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TABLE OF CONTENTS

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, 2016
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

001-32427	Huntsman Corporation	Delaware	42-1648585
	10003 Woodloch Forest Drive The Woodlands, Texas 77380 (281) 719-6000
333-85141	Huntsman International LLC	Delaware	87-0630358
	10003 Woodloch Forest Drive The Woodlands, Texas 77380 (281) 719-6000

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 19, 2016, 238,158,879 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, 2016

TABLE OF CONTENTS



PART I	FINANCIAL INFORMATION	3
ITEM 1.	Condensed Consolidated Financial Statements (Unaudited):	3
	Huntsman Corporation and Subsidiaries:
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Condensed Consolidated Statements of Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Huntsman International LLC and Subsidiaries:
	Condensed Consolidated Balance Sheets	9
	Condensed Consolidated Statements of Operations	10
	Condensed Consolidated Statements of Comprehensive Income (Loss)	11
	Condensed Consolidated Statements of Equity	12
	Condensed Consolidated Statements of Cash Flows	13
	Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:
	Notes to Condensed Consolidated Financial Statements	15
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	63
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	84
ITEM 4.	Controls and Procedures	86
PART II	OTHER INFORMATION	87
ITEM 1.	Legal Proceedings	87
ITEM 1A.	Risk Factors	87
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	89
ITEM 6.	Exhibits	90

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions, Except Share and Per Share Amounts)

	June 30, 2016			December 31, 2015

ASSETS
Current assets:
Cash and cash equivalents(a)	$	373		$	257
Restricted cash(a)		10			12
Accounts and notes receivable (net of allowance for doubtful accounts of $29 and $26, respectively), ($492 and $438 pledged as collateral, respectively)(a)		1,532			1,420
Accounts receivable from affiliates		14			29
Inventories(a)		1,522			1,692
Prepaid expenses		55			112
Other current assets(a)		285			312

Total current assets		3,791			3,834
Property, plant and equipment, net(a)		4,377			4,446
Investment in unconsolidated affiliates		335			347
Intangible assets, net(a)		97			86
Goodwill		123			116
Deferred income taxes		407			418
Other noncurrent assets(a)		597			573

Total assets	$	9,727		$	9,820



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable(a)	$	963		$	1,034
Accounts payable to affiliates		28			27
Accrued liabilities(a)		602			686
Current portion of debt(a)		96			170

Total current liabilities		1,689			1,917
Long-term debt(a)		4,653			4,625
Notes payable to affiliates		1			1
Deferred income taxes		466			422
Other noncurrent liabilities(a)		1,210			1,226

Total liabilities		8,019			8,191
Commitments and contingencies (Notes 12 and 13)
Equity
Huntsman Corporation stockholders' equity:
Common stock $0.01 par value, 1,200,000,000 shares authorized, 250,764,279 and 249,483,541 shares issued and 236,298,003 and 237,080,026 shares outstanding, respectively		3			3
Additional paid-in capital		3,443			3,407
Treasury stock, 12,607,223 and 11,162,454 shares, respectively		(150	)		(135	)
Unearned stock-based compensation		(24	)		(17	)
Accumulated deficit		(447	)		(528	)
Accumulated other comprehensive loss		(1,296	)		(1,288	)

Total Huntsman Corporation stockholders' equity		1,529			1,442
Noncontrolling interests in subsidiaries		179			187

Total equity		1,708			1,629

Total liabilities and equity	$	9,727		$	9,820

(a): At June 30, 2016 and December 31, 2015, respectively, $25 and $34 of cash and cash equivalents, $10 and $12 of restricted cash, $29 and $26 of accounts and notes receivable (net), $39 and $54 of inventories, $5 each of other current assets, $295 and $307 of property, plant and equipment (net), $34 and $36 of intangible assets (net), $43 and $38 of other noncurrent assets, $76 and $82 of accounts payable, $33 and $27 of accrued liabilities, $19 and $15 of current portion of debt, $123 and $137 of long-term debt, and $55 and $54 of other noncurrent liabilities from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 4. Variable Interest Entities."

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Millions, Except Per Share Amounts)

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

	2016			2015			2016			2015
Revenues:
Trade sales, services and fees, net	$	2,512		$	2,697		$	4,833		$	5,257
Related party sales		32			43			66			72

Total revenues		2,544			2,740			4,899			5,329
Cost of goods sold		2,087			2,191			4,026			4,330

Gross profit		457			549			873			999
Operating expenses:
Selling, general and administrative		234			249			457			495
Research and development		39			41			76			83
Other operating income, net		(21	)		(1	)		(16	)		(9	)
Restructuring, impairment and plant closing costs		29			114			42			207

Total expenses		281			403			559			776

Operating income		176			146			314			223
Interest expense, net		(50	)		(53	)		(100	)		(109	)
Equity in income of investment in unconsolidated affiliates		2			3			3			5
Loss on early extinguishment of debt		(2	)		(20	)		(2	)		(23	)
Other income (loss)		1			(1	)		2			(2	)

Income from continuing operations before income taxes		127			75			217			94
Income tax expense		(32	)		(34	)		(59	)		(36	)

Income from continuing operations		95			41			158			58
Loss from discontinued operations		(1	)		(2	)		(2	)		(4	)

Net income		94			39			156			54
Net income attributable to noncontrolling interests		(7	)		(10	)		(13	)		(20	)

