into a 12-year floating to fixed interest rate contract providing for a receipt of LIBOR interest payments for a fixed payment of 5.02%. In connection with the consolidation of Arabian Amines Company as of July 1, 2010, the interest rate contract is now included in our consolidated results. See "Note 5. Variable Interest Entities." The notional amount of the swap as of June 30, 2015 was $26 million, and the interest rate contract is not designated as a cash flow hedge. As of June 30, 2015, the fair value of the swap was $3 million and was recorded as a liability on our condensed consolidated balance sheets (unaudited). For the three and six months ended June 30, 2015, we recorded a reduction of interest expense of nil each due to changes in fair value of the swap.

        In November 2014, we entered into two five year cross-currency interest rate contracts and one eight year cross-currency interest rate contract to swap an aggregate notional $200 million for an aggregate notional €161 million. This swap is designated as a hedge of net investment for financial reporting purposes. Under the cross-currency interest rate contract, we will receive fixed USD payments of $5 million semiannually on May 15 and November 15 (equivalent to an annual rate of 5.125%) and make interest payments of approximately €3 million (equivalent to an annual rate of approximately 3.6%). As of June 30, 2015, the fair value of this swap was $25 million and was recorded in noncurrent assets.

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

        On March 17, 2010, we entered into three five year cross-currency interest rate contracts to swap an aggregate notional $350 million for an aggregate notional €255 million. This swap was designated as a hedge of net investment for financial reporting purposes. During the three months ended March 31, 2015, we terminated these cross-currency interest rate contracts and received $66 million in payments from the counterparties.

        We finance certain of our non-U.S. subsidiaries with intercompany loans that are, in many cases, denominated in currencies other than the entities' functional currency. We manage the net foreign currency exposure created by this debt through various means, including cross-currency swaps, the designation of certain intercompany loans as permanent loans because they are not expected to be repaid in the foreseeable future and the designation of certain debt and swaps as net investment hedges.

        Foreign currency transaction gains and losses on intercompany loans that are not designated as permanent loans are recorded in earnings. Foreign currency transaction gains and losses on intercompany loans that are designated as permanent loans are recorded in other comprehensive income. From time to time, we review such designation of intercompany loans.

        We review our non-U.S. dollar denominated debt and derivative instruments to determine the appropriate amounts designated as hedges. As of June 30, 2015, we have designated approximately €526 million (approximately $588 million) of euro-denominated debt and cross-currency interest rate contracts as a hedge of our net investment. For the three and six months ended June 30, 2015, the amount of (loss) gain recognized on the hedge of our net investment was $(19) million and $57 million, respectively, and was recorded in other comprehensive income (loss) on our condensed consolidated statements of comprehensive income (loss) (unaudited). As of June 30, 2015, we had approximately €1,369 million (approximately $1,531 million) in net euro assets.

9. FAIR VALUE

        The fair values of financial instruments were as follows (dollars in millions):

 
  June 30, 2015   December 31, 2014  
 
  Carrying
Value
  Estimated
Fair Value
  Carrying
Value
  Estimated
Fair Value
 

Non-qualified employee benefit plan investments

  $ 25   $ 25   $ 22   $ 22  

Investments in equity securities

    21     21          

Cross-currency interest rate contracts

    25     25     48     48  

Interest rate contracts

    (6 )   (6 )   (7 )   (7 )

Long-term debt (including current portion)

    (5,047 )   (5,062 )   (5,200 )   (5,210 )

        The carrying amounts reported in our condensed consolidated balance sheets (unaudited) of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. The fair values of non-qualified employee benefit plan investments and investments in equity securities are obtained through market observable pricing using prevailing market prices. The estimated fair values of our long-term debt are

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

9. FAIR VALUE (Continued)

based on quoted market prices for the identical liability when traded as an asset in an active market (Level 1).

        The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2015 and December 31, 2014. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since June 30, 2015 and current estimates of fair value may differ significantly from the amounts presented herein.

        The following assets and liabilities are measured at fair value on a recurring basis (dollars in millions):

 
   
  Fair Value Amounts Using  
Description
  June 30,
2015
  Quoted prices
in active
markets for
identical assets
(Level 1)(4)
  Significant
other
observable
inputs
(Level 2)(4)
  Significant
unobservable
inputs
(Level 3)
 

Assets:

                         

Available-for-sale equity securities:

                         

Equity mutual f