THE WOODLANDS, Texas,
July 28, 2020 /PRNewswire/
--
Second Quarter Highlights
- Second quarter 2020 net loss of $59
million compared to net income of $118 million in the prior year period; second
quarter 2020 loss per share of $0.28
compared to diluted earnings per share of $0.47 in the prior year period.
- Second quarter 2020 adjusted net loss of $30 million compared to adjusted net income of
$108 million in the prior year
period; second quarter 2020 adjusted loss per share of $0.14 compared to diluted earnings per share of
$0.47 in the prior year period.
- Second quarter 2020 adjusted EBITDA of $54 million compared to $245 million in the prior year period.
- Second quarter 2020 net cash provided by operating activities
was $85 million. Free cash flow from
continuing operations was $30 million
for the second quarter 2020 and adjusted free cash flow from
continuing operations was $38
million.
- Balance sheet remains strong with a net leverage of 1.5x and
total liquidity is approximately $2.6
billion.
- The CVC Thermoset Specialties acquisition closed on
May 18, 2020. The integration remains
on track and the Company expects to achieve the targeted annualized
synergies of approximately $15
million by the end of 2021.
- Including approximately $35
million of synergies relating to recent acquisitions,
annualized savings in excess of $100
million are targeted by the end of 2021.
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
In millions, except
per share amounts
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
1,247
|
|
$
1,784
|
|
$
2,840
|
|
$
3,453
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(59)
|
|
$
118
|
|
$
649
|
|
$
249
|
|
Adjusted net (loss)
income(1)
|
|
$
(30)
|
|
$
108
|
|
$
35
|
|
$
193
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) income
per share
|
|
$
(0.28)
|
|
$
0.47
|
|
$
2.90
|
|
$
0.98
|
|
Adjusted diluted
(loss) income per share(1)
|
|
$
(0.14)
|
|
$
0.47
|
|
$
0.16
|
|
$
0.83
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
54
|
|
$
245
|
|
$
219
|
|
$
449
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities from continuing operations
|
$
85
|
|
$
217
|
|
$
45
|
|
$
177
|
|
Free cash flow from
continuing operations(2)
|
|
$
30
|
|
$
160
|
|
$
(71)
|
|
$
59
|
|
Adjusted free cash
flow from continuing operations(6)
|
|
$
38
|
|
$
160
|
|
$
(61)
|
|
$
59
|
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations and reconciliations of non-GAAP
measures.
|
|
|
Huntsman Corporation (NYSE: HUN) today reported second quarter
2020 results with revenues of $1,247
million, net loss of $59
million, adjusted net loss of $30
million and adjusted EBITDA of $54
million.
Peter R. Huntsman, Chairman,
President and CEO, commented:
"We were fortunate to have been more prepared than ever as we
entered the second quarter in an unprecedented global economic
crisis, with little to no visibility. With our transformed
balance sheet, there was no need to access capital markets and we
completed the quarter with $2.6
billion of overall liquidity and generated positive free
cash flow. We remain focused on what we can control and have
accelerated and improved integration plans for our recent
acquisitions, CVC Thermoset Specialties and Icynene-Lapolla.
The total annualized targeted synergies for these
acquisitions, to be achieved by the end of 2021, is now
$35 million. Including these
synergies, we have plans to achieve in excess of $100 million of targeted annualized savings by
year end 2021. While the ongoing related global effects of COVID-19
remain uncertain and visibility continues to be poor, we see
improving trends within most of our major markets and are
optimistic that the worst of this economic slowdown is behind
us."
Segment Analysis for 2Q20 Compared to 2Q19
Polyurethanes
The decrease in revenues in our Polyurethanes segment for the
three months ended June 30, 2020
compared to the same period of 2019 was due to lower MDI average
selling prices and lower overall polyurethanes sales volumes. MDI
average selling prices decreased across most major markets in
relation to the global economic slowdown resulting from the
COVID-19 pandemic. Overall polyurethanes sales volumes decreased in
primarily relation to the global economic slowdown and the
resulting decrease in demand across most major markets, partially
offset by growth in China during
the second quarter of 2020 and additional sales volumes in
connection with the Icynene-Lapolla acquisition. The decrease in
segment adjusted EBITDA was primarily due to lower component and
polymeric systems margins largely driven by lower MDI pricing and
lower polyurethanes sales volumes.
Performance Products
The decrease in revenues in our Performance Products segment for
the three months ended June 30,
2020 compared to the same period of 2019 was due to lower
average selling prices and lower sales volumes. Average selling
prices decreased primarily in response to lower raw material costs.
