THE WOODLANDS, Texas,
May 1, 2020 /PRNewswire/ --
First Quarter Highlights
- First quarter 2020 net income of $708
million compared to $131
million in the prior year period; first quarter 2020 diluted
earnings per share of $3.16 compared
to $0.51 in the prior year
period.
- First quarter 2020 adjusted net income of $65 million compared to $85 million in the prior year period; first
quarter 2020 adjusted diluted earnings per share of $0.29 compared to $0.36 in the prior year period.
- First quarter 2020 adjusted EBITDA of $165 million compared to $204 million in the prior year period.
- First quarter 2020 net cash used in operating activities was
$40 million. Free cash flow was a use
of $101 million for the first quarter
2020.
- Balance sheet remains strong with a net leverage of 0.7x and
total liquidity for the Company is approximately $2.9 billion. First quarter 2020 share
repurchases of approximately 5.4 million shares for approximately
$96 million.
- The Icynene-Lapolla acquisition closed on February 20, 2020, which approximately doubled
our existing global spray polyurethane foam insulation business.
Our recently announced acquisition of CVC Thermoset Specialties on
March 16, 2020, is on track to close
by mid-year.
|
|
Three months
ended
|
|
|
March
31,
|
In millions, except
per share amounts
|
|
2020
|
|
2019
|
|
|
|
|
|
Revenues
|
|
$
1,593
|
|
$
1,669
|
|
|
|
|
|
Net income
|
|
$
708
|
|
$
131
|
Adjusted net
income(1)
|
|
$
65
|
|
$
85
|
|
|
|
|
|
Diluted income per
share
|
|
$
3.16
|
|
$
0.51
|
Adjusted diluted
income per share(1)
|
|
$
0.29
|
|
$
0.36
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
165
|
|
$
204
|
|
|
|
|
|
Net cash used in
operating activities from continuing operations
|
|
$
(40)
|
|
$
(40)
|
Free cash flow from
continuing operations(2)
|
|
$
(101)
|
|
$
(101)
|
|
|
|
|
|
See end of press
release for footnote explanations and reconciliations of non-GAAP
measures.
|
Huntsman Corporation (NYSE: HUN) today reported first quarter
2020 results with revenues of $1,593
million, net income of $708
million, adjusted net income of $65
million and adjusted EBITDA of $165
million.
Peter R. Huntsman, Chairman,
President and CEO, commented:
"Fortunately, we have been well prepared for this global
economic crisis. The ongoing transformation of our
business has made us a much better Company. Our balance sheet
is stronger than ever before, with significant cash and robust
liquidity. Visibility has at no time been more difficult, but
our portfolio of businesses has never been more
differentiated. In this environment we are laser focused on
what is in our control and protecting our balance sheet
strength. Having learned from prior crises, we preemptively
reduced unnecessary inventories and are reducing capital spending
this year by 30%, or approximately $90
million, by delaying discretionary spending. We have
proactively taken other measures, including suspending share
repurchases, and various cost reduction measures yielding immediate
benefit. We will accelerate our plans to achieve synergies
with our recent and pending strategic bolt-on acquisitions and
aggressively press forward with the global scale up of our
differentiated platform. Our Company is ready and able to
take advantage of opportunities to come, and I am confident that
Huntsman will emerge from this global crisis a stronger
Company."
Segment Analysis for 1Q20 Compared to 1Q19
Polyurethanes
The decrease in revenues in our Polyurethanes segment for the
three months ended March 31, 2020
compared to the same period of 2019 was due to lower MDI average
selling prices and modestly lower overall polyurethanes sales
volumes. MDI average selling prices decreased primarily due to a
decline in component MDI selling prices in China and Europe. Overall polyurethanes sales volumes
decreased slightly primarily due to decreased demand across most
major markets, partially offset by modest growth in MDI sales
volumes. The decrease in segment adjusted EBITDA was primarily due
to lower MDI margins driven by lower MDI pricing, partially offset
by higher MDI sales volumes.
Performance Products
The decrease in revenues in our Performance Products segment for
the three months ended March 31,
2020 compared to the same period of 2019 was due to lower
average selling prices and lower sales volumes. Average selling
prices decreased primarily due to lower raw material costs. Sales
volumes decreased primarily due to weakened market conditions in
our maleic anhydride business, partially offset by higher sales
volumes in our amines business. The increase in segment adjusted
EBITDA was primarily due to higher margins in our performance
amines business and lower fixed costs.
