THE WOODLANDS, Texas,
Oct. 28, 2016 /PRNewswire/ --
Third Quarter 2016 Highlights
- Net income was $64 million
compared to $63 million in the prior
year period and $94 million in the
prior quarter.
- Adjusted EBITDA was $272 million
compared to $311 million in the prior
year period and $325 million in the
prior quarter.
- Diluted income per share was $0.23 compared to $0.22 in the prior year period and $0.36 in the prior quarter.
- Adjusted diluted income per share was $0.38 compared to $0.47 in the prior year period and $0.53 in the prior quarter.
- Adjusted EBITDA and net income impact from weather related and
other production outages of approximately $25 million and $16
million or approximately $0.07
per adjusted diluted share.
- Net cash provided by operating activities was $405 million. Free cash flow generation was
$300 million; we made a $100 million early repayment of debt in
July 2016 and another $100 million early repayment of debt in
September 2016.
- On August 3, 2016, we announced
that Innospec Inc. committed to purchase our European surfactants
business at an enterprise value of $225
million. The business represents approximately
$24 million of annual adjusted
EBITDA. Closing is expected to occur by the end of the fourth
quarter of 2016.
Form 10 Highlights
- On October 28, 2016, our
subsidiary, temporarily named Huntsman Spin Corporation, filed an
initial Form 10 registration statement with the U.S. Securities and
Exchange Commission for the previously announced spin-off of our
Pigments & Additives and Textile Effects businesses.
- Subject to market conditions, we plan to separate these
businesses from Huntsman in the first half of 2017.
- The shares of the spin-off corporation that will be distributed
to Huntsman shareholders in the spin-off are expected to be listed
and traded on the New York Stock Exchange.
- The Form 10 filed today includes a business overview, market
information, company strengths and strategy, certain named
executive management and historical carve-out financial
statements. Additional information regarding the final
company name, capitalization, additional pro forma information and
other matters will be provided in subsequent amendments to the Form
10.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
In millions, except
per share amounts
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
2,363
|
|
$
2,638
|
|
$
2,544
|
|
$
7,262
|
|
$
7,967
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
64
|
|
$
63
|
|
$
94
|
|
$
220
|
|
$
117
|
Adjusted net
income(1)
|
|
$
91
|
|
$
115
|
|
$
126
|
|
$
305
|
|
$
368
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
share
|
|
$
0.23
|
|
$
0.22
|
|
$
0.36
|
|
$
0.83
|
|
$
0.36
|
Adjusted diluted
income per share(1)
|
|
$
0.38
|
|
$
0.47
|
|
$
0.53
|
|
$
1.28
|
|
$
1.49
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
272
|
|
$
311
|
|
$
325
|
|
$
871
|
|
$
981
|
|
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations
|
Huntsman Corporation (NYSE: HUN) today reported third quarter
2016 results with revenues of $2,363
million, net income of $64
million and adjusted EBITDA of $272
million.
Peter R. Huntsman, our President
and CEO, commented:
"We have been intensely focused on improving our free cash
flow generation, our results this quarter are reflective of this
drive for value notwithstanding weather related and other
production outages that impacted our earnings. In 2016 we
planned to generate more than $350
million of free cash flow, this quarter we generated
$300 million of free cash flow and
year-to-date we have generated $569
million. Subsequently, we made $200 million of early repayments on our debt
within the third quarter. Much of the improvement has come
from increased discipline related to capital expenditures and
working capital management.
"Earlier today, our temporarily named Huntsman Spin
Corporation, filed an initial Form 10 registration statement with
the U.S. Securities and Exchange Commission for the spin-off of our
Pigments & Additives and Textile Effects businesses. This
filing represents an important step in the progression towards a
separation. Subject to market conditions we plan to separate
in the first half of 2017.
"As I consider our operational performance in the quarter
there are some key trends that standout. Our MDI
business is growing sales volume and improving margins.
Within Performance Products, margins for our key businesses, amines
and maleic anhydride have stabilized. Advanced Materials and
Textile Effects continue to operate at a steady and modestly
improving pace. TiO2 prices are improving and with additional
increases expected in the future, the timing of our spin-off should
be well positioned. Poor refining markets continue to
compress our MTBE margins."
Segment Analysis for 3Q16 Compared to 3Q15
Polyurethanes
The decrease in revenues in our Polyurethanes division for the
three months ended September 30, 2016
compared to the same period in 2015 was primarily due to lower
average selling prices and lower MTBE sales volumes, partially
offset by higher MDI sales volumes. MDI average selling
prices decreased in response to lower raw material costs.