Sales volumes decreased primarily in relation to the global
economic slowdown. The decrease in segment adjusted EBITDA was
primarily due to lower sales volumes, partially offset by 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 June 30, 2020
compared to the same period in 2019 was due to lower sales volumes
while overall average selling prices remained unchanged. Sales
volumes decreased significantly across all markets and regions,
except in our global power market, in primarily relation to the
global economic slowdown and customer destocking. Average
selling prices increased in local currencies, offset by the impact
of a stronger U.S. dollar against major international currencies.
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 June 30, 2020
compared to the same period of 2019 was due to lower sales volumes
and sales mix changes. Sales volumes decreased primarily due to
significantly weaker demand in relation to the global economic
slowdown. Average selling prices in local currencies increased
mainly due to geographical mix change, offset by the impact of a
stronger U.S. dollar against major international currencies. The
decrease in segment adjusted EBITDA was primarily due to lower
sales volumes and lower capitalization of indirect costs because of
reduced production, partially offset by lower raw material costs
and lower fixed costs.
Corporate, LIFO and other
For the three months ended June 30,
2020, adjusted EBITDA from Corporate and other for Huntsman
Corporation increased by $4 million
to a loss of $32 million from a loss
of $36 million for the same period of
2019.
Liquidity and Capital Resources
During the three months ended June 30,
2020, our adjusted free cash flow from continuing operations
was $38 million as compared to
$160 million in the prior year
period. As of June 30, 2020, we
had $2.6 billion of combined cash and
unused borrowing capacity.
During the three months ended June 30,
2020, we spent $55 million on
capital expenditures as compared to $57
million in the same period of 2019. For 2020 we expect
to spend between approximately $225
million and $235 million on
capital expenditures.
On May 18, 2020 we completed our
acquisition of CVC Thermoset Specialties and paid approximately
$300 million from available
cash. In the second half of 2020, we expect to pay from
available cash approximately $365
million in taxes related to the sale of our Chemical
Intermediates and Surfactants businesses which was completed on
January 3, 2020.
As of the end of the second quarter 2020, we have approximately
$420 million remaining on our
existing $1 billion multiyear share
repurchase program. Our share repurchase program remains
suspended.
Income Taxes
In the second quarter 2020, our adjusted effective tax rate was
18%. For 2020, our adjusted effective tax rate is expected to
be approximately 20%. 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 second quarter
2020 financial results on Tuesday, July 28,
2020 at 10:00 a.m. ET.
Webcast link:
https://78449.themediaframe.com/dataconf/productusers/hun/mediaframe/38928/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 third quarter 2020 a
member of management is expected to present at:
Jefferies Virtual Global Industrials Conference on August 5, 2020
Seaport Global Virtual Summer Conference on August 26, 2020
UBS Virtual Global Chemicals Conference on September 9, 2020
RBC Capital Markets Global Industrials Virtual Conference on
September 15, 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
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
In millions, except
per share amounts
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
1,247
|
|
$
1,784
|
|
$
2,840
|
|
$
3,453
|
|
Cost of goods
sold
|
|
1,085
|
|
1,411
|
|
2,381
|
|