Net income attributable to Huntsman Corporation	$	87		$	29		$	143		$	34



Basic income (loss) per share:
Income from continuing operations attributable to Huntsman Corporation common stockholders	$	0.37		$	0.13		$	0.62		$	0.16
Loss from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax		—			(0.01	)		(0.01	)		(0.02	)

Net income attributable to Huntsman Corporation common stockholders	$	0.37		$	0.12		$	0.61		$	0.14



Weighted average shares		236.3			244.1			236.2			244.0



Diluted income (loss) per share:
Income from continuing operations attributable to Huntsman Corporation common stockholders	$	0.36		$	0.13		$	0.61		$	0.16
Loss from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax		—			(0.01	)	$	(0.01	)		(0.02	)

Net income attributable to Huntsman Corporation common stockholders	$	0.36		$	0.12		$	0.60		$	0.14



Weighted average shares		239.5			247.5			238.3			247.3



Amounts attributable to Huntsman Corporation common stockholders:
Income from continuing operations	$	88		$	31		$	145		$	38
Loss from discontinued operations, net of tax		(1	)		(2	)		(2	)		(4	)

Net income	$	87		$	29		$	143		$	34



Dividends per share	$	0.125		$	0.125		$	0.25		$	0.25

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In Millions)

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

	2016			2015			2016			2015
Net income	$	94		$	39		$	156		$	54
Other comprehensive (loss) income, net of tax:
Foreign currency translations adjustments		(53	)		40			(26	)		(142	)
Pension and other postretirement benefits adjustments		11			9			24			22
Other, net		5			10			(6	)		9

Other comprehensive (loss) income, net of tax		(37	)		59			(8	)		(111	)

Comprehensive income (loss)		57			98			148			(57	)
Comprehensive income attributable to noncontrolling interests		(5	)		(12	)		(13	)		(15	)

Comprehensive income (loss) attributable to Huntsman Corporation	$	52		$	86		$	135		$	(72	)

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In Millions, Except Share Amounts)

	Huntsman Corporation Stockholders' Equity

	Shares
	Shares																	Accumulated other comprehensive loss
	Common stock			Common stock		Additional paid-in capital			Treasury stock			Unearned stock-based compensation			Accumulated deficit			Accumulated other comprehensive loss			Noncontrolling interests in subsidiaries			Total equity
Balance, January 1, 2016		237,080,026		$	3	$	3,407		$	(135	)	$	(17	)	$	(528	)	$	(1,288	)	$	187		$	1,629
Net income		—			—		—			—			—			143			—			13			156
Other comprehensive income		—			—		—			—			—			—			(8	)		—			(8	)
Issuance of nonvested stock awards		—			—		17			—			(17	)		—			—			—			—
Vesting of stock awards		886,555			—		2			—			—			—			—			—			2
Recognition of stock-based compensation		—			—		5			—			10			—			—			—			15
Repurchase and cancellation of stock awards		(246,663	)		—		—			—			—			(2	)		—			—			(2	)
Stock options exercised		22,854			—		—			—			—			—			—			—			—
Dividends paid to noncontrolling interests		—			—		—			—			—			—			—			(21	)		(21	)
Treasury stock repurchased		(1,444,769	)		—		15			(15	)		—			—			—			—			—
Excess tax shortfall related to stock-based compensation		—			—		(3	)		—			—			—			—			—			(3	)
Dividends declared on common stock		—			—		—			—			—			(60	)		—			—			(60	)

Balance, June 30, 2016		236,298,003		$	3	$	3,443		$	(150	)	$	(24	)	$	(447	)	$	(1,296	)	$	179		$	1,708



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

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

	Six months ended June 30,

	2016			2015
Operating Activities:
Net income	$	156		$	54
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of investment in unconsolidated affiliates		(3	)		(5	)
Depreciation and amortization		209			194
Loss on disposal of businesses/assets, net		2			—
Loss on early extinguishment of debt		2			23
Noncash interest expense		8			8
Noncash restructuring and impairment charges		9			85
Deferred income taxes		52			(59	)
Noncash gain on foreign currency transactions		—			(4	)
Stock-based compensation		17			17
Portion of insurance proceeds representing cash provided by investing activities		(8	)		—
Other, net		(1	)		4
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts and notes receivable		(90	)		(142	)
Inventories		177			7
Prepaid expenses		14			14
Other current assets		22			62
Other noncurrent assets		(36	)		(99	)
Accounts payable		(56	)		12
Accrued liabilities		(39	)		31
Other noncurrent liabilities		8			(21	)

Net cash provided by operating activities		443			181

Investing Activities:
Capital expenditures		(189	)		(296	)
Insurance proceeds for recovery of property damage		8			—
Cash received from unconsolidated affiliates		19			25
Investment in unconsolidated affiliates		(14	)		(32	)
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
Cash received from termination of cross-currency interest rate contracts		—			66
Change in restricted cash		2			—

Net cash used in investing activities		(174	)		(233	)

(Continued)

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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Millions)

