Company Quick10K Filing
Venator Materials
Price2.48 EPS-1
Shares107 P/E-4
MCap264 P/FCF-7
Net Debt713 EBIT-26
TEV977 TEV/EBIT-38
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-04
10-Q 2020-03-31 Filed 2020-05-06
10-K 2019-12-31 Filed 2020-03-12
10-Q 2019-09-30 Filed 2019-11-06
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-02-20
10-Q 2018-09-30 Filed 2018-10-30
10-Q 2018-06-30 Filed 2018-07-31
10-Q 2018-03-31 Filed 2018-05-01
10-K 2017-12-31 Filed 2018-02-23
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-28
8-K 2020-08-28 Accountant, Exhibits
8-K 2020-08-28 Regulation FD, Exhibits
8-K 2020-08-19 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2020-08-04 Earnings, Exhibits
8-K 2020-06-18
8-K 2020-05-22
8-K 2020-05-08
8-K 2020-05-08
8-K 2020-05-06
8-K 2020-04-27
8-K 2020-02-21
8-K 2019-11-13
8-K 2019-11-06
8-K 2019-08-06
8-K 2019-06-20
8-K 2019-06-11
8-K 2019-05-09
8-K 2019-02-20
8-K 2018-12-10
8-K 2018-11-14
8-K 2018-10-30
8-K 2018-10-30
8-K 2018-09-12
8-K 2018-07-31
8-K 2018-07-16
8-K 2018-05-31
8-K 2018-05-01
8-K 2018-02-23

VNTR 10Q Quarterly Report

Part I - Financial Information
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Note 1. General, Description of Business, Recent Developments and Basis of Presentation
Note 2. Recently Issued Accounting Pronouncements
Note 3. Revenue
Note 4. Inventories
Note 5. Variable Interest Entities
Note 6. Restructuring, Impairment, and Plant Closing and Transition Costs
Note 7. Debt
Note 8. Derivative Instruments and Hedging Activities
Note 9. Income Taxes
Note 10. Earnings per Share
Note 11. Commitments and Contingencies
Note 12. Environmental, Health and Safety Matters
Note 13. Other Comprehensive Income
Note 14. Operating Segment Information
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-10.2 vntr6302010-qexhibit102.htm
EX-10.3 vntr6302010-qexhibit103.htm
EX-10.4 vntr6302010-qexhibit104.htm
EX-10.5 vntr6302010-qexhibit105.htm
EX-31.1 vntr063020exhibit311.htm
EX-31.2 vntr063020exhibit312.htm
EX-32.1 vntr063020exhibit321.htm
EX-32.2 vntr063020exhibit322.htm

Venator Materials Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
3.02.41.81.20.60.02017201820192020
Assets, Equity
0.70.50.30.0-0.2-0.42017201820192020
Rev, G Profit, Net Income
0.30.20.10.0-0.1-0.22017201820192020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q

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

For the quarterly period ended June 30, 2020
OR
   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-38176
_________________________________
vntr-20200630_g1.jpg
Venator Materials PLC
(Exact name of registrant as specified in its charter)
_________________________________
England and Wales98-1373159
(State or other jurisdiction(I.R.S. Employer Identification No.)
of incorporation or organization)
Titanium House, Hanzard Drive, Wynyard Park,
Stockton-On-Tees, TS22 5FD, United Kingdom
+44 (0) 1740 608 001
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary Shares, $0.001 par value per shareVNTRNew York Stock Exchange
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.
Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company," in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  No ☑
_________________________________
As of July 28, 2020, the registrant had outstanding 106,735,892 ordinary shares, $0.001 par value per share.




