THE WOODLANDS, Texas,
July 31, 2018 /PRNewswire/ --
Second Quarter 2018 Highlights
- Net income was $623 million
compared to $183 million in the prior
year period and $350 million in the
prior quarter.
- Adjusted EBITDA was $415 million
compared to $299 million in the prior
year period and $405 million in the
prior quarter.
- Diluted income per share was $1.71 compared to $0.69 in the prior year period and $1.11 in the prior quarter.
- Adjusted diluted income per share was $1.01 compared to $0.59 in the prior year period and $0.96 in the prior quarter.
- Net cash provided by operating activities was $228 million. Free cash flow generation was
$174 million.
- Balance sheet remains strong with a net leverage of 1.4x.
- Completed cumulative share repurchases of approximately
$138 million through end of second
quarter 2018.
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
In millions, except
per share amounts
|
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
2,404
|
|
$
2,054
|
|
$
2,295
|
|
$4,699
|
|
$
3,986
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
623
|
|
$
183
|
|
$
350
|
|
$
973
|
|
$
275
|
Adjusted net
income(1)
|
|
$
246
|
|
$
144
|
|
$
237
|
|
$
483
|
|
$
254
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
share
|
|
$
1.71
|
|
$
0.69
|
|
$
1.11
|
|
$
2.82
|
|
$
1.00
|
Adjusted diluted
income per share(1)
|
|
$
1.01
|
|
$
0.59
|
|
$
0.96
|
|
$
1.98
|
|
$
1.04
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
415
|
|
$
299
|
|
$
405
|
|
$
820
|
|
$
559
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
|
|
|
|
|
|
|
|
from continuing
operations
|
|
$
228
|
|
$
207
|
|
$
111
|
|
$
339
|
|
$
277
|
Free cash
flow(2)
|
|
$
174
|
|
$
154
|
|
$
56
|
|
$
230
|
|
$
177
|
|
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations
|
|
|
Huntsman Corporation (NYSE: HUN) today reported second quarter
2018 results with revenues of $2,404
million, net income of $623
million and adjusted EBITDA of $415
million.
Peter R. Huntsman, Chairman,
President and CEO, commented:
"We had a strong second quarter that is wholly in line with
the outlook we shared at our recent Investor Day, which focused on
the opportunity for significant value creation. Our Polyurethanes
business continues its growth in variants and systems and enjoys
the back drop of good supply and demand fundamentals, foreseeable
for the long term. We completed our multiyear scheduled
turnaround in Performance Products and each of our divisions
continues to see a positive outlook. We delivered strong free cash
flow and our balance sheet remains solidly within investment grade
metrics. We are committed to our balanced approach of
delivering core growth and executing on sensible opportunities in
our downstream businesses, share buybacks, and creating overall
strong returns for shareholders."
Segment Analysis for 2Q18 Compared to 2Q17
Polyurethanes
The increase in revenues in our Polyurethanes segment for the
three months ended June 30, 2018
compared to the same period of 2017 was due to higher average
selling prices and higher sales volumes. MDI average selling prices
increased in response to continued strong market conditions. MTBE
average selling prices increased primarily as a result of higher
pricing for high octane gasoline. MDI sales volumes increased due
to increased demand across most major markets. MTBE sales volumes
increased due to the impact of maintenance outages during the
second quarter of 2017. The increase in segment adjusted EBITDA was
primarily due to higher MDI and MTBE margins.
Performance Products
The increase in revenues in our Performance Products segment for
the three months ended June 30,
2018 compared to the same period of 2017 was due to higher
average selling prices, partially offset by lower sales volumes.
Average selling prices increased primarily due to strong market
conditions across several of our derivatives businesses and in
response to higher raw materials costs. Sales volumes decreased
primarily due to the impact of the planned maintenance outage at
our Port Neches, Texas facility in
the second quarter of 2018, partially offset by higher sales
volumes in certain of our specialty amines and maleic anhydride
businesses. The decrease in segment adjusted EBITDA was primarily
due to lower sales volumes and higher fixed costs attributed to the
planned maintenance outage, partially offset by stronger glycol
market conditions within intermediates.
Advanced Materials
The increase in revenues in our Advanced Materials segment for
the three months ended June 30, 2018,
compared to the same period in 2017 was due to higher sales volumes
and higher average selling prices. Sales volumes increased across
most markets in our core specialty business, but were partially
offset by lower sales volumes in our wind market due to challenging
industry conditions. Average selling prices increased in response
to higher raw material costs and the impact of a weaker U.S. dollar
against major international currencies. The increase in segment
adjusted EBITDA was primarily due to higher specialty sales
volumes, partially offset by higher raw material and fixed
costs.
