Exhibit 99.1

 

News Release

 

FOR IMMEDIATE RELEASE	Investor Relations:	Media:
February 12, 2013	Kurt Ogden	Gary Chapman
The Woodlands, TX	(801) 584-5959	(281) 719-4324
NYSE: HUN

 

HUNTSMAN RELEASES FOURTH QUARTER AND FULL YEAR 2012 RESULTS;
REPORTS RECORD FULL YEAR ADJUSTED EBITDA OF $1.4 BILLION
AND ANNOUNCES INCREASED COMMON DIVIDEND

 

Full Year 2012 Highlights

 

·                  Net income attributable to Huntsman Corporation increased to $363 million compared to $247 million in the prior year period.

 

·                  Adjusted EBITDA improved 15% to $1,396 million compared to the prior year period.

 

·                  Adjusted diluted income per share improved 33% to $2.25 compared to the prior year period.

 

Fourth Quarter 2012 Highlights

 

·                  Adjusted EBITDA was $233 million compared to $243 million in the prior year period.

 

·                  Adjusted diluted income per share was $0.24 compared to $0.28 in the prior year period.

 

·                  Net loss attributable to Huntsman Corporation was $40 million compared to $105 million of income in the prior year period.  The decrease from the prior year period was primarily due to a $78 million loss on early extinguishment of debt (compared to $2 million in the prior year period) and $40 million of restructuring costs (compared to $4 million of credits in the prior year period).

 

Increased Common Dividend

 

·                  The company’s board of directors has declared a $0.125 per share cash dividend on its common stock.  The dividend is payable on March 29, 2013 to stockholders of record as of March 15, 2013.

 

		Three months ended									Twelve months ended
		December 31,						September 30,			December 31,
In millions, except per share amounts, unaudited		2012			2011			2012			2012			2011
Revenues		$	2,619		$	2,632		$	2,741		$	11,187		$	11,221
Net (loss) income attributable to Huntsman Corporation		$	(40	)	$	105		$	116		$	363		$	247
Adjusted net income(1)		$	58		$	68		$	168		$	542		$	408
Diluted (loss) income per share		$	(0.17	)	$	0.44		$	0.48		$	1.51		$	1.02
Adjusted diluted income per share(1)		$	0.24		$	0.28		$	0.70		$	2.25		$	1.69
EBITDA(1)		$	104		$	273		$	341		$	1,187		$	1,039
Adjusted EBITDA(1)		$	233		$	243		$	401		$	1,396		$	1,214

 

See end of press release for footnote explanations

 

 

The Woodlands, TX — Huntsman Corporation (NYSE: HUN) today reported fourth quarter 2012 results with revenues of $2,619 million and adjusted EBITDA of $233 million.

 

Peter R. Huntsman, our President and CEO, commented:

 

“Our 2012 adjusted EBITDA of $1.4 billion represents record earnings for our current configuration of businesses.  I am very enthusiastic about the direction in which the company is headed.  Within our largest division — Polyurethanes — our MDI business is growing at attractive rates, and future prospects are pointing towards tighter market conditions.  In the fourth quarter, I was pleased to see that our smallest division — Textile Effects — recorded positive earnings as a result of our restructuring and cost cutting efforts.  Our Pigments division is going through a business cycle where we expect an improvement in earnings beginning in the second half of 2013.

 

We have put programs in place across our divisions that will enhance our future competitiveness and increase shareholder value.  I expect the future annual benefits of these programs to be approximately $190 million when complete in the middle of 2014.

 

The company generated more than $200 million in cash from operations and repaid $50 million of term loans in the fourth quarter.  We look forward to funding future growth opportunities with free cash flow generation and remain committed to reducing our overall debt.”

 

Segment Analysis for 4Q12 Compared to 4Q11

 

Polyurethanes

 

The increase in revenues in our Polyurethanes division for the three months ended December 31, 2012 compared to the same period in 2011 was due to higher average selling prices and higher sales volumes partially offset by the strength of the U.S. dollar against the euro.  PO/MTBE average selling prices increased primarily due to favorable market conditions.  MDI average selling prices increased in all regions partially offset by the strength of the U.S. dollar against the euro.  MDI sales volumes increased primarily due to strong demand globally for insulation and the housing & automotive recovery in North America, PO/MTBE volumes increased due to strong demand.  The increase in adjusted EBITDA was primarily due to higher volumes, higher contribution margins and lower fixed costs.