MTBE average selling prices decreased primarily as a result of
lower pricing for high octane gasoline. MDI sales volumes
increased due to higher demand in the Americas and European
regions. MTBE sales volumes decreased primarily due to the
impact of weather related and other production outages. The
decrease in adjusted EBITDA was primarily due to lower MTBE margins
and the impact of weather related and other production outages
estimated at approximately $15
million, partially offset by higher MDI margins and sales
volumes.
Performance Products
The decrease in revenues in our Performance Products division
for the three months ended September 30,
2016 compared to the same period in 2015 was due to lower
average selling prices and lower sales volumes. Average
selling prices decreased primarily in response to lower raw
material costs and competitive market conditions. Sales
volumes decreased primarily due to the impact of weather related
and other production outages, softer demand in China and oilfield applications as well as
competitive market conditions. The decrease in adjusted
EBITDA was primarily due to the impact of weather related and other
production outages estimated at approximately $10 million as well as lower margins in our
amines, maleic anhydride and upstream intermediates businesses.
Advanced Materials
The decrease in revenues in our Advanced Materials division for
the three months ended September 30,
2016 compared to the same period in 2015 was due to lower
sales volumes and lower average selling prices. Sales volumes
decreased primarily due to soft demand for low value business in
our coatings and construction and wind markets, partially offset by
global growth in our aerospace and electronics markets.
Average selling prices decreased in our Asia Pacific region primarily as a result of
competitive pressure in our electrical, electronics and wind
markets, partially offset by higher average selling prices in our
European and Americas regions. Adjusted EBITDA was
essentially flat as lower sales volumes and lower margins were
mostly offset by lower selling, general and administrative
costs.
Textile Effects
The decrease in revenues in our Textile Effects division for the
three months ended September 30, 2016
compared to the same period in 2015 was due to lower average
selling prices partially offset by higher sales volumes.
Average selling prices decreased primarily due to lower raw
material costs and the foreign currency exchange impact of a
stronger U.S. dollar against major international currencies.
Sales volumes increased in key target countries, mainly in South
Asia. The increase in adjusted EBITDA was primarily due to
higher margins from lower raw material costs as well as lower
selling, general and administrative costs.
Pigments and Additives
The decrease in revenues in our Pigments and Additives division
for the three months ended September 30,
2016 compared to the same period in 2015 was due to lower
average selling prices. Average selling prices decreased
primarily as a result of competitive pressure, however they
increased compared to the prior quarter. Sales volumes were
unchanged as increased end use demand for our titanium dioxide
products were offset by seasonally lower volumes for our additives
products. The increase in adjusted EBITDA was primarily due
to higher margins and lower fixed costs resulting from
restructuring savings.
Corporate, LIFO and Other
Adjusted EBITDA from Corporate, LIFO and Other increased by
$5 million to a loss of $45 million for the three months ended
September 30, 2016 compared to a loss
of $50 million for the same period in
2015. The increase in adjusted EBITDA was primarily the
result of an increase in unallocated foreign currency exchange
gains and an increase in income from benzene sales.
Liquidity, Capital Resources and Outstanding Debt
As of September 30, 2016, we had
$1,247 million of combined cash and
unused borrowing capacity compared to $1,023
million on December 31,
2015.
We made a $100 million early
repayment of debt on July 22, 2016,
followed by another $100 million
early repayment of debt on September
30, 2016. Both of these early repayments were applied
to our term loan B due 2019.
Total capital expenditures for the three months and nine months
ended September 30, 2016 were
$101 million and $290 million, respectively. During the nine
months ended September 30, 2016 we
have received capital reimbursements from business partners of
$28 million. We expect to spend
approximately $450 million on capital
expenditures in 2016 and $400 million
in 2017 before capital reimbursements from business partners which
are expected to be approximately $30
million and $20 million,
respectively.
We expect our depreciation and amortization to be approximately
$435 million in 2016 and
approximately $450 million in
2017.
Income Taxes
During the three months and nine months ended September 30, 2016, we recorded an income tax
benefit of $1 million and income tax
expense of $58 million,
respectively. During the three months and nine months ended
September 30, 2016, we paid cash for
income taxes of $8 million and
$29 million, respectively.
Our MTBE earnings are taxed at the U.S. statutory rate of 35%
and variability in our MTBE earnings has a meaningful impact on our
adjusted effective tax rate. The combination of significantly
lower MTBE earnings, the impact of weather related and other
production outages in the U.S., and higher earnings in countries
with valuation allowances, resulted in an unusually low adjusted
effective tax rate of 14% in the third quarter of 2016.