Textile Effects
The increase in revenues in our Textile Effects segment for the
three months ended June 30, 2018
compared to the same period of 2017 was due to higher sales volumes
and higher average selling prices. Sales volumes increased across
most regions. Average selling prices increased in response to
higher raw material costs and the impact of a weaker U.S. dollar
against major international currencies. The increase in segment
adjusted EBITDA was primarily due to higher sales volumes and
higher average selling prices, partially offset by higher raw
material costs.
Corporate, LIFO and other
For the three months ended June 30, 2018, segment
adjusted EBITDA from Corporate and other for Huntsman Corporation
increased $11 million to a loss of
$39 million from a loss of
$50 million in the same period in
2017, primarily due to a LIFO inventory valuation benefit.
Venator
Our former Pigments and Additives segment, now known as Venator,
remains classified as held for sale on our balance sheet and
treated as discontinued operations on our income
statement. Huntsman currently owns 53% of
Venator's outstanding shares.
Liquidity, Capital Resources and Outstanding Debt
During the quarter we generated free cash flow of $174 million compared to $154 million a year ago. As of June 30, 2018, we had $1,459 million of combined cash and unused
borrowing capacity compared to $1,247
million as of December 31,
2017. On May 21, 2018, we
entered into a new $1.2 billion
unsecured revolving credit facility that replaced our senior
secured credit facility.
During the three months ended June 30,
2018, we spent $54 million on
capital expenditures compared to $50
million in the same period of 2017. We expect to spend
approximately $325 million on capital
expenditures in 2018.
Through the end of the second quarter 2018, we have spent
approximately $138 million to
repurchase approximately 4.6 million shares. As of the end of
the second quarter 2018 we have approximately $862 million remaining on our existing multiyear
share repurchase authorization.
Income Taxes
During the three months ended June 30,
2018, we recorded income tax expense of $4 million compared to $24
million during the same period in 2017. In the second
quarter 2018, our adjusted effective tax rate was 18%. We expect
our 2018 adjusted effective tax rate will be approximately 20% -
22%. We expect our long-term adjusted effective tax rate will
be approximately 23% - 25%.
Earnings Conference Call Information
We will hold a conference call to discuss our second quarter
2018 financial results on Tuesday, July 31,
2018 at 11:00 a.m. ET.
Call-in numbers for
the conference call:
|
U.S.
participants
|
(888) 680 -
0878
|
International
participants
|
(617) 213 -
4855
|
Passcode
|
445 723
85#
|
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=PUEAXYC3M
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
July 31, 2018 and ending August 7, 2018.
Call-in numbers for
the replay:
|
U.S.
participants
|
(888) 286 -
8010
|
International
participants
|
(617) 801 -
6888
|
Replay
code
|
29385180
|
Upcoming Conferences
During the third quarter 2018 a member of management is expected
to present at:
Jefferies Global Industrials Conference on August 7, 2018
UBS Global Chemicals & Paper and Packaging Conference on
September 5, 2018
RBC Capital Markets Industrials Conference on September 6, 2018
A webcast of the presentation, if applicable, along with
accompanying materials will be available at ir.huntsman.com.