Advanced Materials
The decrease in revenues in our Advanced Materials segment for
the three months ended March 31, 2020
compared to the same period in 2019 was due to lower sales volumes
and lower average selling prices. Sales volumes decreased across
most markets, particularly commodity, industrial and aerospace,
primarily due to economic slowdown and customer destocking. Average
selling prices decreased primarily due to the impact of a stronger
U.S. dollar against major international currencies, partially
offset by higher local currency selling prices. The decrease in
segment adjusted EBITDA was primarily due to lower sales volumes,
partially offset by lower fixed costs.
Textile Effects
The decrease in revenues in our Textile Effects segment for the
three months ended March 31,
2020 compared to the same period of 2019 was due to lower
average selling prices, partially offset by higher sales volumes.
Average selling prices decreased as a result of competitive market
pressures and the impact of a stronger U.S. dollar against major
international currencies. Sales volumes increased mainly in
Europe and Asia. The decrease in segment adjusted EBITDA
was primarily due to lower sales revenues, partially offset by
lower raw material costs and lower fixed costs.
Corporate, LIFO and other
For the three months ended March 31,
2020, adjusted EBITDA from Corporate and other for Huntsman
Corporation decreased by $5 million
to a loss of $45 million from a loss
of $40 million for the same period of
2019.
Liquidity and Capital Resources
During the three months ended March 31,
2020, our free cash flow from continuing operations was a
use of $101 million compared to a use
of $101 million in the prior year
period. As of March 31, 2020,
we had $2.9 billion of combined cash
and unused borrowing capacity.
During the three months ended March 31,
2020, we spent $61 million on
capital expenditures compared to $61
million in the same period of 2019. For 2020, we have
reduced our projected capital spend by $90
million, or approximately 30%, and now expect to spend
between approximately $225 million to
$235 million on capital expenditures.
We have deferred a portion of capital spending on the new MDI
splitter in Geismar, Louisiana for
six months leaving roughly $40
million of capital spend in 2020 with the remaining spend of
approximately $120 million in 2021
and 2022.
During the three months ended March 31,
2020, we spent approximately $96
million to repurchase approximately 5.4 million
shares. As of the end of the first quarter 2020, we have
approximately $420 million remaining
on our existing $1 billion multiyear
share repurchase program. We have temporarily suspended our share
repurchase program.
Income Taxes
In the first quarter, our adjusted effective tax rate was 18%.
We expect our forward adjusted effective tax rate will be
approximately 22% - 24%.
Earnings Conference Call Information
We will hold a conference call to discuss our first quarter 2020
financial results on Friday, May 1,
2020 at 10:00 a.m. ET.
Webcast link:
https://78449.themediaframe.com/dataconf/productusers/hun/mediaframe/37217/indexl.html
Participant dial-in
numbers:
|
Domestic
callers:
|
(877)
402-8037
|
International
callers:
|
(201)
378-4913
|
The conference call will be accompanied by presentation slides
that will be accessible via the webcast link and Huntsman's
investor relations website, ir.huntsman.com. Upon conclusion
of the call, the webcast replay will be accessible via Huntsman's
website.