 

Performance Products

 

The decrease in revenues in our Performance Products division for the three months ended December 31, 2012 compared to the same period in 2011 was due to lower sales volumes and lower average selling prices.  Sales volumes decreased primarily due to lower product availability of intermediates as we prepared for our first quarter 2013 maintenance and softer demand for European surfactants.  Average selling prices declined due to lower raw material costs and the strength of the U.S. dollar against major international currencies, partially offset by an improvement in sales mix.  The increase in adjusted EBITDA was primarily due to higher sales volumes and higher contribution margins in our amines business as well as higher contribution margins in our maleic anhydride and North American intermediates businesses.

 

Advanced Materials

 

Revenues were essentially unchanged in our Advanced Materials division for the three months ended December 31, 2012 compared to the same period in 2011 as higher sales volumes offset lower average selling prices.  Sales volumes increased primarily due to stronger demand in the Americas, Asia Pacific and India while sales volumes in Europe decreased due to planned manufacturing maintenance and lower demand in the wind energy market.  Average selling prices decreased primarily due to competitive market pressure, lower raw material costs in most regions and the strength of the U.S. dollar against major international currencies. 

 

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The decrease in adjusted EBITDA was primarily due to lower contribution margins partially offset by lower selling, general and administrative costs as a result of recent restructuring efforts.

 

On January 23, 2013 we announced a comprehensive restructuring program in our Advanced Materials division designed to improve efficiencies and increase its global competitiveness.  We expect the program to be complete by the middle of 2014 with future annual benefits of approximately $70 million.

 

Textile Effects

 

The increase in revenues in our Textile Effects division for the three months ended December 31, 2012 compared to the same period in 2011 was due to higher sales volumes, partially offset by lower average selling prices.  Sales volumes increased due to increased global market share and improved demand.  The increase in local currency average selling prices was offset by the strength of the U.S. dollar against major international currencies.  The increase in adjusted EBITDA was primarily due to higher sales volumes and lower manufacturing and selling, general and administrative costs as a result of our restructuring efforts.

 

Pigments

 

The decrease in revenues in our Pigments division for the three months ended December 31, 2012 compared to the same period in 2011 was due to lower sales volumes and lower average selling prices.  Sales volumes decreased primarily due to lower global demand and customer destocking.  Average selling prices decreased due to lower global demand and the strength of the U.S. dollar against major international currencies.  The decrease in adjusted EBITDA was primarily due to lower sales volumes and lower contribution margins.

 

Corporate, LIFO and Other

 

Adjusted EBITDA from Corporate, LIFO and Other decreased by $15 million to a loss of $49 million for the three months ended December 31, 2012 compared to a loss of $34 million for the same period in 2011.  The decrease in adjusted EBITDA was primarily the result of a $6 million increase in LIFO inventory valuation expense (income of nil in 2012 compared to $6 million of income in 2011) and increased corporate expenses.

 

Liquidity, Capital Resources and Outstanding Debt

 

As of December 31, 2012 we had $887 million of combined cash and unused borrowing capacity compared to $1,043 million at December 31, 2011.

 

For the three months ended December 31, 2012 our primary net working capital decreased by $130 million and we generated $218 million in cash from operations.  For the year ended December 31, 2012 our primary net working capital increased by $102 million and we generated $774 million in cash from operations.

 

On October 31, 2012 we repaid $50 million of our senior secured term loans due 2014.

 

On December 3, 2012 we used the proceeds of our recent 4.875% senior notes offering due 2020 to redeem $400 million of 5.5% senior notes due 2016.  In connection with the redemption, we recognized a loss on early extinguishment of debt in the fourth quarter of approximately $77 million.  The 5.5% senior notes were favorably issued to us at less than market interest rates; accounting standards required us to record the notes on our balance sheet at less than face value and amortize the difference over time up to the full face value of $400 million.  As a result, when we refinanced the notes we recognized an increase of recorded debt on our balance sheet of $73 million.

 

Total capital expenditures for the year ended December 31, 2012 were $412 million.  We expect to spend approximately $450 million on capital expenditures in 2013 which approximates our annual depreciation and amortization.

 

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Income Taxes

 

During the three months ended December 31, 2012 we recorded an income tax benefit of $17 million and paid $71 million in cash for income taxes.  Our adjusted effective income tax rate for the three months ended December 31, 2012 was approximately 26%.

