Exhibit 99.1

 

News Release

 

 

HUNTSMAN RELEASES FIRST QUARTER 2014 RESULTS;

DEMONSTRATES BROAD EARNINGS STRENGTH ACROSS DIVISIONS AS

ADJUSTED EBITDA IMPROVES 50% COMPARED TO PRIOR YEAR

 

First Quarter 2014 Highlights

 

·                  Adjusted EBITDA was $329 million compared to $220 million in the prior year period, an improvement of 50%.

 

·                  Adjusted diluted income per share was $0.43 compared to $0.19 in the prior year period.

 

·                  Net income attributable to Huntsman Corporation was $54 million compared to net loss of $24 million in the prior year period.

 

		Three months ended
		March 31,						December 31,
In millions, except per share amounts, unaudited		2014			2013			2013
Revenues		$	2,755		$	2,702		$	2,705
Net income (loss) attributable to Huntsman Corporation		$	54		$	(24	)	$	41
Adjusted net income(1)		$	105		$	46		$	118
Diluted income (loss) per share		$	0.22		$	(0.10	)	$	0.17
Adjusted diluted income per share(1)		$	0.43		$	0.19		$	0.48
EBITDA(1)		$	261		$	112		$	225
Adjusted EBITDA(1)		$	329		$	220		$	313

 

See end of press release for footnote explanations

 

 

The Woodlands, TX — Huntsman Corporation (NYSE: HUN) today reported first quarter 2014 results with revenues of $2,755 million and adjusted EBITDA of $329 million.

 

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

 

“Our first quarter results demonstrated broad earnings strength as all of our businesses exceeded the previous year with the exception of PO/MTBE.  The benefits of our previous year’s restructuring efforts are visible in both our Advanced Materials and Textile Effects results.  We continue to see strong results in our Performance Products and MDI polyurethanes, which make up the core of our earnings.

 

We remain actively engaged with the European Union in their antitrust review of our proposed acquisition of Rockwood Holding’s Performance Additives and Titanium Dioxide businesses.

 

This past month, at our Investor Day we presented a plan to achieve $2 billion of Adjusted EBITDA within the next 2-3 years.  With these strong first quarter results, we’re well on our way to achieving this target.”

 

Segment Analysis for 1Q14 Compared to 1Q13

 

Polyurethanes

 

The increase in revenues in our Polyurethanes division for the three months ended March 31, 2014 compared to the same period in 2013 was primarily due to higher sales volumes partially offset by lower average selling prices.  MDI sales volumes increased 6% as a result of improved demand in all regions and across most major markets whereas PO/MTBE sales volumes were essentially unchanged.  PO/MTBE average selling prices decreased primarily due to less favorable market conditions and MDI Urethane average selling prices were essentially flat.  The decrease in adjusted EBITDA was due to lower PO/MTBE margins partially offset by an increase in MDI Urethane earnings.

 

Performance Products

 

The increase in revenues in our Performance Products division for the three months ended March 31, 2014 compared to the same period in 2013 was due to higher sales volumes and higher selling prices partially offset by the mix effect of more toll business.  Sales volumes increased primarily due to the impact of the scheduled maintenance on our olefins and ethylene oxide facilities in Port Neches, Texas in the first quarter of 2013, as well as improved demand for amines and maleic anhydride.  Average selling prices increased, notably for maleic anhydride and surfactants, in response to higher raw materials costs.  The increase in adjusted EBITDA was primarily due to the impact of our scheduled maintenance in the first quarter of 2013, estimated at $55 million.

 

Advanced Materials

 

The decrease in revenues in our Advanced Materials division for the three months ended March 31, 2014 compared to the same period in 2013 was primarily due to lower sales volumes, partially offset by higher average selling prices and favorable sales mix.  Sales volumes decreased in our base resins business primarily due to our restructuring efforts.  During the fourth quarter 2013 we closed two of our base resins production units as we focus on higher value component and formulations sales such as aerospace, transportation and industrial markets.  Average selling prices increased in all regions primarily due to increased prices for certain products as well as an increased focus on higher value component and formulations sales.  The increase in adjusted EBITDA was primarily due to higher contribution margins and lower manufacturing and selling, general and administrative costs as a result of our restructuring efforts.

