ADJUSTED EBITDA IN LINE WITH FOURTH QUARTER RESULTS; AVAILABLE
LIQUIDITY OF $1.1 BILLION THE WOODLANDS, Texas, May 8
/PRNewswire-FirstCall/ -- First Quarter 2009 Highlights -- Revenues
for the first quarter of 2009 were $1,693 million, a decrease of
33% compared to $2,540 million for the first quarter of 2008 and a
decrease of 17% compared to $2,048 million for the fourth quarter
of 2008. -- As of March 31, 2009, we had $1,115 million of combined
cash and unused borrowing capacity consisting of $473 million cash
and $642 million available borrowings under our credit facilities.
We generated positive cash flow through aggressive management of
our primary working capital. This available liquidity uniquely
positions our business during these challenging economic times. --
Net loss attributable to Huntsman Corporation for the first quarter
of 2009 was $290 million or $1.24 loss per diluted share compared
to net income attributable to Huntsman Corporation of $7 million or
$0.03 per diluted share for the same period in 2008 and net income
attributable to Huntsman Corporation of $598 million or $2.53 per
diluted share for the fourth quarter of 2008. Adjusted net loss
from continuing operations attributable to Huntsman Corporation for
the first quarter of 2009 was $274 million or $1.17 loss per
diluted share including tax expense of $146 million or $0.62 per
diluted share due to the establishment of a tax valuation allowance
in the U.K. Excluding the tax valuation allowance the first quarter
2009 loss from continuing operations attributable to Huntsman
Corporation was $128 million or $0.55 loss per diluted share. This
adjusted net loss reflects a decrease compared to adjusted net
income from continuing operations attributable to Huntsman
Corporation of $17 million or $0.07 per diluted share for the same
period in 2008 and adjusted net loss from continuing operations
attributable to Huntsman Corporation of $91 million or $0.38 loss
per diluted share for the fourth quarter of 2008. -- On April 16,
2009, we announced that as a matter of precautionary planning our
wholly owned subsidiary Huntsman International LLC entered into a
credit agreement waiver with lenders of its $650 million revolving
credit facility. Among other things the waiver relaxed the senior
secured leverage ratio covenant from 3.75 to 1.00 to 5.00 to 1.00
for the measurement periods between June 30, 2009 and June 30,
2010. -- On January 22, 2009, we announced a company-wide
initiative to reduce costs across all divisions and functions.
Including steps begun in the fourth quarter of 2008, we intend to
reduce our full-time employment by approximately 1,250 positions -
nearly 10% of all employees. In addition, full-time contractor
positions will be reduced by 490. Annualized operating cost savings
from all elements of the initiative are estimated to be $150
million. -- Adjusted EBITDA from continuing operations for the
first quarter of 2009 was $50 million compared to $188 million for
the same period in 2008 and $51 million for the fourth quarter of
2008. -- We continue to pursue our multi-billion dollar fraud and
tortious interference claims against Credit Suisse and Deutsche
Bank. The court in Montgomery County, Texas has ordered mediation
to begin on May 13, 2009 and trial to commence on June 8, 2009.
Summarized earnings are as follows: Three months ended Three months
March 31, ended --------- ----- December In millions, except per
share amounts 2009 2008 31, 2008
------------------------------------- ---- ---- --------- Net
(loss) income attributable to Huntsman Corporation $(290) $7 $598
Adjusted net (loss) income from continuing operations $(274) $17
$(91) Diluted (loss) income per share $(1.24) $0.03 $2.53 Adjusted
diluted (loss) income per share from continuing operations $(1.17)
$0.07 $(0.38) EBITDA $30 $170 $984 Adjusted EBITDA from $50 $188
$51 continuing operations See end of press release for important
explanations Peter R. Huntsman, our President and CEO, stated: "Our
results for the first quarter of 2009 reflect decreased demand in
all our businesses resulting from the worldwide economic slowdown.
