THE WOODLANDS, Texas,
Oct. 29, 2020 /PRNewswire/ --
Third Quarter Highlights
- Third quarter 2020 net income of $57
million compared to net income of $41
million in the prior year period; third quarter 2020 diluted
earnings per share of $0.22 compared
to diluted earnings per share of $0.13 in the prior year period.
- Third quarter 2020 adjusted net income of $70 million compared to adjusted net income of
$95 million in the prior year period;
third quarter 2020 adjusted diluted earnings per share of
$0.32 compared to adjusted diluted
earnings per share of $0.41 in the
prior year period.
- Third quarter 2020 adjusted EBITDA of $188 million compared to $215 million in the prior year period.
- Third quarter 2020 net cash provided by operating activities
from continuing operations was $65
million. Free cash flow from continuing operations was
$11 million for the third quarter
2020 and adjusted free cash flow from continuing operations was
$189 million.
- Balance sheet remains strong with a net leverage of 1.6x and
total liquidity is approximately $2.5
billion.
- Sale of Venator Materials PLC shares to funds advised
by SK Capital is on track to close near year end. Together
with estimated cash tax savings of approximately $150 million, which this transaction facilitates,
we expect to secure an aggregate total cash benefit of
approximately $250 million.
- In excess of $100 million of
previously announced targeted annualized savings and acquisition
integration synergies remains on track to be achieved by the end of
2021.
- On October 28, 2020, Huntsman
announced the agreement to sell its India based Do-It-Yourself consumer adhesives
business for up to $285 million to
Pidilite Industries Ltd. The transaction value represents a 2019
adjusted EBITDA multiple of ~15x and is expected to close within
the coming week.
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
In millions, except
per share amounts
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
1,510
|
|
$
1,687
|
|
$
4,350
|
|
$
5,140
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
57
|
|
$
41
|
|
$
706
|
|
$
290
|
Adjusted net
income(1)
|
|
$
70
|
|
$
95
|
|
$
105
|
|
$
288
|
|
|
|
|
|
|
|
|
|
Diluted income per
share
|
|
$
0.22
|
|
$
0.13
|
|
$
3.13
|
|
$
1.12
|
Adjusted diluted
income per share(1)
|
|
$
0.32
|
|
$
0.41
|
|
$
0.47
|
|
$
1.24
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
188
|
|
$
215
|
|
$
407
|
|
$
664
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities from continuing operations
|
$
65
|
|
$
257
|
|
$
110
|
|
$
434
|
Free cash flow from
continuing operations(2)
|
|
$
11
|
|
$
194
|
|
$
(60)
|
|
$
253
|
Adjusted free cash
flow from continuing operations(6)
|
|
$
189
|
|
$
194
|
|
$
128
|
|
$
253
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations and reconciliations of non-GAAP
measures.
|
Huntsman Corporation (NYSE: HUN) today reported third quarter
2020 results with revenues of $1,510
million, net income of $57
million, adjusted net income of $70
million and adjusted EBITDA of $188
million.
Peter R. Huntsman, Chairman,
President and CEO, commented:
"The third quarter proved to be better than we had
anticipated with improving conditions in almost all of our
businesses except for commercial aircraft. Although the global
community continues to face significant challenges around COVID-19,
we see positive momentum entering the fourth quarter. We
remain fully on track in integrating our two downstream
acquisitions completed earlier this year and in delivering in
excess of $100 million of annualized
synergies and savings from our previously announced cost
optimization initiative by the end of 2021. We are also on track to
close on the sale of our Venator shares near the end of 2020
further bolstering our liquidity and balance sheet with
approximately $250 million of total
related cash. During 2020, a year that history will remember for
unprecedented challenges, more than ever before Huntsman has become
significantly stronger, further focused on strategically growing
its differentiated businesses and enhancing shareholder
value."
Segment Analysis for 3Q20 Compared to 3Q19
Polyurethanes
The decrease in revenues in our Polyurethanes segment for the
three months ended September 30, 2020
compared to the same period of 2019 was primarily due to lower MDI
average selling prices. 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 were roughly flat, when including sales
volumes in connection with the Icynene-Lapolla Acquisition. The
increase in segment adjusted EBITDA was primarily due to lower raw
material costs and lower fixed costs as well as additional sales
volumes in connection with the Icynene-Lapolla Acquisition,
partially offset by lower MDI pricing.
