THE WOODLANDS, Texas,
July 27, 2016 /PRNewswire/ --
Second Quarter 2016 Highlights
- Net income was $94 million
compared to $39 million in the prior
year period and $62 million in the
prior quarter.
- Adjusted EBITDA was $325 million
compared to $385 million in the prior
year period and $274 million in the
prior quarter.
- Diluted income per share was $0.36 compared to $0.12 in the prior year period and $0.24 in the prior quarter.
- Adjusted diluted income per share was $0.53 compared to $0.63 in the prior year period and $0.37 in the prior quarter.
- Net cash provided by operating activities was $355 million. Free cash flow generation was
$282 million; we subsequently made a
$100 million early repayment of debt
in July 2016.
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
In millions, except
per share amounts
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$2,544
|
|
$2,740
|
|
$
2,355
|
|
$
4,899
|
|
$
5,329
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
94
|
|
$
39
|
|
$
62
|
|
$
156
|
|
$
54
|
Adjusted net
income(1)
|
|
$
126
|
|
$
155
|
|
$
88
|
|
$
214
|
|
$
253
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
share
|
|
$
0.36
|
|
$
0.12
|
|
$
0.24
|
|
$
0.60
|
|
$
0.14
|
Adjusted diluted
income per share(1)
|
|
$
0.53
|
|
$
0.63
|
|
$
0.37
|
|
$
0.90
|
|
$
1.02
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
325
|
|
$
385
|
|
$
274
|
|
$
599
|
|
$
670
|
|
|
|
|
|
|
|
|
|
|
|
See end of press
release for footnote explanations
|
Huntsman Corporation (NYSE: HUN) today reported second quarter
2016 results with revenues of $2,544
million, net income of $94
million and adjusted EBITDA of $325
million.
Peter R. Huntsman, our President
and CEO, commented:
"Our management team is focused on three primary strategic
financial objectives. 1) Generating more than $350 million of free cash flow in 2016. 2)
Growing margins and earnings in our downstream differentiated
businesses. 3) Separating our TiO2 business through either a
strategic combination or a spin-off.
"Our second quarter results demonstrate our commitment to
these objectives. I am delighted we generated $282 million of free cash flow during the
quarter, in part due to our increased focus on inventory management
and are on plan to exceed our $350
million target. This enabled us to make a
$100 million early repayment of debt
in July. Our MDI margins are expanding, our Performance
Products margins are healthy and our Advanced Materials business is
maintaining strong margins. We are actively working toward a
separation of our TiO2 business with a target of year-end or first
quarter 2017. TiO2 selling prices are rising and other
business conditions are improving for our Pigments and Additives
business. In time, it should be well positioned for our
planned separation. We will provide more information
regarding the separation on our second quarter earnings conference
call.
"I am encouraged by our second quarter results. We are
well on track to successfully accomplish our objectives."
Segment Analysis for 2Q16 Compared to 2Q15
Polyurethanes
The decrease in revenues in our Polyurethanes division for the
three months ended June 30, 2016
compared to the same period in 2015 was primarily due to lower
average selling prices partially offset by higher sales
volumes. MDI average selling prices decreased in response to
lower raw material costs. MTBE average selling prices
decreased primarily as a result of lower pricing for high octane
gasoline. MDI sales volumes increased due to higher demand in
the Americas and European regions. PO/MTBE sales volumes
increased due to the impact of the prior year planned maintenance
outage. The increase in adjusted EBITDA was primarily due to
the impact of the prior year planned PO/MTBE maintenance outage,
estimated at $30 million, as well as
higher MDI margins and sales volumes, partially offset by lower
MTBE margins.
Performance Products
The decrease in revenues in our Performance Products division
for the three months ended June 30,
2016 compared to the same period in 2015 was due to lower
average selling prices and lower sales volumes. Average
selling prices decreased primarily in response to lower raw
material costs and competitive market conditions. Sales
volumes decreased primarily due to softer demand in China and oilfield applications as well as
competitive market conditions. The decrease in adjusted
EBITDA was primarily due to lower margins in our amines, maleic
anhydride and upstream intermediates businesses.