Although average demand for the quarter was soft, in fact it was
softer than the fourth quarter, we did see positive order patterns
within the first quarter and left the quarter with stronger demand
than we entered. We have taken aggressive action to manage those
business elements within our control. We are ahead of target and
schedule to eliminate in excess of $150 million from our cost
structure. We are actively managing our working capital for
improvements to provide additional liquidity and we have obtained a
waiver to our credit agreement that relaxes certain covenants and
preserves our ability to access our $650 million revolver." He
added, "With our strong liquidity and lower cost structure we are
well positioned for the current recession and to prosper as we see
a return to normal market conditions." Huntsman Corporation
Operating Results Three months ended March 31, In millions, except
per share amounts 2009 2008 -------------------------------------
---- ---- Revenues $1,693 $2,540 Cost of goods sold 1,548 2,173
----- ----- Gross profit 145 367 Operating expenses 225 276
Restructuring, impairment and plant closing costs 14 4 --- ---
Operating (loss) income (94) 87 Interest expense, net (55) (65)
Loss on accounts receivable securitization program (4) (4) Equity
in income of investment in unconsolidated affiliates 1 3 Expenses
associated with the Merger and related litigation (7) (5) --- ---
(Loss) income from continuing operations before income taxes (159)
16 Income tax expense (138) (4) ---- --- (Loss) income from
continuing operations (297) 12 Income (loss) from discontinued
operations, net of tax(1) 3 (1) --- --- Net (loss) income (294) 11
Less net loss (income) attributable to noncontrolling interests 4
(4) --- --- Net (loss) income attributable to Huntsman Corporation
$(290) $7 ===== === Net (loss) income attributable to Huntsman
Corporation $(290) $7 Interest expense, net 55 65 Income tax
expense 138 4 Depreciation and amortization 126 94 Income taxes
included in discontinued operations(1,3) 1 - --- --- EBITDA(3) $30
$170 Adjusted EBITDA - continuing operations(3) $50 $188 Basic
(loss) income per share $(1.24) $0.03 Diluted (loss) income per
share $(1.24) $0.03 Adjusted diluted (loss) income per share from
continuing operations(3) $(1.17) $0.07 Common share information:
Basic shares outstanding 234 227 Diluted shares 234 234 See end of
press release for footnote explanations Huntsman Corporation
Segment Results Three months ended March 31, In millions 2009 2008
---- ---- Segment Revenues: Polyurethanes $600 $1,002 Advanced
Materials 257 379 Textile Effects 152 243 Performance Products 500
631 Pigments 196 285 Eliminations and other (12) - --- --- Total
$1,693 $2,540 ====== ====== Segment EBITDA(3): Polyurethanes $26
$132 Advanced Materials 10 40 Textile Effects (11) (1) Performance
Products 81 53 Pigments (29) 10 Corporate and other (51) (63)
Discontinued operations(1) 4 (1) --- --- Total $30 $170 === ====
Segment Adjusted EBITDA(3) : Polyurethanes $27 $132 Advanced
Materials 10 40 Textile Effects (11) - Performance Products 81 53
Pigments (16) 11 Corporate and other (41) (48) --- --- Total $50
$188 === ==== Three months ended March 31, 2009 vs. 2008
------------- Average Sales Period-Over-Period Decrease Selling
Price Volume ------------- ------ Polyurethanes (27)% (18)%
Advanced Materials (8)% (27)% Textile Effects (4)% (34)%
Performance Products (a) (13)% (10)% Pigments (2)% (30)% (a)
Excludes revenues and sales volumes from tolling arrangements. See
end of press release for footnote explanations Three Months Ended
March 31, 2009 Compared to Three Months Ended March 31, 2008
Revenues for the three months ended March 31, 2009 decreased to
$1,693 million from $2,540 million during the same period in 2008.
