HUN

Three months ended

Nine months ended

September 30,

September 30,

In millions, except per share amounts

2022

2021

2022

2021

Revenues

$     2,011

$     2,097

$     6,373

$     5,558

Net income

$        115

$        225

$        597

$        497

Adjusted net income ⁽¹⁾

$        141

$        226

$        628

$        531

Diluted income per share

$       0.50

$       0.94

$       2.66

$       2.02

Adjusted diluted income per share⁽¹⁾

$       0.71

$       1.02

$       3.03

$       2.39

Adjusted EBITDA⁽¹⁾

$        271

$        349

$     1,068

$        919

Net cash provided by operating activities from continuing operations

$        285

$        179

$        595

$        182

Free cash flow from continuing operations⁽²⁾

$        228

$        106

$        409

$        (59)

See end of press release for footnote explanations and reconciliations of non-GAAP measures.

Table 1 -- Results of Operations

Three months ended

Nine months ended

September 30,

September 30,

In millions, except per share amounts

2022

2021

2022

2021

Revenues

$     2,011

$     2,097

$     6,373

$     5,558

Cost of goods sold

1,662

1,660

5,017

4,397

Gross profit

349

437

1,356

1,161

Operating expenses, net

199

208

621

597

Restructuring, impairment and plant closing costs (credits)

12

(1)

36

34

Operating income

138

230

699

530

Interest expense, net

(16)

(15)

(46)

(52)

Equity in income of investment in unconsolidated affiliates

21

34

55

118

Fair value adjustments to Venator investment, net

(7)

(3)

(9)

(28)

Loss on early extinguishment of debt

-

-

-

(27)

Other income, net

10

7

23

21

Income from continuing operations before income taxes

146

253

722

562

Income tax expense

(30)

(34)

(155)

(101)

Income from continuing operations

116

219

567

461

(Loss) income from discontinued operations, net of tax⁽³⁾

(1)

6

30

36

Net income

115

225

597

497

Net income attributable to noncontrolling interests, net of tax

(15)

(16)

(46)

(49)

Net income attributable to Huntsman Corporation

$        100

$        209

$        551

$        448

Adjusted EBITDA⁽¹⁾

$        271

$        349

$     1,068

$        919

Adjusted net income ⁽¹⁾

$        141

$        226

$        628

$        531

Basic income per share

$       0.51

$       0.95

$       2.69

$       2.03

Diluted income per share

$       0.50

$       0.94

$       2.66

$       2.02

Adjusted diluted income per share⁽¹⁾

$       0.71

$       1.02

$       3.03

$       2.39

Common share information:

Basic weighted average shares

198

219

205

220

Diluted weighted average shares

199

221

207

222

Diluted shares for adjusted diluted income per share

199

221

207

222

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

2022

2021

(Worse)

2022

2021

(Worse)

Segment Revenues:

Polyurethanes

$     1,257

$     1,403

(10 %)

$     3,996

$     3,626

10 %

Performance Products

434

399

9 %

1,406

1,075

31 %

Advanced Materials

328

304

8 %

999

881

13 %

Total Reportable Segments' Revenue

2,019

2,106

(4 %)

6,401

5,582

15 %

Intersegment Eliminations

(8)

(9)

n/m

(28)

(24)

n/m

Total Revenues

$     2,011

$     2,097

(4 %)

$     6,373

$     5,558

15 %

Segment Adjusted EBITDA⁽¹⁾:

Polyurethanes

$        138

$        246

(44 %)

$        591

$        661

(11 %)

Performance Products

110

103

7 %

408

254

61 %

Advanced Materials

58

48

21 %

192

150

28 %

Total Reportable Segments' Adjusted EBITDA⁽¹⁾

306

397

(23 %)

1,191

1,065

12 %

Corporate, LIFO and other

(35)

(48)

27 %

(123)

(146)

16 %

$        271

$        349

(22 %)

$     1,068

$        919

16 %

n/m = not meaningful

See end of press release for footnote explanations.

Table 3 -- Factors Impacting Sales Revenue

Three months ended

September 30, 2022 vs. 2021

Average Selling Price^(a)

Local

Exchange

Sales Mix

Sales

Currency

Rate

& Other

Volume^(b)

Total

Polyurethanes

12 %

(5 %)

(1 %)

(16 %)

(10 %)

Performance Products

23 %

(4 %)

3 %

(13 %)

9 %

Advanced Materials

16 %

(7 %)

15 %

(16 %)

8 %

Nine months ended

September 30, 2022 vs. 2021

Average Selling Price^(a)

Local

Exchange

Sales Mix

Sales

Currency

Rate

& Other

Volume^(b)

Total

Polyurethanes

21 %

(4 %)

(1 %)

(6 %)

10 %

Performance Products

34 %

(3 %)

4 %

(4 %)

31 %

Advanced Materials

19 %

(5 %)