2,721
|
|
Gross
profit
|
|
162
|
|
373
|
|
459
|
|
732
|
|
Operating
expenses
|
|
212
|
|
221
|
|
452
|
|
464
|
|
Restructuring,
impairment and plant closing costs
|
|
19
|
|
-
|
|
22
|
|
1
|
|
Operating (loss)
income
|
|
(69)
|
|
152
|
|
(15)
|
|
267
|
|
Interest
expense
|
|
(21)
|
|
(29)
|
|
(39)
|
|
(59)
|
|
Equity in income of
investment in unconsolidated affiliates
|
|
2
|
|
12
|
|
4
|
|
22
|
|
Fair value
adjustments to Venator investment
|
|
4
|
|
(18)
|
|
(106)
|
|
58
|
|
Loss on early
extinguishment of debt
|
|
-
|
|
-
|
|
-
|
|
(23)
|
|
Other income,
net
|
|
7
|
|
4
|
|
17
|
|
9
|
|
(Loss) income from
continuing operations before income taxes
|
|
(77)
|
|
121
|
|
(139)
|
|
274
|
|
Income tax benefit
(expense)
|
|
13
|
|
(38)
|
|
6
|
|
(83)
|
|
(Loss) income from
continuing operations
|
|
(64)
|
|
83
|
|
(133)
|
|
191
|
|
Income from
discontinued operations, net of tax(3)
|
|
5
|
|
35
|
|
782
|
|
58
|
|
Net (loss)
income
|
|
(59)
|
|
118
|
|
649
|
|
249
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
(3)
|
|
(8)
|
|
(6)
|
|
(20)
|
|
Net (loss) income
attributable to Huntsman Corporation
|
|
$
(62)
|
|
$
110
|
|
$
643
|
|
$
229
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
54
|
|
$
245
|
|
$
219
|
|
$
449
|
|
Adjusted net
(loss) income(1)
|
|
$
(30)
|
|
$
108
|
|
$
35
|
|
$
193
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)
income per share
|
|
$
(0.28)
|
|
$
0.48
|
|
$
2.90
|
|
$
0.99
|
|
Diluted (loss)
income per share
|
|
$
(0.28)
|
|
$
0.47
|
|
$
2.90
|
|
$
0.98
|
|
Adjusted diluted
(loss) income per share(1)
|
|
$
(0.14)
|
|
$
0.47
|
|
$
0.16
|
|
$
0.83
|
|
|
|
|
|
|
|
|
|
|
Common share
information:
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares
|
|
220
|
|
231
|
|
221
|
|
232
|
|
Diluted weighted
average shares
|
|
220
|
|
232
|
|
221
|
|
234
|
|
Diluted shares for
adjusted diluted (loss) income per share
|
|
220
|
|
232
|
|
223
|
|
234
|
|
|
|
|
|
|
|
|
|
|
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
|
|
2020
|
|
2019
|
|
(Worse)
|
|
2020
|
|
2019
|
|
(Worse)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
730
|
|
$
1,014
|
|
(28%)
|
|
$
1,618
|
|
$
1,938
|
|
(17%)
|
|
Performance
Products
|
|
228
|
|
299
|
|
(24%)
|
|
520
|
|
599
|
|
(13%)
|
|
Advanced
Materials
|
|
192
|
|
275
|
|
(30%)
|
|
433
|
|
547
|
|
(21%)
|
|
Textile
Effects
|
|
102
|
|
215
|
|
(53%)
|
|
282
|
|
404
|
|
(30%)
|
|
Corporate and
Eliminations
|
|
(5)
|
|
(19)
|
|
n/m
|
|
(13)
|
|
(35)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
1,247
|
|
$
1,784
|
|
(30%)
|
|
$
2,840
|
|
$
3,453
|
|
(18%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
31
|
|
$
156
|
|
(80%)
|
|
$
115
|
|
$
280
|
|
(59%)
|
|
Performance
Products
|
|
29
|
|
42
|
|
(31%)
|
|
87
|
|
87
|
|
0%
|
|
Advanced
Materials
|
|
30
|
|
55
|
|
(45%)
|
|
78
|
|
108
|
|
(28%)
|
|
Textile
Effects
|
|
(4)
|
|
28
|
|
n/m
|
|
16
|
|
50
|
|
(68%)
|
|
Corporate, LIFO and
other
|
|
(32)
|
|
(36)
|
|
11%
|
|
(77)
|
|
(76)
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
54
|
|
$
245
|
|
(78%)
|
|
$
219
|
|
$
449
|
|
(51%)
|
|
n/m = not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations.
|
|
|
|
|
|
|
Table 3 -- Factors
Impacting Sales Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
June 30, 2020 vs.
2019
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
(7%)
|
|
(2%)
|
|
(3%)
|
|
(16%)
|
|
(28%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Products
|
|
(7%)
|
|
(1%)
|
|
4%
|
|
(20%)
|
|
(24%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced
Materials
|
|
3%
|
|
(3%)
|
|
1%
|
|
(31%)
|
|
(30%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Textile
Effects
|
|
1%
|
|
(1%)
|
|
(5%)
|
|
(48%)
|
|
(53%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
|
|
|
June 30, 2020 vs.