Revenues decreased due to lower sales volumes and lower average
selling prices in all of our segments. For the three months ended
March 31, 2009, EBITDA was $30 million compared to $170 million in
the same period in 2008. Adjusted EBITDA from continuing operations
for the three months ended March 31, 2009 was $50 million compared
to $188 million for the same period in 2008. Polyurethanes The
decrease in revenues in the Polyurethanes segment for the three
months ended March 31, 2009 compared to the same period in 2008 was
primarily due to lower MDI sales volumes and overall lower average
selling prices. MDI sales volumes decreased primarily due to lower
demand in all regions and across all major markets as a result of
the worldwide economic slowdown. MDI average selling prices
decreased primarily due to competitive pressures, lower raw
material costs and the strength of the U.S. dollar against major
European currencies. PO and MTBE sales volumes increased due to
stronger demand while average selling prices decreased with lower
raw material costs. The decrease in EBITDA in the Polyurethanes
segment was primarily the result of lower MDI sales volumes and
margins partially offset by lower general and administrative costs.
Advanced Materials The decrease in revenues in the Advanced
Materials segment for the three months ended March 31, 2009
compared to the same period in 2008 was due to lower sales volumes
and lower average selling prices. Sales volumes decreased due to
lower demand in all regions and across all major markets as a
result of the worldwide economic slowdown. Average selling prices
decreased primarily as a result of increased competition in our
base resins market and the strength of the U.S. dollar against
major European currencies. The decrease in EBITDA was primarily due
to lower sales volumes, partially offset by lower raw material and
fixed costs. Textile Effects The decrease in revenues in the
Textile Effects segment for the three months ended March 31, 2009
compared to the same period in 2008 was due to lower sales volumes
and lower average selling prices. Sales volumes decreased primarily
due to lower demand for Apparel and Home Textile products, as well
as for Specialty Textiles products in all regions as a result of
the worldwide economic slowdown. Average selling prices decreased
primarily as a result of the strength of the U.S. dollar against
major European currencies, the Indian Rupee and Brazilian Real
while selling prices in local currency were higher in Asia and the
Americas. The decrease in EBITDA was primarily due to lower sales
volumes, partially offset by lower raw material and fixed costs.
Performance Products The decrease in revenues in the Performance
Products segment for the three months ended March 31, 2009 compared
to the same period in 2008 was due to a decrease in both average
selling prices and sales volumes. Average selling prices decreased
in response to lower raw material costs. Sales volumes decreased
across most product lines primarily due to the worldwide economic
slowdown. The increase in EBITDA in the Performance Products
segment was mainly due to higher contribution margins resulting
from lower raw material costs. Also, in the prior year period our
Port Neches, Texas facility underwent an extended turnaround and
inspection, the financial impact of which we estimate was
approximately $14 million. Pigments The decrease in revenues in the
Pigments segment for the three months ended March 31, 2009 compared
to the same period in 2008 was due to lower sales volumes and lower
average selling prices. Sales volumes decreased primarily due to
lower demand in all regions as a result of the worldwide economic
slowdown. Average selling prices decreased primarily as a result of
the strength of the U.S. dollar against major European currencies
while selling prices in local currency were higher. The decrease in
EBITDA in the Pigments segment was primarily due to lower sales
volumes and higher restructuring and plant closing costs. During
the three months ended March 31, 2009 the Pigments segment recorded
restructuring, impairment and plant closing costs of $13 million
compared to $1 million for the same period in 2008. Discontinued
Operations On November 5, 2007, we completed the sale of the assets
that comprised our U.S. base chemicals business to Flint Hills
Resources. On August 1, 2007, we completed the sale of the majority
of the assets that comprised our Polymers segment to Flint Hills
Resources. Results from these businesses have been classified as
discontinued operations. Corporate and Other Corporate and other
items include the results of our Australia styrenics business,
unallocated foreign exchange gains and losses, unallocated
corporate overhead, loss on the sale of accounts receivable, merger
and related litigation associated income and expense, income and
expense attributable to noncontrolling interests, unallocated
restructuring costs, gain and loss on the disposition of assets and
other non-operating income and expense. In the first quarter of
2009, the total of these items was a loss of $51 million compared
to a loss of $63 million in the comparable period of 2008. The
increase in EBITDA from these items was primarily the result of an
$8 million increase in income attributable to noncontrolling
interests and a $6 million increase in unallocated foreign exchange
gains ($2 million in gains in the 2009 period compared to $4
million in losses in the 2008 period). Income Taxes During the
three months ended March 31, 2009, we recorded $138 million of
income tax expense compared to $4 million of income tax expense in
the comparable period of 2008. During the first quarter of 2009, we
established a valuation allowance of $146 million on our U.K. net
deferred tax assets, primarily as a result of cumulative losses
through the current period. Liquidity, Capital Resources and
Outstanding Debt As of March 31, 2009 we had $1,115 million of
combined cash and unused borrowing capacity compared to $1,291
million at December 31, 2008. During the three months ended March
31, 2009, net debt plus outstandings under our off-balance sheet
accounts receivable securitization program decreased $37 million.
