Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE		Investor Relations:	Media:
July 30, 2014		Kurt Ogden	Gary Chapman
The Woodlands, TX		(801) 584-5959	(281) 719-4324
NYSE: HUN

 

HUNTSMAN RELEASES SECOND QUARTER 2014 RESULTS;

SEES MEANINGFUL IMPROVEMENTS ACROSS ITS BUSINESS AS
ADJUSTED EBITDA INCREASES 19% COMPARED TO PRIOR YEAR

 

Second Quarter 2014 Highlights

 

·                  Adjusted EBITDA was $363 million compared to $304 million in the prior year period, an improvement of 19%.

 

·                  Adjusted diluted income per share was $0.59 compared to $0.39 in the prior year period.

 

·                  Net income attributable to Huntsman Corporation was $119 million compared to $47 million in the prior year period.

 

		Three months ended									Six months ended
		June 30,						March 31,			June 30,
In millions, except per share amounts, unaudited		2014			2013			2014			2014			2013
Revenues		$	2,988		$	2,830		$	2,755		$	5,743		$	5,532
Net income attributable to Huntsman Corporation		$	119		$	47		$	54		$	173		$	23
Adjusted net income(1)		$	145		$	94		$	105		$	250		$	140
Diluted income per share		$	0.48		$	0.19		$	0.22		$	0.71		$	0.10
Adjusted diluted income per share(1)		$	0.59		$	0.39		$	0.43		$	1.02		$	0.58
EBITDA(1)		$	327		$	249		$	261		$	588		$	361
Adjusted EBITDA(1)		$	363		$	304		$	329		$	692		$	524

 

See end of press release for footnote explanations

 

 

The Woodlands, TX — Huntsman Corporation (NYSE: HUN) today reported second quarter 2014 results with revenues of $2,988 million and adjusted EBITDA of $363 million.

 

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

 

“We saw strong earnings in the second quarter as a result of increased demand for key products such as MDI and amines and higher selling prices for many of our products. We also benefited from restructuring efforts in our Advanced Materials and Textile Effects businesses. These results are well in line with our earlier forecast of substantial earnings growth in the next two to three years.

 

We are working closely with the European Commission in its review of the proposed acquisition of Rockwood Holding’s Performance Additives and Titanium Dioxide businesses. We have proposed certain remedies we believe address the Commission’s concerns and are confident that final approval will be secured by the end of the third quarter.”

 

Segment Analysis for 2Q14 Compared to 2Q13

 

Polyurethanes

 

The increase in revenues in our Polyurethanes division for the three months ended June 30, 2014 compared to the same period in 2013 was primarily due to higher sales volumes.  MDI sales volumes increased 7% as a result of improved demand in all regions and across most major markets.  PO/MTBE sales volumes decreased as a result of a manufacturing disruption at our Port Neches, Texas facility which resulted in lower EBITDA of approximately $10 million.  MDI average selling prices increased in the Americas and European regions, offset by lower component pricing in China.  PO/MTBE average selling prices increased primarily due to favorable market conditions.  The increase in adjusted EBITDA was due to higher MDI sales volumes and contribution margins.

 

Performance Products

 

The increase in revenues in our Performance Products division for the three months ended June 30, 2014 compared to the same period in 2013 was due to higher average selling prices, partially offset by lower sales volumes. Average selling prices increased in response to higher raw materials costs and strong market conditions for amines, maleic anhydride and specialty surfactants.  Sales volumes decreased primarily due to the impact of scheduled maintenance, partially offset by increased sales volumes in amines and maleic anhydride.  The increase in adjusted EBITDA was primarily due to higher contribution margins.

Advanced Materials

 

The increase in revenues in our Advanced Materials division for the three months ended June 30, 2014 compared to the same period in 2013 was primarily due to higher average selling prices and favorable sales mix, partially offset by lower sales volumes.  Average selling prices increased in all regions and across most markets primarily due to certain price increase initiatives and higher value sales markets.  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 markets such as aerospace, transportation and industrial and coatings and construction.  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.