Performance Products
The decrease in revenues in our Performance Products segment for
the three months ended September 30,
2020 compared to the same period of 2019 was due to lower
sales volumes and lower average selling prices. Sales volumes
decreased primarily in relation to the global economic slowdown.
Average selling prices decreased primarily due to lower raw
material costs. 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 September 30,
2020 compared to the same period in 2019 was due to lower
sales volumes and lower overall average selling prices. Sales
volumes decreased across all markets and regions, except in our
global power market, primarily in relation to the global economic
slowdown and customer destocking. Despite local currency average
selling prices remaining unchanged, overall average selling prices
decreased due to 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 September 30, 2020
compared to the same period of 2019 was due to lower sales volumes
and lower average selling prices. Sales volumes decreased primarily
due to weaker demand in relation to the global economic
slowdown. Average selling prices decreased as a result of
product mix change, competitive market pressures and the impact of
a stronger U.S. dollar against major international currencies. The
decrease in segment adjusted EBITDA was primarily due to lower
sales revenues 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 September
30, 2020, adjusted EBITDA from Corporate and other for
Huntsman Corporation decreased by $1
million to a loss of $37
million from a loss of $36
million for the same period of 2019.
Liquidity and Capital Resources
During the three months ended September
30, 2020, our adjusted free cash flow from continuing
operations was $189 million as
compared to $194 million in the prior
year period. As of September 30,
2020, we had approximately $2.5
billion of combined cash and unused borrowing capacity.
During the three months ended September
30, 2020, we spent $54 million
on capital expenditures as compared to $63
million in the same period of 2019. For 2020 we expect
to spend between $250 million to
$255 million on capital
expenditures.
Year to date we paid approximately $188
million in taxes related to the sale of our Chemical
Intermediates Businesses, which was completed on January 3, 2020, and we expect to spend an
additional $187 million within the
fourth quarter. However, depending upon the timing of the
completion of the sale of most of our Venator shares, which is
expected near year-end, the net amount of taxes to be paid in the
fourth quarter may be reduced by approximately $150 million.
Income Taxes
In the third quarter 2020, our adjusted effective tax rate was
23%. For 2020, our adjusted effective tax rate is expected to
be approximately 20% - 22%. 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 third quarter 2020
financial results on Thursday, October 29,
2020 at 10:00 a.m. ET.
Webcast link:
https://78449.themediaframe.com/dataconf/productusers/hun/mediaframe/41067/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 fourth quarter 2020, a member of management is
expected to present at:
Morgan Stanley Virtual Global Chemicals Conference on November 10, 2020
Citi Basic Materials Virtual Conference on December 1, 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
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