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General


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GENERAL

Except when the context otherwise requires or where otherwise indicated, (1) all references to "Venator," the "Company," "we," "us" and "our" refer to Venator Materials PLC and its subsidiaries, (2) all references to "Huntsman" refer to Huntsman Corporation and its subsidiaries, (3) all references to the "Titanium Dioxide" segment or business refer to the titanium dioxide ("TiO2") business of Venator, (4) all references to the "Performance Additives" segment or business refer to the functional additives, color pigments, timber treatment and water treatment businesses of Venator, and (5) we refer to the internal reorganization prior to our initial public offering ("IPO"), the separation transactions initiated to separate the Venator business from Huntsman’s other businesses, including the entry into and effectiveness of the separation agreement and ancillary agreements, and the financing arrangements and debt, comprising the senior secured term loan facility (the "Term Loan Facility"), the asset-based revolving facility (the "ABL Facility" and, together with the Term Loan Facility, the "Senior Credit Facilities") and the 5.75% senior unsecured notes due 2025 (the "Senior Unsecured Notes"), including the use of the net proceeds of the Senior Credit Facilities and the Senior Unsecured Notes, which were used to repay intercompany debt we owed to Huntsman and to pay related fees and expenses, as the "separation," which occurred on August 8, 2017.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information set forth in this report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934 (the "Exchange Act"). All statements other than historical or current factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, construction cost estimates, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, spin-offs or other distributions, strategic opportunities, securities offerings, share repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into; new or modified laws, regulations and accounting pronouncements; legal proceedings, environmental, health and safety ("EHS") matters, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; general economic and capital markets conditions; the timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that we intend or believe will or may occur in the future. In some cases, forward-looking statements can be identified by terminology such as "believes," "expects," "may," "will," "should," "anticipates," "estimates" or "intends" or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.

Forward-looking statements are based on certain assumptions and expectations of future events which may not be accurate or realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond our control. Important factors that may materially affect such forward-looking statements and projections include:
 
the impacts and duration of the global outbreak of the Coronavirus Disease 2019 ("COVID-19") pandemic on the global economy and all aspects of our business including our employees, customers, suppliers, partners' results of operations, financial condition and liquidity;
volatile global economic conditions;
cyclical and volatile product applications;
highly competitive industries and the need to innovate and develop new products;
industry production capacity and operating rates;
high levels of indebtedness;
our ability to maintain sufficient working capital to fund our operations and capital expenditures, and service our debt;
our ability to obtain future capital on favorable terms;
planned and unplanned production shutdowns, turnarounds, outages and other disruptions at our or our suppliers' manufacturing facilities;
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any changes to the prices at which we purchase raw materials and energy, any interruptions in supply of raw materials and energy, or any changes in regulations impacting raw materials and our supply chain;
increased manufacturing, labeling and waste disposal regulations associated with some of our products, including the classification of TiO2 as a carcinogen in the European Union ("EU") or any increased regulatory scrutiny;
our ability to successfully grow and transform our business including by way of acquisitions, divestments and restructuring activities;
our ability to successfully transfer production of certain specialty and differentiated products formerly produced at our Pori, Finland manufacturing facility to other sites within our manufacturing network;
our ability to develop new products or successfully transfer production of existing products within our manufacturing network;
fluctuations in currency exchange rates and tax rates;
our ability to adequately protect our critical information technology systems;
impacts on the markets for our products and the broader global economy from the imposition of tariffs by the U.S. and other countries;
our ability to realize financial and operational benefits from our business improvement plans and initiatives;
changes to laws, regulations or the interpretation thereof;
differences in views with our joint venture participants;
EHS laws and regulations;
our ability to successfully defend legal claims against us, or to pursue legal claims against third parties;
economic conditions and regulatory changes following the exit of the United Kingdom (the "U.K.") from the EU;
seasonal sales patterns in our product markets;
our ability to comply with expanding data privacy regulations;
failure to maintain effective internal controls over financial reporting and disclosure;
our indemnification of Huntsman and other commitments and contingencies;
financial difficulties and related problems experienced by our customers, vendors, suppliers and other business partners;
the effects of public health crises on the global economy, our business, employees, supply chain and customers;
conflicts, military actions, terrorist attacks, public health crises, including the occurrence of a contagious disease or illness, cyber-attacks and general instability;
failure to enforce our intellectual property rights; and
our ability to effectively manage our labor force.

All forward-looking statements, including, without limitation, management’s examination of historical operating trends, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that management’s expectations, beliefs and projections will result or be achieved. All forward-looking statements apply only as of the date made. We undertake no obligation to publicly update or revise forward-looking statements whether because of new information, future events or otherwise, except as required by securities and other applicable law.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this report. Any forward-looking statements should be considered in light of the risks set forth in "Part II. Item 1A. Risk Factors."