We expect our 2016 and 2017 adjusted effective tax rate to be
approximately 25 - 30%, with variability primarily conditioned on
earnings within the U.S. We expect our long term adjusted
effective tax rate to be approximately 30%.
Earnings Conference Call Information
We will hold a conference call to discuss our third quarter 2016
financial results on Friday, October 28,
2016 at 10:00 a.m. ET.
Call-in numbers for the conference call:
U.S.
participants
|
(888) 680 -
0890
|
International
participants
|
(617) 213 -
4857
|
Passcode
|
928 629
27#
|
In order to facilitate the registration process, you may use the
following link to pre-register for the conference call. Callers who
pre-register will be given a unique PIN to gain immediate access to
the call and bypass the live operator. You may pre-register at any
time, including up to and after the call start time. To
pre-register, please go to:
https://www.theconferencingservice.com/prereg/key.process?key=P3L7W44M8
Webcast Information
The conference call will be available via webcast and can be
accessed from the company's website at ir.huntsman.com.
Replay Information
The conference call will be available for replay beginning
October 28, 2016 and ending
November 4, 2016.
Call-in numbers for the replay:
U.S.
participants
|
(888) 286 -
8010
|
International
participants
|
(617) 801 -
6888
|
Replay
code
|
23056817
|
Upcoming Conferences
During the fourth quarter a member of management is expected to
present at the Citi Basic Materials Conference on November 29, 2016 and the Bank of America Merrill
Lynch Leveraged Finance Conference on November 30, 2016. A webcast of the
presentation, if applicable, along with accompanying materials will
be available at ir.huntsman.com.
Table 1 -- Results
of Operations
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
In millions, except
per share amounts
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
2,363
|
|
$
2,638
|
|
$
7,262
|
|
$
7,967
|
Cost of goods
sold
|
|
1,965
|
|
2,165
|
|
5,991
|
|
6,495
|
Gross
profit
|
|
398
|
|
473
|
|
1,271
|
|
1,472
|
Operating
expenses
|
|
235
|
|
290
|
|
752
|
|
859
|
Restructuring,
impairment and plant closing costs
|
|
45
|
|
14
|
|
87
|
|
221
|
Operating
income
|
|
118
|
|
169
|
|
432
|
|
392
|
Interest
expense
|
|
(52)
|
|
(49)
|
|
(152)
|
|
(158)
|
Equity in income of
investment in unconsolidated affiliates
|
|
1
|
|
-
|
|
4
|
|
5
|
Loss on early
extinguishment of debt
|
|
(1)
|
|
(8)
|
|
(3)
|
|
(31)
|
Other loss
|
|
(2)
|
|
-
|
|
-
|
|
(2)
|
Income before
income taxes
|
|
64
|
|
112
|
|
281
|
|
206
|
Income tax benefit
(expense)
|
|
1
|
|
(49)
|
|
(58)
|
|
(85)
|
Income from
continuing operations
|
|
65
|
|
63
|
|
223
|
|
121
|
Loss from
discontinued operations, net of tax(2)
|
|
(1)
|
|
-
|
|
(3)
|
|
(4)
|
Net
income
|
|
64
|
|
63
|
|
220
|
|
117
|
Net income
attributable to noncontrolling interests, net of tax
|
|
(9)
|
|
(8)
|
|
(22)
|
|
(28)
|
Net income
attributable to Huntsman Corporation
|
|
$
55
|
|
$
55
|
|
$
198
|
|
$
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
272
|
|
$
311
|
|
$
871
|
|
$
981
|
Adjusted net
income(1)
|
|
$
91
|
|
$
115
|
|
$
305
|
|
$
368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share
|
|
$
0.23
|
|
$
0.23
|
|
$
0.84
|
|
$
0.36
|
Diluted income per
share
|
|
$
0.23
|
|
$
0.22
|
|
$
0.83
|
|
$
0.36
|
Adjusted diluted
income per share(1)
|
|
$
0.38
|
|
$
0.47
|
|
$
1.28
|
|
$
1.49
|
|
|
|
|
|
|
|
|
|
Common share
information:
|
|
|
|
|
|
|
|
|
Basic shares
outstanding
|
|
236
|
|
244
|
|
236