In millions, except
per share amounts
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
1,510
|
|
$
1,687
|
|
$
4,350
|
|
$
5,140
|
Cost of goods
sold
|
|
1,231
|
|
1,347
|
|
3,612
|
|
4,068
|
Gross
profit
|
|
279
|
|
340
|
|
738
|
|
1,072
|
Operating
expenses
|
|
208
|
|
231
|
|
660
|
|
695
|
Restructuring,
impairment and plant closing costs (credits)
|
|
12
|
|
(43)
|
|
34
|
|
(42)
|
Operating
income
|
|
59
|
|
152
|
|
44
|
|
419
|
Interest
expense
|
|
(24)
|
|
(27)
|
|
(63)
|
|
(86)
|
Equity in income of
investment in unconsolidated affiliates
|
|
21
|
|
19
|
|
25
|
|
41
|
Fair value
adjustments to Venator investment
|
|
6
|
|
(148)
|
|
(100)
|
|
(90)
|
Loss on early
extinguishment of debt
|
|
-
|
|
-
|
|
-
|
|
(23)
|
Other income,
net
|
|
10
|
|
7
|
|
27
|
|
16
|
Income (loss) from
continuing operations before income taxes
|
|
72
|
|
3
|
|
(67)
|
|
277
|
Income tax
expense
|
|
(15)
|
|
(30)
|
|
(9)
|
|
(113)
|
Income (loss) from
continuing operations
|
|
57
|
|
(27)
|
|
(76)
|
|
164
|
Income from
discontinued operations, net of tax(3)
|
|
-
|
|
68
|
|
782
|
|
126
|
Net
income
|
|
57
|
|
41
|
|
706
|
|
290
|
Net income
attributable to noncontrolling interests, net of tax
|
|
(9)
|
|
(11)
|
|
(15)
|
|
(31)
|
Net income
attributable to Huntsman Corporation
|
|
$
48
|
|
$
30
|
|
$
691
|
|
$
259
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
188
|
|
$
215
|
|
$
407
|
|
$
664
|
Adjusted net
income(1)
|
|
$
70
|
|
$
95
|
|
$
105
|
|
$
288
|
|
|
|
|
|
|
|
|
|
Basic income per
share
|
|
$
0.22
|
|
$
0.13
|
|
$
3.13
|
|
$
1.12
|
Diluted income per
share
|
|
$
0.22
|
|
$
0.13
|
|
$
3.13
|
|
$
1.12
|
Adjusted diluted
income per share(1)
|
|
$
0.32
|
|
$
0.41
|
|
$
0.47
|
|
$
1.24
|
|
|
|
|
|
|
|
|
|
Common share
information:
|
|
|
|
|
|
|
|
|
Basic weighted
average shares
|
|
220
|
|
227
|
|
221
|
|
230
|
Diluted weighted
average shares
|
|
221
|
|
227
|
|
221
|
|
232
|
Diluted shares for
adjusted diluted income per share
|
|
221
|
|
229
|
|
222
|
|
232
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations.
|
|
|
|
|
|
|
|
|
Table 2 – Results
of Operations by Segment
|
|
|
|
Three months
ended
|
|
|
|
Nine months
ended
|
|
|
|
|
September
30,
|
|
Better
/
|
|
September
30,
|
|
Better
/
|
In
millions
|
|
2020
|
|
2019
|
|
(Worse)
|
|
2020
|
|
2019
|
|
(Worse)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
936
|
|
$
993
|
|
(6%)
|
|
$
2,554
|
|
$
2,931
|
|
(13%)
|
Performance
Products
|
|
238
|
|
281
|
|
(15%)
|
|
758
|
|
880
|
|
(14%)
|
Advanced
Materials
|
|
199
|
|
256
|
|
(22%)
|
|
632
|
|
803
|
|
(21%)
|
Textile
Effects
|
|
142
|
|
179
|
|
(21%)
|
|
424
|
|
583
|
|
(27%)
|
Corporate and
Eliminations
|
|
(5)
|
|
(22)
|
|
n/m
|
|
(18)
|
|
(57)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
1,510
|
|
$
1,687
|
|
(10%)
|
|
$
4,350
|
|
$
5,140
|
|
(15%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
156
|
|
$
146
|
|
7%
|
|
$
271
|
|
$
426
|
|
(36%)
|
Performance
Products
|
|
36
|
|
38
|
|
(5%)
|
|
123
|
|
125
|
|
(2%)
|
Advanced
Materials
|
|
25
|
|
51
|
|
(51%)
|
|
103
|
|
159
|
|
(35%)
|
Textile
Effects
|
|
8
|
|
16
|
|
(50%)
|
|
24
|
|
66
|
|
(64%)
|
Corporate, LIFO and
other
|
|
(37)
|
|
(36)
|
|
(3%)
|
|
(114)
|
|
(112)
|
|
(2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
188
|
|
$
215
|
|
(13%)
|
|
$
407
|
|
$
664
|
|
(39%)
|
n/m = not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations.