2019
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
(6%)
|
|
(2%)
|
|
0%
|
|
(9%)
|
|
(17%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Products
|
|
(5%)
|
|
(1%)
|
|
4%
|
|
(11%)
|
|
(13%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced
Materials
|
|
1%
|
|
(2%)
|
|
1%
|
|
(21%)
|
|
(21%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Textile
Effects
|
|
(3%)
|
|
(1%)
|
|
(2%)
|
|
(24%)
|
|
(30%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
(Loss) Income
|
|
|
EBITDA
|
|
Benefit
(Expense)
|
|
Net (Loss)
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
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(59)
|
|
$
118
|
|
|
|
|
|
$
(59)
|
|
$
118
|
|
$
(0.27)
|
|
$
0.51
|
|
Net income
attributable to noncontrolling interests
|
|
(3)
|
|
(8)
|
|
|
|
|
|
(3)
|
|
(8)
|
|
(0.01)
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to Huntsman Corporation
|
|
(62)
|
|
110
|
|
|
|
|
|
(62)
|
|
110
|
|
(0.28)
|
|
0.47
|
|
Interest expense from
continuing operations
|
|
21
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense from continuing operations
|
|
(13)
|
|
38
|
|
$
13
|
|
$
(38)
|
|
|
|
|
|
|
|
|
|
Income tax expense
from discontinued operations(3)
|
|
1
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from continuing operations
|
|
69
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from discontinued operations(3)
|
|
-
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration expenses and purchase accounting inventory
adjustments
|
|
8
|
|
-
|
|
-
|
|
-
|
|
8
|
|
-
|
|
0.04
|
|
-
|
|
EBITDA / Income from
discontinued operations, net of tax(3)
|
|
(6)
|
|
(72)
|
|
N/A
|
|
N/A
|
|
(5)
|
|
(35)
|
|
(0.02)
|
|
(0.15)
|
|
U.S. tax reform
impact on tax expense
|
|
-
|
|
-
|
|
-
|
|
3
|
|
-
|
|
3
|
|
-
|
|
0.01
|
|
Loss on sale of
businesses/assets
|
|
1
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
0.00
|
|
-
|
|
Income from
transition services arrangements
|
|
(5)
|
|
-
|
|
1
|
|
-
|
|
(4)
|
|
-
|
|
(0.02)
|
|
-
|
|
Fair value
adjustments to Venator Investment(a)
|
|
(4)
|
|
18
|
|
-
|
|
-
|
|
(4)
|
|
18
|
|
(0.02)
|
|
0.08
|
|
Certain legal
settlements and related expenses
|
|
4
|
|
-
|
|
(1)
|
|
-
|
|
3
|
|
-
|
|
0.01
|
|
-
|
|
Certain non-recurring
information technology project implementation costs
|
|
1
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
0.00
|
|
-
|
|
Amortization of
pension and postretirement actuarial losses
|
|
19
|
|
16
|
|
(4)
|
|
(4)
|
|
15
|
|
12
|
|
0.07
|
|
0.05
|
|
Restructuring,
impairment and plant closing and transition costs
|
|
19
|
|
-
|
|
(3)
|
|
-
|
|
16
|
|
-
|
|
0.07
|
|
-
|
|
Plant incident
remediation costs
|
|
1
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
0.00
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
54
|
|
$
245
|
|
$
6
|
|
$
(39)
|
|
$
(30)
|
|
$
108
|
|
$
(0.14)
|
|
$
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
(benefit) expense(1)
|
|
|
|
|
|
|
|
|
|
$
(6)
|
|
$
39
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
3
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
(loss) income(1)
|
|
|
|
|
|
|
|
|
|
$
(33)
|
|
$
155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate(4)
|
|
|
|
|
|
|
|
|
|
18%
|
|
25%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
|
|
17%
|
|
31%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax
|
|
|
|
|
|
Diluted
Income
|
|
|
EBITDA
|
|
Benefit
(Expense)
|
|
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
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
649
|
|
$
249
|
|
|
|
|
|
$
649
|
|
$
249
|
|
$
2.93
|
|
$
1.07
|
|
Net income
attributable to noncontrolling interests
|
|
(6)
|
|
(20)
|
|
|
|
|
|
(6)
|
|
(20)
|
|
(0.03)
|
|
(0.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
643
|
|
229
|
|
|
|
|
|
643
|
|
229
|
|
2.90
|
|
0.98
|
|
Interest expense from
continuing operations
|
|
39
|
|
59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense from continuing operations
|
|
(6)
|
|
83
|
|
$
6
|
|
$
(83)
|
|
|
|
|
|
|
|
|
|
Income tax expense
from discontinued operations(3)
|
|
239
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from continuing operations
|
|
136
|
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from discontinued operations(3)
