Huntsman Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 8 - Variable Interest Entities

Note 8 - Variable Interest Entities

12 Months Ended

Dec. 31, 2021

Variable Interest Entity Disclosure [Text Block]

8. 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 is our 50%-owned joint venture with Lanxess 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.

●

AAC 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 AAC’s production and sell it to our customers. Substantially all of the joint venture’s activities are conducted on our behalf.

Sasol-Huntsman was our 50%-owned joint venture with Sasol that owned and operated a maleic anhydride facility in Moers, Germany. On September 30, 2019, we acquired the 50% noncontrolling interest that we did not own in the Sasol-Huntsman. As such, as of September 30, 2019, Sasol-Huntsman became our wholly-owned subsidiary and was no longer accounted for as a variable interest entity.

During the year ended December 31, 2021, there were no changes in our variable interest entities.

Creditors of our variable interest entities have no recourse to our general credit. See “Note 14. Debt—Direct and Subsidiary Debt.” As the primary beneficiary of these variable interest entities at December 31, 2021, the joint ventures’ assets, liabilities and results of operations are included in our consolidated financial statements.

The following table summarizes the carrying amount of our variable interest entities’ assets and liabilities included in our consolidated balance sheets as of December 31, 2021 and 2020 (dollars in millions):

	*December 31,*
	*2021*		*2020*
Current assets	$	81	$	49
Property, plant and equipment, net		161		167
Operating lease right-of-use assets		26		22
Other noncurrent assets		148		138
Deferred income taxes		21		30
Total assets	$	437	$	406
Current liabilities	$	176	$	183
Long-term debt		35		3
Noncurrent operating lease liabilities		20		17
Other noncurrent liabilities		46		82
Deferred income taxes		—		1
Total liabilities	$	277	$	286

The revenues, income from continuing operations before income taxes and net cash provided by operating activities for our variable interest entities are as follows (dollars in millions):

	*Year ended December 31,*
	*2021*		*2020*		*2019(1)*
Revenues	$	—	$	—	$	95
Income from continuing operations before income taxes		12		4		17
Net cash provided by operating activities		33		10		81

(1)

As of September 30, 2019, Sasol-Huntsman was no longer accounted for as a variable interest entity. Therefore, this financial data only includes information for Sasol-Huntsman applicable to the period from January 1, 2019 through September 30, 2019.