|
|
|
|
|
|
|
|
|
|
|
Table 3 – Factors
Impacting Sales Revenue
|
|
|
|
Three months
ended
|
|
|
September 30, 2020
vs. 2019
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
(5%)
|
|
1%
|
|
(2%)
|
|
0%
|
|
(6%)
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Products
|
|
(3%)
|
|
1%
|
|
6%
|
|
(19%)
|
|
(15%)
|
|
|
|
|
|
|
|
|
|
|
|
Advanced
Materials
|
|
0%
|
|
(1%)
|
|
(10%)
|
|
(11%)
|
|
(22%)
|
|
|
|
|
|
|
|
|
|
|
|
Textile
Effects
|
|
(7%)
|
|
(2%)
|
|
1%
|
|
(13%)
|
|
(21%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended
|
|
|
September 30, 2020
vs. 2019
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
(6%)
|
|
(1%)
|
|
0%
|
|
(6%)
|
|
(13%)
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Products
|
|
(5%)
|
|
(1%)
|
|
5%
|
|
(13%)
|
|
(14%)
|
|
|
|
|
|
|
|
|
|
|
|
Advanced
Materials
|
|
1%
|
|
(2%)
|
|
(2%)
|
|
(18%)
|
|
(21%)
|
|
|
|
|
|
|
|
|
|
|
|
Textile
Effects
|
|
(2%)
|
|
(2%)
|
|
(2%)
|
|
(21%)
|
|
(27%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
In millions, except
per share amounts
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
57
|
|
$
41
|
|
|
|
|
|
$
57
|
|
$
41
|
|
$
0.26
|
|
$
0.18
|
Net income
attributable to noncontrolling interests
|
|
(9)
|
|
(11)
|
|
|
|
|
|
(9)
|
|
(11)
|
|
(0.04)
|
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
48
|
|
30
|
|
|
|
|
|
48
|
|
30
|
|
0.22
|
|
0.13
|
Interest expense from
continuing operations
|
|
24
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
15
|
|
30
|
|
$
(15)
|
|
$
(30)
|
|
|
|
|
|
|
|
|
Income tax expense
from discontinued operations(3)
|
|
-
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from continuing operations
|
|
70
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from discontinued operations(3)
|
|
-
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration expenses and purchase accounting inventory
adjustments
|
|
9
|
|
3
|
|
(3)
|
|
(1)
|
|
6
|
|
2
|
|
0.03
|
|
0.01
|
EBITDA / Income from
discontinued operations, net of tax(3)
|
|
-
|
|
(106)
|
|
N/A
|
|
N/A
|
|
-
|
|
(68)
|
|
-
|
|
(0.30)
|
Income from
transition services arrangements
|
|
(1)
|
|
-
|
|
-
|
|
-
|
|
(1)
|
|
-
|
|
-
|
|
-
|
Fair value
adjustments to Venator Investment(a)
|
|
(6)
|
|
148
|
|
-
|
|
-
|
|
(6)
|
|
148
|
|
(0.03)
|
|
0.65
|
Certain legal and
other settlements and related (income) expenses
|
|
(4)
|
|
1
|
|
1
|
|
-
|
|
(3)
|
|
1
|
|
(0.01)
|
|
-
|
Certain non-recurring
information technology project implementation costs
|
|
1
|
|
1
|
|
-
|
|
-
|
|
1
|
|
1
|
|
-
|
|
-
|
Amortization of
pension and postretirement actuarial losses
|
|
20
|
|
16
|
|
(4)
|
|
(5)
|
|
16
|
|
11
|
|
0.07
|
|
0.05
|
Restructuring,
impairment and plant closing and transition costs
(credits)
|
|
12
|
|
(43)
|
|
(3)
|
|
9
|
|
9
|
|
(34)
|
|
0.04
|
|
(0.15)
|
Plant incident
remediation costs
|
|
-
|
|
5
|
|
-
|
|
(1)
|
|
-
|
|
4
|
|
-
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
188
|
|
$
215
|
|
$
(24)
|
|
$
(28)
|
|
$
70
|
|
$
95
|
|
$
0.32
|
|
$
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(1)
|
|
|
|
|
|
|
|
|
|
$
24
|
|
$
28
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
9
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
103
|
|
$
134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate(4)
|
|
|
|
|
|
|
|
|
|
23%
|
|
21%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
|
|
21%
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax
|
|
|
|
|
|
Diluted
Income
|
|
|
EBITDA
|
|
(Expense)
Benefit
|
|
Net
Income
|
|
Per
Share
|
|
|
Nine months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
In millions, except
per share amounts
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
706
|
|
$
290
|
|
|
|
|
|
$
706
|
|
$
290
|
|
$
3.20
|
|
$
1.25
|
Net income
attributable to noncontrolling interests
|
|
(15)
|
|
(31)
|
|
|
|
|
|
(15)
|
|
(31)
|
|
(0.07)
|
|
