Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE		Investor Relations:		Media:
July 31, 2013		Kurt Ogden		Gary Chapman
The Woodlands, TX		(801) 584-5959		(281) 719-4324
NYSE: HUN

 

HUNTSMAN RELEASES SECOND QUARTER 2013 RESULTS;

ADJUSTED EBITDA IMPROVES 38% COMPARED TO PRIOR QUARTER

 

Second Quarter 2013 Highlights

 

·                 Adjusted EBITDA was $304 million, a decrease of $72 million compared to $376 million in the prior year period primarily as a result of the $103 million decrease in our TiO2 Pigments division.  Adjusted EBITDA increased $84 million compared to $220 million in the prior quarter.

 

·                 Adjusted diluted income per share was $0.39 compared to $0.61 in the prior year period and $0.19 in the prior quarter.

 

·                 Net income attributable to Huntsman Corporation was $47 million compared to net income of $124 million in the prior year period and net loss of $24 million in the prior quarter.

 

·                 On July 8, 2013 we announced an agreement to acquire the business of Oxid, a privately-held manufacturer and marketer of specialty urethane polyols.  This transaction is expected to close during the third quarter of 2013.

 

		Three months ended									Six months ended
		June 30,						March 31,			June 30,
In millions, except per share amounts, unaudited		2013			2012			2013			2013			2012
Revenues		$	2,830		$	2,914		$	2,702		$	5,532		$	5,827
Net income (loss) attributable to Huntsman Corporation		$	47		$	124		$	(24	)	$	23		$	287
Adjusted net income(1)		$	94		$	147		$	46		$	140		$	333
Diluted income (loss) per share		$	0.19		$	0.52		$	(0.10	)	$	0.10		$	1.19
Adjusted diluted income per share(1)		$	0.39		$	0.61		$	0.19		$	0.58		$	1.39
EBITDA(1)		$	249		$	352		$	112		$	361		$	742
Adjusted EBITDA(1)		$	304		$	376		$	220		$	524		$	783

 

See end of press release for footnote explanations

 

 

The Woodlands, TX — Huntsman Corporation (NYSE: HUN) today reported second quarter 2013 results with revenues of $2,830 million and adjusted EBITDA of $304 million.

 

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

 

“I am pleased with the quality of our second quarter results. Excluding the approximate $25 million negative impact from the force majeure at our European MDI facility, and with the exception of our TiO2 Pigments division, all of our divisions improved year over year and compared to the prior quarter’s performance. We are starting to see the benefits of our restructuring efforts within our Textile Effects and Advanced Materials divisions. I am also impressed with the strong earnings from our Performance Products division following the planned maintenance closure earlier in the year.

 

While many areas of the global economy continue to moderate or languish, between new products, our focus on growing sectors and our further cost reduction efforts, we believe that we will see an improving second half of the year.”

 

Segment Analysis for 2Q13 Compared to 2Q12

 

Polyurethanes

 

The decrease in revenues in our Polyurethanes division for the three months ended June 30, 2013 compared to the same period in 2012 was primarily due to sales mix effect partially offset by higher average selling prices.  MDI sales volumes decreased in the European region primarily as a result of the force majeure at our MDI facility in Rotterdam, The Netherlands partially offset by increased sales volumes in the Americas and Asia Pacific regions.  PO/MTBE sales volumes were essentially unchanged.  MDI average selling prices increased in all regions primarily in response to higher raw material costs.  PO/MTBE average selling prices decreased primarily due to less favorable market conditions.  Adjusted EBITDA was unchanged as increased PO/MTBE earnings offset the impact of the force majeure at our MDI facility in Rotterdam, The Netherlands.

 

Performance Products

 

Sales revenues in our Performance Products division for the three months ended June 30, 2013 compared to the same period in 2012 were essentially unchanged.  Average selling prices decreased primarily in response to lower raw material costs offset by an improvement in sales mix effect.  Sales volumes were essentially unchanged as higher sales of maleic anhydride and glycols were offset by lower surfactant sales.  The increase in adjusted EBITDA was primarily due to higher margins in our maleic anhydride and U.S. ethylene derivatives.