Table 1 – Results
of Operations
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
In millions, except
per share amounts
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$2,404
|
|
$2,054
|
|
$4,699
|
|
$3,986
|
Cost of goods
sold
|
|
1,849
|
|
1,618
|
|
3,604
|
|
3,160
|
Gross
profit
|
|
555
|
|
436
|
|
1,095
|
|
826
|
Operating
expenses
|
|
254
|
|
220
|
|
496
|
|
439
|
Restructuring,
impairment and plant closing costs
|
|
1
|
|
3
|
|
3
|
|
12
|
Expenses associated
with the merger
|
|
1
|
|
6
|
|
1
|
|
6
|
Operating
income
|
|
299
|
|
207
|
|
595
|
|
369
|
Interest
expense
|
|
(29)
|
|
(47)
|
|
(56)
|
|
(95)
|
Equity in income of
investment in unconsolidated affiliates
|
|
18
|
|
3
|
|
31
|
|
3
|
Loss on early
extinguishment of debt
|
|
(3)
|
|
(1)
|
|
(3)
|
|
(1)
|
Other income,
net
|
|
8
|
|
-
|
|
15
|
|
4
|
Income before
income taxes
|
|
293
|
|
162
|
|
582
|
|
280
|
Income tax
expense
|
|
(4)
|
|
(24)
|
|
(57)
|
|
(43)
|
Income from
continuing operations
|
|
289
|
|
138
|
|
525
|
|
237
|
Income from
discontinued operations, net of tax(3)
|
|
334
|
|
45
|
|
448
|
|
38
|
Net
income
|
|
623
|
|
183
|
|
973
|
|
275
|
Net income
attributable to noncontrolling interests, net of tax
|
|
(209)
|
|
(16)
|
|
(285)
|
|
(32)
|
Net income
attributable to Huntsman Corporation
|
|
$
414
|
|
$
167
|
|
$
688
|
|
$
243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
415
|
|
$
299
|
|
$
820
|
|
$
559
|
Adjusted net
income(1)
|
|
$
246
|
|
$
144
|
|
$
483
|
|
$
254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share
|
|
$
1.73
|
|
$
0.70
|
|
$
2.87
|
|
$
1.02
|
Diluted income per
share
|
|
$
1.71
|
|
$
0.69
|
|
$
2.82
|
|
$
1.00
|
Adjusted diluted
income per share(1)
|
|
$
1.01
|
|
$
0.59
|
|
$
1.98
|
|
$
1.04
|
|
|
|
|
|
|
|
|
|
Common share
information:
|
|
|
|
|
|
|
|
|
Basic weighted
average shares
|
|
239
|
|
238
|
|
240
|
|
238
|
Diluted weighted
average shares
|
|
243
|
|
244
|
|
244
|
|
243
|
Diluted shares for
adjusted diluted income per share
|
|
243
|
|
244
|
|
244
|
|
243
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations
|
|
|
|
Table 2 – Results
of Operations by Segment
|
|
|
|
Three months
ended
|
|
|
Six months
ended
|
|
|
|
|
June
30,
|
|
Better
/
|
|
June
30,
|
|
Better
/
|
In
millions
|
|
2018
|
|
2017
|
|
(Worse)
|
|
2018
|
|
2017
|
|
(Worse)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
1,313
|
|
$
1,022
|
|
28%
|
|
$
2,535
|
|
$
1,975
|
|
28%
|
Performance
Products
|
|
593
|
|
561
|
|
6%
|
|
1,196
|
|
1,094
|
|
9%
|
Advanced
Materials
|
|
292
|
|
260
|
|
12%
|
|
571
|
|
519
|
|
10%
|
Textile
Effects
|
|
227
|
|
205
|
|
11%
|
|
427
|
|
393
|
|
9%
|
Corporate and
eliminations
|
|
(21)
|
|
6
|
|
n/m
|
|
(30)
|
|
5
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
2,404
|
|
$
2,054
|
|
17%
|
|
$
4,699
|
|
$
3,986
|
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
269
|
|
$
167
|
|
61%
|
|
$
530
|
|
$
311
|
|
70%
|
Performance
Products
|
|
94
|
|
102
|
|
(8)%
|
|
196
|
|
186
|
|
5%
|
Advanced
Materials
|
|
62
|
|
56
|
|
11%
|
|
121
|
|
110
|
|
10%
|
Textile
Effects
|
|
29
|
|
24
|
|
21%
|
|
55
|
|
45
|
|
22%
|
Corporate, LIFO and
other
|
|
(39)
|
|
(50)
|
|
22%
|
|
(82)
|
|
(93)
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
415
|
|
$
299
|
|
39%
|
|
$
820
|
|
$
559
|
|
47%
|
n/m = not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations
|
|
|
Table 3 – Factors
Impacting Sales Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
June 30, 2018 vs.
2017
|
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
10%
|
|
4%
|
|
0%
|
|
14%
|
|
28%
|
|
Polyurethanes,
adj
|
|
10%
|
|
4%
|
|
5%
|
|
6%
|
|
25%
|
(c)(d)
|
Performance
Products
|
|
4%
|
|
3%
|
|
5%
|
|
(6)%
|
|
6%
|
|
Performance
Products, adj
|
|
4%
|
|
3%
|
|
4%
|
|
(3)%
|
|
8%
|
(c)(e)
|
Advanced
Materials
|
|
4%
|
|
4%
|
|
2%
|
|
2%
|
|
12%
|
|
Textile
Effects
|
|
3%
|
|
3%
|
|
(1)%
|
|
6%
|
|
11%
|
|
Total
Company
|
|
6%
|
|
4%
|
|
1%
|
|
6%
|
|
17%
|
|
Total Company,
adj
|
|
7%
|
|
4%
|
|
2%
|
|
3%
|
|
16%
|
(c)(d)(e)
|
|
|
Six months
ended
|
|
|
|
June 30, 2018 vs.