 

Textile Effects

 

The increase in revenues in our Textile Effects division for the three months ended March 31, 2014 compared to the same period in 2013 was due to higher average selling prices and higher sales volumes.  Average

 

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selling prices increased primarily in response to higher raw material costs.  Sales volumes increased primarily due to increased market share and stronger consumer end market sentiment.  The increase in adjusted EBITDA was primarily due to higher contribution margins as a result of our restructuring efforts.

 

Pigments

 

The decrease in revenues in our Pigments division for the three months ended March 31, 2014 compared to the same period in 2013 was primarily due to lower average selling prices as sales volumes were essentially unchanged.  Average selling prices decreased primarily as a result of high industry inventory levels partially offset by the strength of the euro against the U.S. dollar.  The increase in adjusted EBITDA was primarily due to lower manufacturing costs as a result of higher production volumes.

 

Corporate, LIFO and Other

 

Adjusted EBITDA from Corporate, LIFO and Other improved by $1 million to a loss of $44 million for the three months ended March 31, 2014 compared to a loss of $45 million for the same period in 2013.

 

Liquidity, Capital Resources and Outstanding Debt

 

As of March 31, 2014 we had $902 million of combined cash and unused borrowing capacity compared to $1,048 million at December 31, 2013.

 

Total capital expenditures for the quarter ended March 31, 2014 were $107 million.  We expect to spend approximately $500 million on capital expenditures in 2014, net of reimbursements and excluding any amounts associated with the planned acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc.

 

Income Taxes

 

During the three months ended March 31, 2014 we recorded income tax expense of $36 million and paid $46 million in cash for income taxes.  Our adjusted effective income tax rates for the three months ended March 31, 2014 was approximately 32%.

 

We expect our 2014 adjusted effective tax rate to be approximately 35% excluding the impact of the acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc.  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 first quarter 2014 financial results on Tuesday, April 29, 2014 at 10:00 a.m. ET.

 

Call-in numbers for the conference call:
U.S. participants	(888) 713 - 4214
International participants	(617) 213 - 4866
Passcode	60716193

 

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=PXFJDHCNN

 

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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 April 29, 2014 and ending May 6, 2014.

 

Call-in numbers for the replay:
U.S. participants	(888) 286 - 8010
International participants	(617) 801 - 6888
Replay code	10497006

 

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Table 1 — Results of Operations

 

		Three months ended
		March 31,
In millions, except per share amounts, unaudited		2014			2013
Revenues		$	2,755		$	2,702
Cost of goods sold		2,305			2,353
Gross profit		450			349
Operating expenses		261			255
Restructuring, impairment and plant closing costs		39			44
Operating income		150			50
Interest expense		(48		)	(51		)
Equity in income of investment in unconsolidated affiliates		2			1
Loss on early extinguishment of debt		—			(35		)
Other income		1			—
Income (loss) before income taxes		105			(35		)
Income tax (expense) benefit		(36		)	20
Income (loss) from continuing operations		69			(15		)
Loss from discontinued operations, net of tax(2)		(7		)	(2		)
Net income (loss)		62			(17		)
Net income attributable to noncontrolling interests, net of tax		(8		)	(7		)
Net income (loss) attributable to Huntsman Corporation		$	54		$	(24	)
Adjusted EBITDA(1)		$	329		$	220
Adjusted net income(1)		$	105		$	46
Basic income (loss) per share		$	0.22		$	(0.10	)
Diluted income (loss) per share		$	0.22		$	(0.10	)
Adjusted diluted income per share(1)		$	0.43		$	0.19
Common share information:
Basic shares outstanding		240.9			239.0
Diluted shares		244.5			239.0
Diluted shares for adjusted diluted income per share		244.5			241.8

 

See end of press release for footnote explanations

 

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Table 2 — Results of Operations by Segment

 