Advanced Materials
The decrease in revenues in our Advanced Materials division for
the three months ended June 30, 2016
compared to the same period in 2015 was due to lower sales volumes
and lower average selling prices. Sales volumes decreased
primarily due to soft demand for low value business in our coatings
and construction market, partially offset by growth in our
aerospace market across all regions. Average selling prices
decreased in our Asia Pacific
region primarily as a result of competitive pressure in our
electrical and wind markets, partially offset by higher average
selling prices in our European and Americas regions. Adjusted
EBITDA was unchanged as higher contribution margins from lower raw
material costs were offset by lower sales volumes.
Textile Effects
The decrease in revenues in our Textile Effects division for the
three months ended June 30, 2016
compared to the same period in 2015 was due to lower average
selling prices partially offset by higher sales volumes.
Average selling prices decreased primarily due to lower raw
material costs. Sales volumes increased in key target
countries such as Bangladesh and
India. The increase in adjusted EBITDA was primarily due to
higher contribution margins from lower raw material costs.
Pigments and Additives
The decrease in revenues in our Pigments and Additives division
for the three months ended June 30,
2016 compared to the same period in 2015 was due to lower
average selling prices, partially offset by higher sales
volumes. Average selling prices decreased primarily as a
result of competitive pressure however they increased compared to
the prior quarter. Sales volumes increased primarily due to
increased end use demand. The decrease in adjusted EBITDA was
primarily due to lower contribution margins for titanium
dioxide.
Corporate, LIFO and Other
Adjusted EBITDA from Corporate, LIFO and Other decreased by
$14 million to a loss of $45 million for the three months ended
June 30, 2016 compared to a loss of
$31 million for the same period in
2015. The decrease in adjusted EBITDA was primarily the
result of a decrease in LIFO inventory valuation income and a
decrease in income from benzene sales.
Liquidity, Capital Resources and Outstanding Debt
As of June 30, 2016, we had
$1,213 million of combined cash and
unused borrowing capacity compared to $1,023
million on December 31,
2015.
On April 1, 2016, we entered into
a new $550 million 2016 term loan B
due 2023. Proceeds from the new term loan were used to repay
in full our term loan B due 2017 and remaining term loan C due
2016. We also extended the maturity of our revolving credit
facility to 2021 and increased the amount to $650 million.
On July 22, 2016, we made a
$100 million early repayment of debt
on our term loan B due 2019. We expect to record less than
$1 million in early extinguishment of
debt costs in the third quarter 2016.
Total capital expenditures for the three months and six months
ended June 30, 2016 were $90 million and $189
million, respectively. As part of our completed
ethylene oxide expansion in Port Neches,
Texas, we received $26 million
of capital reimbursement during the second quarter of 2016 from our
customer with whom we have a multi-year offtake agreement. We
expect to spend approximately $450
million annually on capital expenditures in 2016 and
2017.
We expect our 2016 depreciation and amortization to be
approximately $430 million.
Income Taxes
During the three months ended June 30,
2016, we recorded an income tax expense of $32 million. During the same period we paid
$16 million in cash for income
taxes.
We expect our 2016 adjusted effective tax rate to be
approximately 25 – 30%. Our MTBE earnings are taxed at the
U.S. statutory rate of 35%, variability in our MTBE earnings will
have a meaningful impact on where our adjusted tax rate will be
within that range. We expect our long term adjusted effective
tax rate to be approximately 30%.
Earnings Conference Call Information
We will hold a conference call to discuss our second quarter
2016 financial results on Wednesday, July
27, 2016 at 11:00 a.m. ET.