	Six months ended June 30,

	2016			2015
Financing Activities:
Net repayments on overdraft facilities	$	(1	)	$	(2	)
Repayments of short-term debt		(18	)		(17	)
Borrowings on short-term debt		6			—
Repayments of long-term debt		(582	)		(388	)
Proceeds from issuance of long-term debt		547			326
Repayments of notes payable		(16	)		(15	)
Borrowings on notes payable		2			1
Debt issuance costs paid		(8	)		(5	)
Call premiums related to early extinguishment of debt		—			(26	)
Contingent consideration paid for acquisition		—			(4	)
Dividends paid to common stockholders		(60	)		(62	)
Dividends paid to noncontrolling interests		(21	)		(4	)
Repurchase and cancellation of stock awards		(2	)		(7	)
Proceeds from issuance of common stock		—			1
Excess tax benefit related to stock-based compensation		—			1
Other, net		—			(1	)

Net cash used in financing activities		(153	)		(202	)

Effect of exchange rate changes on cash		—			(7	)

Increase (decrease) in cash and cash equivalents		116			(261	)
Cash and cash equivalents at beginning of period		257			860

Cash and cash equivalents at end of period	$	373		$	599



Supplemental cash flow information:
Cash paid for interest	$	103		$	115
Cash paid for income taxes		21			30

As of June 30, 2016 and 2015, the amount of capital expenditures in accounts payable was $59 million and $55 million, respectively.

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions)

	June 30, 2016			December 31, 2015

ASSETS
Current assets:
Cash and cash equivalents(a)	$	373		$	257
Restricted cash(a)		10			12
Accounts and notes receivable (net of allowance for doubtful accounts of $29 and $26, respectively), ($492 and $438 pledged as collateral, respectively)(a)		1,532			1,420
Accounts receivable from affiliates		329			340
Inventories(a)		1,522			1,692
Prepaid expenses		54			111
Other current assets(a)		279			306

Total current assets		4,099			4,138
Property, plant and equipment, net(a)		4,347			4,410
Investment in unconsolidated affiliates		335			347
Intangible assets, net(a)		98			86
Goodwill		123			116
Deferred income taxes		407			418
Other noncurrent assets(a)		596			573

Total assets	$	10,005		$	10,088



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable(a)	$	963		$	1,034
Accounts payable to affiliates		57			52
Accrued liabilities(a)		599			683
Notes payable to affiliates		100			100
Current portion of debt(a)		96			170

Total current liabilities		1,815			2,039
Long-term debt(a)		4,653			4,625
Notes payable to affiliates		697			698
Deferred income taxes		462			418
Other noncurrent liabilities(a)		1,212			1,224

Total liabilities		8,839			9,004
Commitments and contingencies (Notes 12 and 13)
Equity
Huntsman International LLC members' equity:
Members' equity, 2,728 units issued and outstanding		3,209			3,196
Accumulated deficit		(901	)		(983	)
Accumulated other comprehensive loss		(1,321	)		(1,316	)

Total Huntsman International LLC members' equity		987			897
Noncontrolling interests in subsidiaries		179			187

Total equity		1,166			1,084

Total liabilities and equity	$	10,005		$	10,088

(a): At June 30, 2016 and December 31, 2015, respectively, $25 and $34 of cash and cash equivalents, $10 and $12 of restricted cash, $29 and $26 of accounts and notes receivable (net), $39 and $54 of inventories, $5 each of other current assets, $295 and $307 of property, plant and equipment (net), $34 and $36 of intangible assets (net), $43 and $38 of other noncurrent assets, $76 and $82 of accounts payable, $33 and $27 of accrued liabilities, $19 and $15 of current portion of debt, $123 and $137 of long-term debt, and $55 and $54 of other noncurrent liabilities from consolidated variable interest entities are included in the respective balance sheet captions above. See "Note 4. Variable Interest Entities."

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Millions)

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

	2016			2015			2016			2015
Revenues:
Trade sales, services and fees, net	$	2,512		$	2,697		$	4,833		$	5,257
Related party sales		32			43			66			72

Total revenues		2,544			2,740			4,899			5,329
Cost of goods sold		2,086			2,191			4,024			4,328

Gross profit		458			549			875			1,001
Operating expenses:
Selling, general and administrative		234			248			455			492
Research and development		39			41			76			83
Other operating income, net		(21	)		(2	)		(16	)		(9	)
Restructuring, impairment and plant closing costs		29			114			42			207

Total expenses		281			401			557			773

Operating income		177			148			318			228
Interest expense		(53	)		(56	)		(106	)		(114	)
Equity in income of investment in unconsolidated affiliates		2			3			3			5
Loss on early extinguishment of debt		(2	)		(20	)		(2	)		(23	)
Other income (loss)		1			—			2			(1	)

Income from continuing operations before income taxes		125			75			215			95
Income tax expense		(31	)		(34	)		(58	)		(37	)

Income from continuing operations		94			41			157			58
Loss from discontinued operations, net of tax		(1	)		(2	)		(2	)		(4	)

Net income		93			39			155			54
Net income attributable to noncontrolling interests		(7	)		(10	)		(13	)		(20	)

Net income attributable to Huntsman International LLC	$	86		$	29		$	142		$	34

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In Millions)

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

	2016			2015			2016			2015
Net income	$	93		$	39		$	155		$	54
Other comprehensive (loss) income, net of tax:
Foreign currency translations adjustment		(54	)		39			(26	)		(143	)
Pension and other postretirement benefits adjustments		11			11			26			26
Other, net		6			10			(5	)		9

Other comprehensive (loss) income, net of tax		(37	)		60			(5	)		(108	)