|
|
244
|
Diluted
shares
|
|
240
|
|
247
|
|
239
|
|
247
|
Diluted shares for
adjusted diluted income per share
|
|
240
|
|
247
|
|
239
|
|
247
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations
|
Table 2 -- Results
of Operations by Segment
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Nine months
ended
|
|
|
|
|
September
30,
|
|
Better
/
|
|
September
30,
|
|
Better
/
|
In
millions
|
|
2016
|
|
2015
|
|
(Worse)
|
|
2016
|
|
2015
|
|
(Worse)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
891
|
|
$
1,017
|
|
(12)%
|
|
$
2,703
|
|
$
2,902
|
|
(7)%
|
Performance
Products
|
|
509
|
|
618
|
|
(18)%
|
|
1,611
|
|
1,949
|
|
(17)%
|
Advanced
Materials
|
|
247
|
|
275
|
|
(10)%
|
|
774
|
|
847
|
|
(9)%
|
Textile
Effects
|
|
184
|
|
196
|
|
(6)%
|
|
567
|
|
618
|
|
(8)%
|
Pigments &
Additives
|
|
532
|
|
543
|
|
(2)%
|
|
1,648
|
|
1,707
|
|
(3)%
|
Corporate and
eliminations
|
|
-
|
|
(11)
|
|
n/m
|
|
(41)
|
|
(56)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
2,363
|
|
$
2,638
|
|
(10)%
|
|
$
7,262
|
|
$
7,967
|
|
(9)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
137
|
|
$
168
|
|
(18)%
|
|
$
439
|
|
$
432
|
|
2%
|
Performance
Products
|
|
70
|
|
122
|
|
(43)%
|
|
248
|
|
384
|
|
(35)%
|
Advanced
Materials
|
|
55
|
|
56
|
|
(2)%
|
|
173
|
|
172
|
|
1%
|
Textile
Effects
|
|
17
|
|
10
|
|
70%
|
|
59
|
|
50
|
|
18%
|
Pigments &
Additives
|
|
38
|
|
5
|
|
660%
|
|
84
|
|
61
|
|
38%
|
Corporate, LIFO and
other
|
|
(45)
|
|
(50)
|
|
10%
|
|
(132)
|
|
(118)
|
|
(12)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
272
|
|
$
311
|
|
(13)%
|
|
$
871
|
|
$
981
|
|
(11)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/m = not
meaningful
|
See end of press release for footnote explanations
|
Table 3 -- Factors
Impacting Sales Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
September 30, 2016
vs. 2015
|
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
(10)%
|
|
(1)%
|
|
7%
|
|
(8)%
|
|
(12)%
|
|
Polyurethanes,
adj
|
|
(10)%
|
|
(1)%
|
|
7%
|
|
2%
|
|
(2)%
|
(e)
|
Performance
Products
|
|
(7)%
|
|
(1)%
|
|
(1)%
|
|
(9)%
|
|
(18)%
|
|
Performance
Products, adj
|
|
(7)%
|
|
(1)%
|
|
(1)%
|
|
(5)%
|
|
(14)%
|
(e)
|
Advanced
Materials
|
|
(2)%
|
|
(1)%
|
|
5%
|
|
(12)%
|
|
(10)%
|
|
Textile
Effects
|
|
(8)%
|
|
(2)%
|
|
(1)%
|
|
5%
|
|
(6)%
|
|
Pigments &
Additives
|
|
(3)%
|
|
(1)%
|
|
2%
|
|
0%
|
|
(2)%
|
|
Pigments &
Additives, adj
|
|
(3)%
|
|
(1)%
|
|
2%
|
|
(1)%
|
|
(3)%
|
(d)
|
Total
Company
|
|
(7)%
|
|
(1)%
|
|
4%
|
|
(6)%
|
|
(10)%
|
|
Total Company,
adj
|
|
(7)%
|
|
(1)%
|
|
4%
|
|
0%
|
|
(4)%
|
(d)(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended
|
|
|
|
September 30, 2016
vs. 2015
|
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
(15)%
|
|
(1)%
|
|
0%
|
|
9%
|
|
(7)%
|
|
Polyurethanes,
adj
|
|
(15)%
|
|
(1)%
|
|
0%
|
|
6%
|
|
(10)%
|
(c)(e)
|
Performance
Products
|
|
(10)%
|
|
(1)%
|
|
(4)%
|
|
(2)%
|
|
(17)%
|
|
Performance
Products, adj
|
|
(10)%
|
|
(1)%
|
|
(4)%
|
|
(1)%
|
|
(16)%
|
(e)
|
Advanced
Materials
|
|
(2)%
|
|
(2)%
|
|
3%
|
|
(8)%
|
|
(9)%
|
|
Textile
Effects
|
|
(6)%
|
|
(3)%
|
|
0%
|
|
1%
|
|
(8)%
|
|
Pigments &
Additives
|
|
(7)%
|
|
(1)%
|
|
2%
|
|
3%
|
|
(3)%
|
|
Pigments &
Additives, adj
|
|
(7)%
|
|
(1)%
|
|
2%
|
|
3%
|
|
(3)%
|
(d)
|
Total
Company
|
|
(11)%
|
|
(1)%
|
|
(1)%
|
|
4%
|
|
(9)%
|
|
Total Company,
adj
|
|
(11)%
|
|
(1)%
|
|
(1)%
|
|
2%
|
|
(11)%
|
(c)(d)(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Excludes sales
from tolling arrangements, by-products and raw
materials.