16 %

(17 %)

13 %

(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

 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

2022

2021

2022

2021

2022

2021

2022

2021

Net income

$     115

$   225

$     115

$    225

$   0.58

$   1.02

Net income attributable to noncontrolling interests

(15)

(16)

(15)

(16)

(0.08)

(0.07)

Net income attributable to Huntsman Corporation

100

209

100

209

0.50

0.94

Interest expense from continuing operations

16

15

Income tax expense from continuing operations

30

34

$      (30)

$      (34)

Income tax expense from discontinued operations⁽³⁾

7

9

Depreciation and amortization from continuing operations

72

68

Depreciation and amortization from discontinued operations⁽³⁾

3

4

Business acquisition and integration expenses and purchase accounting inventory adjustments

1

5

(1)

(2)

-

3

-

0.01

Costs associated with the Albemarle Settlement, net

1

-

(1)

-

-

-

-

-

EBITDA / Income from discontinued operations, net of tax⁽³⁾

(9)

(19)

 N/A 

 N/A 

1

(6)

0.01

(0.03)

Loss on sale of businesses/assets

16

-

(4)

-

12

-

0.06

-

Income from transition services arrangements

-

(2)

-

-

-

(2)

-

(0.01)

Fair value adjustments to Venator Investment

7

3

-

-

7

3

0.04

0.01

Certain legal and other settlements and related expenses

1

-

(1)

-

-

-

-

-

Certain non-recurring information technology project implementation costs

1

2

-

-

1

2

0.01

0.01

Amortization of pension and postretirement actuarial losses

10

19

(2)

(4)

8

15

0.04

0.07

Restructuring, impairment and plant closing and transition costs

14

-

(3)

-

11

-

0.06

-

Plant incident remediation costs

1

2

-

-

1

2

0.01

0.01

Adjusted⁽¹⁾

$     271

$    349

$      (42)

$      (40)

$     141

$    226

$   0.71

$   1.02

Adjusted income tax expense (benefit)⁽¹⁾

$       42

$      40

Net income attributable to noncontrolling interests, net of tax

15

16

Adjusted pre-tax income ⁽¹⁾

$     198

$    282

Adjusted effective tax rate⁽⁴⁾

21 %

14 %

Effective tax rate

21 %

13 %

 Income Tax 

 Diluted Income 

 EBITDA 

Expense

 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

2022

2021

2022

2021

2022

2021

2022

2021

Net income

$     597

$    497

$     597

$    497

$   2.88

$   2.24

Net income attributable to noncontrolling interests

(46)

(49)

(46)

(49)

(0.22)

(0.22)

Net income attributable to Huntsman Corporation

551

448

551

448

2.66

2.02

Interest expense from continuing operations

46

52

Income tax expense from continuing operations

155

101

$     (155)

$     (101)

Income tax expense from discontinued operations⁽³⁾

14

18

Depreciation and amortization from continuing operations

207

205

Depreciation and amortization from discontinued operations⁽³⁾

11

14

Business acquisition and integration expenses and purchase accounting inventory adjustments

11

19

(3)

(4)

8

15

0.04

0.07

Costs associated with the Albemarle Settlement, net

3

-

(1)

-

2

-

0.01

-

EBITDA / Income from discontinued operations, net of tax⁽³⁾

(55)

(68)

N/A

N/A

(30)

(36)

(0.14)

(0.16)

Loss (gain) on sale of businesses/assets

27

(30)

(6)

4

21

(26)

0.10

(0.12)

Income from transition services arrangements

(2)

(6)

-

1

(2)

(5)

(0.01)

(0.02)

Fair value adjustments to Venator Investment

9

28

-

-

9

28

0.04

0.13

Loss on early extinguishment of debt

-

27

-

(6)

-

21

-

0.09

Certain legal settlements and related expenses

15

10

(4)

(3)

11

7

0.05

0.03

Certain non-recurring information technology project implementation costs

4

6

(1)

(1)

3

5

0.01

0.02

Amortization of pension and postretirement actuarial losses

32

56

(7)

(13)

25

43

0.12

0.19

Restructuring, impairment and plant closing and transition costs

44

36

(11)

(8)

33

28

0.16

0.13

Plant incident remediation (credits) costs

(4)

3

1

-

(3)

3

(0.01)

0.01

Adjusted⁽¹⁾

$  1,068

$    919

$    (187)

$    (131)

$     628

$    531

$  3.03

$  2.39

Adjusted income tax expense⁽¹⁾

$    187

$   131

Net income attributable to noncontrolling interests, net of tax

46

49

Adjusted pre-tax income⁽¹⁾

$     861

$   711

Adjusted effective tax rate⁽⁴⁾

22 %

18 %

Effective tax rate

21 %

18 %

N/A = not applicable

See end of press release for footnote explanations.

