WYNYARD, UK, May 1, 2018 /PRNewswire/ --
First Quarter 2018 Highlights
- Net income attributable to Venator of $78 million compared to a net loss of
$16 million in the prior year
period
- Adjusted EBITDA of $157 million
compared to $49 million in the prior
year period
- Diluted earnings per share of $0.73 and adjusted diluted earnings per share of
$0.85
- Net cash provided by operating activities from continuing
operations was $51 million, free cash
flow was $(15) million or
$23 million excluding the impact of
Pori
- $10 million of adjusted EBITDA
benefit captured from our Business Improvement Program in the first
quarter of 2018
Subsequent Developments
- $236 million (€191 million) of
insurance proceeds received in the second quarter of 2018
representing the final payment and the full extent of our policy
limits
|
|
Three months
ended
|
|
|
March
31,
|
|
December
31,
|
(In millions, except per share amounts)
|
|
2018
|
|
2017
|
|
2017
|
Revenues
|
|
$
|
622
|
|
|
$
|
537
|
|
|
$
|
528
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Venator
|
|
$
|
78
|
|
|
$
|
(16)
|
|
|
$
|
68
|
|
Adjusted net
income(1)
|
|
$
|
91
|
|
|
$
|
9
|
|
|
$
|
65
|
|
Adjusted
EBITDA(1)
|
|
$
|
157
|
|
|
$
|
49
|
|
|
$
|
118
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share(1)
|
|
$
|
0.73
|
|
|
$
|
(0.15)
|
|
|
$
|
0.64
|
|
Adjusted diluted
earnings per share(1)
|
|
$
|
0.85
|
|
|
$
|
0.08
|
|
|
$
|
0.61
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities from continuing operations
|
|
$
|
51
|
|
|
$
|
21
|
|
|
$
|
157
|
|
Operating free cash
flow(3)
|
|
$
|
23
|
|
|
$
|
(37)
|
|
|
$
|
85
|
|
Free cash
flow(3)
|
|
$
|
(15)
|
|
|
$
|
(37)
|
|
|
$
|
80
|
|
|
See end of press
release for footnote explanations
|
Venator Materials PLC ("Venator") (NYSE: VNTR) today reported
first quarter 2018 results with revenues of $622 million, net income attributable to Venator
of $78 million and adjusted EBITDA of
$157 million.
Simon Turner, President and
CEO of Venator, commented:
"Our first quarter results highlight continued titanium dioxide
pricing momentum, a seasonal improvement in volumes and further
benefit from our $90 million Business
Improvement Program.
"Titanium dioxide industry fundamentals remain favorable and
supportive of an elongated cycle. We are working closely with our
customers and expect a more modest pricing environment as we target
ongoing margin stability. We are well positioned to manage and pass
on raw material headwinds.
"We continue to make progress on the construction phase of our
complex Pori project. Our current estimate for the self-funded
portion of the reconstruction and commissioning remains within the
range of our previous guidance of $325 to $375
million."
Segment Analysis for 1Q18 Compared to 1Q17
Titanium Dioxide
The $71 million, or 18%, increase
in revenues in our Titanium Dioxide segment for the three months
ended March 31, 2018 compared to the same period in 2017 was
primarily due to a 23% increase in average selling prices, a 10%
improvement driven by the favorable impact of foreign exchange
rates, primarily against the Euro, partially offset by a 15%
decrease in sales volumes. The increase in selling prices reflects
continued improvement in business conditions for TiO2,
allowing for an increase in prices globally. Sales volumes
decreased primarily as a result of the fire at our Pori,
Finland manufacturing facility and
as a result of plant closures as part of our restructuring
programs. Excluding the impact of the fire at our Pori plant and
the impact of plants closed as part of our restructuring programs,
sales volumes increased by 2%.
Segment adjusted EBITDA of our Titanium Dioxide segment
increased by $95 million for the
three months ended March 31, 2018
compared to the same period in 2017. This improvement was primarily
a result of higher revenues, $7
million from the sale of carbon credits and $8 million of EBITDA benefit from our Business
Improvement Program, partially offset by increases in raw material
and other direct costs.