Call-in numbers for
the conference call:
|
U.S.
participants
|
(888) 713 -
4218
|
International
participants
|
(617) 213 -
4870
|
Passcode
|
478 152
79#
|
In order to facilitate the registration process, you may use the
following link to pre-register for the conference call. Callers who
pre-register will be given a unique PIN to gain immediate access to
the call and bypass the live operator. You may pre-register at any
time, including up to and after the call start time. To
pre-register, please go to:
https://www.theconferencingservice.com/prereg/key.process?key=PMUG7QP3W
Webcast Information
The conference call will be available via webcast and can be
accessed from the company's website at ir.huntsman.com.
Replay Information
The conference call will be available for replay beginning
July 27, 2016 and ending August 3, 2016.
Call-in numbers for
the replay:
|
U.S.
participants
|
(888) 286 -
8010
|
International
participants
|
(617) 801 -
6888
|
Replay
code
|
27138577
|
Upcoming Conferences
During the third quarter a member of management will present at
the Jefferies Industrials Conference, August
10, 2016. 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
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$2,544
|
|
$2,740
|
|
$4,899
|
|
$5,329
|
Cost of goods
sold
|
|
2,087
|
|
2,191
|
|
4,026
|
|
4,330
|
Gross
profit
|
|
457
|
|
549
|
|
873
|
|
999
|
Operating
expenses
|
|
252
|
|
289
|
|
517
|
|
569
|
Restructuring,
impairment and plant closing costs
|
|
29
|
|
114
|
|
42
|
|
207
|
Operating
income
|
|
176
|
|
146
|
|
314
|
|
223
|
Interest
expense
|
|
(50)
|
|
(53)
|
|
(100)
|
|
(109)
|
Equity in income of
investment in unconsolidated affiliates
|
|
2
|
|
3
|
|
3
|
|
5
|
Loss on early
extinguishment of debt
|
|
(2)
|
|
(20)
|
|
(2)
|
|
(23)
|
Other income
(loss)
|
|
1
|
|
(1)
|
|
2
|
|
(2)
|
Income before
income taxes
|
|
127
|
|
75
|
|
217
|
|
94
|
Income tax
expense
|
|
(32)
|
|
(34)
|
|
(59)
|
|
(36)
|
Income from
continuing operations
|
|
95
|
|
41
|
|
158
|
|
58
|
Loss from
discontinued operations, net of tax(2)
|
|
(1)
|
|
(2)
|
|
(2)
|
|
(4)
|
Net
income
|
|
94
|
|
39
|
|
156
|
|
54
|
Net income
attributable to noncontrolling interests, net of tax
|
|
(7)
|
|
(10)
|
|
(13)
|
|
(20)
|
Net income
attributable to Huntsman Corporation
|
|
$
87
|
|
$
29
|
|
$
143
|
|
$
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
325
|
|
$
385
|
|
$
599
|
|
$
670
|
Adjusted net
income(1)
|
|
$
126
|
|
$
155
|
|
$
214
|
|
$
253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share
|
|
$
0.37
|
|
$
0.12
|
|
$
0.61
|
|
$
0.14
|
Diluted income per
share
|
|
$
0.36
|
|
$
0.12
|
|
$
0.60
|
|
$
0.14
|
Adjusted diluted
income per share(1)
|
|
$
0.53
|
|
$
0.63
|
|
$
0.90
|
|
$
1.02
|
|
|
|
|
|
|
|
|
|
Common share
information:
|
|
|
|
|
|
|
|
|
Basic shares
outstanding
|
|
236
|
|
244
|
|
236
|
|
244
|
Diluted
shares
|
|
240
|
|
248
|
|
238
|
|
247
|
Diluted shares for
adjusted diluted income per share
|
|
240
|
|
248
|
|
238
|
|
247