(0.13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
691
|
|
259
|
|
|
|
|
|
691
|
|
259
|
|
3.13
|
|
1.12
|
Interest expense from
continuing operations
|
|
63
|
|
86
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
9
|
|
113
|
|
$
(9)
|
|
$
(113)
|
|
|
|
|
|
|
|
|
Income tax expense
from discontinued operations(3)
|
|
239
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from continuing operations
|
|
206
|
|
201
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization from discontinued operations(3)
|
|
-
|
|
59
|
|
|
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration expenses and purchase accounting inventory
adjustments
|
|
30
|
|
4
|
|
(6)
|
|
(1)
|
|
24
|
|
3
|
|
0.11
|
|
0.01
|
EBITDA / Income from
discontinued operations, net of tax(3)
|
|
(1,021)
|
|
(229)
|
|
N/A
|
|
N/A
|
|
(782)
|
|
(126)
|
|
(3.54)
|
|
(0.54)
|
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)
|
|
-
|
|
-
|
|
-
|
Income from
transition services arrangements
|
|
(6)
|
|
-
|
|
1
|
|
-
|
|
(5)
|
|
-
|
|
(0.02)
|
|
-
|
Fair value
adjustments to Venator Investment(a)
|
|
100
|
|
90
|
|
-
|
|
-
|
|
100
|
|
90
|
|
0.45
|
|
0.39
|
Loss on early
extinguishment of debt
|
|
-
|
|
23
|
|
-
|
|
(5)
|
|
-
|
|
18
|
|
-
|
|
0.08
|
Certain legal and
other settlements and related expenses
|
|
2
|
|
1
|
|
-
|
|
-
|
|
2
|
|
1
|
|
0.01
|
|
-
|
Certain non-recurring
information technology project implementation costs
|
|
3
|
|
1
|
|
-
|
|
-
|
|
3
|
|
1
|
|
0.01
|
|
-
|
Amortization of
pension and postretirement actuarial losses
|
|
57
|
|
49
|
|
(12)
|
|
(13)
|
|
45
|
|
36
|
|
0.20
|
|
0.16
|
Restructuring,
impairment and plant closing and transition costs
(credits)
|
|
34
|
|
(42)
|
|
(7)
|
|
9
|
|
27
|
|
(33)
|
|
0.12
|
|
(0.14)
|
Plant incident
remediation costs
|
|
1
|
|
5
|
|
-
|
|
(1)
|
|
1
|
|
4
|
|
-
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$
407
|
|
$
664
|
|
$
(33)
|
|
$
(89)
|
|
$
105
|
|
$
288
|
|
$
0.47
|
|
$
1.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(1)
|
|
|
|
|
|
|
|
|
|
$
33
|
|
$
89
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
15
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$
153
|
|
$
408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate(4)
|
|
|
|
|
|
|
|
|
|
22%
|
|
22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
|
|
(13%)
|
|
41%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
|
September
30,
|
|
December
31,
|
In
millions
|
|
2020
|
|
2019
|
|
|
|
|
|
Cash
|
|
$
1,168
|
|
$
525
|
Accounts and notes
receivable, net
|
|
889
|
|
953
|
Inventories
|
|
819
|
|
914
|
Other current
assets
|
|
125
|
|
155
|
Current assets held
for sale
|
|
-
|
|
1,208
|
Property, plant and
equipment, net
|
|
2,477
|
|
2,383
|
Other noncurrent
assets
|
|
2,619
|
|
2,182
|
|
|
|
|
|
Total
assets
|
|
$
8,097
|
|
$
8,320
|
|
|
|
|
|
Accounts
payable
|
|
$
725
|
|
$
822
|
Other current
liabilities
|
|
629
|
|
462
|
Current portion of
debt
|
|
567
|
|
212
|
Current liabilities
held for sale
|
|
-
|
|
512
|
Long-term
debt
|
|
1,557
|
|
2,177
|
Other noncurrent
liabilities
|
|
1,242
|
|
1,311
|
Huntsman Corporation
stockholders' equity
|
|
3,222
|
|
2,687
|
Noncontrolling
interests in subsidiaries
|
|
155
|
|
137
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
8,097
|
|
$
8,320
|
Table 6 –
Outstanding Debt
|
|
|
|
September
30,
|
|
December
31,
|
In
millions
|
|
2020
|
|
2019
|
|
|
|
|
|
Debt:
|
|
|
|
|
Revolving credit
facility
|
|
$
-
|
|
$
40
|
Accounts receivable
programs
|
|
52
|
|
167
|
Term loan
|
|
-
|
|
103
|
Senior
notes
|
|
2,003
|
|
1,963
|
Variable interest
entities
|
|
50
|
|
65
|
Other debt
|
|
19
|
|
51
|
|
|
|
|
|
Total debt -
excluding affiliates
|
|
2,124
|
|
2,389
|
|
|
|
|
|
Total cash
|
|
1,168
|
|
525
|
|
|
|
|
|
Net debt -
excluding affiliates(5)
|
|
$
956
|
|
$
1,864
|
|
|
|
|
|
See end of press
release for footnote explanations.