 

During the year ended December 31, 2012 we recorded income tax expense of $169 million and paid $224 million in cash for income taxes.  Our adjusted effective income tax rate for the year ended December 31, 2012 was approximately 30%.

 

We expect our full year 2013 adjusted effective tax rate to be approximately 35% primarily due to the effect of tax valuation allowances and expected regional mix of income.  We expect our long term effective income tax rate to be approximately 30 - 35%.

 

Conference Call Information

 

We will hold a conference call to discuss our fourth quarter and full year 2012 financial results on Tuesday, February 12, 2013 at 10:00 a.m. ET.

 

Call-in numbers for the conference call:

U.S. participants	(888) 713 - 4205
International participants	(617) 213 - 4862
Passcode	39830729

 

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=P9P3QHHYU

 

Webcast Information

 

The conference call will be available via webcast and can be accessed from the investor relations portion of the company’s website at huntsman.com.

 

Replay Information

 

The conference call will be available for replay beginning February 12, 2013 and ending February 19, 2013.

 

Call-in numbers for the replay:

U.S. participants	(888) 286 - 8010
International participants	(617) 801 - 6888
Replay code	46339142

 

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Table 1 — Results of Operations

 

		Three months ended						Twelve months ended
		December 31,						December 31,
In millions, except per share amounts, unaudited		2012			2011			2012			2011
Revenues		$	2,619		$	2,632		$	11,187		$	11,221
Cost of goods sold		2,199			2,243			9,153			9,381
Gross profit		420			389			2,034			1,840
Operating expenses		305			246			1,097			1,067
Restructuring, impairment and plant closing costs (credits)		40			(4		)	92			167
Operating income		75			147			845			606
Interest expense, net		(54		)	(62		)	(226		)	(249		)
Equity in income of investment in unconsolidated affiliates		2			2			7			8
Loss on early extinguishment of debt		(78		)	(2		)	(80		)	(7		)
Other (loss) income		(1		)	2			1			2
(Loss) income before income taxes		(56		)	87			547			360
Income tax benefit (expense)		17			2			(169		)	(109		)
(Loss) income from continuing operations		(39		)	89			378			251
Income (loss) from discontinued operations, net of tax(2)		—			4			(7		)	(1		)
Extraordinary gain on the acquisition of a business, net of tax of nil		1			2			2			4
Net (loss) income		(38		)	95			373			254
Net (income) loss attributable to noncontrolling interests, net of tax		(2		)	10			(10		)	(7		)
Net (loss) income attributable to Huntsman Corporation		$	(40	)	$	105		$	363		$	247
Adjusted EBITDA(1)		$	233		$	243		$	1,396		$	1,214
Adjusted net income(1)		$	58		$	68		$	542		$	408
Basic (loss) income per share		$	(0.17	)	$	0.45		$	1.53		$	1.04
Diluted (loss) income per share		$	(0.17	)	$	0.44		$	1.51		$	1.02
Adjusted diluted income per share(1)		$	0.24		$	0.28		$	2.25		$	1.69
Common share information:
Basic shares outstanding		238.2			235.7			237.6			237.6
Diluted shares		238.2			239.5			240.6			241.7
Diluted shares for adjusted diluted income per share		241.3			239.5			240.6			241.7

 

See end of press release for footnote explanations

 

5

 

Table 2 — Results of Operations by Segment

 

		Three months ended								Twelve months ended
		December 31,						Better /		December 31,						Better /
In millions, unaudited		2012			2011			(Worse)		2012			2011			(Worse)
Segment Revenues:
Polyurethanes		$	1,182		$	1,043		13	%	$	4,894		$	4,434		10	%
Performance Products		723			755			(4	)%	3,065			3,301			(7	)%
Advanced Materials		311			313			(1	)%	1,325			1,372			(3	)%
Textile Effects		190			174			9	%	752			737			2	%
Pigments		286			399			(28	)%	1,436			1,642			(13	)%
Eliminations and other		(73		)	(52		)	(40	)%	(285		)	(265		)	(8	)%
Total		$	2,619		$	2,632		—		$	11,187		$	11,221		—
Segment Adjusted EBITDA(1):
Polyurethanes		$	186		$	79		135	%	$	772		$	476		62	%
Performance Products		79			60			32	%	361			374			(3	)%
Advanced Materials		6			15			(60	)%	92			111			(17	)%
Textile Effects		1			(22		)	NM		(22		)	(64		)	66	%
Pigments		10			145			(93	)%	362			508			(29	)%
Corporate, LIFO and other		(49		)	(34		)	(44	)%	(169		)	(191		)	12	%
Total		$	233		$	243		(4	)%	$	1,396		$	1,214		15	%