|
(b) Excludes sales
from by-products and raw materials.
|
(c) Excludes volume
impact from the planned maintenance at our PO/MTBE facility that
occurred in 1H15.
|
(d) Excludes volume
impact from nitrogen tank incident at our Uerdingen, Germany
facility in 3Q15.
|
(e) Excludes volume
impact from weather related and other production outages in
3Q16.
|
Table 4 --
Reconciliation of U.S. GAAP to Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax
|
|
|
|
|
|
Diluted
Income
|
|
|
|
EBITDA
|
|
(Expense)
Benefit
|
|
Net
Income
|
|
Per
Share
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
In millions, except
per share amounts
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
64
|
|
$
63
|
|
|
|
|
|
$
64
|
|
$
63
|
|
$
0.27
|
|
$
0.26
|
|
Net income
attributable to noncontrolling interests
|
|
(9)
|
|
(8)
|
|
|
|
|
|
(9)
|
|
(8)
|
|
(0.04)
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
55
|
|
55
|
|
|
|
|
|
55
|
|
55
|
|
0.23
|
|
0.22
|
|
Interest
expense
|
|
52
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense from continuing operations
|
|
(1)
|
|
49
|
|
1
|
|
(49)
|
|
|
|
|
|
|
|
|
|
Income tax benefit
from discontinued operations(2)
|
|
-
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
113
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration expenses, purchase accounting adjustments
|
|
8
|
|
10
|
|
(4)
|
|
(2)
|
|
4
|
|
8
|
|
0.02
|
|
0.03
|
|
Loss from
discontinued operations, net of tax(2)
|
|
1
|
|
1
|
|
N/A
|
|
N/A
|
|
1
|
|
-
|
|
-
|
|
-
|
|
Gain on disposition
of businesses/assets
|
|
(22)
|
|
-
|
|
2
|
|
-
|
|
(20)
|
|
-
|
|
(0.08)
|
|
-
|
|
Loss on early
extinguishment of debt
|
|
1
|
|
8
|
|
-
|
|
(3)
|
|
1
|
|
5
|
|
-
|
|
0.02
|
|
Certain legal
settlements and related expenses
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
-
|
|
Plant incident
remediation costs, net
|
|
4
|
|
3
|
|
-
|
|
(1)
|
|
4
|
|
2
|
|
0.02
|
|
0.01
|
|
Amortization of
pension and postretirement actuarial losses
|
|
16
|
|
19
|
|
(4)
|
|
(4)
|
|
12
|
|
15
|
|
0.05
|
|
0.06
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
45
|
|
14
|
|
(11)
|
|
15
|
|
34
|
|
29
|
|
0.14
|
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
272
|
|
$
311
|
|
$
(16)
|
|
$
(44)
|
|
$
91
|
|
$
115
|
|
$
0.38
|
|
$
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(4)
|
|
|
|
|
|
|
|
|
|
$
16
|
|
$
44
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
9
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
116
|
|
$
167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
|
|
|
|
14%
|
|
26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax
|
|
|
|
|
|
Diluted
Income
|
|
|
|
EBITDA
|
|
(Expense)
Benefit
|
|
Net
Income
|
|
Per
Share
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
In millions, except
per share amounts
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
94
|
|
|
|
|
|
|
|
$
94
|
|
|
|
$
0.39
|
|
|
|
Net income
attributable to noncontrolling interests
|
|
(7)
|
|
|
|
|
|
|
|
(7)
|
|
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
87
|
|
|
|
|
|
|
|
87
|
|
|
|
0.36
|
|
|
|
Interest
expense
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
32
|
|
|
|
(32)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
from discontinued operations(2)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration expenses, purchase accounting adjustments
|
|
4
|
|
|
|
-
|
|
|
|
4
|
|
|
|
0.02
|
|
|
|
Loss from
discontinued operations, net of tax(2)
|
|
1
|
|
|
|
N/A
|
|
|
|
1
|
|
|
|
-
|
|
|
|
Loss on early
extinguishment of debt
|
|
2
|
|
|
|
(1)
|
|
|
|
1
|