		Three months ended
		March 31,						Better /
In millions, unaudited		2014			2013			(Worse)
Segment Revenues:
Polyurethanes		$	1,200		$	1,182		2	%
Performance Products		765			722			6	%
Advanced Materials		319			336			(5	)%
Textile Effects		224			188			19	%
Pigments		318			330			(4	)%
Eliminations and other		(71		)	(56		)	(27	)%
Total		$	2,755		$	2,702		2	%
Segment Adjusted EBITDA(1):
Polyurethanes		$	167		$	178		(6	)%
Performance Products		118			54			119	%
Advanced Materials		46			27			70	%
Textile Effects		16			(3		)	NM
Pigments		26			9			189	%
Corporate, LIFO and other		(44		)	(45		)	2	%
Total		$	329		$	220		50	%

 

See end of press release for footnote explanations

NM—Not meaningful

 

Table 3 — Factors Impacting Sales Revenues

 

		Three months ended
		March 31, 2014 vs. 2013
		Average Selling Price(a)
		Local		Exchange		Sales Mix		Sales
Unaudited		Currency		Rate		& Other		Volume(b)		Total
Polyurethanes		(4	)%	—		1	%	5	%	2	%
Performance Products		2	%	—		(10	)%	14	%	6	%
Advanced Materials		6	%	(1	)%	6	%	(16	)%	(5	)%
Textile Effects		15	%	(2	)%	2	%	4	%	19	%
Pigments		(5	)%	1	%	—		—		(4	)%
Total Company		(2	)%	—		(4	)%	8	%	2	%

 

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

(b) Excludes sales from 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
		EBITDA						Expense						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		2014			2013			2014			2013			2014			2013			2014			2013
GAAP(1)		$	261		$	112		$	(36	)	$	20		$	54		$	(24	)	$	0.22		$	(0.10	)
Adjustments:
Acquisition expenses and purchase accounting inventory adjustments		8			3			(2		)	(1		)	6			2			0.02			0.01
Loss from discontinued operations, net of tax(2)		7			3			N/A			N/A			7			2			0.03			0.01
Discount amortization on settlement financing associated with the terminated merger		N/A			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		13			19			(4		)	(7		)	9			12			0.04			0.05
Restructuring, impairment and plant closing and transition costs		40			46			(11		)	(17		)	29			29			0.12			0.12
Adjusted(1)		$	329		$	220		$	(53	)	$	(20	)	$	105		$	46		$	0.43		$	0.19
Adjusted income tax expense														53			20
Net income attributable to noncontrolling interests, net of tax														8			7
Adjusted pre-tax income(1)														$	166		$	73
Adjusted effective tax rate														32		%	27		%

 

					Income Tax			Net Income			Diluted Income
		EBITDA			Expense			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		2013			2013			2013			2013
GAAP(1)		$	225		$	(20	)	$	41		$	0.17
Adjustments:
Acquisition expenses and purchase accounting inventory adjustments		7			(3		)	4			0.02
Loss from discontinued operations, net of tax(2)		2			N/A			1			—
Discount amortization on settlement financing associated with the terminated merger		N/A			(1		)	1			—
Loss on early extinguishment of debt		16			(6		)	10			0.04
Certain legal settlements and related expenses		1			—			1			—
Amortization of pension and postretirement actuarial losses		18			(7		)	11			0.05
Restructuring, impairment and plant closing and transition costs		44			5			49			0.20
Adjusted(1)		$	313		$	(32	)	$	118		$	0.48
Adjusted income tax expense								32
Net income attributable to noncontrolling interests, net of tax								1
Adjusted pre-tax income(1)								$	151
Adjusted effective tax rate								21		%

 

See end of press release for footnote explanations                               

 

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

 

		Three months ended
		March 31,						December 31,
In millions, unaudited		2014			2013			2013
Net income (loss) attributable to Huntsman Corporation		$	54		$	(24	)	$	41
Interest expense		48			51			44
Income tax expense (benefit) from continuing operations		36			(20		)	20
Income tax benefit from discontinued operations(2)		—			(2		)	(2		)
Depreciation and amortization		123			107			122
EBITDA(1)		$	261		$	112		$	225

 

See end of press release for footnote explanations

 

Table 6 — Selected Balance Sheet Items

 