Comprehensive income (loss)		56			99			150			(54	)
Comprehensive income attributable to noncontrolling interests		(5	)		(12	)		(13	)		(15	)

Comprehensive income (loss) attributable to Huntsman International LLC	$	51		$	87		$	137		$	(69	)

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In Millions, Except Unit Amounts)

	Huntsman International LLC Members

	Members' equity
	Members' equity					Accumulated deficit			Accumulated other comprehensive loss			Noncontrolling interests in subsidiaries
	Units		Amount			Accumulated deficit			Accumulated other comprehensive loss			Noncontrolling interests in subsidiaries			Total equity
Balance, January 1, 2016		2,728	$	3,196		$	(983	)	$	(1,316	)	$	187		$	1,084
Net income		—		—			142			—			13			155
Dividends paid to parent		—		—			(60	)		—			—			(60	)
Other comprehensive income		—		—			—			(5	)		—			(5	)
Contribution from parent		—		16			—			—			—			16
Dividends paid to noncontrolling interests		—		—			—			—			(21	)		(21	)
Excess tax shortfall related to stock-based compensation		—		(3	)		—			—			—			(3	)

Balance, June 30, 2016		2,728	$	3,209		$	(901	)	$	(1,321	)	$	179		$	1,166



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

See accompanying notes to condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

	Six months ended June 30,

	2016			2015
Operating Activities:
Net income	$	155		$	54
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of investment in unconsolidated affiliates		(3	)		(5	)
Depreciation and amortization		203			187
Loss on disposal of businesses/assets, net		2			—
Loss on early extinguishment of debt		2			23
Noncash interest expense		13			12
Noncash restructuring and impairment charges		9			85
Deferred income taxes		53			(59	)
Noncash gain on foreign currency transactions		—			(4	)
Noncash compensation		16			16
Portion of insurance proceeds representing cash provided by investing activities		(8	)		—
Other, net		(1	)		6
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts and notes receivable		(90	)		(142	)
Inventories		177			7
Prepaid expenses		15			15
Other current assets		22			55
Other noncurrent assets		(36	)		(99	)
Accounts payable		(62	)		8
Accrued liabilities		(38	)		39
Other noncurrent liabilities		12			(17	)

Net cash provided by operating activities		441			181

Investing Activities:
Capital expenditures		(189	)		(296	)
Insurance proceeds for recovery of property damage		8			—
Cash received from unconsolidated affiliates		19			25
Investment in unconsolidated affiliates		(14	)		(32	)
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
Increase in receivable from affiliate		—			(4	)
Cash received from termination of cross-currency interest rate contracts		—			66
Change in restricted cash		2			—

Net cash used in investing activities		(174	)		(237	)

(Continued)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Millions)

	Six months ended June 30,

	2016			2015
Financing Activities:
Net repayments on overdraft facilities	$	(1	)	$	(2	)
Repayments of short-term debt		(18	)		(17	)
Borrowings on short-term debt		6			—
Repayments of long-term debt		(582	)		(388	)
Proceeds from issuance of long-term debt		547			326
Repayments of notes payable to affiliate		(1	)		(50	)
Proceeds from issuance of notes payable from affiliate		—			195
Repayments of notes payable		(16	)		(15	)
Borrowings on notes payable		2			1
Debt issuance costs paid		(8	)		(5	)
Call premiums related to early extinguishment of debt		—			(26	)
Contingent consideration paid for acquisition		—			(4	)
Dividends paid to noncontrolling interests		(21	)		(4	)
Dividends paid to parent		(60	)		(61	)
Excess tax benefit related to stock-based compensation		—			1
Other, net		1			(1	)

Net cash used in financing activities		(151	)		(50	)

Effect of exchange rate changes on cash		—			(7	)

Increase (decrease) in cash and cash equivalents		116			(113	)
Cash and cash equivalents at beginning of period		257			710

Cash and cash equivalents at end of period	$	373		$	597



Supplemental cash flow information:
Cash paid for interest	$	103		$	115
Cash paid for income taxes		21			30

As of June 30, 2016 and 2015, the amount of capital expenditures in accounts payable was $59 million and $55 million, respectively. During each of the six months ended June 30, 2016 and 2015, Huntsman Corporation contributed $16 million, related to stock-based compensation.

See accompanying notes to condensed consolidated financial statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 wholly-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 unaudited interim condensed consolidated financial statements and Huntsman International's unaudited interim condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP" or "U.S. GAAP") and in management's opinion reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results of operations, comprehensive income, 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 10-K for the year ended December 31, 2015 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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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 wholly-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 for both our Company and Huntsman International. The differences between our financial statements and Huntsman International's financial statements relate primarily to the following:

•: purchase accounting recorded at our Company for the 2003 step-acquisition of Huntsman International Holdings LLC, the former parent company of Huntsman International that was merged into Huntsman International in 2005;
•: the different capital structures; and
•: a note payable from Huntsman International to us.

PRINCIPLES OF CONSOLIDATION

Our condensed consolidated financial statements 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.

RECENT DEVELOPMENTS

Prepayment of Debt

On July 22, 2016, Huntsman International prepaid $100 million of the 2015 extended term loan B facility due 2019 ("2015 Extended Term Loan B"). For more information, see "Note 6. Debt—Direct and Subsidiary Debt."