|
|
|
-
|
|
|
|
Certain legal
settlements and related expenses
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Plant incident
remediation credits, net
|
|
(7)
|
|
|
|
1
|
|
|
|
(6)
|
|
|
|
(0.03)
|
|
|
|
Amortization of
pension and postretirement actuarial losses
|
|
17
|
|
|
|
(3)
|
|
|
|
14
|
|
|
|
0.06
|
|
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
30
|
|
|
|
(5)
|
|
|
|
25
|
|
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
325
|
|
|
|
$
(40)
|
|
|
|
$
126
|
|
|
|
$
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(4)
|
|
|
|
|
|
|
|
|
|
$
40
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
|
|
|
|
23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax
|
|
|
|
|
|
Diluted
Income
|
|
|
|
EBITDA
|
|
(Expense)
Benefit
|
|
Net
Income
|
|
Per
Share
|
|
|
|
Nine months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
In millions, except
per share amounts
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
220
|
|
$
117
|
|
|
|
|
|
$
220
|
|
$
117
|
|
$
0.92
|
|
$
0.47
|
|
Net income
attributable to noncontrolling interests
|
|
(22)
|
|
(28)
|
|
|
|
|
|
(22)
|
|
(28)
|
|
(0.09)
|
|
(0.11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
198
|
|
89
|
|
|
|
|
|
198
|
|
89
|
|
0.83
|
|
0.36
|
|
Interest
expense
|
|
152
|
|
158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
58
|
|
85
|
|
(58)
|
|
(85)
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense from discontinued operations(2)
|
|
(1)
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
322
|
|
297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration expenses, purchase accounting adjustments
|
|
21
|
|
31
|
|
(7)
|
|
(7)
|
|
14
|
|
24
|
|
0.06
|
|
0.10
|
|
Loss from
discontinued operations, net of tax(2)
|
|
4
|
|
3
|
|
N/A
|
|
N/A
|
|
3
|
|
4
|
|
0.01
|
|
0.02
|
|
(Gain) loss on
disposition of businesses/assets
|
|
(22)
|
|
1
|
|
2
|
|
-
|
|
(20)
|
|
1
|
|
(0.08)
|
|
-
|
|
Loss on early
extinguishment of debt
|
|
3
|
|
31
|
|
(1)
|
|
(11)
|
|
2
|
|
20
|
|
0.01
|
|
0.08
|
|
Certain legal
settlements and related expenses
|
|
1
|
|
3
|
|
-
|
|
(1)
|
|
1
|
|
2
|
|
-
|
|
0.01
|
|
Plant incident
remediation (credits) costs, net
|
|
(2)
|
|
3
|
|
1
|
|
(1)
|
|
(1)
|
|
2
|
|
-
|
|
0.01
|
|
Amortization of
pension and postretirement actuarial losses
|
|
49
|
|
56
|
|
(10)
|
|
(14)
|
|
39
|
|
42
|
|
0.16
|
|
0.17
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
88
|
|
223
|
|
(19)
|
|
(39)
|
|
69
|
|
184
|
|
0.29
|
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
871
|
|
$
981
|
|
$
(92)
|
|
$
(158)
|
|
$
305
|
|
$
368
|
|
$
1.28
|
|
$
1.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(4)
|
|
|
|
|
|
|
|
|
|
$
92
|
|
$
158
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
22
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
419
|
|
$
554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
|
|
|
|
22%
|
|
29%
|
|
|
|
|
|
See end of press
release for footnote explanations
|
Table 5 --
Selected Balance Sheet Items
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
|
December
31,
|
In
millions
|
|
2016
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
450
|
|
$
383
|
|
|
$
269
|
Accounts and notes
receivable, net
|
|
1,466
|
|
1,546
|
|
|
1,449
|
Inventories
|
|
1,444
|
|
1,522
|
|
|
1,692
|
Other current
assets
|
|
392
|
|
340
|
|
|
424
|
Property, plant and
equipment, net
|
|
4,298
|
|
4,377
|
|
|
4,446
|
Assets held for
sale
|
|
121
|
|
-
|
|
|
-
|
Other
assets
|
|
1,536
|
|
1,559
|
|
|
1,540
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
9,707
|
|
$