 

See end of press release for footnote explanations

 

Table 3 — Factors Impacting Sales Revenues

 

		Three months ended
		December 31, 2012 vs. 2011
		Average Selling Price(a)
		Local		Exchange		Sales Mix		Sales
Unaudited		Currency		Rate		& Other		Volume(a)		Total
Polyurethanes		6	%	(2	)%	(1	)%	10	%	13	%
Performance Products		(3	)%	(2	)%	5	%	(4	)%	(4	)%
Advanced Materials		(6	)%	(3	)%	1	%	7	%	(1	)%
Textile Effects		1	%	(2	)%	(1	)%	11	%	9	%
Pigments		(9	)%	(2	)%	—		(17	)%	(28	)%
Total Company		—		(2	)%	—		2	%	—

 

		Twelve months ended
		December 31, 2012 vs. 2011
		Average Selling Price(a)
		Local		Exchange		Sales Mix		Sales
Unaudited		Currency		Rate		& Other		Volume(a)		Total
Polyurethanes		4	%	(2	)%	—		8	%	10	%
Performance Products		(3	)%	(3	)%	2	%	(3	)%	(7	)%
Advanced Materials		(6	)%	(4	)%	—		7	%	(3	)%
Textile Effects		—		(4	)%	(1	)%	7	%	2	%
Pigments		14	%	(5	)%	—		(22	)%	(13	)%
Total Company		2	%	(3	)%	1	%	—		—

 

(a) Excludes revenues and sales volumes primarily from tolling arrangements and the sale of by-products and raw materials.

 

6

 

Table 4 — Reconciliation of U.S. GAAP to Non-GAAP Measures

 

								Income Tax						Net Income (Loss)						Diluted Income (Loss)
		EBITDA						(Expense) Benefit						Attrib. to HUN Corp.						Per Share
		Three months ended						Three months ended						Three months ended						Three months ended
		December 31,						December 31,						December 31,						December 31,
In millions, except per share amounts, unaudited		2012			2011			2012			2011			2012			2011			2012			2011
GAAP(1)		$	104		$	273		$	17		$	2		$	(40	)	$	105		$	(0.17	)	$	0.44
Adjustments:
Legal settlements and related expenses		6			8			(2		)	(3		)	4			5			0.02			0.02
Loss on early extinguishment of debt		78			2			(28		)	(1		)	50			1			0.21			—
Restructuring, impairment, plant closing and transition costs (credits)		45			(4		)	(4		)	(7		)	41			(11		)	0.17			(0.05		)
Discount amortization on settlement financing associated with the terminated merger		N/A			N/A			(3		)	(2		)	5			5			0.02			0.02
Acquisition expenses		3			—			(1		)	—			2			—			0.01			—
Gain on disposition of businesses/assets		(3		)	(34		)	—			3			(3		)	(31		)	(0.01		)	(0.13		)
Loss (income) from discontinued operations, net of tax(2)		1			—			N/A			N/A			—			(4		)	—			(0.02		)
Extraordinary gain on the acquisition of a business, net of tax		(1		)	(2		)	N/A			N/A			(1		)	(2		)	—			(0.01		)
Adjusted(1)		$	233		$	243		$	(21	)	$	(8	)	$	58		$	68		$	0.24		$	0.28
Adjusted income tax expense														21			8
Net income (loss) attributable to noncontrolling interests, net of tax														2			(10		)
Adjusted pre-tax income(1)														$	81		$	66
Adjusted effective tax rate														26		%	12		%

 