|
|
|
|
|
|
|
|
|
|
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
|
|
2016
|
|
2015
|
|
(Worse)
|
|
2016
|
|
2015
|
|
(Worse)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
976
|
|
$
995
|
|
(2)%
|
|
$1,812
|
|
$1,885
|
|
(4)%
|
Performance
Products
|
|
566
|
|
675
|
|
(16)%
|
|
1,102
|
|
1,331
|
|
(17)%
|
Advanced
Materials
|
|
261
|
|
282
|
|
(7)%
|
|
527
|
|
572
|
|
(8)%
|
Textile
Effects
|
|
198
|
|
216
|
|
(8)%
|
|
383
|
|
422
|
|
(9)%
|
Pigments &
Additives
|
|
576
|
|
592
|
|
(3)%
|
|
1,116
|
|
1,164
|
|
(4)%
|
Corporate and
eliminations
|
|
(33)
|
|
(20)
|
|
n/m
|
|
(41)
|
|
(45)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$2,544
|
|
$2,740
|
|
(7)%
|
|
$4,899
|
|
$5,329
|
|
(8)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
$
171
|
|
$
159
|
|
8%
|
|
$
302
|
|
$
264
|
|
14%
|
Performance
Products
|
|
86
|
|
141
|
|
(39)%
|
|
178
|
|
262
|
|
(32)%
|
Advanced
Materials
|
|
58
|
|
58
|
|
0%
|
|
118
|
|
116
|
|
2%
|
Textile
Effects
|
|
24
|
|
23
|
|
4%
|
|
42
|
|
40
|
|
5%
|
Pigments &
Additives
|
|
31
|
|
35
|
|
(11)%
|
|
46
|
|
56
|
|
(18)%
|
Corporate, LIFO and
other
|
|
(45)
|
|
(31)
|
|
(45)%
|
|
(87)
|
|
(68)
|
|
(28)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
325
|
|
$
385
|
|
(16)%
|
|
$
599
|
|
$
670
|
|
(11)%
|
|
n/m = not
meaningful
|
See end of press
release for footnote explanations
|
Table 3 -- Factors
Impacting Sales Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
June 30, 2016 vs.
2015
|
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
(19)%
|
|
0%
|
|
(7)%
|
|
24%
|
|
(2)%
|
|
Polyurethanes,
adj
|
|
(19)%
|
|
0%
|
|
(7)%
|
|
15%
|
|
(11)%
|
(c)
|
Performance
Products
|
|
(9)%
|
|
0%
|
|
(3)%
|
|
(4)%
|
|
(16)%
|
|
Advanced
Materials
|
|
(1)%
|
|
(1)%
|
|
4%
|
|
(9)%
|
|
(7)%
|
|
Textile
Effects
|
|
(7)%
|
|
(2)%
|
|
0%
|
|
1%
|
|
(8)%
|
|
Pigments &
Additives
|
|
(8)%
|
|
1%
|
|
1%
|
|
3%
|
|
(3)%
|
|
Total
Company
|
|
(12)%
|
|
0%
|
|
(5)%
|
|
10%
|
|
(7)%
|
|
Total Company,
adj
|
|
(12)%
|
|
0%
|
|
(5)%
|
|
6%
|
|
(11)%
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
|
|
|
|
June 30, 2016 vs.
2015
|
|
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
|
|
Local
|
|
Exchange
|
|
Sales
Mix
|
|
Sales
|
|
|
|
Unaudited
|
|
Currency
|
|
Rate
|
|
&
Other
|
|
Volume(b)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polyurethanes
|
|
(19)%
|
|
(1)%
|
|
(3)%
|
|
19%
|
|
(4)%
|
|
Polyurethanes,
adj
|
|
(19)%
|
|
(1)%
|
|
(3)%
|
|
9%
|
|
(14)%
|
(c)
|
Performance
Products
|
|
(11)%
|
|
(1)%
|
|
(6)%
|
|
1%
|
|
(17)%
|
|
Advanced
Materials
|
|
(2)%
|
|
(3)%
|
|
3%
|
|
(6)%
|
|
(8)%
|
|
Textile
Effects
|
|
(4)%
|
|
(4)%
|
|
(1)%
|
|
0%
|
|
(9)%
|
|
Pigments &
Additives
|
|
(9)%
|
|
(1)%
|
|
1%
|
|
5%
|
|
(4)%
|
|
Total
Company
|
|
(13)%
|
|
(1)%
|
|
(3)%
|
|
9%
|
|
(8)%
|
|
Total Company,
adj
|
|
(13)%
|
|
(1)%
|
|
(3)%
|
|
6%
|
|
(11)%
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Excludes sales
from tolling arrangements, by-products and raw
materials.