Performance Additives
The increase in revenues in our Performance Additives segment of
$14 million, or 9%, for the three
months ended March 31, 2018 compared to the same period in
2017 was primarily due to a 7% increase in average selling prices,
a 6% improvement driven by the favorable impact of foreign exchange
rates, partially offset by a 1% decrease in volumes and a 3%
decrease due to less favorable mix and other. The improvement in
selling prices was primarily in certain color pigment and
functional additives product lines, where we raised prices to
offset increases in raw material costs.
Segment adjusted EBITDA in our Performance Additives segment
increased by $3 million, or 14%
compared to the same period in 2017, due to the increase in revenue
and a $2 million increase due to
savings from our Business Improvement Program, partially offset by
increases in raw material costs.
Corporate and Other
Corporate and other represents expenses which are not allocated
to our segments. Losses from Corporate and other were $10 million lower than the same period in the
prior year as our costs to operate as a standalone company are
lower than those costs historically allocated to us from
Huntsman.
Update on Pori
Currently, 20% of the site's prior total capacity is available
for production. We are focused on restoring an additional 40% of
capacity as quickly as possible to reach an aggregate 60% of former
site capacity for manufacturing of our higher value specialty
products. This reconstruction process entails a series of
mechanical construction phases with a concurrent rolling
commissioning. Subject to the pace of our progress during
commissioning, we expect some of this additional capacity to be
producing finished product during the second half of this year, and
the remaining specialty capacity to be restored and producing
finished product during 2019. Based on current market and economic
conditions, associated costs and projected returns, we intend to
rebuild the commodity production capacity of the facility, but do
not currently expect it to produce product prior to 2020. We
continue to estimate the self-funded portion of the reconstruction
and commissioning remain within the range of our previous guidance
of $325 to $375 million.
Tax Items
We recorded income tax expense of $20
million and income tax benefit of $4
million for the three months ended March 31, 2018 and 2017, respectively.
Our tax expense is significantly affected by the mix of income
and losses in tax jurisdictions in which we operate. We expect our
adjusted long-term effective tax rate will be approximately 15% to
20%. We believe the impact of the U.S. Tax Cuts and Jobs Act of
2017 on our adjusted long-term effective tax rate will not be
material, given the low percentage of our global pre-tax income
earned in the United States. We
expect our cash tax rate will be between 10% to 15%.
Liquidity and Capital Resources
As of March 31, 2018, we had cash and cash equivalents of
$223 million compared with
$238 million as of December 31,
2017. In addition, we have in place an undrawn asset based
revolving credit facility available for our working capital needs
and general corporate purposes with an available borrowing base of
$263 million.
As of March 31, 2018, net debt was
$529 million compared to $519 million as of December 31, 2017. In the
first quarter of 2018, capital expenditures, excluding Pori, were
$20 million. We continue to expect
total capital expenditures, excluding Pori, to be approximately
$120 million in 2018.
Earnings Conference Call Information
We will hold a conference call to discuss our first quarter 2018
results on Tuesday, May 1, 2018 at 9:00 a.m. ET.
|
Call-in numbers for
the conference call:
|
|
U.S.
participants
|
1-866-807-9684
|
|
International
participants
|
1-412-317-5415
|
|
(No passcode
required)
|
|
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 and separate call-in number
to gain immediate access to the call and bypass the live operator.
To pre-register, please go to:
http://dpregister.com/10118623
Webcast Information
The conference call will be available via webcast and can be
accessed from the company's website at
venatorcorp.com/investor-relations.
Replay Information
The conference call will be available for replay beginning
May 1, 2018 and ending May 8,
2018.
|
Call-in numbers for
the replay:
|
|
U.S.
participants
|
1-877-344-7529
|
|
International
participants
|
1-412-317-0088
|
|
Passcode
|
10118623
|
Upcoming Conferences
During the second quarter of 2018, a member of management is
expected to present at the Goldman Sachs Basic Materials Conference
on May 15, 2018 and the Deutsche Bank
Global Industrials and Materials Summit on June 6, 2018. A webcast of the presentations, if
applicable, along with accompanying materials will be available at
venatorcorp.com/investor-relations.