2017
|
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
12%
|
|
5%
|
|
(1)%
|
|
12%
|
|
28%
|
|
Polyurethanes,
adj
|
|
12%
|
|
5%
|
|
1%
|
|
8%
|
|
26%
|
(c)(d)
|
Performance
Products
|
|
5%
|
|
3%
|
|
0%
|
|
1%
|
|
9%
|
|
Performance
Products, adj
|
|
6%
|
|
3%
|
|
(1)%
|
|
2%
|
|
10%
|
(c)(e)
|
Advanced
Materials
|
|
3%
|
|
6%
|
|
2%
|
|
(1)%
|
|
10%
|
|
Textile
Effects
|
|
1%
|
|
3%
|
|
1%
|
|
4%
|
|
9%
|
|
Total
Company
|
|
7%
|
|
5%
|
|
(1)%
|
|
7%
|
|
18%
|
|
Total Company,
adj
|
|
7%
|
|
5%
|
|
(1)%
|
|
6%
|
|
17%
|
(c)(d)(e)
|
|
(a) Excludes sales
from tolling arrangements, by-products and raw
materials.
|
(b) Excludes sales
from by-products and raw materials.
|
(c) Pro forma
adjusted to exclude the impact from maintenance outages in
2Q17.
|
(d) Pro forma
adjusted to exclude the impact from unplaned outages in 2Q18 at
Rotterdam onset by third party constraints.
|
(e) Pro forma
adjusted to exclude the impact from maintenance outages in
2Q18.
|
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
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
In millions, except
per share amounts
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
623
|
|
$
183
|
|
|
|
|
|
$
623
|
|
$
183
|
|
$2.57
|
|
$0.75
|
Net income
attributable to noncontrolling interests
|
|
(209)
|
|
(16)
|
|
|
|
|
|
(209)
|
|
(16)
|
|
(0.86)
|
|
(0.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
414
|
|
167
|
|
|
|
|
|
414
|
|
167
|
|
1.71
|
|
0.69
|
Interest expense from
continuing operations
|
|
29
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense from
discontinued operations(3)
|
|
11
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
4
|
|
24
|
|
$
(4)
|
|
$
(24)
|
|
|
|
|
|
|
|
|
Income tax expense
from discontinued operations(3)
|
|
84
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from continuing operations
|
|
83
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from discontinued operations(3)
|
|
-
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration expenses and purchase accounting adjustments
|
7
|
|
4
|
|
(2)
|
|
-
|
|
5
|
|
4
|
|
0.02
|
|
0.02
|
EBITDA / Income from
discontinued operations, net of tax(3)
|
|
(429)
|
|
(95)
|
|
N/A
|
|
N/A
|
|
(334)
|
|
(45)
|
|
(1.38)
|
|
(0.18)
|
Noncontrolling
interest of discontinued operations(1)(3)
|
|
188
|
|
3
|
|
N/A
|
|
N/A
|
|
188
|
|
3
|
|
0.77
|
|
0.01
|
U.S. tax reform
impact on tax expense
|
|
N/A
|
|
N/A
|
|
49
|
|
-
|
|
49
|
|
-
|
|
0.20
|
|
-
|
Release of
significant income tax valuation allowances (a)
|
|
N/A
|
|
N/A
|
|
(95)
|
|
-
|
|
(95)
|
|
-
|
|
(0.39)
|
|
-
|
Gain on disposition
of businesses/assets
|
|
-
|
|
(8)
|
|
-
|
|
-
|
|
-
|
|
(8)
|
|
-
|
|
(0.03)
|
Loss on early
extinguishment of debt
|
|
3
|
|
1
|
|
(1)
|
|
-
|
|
2
|
|
1
|
|
0.01
|
|
-
|
Expenses associated
with merger, net of tax
|
|
1
|
|
6
|
|
-
|
|
-
|
|
1
|
|
6
|
|
-
|
|
0.02
|
Certain legal and
other settlements and related expenses
|
|
1
|
|
1
|
|
-
|
|
-
|
|
1
|
|
1
|
|
-
|
|
-
|
Amortization of
pension and postretirement actuarial losses
|
|
18
|
|
17
|
|
(4)
|
|
(4)
|
|
14
|
|
13
|
|
0.06
|
|
0.05
|
Restructuring,
impairment and plant closing and transition costs
|
|
1
|
|
3
|
|
-
|
|
(1)
|
|
1
|
|
2
|
|
-
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
415
|
|
$
299
|
|
$
(57)
|
|
$
(29)
|
|
$
246
|
|
$
144
|
|
$1.01
|
|
$0.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(1)
|
|
|
|
|
|
|
|
|
|
$
57
|
|
$
29
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
209
|
|
16
|
|
|
|
|
Noncontrolling
interest of discontinued operations(1)(3)
|
|
|
|
|
|
|
|
|
|
(188)