 

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Textile Effects

 

The increase in revenues in our Textile Effects division for the three months ended June 30, 2014 compared to the same period in 2013 was primarily due to higher average selling prices, partially offset by lower sales volumes.  Average selling prices increased primarily in response to higher raw material costs.  Sales volumes decreased primarily due to the de-selection of lower value business.  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.

 

Pigments

 

The increase in revenues in our Pigments division for the three months ended June 30, 2014 compared to the same period in 2013 was primarily due to higher sales volumes, partially offset by lower average selling prices.  Sales volumes increased primarily as a result of higher end-use demand, particularly in Europe.  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 (notably, average selling prices were flat compared to the first quarter).  The decrease in adjusted EBITDA was primarily due to lower contribution margins, partially offset by higher sales volumes.

 

Corporate, LIFO and Other

 

Adjusted EBITDA from Corporate, LIFO and Other improved by $2 million to a loss of $47 million for the three months ended June 30, 2014 compared to a loss of $49 million for the same period in 2013.

 

Liquidity, Capital Resources and Outstanding Debt

 

As of June 30, 2014 we had $1,072 million of combined cash and unused borrowing capacity compared to $1,048 million at December 31, 2013.

 

In June 2014, we issued an additional €145 million (approximately $197 million) of 5.125% Senior Notes due 2021.  The notes were issued at a premium to yield 4.57%.  Net proceeds were used for general corporate purposes.

 

Total capital expenditures for the quarter ended June 30, 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 June 30, 2014 we recorded income tax expense of $43 million and paid $97 million in cash for income taxes.  Our adjusted effective income tax rate for the three months ended June 30, 2014 was 25%.  The low tax rate was a result of the release of tax valuation allowances in part due to the restructuring of our European surfactants business.

 

We expect our full year 2014 adjusted effective tax rate to be in the low thirties excluding the impact of the planned 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%.

 

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Earnings Conference Call Information

 

We will hold a conference call to discuss our second quarter 2014 financial results on Wednesday, July 30, 2014 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	72944602

 

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=P7ABG8KYW

 

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 30, 2014 and ending August 6, 2014.

 

Call-in numbers for the replay:

U.S. participants	(888) 286 - 8010
International participants	(617) 801 - 6888
Replay code	93930078

 

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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		2014			2013			2014			2013
Revenues		$	2,988		$	2,830		$	5,743		$	5,532
Cost of goods sold		2,483			2,379			4,788			4,732
Gross profit		505			451			955			800
Operating expenses		276			281			537			536
Restructuring, impairment and plant closing costs		13			29			52			73
Operating income		216			141			366			191
Interest expense		(51		)	(47		)	(99		)	(98		)
Equity in income of investment in unconsolidated affiliates		2			2			4			3
Loss on early extinguishment of debt		—			—			—			(35		)
Other income		—			2			1			2
Income before income taxes		167			98			272			63
Income tax expense		(43		)	(44		)	(79		)	(24		)
Income from continuing operations		124			54			193			39
Loss from discontinued operations, net of tax(2)		—			—			(7		)	(2		)
Net income		124			54			186			37
Net income attributable to noncontrolling interests, net of tax		(5		)	(7		)	(13		)	(14		)
Net income attributable to Huntsman Corporation		$	119		$	47		$	173		$	23
Adjusted EBITDA(1)		$	363		$	304		$	692		$	524
Adjusted net income(1)		$	145		$	94		$	250		$	140
Basic income per share		$	0.49		$	0.20		$	0.72		$	0.10
Diluted income per share		$	0.48		$	0.19		$	0.71		$	0.10
Adjusted diluted income per share(1)		$	0.59		$	0.39		$	1.02		$	0.58
Common share information:
Basic shares outstanding		241.8			239.7			241.3			239.4
Diluted shares		245.7			242.2			245.0			242.0
Diluted shares for adjusted diluted income per share		245.7			242.2			245.0			242.0