|
|
-
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration expenses and purchase accounting inventory
adjustments
|
|
21
|
|
1
|
|
(3)
|
|
-
|
|
18
|
|
1
|
|
0.08
|
|
0.00
|
|
EBITDA / Income loss
from discontinued operations, net of tax(3)
|
|
(1,021)
|
|
(123)
|
|
N/A
|
|
N/A
|
|
(782)
|
|
(58)
|
|
(3.53)
|
|
(0.25)
|
|
U.S. tax reform
impact on tax expense
|
|
-
|
|
-
|
|
-
|
|
3
|
|
-
|
|
3
|
|
-
|
|
0.01
|
|
Impact of Switzerland
income tax rate change
|
|
-
|
|
-
|
|
-
|
|
32
|
|
-
|
|
32
|
|
-
|
|
0.14
|
|
Gain on sale of
businesses/assets
|
|
(1)
|
|
-
|
|
-
|
|
-
|
|
(1)
|
|
-
|
|
(0.00)
|
|
-
|
|
Income from
transition services arrangements
|
|
(5)
|
|
-
|
|
1
|
|
-
|
|
(4)
|
|
-
|
|
(0.02)
|
|
-
|
|
Fair value
adjustments to Venator Investment(a)
|
|
106
|
|
(58)
|
|
-
|
|
-
|
|
106
|
|
(58)
|
|
0.48
|
|
(0.25)
|
|
Loss on early
extinguishment of debt
|
|
-
|
|
23
|
|
-
|
|
(5)
|
|
-
|
|
18
|
|
-
|
|
0.08
|
|
Certain legal
settlements and related expenses
|
|
6
|
|
-
|
|
(1)
|
|
-
|
|
5
|
|
-
|
|
0.02
|
|
-
|
|
Certain non-recurring
information technology project implementation costs
|
|
2
|
|
-
|
|
-
|
|
-
|
|
2
|
|
-
|
|
0.01
|
|
-
|
|
Amortization of
pension and postretirement actuarial losses
|
|
37
|
|
33
|
|
(8)
|
|
(8)
|
|
29
|
|
25
|
|
0.13
|
|
0.11
|
|
Restructuring,
impairment and plant closing and transition costs
|
|
22
|
|
1
|
|
(4)
|
|
-
|
|
18
|
|
1
|
|
0.08
|
|
0.00
|
|
Plant incident
remediation costs
|
|
1
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
0.00
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
219
|
|
$
449
|
|
$
(9)
|
|
$
(61)
|
|
$
35
|
|
$
193
|
|
$
0.16
|
|
$
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(1)
|
|
|
|
|
|
|
|
|
|
$
9
|
|
$
61
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
6
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
50
|
|
$
274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate(4)
|
|
|
|
|
|
|
|
|
|
18%
|
|
22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
|
|
4%
|
|
30%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents the
changes in market value in Huntsman's remaining interesting in
Venator.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A = not
applicable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 5 --
Selected Balance Sheet Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
In
millions
|
|
2020
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Cash
|
|
$
1,254
|
|
$
1,594
|
|
$
525
|
|
Accounts and notes
receivable, net
|
|
835
|
|
1,027
|
|
953
|
|
Inventories
|
|
885
|
|
1,008
|
|
914
|
|
Other current
assets
|
|
130
|
|
145
|
|
155
|
|
Current assets held
for sale
|
|
-
|
|
-
|
|
1,208
|
|
Property, plant and
equipment, net
|
|
2,457
|
|
2,357
|
|
2,383
|
|
Other noncurrent
assets
|
|
2,565
|
|
2,327
|
|
2,182
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
8,126
|
|
$
8,458
|
|
$
8,320
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
610
|
|
$
856
|
|
$
822
|
|
Other current
liabilities
|
|
767
|
|
784
|
|
462
|
|
Current portion of
debt
|
|
650
|
|
134
|
|
212
|
|
Current liabilities
held for sale
|
|
-
|
|
-
|
|
512
|
|
Long-term
debt
|
|
1,527
|
|
2,049
|
|
2,177
|
|
Other noncurrent
liabilities
|
|
1,248
|
|
1,252
|
|
1,311
|
|
Huntsman Corporation
stockholders' equity
|
|
3,181
|
|
3,243
|
|
2,687
|
|
Noncontrolling
interests in subsidiaries
|
|
143
|
|
140
|
|
137
|
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
8,126
|
|
$
8,458
|
|
$
8,320
|
|
Table 6 --
Outstanding Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
In
millions
|
|
2020
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Debt:
|
|
|
|
|
|
|
|
Revolving credit
facility
|
|
$
-
|
|
$
-
|
|
$
40
|
|
Accounts receivable
programs
|
|
34
|
|
55
|
|
167
|
|
Term loan
|
|
103
|
|
101
|
|
103
|
|
Senior
notes
|
|
1,969
|
|
1,950
|
|
1,963
|
|
Variable interest
entities
|
|
53
|
|
58
|
|
65
|
|
Other debt
|
|
18
|
|
19
|
|
51
|
|
|
|
|
|
|
|
|
Total debt -
excluding affiliates
|
|
2,177
|
|
2,183
|
|
2,389
|
|
|
|
|
|
|
|
|
Total cash
|
|
1,254
|
|
1,594
|
|
525
|
|
|
|
|
|
|
|
|
Net debt -
excluding affiliates(5)
|
|
$
923
|
|
$
589
|
|
$
1,864
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations.