Annual General Meeting of Shareholders
Venator will hold its 2018 Annual General Meeting of
Shareholders on Thursday, May 31,
2018 at 3.00 p.m. local time,
at the offices of Latham & Watkins LLP, 99 Bishopsgate,
London, United Kingdom, EC2M 3XF.
Shareholders of record as of the close of business on April 20, 2018 will be entitled to vote at the
meeting.
Table 1 — Results
of Operations
|
|
|
|
Three months
ended
|
|
|
March
31,
|
(In millions, except per share amounts)
|
|
2018
|
|
2017
|
Revenues
|
|
$
|
622
|
|
|
$
|
537
|
|
Cost of goods
sold
|
|
454
|
|
|
465
|
|
Gross
profit
|
|
168
|
|
|
72
|
|
Operating
expenses
|
|
51
|
|
|
60
|
|
Restructuring,
impairment, and plant closing and transition costs
|
|
9
|
|
|
26
|
|
Operating income
(loss)
|
|
108
|
|
|
(14)
|
|
Interest expense,
net
|
|
(10)
|
|
|
(12)
|
|
Other
income
|
|
2
|
|
|
1
|
|
Income (loss)
before income taxes
|
|
100
|
|
|
(25)
|
|
Income tax (expense)
benefit
|
|
(20)
|
|
|
4
|
|
Income (loss) from
continuing operations
|
|
80
|
|
|
(21)
|
|
Income from
discontinued operations, net of tax
|
|
—
|
|
|
8
|
|
Net income
(loss)
|
|
80
|
|
|
(13)
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
(2)
|
|
|
(3)
|
|
Net income (loss)
attributable to Venator
|
|
$
|
78
|
|
|
$
|
(16)
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
157
|
|
|
$
|
49
|
|
Adjusted net
income(1)
|
|
$
|
91
|
|
|
$
|
9
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
|
$
|
0.73
|
|
|
$
|
(0.15)
|
|
Diluted earnings
(loss) per share(1)
|
|
$
|
0.73
|
|
|
$
|
(0.15)
|
|
Adjusted earnings
per share(1)
|
|
$
|
0.86
|
|
|
$
|
0.08
|
|
Adjusted diluted
earnings per share(1)
|
|
$
|
0.85
|
|
|
$
|
0.08
|
|
|
|
|
|
|
Common share
information(1):
|
|
|
|
|
Basic shares
outstanding
|
|
106.4
|
|
|
106.3
|
|
Diluted
shares
|
|
106.8
|
|
|
106.3
|
|
|
See end of press
release for footnote explanations
|
Table 2 — Results
of Operations by Segment
|
|
|
|
Three months
ended
|
|
|
|
|
March
31,
|
|
Better
/
|
(In millions)
|
|
2018
|
|
2017
|
|
(Worse)
|
Segment
Revenues:
|
|
|
|
|
|
|
Titanium
Dioxide
|
|
$
|
456
|
|
|
$
|
385
|
|
|
18
|
%
|
Performance
Additives
|
|
166
|
|
|
152
|
|
|
9
|
%
|
Total
|
|
$
|
622
|
|
|
$
|
537
|
|
|
16
|
%
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
Titanium
Dioxide
|
|
$
|
143
|
|
|
$
|
48
|
|
|
198
|
%
|
Performance
Additives
|
|
24
|
|
|
21
|
|
|
14
|
%
|
Corporate and
other
|
|
(10)
|
|
|
(20)
|
|
|
50
|
%
|
Total
|
|
$
|
157
|
|
|
$
|
49
|
|
|
220
|
%
|
|
See end of press
release for footnote explanations
|
Table 3 — Factors
Impacting Sales Revenue
|
|
|
Three months
ended
|
|
March 31, 2018 vs. 2017
|
|
Average Selling Price(a)
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales Mix
|
|
Sales
|
|
|
|
Currency
|
|
Rate
|
|
& Other
|
|
Volume(b)
|
|
Total
|
Titanium
Dioxide
|
23
|
%
|
|
10
|
%
|
|
—
|
%
|
|
(15)
|
%
|
|
18
|
%
|
Titanium Dioxide -
adjusted(c)
|
26
|
%
|
|
10
|
%
|
|
2
|
%
|
|
2
|
%
|
|
40
|
%
|
|
|
|
|
|
|
|
|
|
|
Performance
Additives
|
7
|
%
|
|
6
|
%
|
|
(3)
|
%
|
|
(1)
|
%
|
|
9
|
%
|
Performance
Additives - adjusted(c)
|
7
|
%
|
|
6
|
%
|
|
(3)
|
%
|
|
—
|
%
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
18
|
%
|
|
9
|
%
|
|
—
|
%
|
|
(11)
|
%
|
|
16
|
%
|
Total Company -
adjusted(c)