Sale of European Surfactants Manufacturing Facilities

On July 29, 2016, Huntsman Investments (Netherlands) BV ("HIBV"), a wholly-owned subsidiary of Huntsman Corporation, entered into an Exclusivity and Put Option Agreement (the "Put Option Agreement") with Innospec International LTD ("Innospec"), a wholly-owned subsidiary of Innospec Inc. The Put Option Agreement, together with a Share and Asset Purchase Agreement in an agreed form and attached thereto as an exhibit (the "Purchase Agreement," and together with the Put Option Agreement, the "Acquisition Agreements"), set forth the terms of a commitment from Innospec to purchase HIBV's European surfactants manufacturing facilities and related assets for an enterprise value of $225 million. Pursuant to the terms of the Acquisition Agreements, HIBV would retain its accounts receivable and certain trade payables. The purchase price would also be subject to additional working capital and other adjustments (the "Transaction"). Pursuant to the terms of the Acquisition Agreements, Innospec, upon exercise of the Put Option Agreement by HIBV and following satisfaction of closing conditions referred to below, would acquire HIBV's manufacturing facilities located in

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. GENERAL (Continued)

Saint-Mihiel, France; Castiglione delle Stiviere, Italy; and Barcelona, Spain and HIBV would enter into supply and long-term tolling arrangements with Innospec to continue supplying certain surfactants and other key products globally.

The Acquisition Agreements contain customary representations, warranties, and covenants and provide for indemnification rights with respect to a breach of a representation, warranty or covenant by either party, as well as for other specified matters.

The Transaction is subject to the satisfaction or waiver of customary closing conditions, including, among others: (i) the representative bodies consultation processes required by French legislation, (ii) clearance by any applicable competition law authorities, and (iii) the absence of a change that has had or is reasonably likely to have a material adverse effect on the business. The Acquisition Agreements also contain certain customary termination rights for each of HIBV and Innospec.

The foregoing description of the terms of the Acquisition Agreements is qualified in its entirety by reference to such Agreements, which will be filed subsequently with the Securities and Exchange Commission.

The Acquisition Agreements will be included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about HIBV. The representations, warranties and covenants contained in the Acquisition Agreements were made only for purposes of such Agreements and as of specific dates, were solely for the benefit of the parties to such Agreements, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Acquisition Agreements. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the Acquisition Agreements instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors.

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 2016

In January 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 U.S. 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. We adopted the amendments in this ASU effective January 1, 2016, and the initial adoption of

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2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)

the amendments in this ASU did not have a significant impact on our condensed consolidated financial statements.

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 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. We adopted the amendments in this ASU effective January 1, 2016, and the initial adoption of the amendments in this ASU did not have a significant impact on our condensed consolidated financial statements.

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. We adopted the amendments in this ASU effective January 1, 2016, and the initial adoption of the amendments in this ASU did not have a significant impact on our condensed consolidated financial statements.

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. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, deferring the effective date of ASU No. 2014-09 for all entities by one year. Further, in March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), clarifying the implementation guidance on principal versus agent considerations, in April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, clarifying the implementation guidance on identifying performance obligations in a contract and determining whether an entity's promise to grant a license provides a customer with either a right to use the entity's intellectual property (which is satisfied at a point in time) or a right to access the entity's intellectual property (which is satisfied over time), and in May 2016, the FASB issued ASU No. 2016-12, Revenue from Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, providing clarifications and practical expedients for certain narrow aspects in Topic 606. The amendments in these ASUs are effective for annual reporting periods

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2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)

beginning after December 15, 2017, including interim periods within that reporting period. The amendments in ASU No. 2014-09, ASU No. 2016-08, ASU No. 2016-10 and ASU No. 2016-12 should be applied retrospectively, and early application is permitted. We are currently evaluating the impact of the adoption of the amendments in ASU No. 2014-09, ASU No. 2016-08, ASU No. 2016-10 and ASU No. 2016-12 on our condensed consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, 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 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 amendments in this ASU to have a significant impact on our condensed consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amendments in this ASU will increase transparency and comparability among entities by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this ASU will require lessees to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application of the amendments in this ASU is permitted for all entities. Reporting entities are required to recognize and measure leases under these amendments at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact of the adoption of the amendments in this ASU on our condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in this ASU simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption of the amendments in this ASU is permitted in any interim or annual period. We do not expect the adoption of the amendments in this ASU to have a significant impact on our condensed consolidated financial statements.

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3. INVENTORIES

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

	June 30, 2016			December 31, 2015

Raw materials and supplies	$	353		$	389
Work in progress		110			125
Finished goods		1,101			1,221

Total		1,564			1,735
LIFO reserves		(42	)		(43	)

Net inventories	$	1,522		$	1,692

For both June 30, 2016 and December 31, 2015, approximately 9% of inventories were recorded using the LIFO cost method.