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PART I – FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

VENATOR MATERIALS PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except par value)June 30, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents(a)
$188  $55  
Accounts receivable (net of allowance for doubtful accounts of $5 and $4, respectively)(a)
319  321  
Accounts receivable from affiliates13    
Inventories(a)
487  513  
Prepaid expenses10  21  
Other current assets58  67  
Total current assets1,075  977  
Property, plant and equipment, net(a)
941  989  
Operating lease right-of-use assets, net(a)
39  43  
Intangible assets, net(a)
19  21  
Investment in unconsolidated affiliates98  92  
Deferred income taxes36  33  
Other noncurrent assets122  110  
Total assets$2,330  $2,265  
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable(a)
$242  $334  
Accounts payable to affiliates15  17  
Accrued liabilities(a)
99  116  
Current operating lease liability(a)
8  8  
Current portion of debt(a)
7  13  
Total current liabilities371  488  
Long-term debt950  737  
Operating lease liability(a)
34  37  
Other noncurrent liabilities281  300  
Noncurrent payable to affiliates30  30  
Total liabilities1,666  1,592  
Commitments and contingencies (Notes 11 and 12)
Equity
Ordinary shares $0.001 par value, 200 shares authorized, each, 107 issued and outstanding, each
    
Additional paid-in capital1,326  1,322  
Retained deficit(283) (271) 
Accumulated other comprehensive loss(386) (385) 
Total Venator Materials PLC shareholders' equity657  666  
Noncontrolling interest in subsidiaries7  7  
Total equity664  673  
Total liabilities and equity$2,330  $2,265  

(a) At June 30, 2020 and December 31, 2019, the following amounts from consolidated variable interest entities are included in the respective balance sheet captions above: $4 and $2 of cash and cash equivalents; $5 and $4 of accounts receivable, net; $2 each of inventories; $5 each of property, plant and equipment, net; $1 each of operating lease right-of-use assets; $10 and $11 of intangible assets, net; $1 each of accounts payable; $2 and $3 of accrued liabilities; nil and $1 of operating lease liabilities; and $2 and nil of current portion of debt. See "Note 5. Variable Interest Entities."

See notes to unaudited condensed consolidated financial statements.
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VENATOR MATERIALS PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
June 30,
Six months ended
June 30,
(Dollars in millions, except per share amounts)2020201920202019
Trade sales, services and fees, net$456  $578  $988  $1,140  
Cost of goods sold411  511  882  997  
Operating expenses:
Selling, general and administrative
36  45  78  93  
Restructuring, impairment, and plant closing and transition costs5    12  12  
Other operating expense, net10    10  7  
Total operating expenses51  45  100  112  
Operating (loss) income(6) 22  6  31  
Interest expense(15) (13) (28) (27) 
Interest income3  3  6  6  
Other income3  1  7  2  
(Loss) income before income taxes(15) 13  (9) 12  
Income tax (expense) benefit(2) 9    8  
Net (loss) income(17) 22  (9) 20  
Net income attributable to noncontrolling interests(2) (1) (3) (2) 
Net (loss) income attributable to Venator$(19) $21  $(12) $18  
Per Share Data:
(Loss) earnings attributable to Venator Materials PLC ordinary shareholders, basic$(0.18) $0.20  $(0.11) $0.17  
(Loss) earnings attributable to Venator Materials PLC ordinary shareholders, diluted$(0.18) $0.20  $(0.11) $0.17  

See notes to unaudited condensed consolidated financial statements.
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VENATOR MATERIALS PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Three months ended
June 30,
Six months ended
June 30,
(Dollars in millions)2020201920202019
Net (loss) income$(17) $22  $(9) $20  
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment
19  (13) (17) (2) 
Pension and other postretirement benefits adjustments
4  4  7  8  
Hedging instruments
(1) 1  9  5  
Total other comprehensive income (loss), net of tax22  (8) (1) 11  
Comprehensive income (loss)5  14  (10) 31  
Comprehensive income attributable to noncontrolling interest(2) (1) (3) (2) 
Comprehensive income (loss) attributable to Venator$3  $13  $(13) $29  