Upcoming Conferences
During the second quarter 2020 a
member of management is expected to present at:
Fermium Research Virtual Chemicals Conference, May 5, 2020
Wells Fargo Virtual Industrials Conference, May 6, 2020
Goldman Sachs Virtual Industrials & Materials Conference,
May 14, 2020
KeyBanc Capital Markets' Virtual Industrial & Basic Materials
Conference, May 27, 2020
Tudor, Pickering, Holt & Co. Virtual Hotter 'N Hell 2020
Conference, June 11, 2020
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
|
|
|
March
31,
|
In millions, except
per share amounts
|
|
2020
|
|
2019
|
|
|
|
|
|
Revenues
|
|
$
1,593
|
|
$
1,669
|
Cost of goods
sold
|
|
1,296
|
|
1,310
|
Gross
profit
|
|
297
|
|
359
|
Operating
expenses
|
|
240
|
|
243
|
Restructuring,
impairment and plant closing costs
|
|
3
|
|
1
|
Operating
income
|
|
54
|
|
115
|
Interest expense,
net
|
|
(18)
|
|
(30)
|
Equity in income of
investment in unconsolidated affiliates
|
|
2
|
|
10
|
Fair value
adjustments to Venator investment
|
|
(110)
|
|
76
|
Loss on early
extinguishment of debt
|
|
-
|
|
(23)
|
Other income,
net
|
|
10
|
|
5
|
(Loss) income from
continuing operations before income taxes
|
|
(62)
|
|
153
|
Income tax
expense
|
|
(7)
|
|
(45)
|
(Loss) income from
continuing operations
|
|
(69)
|
|
108
|
Income from
discontinued operations, net of tax(3)
|
|
777
|
|
23
|
Net
income
|
|
708
|
|
131
|
Net income
attributable to noncontrolling interests, net of tax
|
|
(3)
|
|
(12)
|
Net income
attributable to Huntsman Corporation
|
|
$
705
|
|
$
119
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
165
|
|
$
204
|
Adjusted net
income(1)
|
|
$
65
|
|
$
85
|
|
|
|
|
|
Basic income per
share
|
|
$
3.16
|
|
$
0.51
|
Diluted income per
share
|
|
$
3.16
|
|
$
0.51
|
Adjusted diluted
income per share(1)
|
|
$
0.29
|
|
$
0.36
|
|
|
|
|
|
Common share
information:
|
|
|
|
|
Basic weighted
average shares
|
|
223
|
|
233
|
Diluted weighted
average shares
|
|
223
|
|
235
|
|
|
|
|
|
See end of press
release for footnote explanations.
|
Table 2 – Results
of Operations by Segment
|
|
|
|
Three months
ended
|
|
|
|
|
March
31,
|
|
Better
/
|
In
millions
|
|
2020
|
|
2019
|
|
(Worse)
|
|
|
|
|
|
|
|
Segment
Revenues:
|
|
|
|
|
|
|
Polyurethanes
|
|
$
888
|
|
$
924
|
|
(4%)
|
Performance
Products
|
|
292
|
|
300
|
|
(3%)
|
Advanced
Materials
|
|
241
|
|
272
|
|
(11%)
|
Textile
Effects
|
|
180
|
|
189
|
|
(5%)
|
Corporate and
Eliminations
|
|
(8)
|
|
(16)
|
|
n/m
|
|
|
|
|
|
|
|
Total
|
|
$
1,593
|
|
$
1,669
|
|
(5%)
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
Polyurethanes
|
|
$
84
|
|
$
124
|
|
(32%)
|
Performance
Products
|
|
58
|
|
45
|
|
29%
|
Advanced
Materials
|
|
48
|
|
53
|
|
(9%)
|
Textile
Effects
|
|
20
|
|
22
|
|
(9%)
|
Corporate, LIFO and
other
|
|
(45)
|
|
(40)
|
|
(13%)
|
|
|
|
|
|
|
|
Total
|
|
$
165
|
|
$
204
|
|
(19%)
|
n/m = not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations.
|
Table 3 – Factors
Impacting Sales Revenue
|
|
|
|
Three months
ended
|
|
|
March 31, 2020 vs.
2019
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
(6%)
|
|
(1%)
|
|
4%
|
|
(1%)
|
|
(4%)
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Products
|
|
(3%)
|
|
(1%)
|
|
4%
|
|
(3%)
|
|
(3%)
|
|
|
|
|
|
|
|
|
|
|
|
Advanced
Materials
|
|
1%
|
|
(2%)
|
|
1%
|
|
(11%)
|
|
(11%)
|
|
|
|
|
|
|
|
|
|
|
|
Textile
Effects
|
|
(3%)
|
|
(1%)
|
|
(2%)
|
|
1%
|
|
(5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Excludes sales
from tolling arrangements, by-products and raw
materials.
|
(b) Excludes sales
from by-products and raw materials.