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
324
|
|
$
186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate(4)
|
|
|
|
|
|
|
|
|
|
18%
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
|
|
1%
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax
|
|
|
|
|
|
Diluted
Income
|
|
|
EBITDA
|
|
Expense
|
|
Net
Income
|
|
Per
Share
|
|
|
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
|
|
2018
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
350
|
|
|
|
|
|
|
|
$
350
|
|
|
|
$1.42
|
|
|
Net income
attributable to noncontrolling interests
|
|
(76)
|
|
|
|
|
|
|
|
(76)
|
|
|
|
(0.31)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
274
|
|
|
|
|
|
|
|
274
|
|
|
|
1.11
|
|
|
Interest expense from
continuing operations
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense from
discontinued operations(3)
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
53
|
|
|
|
$
(53)
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from discontinued operations(3)
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from continuing operations
|
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration expenses and purchase accounting adjustments
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
EBITDA / Income from
discontinued operations, net of tax(3)
|
|
(143)
|
|
|
|
N/A
|
|
|
|
(114)
|
|
|
|
(0.46)
|
|
|
Noncontrolling
interest of discontinued operations(1)(3)
|
|
55
|
|
|
|
N/A
|
|
|
|
55
|
|
|
|
0.22
|
|
|
Certain legal and
other settlements and related costs
|
|
7
|
|
|
|
(1)
|
|
|
|
6
|
|
|
|
0.02
|
|
|
Amortization of
pension and postretirement actuarial losses
|
|
17
|
|
|
|
(4)
|
|
|
|
13
|
|
|
|
0.05
|
|
|
Restructuring,
impairment and plant closing and transition costs
|
|
3
|
|
|
|
(1)
|
|
|
|
2
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
405
|
|
|
|
$
(59)
|
|
|
|
$
237
|
|
|
|
$0.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(1)
|
|
|
|
|
|
|
|
|
|
$
59
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
76
|
|
|
|
|
|
|
Noncontrolling
interest of discontinued operations(1)(3)
|
|
|
|
|
|
|
|
|
|
(55)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate(4)
|
|
|
|
|
|
|
|
|
|
19%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
|
|
18%
|
|
|
|
|
|
|
Table 4 –
Reconciliation of U.S. GAAP to Non-GAAP Measures
(cont.)
|
|
|
|
|
|
|
Income
Tax
|
|
|
|
|
|
Diluted
Income
|
|
|
EBITDA
|
|
(Expense)
Benefit
|
|
Net
Income
|
|
Per
Share
|
|
|
Six months
ended
|
|
Six months
ended
|
|
Six months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
In millions, except
per share amounts
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
973
|
|
$
275
|
|
|
|
|
|
$
973
|
|
$
275
|
|
$3.98
|
|
$1.13
|
Net income
attributable to noncontrolling interests
|
|
(285)
|
|
(32)
|
|
|
|
|
|
(285)
|
|
(32)
|
|
(1.17)
|
|
(0.13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
688
|
|
243
|
|
|
|
|
|
688
|
|
243
|
|
2.82
|
|
1.00
|
Interest expense from
continuing operations
|
|
56
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense from
discontinued operations(3)
|
|
20
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
57
|
|
43
|
|
(57)
|
|
(43)
|
|
|
|
|
|
|
|
|
Income tax expense
from discontinued operations(3)
|
|
104
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from continuing operations
|
|
165
|
|
155
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from discontinued operations(3)
|
|
-
|
|
59
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration expenses and purchase accounting adjustments
|
8
|
|
7
|
|
(2)
|
|
(1)
|
|
6
|
|
6
|
|
0.02
|
|
0.02
|
EBITDA / Income from