9,727
|
|
|
$
9,820
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
1,026
|
|
$
991
|
|
|
$
1,061
|
Other current
liabilities
|
|
655
|
|
602
|
|
|
686
|
Current portion of
debt
|
|
88
|
|
96
|
|
|
170
|
Long-term
debt
|
|
4,468
|
|
4,653
|
|
|
4,625
|
Liabilities held for
sale
|
|
30
|
|
-
|
|
|
-
|
Other
liabilities
|
|
1,669
|
|
1,677
|
|
|
1,649
|
Total
equity
|
|
1,771
|
|
1,708
|
|
|
1,629
|
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
9,707
|
|
$
9,727
|
|
|
$
9,820
|
Table 6 --
Outstanding Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
December
31,
|
In
millions
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt:
|
|
|
|
|
|
|
Senior credit
facilities
|
|
$
2,234
|
|
$
2,435
|
|
$
2,454
|
Accounts receivable
programs
|
|
218
|
|
216
|
|
215
|
Senior
notes
|
|
1,873
|
|
1,862
|
|
1,850
|
Variable interest
entities
|
|
134
|
|
142
|
|
151
|
Other debt
|
|
97
|
|
94
|
|
125
|
|
|
|
|
|
|
|
Total debt -
excluding affiliates
|
|
4,556
|
|
4,749
|
|
4,795
|
|
|
|
|
|
|
|
Total cash
|
|
450
|
|
383
|
|
269
|
|
|
|
|
|
|
|
Net debt-
excluding affiliates
|
|
$
4,106
|
|
$
4,366
|
|
$
4,526
|
Table 7 --
Summarized Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
September
30,
|
|
September
30,
|
In
millions
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Total cash at
beginning of period(a)
|
$
383
|
|
$
269
|
|
$
870
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
405
|
|
848
|
|
387
|
Net cash used in
investing activities
|
(96)
|
|
(270)
|
|
(383)
|
Net cash used in
financing activities
|
(244)
|
|
(397)
|
|
(418)
|
Effect of exchange
rate changes on cash
|
1
|
|
1
|
|
(13)
|
Change in restricted
cash
|
1
|
|
(1)
|
|
(6)
|
|
|
|
-
|
|
|
Total cash at end
of period(a)
|
$
450
|
|
$
450
|
|
$
437
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
Cash paid for
interest
|
$
(36)
|
|
$
(139)
|
|
$
(158)
|
Cash paid for income
taxes
|
(8)
|
|
(29)
|
|
(81)
|
Cash paid for capital
expenditures
|
(101)
|
|
(290)
|
|
(454)
|
Depreciation and
amortization
|
113
|
|
322
|
|
297
|
|
|
|
|
|
|
Changes in primary
working capital:
|
|
|
|
|
|
Accounts and notes
receivable
|
$
84
|
|
$
(6)
|
|
$
(53)
|
Inventories
|
69
|
|
246
|
|
46
|
Accounts
payable
|
40
|
|
(16)
|
|
(111)
|
|
|
|
|
|
|
Total cash provided
by (used in) primary working capital
|
$
193
|
|
$
224
|
|
$
(118)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2016
|
|
2015
|
Free cash
flow(3):
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
405
|
|
$
848
|
|
$
387
|
Capital
expenditures
|
(101)
|
|
(290)
|
|
(454)
|
All other investing
activities
|
5
|
|
20
|
|
71
|
Excluding acquisition
and disposition activities(b)
|
(9)
|
|
(9)
|
|
(5)
|
|
|
|
|
|
|
Total free cash
flow
|
$
300
|
|
$
569
|
|
$
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
272
|
|
$
871
|
|
$
981
|
Capital
expenditures
|
(101)
|
|
(290)
|
|
(454)
|
Capital
reimbursements
|
1
|
|
28
|
|
11
|
Interest
|
(36)
|
|
(139)
|
|
(158)
|
Income
taxes
|
(8)
|
|
(29)
|
|
(81)
|
Primary working
capital change
|
193
|
|
224
|
|
(118)
|
Restructuring
|
(29)
|
|
(85)
|
|
(82)
|
Pensions
|
(18)
|
|
(63)
|
|
(87)
|
Maintenance &
other
|
26
|
|
52
|
|
(13)
|
|
|
|
|
|
|
Total free cash
flow(3)
|
$
300
|
|
$
569
|
|
$
(1)
|
|
(a) Includes
restricted cash.
|
(b) Represents
"Acquisition of business, net of cash acquired", "Cash
received from purchase price adjustment for business acquired", and
"Proceeds from sale of business/assets".
|
|
Footnotes
|
|
|
(1)
|
We use adjusted
EBITDA to measure the operating performance of our business.