|
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
|
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
In millions, except
per share amounts
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
708
|
|
$
131
|
|
|
|
|
|
$
708
|
|
$
131
|
|
$
3.17
|
|
$
0.56
|
Net income
attributable to noncontrolling interests
|
|
(3)
|
|
(12)
|
|
|
|
|
|
(3)
|
|
(12)
|
|
(0.01)
|
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
705
|
|
119
|
|
|
|
|
|
705
|
|
119
|
|
3.16
|
|
0.51
|
Interest expense, net
from continuing operations
|
|
18
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
7
|
|
45
|
|
$
(7)
|
|
$
(45)
|
|
|
|
|
|
|
|
|
Income tax expense
from discontinued operations(3)
|
|
238
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from continuing operations
|
|
67
|
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from discontinued operations(3)
|
|
-
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and purchase
accounting inventory adjustments
|
|
13
|
|
1
|
|
(3)
|
|
-
|
|
10
|
|
1
|
|
0.04
|
|
0.00
|
EBITDA / Income from
discontinued operations, net of tax(3)
|
|
(1,015)
|
|
(51)
|
|
N/A
|
|
N/A
|
|
(777)
|
|
(23)
|
|
(3.48)
|
|
(0.10)
|
Impact of Switzerland
income tax rate change
|
|
-
|
|
-
|
|
-
|
|
32
|
|
-
|
|
32
|
|
-
|
|
0.14
|
Gain on sale of
businesses/assets
|
|
(2)
|
|
-
|
|
-
|
|
-
|
|
(2)
|
|
-
|
|
(0.01)
|
|
-
|
Fair value
adjustments to Venator Investment(a)
|
|
110
|
|
(76)
|
|
-
|
|
-
|
|
110
|
|
(76)
|
|
0.49
|
|
(0.32)
|
Loss on early
extinguishment of debt
|
|
-
|
|
23
|
|
-
|
|
(5)
|
|
-
|
|
18
|
|
-
|
|
0.08
|
Certain legal
settlements and related expenses
|
|
2
|
|
-
|
|
-
|
|
-
|
|
2
|
|
-
|
|
0.01
|
|
-
|
Certain non-recurring
information technology project implementation costs
|
|
1
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
0.00
|
|
-
|
Amortization of
pension and postretirement actuarial losses
|
|
18
|
|
17
|
|
(4)
|
|
(4)
|
|
14
|
|
13
|
|
0.06
|
|
0.06
|
Restructuring,
impairment and plant closing and transition costs
|
|
3
|
|
1
|
|
(1)
|
|
-
|
|
2
|
|
1
|
|
0.01
|
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
165
|
|
$
204
|
|
$
(15)
|
|
$
(22)
|
|
$
65
|
|
$
85
|
|
$
0.29
|
|
$
0.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(1)
|
|
|
|
|
|
|
|
|
|
$
15
|
|
$
22
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
3
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
83
|
|
$
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate(4)
|
|
|
|
|
|
|
|
|
|
18%
|
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
|
|
(11%)
|
|
29%
|
|
|
|
|
|
(a) Represents the
changes in market value in Huntsman's remaining interesting in
Venator.
|
|
n/m = not
meaningful; n/a = not applicable
|
See end of press
release for footnote explanations.
|
Table 5 – Selected
Balance Sheet Items
|
|
|
|
March
31,
|
|
December
31,
|
In
millions
|
|
2020
|
|
2019
|
|
|
|
|
|
Cash
|
|
$
1,594
|
|
$
525
|
Accounts and notes
receivable, net
|
|
1,027
|
|
953
|
Inventories
|
|
1,008
|
|
914
|
Other current
assets
|
|
145
|
|
155
|
Current assets held
for sale
|
|
-
|
|
1,208
|
Property, plant and
equipment, net
|
|
2,357
|
|
2,383
|
Other noncurrent
assets
|
|
2,327
|
|
2,182
|
|
|
|
|
|
Total
assets
|
|
$
8,458
|
|
$
8,320
|
|
|
|
|
|
Accounts
payable
|
|
$
856
|
|
$
822
|
Other current
liabilities
|
|
784
|
|
462
|
Current portion of
debt
|
|
134
|
|
212
|
Current liabilities
held for sale
|
|
-
|
|
512
|
Long-term
debt
|
|
2,049
|
|
2,177
|
Other noncurrent
liabilities
|
|
1,252
|
|
1,311
|
Huntsman Corporation
stockholders' equity
|
|
3,243
|
|
2,687
|
Noncontrolling
interests in subsidiaries
|
|
140
|
|
137
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
8,458
|
|
$
8,320
|
Table 6 –
Outstanding Debt
|
|
|
|
March
31,
|
|
December
31,
|
In
millions
|
|
2020
|
|
2019
|
|
|
|
|
|
Debt:
|
|
|
|
|
Revolving credit
facility
|
|
$
-
|
|
$
40
|
Accounts receivable
programs
|
|
55
|
|
167
|
Term loan
|
|
101
|
|
103
|
Senior
notes
|
|
1,950
|
|
1,963
|
Variable interest
entities
|
|
58
|
|
65
|
Other debt
|
|
19
|
|
51
|
|
|
|
|
|
Total debt -
excluding affiliates
|
|
2,183
|
|
2,389
|
|
|
|
|
|
Total cash
|
|
1,594
|
|
525
|
|
|
|
|
|
Net debt -
excluding affiliates(5)
|
|
$
589
|
|
$
1,864
|
|
|
|
|
|
See end of press
release for footnote explanations.