|
21
|
%
|
|
9
|
%
|
|
1
|
%
|
|
1
|
%
|
|
32
|
%
|
|
(a)
|
Excludes revenues
from tolling arrangements, by-products and raw materials
|
(b)
|
Excludes sales
volumes of by-products and raw materials
|
(c)
|
Reflects lost volumes
as a result of the impact of the fire at our Pori plant and closure
of our Calais, Umbogintwini, St. Louis and Easton sites
|
Table 4 —
Reconciliation of U.S. GAAP to Non-GAAP Measures
|
|
|
|
EBITDA
|
|
Income Tax
(Expense)
Benefit (2)
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per Share(1)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
In millions, except per share amounts
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
(loss)
|
|
$
|
80
|
|
|
$
|
(13)
|
|
|
|
|
|
|
$
|
80
|
|
|
$
|
(13)
|
|
|
$
|
0.75
|
|
|
$
|
(0.12)
|
|
Net income
attributable to noncontrolling interests
|
|
(2)
|
|
|
(3)
|
|
|
|
|
|
|
(2)
|
|
|
(3)
|
|
|
(0.02)
|
|
|
(0.03)
|
|
Net income (loss)
attributable to Venator
|
|
78
|
|
|
(16)
|
|
|
|
|
|
|
78
|
|
|
(16)
|
|
|
0.73
|
|
|
(0.15)
|
|
Interest expense,
net
|
|
10
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) from continuing operations
|
|
20
|
|
|
(4)
|
|
|
(20)
|
|
|
4
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
34
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration expenses
|
|
2
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
Separation expense,
net
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
Net income of
discontinued operations
|
|
—
|
|
|
(8)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8)
|
|
|
—
|
|
|
(0.08)
|
|
Amortization of
pension and postretirement actuarial losses
|
|
3
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
4
|
|
|
0.03
|
|
|
0.04
|
|
Net plant incident
costs
|
|
—
|
|
|
5
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
0.04
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
9
|
|
|
26
|
|
|
(1)
|
|
|
(1)
|
|
|
8
|
|
|
25
|
|
|
0.07
|
|
|
0.24
|
|
Adjusted(1)
|
|
$
|
157
|
|
|
$
|
49
|
|
|
$
|
(22)
|
|
|
$
|
2
|
|
|
$
|
91
|
|
|
$
|
9
|
|
|
$
|
0.85
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense (benefit)(2)
|
|
|
|
|
|
|
|
|
|
$
|
22
|
|
|
$
|
(2)
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
2
|
|
|
3
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
|
115
|
|
|
$
|
10
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
|
|
|
|
19
|
%
|
|
N/A
|
|
|
|
|
|
|
|
EBITDA
|
|
Income Tax
(Expense)
Benefit (2)
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per Share(1)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
In millions, except per share amounts
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
Net
income
|
|
$
|
70
|
|
|
|
|
$
|
70
|
|
|
0.66
|
|
Net income
attributable to noncontrolling interests
|
|
(2)
|
|
|
|
|
(2)
|
|
|
(0.02)
|
|
Net income
attributable to Venator
|
|
68
|
|
|
|
|
68
|
|
|
0.64
|
|
Interest
expense
|
|
11
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
24
|
|
|
(24)
|
|
|
|
|
|
Depreciation and
amortization
|
|
32
|
|
|
|
|
|
|
|
Business acquisition
and integration expenses
|
|
3
|
|
|
(1)
|
|
|
2
|
|
|
0.02
|
|
Separation expense,
net
|
|
7
|
|
|
—
|
|
|
7
|
|
|
0.07
|
|
U.S. income tax
reform
|
|
(34)
|
|
|
16
|
|
|
(18)
|
|
|
(0.17)
|
|
Amortization of