We provide adjusted net income because we feel it provides
meaningful insight for the investment community into the
performance of our business. We believe that net income
(loss) is the performance measure calculated and presented in
accordance with generally accepted accounting principles in the
U.S. ("GAAP") that is most directly comparable to adjusted EBITDA
and adjusted net income. Additional information with respect
to our use of each of these financial measures follows:
|
|
|
|
Adjusted EBITDA,
adjusted net income (loss) and adjusted diluted income (loss) per
share, as used herein, are not necessarily comparable to other
similarly titled measures of other companies.
|
|
|
|
Adjusted EBITDA is
computed by eliminating the following from net income (loss):
(a) net income attributable to noncontrolling interest, net of tax;
(b) interest; (c) income taxes; (d) depreciation and amortization;
(e) acquisition and integration expenses, purchase accounting
adjustments; (f) EBITDA from discontinued operations; (g) loss
(gain) on disposition of businesses/assets; (h) loss on early
extinguishment of debt; (i) certain legal settlements and related
expenses; (j) plant incident remediation costs (credits), net; (k)
amortization of pension and postretirement actuarial losses
(gains); and (l) restructuring, impairment, plant closing and
transition costs (credits). The reconciliation of adjusted
EBITDA to net income (loss) is set forth in Table 4
above.
|
|
|
|
Adjusted net income
(loss) and adjusted diluted income (loss) per share are computed by
eliminating the after tax impact of the following items from net
income (loss): (a) net income attributable to noncontrolling
interest; (b) acquisition and integration expenses, purchase
accounting adjustments; (c) impact of certain foreign tax credit
elections; (d) loss (income) from discontinued operations; (e)
discount amortization on settlement financing associated with the
terminated merger; (f) loss (gain) on disposition of
businesses/assets; (g) loss on early extinguishment of debt; (h)
certain legal settlements and related expenses; (i) plant incident
remediation costs (credits), net; (j) amortization of pension and
postretirement actuarial losses (gains); and (k) restructuring,
impairment, plant closing and transition costs (credits). The
income tax impacts, if any, of each adjusting item represent a
ratable allocation of the total difference between the unadjusted
tax expense and the total adjusted tax expense, computed without
consideration of any adjusting items using a with and without
approach. We do not adjust for changes in tax valuation
allowances because we do not believe it provides more meaningful
information than is provided under GAAP. The reconciliation
of adjusted net income (loss) to net income (loss) is set forth in
Table 4 above.
|
|
|
(2)
|
During the first
quarter 2010 we closed our Australian styrenics operations; results
from associated business are treated as discontinued
operations.
|
|
|
(3)
|
Management internally
uses a free cash flow measure: (a) to evaluate the Company's
liquidity, (b) to evaluate strategic investments, (c) to plan stock
buyback and dividend levels and (d) to evaluate the Company's
ability to incur and service debt. Free cash flow is not a defined
term under U.S. GAAP, and it should not be inferred that the entire
free cash flow amount is available for discretionary expenditures.
The Company defines free cash flow as cash flow provided by
operating activities less cash flow used in investing activities,
excluding merger and acquisition activities. Free cash flow is
typically derived directly from the Company's condensed
consolidated statement of cash flows; however, it may be adjusted
for items that affect comparability between periods.
|
About Huntsman:
Huntsman Corporation is a publicly
traded global manufacturer and marketer of differentiated chemicals
with 2015 revenues of approximately $10
billion. Our chemical products number in the thousands
and are sold worldwide to manufacturers serving a broad and diverse
range of consumer and industrial end markets. We operate more than
100 manufacturing and R&D facilities in approximately 30
countries and employ approximately 15,000 associates within our 5
distinct business divisions. For more information about Huntsman,
please visit the company's website at
www.huntsman.com.
Social Media:
Twitter:
twitter.com/Huntsman_Corp
Facebook: www.facebook.com/huntsmancorp
LinkedIn:
www.linkedin.com/company/huntsman
Forward-Looking Statements:
Statements in this
release that are not historical are forward-looking statements.
These statements are based on management's current beliefs and
expectations. The forward-looking statements in this release are
subject to uncertainty and changes in circumstances and involve
risks and uncertainties that may affect the company's operations,
markets, products, services, prices and other factors as discussed
in the Huntsman companies' filings with the U.S. Securities and
Exchange Commission. Significant risks and uncertainties may relate
to, but are not limited to, financial, economic, competitive,
environmental, political, legal, regulatory and technological
factors. The company assumes no obligation to provide
revisions to any forward-looking statements should circumstances
change, except as otherwise required by applicable laws.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/huntsman-announces-third-quarter-results-and-filing-of-initial-form-10-registration-statement-for-spin-off-300353090.html
SOURCE Huntsman Corporation