4. 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:

•: Rubicon LLC is our 50%-owned joint venture with Chemtura that manufactures products for our Polyurethanes and Performance Products segments. The structure of the joint venture is such that the total equity investment at risk is not sufficient to permit the joint venture to finance its activities without additional financial support. By virtue of the operating agreement with this joint venture, we purchase a majority of the output, absorb a majority of the operating costs and provide a majority of the additional funding.
•: Pacific Iron Products Sdn Bhd is our 50%-owned joint venture with Coogee Chemicals that manufactures products for our Pigments and Additives segment. In this joint venture, we supply all the raw materials through a fixed cost supply contract, operate the manufacturing facility and market the products of the joint venture to customers. Through a fixed price raw materials supply contract with the joint venture, we are exposed to risk related to the fluctuation of raw material pricing.
•: Arabian Amines Company is our 50%-owned joint venture with Zamil group that manufactures products for our Performance Products segment. As required in the operating agreement governing this joint venture, we purchase all of Arabian Amines Company's production and sell it to our customers. Substantially all of the joint venture's activities are conducted on our behalf.
•: Sasol-Huntsman is our 50%-owned joint venture with Sasol that owns and operates a maleic anhydride facility in Moers, Germany. This joint venture manufactures products for our Performance Products segment. The joint venture uses our technology and expertise, and we bear a disproportionate amount of risk of loss due to a related-party loan to Sasol-Huntsman for which we bear the default risk.

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4. VARIABLE INTEREST ENTITIES (Continued)

•: Viance is our 50%-owned joint venture with Dow Chemical. Viance markets timber treatment products for our Pigments and Additives segment. The joint venture sources all of its products through a contract manufacturing arrangement at our Harrisburg, North Carolina facility, and we bear a disproportionate amount of working capital risk of loss due to the supply arrangement whereby we control manufacturing on Viance's behalf.

Creditors of these entities have no recourse to our general credit. See "Note 6. Debt—Direct and Subsidiary Debt." As the primary beneficiary of these variable interest entities at June 30, 2016, the joint ventures' assets, liabilities and results of operations are included in our condensed consolidated financial statements.

The following table summarizes the carrying amount of our variable interest entities' assets and liabilities included in our condensed consolidated balance sheets, before intercompany eliminations, as of June 30, 2016 and our consolidated balance sheets as of December 31, 2015 (dollars in millions):

	June 30, 2016		December 31, 2015

Current assets	$	91	$	121
Property, plant and equipment, net		295		307
Other noncurrent assets		112		95
Deferred income taxes		35		35
Intangible assets		34		36
Goodwill		13		13

Total assets	$	580	$	607



Current liabilities	$	155	$	159
Long-term debt		125		140
Deferred income taxes		11		11
Other noncurrent liabilities		55		54

Total liabilities	$	346	$	364

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5. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

As of June 30, 2016 and December 31, 2015, 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, 2016	$	109		$	16		$	38		$	5		$	168
2016 charges for 2015 and prior initiatives		4			1			1			22			28
2016 charges for 2016 initiatives		4			—			—			2			6
Reversal of reserves no longer required		(1	)		—			—			—			(1	)
Distribution of prefunded restructuring costs		(39	)		(2	)		—			(1	)		(42	)
2016 payments for 2015 and prior initiatives		(27	)		(3	)		(2	)		(22	)		(54	)
2016 payments for 2016 initiatives		—			—			—			(2	)		(2	)
Foreign currency effect on liability balance		—			—			1			—			1

Accrued liabilities as of June 30, 2016	$	50		$	12		$	38		$	4		$	104

(1): The workforce reduction reserves relate to the termination of 545 positions, of which 485 positions had not been terminated as of June 30, 2016.
(2): Accrued liabilities by initiatives were as follows (dollars in millions):

	June 30, 2016		December 31, 2015

2014 and prior initiatives		86		143
2015 initiatives		14		25
2016 initiatives		4		—

Total	$	104	$	168

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

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			Discontinued Operations		Corporate and Other			Total

Accrued liabilities as of January 1, 2016	$	5		$	9		$	4	$	55		$	90		$	1	$	4		$	168
2016 charges for 2015 and prior initiatives		—			10			—		4			12			—		2			28
2016 charges for 2016 initiatives		2			—			—		1			3			—		—			6
Reversal of reserves no longer required		—			—			—		(1	)		—			—		—			(1	)
Distribution of prefunded restructuring costs		—			(4	)		—		(2	)		(36	)		—		—			(42	)
2016 payments for 2015 and prior initiatives		(1	)		(12	)		—		(6	)		(33	)		—		(2	)		(54	)
2016 payments for 2016 initiatives		(2	)		—			—		—			—			—		—			(2	)
Foreign currency effect on liability balance		—			—			—		1			1			—		(1	)		1

Accrued liabilities as of June 30, 2016	$	4		$	3		$	4	$	52		$	37		$	1	$	3		$	104



Current portion of restructuring reserves	$	3		$	3		$	2	$	12		$	31		$	1	$	3		$	55
Long-term portion of restructuring reserves		1			—			2		40			6			—		—			49

Details with respect to cash and noncash restructuring charges for the three and six months ended June 30, 2016 and 2015 by initiative are provided below (dollars in millions):

	Three months ended June 30, 2016		Six months ended June 30, 2016

Cash charges:
2016 charges for 2015 and prior initiatives	$	19	$	28
2016 charges for 2016 initiatives		6		6
Reversal of reserves no longer required		—		(1	)
Accelerated depreciation		3		7
Other non-cash charges		1		2

Total 2016 Restructuring, Impairment and Plant Closing Costs	$	29	$	42

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

	Three months ended June 30, 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
Other non-cash charges		10		10

Total 2015 Restructuring, Impairment and Plant Closing Costs	$	114	$	207

2016 RESTRUCTURING ACTIVITIES

In December 2015, our Performance Products segment announced plans for a reorganization of its commercial and technical functions and a refocused divisional business strategy to better position the segment for growth in coming years. In addition, a program was launched to capture growth opportunities, improve manufacturing cost efficiency and reduce inventories. In connection with this restructuring program, we recorded restructuring expense of $10 million in the six months ended June 30, 2016.