|
|
|
|
|
Table 7 –
Summarized Statement of Cash Flows
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
In
millions
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Total cash at
beginning of period
|
|
$
1,254
|
|
$
449
|
|
$
525
|
|
$
340
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities from continuing operations
|
|
65
|
|
257
|
|
110
|
|
434
|
Net cash provided by
(used in) operating activities from discontinued
operations(3)
|
18
|
|
126
|
|
(22)
|
|
222
|
Net cash (used in)
provided by investing activities from continuing
operations
|
|
(47)
|
|
(11)
|
|
1,105
|
|
(111)
|
Net cash used in
investing activities from discontinued
operations(3)
|
|
-
|
|
(13)
|
|
-
|
|
(31)
|
Net cash used in
financing activities
|
|
(129)
|
|
(383)
|
|
(546)
|
|
(431)
|
Effect of exchange
rate changes on cash
|
|
7
|
|
(7)
|
|
(4)
|
|
(5)
|
|
|
|
|
|
|
|
|
|
Total cash at end
of period
|
|
$
1,168
|
|
$
418
|
|
$
1,168
|
|
$
418
|
|
|
|
|
|
|
|
|
|
Free cash flow
from continuing operations(2):
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
65
|
|
$
257
|
|
$
110
|
|
$
434
|
Capital
expenditures
|
|
(54)
|
|
(63)
|
|
(170)
|
|
(181)
|
|
|
|
|
|
|
|
|
|
Free cash flow
from continuing operations
|
|
$
11
|
|
$
194
|
|
$
(60)
|
|
$
253
|
|
|
|
|
|
|
|
|
|
Taxes paid on sale of
Chemical Intermediates Businesses
|
|
$
178
|
|
$
-
|
|
$
188
|
|
$
-
|
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow from continuing
operations(6):
|
|
$
189
|
|
$
194
|
|
$
128
|
|
$
253
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
(9)
|
|
$
(12)
|
|
$
(49)
|
|
$
(65)
|
Cash paid for income
taxes
|
|
(187)
|
|
(34)
|
|
(242)
|
|
(102)
|
Cash paid for
restructuring and integration
|
|
(10)
|
|
(3)
|
|
(24)
|
|
(14)
|
Cash paid for
pensions
|
|
(27)
|
|
(29)
|
|
(73)
|
|
(68)
|
Depreciation and
amortization
|
|
70
|
|
65
|
|
206
|
|
201
|
|
|
|
|
|
|
|
|
|
Change in primary
working capital:
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable
|
|
$
(76)
|
|
$
116
|
|
$
103
|
|
$
69
|
Inventories
|
|
75
|
|
(5)
|
|
154
|
|
19
|
Accounts
payable
|
|
111
|
|
(4)
|
|
(85)
|
|
(16)
|
Total change in
primary working capital
|
|
$
110
|
|
$
107
|
|
$
172
|
|
$
72
|
|
|
|
|
|
|
|
|
|
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 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 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 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.
View original
content:http://www.prnewswire.com/news-releases/huntsman-announces-third-quarter-2020-earnings-solid-recovery-trends-in-core-markets-301162345.html
SOURCE Huntsman Corporation