On April 16, 2009, we announced that our wholly owned subsidiary,
Huntsman International LLC, entered into a credit agreement waiver
with the lenders under its $650 million revolving credit facility.
The waiver relaxes the senior secured leverage ratio covenant from
3.75 to 1.00 to 5.00 to 1.00 for the measurement periods between
June 30, 2009 and June 30, 2010. The waiver, among other things,
also modifies the definition of Consolidated EBITDA and permits
Huntsman International LLC to add back any lost profits
attributable to Hurricanes Gustav and Ike that occurred in 2008.
Additionally, the amount of permitted cash charges that can be
added back to Consolidated EBITDA was increased from $100 million
to $200 million. As consideration for the waiver, Huntsman
International offered a one-time payment of 50 basis points to
consenting lenders. In addition the LIBOR spread on borrowed funds
under the revolving credit facility increased to 400 basis points.
Among other things, Huntsman also agreed not to make aggregate
restricted payments greater than $100 million plus Available Equity
Proceeds during the waiver period. During the first quarter 2009,
we achieved a favorable cash benefit from changes in accounts
receivable, inventory and accounts payable of $58 million. For the
three months ended March 31, 2009, total capital expenditures were
$61 million compared to $109 million for the same period in 2008.
We expect to spend approximately $230 million on capital
expenditures in 2009 compared to approximately $418 million in
2008. We continue to pursue our multi-billion dollar fraud and
tortious interference claims against Credit Suisse and Deutsche
Bank in the Montgomery County, Texas court. Any potential recovery
resulting from this litigation may impact our liquidity. In
connection with our ongoing insurance claim related to the April
29, 2006 Port Arthur, Texas fire, we have received partial
insurance proceeds to date of $365 million. We have claimed an
additional $243 million as presently due and owing and unpaid under
our insurance policies as of March 31, 2009. The settlement of
insurance claims will continue during 2009. Any anticipated
recoveries are expected to be used to repay secured debt. Below is
our outstanding debt: March 31, December 31, In millions 2009 2008
---- ---- Debt: Senior Credit Facilities $1,524 $1,540 Secured
Notes 295 295 Senior Notes 198 198 Subordinated Notes 1,238 1,285
Other Debt 284 329 Convertible Notes 235 235 --- --- Total Debt
3,774 3,882 ----- ----- Total Cash 473 662 --- --- Net Debt $3,301
$3,220 ====== ====== Off-balance sheet accounts receivable
securitization program $328 $446 Huntsman Corporation
Reconciliation of Adjustments Net Income (Loss) Attributable
Diluted to Huntsman Income (Loss) EBITDA Corporation Per Share
------ ------------- --------- Three months Three months Three
months ended ended ended In millions, except March 31, March 31,
March 31, per share amounts 2009 2008 2009 2008 2009 2008
-------------------- ---- ---- ---- ---- ---- ---- GAAP $30 $170
$(290) $7 $(1.24) $0.03 Adjustments: Loss on accounts receivable
securitization program 4 4 - - - - Unallocated foreign currency
(gain) loss (2) 4 - 1 - - Other restructuring, impairment and plant
closing costs 14 4 14 3 0.06 0.01 Expenses associated with the
Merger 7 5 4 5 0.02 0.02 Acquisition related expenses 1 - 1 - - -
(Income) loss from discontinued operations, net of tax(1) (4) 1 (3)
1 (0.01) - --- ---- ----- --- ------ ----- Adjusted continuing
operations $50 $188 $(274) $17 $(1.17) $0.07 ------ ----- UK tax
valuation allowance - - 146 - 0.62 - --- --- --- --- --- ---
Adjusted continuing operations (excluding UK tax valuation
allowance) $50 $188 $(128) $17 $(0.55) $0.07 ------ -----
Discontinued operations $4 $(1) $3 $(1) $0.01 $- (Gain) loss on
disposition of assets (4) 1 (3) 1 (0.01) - --- --- --- --- -----