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, 2016, our Textile Effects segment recorded charges of $1 million for non-cancelable long-term contract termination costs, $1 million for decommissioning and $2 million in other restructuring costs associated with this initiative.

On December 1, 2014, we announced a comprehensive restructuring program to improve the global competitiveness of our Pigments and Additives segment. As part of the program, we are reducing our workforce by approximately 900 positions. In connection with this restructuring program, we recorded restructuring expense of $4 million in the six months ended June 30, 2016.

On March 4, 2015, we announced plans to restructure our color pigments business, another step in our comprehensive restructuring program in our Pigments and Additives segment, and recorded restructuring expense of approximately $8 million in the six months ended June 30, 2016.

On July 6, 2016, we announced plans to close our Pigments and Additives segment's South African titanium dioxide manufacturing facility. As part of the program, we recorded restructuring expense of approximately $3 million in the six months ended June 30, 2016. Additionally, we recorded an impairment charge of $1 million during the second quarter of 2016. The majority of the long-lived assets associated with this manufacturing facility were impaired in the fourth quarter of 2015.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

In connection with planned restructuring activities, our Pigments and Additives segment recorded accelerated depreciation as restructuring expense of $7 million during the six months ended June 30, 2016.

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.

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 $23 million for workforce reductions and non-cash charges of $10 million.

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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. DEBT

Outstanding debt, net of debt issuance costs, consisted of the following (dollars in millions):

Huntsman Corporation

	June 30, 2016		December 31, 2015

Senior Credit Facilities:
Term loans	$	2,435	$	2,454
Amounts outstanding under A/R programs		216		215
Senior notes		1,862		1,850
Variable interest entities		142		151
Other		94		125

Total debt—excluding debt to affiliates	$	4,749	$	4,795



Total current portion of debt	$	96	$	170
Long-term portion		4,653		4,625

Total debt—excluding debt to affiliates	$	4,749	$	4,795



Total debt—excluding debt to affiliates	$	4,749	$	4,795
Notes payable to affiliates-noncurrent		1		1

Total debt	$	4,750	$	4,796

Huntsman International

	June 30, 2016		December 31, 2015

Senior Credit Facilities:
Term loans	$	2,435	$	2,454
Amounts outstanding under A/R programs		216		215
Senior notes		1,862		1,850
Variable interest entities		142		151
Other		94		125

Total debt—excluding debt to affiliates	$	4,749	$	4,795



Total current portion of debt	$	96	$	170
Long-term portion		4,653		4,625

Total debt—excluding debt to affiliates	$	4,749	$	4,795



Total debt—excluding debt to affiliates	$	4,749	$	4,795
Notes payable to affiliates-current		100		100
Notes payable to affiliates-noncurrent		697		698

Total debt	$	5,546	$	5,593

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. 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 ("Nonguarantors") 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.

Debt Issuance Costs

We record debt issuance costs related to a debt liability on the balance sheet as a reduction in the face amount of that debt liability. As of June 30, 2016 and December 31, 2015, the amount of debt issuance costs directly reducing the debt liability was $64 million and $67 million, respectively. We record the amortization of debt issuance costs as interest expense.

Senior Credit Facilities

As of June 30, 2016, our senior credit facilities ("Senior Credit Facilities") consisted of our revolving credit facility ("Revolving Facility"), our 2015 Extended Term Loan B, our 2014 term loan B facility due 2021 ("2014 Term Loan B"), and our 2016 term loan B facility due 2023 ("2016 Term Loan B") (dollars in millions):

Facility	Committed Amount		Principal Outstanding		Unamortized Discounts and Debt Issuance Costs			Carrying Value		Interest Rate(3)	Maturity

Revolving Facility(1)	$	650	$	—	$	—		$	—	USD LIBOR plus 3.00%	2021
2015 Extended Term Loan B		N/A		766		(4	)		762	USD LIBOR plus 3.00%	2019
2014 Term Loan B		N/A		1,182		(50	)		1,132	USD LIBOR plus 3.00%(2)	2021
2016 Term Loan B		N/A		549		(8	)		541	USD LIBOR plus 3.50%(2)	2023

(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 B and the 2016 Term Loan B are 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, 2016, the weighted average interest rate on our outstanding balances under the Senior Credit Facilities was approximately 4%.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. DEBT (Continued)

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.

On July 22, 2016, Huntsman International prepaid $100 million of the 2015 Extended Term Loan B.

Amendment to the Credit Agreement

On April 1, 2016, Huntsman International entered into a fifteenth amendment to the agreement governing the Senior Credit Facilities (the "Credit Agreement"). The amendment provides for a new term loan facility, the 2016 Term Loan B, to refinance existing term loans pursuant to the Credit Agreement in an aggregate principal amount of $550 million. The net proceeds of the 2016 Term Loan B were used to repay in full Huntsman International's extended term loan B due 2017, our extended term loan B—series 2 due 2017 and our term loan C due 2016 ("Term Loan C"). In connection with these repayments, we recorded a loss on early extinguishment of debt of approximately $2 million in the second quarter of 2016.