See notes to unaudited condensed consolidated financial statements.
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VENATOR MATERIALS PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
Total Venator Materials PLC Equity
Ordinary SharesAdditional Paid-in CapitalRetained DeficitAccumulated Other Comprehensive LossNoncontrolling Interest in SubsidiariesTotal
(In millions)SharesAmount
Balance, January 1, 2020107$  $1,322  $(271) $(385) $7  $673  
Net income
—  —  7  —  1  8  
Other comprehensive loss, net of tax
—  —  —  (23) —  (23) 
Dividends paid to noncontrolling interests
—  —  —  —  (1) (1) 
Activity related to stock plans
—  2  —  —  —  2  
Balance, March 31, 2020107$  $1,324  $(264) $(408) $7  $659  
Net (loss) income
—  —  (19) —  2  (17) 
Other comprehensive income, net of tax
—  —  —  22  —  22  
Dividends paid to noncontrolling interests
—  —  —  —  (2) (2) 
Activity related to stock plans
—  2  —  —  —  2  
Balance, June 30, 2020107$  $1,326  $(283) $(386) $7  $664  

Total Venator Materials PLC Equity
Ordinary SharesAdditional Paid-in CapitalRetained DeficitAccumulated Other Comprehensive LossNoncontrolling Interest in SubsidiariesTotal
(In millions)SharesAmount
Balance, January 1, 2019106$  $1,316  $(96) $(373) $8  $855  
Net (loss) income
—  —  (3) —  1  (2) 
Other comprehensive income, net of tax
—  —  —  19  —  19  
Dividends paid to noncontrolling interests
—  —  —  —  (1) (1) 
Activity related to stock plans
1—  1  —  —  —  1  
Balance, March 31, 2019107$  $1,317  $(99) $(354) $8  $872  
Net income
—  —  21  —  1  22  
Other comprehensive loss, net of tax
—  —  —  (8) —  (8) 
Dividends paid to noncontrolling interests
—  —  —  —  (2) (2) 
Activity related to stock plans
—  2  —  —  —  2  
Balance, June 30, 2019107$  $1,319  $(78) $(362) $7  $886  

See notes to unaudited condensed consolidated financial statements.
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VENATOR MATERIALS PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30,
(Dollars in millions)20202019
Operating Activities:
Net (loss) income$(9) $20  
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization56  55  
Deferred income taxes(3) (12) 
Noncash restructuring and impairment charges2  (2) 
Other, net12  8  
Changes in operating assets and liabilities:
Accounts receivable(13) (77) 
Inventories22  30  
Prepaid expenses10  10  
Other current assets3  (2) 
Other noncurrent assets(10)   
Accounts payable(67) (44) 
Accrued liabilities(16) (18) 
Other noncurrent liabilities(7) (18) 
Net cash used in operating activities(20) (50) 
Investing Activities:
Capital expenditures(47) (83) 
Cash received from unconsolidated affiliates20  20  
Investment in unconsolidated affiliates(26) (24) 
Cash received from notes receivable 6  6  
Other, net  (1) 
Net cash used in investing activities(47) (82) 
Financing Activities:
Net proceeds from short-term debt2    
Net repayments on notes payable(7)   
Repayment of third-party debt(3) (2) 
Net borrowings under ABL Facility  24  
Dividends paid to noncontrolling interests(3) (3) 
Proceeds from issuance of long-term debt221    
Debt issuance costs paid(6)   
Other, net(4) (2) 
Net cash provided by financing activities200  17  
Net change in cash and cash equivalents133  (115) 
Cash and cash equivalents at beginning of period55  165  
Cash and cash equivalents at end of period$188  $50  
Supplemental cash flow information:
Cash paid for interest$18  $23  
Cash paid for income taxes  3  
Supplemental disclosure of noncash activities:
Capital expenditures included in accounts payable as of June 30, 2020 and 2019, respectively
$21  $26  