--- Adjusted discontinued operations(1) $- $- $- $- $- $- Three
months ended December 31, In millions 2008 ----------- ---- Net
income attributable to Huntsman Corporation 598 Interest expense,
net 64 Income tax expense 148 Depreciation and amortization 108
Income taxes, depreciation and amortization included in
discontinued operations(1,3) 66 --- EBITDA(3) $984 Net Income
(Loss) Diluted Attributable Income to Huntsman (Loss) EBITDA
Corporation Per Share Three months Three months Three months ended
ended ended In millions, except per December 31, December 31,
December 31, share amounts 2008 2008 2008 -----------------------
---- ---- ---- GAAP $984 $598 2.53 Adjustments: Loss on accounts
receivable securitization program 11 - - Unallocated foreign
currency loss 25 12 0.05 Loss on early extinguishment of debt 1 - -
Other restructuring, impairment and plant closing costs 28 25 0.11
Income associated with the Merger (815) (610) (2.58) Gain on
dispositions of assets (1) - - Gain from discontinued operations,
net of tax(1) (178) (112) (0.47) Extraordinary gain on the
acquisition of a business, net of tax(2) (4) (4) (0.02) --- ----
------ Adjusted continuing operations $51 $(91) $(0.38) ------ See
end of press release for footnote explanations Conference Call
Information We will hold a conference call to discuss our first
quarter 2009 financial results on Friday, May 8, 2009 at 11:00 a.m.
ET. Call-in number for U.S. participants: (888) 680 - 0892 Call-in
number for international participants: (617) 213 - 4858 Participant
access code: 42481081 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=PM4FPJMTR
The conference call will be available via webcast and can be
accessed from the investor relations portion of the company's
website at http://www.huntsman.com/. The conference call will be
available for replay beginning May 8, 2009 and ending May 15, 2009.
Call-in numbers for the replay: Within the U.S.: (888) 286 - 8010
International: (617) 801 - 6888 Access code for replay: 16299215
About Huntsman: Huntsman (NYSE:HUN) is a global manufacturer and
marketer of differentiated chemicals. Its operating companies
manufacture products for a variety of global industries, including
chemicals, plastics, automotive, aviation, textiles, footwear,
paints and coatings, construction, technology, agriculture, health
care, detergent, personal care, furniture, appliances and
packaging. Originally known for pioneering innovations in packaging
and, later, for rapid and integrated growth in petrochemicals,
Huntsman has more than 12,000 employees and operates from multiple
locations worldwide. The Company had 2008 revenues exceeding $10
billion. For more information about Huntsman, please visit the
company's website at http://www.huntsman.com/. 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. In
addition, the completion of any transactions described in this
release is subject to a number of uncertainties and closing will be
subject to approvals and other customary conditions. Accordingly,
there can be no assurance that such transactions will be completed
or that the company's expectations will be realized. The company
assumes no obligation to provide revisions to any forward-looking
statements should circumstances change, except as otherwise
required by applicable laws. (1) On November 5, 2007, we completed
the sale of our U.S. base chemicals business to Flint Hills
Resources. On August 1, 2007, we completed the sale of our U.S.
polymers business to Flint Hills Resources. On December 29, 2006,
we completed the sale of our European petrochemicals business to
SABIC. Results from these businesses are treated as discontinued
operations. Segment EBITDA discontinued operations only includes
the results of our U.S. base chemicals, U.S. polymers and European
petrochemical businesses. (2) On June 30, 2006, we acquired the
global textile effects business of Ciba Specialty Chemicals Inc.