|
(b) Excludes sales
from by-products and raw materials.
|
(c) Excludes volume
impact from the planned maintenance at our PO/MTBE facility that
occurred in 1H15.
|
Table 4 --
Reconciliation of U.S. GAAP to Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax
|
|
|
|
|
|
Diluted
Income
|
|
|
EBITDA
|
|
(Expense)
Benefit
|
|
Net
Income
|
|
Per
Share
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
In millions, except
per share amounts
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
94
|
|
$
39
|
|
|
|
|
|
$
94
|
|
$
39
|
|
$
0.39
|
|
$
0.16
|
Net income
attributable to noncontrolling interests
|
|
(7)
|
|
(10)
|
|
|
|
|
|
(7)
|
|
(10)
|
|
(0.03)
|
|
(0.04)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
87
|
|
29
|
|
|
|
|
|
87
|
|
29
|
|
0.36
|
|
0.12
|
Interest
expense
|
|
50
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
32
|
|
34
|
|
(32)
|
|
(34)
|
|
|
|
|
|
|
|
|
Income tax expense
from discontinued operations(2)
|
|
-
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
109
|
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration expenses, purchase accounting adjustments
|
|
4
|
|
12
|
|
-
|
|
(3)
|
|
4
|
|
9
|
|
0.02
|
|
0.04
|
Loss from
discontinued operations, net of tax(2)
|
|
1
|
|
1
|
|
N/A
|
|
N/A
|
|
1
|
|
2
|
|
-
|
|
0.01
|
Loss on disposition
of businesses/assets
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
-
|
Loss on early
extinguishment of debt
|
|
2
|
|
20
|
|
(1)
|
|
(7)
|
|
1
|
|
13
|
|
-
|
|
0.05
|
Certain legal
settlements and related expenses
|
|
-
|
|
1
|
|
-
|
|
(1)
|
|
-
|
|
-
|
|
-
|
|
-
|
Plant incident
remediation credits, net
|
|
(7)
|
|
-
|
|
1
|
|
-
|
|
(6)
|
|
-
|
|
(0.03)
|
|
-
|
Amortization of
pension and postretirement actuarial losses
|
|
17
|
|
19
|
|
(3)
|
|
(5)
|
|
14
|
|
14
|
|
0.06
|
|
0.06
|
Restructuring,
impairment, plant closing and transition costs
|
|
30
|
|
115
|
|
(5)
|
|
(28)
|
|
25
|
|
87
|
|
0.10
|
|
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$ 325
|
|
$ 385
|
|
$ (40)
|
|
$
(78)
|
|
$ 126
|
|
$
155
|
|
$
0.53
|
|
$
0.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(4)
|
|
|
|
|
|
|
|
|
|
$
40
|
|
$
78
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
7
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$ 173
|
|
$
243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
|
|
|
|
23%
|
|
32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax
|
|
|
|
|
|
Diluted
Income
|
|
|
EBITDA
|
|
Expense
|
|
Net
Income
|
|
Per
Share
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
In millions, except
per share amounts
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
62
|
|
|
|
|
|
|
|
$
62
|
|
|
|
$
0.26
|
|
|
Net income
attributable to noncontrolling interests
|
|
(6)
|
|
|
|
|
|
|
|
(6)
|
|
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
56
|
|
|
|
|
|
|
|
56
|
|
|
|
0.24
|
|
|
Interest
expense
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
27
|
|
|
|
(27)
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
from discontinued operations(2)
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration expenses, purchase accounting adjustments
|
|
9
|
|
|
|
(3)
|
|
|
|
6
|
|
|
|
0.03
|
|
|
Loss from
discontinued operations, net of tax(2)
|
|
2
|
|
|
|
N/A
|
|
|
|
1
|
|
|
|
-
|
|
|
Certain legal
settlements and related expenses
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
Plant incident