 

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		2014			2013			(Worse)		2014			2013			(Worse)
Segment Revenues:
Polyurethanes		$	1,310		$	1,246		5	%	$	2,510		$	2,428		3	%
Performance Products		833			777			7	%	1,598			1,499			7	%
Advanced Materials		324			321			1	%	643			657			(2	)%
Textile Effects		248			216			15	%	472			404			17	%
Pigments		340			334			2	%	658			664			(1	)%
Eliminations and other		(67)			(64		)	(5	)%	(138		)	(120		)	(15	)%
Total		$	2,988		$	2,830		6	%	$	5,743		$	5,532		4	%
Segment Adjusted EBITDA(1):
Polyurethanes		$	197		$	174		13	%	$	364		$	352		3	%
Performance Products		115			111			4	%	233			165			41	%
Advanced Materials		53			32			66	%	99			59			68	%
Textile Effects		22			3			633	%	38			—			NM
Pigments		23			33			(30	)%	49			42			17	%
Corporate, LIFO and other		(47)			(49		)	4	%	(91		)	(94		)	3	%
Total		$	363		$	304		19	%	$	692		$	524		32	%

 

See end of press release for footnote explanations

NM—Not meaningful

 

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Table 3 — Factors Impacting Sales Revenues

 

		Three months ended
		June 30, 2014 vs. 2013
		Average Selling Price(a)
		Local		Exchange		Sales Mix		Sales
Unaudited		Currency		Rate		& Other		Volume(b)		Total
Polyurethanes		—		1	%	1	%	3	%	5	%
Performance Products		4	%	1	%	3	%	(1	)%	7	%
Advanced Materials		3	%	1	%	8	%	(11	)%	1	%
Textile Effects		19	%	—		1	%	(5	)%	15	%
Pigments		(4	)%	3	%	—		3	%	2	%
Total Company		3	%	1	%	—		2	%	6	%

 

		Six months ended
		June 30, 2014 vs. 2013
		Average Selling Price(a)
		Local		Exchange		Sales Mix		Sales
Unaudited		Currency		Rate		& Other		Volume(b)		Total
Polyurethanes		(1	)%	—		—		4	%	3	%
Performance Products		4	%	—		(3	)%	6	%	7	%
Advanced Materials		5	%	—		7	%	(14	)%	(2	)%
Textile Effects		17	%	(1	)%	2	%	(1	)%	17	%
Pigments		(5	)%	2	%	1	%	1	%	(1	)%
Total Company		1	%	—		(2	)%	5	%	4	%

 

(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						Diluted Income
		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		2014			2013			2014			2013			2014			2013			2014			2013
GAAP(1)		$	327		$	249		$	(43	)	$	(44	)	$	119		$	47		$	0.48		$	0.19
Adjustments:
Acquisition expenses and integration costs		9			2			(2		)	—			7			2			0.03			0.01
Loss (income) from discontinued operations, net of tax(2)		2			(2		)	N/A			N/A			—			—			—			—
Discount amortization on settlement financing associated with the terminated merger		N/A			N/A			—			(1		)	—			1			—			—
Gain on disposition of businesses/assets		(2		)	—			1			—			(1		)	—			—			—
Certain legal settlements and related expenses		2			6			—			(1		)	2			5			0.01			0.02
Amortization of pension and postretirement actuarial losses		12			18			(4		)	(4		)	8			14			0.03			0.06
Restructuring, impairment and plant closing and transition costs		13			31			(3		)	(6		)	10			25			0.04			0.10
Adjusted(1)		$	363		$	304		$	(51	)	$	(56	)	$	145		$	94		$	0.59		$	0.39
Adjusted income tax expense														51			56
Net income attributable to noncontrolling interests, net of tax														5			7
Adjusted pre-tax income(1)														$	201		$	157
Adjusted effective tax rate														25		%	36		%