 

Advanced Materials

 

The decrease in revenues in our Advanced Materials division for the three months ended June 30, 2013 compared to the same period in 2012 was primarily due to lower sales volumes, partially offset by higher average selling prices.  Sales volumes decreased in the European and India Middle East regions, primarily in our base resins business due to weaker demand and increased competition while sales volumes in the Americas region increased primarily due to strong demand in the aerospace and coatings and construction markets.  Average selling prices increased in the European region, primarily in response to higher raw material costs and increased focus on higher value component sales, partially offset by decreases in average selling prices in the Asia Pacific formulations business and in the Americas base resins business due to increased competition.  The increase in adjusted EBITDA was primarily due to lower manufacturing and selling, general and administrative costs as a result of our restructuring efforts, partially offset by lower contribution margins and lower sales volumes.

 

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Textile Effects

 

The increase in revenues in our Textile Effects division for the three months ended June 30, 2013 compared to the same period in 2012 was due to higher sales volumes and higher average selling prices.  Sales volumes increased primarily due to increased market share in key markets.  Average selling prices increased primarily in response to higher raw material costs.  The increase in adjusted EBITDA was primarily due to higher sales volumes, higher contribution margins 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 June 30, 2013 compared to the same period in 2012 was primarily due to lower average selling prices partially offset by higher sales volumes.  Average selling prices decreased in all regions of the world primarily as a result of high industry inventory levels, however we have now seen sequential stabilization in selling prices.  Sales volumes increased primarily due to higher end-use demand.  The decrease in adjusted EBITDA was primarily due to lower contribution margins partially offset by lower manufacturing and selling, general and administrative costs as a result of our restructuring efforts.

 

Corporate, LIFO and Other

 

Adjusted EBITDA from Corporate, LIFO and Other decreased by $6 million to a loss of $49 million for the three months ended June 30, 2013 compared to a loss of $43 million for the same period in 2012.  The decrease in adjusted EBITDA was primarily the result of a $5 million increase in LIFO inventory valuation expense ($4 million of income in 2013 compared to $9 million of income in 2012).

 

Liquidity, Capital Resources and Outstanding Debt

 

As of June 30, 2013 we had $838 million of combined cash and unused borrowing capacity compared to $887 million at December 31, 2012.

 

On April 29, 2013, we amended our accounts receivable securitization programs to, among other things, extend the maturities to April 2016, reduce the applicable borrowing rates and increase the availability under the programs.

 

Total capital expenditures for the quarter ended June 30, 2013 were $92 million.  We expect to spend approximately $450 million on capital expenditures in 2013.

 

Income Taxes

 

During the three months ended June 30, 2013 we recorded an income tax expense of $44 million and paid $29 million in cash for income taxes.  Our adjusted effective income tax rate for the three months ended June 30, 2013 was approximately 36%.

 

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

 

Earnings Conference Call Information

 

We will hold a conference call to discuss our second quarter 2013 financial results on Wednesday, July 31, 2013 at 10:00 a.m. ET.

 

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Call-in numbers for the conference call:

 

U.S. participants	(888) 713 - 4215
International participants	(617) 213 - 4867
Passcode	50478256

 

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=PQ77Q3UJQ

 

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 July 31, 2013 and ending August 6, 2013.

 

Call-in numbers for the replay:

 

U.S. participants	(888) 286 - 8010
International participants	(617) 801 - 6888
Replay code	65843848

 

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Table 1 — Results of Operations

 

		Three months ended						Six months ended
		June 30,						June 30,
In millions, except per share amounts, unaudited		2013			2012			2013			2012
Revenues		$	2,830		$	2,914		$	5,532		$	5,827
Cost of goods sold		2,379			2,387			4,732			4,750
Gross profit		451			527			800			1,077
Operating expenses		281			272			536			537
Restructuring, impairment and plant closing costs		29			5			73			5
Operating income		141			250			191			535
Interest expense, net		(47		)	(57		)	(98		)	(116		)
Equity in income of investment in unconsolidated affiliates		2			1			3			3
Loss on early extinguishment of debt		—			—			(35		)	(1		)
Other income		2			1			2			1
Income before income taxes		98			195			63			422
Income tax expense		(44		)	(65		)	(24		)	(125		)
Income from continuing operations		54			130			39			297
Loss from discontinued operations, net of tax(2)		—			(2		)	(2		)	(6		)
Net income		54			128			37			291
Net income attributable to noncontrolling interests, net of tax		(7		)	(4		)	(14		)	(4		)
Net income attributable to Huntsman Corporation		$	47		$	124		$	23		$	287
Adjusted EBITDA(1)		$	304		$	376		$	524		$	783
Adjusted net income(1)		$	94		$	147		$	140		$	333
Basic income per share		$	0.20		$	0.52		$	0.10		$	1.21
Diluted income per share		$	0.19		$	0.52		$	0.10		$	1.19
Adjusted diluted income per share(1)		$	0.39		$	0.61		$	0.58		$	1.39
Common share information:
Basic shares outstanding		239.7			237.8			239.4			237.2
Diluted shares		242.2			240.5			242.0			240.2
Diluted shares for adjusted diluted income per share		242.2			240.5			242.0			240.2