remediation costs, net
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
Amortization of
pension and postretirement actuarial losses
|
|
16
|
|
|
|
(3)
|
|
|
|
13
|
|
|
|
0.05
|
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
13
|
|
|
|
(3)
|
|
|
|
10
|
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$ 274
|
|
|
|
$ (36)
|
|
|
|
$
88
|
|
|
|
$
0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(4)
|
|
|
|
|
|
|
|
|
|
$
36
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$ 130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
|
|
|
|
28%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax
|
|
|
|
|
|
Diluted
Income
|
|
|
EBITDA
|
|
(Expense)
Benefit
|
|
Net
Income
|
|
Per
Share
|
|
|
Six months
ended
|
|
Six months
ended
|
|
Six months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
In millions, except
per share amounts
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$ 156
|
|
$
54
|
|
|
|
|
|
$ 156
|
|
$
54
|
|
$
0.65
|
|
$
0.22
|
Net income
attributable to noncontrolling interests
|
|
(13)
|
|
(20)
|
|
|
|
|
|
(13)
|
|
(20)
|
|
(0.05)
|
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Huntsman Corporation
|
|
143
|
|
34
|
|
|
|
|
|
143
|
|
34
|
|
0.60
|
|
0.14
|
Interest
expense
|
|
100
|
|
109
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
from continuing operations
|
|
59
|
|
36
|
|
(59)
|
|
(36)
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense from discontinued operations(2)
|
|
(1)
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
209
|
|
194
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration expenses, purchase accounting adjustments
|
|
13
|
|
21
|
|
(3)
|
|
(5)
|
|
10
|
|
16
|
|
0.04
|
|
0.06
|
Loss from
discontinued operations, net of tax(2)
|
|
3
|
|
2
|
|
N/A
|
|
N/A
|
|
2
|
|
4
|
|
0.01
|
|
0.02
|
Loss on disposition
of businesses/assets
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
-
|
Loss on early
extinguishment of debt
|
|
2
|
|
23
|
|
(1)
|
|
(8)
|
|
1
|
|
15
|
|
-
|
|
0.06
|
Certain legal
settlements and related expenses
|
|
1
|
|
2
|
|
-
|
|
(1)
|
|
1
|
|
1
|
|
-
|
|
-
|
Plant incident
remediation credits, net
|
|
(6)
|
|
-
|
|
1
|
|
-
|
|
(5)
|
|
-
|
|
(0.02)
|
|
-
|
Amortization of
pension and postretirement actuarial losses
|
|
33
|
|
37
|
|
(6)
|
|
(10)
|
|
27
|
|
27
|
|
0.11
|
|
0.11
|
Restructuring,
impairment, plant closing and transition costs
|
|
43
|
|
209
|
|
(8)
|
|
(54)
|
|
35
|
|
155
|
|
0.15
|
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted(1)
|
|
$ 599
|
|
$ 670
|
|
$ (76)
|
|
$ (114)
|
|
$ 214
|
|
$
253
|
|
$
0.90
|
|
$
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(4)
|
|
|
|
|
|
|
|
|
|
$
76
|
|
$
114
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
13
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income(1)
|
|
|
|
|
|
|
|
|
|
$ 303
|
|
$
387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
|
|
|
|
25%
|
|
29%
|
|
|
|
|
See end of press
release for footnote explanations
|
Table 5 --
Selected Balance Sheet Items
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
|
December
31,
|
In
millions
|
|
2016
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
383
|
|
$
218
|
|
|
$
269
|
Accounts and notes
receivable, net
|
|
1,546
|
|
1,572
|
|
|
1,449
|
Inventories
|
|
1,522
|
|
1,689
|
|
|
1,692
|
Other current
assets
|
|
340
|
|
351
|
|
|
424
|
Property, plant and
equipment, net
|
|