discontinued operations, net of tax(3)
|
|
(572)
|
|
(121)
|
|
N/A
|
|
N/A
|
|
(448)
|
|
(38)
|
|
(1.83)
|
|
(0.16)
|
Noncontrolling
interest of discontinued operations(1)(3)
|
|
243
|
|
6
|
|
N/A
|
|
N/A
|
|
243
|
|
6
|
|
1.00
|
|
0.02
|
U.S. tax reform
impact on tax expense
|
|
N/A
|
|
N/A
|
|
49
|
|
-
|
|
49
|
|
-
|
|
0.20
|
|
-
|
Release of
significant income tax valuation allowances (a)
|
|
N/A
|
|
N/A
|
|
(95)
|
|
-
|
|
(95)
|
|
-
|
|
(0.39)
|
|
-
|
Gain on disposition
of businesses/assets
|
|
-
|
|
(8)
|
|
-
|
|
-
|
|
-
|
|
(8)
|
|
-
|
|
(0.03)
|
Loss on early
extinguishment of debt
|
|
3
|
|
1
|
|
(1)
|
|
-
|
|
2
|
|
1
|
|
0.01
|
|
-
|
Expenses associated
with merger
|
|
1
|
|
6
|
|
-
|
|
-
|
|
1
|
|
6
|
|
-
|
|
0.02
|
Certain legal and
other settlements and related expenses
|
|
8
|
|
1
|
|
(1)
|
|
-
|
|
7
|
|
1
|
|
0.03
|
|
-
|
Amortization of
pension and postretirement actuarial losses
|
|
35
|
|
36
|
|
(8)
|
|
(8)
|
|
27
|
|
28
|
|
0.11
|
|
0.12
|
Restructuring,
impairment and plant closing and transition costs
|
|
4
|
|
12
|
|
(1)
|
|
(3)
|
|
3
|
|
9
|
|
0.01
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
820
|
|
$
559
|
|
$
(116)
|
|
$
(55)
|
|
$
483
|
|
$
254
|
|
$1.98
|
|
$1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(1)
|
|
|
|
|
|
|
|
|
|
$
116
|
|
$
55
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
285
|
|
32
|
|
|
|
|
Noncontrolling
interest of discontinued operations(1)(3)
|
|
|
|
|
|
|
|
|
|
(243)
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
641
|
|
$
335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate(4)
|
|
|
|
|
|
|
|
|
|
18%
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
|
|
10%
|
|
15%
|
|
|
|
|
(a)
|
During the six months
ended June 30, 2018, we released $95 million of valuation
allowances in Switzerland and the U.K. We eliminated the effect of
this significant change in tax valuation allowances from our
presentation of adjusted net income to allow investors to better
compare our ongoing financial performance from period to period. We
do not adjust for insignificant changes in tax valuation allowances
because we do not believe this provides more meaningful information
than is provided under GAAP.
|
|
See end of press
release for footnote explanations
|
Table 5 – Selected
Balance Sheet Items
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
|
December
31,
|
In
millions
|
|
2018
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
409
|
|
$
453
|
|
|
$
481
|
Accounts and notes
receivable, net
|
|
1,377
|
|
1,407
|
|
|
1,283
|
Inventories
|
|
1,178
|
|
1,203
|
|
|
1,073
|
Other current
assets
|
|
251
|
|
262
|
|
|
262
|
Current assets held
for sale
|
|
3,158
|
|
3,060
|
|
|
2,880
|
Property, plant and
equipment, net
|
|
3,014
|
|
3,117
|
|
|
3,098
|
Other noncurrent
assets
|
|
1,667
|
|
1,201
|
|
|
1,167
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
11,054
|
|
$
10,703
|
|
|
$
10,244
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
993
|
|
$
993
|
|
|
$
964
|
Other current
liabilities
|
|
469
|
|
533
|
|
|
569
|
Current portion of
debt
|
|
255
|
|
36
|
|
|
40
|
Current liabilities
held for sale
|
|
1,578
|
|
1,721
|
|
|
1,692
|
Long-term
debt
|
|
2,311
|
|
2,298
|
|
|
2,258
|
Other noncurrent
liabilities
|
|
1,378
|
|
1,353
|
|
|
1,350
|
Total
equity
|
|
4,070
|
|
3,769
|
|
|
3,371
|
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
11,054
|
|
$
10,703
|
|
|
$
10,244
|
Table 6 –
Outstanding Debt
|
|
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
In
millions
|
|
2018
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt:
|
|
|
|
|
|
|
Credit