					Income Tax			Net Income (Loss)			Diluted Income (Loss)
		EBITDA			(Expense) Benefit			Attrib. to HUN Corp.			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, unaudited		2012			2012			2012			2012
GAAP(1)		$	341		$	(61	)	$	116		$	0.48
Adjustments:
Legal settlements and related expenses		4			(2		)	2			0.01
Loss on early extinguishment of debt		1			(1		)	—			—
Loss on initial consolidation of subsidiaries		4			—			4			0.02
Restructuring, impairment, plant closing and transition costs		51			(11		)	40			0.17
Discount amortization on settlement financing associated with the terminated merger		N/A			(3		)	5			0.02
Acquisition expenses		1			—			1			—
Loss from discontinued operations, net of tax(2)		—			N/A			1			—
Extraordinary gain on the acquisition of a business, net of tax(3)		(1		)	N/A			(1		)	—
Adjusted(1)		$	401		$	(78	)	$	168		$	0.70
Adjusted income tax expense								78
Adjusted pre-tax income(1)								$	250
Adjusted effective tax rate								31		%

 

								Income Tax						Net Income (Loss)						Diluted Income (Loss)
		EBITDA						(Expense) Benefit						Attrib. to HUN Corp.						Per Share
		Twelve months ended						Twelve months ended						Twelve months ended						Twelve months ended
		December 31,						December 31,						December 31,						December 31,
In millions, except per share amounts, unaudited		2012			2011			2012			2011			2012			2011			2012			2011
GAAP(1)		$	1,187		$	1,039		$	(169	)	$	(109	)	$	363		$	247		$	1.51		$	1.02
Adjustments:
Legal settlements and related expenses		11			46			(4		)	(17		)	7			29			0.03			0.12
Loss on early extinguishment of debt		80			7			(29		)	(3		)	51			4			0.21			0.02
Loss (gain) on initial consolidation of subsidiaries		4			(12		)	—			2			4			(10		)	0.02			(0.04		)
Restructuring, impairment, plant closing and transition costs		109			167			(18		)	(11		)	91			156			0.38			0.65
Discount amortization on settlement financing associated with the terminated merger		N/A			N/A			(11		)	(10		)	20			18			0.08			0.07
Acquisition expenses		5			5			(1		)	(1		)	4			4			0.02			0.02
Gain on disposition of businesses/assets		(3		)	(40		)	—			3			(3		)	(37		)	(0.01		)	(0.15		)
Loss from discontinued operations, net of tax(2)		5			6			N/A			N/A			7			1			0.03			—
Extraordinary gain on the acquisition of a business, net of tax		(2		)	(4		)	N/A			N/A			(2		)	(4		)	(0.01		)	(0.02		)
Adjusted(1)		$	1,396		$	1,214		$	(232	)	$	(146	)	$	542		$	408		$	2.25		$	1.69
Adjusted income tax expense														232			146
Net income attributable to noncontrolling interests, net of tax														10			7
Adjusted pre-tax income(1)														$	784		$	561
Adjusted effective tax rate														30		%	26		%

 

See end of press release for footnote explanations

 

7

 

Table 5 — Reconciliation of Net Income (Loss) to EBITDA

 

		Three months ended									Twelve months ended
		December 31,						September 30,			December 31,
In millions, unaudited		2012			2011			2012			2012			2011
Net (loss) income attributable to Huntsman Corporation		$	(40	)	$	105		$	116		$	363		$	247
Interest expense, net		54			62			56			226			249
Income tax (benefit) expense from continuing operations		(17		)	(2		)	61			169			109
Income tax benefit from discontinued operations(2)		(1		)	(4		)	—			(3		)	(5		)
Depreciation and amortization of continuing operations		108			112			107			427			439
Depreciation and amortization of discontinued operations(2)		—			—			1			5			—
EBITDA(1)		$	104		$	273		$	341		$	1,187		$	1,039

 

See end of press release for footnote explanations

 

Table 6 — Selected Balance Sheet Items

 

		December 31,			September 30,			December 31,
In millions		2012			2012			2011
					(unaudited)
Cash		$	396		$	444		$	562
Accounts and notes receivable, net		1,534			1,626			1,529
Inventories		1,819			1,807			1,539
Other current assets		370			365			316
Property, plant and equipment, net		3,745			3,626			3,622
Other assets		1,020			1,078			1,089
Total assets		$	8,884		$	8,946		$	8,657
Accounts payable		$	1,102		$	1,017		$	862
Other current liabilities		791			758			752
Current portion of debt		288			130			212
Long-term debt		3,414			3,550			3,730
Other liabilities		1,393			1,275			1,325
Total equity		1,896			2,216			1,776
Total liabilities and equity		$	8,884		$	8,946		$	8,657

 

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