4,377
|
|
4,437
|
|
|
4,446
|
Other
assets
|
|
1,559
|
|
1,573
|
|
|
1,540
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
9,727
|
|
$
9,840
|
|
|
$
9,820
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
991
|
|
$
1,027
|
|
|
$
1,061
|
Other current
liabilities
|
|
602
|
|
652
|
|
|
686
|
Current portion of
debt
|
|
96
|
|
103
|
|
|
170
|
Long-term
debt
|
|
4,653
|
|
4,724
|
|
|
4,625
|
Other
liabilities
|
|
1,677
|
|
1,649
|
|
|
1,649
|
Total
equity
|
|
1,708
|
|
1,685
|
|
|
1,629
|
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
9,727
|
|
$
9,840
|
|
|
$
9,820
|
Table 6 --
Outstanding Debt
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
In
millions
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt:
|
|
|
|
|
|
|
Senior credit
facilities
|
|
$
2,435
|
|
$
2,441
|
|
$
2,454
|
Accounts receivable
programs
|
|
216
|
|
263
|
|
215
|
Senior
notes
|
|
1,862
|
|
1,872
|
|
1,850
|
Variable interest
entities
|
|
142
|
|
140
|
|
151
|
Other debt
|
|
94
|
|
111
|
|
125
|
|
|
|
|
|
|
|
Total debt -
excluding affiliates
|
|
4,749
|
|
4,827
|
|
4,795
|
|
|
|
|
|
|
|
Total cash
|
|
383
|
|
218
|
|
269
|
|
|
|
|
|
|
|
Net debt-
excluding affiliates
|
|
$
4,366
|
|
$
4,609
|
|
$
4,526
|
Table 7 --
Summarized Statement of Cash Flows
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30,
|
|
June
30,
|
In
millions
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Total cash at
beginning of period(a)
|
$
218
|
|
$ 269
|
|
$ 870
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
355
|
|
443
|
|
181
|
Net cash used in
investing activities
|
(73)
|
|
(174)
|
|
(233)
|
Net cash used in
financing activities
|
(115)
|
|
(153)
|
|
(202)
|
Effect of exchange
rate changes on cash
|
(2)
|
|
-
|
|
(7)
|
Change in restricted
cash
|
-
|
|
(2)
|
|
(1)
|
|
|
|
-
|
|
|
Total cash at end
of period(a)
|
$
383
|
|
$ 383
|
|
$ 608
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
Cash paid for
interest
|
$
(68)
|
|
$(103)
|
|
$(115)
|
Cash paid for income
taxes
|
(16)
|
|
(21)
|
|
(30)
|
Cash paid for capital
expenditures
|
(90)
|
|
(189)
|
|
(296)
|
Depreciation and
amortization
|
109
|
|
209
|
|
194
|
|
|
|
|
|
|
Changes in primary
working capital:
|
|
|
|
|
|
Accounts and notes
receivable
|
$
15
|
|
$
(90)
|
|
$(142)
|
Inventories
|
155
|
|
177
|
|
7
|
Accounts
payable
|
(25)
|
|
(56)
|
|
12
|
|
|
|
|
|
|
Total cash provided
by (used in) primary working capital
|
$
145
|
|
$
31
|
|
$(123)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30,
|
|
June
30,
|
|
2016
|
|
2016
|
|
2015
|
Free cash
flow(3):
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
355
|
|
$ 443
|
|
$ 181
|
Capital
expenditures
|
(90)
|
|
(189)
|
|
(296)
|
All other investing
activities
|
17
|
|
15
|
|
63
|
Excluding merger and
acquisition activities(b)
|
-
|
|
-
|
|
(3)
|
|
|
|
|
|
|
Total free cash
flow
|
$
282
|
|
$ 269
|
|
$
(55)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
325
|
|
$ 599
|
|
$ 670
|
Capital
expenditures
|
(90)
|
|
(189)
|
|
(296)
|
Interest
|
(68)
|
|
(103)
|
|
(115)
|
Income
taxes
|
(16)
|
|
(21)
|
|
(30)
|
Primary working
capital change
|
145
|
|
31
|
|
(123)
|
Restructuring
|
(36)
|
|
(56)
|
|
(46)
|
Pensions
|
(18)
|
|
(38)
|
|
(55)
|
Maintenance &
other
|
40
|
|
46
|
|
(60)
|
|
|
|
|
|
|
Total free cash
flow(3)
|
$
282
|
|
$ 269
|
|
$
(55)
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes
restricted cash.