facility
|
|
$
225
|
|
$
-
|
|
$
-
|
Accounts receivable
programs
|
|
268
|
|
184
|
|
180
|
Senior
notes
|
|
1,906
|
|
1,964
|
|
1,927
|
Variable interest
entities
|
|
97
|
|
105
|
|
107
|
Other debt
|
|
70
|
|
81
|
|
84
|
|
|
|
|
|
|
|
Total debt -
excluding affiliates
|
|
2,566
|
|
2,334
|
|
2,298
|
|
|
|
|
|
|
|
Total cash
|
|
409
|
|
453
|
|
481
|
|
|
|
|
|
|
|
Net debt -
excluding affiliates(5)
|
|
$
2,157
|
|
$
1,881
|
|
$
1,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTM Adjusted
EBITDA(1)
|
|
$
1,520
|
|
$
1,404
|
|
$
1,259
|
LTM Net
income
|
|
950
|
|
834
|
|
636
|
|
|
|
|
|
|
|
Net debt -
excluding affiliates / LTM Adjusted
EBITDA(1)(5)
|
|
1.4x
|
|
1.3x
|
|
1.4x
|
Total debt -
excluding affiliates / LTM Net income
|
|
2.7x
|
|
2.8x
|
|
3.6x
|
Table 7 –
Summarized Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
In
millions
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Total cash at
beginning of period(a)
|
|
$
676
|
|
$
469
|
|
$
719
|
|
$
425
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities - continuing operations
|
|
228
|
|
207
|
|
339
|
|
277
|
Net cash provided by
operating activities - discontinued
operations(3)
|
|
249
|
|
94
|
|
301
|
|
117
|
Net cash used in
investing activities - continuing operations
|
|
(411)
|
|
(48)
|
|
(480)
|
|
(95)
|
Net cash (used in)
provided by investing activities - discontinued
operations(3)
|
|
(94)
|
|
(12)
|
|
(161)
|
|
12
|
Net cash provided by
(used in) financing activities
|
|
150
|
|
(193)
|
|
64
|
|
(224)
|
Effect of exchange
rate changes on cash
|
|
(35)
|
|
3
|
|
(19)
|
|
8
|
|
|
|
|
|
|
|
|
-
|
Total cash at end
of period(a)
|
|
$
763
|
|
$
520
|
|
$
763
|
|
$
520
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information - continuing operations:
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
(47)
|
|
$
(56)
|
|
$
(59)
|
|
$
(92)
|
Cash (paid) received
for income taxes
|
|
(51)
|
|
65
|
|
(77)
|
|
57
|
Cash paid for capital
expenditures
|
|
(54)
|
|
(50)
|
|
(109)
|
|
(101)
|
Depreciation and
amortization
|
|
83
|
|
79
|
|
165
|
|
155
|
|
|
-
|
|
|
|
|
|
|
Changes in primary
working capital:
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable
|
|
10
|
|
(65)
|
|
(94)
|
|
(120)
|
Inventories
|
|
(2)
|
|
(28)
|
|
(107)
|
|
(137)
|
Accounts
payable
|
|
14
|
|
(4)
|
|
50
|
|
79
|
|
|
|
|
|
|
|
|
|
Total cash received
from (used in) primary working capital
|
|
$
22
|
|
$
(97)
|
|
$
(151)
|
|
$
(178)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Free cash
flow(2):
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
228
|
|
$
207
|
|
$
339
|
|
$
277
|
Capital
expenditures
|
|
(54)
|
|
(50)
|
|
(109)
|
|
(101)
|
All other investing
activities, excluding acquisition
|
|
|
|
|
|
|
|
|
and
disposition activities(b)
|
|
(1)
|
|
(3)
|
|
(1)
|
|
1
|
Non-recurring merger
costs(c)
|
|
1
|
|
-
|
|
1
|
|
-
|
|
|
|
|
|
|
|
|
|
Total free cash
flow
|
|
$
174
|
|
$
154
|
|
$
230
|
|
$
177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
415
|
|
$
299
|
|
$
820
|
|
$
559
|
Capital
expenditures
|
|
(54)
|
|
(50)
|
|
(109)
|
|
(101)
|
Capital
reimbursements
|
|
1
|
|
-
|
|
2
|
|
1
|
Interest
|
|
(47)
|
|
(56)
|
|
(59)
|
|
(92)
|
Income
taxes
|
|
(51)
|
|
65
|
|
(77)
|
|
57
|
Primary working
capital change
|
|
22
|
|
(97)
|
|
(151)
|
|
(178)
|
Restructuring
|
|
(6)
|
|
(10)
|
|
(6)
|
|
(19)
|
Pensions
|
|
(28)
|
|
(22)
|
|
(59)
|
|
(37)
|
Maintenance &
other
|
|
(78)
|
|
25
|
|
(131)
|
|
(13)
|
|
|
|
|
|
|
|
|
|
Total free cash
flow(2)
|
|
$
174
|
|
$
154
|
|
$
230
|
|
$
177
|
|
|
(a)
|
Includes restricted
cash and cash held in discontinued operations.