|
|
|
|
|
|
|
|
Table 7 --
Summarized Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
In
millions
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Total cash at
beginning of period
|
|
$
1,594
|
|
$
444
|
|
$
525
|
|
$
340
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities from continuing operations
|
|
85
|
|
217
|
|
45
|
|
177
|
|
Net cash (used in)
provided by operating activities from discontinued
operations(3)
|
(5)
|
|
87
|
|
(40)
|
|
96
|
|
Net cash (used in)
provided by investing activities from continuing
operations
|
|
(359)
|
|
(55)
|
|
1,152
|
|
(100)
|
|
Net cash used in
investing activities from discontinued
operations(3)
|
|
-
|
|
(9)
|
|
-
|
|
(18)
|
|
Net cash used in
financing activities
|
|
(63)
|
|
(231)
|
|
(417)
|
|
(48)
|
|
Effect of exchange
rate changes on cash
|
|
2
|
|
(4)
|
|
(11)
|
|
2
|
|
|
|
|
|
|
|
|
|
|
Total cash at end
of period
|
|
$
1,254
|
|
$
449
|
|
$
1,254
|
|
$
449
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
from continuing operations(2):
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
85
|
|
$
217
|
|
$
45
|
|
$
177
|
|
Capital
expenditures
|
|
(55)
|
|
(57)
|
|
(116)
|
|
(118)
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
from continuing operations
|
|
$
30
|
|
$
160
|
|
$
(71)
|
|
$
59
|
|
|
|
|
|
|
|
|
|
|
Taxes paid on sale of
Chemical Intermediates Businesses
|
|
$
8
|
|
$
-
|
|
$
10
|
|
$
-
|
|
Adjusted free cash
flow from continuing
operations(6):
|
|
$
38
|
|
$
160
|
|
$
(61)
|
|
$
59
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
(35)
|
|
$
(27)
|
|
$
(40)
|
|
$
(53)
|
|
Cash paid for income
taxes
|
|
(19)
|
|
(54)
|
|
(55)
|
|
(68)
|
|
Cash paid for
restructuring and integration
|
|
(9)
|
|
(2)
|
|
(14)
|
|
(11)
|
|
Cash paid for
pensions
|
|
(26)
|
|
(18)
|
|
(46)
|
|
(39)
|
|
Depreciation and
amortization
|
|
69
|
|
69
|
|
136
|
|
136
|
|
|
|
|
|
|
|
|
|
|
Change in primary
working capital:
|
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable
|
|
$
213
|
|
$
(32)
|
|
$
179
|
|
$
(47)
|
|
Inventories
|
|
171
|
|
106
|
|
79
|
|
24
|
|
Accounts
payable
|
|
(257)
|
|
(2)
|
|
(196)
|
|
(12)
|
|
Total change in
primary working capital
|
|
$
127
|
|
$
72
|
|
$
62
|
|
$
(35)
|
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations.
|
|
|
|
|
|
|
|
|
|
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, was 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.
|
|
|
|
(6)
|
Adjusted free cash
flow is defined as free cash flow, as described above, adjusted by
excluding the taxes paid in connection with the sale of our
Chemical Intermediates and Surfactants Businesses. We believe
that adjusted free cash flow provides a useful comparison from
period to period because it excludes the impact of cash taxes
unrelated to our operations. Additionally, the proceeds received
from the sale of our Chemical Intermediates and Surfactants
Businesses was classified as cash provided by investing activities
and therefore was not factored into our free cash flow. As
result, we believe the adjustment to exclude the taxes paid
associated with this sale provides a meaningful measure of our free
cash flow.
|
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.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