Table 5 -- Selected Balance Sheet Items

September 30,

December 31,

In millions

2022

2021

Cash

$               515

$            1,041

Accounts and notes receivable, net

1,004

1,015

Inventories

1,079

1,038

Receivable associated with the Albemarle Settlement

-

333

Other current assets

115

155

Current assets held for sale

483

346

Property, plant and equipment, net

2,288

2,443

Other noncurrent assets

2,648

2,839

Noncurrent assets held for sale

-

182

Total assets

$            8,132

$            9,392

Accounts payable

$               898

$            1,114

Other current liabilities

443

762

Current portion of debt

12

12

Current liabilities held for sale

242

163

Long-term debt

1,476

1,538

Other noncurrent liabilities

1,077

1,093

Noncurrent liabilities held for sale

-

151

Huntsman Corporation stockholders' equity

3,774

4,378

Noncontrolling interests in subsidiaries

210

181

Total liabilities and equity

$            8,132

$            9,392

Table 6 -- Outstanding Debt

September 30,

December 31,

In millions

2022

2021

Debt:

Revolving credit facility

$                   -

$                   -

Accounts receivable programs

-

-

Senior notes

1,423

1,473

Variable interest entities

38

45

Other debt

27

32

Total debt - excluding affiliates

1,488

1,550

Total cash

515

1,041

Net debt - excluding affiliates⁽⁵⁾

$               973

$               509

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

2022

2021

2022

2021

Total cash at beginning of period

$            608

$            510

$         1,041

$         1,593

Net cash provided by operating activities from continuing operations

285

179

595

182

Net cash provided by (used in) operating activities from discontinued operations⁽³⁾

3

7

9

(20)

Net cash used in investing activities from continuing operations

(56)

(67)

(176)

(430)

Net cash used in investing activities from discontinued operations⁽³⁾

(3)

(3)

(12)

(9)

Net cash used in financing activities

(296)

(118)

(905)

(809)

Effect of exchange rate changes on cash

(26)

(3)

(37)

(2)

Total cash at end of period

$            515

$            505

$            515

$            505

Free cash flow from continuing operations⁽²⁾:

Net cash provided by operating activities from continuing operations

$            285

$            179

$            595

$            182

Capital expenditures from continuing operations

(57)

(73)

(186)

(241)

Free cash flow from continuing operations

$            228

$            106

$            409

$            (59)

Supplemental cash flow information:

Cash paid for interest

$              (8)

$            (10)

$            (41)

$            (57)

Cash paid for income taxes

(17)

(7)

(171)

(83)

Cash paid for restructuring and integration

(18)

(11)

(44)

(28)

Cash paid for pensions

(12)

(17)

(38)

(45)

Depreciation and amortization from continuing operations

72

68

207

205

Change in primary working capital:

Accounts and notes receivable

$             69

$          (143)

$            (60)

$          (335)

Inventories

72

(13)

(128)

(270)

Accounts payable

(80)

(1)

(113)

134

Total change in primary working capital

$             61

$          (157)

$          (301)

$          (471)

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 the reconciliation of net income (loss) to adjusted EBITDA 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 the reconciliation of net income (loss) to adjusted 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 may disclose forward-looking adjusted EBITDA because we cannot adequately forecast certain items and events that may or may not impact us in the near future, such as business acquisition and integration expenses and purchase accounting inventory adjustments, certain legal and other settlements and related expenses, gains on sale of businesses/assets and certain tax only items, including tax law changes not yet enacted. Each of such adjustment has not yet occurred, is out of our control and/or cannot be reasonably predicted. In our view, our forward-looking adjusted EBITDA represents the forecast net income on our underlying business operations but does not reflect any adjustments related to the items noted above that may occur and can cause our adjusted EBITDA to differ.

(2)

Management internally uses 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. Free cash flow is defined as net cash provided by operating activities less capital expenditures. 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 2022, we entered into an agreement to sell our Textile Effects business, which is now reported as discontinued operations on the income and cash flow statements and held for sale on the balance sheet.

(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. Please see the reconciliation of our net income to adjusted net income in Table 4for details regarding the tax impacts of our non-GAAP adjustments.

Our forward-looking adjusted effective tax rate is calculated based on our forecast effective tax rate, and the range of our forward-looking adjusted effective tax rate equals the range of our forecast effective tax rate. We disclose forward-looking adjusted effective tax rate because we cannot adequately forecast certain items and events that may or may not impact us in the near future, such as business acquisition and integration expenses and purchase accounting inventory adjustments, certain legal and other settlements and related expenses, gains on sale of businesses/assets and certain tax only items, including tax law changes not yet enacted. Each of such adjustment has not yet occurred, is out of our control and/or cannot be reasonably predicted. In our view, our forward-looking adjusted effective tax rate represents the forecast effective tax rate on our underlying business operations but does not reflect any adjustments related to the items noted above that may occur and can cause our effective tax rate to differ.

(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.