|
(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 and for
planning and evaluating the performance of our business
segments. 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 (loss). 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 interests, net of
tax; (b) interest; (c) income taxes; (d) depreciation and
amortization (e) amortization of pension and postretirement
actuarial losses (gains); (f) restructuring, impairment and plant
closing costs (credits); and further adjusted for certain other
items set forth in reconciliation of adjusted EBITDA to net income
(loss) 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) amortization of pension and postretirement actuarial
losses (gains); (c) restructuring, impairment and plant closing
costs (credits); and further adjusted for certain other items set
forth in reconciliation of adjusted EBITDA to net income (loss) in
Table 4 above. 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 provide
reconciliations for adjusted EBITDA, adjusted net income (loss) or
adjusted diluted income (loss) per share on a forward-looking basis
because we are unable to provide a meaningful or accurate
calculation or estimation of reconciling items and the information
is not available without unreasonable effort. This is due to the
inherent difficulty of forecasting the timing and amount of certain
items, such as, but not limited to, (a) business acquisition and
integration expenses and purchase accounting adjustments, (b)
merger costs, and (c) certain legal and other settlements and
related costs. Each of such adjustments has not yet occurred, are
out of our control and/or cannot be reasonably predicted. For the
same reasons, we are unable to address the probable significance of
the unavailable information.
|
|
|
(2)
|
Management internally
uses a free cash flow measure: (a) to evaluate the Company's
liquidity, (b) to evaluate strategic investments, (c) to plan stock
buy back 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 acquisition/disposition activities and non-recurring
separation costs. 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.
|
|
|
(3)
|
During the third
quarter of 2017 we separated our Pigments and Additives division
through an Initial Public Offering of Venator Materials PLC;
Additionally, during the first quarter 2010 we closed our
Australian styrenics operations. Results from these
associated businesses are treated as discontinued
operations.
|
|
|
(4)
|
We believe adjusted
effective tax rate provides improved comparability between periods
through the exclusion of certain items that management believes are
not indicative of the businesses' operational profitability and
that may obscure underlying business results and trends. In our
view, effective tax rate is the performance measure calculated and
presented in accordance with U.S. GAAP that is most directly
comparable to adjusted effective tax rate.
|
|
|
|
The reconciliation of
historical adjusted effective tax rate and effective tax rate is
set forth in Table 4 above. We do not provide reconciliations for
adjusted effective tax rate on a forward-looking basis because we
are unable to provide a meaningful or accurate calculation or
estimation of reconciling items and the information is not
available without unreasonable effort. This is due to the inherent
difficulty of forecasting the timing and amount of certain items,
such as, but not limited to, (a) business acquisition and
integration expenses, (b) merger costs, and (c) certain legal and
other settlements and related costs. Each of such adjustments has
not yet occurred, are out of our control and/or cannot be
reasonably predicted. For the same reasons, we are unable to
address the probable significance of the unavailable
information.
|
|
|
(5)
|
Net debt is a measure
we use to monitor how much debt we have after taking into account
our total cash. We use it as an indicator of our overall financial
position, and calculate it by taking our total debt, including the
current portion, and subtracting total cash.
|
About Huntsman:
Huntsman Corporation is a publicly
traded global manufacturer and marketer of differentiated and
specialty chemicals with 2017 revenues more than $8 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 75 manufacturing, R&D and operations
facilities in approximately 30 countries and employ approximately
10,000 associates within our four distinct business divisions. For
more information about Huntsman, please visit the company's website
at www.huntsman.com.
Social Media:
Twitter:
www.twitter.com/Huntsman_Corp
Facebook:
www.facebook.com/huntsmancorp
LinkedIn:
www.linkedin.com/company/huntsman
Forward-Looking Statements:
Certain information in
this release constitutes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. 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 under the
caption "Risk Factors" 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, volatile
global economic conditions, cyclical and volatile product markets,
disruptions in production at manufacturing facilities,
reorganization or restructuring of Huntsman's operations, including
any delay of, or other negative developments affecting the ability
to implement cost reductions and manufacturing optimization
improvements in Huntsman businesses and realize anticipated cost
savings, and other 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.
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SOURCE Huntsman Corporation