 

					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
		March 31,			March 31,			March 31,			March 31,
In millions, except per share amounts, unaudited		2014			2014			2014			2014
GAAP(1)		$	261		$	(36	)	$	54		$	0.22
Adjustments:
Acquisition expenses and integration costs		8			(2		)	6			0.02
Loss from discontinued operations, net of tax(2)		7			N/A			7			0.03
Amortization of pension and postretirement actuarial losses		13			(4		)	9			0.04
Restructuring, impairment and plant closing and transition costs		40			(11		)	29			0.12
Adjusted(1)		$	329		$	(53	)	$	105		$	0.43
Adjusted income tax expense								53
Net income attributable to noncontrolling interests, net of tax								8
Adjusted pre-tax income(1)								$	166
Adjusted effective tax rate								32		%

 

								Income Tax						Net Income						Diluted Income
		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		2014			2013			2014			2013			2014			2013			2014			2013
GAAP(1)		$	588		$	361		$	(79	)	$	(24	)	$	173		$	23		$	0.71		$	0.10
Adjustments:
Acquisition expenses and integration costs		17			5			(4		)	(1		)	13			4			0.05			0.02
Loss from discontinued operations, net of tax(2)		9			1			N/A			N/A			7			2			0.03			0.01
Discount amortization on settlement financing associated with the terminated merger		N/A			N/A			—			(2		)	—			3			—			0.01
Gain on disposition of businesses/assets		(2		)	—			1			—			(1		)	—			—			—
Loss on early extinguishment of debt		—			35			—			(13		)	—			22			—			0.09
Certain legal settlements and related expenses		2			8			—			(2		)	2			6			0.01			0.02
Amortization of pension and postretirement actuarial losses		25			37			(8		)	(11		)	17			26			0.07			0.11
Restructuring, impairment and plant closing and transition costs		53			77			(14		)	(23		)	39			54			0.16			0.22
Adjusted(1)		$	692		$	524		$	(104	)	$	(76	)	$	250		$	140		$	1.02		$	0.58
Adjusted income tax expense														104			76
Net income attributable to noncontrolling interests, net of tax														13			14
Adjusted pre-tax income(1)														$	367		$	230
Adjusted effective tax rate														28		%	33		%

 

See end of press release for footnote explanations

 

8

 

Table 5 — Reconciliation of Net Income to EBITDA

 

		Three months ended									Six months ended
		June 30,						March 31,			June 30,
In millions, unaudited		2014			2013			2014			2014			2013
Net income attributable to Huntsman Corporation		$	119		$	47		$	54		$	173		$	23
Interest expense		51			47			48			99			98
Income tax expense from continuing operations		43			44			36			79			24
Income tax (benefit) expense from discontinued operations(2)		(2		)	2			—			(2		)	—
Depreciation and amortization		116			109			123			239			216
EBITDA(1)		$	327		$	249		$	261		$	588		$	361

 

See end of press release for footnote explanations

 

Table 6 — Selected Balance Sheet Items

 

		June 30,			March 31,			December 31,
In millions		2014			2014			2013
		(unaudited)			(unaudited)
Cash		$	412		$	286		$	529
Accounts and notes receivable, net		1,870			1,724			1,575
Inventories		1,847			1,911			1,741
Other current assets		319			307			314
Property, plant and equipment, net		3,776			3,794			3,824
Other assets		1,218			1,205			1,205
Total assets		$	9,442		$	9,227		$	9,188
Accounts payable		$	1,162		$	1,185		$	1,113
Other current liabilities		725			760			769
Current portion of debt		257			270			277
Long-term debt		3,809			3,621			3,633
Other liabilities		1,181			1,214			1,267
Total equity		2,308			2,177			2,129
Total liabilities and equity		$	9,442		$	9,227		$	9,188

 

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