for approximately $172 million. Because the fair value of acquired
current assets less liabilities assumed exceeded the acquisition
price and planned restructuring costs, the excess was recorded as
an extraordinary gain on the acquisition of a business. The
extraordinary gain recorded during the three months ended December
31, 2008 was $4 million of which taxes were not applicable. (3) We
use EBITDA, Adjusted EBITDA from continuing operations, Adjusted
EBITDA from discontinued operations, Adjusted net income from
continuing operations and Adjusted net income from discontinued
operations. We believe that net income (loss) attributable to
Huntsman Corporation 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
EBITDA, Adjusted EBITDA from continuing operations and Adjusted net
income from continuing operations. We believe that income (loss)
from discontinued operations is the performance measure calculated
and presented in accordance with GAAP that is most directly
comparable to Adjusted EBITDA from discontinued operations and
Adjusted net income from discontinued operations. Additional
information with respect to our use of each of these financial
measures follows: EBITDA is defined as net income (loss)
attributable to Huntsman Corporation before interest, income taxes,
and depreciation and amortization. EBITDA as used herein is not
necessarily comparable to other similarly titled measures of other
companies. The reconciliation of EBITDA to net income (loss)
available to common stockholders is set forth in the operating
results table above. Adjusted EBITDA from continuing operations is
computed by eliminating the following from EBITDA: gains and losses
from discontinued operations; restructuring, impairment and plant
closing (credits) costs; merger associated income and expense;
losses on the sale of accounts receivable to our securitization
program; unallocated foreign currency (gain) loss; certain legal
and contract settlements; losses from early extinguishment of debt;
extraordinary loss (gain) on the acquisition of a business; and
loss (gain) on dispositions of assets. The reconciliation of
Adjusted EBITDA from continuing operations to EBITDA is set forth
in the Reconciliation of Adjustments table above. Adjusted EBITDA
from discontinued operations is computed by eliminating the
following from income (loss) from discontinued operations: income
taxes; depreciation and amortization; restructuring, impairment and
plant closing (credits) costs; losses on the sale of accounts
receivable to our securitization program; unallocated foreign
currency (gain) loss; gain on partial fire insurance settlement;
and (gain) loss on disposition of assets. The following table
provides a reconciliation of Adjusted EBITDA from discontinued
operations to income (loss) from discontinued operations: Three
months ended March 31, 2009 2008 ---- ---- Net Income (loss) from
discontinued operations, net of tax $3 $(1) Income tax expense 1 -
--- --- EBITDA from discontinued operations 4 (1) (Gain) loss on
disposition of assets (4) 1 --- --- Adjusted EBITDA from
discontinued operations $- $- === === Adjusted net income (loss)
from continuing operations is computed by eliminating the after tax
impact of the following items from net income (loss) attributable
to Huntsman Corporation: loss (income) from discontinued
operations; restructuring, impairment and plant closing (credits)
costs; merger associated income and expense; unallocated foreign
currency (gain) loss; certain legal and contract settlements;
losses on the early extinguishment of debt; extraordinary loss
(gain) on the acquisition of a business; and loss (gain) on
dispositions of assets. The reconciliation of Adjusted net income
(loss) from continuing operations to net income (loss) attributable
to Huntsman Corporation common stockholders is set forth in the
Reconciliation of Adjustments table above. Adjusted net income
(loss) from discontinued operations is computed by eliminating the
after tax impact of the following items from income (loss) from
discontinued operations: restructuring, impairment and plant
closing (credits) costs; gain on partial fire insurance settlement;
and (gain) loss on the disposition of assets. The reconciliation of
Adjusted net income (loss) from discontinued operations to net
income (loss) available to common stockholders is set forth in the
Reconciliation of Adjustments table above. DATASOURCE: Huntsman
Corporation CONTACT: Media, Russ Stolle, +1-281-719-6624, or
Investor Relations, Kurt Ogden, +1-801-584-5959, both of Huntsman
Corporation Web Site: http://www.huntsman.com/
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