pension and postretirement actuarial losses
|
|
4
|
|
|
—
|
|
|
4
|
|
|
0.04
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
3
|
|
|
(1)
|
|
|
2
|
|
|
0.02
|
|
Adjusted(1)
|
|
$
|
118
|
|
|
$
|
(10)
|
|
|
$
|
65
|
|
|
0.61
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
|
|
$
|
10
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
2
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
$
|
77
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
13
|
%
|
|
|
|
See end of press
release for footnote explanations
|
Table 5 — Selected
Balance Sheet Items
|
|
|
|
March
31,
|
|
December
31,
|
(In millions)
|
|
2018
|
|
2017
|
Cash
|
|
$
|
223
|
|
|
$
|
238
|
|
Accounts and notes
receivable, net
|
|
452
|
|
|
392
|
|
Inventories
|
|
482
|
|
|
454
|
|
Prepaid and other
current assets
|
|
93
|
|
|
85
|
|
Property, plant and
equipment, net
|
|
1,444
|
|
|
1,367
|
|
Other
assets
|
|
304
|
|
|
311
|
|
Total
assets
|
|
$
|
2,998
|
|
|
$
|
2,847
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
402
|
|
|
$
|
401
|
|
Other current
liabilities
|
|
269
|
|
|
244
|
|
Current portion of
debt
|
|
9
|
|
|
14
|
|
Long-term
debt
|
|
743
|
|
|
743
|
|
Non-current payable
to affiliates
|
|
34
|
|
|
34
|
|
Other
liabilities
|
|
304
|
|
|
306
|
|
Total
equity
|
|
1,237
|
|
|
1,105
|
|
Total liabilities
and equity
|
|
$
|
2,998
|
|
|
$
|
2,847
|
|
Table 6 —
Outstanding Debt
|
|
|
|
March
31,
|
|
December
31,
|
(In millions)
|
|
2018
|
|
2017
|
Debt:
|
|
|
|
|
Senior
Notes
|
|
$
|
370
|
|
|
$
|
370
|
|
Term Loan
Facility
|
|
366
|
|
|
367
|
|
Other debt
|
|
16
|
|
|
20
|
|
Total debt -
excluding affiliates
|
|
752
|
|
|
757
|
|
Total cash
|
|
223
|
|
|
238
|
|
Net debt -
excluding affiliates
|
|
$
|
529
|
|
|
$
|
519
|
|
Table 7 —
Summarized Statement of Cash Flows
|
|
|
|
Three months
ended
|
|
|
March
31,
|
(In millions)
|
|
2018
|
|
2017
|
Total cash at
beginning of period(a)
|
|
$
|
238
|
|
|
$
|
30
|
|
Net cash provided by
operating activities(a)
|
|
51
|
|
|
22
|
|
Net cash used in
investing activities(a)
|
|
(67)
|
|
|
(59)
|
|
Net cash (used in)
provided by financing activities(a)
|
|
(8)
|
|
|
41
|
|
Effect of exchange
rate changes on cash
|
|
9
|
|
|
1
|
|
Total cash at end
of period(a)
|
|
$
|
223
|
|
|
$
|
35
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
Cash paid for
interest
|
|
$
|
(19)
|
|
|
$
|
(2)
|
|
Cash paid for income
taxes
|
|
(15)
|
|
|
(2)
|
|
Capital
expenditures
|
|
(73)
|
|
|
(19)
|
|
Depreciation and
amortization
|
|
34
|
|
|
30
|
|
Changes in primary
working capital:
|
|
|
|
|
Accounts and
notes receivable
|
|
(50)
|
|
|
(4)
|
|
Inventories
|
|
(12)
|
|
|
(1)
|
|
Accounts
payable
|
|
7
|
|
|
6
|
|
Total cash (used in) provided by primary working
capital
|
|
$
|
(55)
|
|
|
$
|
1
|
|
|
|
|
|
|
Three months
ended
|
|
|
March
31,
|
(In
millions)
|
|
2018
|
|
2017
|
Free cash
flow(3):
|
|
|
|
|
Net cash provided by
operating activities from continuing operations
|
|
$
|
51
|
|
|
$
|
21
|
|
Capital
expenditures
|
|
(73)
|
|
|
(19)
|
|
Cash received from
(investment in) unconsolidated affiliates, net
|
|
6
|
|
|
(3)
|
|
Other investing
activities excluding transactions with former parent and cash flows
related to sales of businesses/assets
|
|
—
|
|
|
(36)
|
|
Non-recurring