 

See end of press release for footnote explanations

 

5

 

Table 2 — Results of Operations by Segment

 

		Three months ended								Six months ended
		June 30,						Better /		June 30,						Better /
In millions, unaudited		2013			2012			(Worse)		2013			2012			(Worse)
Segment Revenues:
Polyurethanes		$	1,246		$	1,262		(1	)%	$	2,428		$	2,475		(2	)%
Performance Products		777			778			—		1,499			1,592			(6	)%
Advanced Materials		321			346			(7	)%	657			686			(4	)%
Textile Effects		216			195			11	%	404			380			6	%
Pigments		334			407			(18	)%	664			831			(20	)%
Eliminations and other		(64		)	(74		)	14	%	(120		)	(137		)	12	%
Total		$	2,830		$	2,914		(3	)%	$	5,532		$	5,827		(5	)%
Segment Adjusted EBITDA(1):
Polyurethanes		$	174		$	174		—		$	352		$	355		(1	)%
Performance Products		111			87			28	%	165			179			(8	)%
Advanced Materials		32			26			23	%	59			59			—
Textile Effects		3			(4		)	NM		—			(12		)	100	%
Pigments		33			136			(76	)%	42			286			(85	)%
Corporate, LIFO and other		(49		)	(43		)	(14	)%	(94		)	(84		)	(12	)%
Total		$	304		$	376		(19	)%	$	524		$	783		(33	)%

 

See end of press release for footnote explanations

 

Table 3 — Factors Impacting Sales Revenues

 

		Three months ended
		June 30, 2013 vs. 2012
		Average Selling Price(a)
		Local		Exchange		Sales Mix		Sales
Unaudited		Currency		Rate		& Other		Volume(a)		Total
Polyurethanes		1	%	(1	)%	(1	)%	—		(1	)%
Performance Products		(1	)%	—		1	%	—		—
Advanced Materials		3	%	(2	)%	2	%	(10	)%	(7	)%
Textile Effects		3	%	(1	)%	—		9	%	11	%
Pigments		(26	)%	(1	)%	—		9	%	(18	)%
Total Company		(4	)%	(1	)%	(1	)%	3	%	(3	)%

 

		Six months ended
		June 30, 2013 vs. 2012
		Average Selling Price(a)
		Local		Exchange		Sales Mix		Sales
Unaudited		Currency		Rate		& Other		Volume(a)		Total
Polyurethanes		1	%	—		1	%	(4	)%	(2	)%
Performance Products		3	%	—		—		(9	)%	(6	)%
Advanced Materials		2	%	(2	)%	3	%	(7	)%	(4	)%
Textile Effects		—		(1	)%	(1	)%	8	%	6	%
Pigments		(25	)%	—		1	%	4	%	(20	)%
Total Company		(1	)%	(1	)%	—		(3	)%	(5	)%

 

(a) Excludes revenues and sales volumes from tolling arrangements, by-products and raw materials.

 

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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
		June 30,						June 30,						June 30,						June 30,
In millions, except per share amounts, unaudited		2013			2012			2013			2012			2013			2012			2013			2012
GAAP(1)		$	249		$	352		$	(44	)	$	(65	)	$	47		$	124		$	0.19		$	0.52
Adjustments:
Acquisition expenses		2			1			—			—			2			1			0.01			—
(Income) loss from discontinued operations, net of tax(2)		(2		)	3			N/A			N/A			—			2			—			0.01
Discount amortization on settlement financing associated with the terminated merger		N/A			N/A			(1		)	(3		)	1			5			—			0.02
Certain legal settlements and related expenses		6			—			(1		)	—			5			—			0.02			—
Amortization of pension and postretirement actuarial losses		18			11			(4		)	(3		)	14			8			0.06			0.03
Restructuring, impairment and plant closing and transition costs		31			9			(6		)	(2		)	25			7			0.10			0.03
Adjusted(1)		$	304		$	376		$	(56	)	$	(73	)	$	94		$	147		$	0.39		$	0.61
Adjusted income tax expense														56			73
Net income attributable to noncontrolling interests, net of tax														7			4
Adjusted pre-tax income(1)														$	157		$	224
Adjusted effective tax rate														36		%	33		%