		March 31,			December 31,
In millions		2014			2013
		(unaudited)
Cash		$	286		$	529
Accounts and notes receivable, net		1,724			1,575
Inventories		1,911			1,741
Other current assets		307			314
Property, plant and equipment, net		3,794			3,824
Other assets		1,205			1,205
Total assets		$	9,227		$	9,188
Accounts payable		$	1,185		$	1,113
Other current liabilities		760			769
Current portion of debt		270			277
Long-term debt		3,621			3,633
Other liabilities		1,214			1,267
Total equity		2,177			2,129
Total liabilities and equity		$	9,227		$	9,188

 

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Table 7 — Outstanding Debt

 

		March 31,			December 31,
In millions		2014			2013
		(unaudited)
Debt:
Senior credit facilities		$	1,338		$	1,351
Accounts receivable programs		247			248
Senior notes		1,060			1,061
Senior subordinated notes		891			891
Variable interest entities		238			247
Other debt		117			112
Total debt - excluding affiliates		3,891			3,910
Total cash		286			529
Net debt- excluding affiliates		$	3,605		$	3,381

 

Table 8 — Summarized Statement of Cash Flows

 

		Three months ended
		March 31,
In millions, unaudited		2014			2013
Total cash at beginning of period		$	529		$	396
Net cash used in operating activities		(67		)	(74		)
Net cash used in investing activities		(104		)	(85		)
Net cash (used in) provided by financing activities		(71		)	21
Effect of exchange rate changes on cash		(1		)	(2		)
Total cash at end of period		$	286		$	256
Supplemental cash flow information:
Cash paid for interest		$	(56	)	$	(59	)
Cash paid for income taxes		(46		)	(17		)
Cash paid for capital expenditures		(107		)	(89		)
Depreciation and amortization		123			107
Changes in primary working capital:
Accounts and notes receivable		(149		)	(85		)
Inventories		(172		)	(9		)
Accounts payable		107			10
Total cash used in primary working capital		$	(214	)	$	(84	)

 

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Footnotes

 

(1)   We use EBITDA and 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) attributable to Huntsman Corporation 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 EBITDA, adjusted EBITDA and adjusted net income.  Additional information with respect to our use of each of these financial measures follows:

 

EBITDA is defined as net income (loss) attributable to Huntsman Corporation before interest, income taxes, and depreciation and amortization. EBITDA as used herein is not necessarily comparable to other similarly titled measures of other companies. The reconciliation of EBITDA to net income (loss) attributable to Huntsman Corporation is set forth in Table 5 above.

 

Adjusted EBITDA is computed by eliminating the following from EBITDA:  acquisition expenses and purchase accounting inventory adjustments; loss (gain) on initial consolidation of subsidiaries; EBITDA from discontinued operations; loss (gain) on disposition of businesses/assets; loss on early extinguishment of debt; extraordinary loss (gain) on the acquisition of a business; certain legal settlements and related expenses; amortization of pension and postretirement actuarial losses (gains); and restructuring, impairment, plant closing and transition costs (credits).  The reconciliation of adjusted EBITDA to EBITDA is set forth in Table 4 above.

 

Adjusted net income (loss) is computed by eliminating the after tax impact of the following items from net income (loss) attributable to Huntsman Corporation: acquisition expenses and purchase accounting inventory adjustments; loss (gain) on initial consolidation of subsidiaries; loss (income) from discontinued operations; discount amortization on settlement financing associated with the terminated merger; loss (gain) on disposition of businesses/assets; loss on early extinguishment of debt; extraordinary loss (gain) on the acquisition of a business; certain legal settlements and related expenses; amortization of pension and postretirement actuarial losses (gains); and restructuring, impairment, plant closing and transition costs (credits).  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) attributable to Huntsman Corporation common stockholders is set forth in Table 4 above.

 

(2)   During the first quarter 2010 we closed our Australian styrenics operations; results from this business are treated as discontinued operations.

 

About Huntsman:

 

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals with 2013 revenues of over $11 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 80 manufacturing and R&D facilities in 30 countries and employ approximately 12,000 associates within our 5 distinct business divisions.  For more information about Huntsman, please visit the company’s website at www.huntsman.com.

 

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.

 

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