separation costs(b)
|
|
1
|
|
|
—
|
|
Total
free cash flow
|
|
$
|
(15)
|
|
|
$
|
(37)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
157
|
|
|
$
|
49
|
|
Capital expenditures
excluding cash paid for Pori rebuild
|
|
(20)
|
|
|
(19)
|
|
Cash paid for
interest
|
|
(19)
|
|
|
(2)
|
|
Cash paid for income
taxes
|
|
(15)
|
|
|
(2)
|
|
Primary working
capital change
|
|
(55)
|
|
|
1
|
|
Restructuring
|
|
(9)
|
|
|
(26)
|
|
Pensions
|
|
(3)
|
|
|
(4)
|
|
Maintenance & other
|
|
(13)
|
|
|
(34)
|
|
Operating free
cash flow
|
|
23
|
|
|
(37)
|
|
Net cash flows
associated with Pori
|
|
(38)
|
|
|
—
|
|
Total free cash
flow(3)
|
|
$
|
(15)
|
|
|
$
|
(37)
|
|
|
See end of press
release for numbered footnote explanations
|
|
(a)
|
Includes discontinued
operations
|
(b)
|
Represents payments
associated with our separation from Huntsman
|
Footnotes
(1)
|
Our management uses
adjusted EBITDA to assess financial performance. Adjusted EBITDA is
defined as net income (loss) before interest expense, net, income
tax (benefit) from continuing operations, depreciation and
amortization, and net income attributable to noncontrolling
interests, after eliminating the following: (a) business
acquisition and integration expenses; (b) separation expense,
net; (c) net income of discontinued operations net of tax;
(d) amortization of pension and postretirement actuarial
losses; (e) net plant incident (credits) costs; and
(f) restructuring, impairment, plant closing and transition
costs. We believe that net income (loss) is the performance measure
calculated and presented in accordance with U.S. GAAP that is
most directly comparable to adjusted EBITDA.
|
|
|
|
We believe adjusted
EBITDA is useful to investors in assessing our ongoing financial
performance and provides improved comparability between periods
through the exclusion of certain items that management believes are
not indicative of our operational profitability and that may
obscure underlying business results and trends. However, this
measure should not be considered in isolation or viewed as a
substitute for net income or other measures of performance
determined in accordance with U.S. GAAP. Moreover, adjusted
EBITDA as used herein is not necessarily comparable to other
similarly titled measures of other companies due to potential
inconsistencies in the methods of calculation. Our management
believes this measure is useful to compare general operating
performance from period to period and to make certain related
management decisions. Adjusted EBITDA is also used by securities
analysts, lenders and others in their evaluation of different
companies because it excludes certain items that can vary widely
across different industries or among companies within the same
industry. For example, interest expense can be highly dependent on
a company's capital structure, debt levels and credit ratings.
Therefore, the impact of interest expense on earnings can vary
significantly among companies. In addition, the tax positions of
companies can vary because of their differing abilities to take
advantage of tax benefits and because of the tax policies of the
various jurisdictions in which they operate. As a result, effective
tax rates and tax expense can vary considerably among companies.