The 2016 Term Loan B matures on April 1, 2023, provided that the maturity date will accelerate if we do not repay, refinance or have a minimum level of liquidity available to enable us to repay certain of our senior notes upon maturity. The 2016 Term Loan B is subject to the same terms and conditions as our existing senior secured term loan facilities.

The 2016 Term Loan B bears interest at an interest rate margin of LIBOR plus 3.50% (subject to a 0.75% floor) and amortizes in annual amounts equal to 1% of the principal amount of the 2016 Term Loan B, payable quarterly commencing on June 30, 2016.

The amendment also extends the stated termination date of our Revolving Facility from March 20, 2017 to March 20, 2021, provided that the maturity date will accelerate if we do not repay, refinance or have a minimum level of liquidity available to enable us to repay our 2015 Term Loan B due 2019 or our senior notes upon their maturity. The amendment further increased the committed amount of our Revolving Facility by $25 million (from $625 million to $650 million). Borrowings under the Revolving Facility bear interest at the same rate as the existing revolving commitments. As of June 30, 2016 we had no borrowings under our Revolving Facility.

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. DEBT (Continued)

incurred by the U.S. SPE and the EU SPE. Information regarding our A/R Programs as of June 30, 2016 was as follows (monetary amounts in millions):

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

U.S. A/R Program	March 2018	$250	$90(3)	Applicable rate plus 0.95%
EU A/R Program	March 2018	€225	€114	Applicable rate plus 1.10%
		(approximately $249)	(approximately $126)

(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): The applicable rate for our U.S. A/R Program is defined by the lender as either USD LIBOR or CP rate. The applicable rate for our EU A/R Program is either GBP LIBOR, USD LIBOR or EURIBOR. 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): As of June 30, 2016, we had approximately $7 million (U.S. dollar equivalents) of letters of credit issued and outstanding under our U.S. A/R Program.

As of June 30, 2016 and December 31, 2015, $492 million and $438 million, respectively, of accounts receivable were pledged as collateral under our A/R Programs.

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 (dollars in millions):

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

April 2015	2021 Senior Subordinated Notes	$	289	$	311	$	20
January 2015	2021 Senior Subordinated Notes		37		40		3

Note Payable from Huntsman International to Huntsman Corporation

As of June 30, 2016, we had a loan of $796 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, 2016 on our condensed consolidated balance sheets. As of June 30, 2016, 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).

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. DEBT (Continued)

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 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.

7. 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

All derivatives, whether designated as 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.

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 revenues and expenses are denominated in various foreign currencies, and our cash flows and earnings are thus subject to fluctuations due to exchange rate variations. 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, 2016, we had approximately $168 million in notional amount (in U.S. dollar equivalents) outstanding in forward foreign currency contracts.

Huntsman International has entered into two 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, 2016

Notional Value		Effective Date	Maturity	Fixed Rate			Fair Value
$	50	December 2014	April 2017		2.5	%	$1 current liability
	50	January 2015	April 2017		2.5	%	1 current 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 4. Variable Interest Entities." The notional amount of the swap as of June 30, 2016 was $22 million, and the interest rate contract is not designated as a cash flow hedge. As of June 30, 2016, the fair value of the swap was $2 million and was recorded in noncurrent liabilities on our condensed consolidated balance sheets. For each of the three and six months ended June 30, 2016, we recorded a reduction of interest expense of nil due to changes in fair value of the swap.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

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 U.S. dollar 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, 2016, the fair value of this swap was $26 million and was recorded in noncurrent assets on our condensed consolidated balance sheets.

In March 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 six months ended June 30, 2015, we terminated these cross-currency interest rate contracts and received $66 million in payments from the counterparties.

A portion of our debt is denominated in euros. We also 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 (loss) income on our condensed statements of comprehensive income (loss). 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, 2016, we have designated approximately €651 million (approximately $721 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, 2016, the amount of gain (loss) recognized on the hedge of our net investment was $14 million and $(7) million, respectively, and was recorded in other comprehensive (loss) income on our condensed consolidated statements of comprehensive income (loss).

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. FAIR VALUE

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

	June 30, 2016						December 31, 2015

	Carrying Value			Estimated Fair Value			Carrying Value			Estimated Fair Value
Non-qualified employee benefit plan investments	$	27		$	27		$	26		$	26
Investments in equity securities		18			18			18			18
Cross-currency interest rate contracts		26			26			28			28
Interest rate contracts		(4	)		(4	)		(4	)		(4	)
Long-term debt (including current portion)		(4,749	)		(4,789	)		(4,795	)		(4,647	)

The carrying amounts reported in our condensed consolidated balance sheets 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 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, 2016 and December 31, 2015. The estimated fair value amounts have not been comprehensively revalued for purposes of these financial statements since June 30, 2016 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, 2016			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 funds	$	27		$	27	$	—		$	—
Investments in equity securities(1)		18			18		—			—
Derivatives:
Cross-currency interest rate contracts(2)		26			—		—			26

Total assets	$	71		$	45	$	—		$	26



Liabilities:
Derivatives:
Interest rate contracts(3)	$	(4	)	$	—	$	(4	)	$	—

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. FAIR VALUE (Continued)