|
Table 7 –
Summarized Statement of Cash Flows
|
|
|
|
Three months
ended
|
|
|
March
31,
|
In
millions
|
|
2020
|
|
2019
|
|
|
|
|
|
Total cash at
beginning of period
|
|
$
525
|
|
$
340
|
|
|
|
|
|
Net cash used in
operating activities from continuing operations
|
|
(40)
|
|
(40)
|
Net cash (used in)
provided by operating activities from discontinued
operations(3)
|
|
(35)
|
|
9
|
Net cash provided by
(used in) investing activities from continuing
operations
|
|
1,511
|
|
(45)
|
Net cash used in
investing activities from discontinued
operations(3)
|
|
-
|
|
(9)
|
Net cash (used in)
provided by financing activities
|
|
(354)
|
|
183
|
Effect of exchange
rate changes on cash
|
|
(13)
|
|
6
|
|
|
|
|
|
Total cash at end
of period
|
|
$
1,594
|
|
$
444
|
|
|
|
|
|
Free cash flow
from continuing operations(2):
|
|
|
|
|
Net cash used in
operating activities
|
|
$
(40)
|
|
$
(40)
|
Capital
expenditures
|
|
(61)
|
|
(61)
|
|
|
|
|
|
Free cash flow
from continuing operations
|
|
$
(101)
|
|
$
(101)
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
Cash paid for
interest
|
|
$
(5)
|
|
$
(26)
|
Cash paid for income
taxes
|
|
(36)
|
|
(14)
|
Cash paid for
restructuring
|
|
(5)
|
|
(9)
|
Cash paid for
pensions
|
|
(20)
|
|
(21)
|
Depreciation and
amortization
|
|
67
|
|
67
|
|
|
|
|
|
Change in primary
working capital:
|
|
|
|
|
Accounts and notes
receivable
|
|
$
(34)
|
|
$
(15)
|
Inventories
|
|
(92)
|
|
(82)
|
Accounts
payable
|
|
61
|
|
(10)
|
Total change in
primary working capital
|
|
$
(65)
|
|
$
(107)
|
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 our liquidity, (b)
evaluate strategic investments, (c) plan stock buyback and dividend
levels and (d) evaluate our ability to incur and service debt. We
have historically defined free cash flow as cash flows provided by
operating activities and used in investing activities, excluding
acquisition/disposition activities and including non-recurring
separation costs. Starting with the quarter ended March 31, 2020,
we updated our definition of free cash flow to a presentation more
consistent with today's market standard of net cash provided by
operating activities less capital expenditures. Using our updated
definition, our free cash flow for the years ended December 31,
2019, 2018, and 2017 were $382 million, $453 million, and $438
million, respectively. 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.
|
|
|
(3)
|
During the third
quarter 2019, we entered into an agreement to sell our Chemical
Intermediates and Surfactants businesses. Results from these
businesses, including the associated gain on sale, are treated as
discontinued operations until the completion of the sale on January
3, 2020.
|
|
|
(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 2019 revenues of approximately
$7 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 70 manufacturing, R&D and
operations facilities in approximately 30 countries and
employ approximately 9,000 associates within our four distinct
business divisions. For more information about Huntsman, please
visit the company's website
at www.huntsman.comhttps://c212.net/c/link/?t=0&l=en&o=2729073-1&h=708906847&u=http%3A%2F%2Fwww.huntsman.com%2F&a=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, timing of proposed transactions, 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