Finally, companies employ productive assets of different ages and
utilize different methods of acquiring and depreciating such
assets. This can result in considerable variability in the relative
costs of productive assets and the depreciation and amortization
expense among companies.
|
|
|
|
Nevertheless, our
management recognizes that there are limitations associated with
the use of adjusted EBITDA in the evaluation of us as compared to
net income. Our management compensates for the limitations of using
adjusted EBITDA by using this measure to supplement U.S. GAAP
results to provide a more complete understanding of the factors and
trends affecting the business rather than U.S. GAAP results
alone.
|
|
|
|
In addition to the
limitations noted above, adjusted EBITDA excludes items that may be
recurring in nature and should not be disregarded in the evaluation
of performance. However, we believe it is useful to exclude such
items to provide a supplemental analysis of current results and
trends compared to other periods because certain excluded items can
vary significantly depending on specific underlying transactions or
events, and the variability of such items may not relate
specifically to ongoing operating results or trends and certain
excluded items, while potentially recurring in future periods, may
not be indicative of future results. For example, while EBITDA from
discontinued operations is a recurring item, it is not indicative
of ongoing operating results and trends or future
results.
|
|
|
|
Adjusted net income
is computed by eliminating the after-tax amounts related to the
following from net income attributable to Venator Materials PLC
ordinary shareholders: (a) business acquisition and
integration expenses; (b) separation (gain) expense, net;
(c) U.S. income tax reform; (d) (gain) loss on
disposition of businesses/assets; (e) net income of
discontinued operations; (f) certain legal settlements and
related expenses; (g) amortization of pension and
postretirement actuarial losses; (h) net plant incident
(credits) costs; (i) restructuring, impairment, plant closing
and transition costs. Basic adjusted net earnings (loss) per share
excludes dilution and is computed by dividing adjusted net income
by the weighted average number of shares outstanding during the
period. Adjusted diluted net earnings (loss) per share reflects all
potential dilutive common shares outstanding during the period
increased by the number of additional shares that would have been
outstanding as dilutive securities. For the periods prior to our
IPO, the average number of common shares outstanding used to
calculate basic and diluted adjusted net income per share was based
on the ordinary shares that were outstanding at the time of
our IPO. Adjusted net earnings (loss) and adjusted net
earnings (loss) per share amounts are presented solely as
supplemental information.
|
|
|
(2)
|
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 U.S. GAAP.
|
|
|
(3)
|
Management internally
uses a free cash flow measure: (a) to evaluate the Company's
liquidity, (b) to evaluate strategic investments, (c) 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 flows provided by (used in) operating activities from
continuing operations and used in investing activities. Free cash
flow is typically derived directly from the Company's consolidated
and combined statement of cash flows; however, it may be adjusted
for items that affect comparability between periods. Free cash flow
is presented as supplemental information.
|
About Venator
Venator is a global manufacturer and marketer of chemical
products that comprise a broad range of pigments and additives that
bring color and vibrancy to buildings, protect and extend product
life, and reduce energy consumption. We market our products
globally to a diversified group of industrial customers through two
segments: Titanium Dioxide, which consists of our
TiO2 business, and Performance Additives, which
consists of our functional additives, color pigments, timber
treatment and water treatment businesses. We operate 26
facilities, employ approximately 4,500 associates worldwide and
sell our products in more than 110 countries.
Social Media:
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LinkedIn: www.linkedin.com/company/venator-corp
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements contained in this press release constitute
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements represent Venator's expectations or beliefs concerning
future events, and it is possible that the expected results
described in this press release will not be achieved. These
forward-looking statements are subject to risks, uncertainties and
other factors, many of which are outside of Venator's control, that
could cause actual results to differ materially from the results
discussed in the forward-looking statements, including any delays
in reconstruction or commissioning of our Pori, Finland manufacturing facility or losses for
business interruption or construction costs that exceed our
coverage limit applicable to the fire at that facility.
Any forward-looking statement speaks only as of the date on
which it is made, and, except as required by law, Venator does not
undertake any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. New factors emerge from time to time, and it is not
possible for Venator to predict all such factors. When considering
these forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in Venator's Annual Report
on Form 10-K for the year ended December 31,
2017 filed with the SEC, and in its Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K.The risk factors and
other factors noted therein could cause its actual results to
differ materially from those contained in any forward-looking
statement.
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SOURCE Venator Materials PLC