See notes to unaudited condensed consolidated financial statements.
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VENATOR MATERIALS PLC AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. General, Description of Business, Recent Developments and Basis of Presentation

Description of Business

Venator became an independent publicly traded company following our IPO and separation from Huntsman Corporation in August 2017. Venator operates in two segments: Titanium Dioxide and Performance Additives. The Titanium Dioxide segment primarily manufactures and sells TiO2, and operates seven TiO2 manufacturing facilities across the globe, excluding our plant in Pori, Finland, ongoing closure of which was announced in the third quarter of 2018. The Performance Additives segment manufactures and sells functional additives, color pigments, timber treatment and water treatment chemicals. This segment operates 16 manufacturing and processing facilities globally.

Basis of Presentation

Our unaudited 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 condition 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 and combined financial statements and notes to consolidated and combined financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2019 for our Company.

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.

In the notes to unaudited condensed consolidated financial statements, all dollar and share amounts, except per share amounts, in tabulations are in millions unless otherwise indicated.

COVID-19

In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. COVID-19 has had a material impact on demand for our products in the three months ended June 30, 2020 as sales were impacted by government ordered restrictions on our customers. We expect that the COVID-19 pandemic will continue to have a negative impact on our future results of operations, financial condition and liquidity. The duration and severity of the outbreak and its long-term impacts on our business cannot be fully determined at this time.

Note 2. Recently Issued Accounting Pronouncements

Accounting Pronouncements Adopted During the Period

Effective April 1, 2020, we adopted ASU No. 2019-12, Income Taxes (Topic 740). The amendments in this ASU remove certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also clarifies and simplifies other areas of ASC Topic 740. Certain adjustments in this update must be applied on a prospective basis, certain amendments must be applied on a retrospective basis and certain amendments must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings in the period of adoption. The adoption of this ASU did not have a material impact on our unaudited condensed consolidated financial statements.

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Accounting Pronouncements Pending Adoption in Future Periods

In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20). The amendments in this ASU add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. This ASU eliminates the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as part of net periodic benefit cost over the next year. The ASU also removes the disclosure requirements for the effects of a one-percentage-point change on the assumed health care costs and the effect of this change in rates on service cost, interest cost and the benefit obligation for postretirement health care benefits. This standard is effective for fiscal years ending after December 15, 2020, and must be applied on a retrospective basis. We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848). The amendments in this ASU temporarily simplify the accounting for contract modifications, including hedging relationships, due to the transition from London Interbank Offering Rate ("LIBOR") and other interbank offered rates to alternative reference interest rates. For example, entities can elect not to remeasure the contracts at the modification date or reassess a previous accounting determination if certain conditions are met. Additionally, entities can elect to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain conditions are met. This standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. We are currently evaluating the impact of the transition from LIBOR to alternative reference interest rates on our financial statements.

Note 3. Revenue

We generate substantially all of our revenues through sales of inventory in the open market and via long-term supply agreements. At contract inception, we assess the goods promised in our contracts and identify a performance obligation for each promise to transfer to the customer a distinct good. In substantially all cases, a contract has a single performance obligation to deliver a promised good to the customer. Revenue is recognized when the performance obligations under the terms of our contracts are satisfied. Generally, this occurs at the time of shipping, at which point the control of the goods transfers to the customer. Further, in determining whether control has transferred, we consider if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. Revenue is measured as the amount of consideration we expect to receive in exchange for transferred goods. Sales, value added, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. We have elected to account for all shipping and handling activities as fulfillment costs. We recognize these costs for shipping and handling when control over products have transferred to the customer as an expense in cost of goods sold. We have also elected to expense commissions when incurred as the amortization period of the commission asset that we would have otherwise recognized is less than one year.

The following table disaggregates our revenues by major geographical region for the three and six months ended June 30, 2020 and 2019:
Three Months Ended June 30, 2020Six Months Ended June 30, 2020
Titanium DioxidePerformance AdditivesTotalTitanium DioxidePerformance AdditivesTotal
Europe$166  $42  $208  $372  $92  $464  
North America74  55  129  150  112  262  
Asia71  18  89  148  38  186