 

					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
		March 31,			March 31,			March 31,			March 31,
In millions, except per share amounts, unaudited		2013			2013			2013			2013
GAAP(1)		$	112		$	20		$	(24	)	$	(0.10	)
Adjustments:
Acquisition expenses		3			(1		)	2			0.01
Loss from discontinued operations, net of tax(2)		3			N/A			2			0.01
Discount amortization on settlement financing associated with the terminated merger		N/A			(1		)	2			0.01
Loss on early extinguishment of debt		35			(13		)	22			0.09
Certain legal settlements and related expenses		2			(1		)	1			—
Amortization of pension and postretirement actuarial losses		19			(7		)	12			0.05
Restructuring, impairment and plant closing and transition costs		46			(17		)	29			0.12
Adjusted(1)		$	220		$	(20	)	$	46		$	0.19
Adjusted income tax expense								20
Net income attributable to noncontrolling interests, net of tax								7
Adjusted pre-tax income(1)								$	73
Adjusted effective tax rate								27		%

 

								Income Tax						Net Income (Loss)						Diluted Income (Loss)
		EBITDA						(Expense) Benefit						Attrib. to HUN Corp.						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, unaudited		2013			2012			2013			2012			2013			2012			2013			2012
GAAP(1)		$	361		$	742		$	(24	)	$	(125	)	$	23		$	287		$	0.10		$	1.19
Adjustments:
Acquisition expenses		5			1			(1		)	—			4			1			0.02			—
Loss from discontinued operations, net of tax(2)		1			4			N/A			N/A			2			6			0.01			0.02
Discount amortization on settlement financing associated with the terminated merger		N/A			N/A			(2		)	(5		)	3			10			0.01			0.04
Loss on early extinguishment of debt		35			1			(13		)	—			22			1			0.09			—
Certain legal settlements and related expenses		8			1			(2		)	—			6			1			0.02			—
Amortization of pension and postretirement actuarial losses		37			21			(11		)	(4		)	26			17			0.11			0.07
Restructuring, impairment and plant closing and transition costs		77			13			(23		)	(3		)	54			10			0.22			0.04
Adjusted(1)		$	524		$	783		$	(76	)	$	(137	)	$	140		$	333		$	0.58		$	1.39
Adjusted income tax expense														76			137
Net income attributable to noncontrolling interests, net of tax														14			4
Adjusted pre-tax income(1)														$	230		$	474
Adjusted effective tax rate														33		%	29		%

 

See end of press release for footnote explanations

 

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

 

		Three months ended									Six months ended
		June 30,						March 31,			June 30,
In millions, unaudited		2013			2012			2013			2013			2012
Net income (loss) attributable to Huntsman Corporation		$	47		$	124		$	(24	)	$	23		$	287
Interest expense, net		47			57			51			98			116
Income tax expense (benefit) from continuing operations		44			65			(20		)	24			125
Income tax expense (benefit) from discontinued operations(2)		2			(1		)	(2		)	—			(2		)
Depreciation and amortization of continuing operations		109			107			106			215			212
Depreciation and amortization of discontinued operations(2)		—			—			1			1			4
EBITDA(1)		$	249		$	352		$	112		$	361		$	742

 

See end of press release for footnote explanations

 

Table 6 — Selected Balance Sheet Items

 

		June 30,			March 31,			December 31,
In millions		2013			2013			2012
		(unaudited)			(unaudited)
Cash		$	181		$	256		$	396
Accounts and notes receivable, net		1,714			1,646			1,583
Inventories		1,698			1,797			1,819
Other current assets		339			304			321
Property, plant and equipment, net		3,613			3,643			3,745
Other assets		1,109			1,073			1,020
Total assets		$	8,654		$	8,719		$	8,884
Accounts payable		$	996		$	1,101		$	1,102
Other current liabilities		778			724			791
Current portion of debt		317			298			288
Long-term debt		3,454			3,489			3,414
Other liabilities		1,266			1,282			1,393
Total equity		1,843			1,825			1,896
Total liabilities and equity		$	8,654		$	8,719		$	8,884

 

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