|
(b) Represents
"Acquisition of Business, net of cash acquired" and "Cash received
from purchase price adjustment for business acquired"
|
Footnotes
|
|
|
(1)
|
We use adjusted
EBITDA to measure the operating performance of our business.
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. 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 interest, net of tax;
(b) interest; (c) income taxes; (d) depreciation and amortization;
(e) acquisition and integration expenses, purchase accounting
adjustments; (f) EBITDA from discontinued operations; (g) loss
(gain) on disposition of businesses/assets; (h) loss on early
extinguishment of debt; (i) certain legal settlements and related
expenses; (j) plant incident remediation costs (credits), net; (k)
amortization of pension and postretirement actuarial losses
(gains); and (l) restructuring, impairment, plant closing and
transition costs (credits). The reconciliation of adjusted
EBITDA to net income (loss) is set forth 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) acquisition and integration expenses, purchase
accounting adjustments; (c) impact of certain foreign tax credit
elections; (d) loss (income) from discontinued operations; (e)
discount amortization on settlement financing associated with the
terminated merger; (f) loss (gain) on disposition of
businesses/assets; (g) loss on early extinguishment of debt; (h)
certain legal settlements and related expenses; (i) plant incident
remediation costs (credits), net; (j) amortization of pension and
postretirement actuarial losses (gains); and (k) restructuring,
impairment, plant closing and transition costs (credits). 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 adjust for changes in tax valuation
allowances because we do not believe it provides more meaningful
information than is provided under GAAP. The reconciliation
of adjusted net income (loss) to net income (loss) is set forth in
Table 4 above.
|
|
|
(2)
|
During the first
quarter 2010 we closed our Australian styrenics operations; results
from associated business are treated as discontinued
operations.
|
|
|
(3)
|
Management
internally uses a free cash flow measure: (a) to evaluate the
Company's liquidity, (b) to evaluate strategic investments, (c) to
plan stock buyback and dividend levels and (d) to evaluate the
Company's ability to incur and service debt. Free cash flow is not
a defined term under U.S. GAAP, and it should not be inferred that
the entire free cash flow amount is available for discretionary
expenditures. The Company defines free cash flow as cash flow
provided by operating activities less cash flow used in investing
activities, excluding merger and acquisition activities. Free cash
flow is typically derived directly from the Company's condensed
consolidated statement of cash flows; however, it may be adjusted
for items that affect comparability between periods.
|
About Huntsman:
Huntsman Corporation is a publicly
traded global manufacturer and marketer of differentiated chemicals
with 2015 revenues of approximately $10
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
100 manufacturing and R&D facilities in approximately 30
countries and employ approximately 15,000 associates within our 5
distinct business divisions. For more information about Huntsman,
please visit the company's website at
www.huntsman.com.
Social Media:
Twitter:
twitter.com/Huntsman_Corp
Facebook: www.facebook.com/huntsmancorp
LinkedIn: www.linkedin.com/company/huntsman
Forward-Looking Statements:
Statements in this
release that are not historical are forward-looking statements.
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
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, 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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/huntsman-announces-second-quarter-results-reports-attractive-mdi-margin-growth-improving-sequential-tio2-prices-and-substantial-improvement-in-cash-generation-300304532.html
SOURCE Huntsman Corporation