Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Investor Relations:

 

Media:

July 29, 2015

 

Kurt Ogden

 

Gary Chapman

The Woodlands, TX

 

(801) 584-5959

 

(281) 719-4324

NYSE: HUN

 

 

 

 

 

HUNTSMAN RELEASES SECOND QUARTER 2015 RESULTS;

ADJUSTED EARNINGS PER SHARE IMPROVES MORE THAN 50%

COMPARED TO THE FIRST QUARTER

 

Second Quarter 2015 Highlights

 

·                 Adjusted EBITDA was $385 million compared to $363 million in the prior year period and $285 million in the prior quarter.

 

·                 Adjusted diluted income per share was $0.63 compared to $0.59 in the prior year period and $0.40 in the prior quarter.

 

·                 Net income attributable to Huntsman Corporation was $29 million compared to net income of $119 million in the prior year period and $5 million in the prior quarter.

 

·                 The stronger U.S. dollar reduced adjusted EBITDA by an estimated $49 million compared to the prior year period.

 

·                 Extended planned maintenance at our Port Neches, TX facility reduced adjusted EBITDA in the second quarter 2015 by approximately $35 million.

 

 

 

Three months ended

 

Six months ended

 

 

 

June 30,

 

March 31,

 

June 30,

 

In millions, except per share amounts, unaudited

 

2015

 

2014

 

2015

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,740

 

$

2,988

 

$

2,589

 

$

5,329

 

$

5,743

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Huntsman Corporation

 

$

29

 

$

119

 

$

5

 

$

34

 

$

173

 

Adjusted net income(1)

 

$

155

 

$

145

 

$

98

 

$

253

 

$

250

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income per share

 

$

0.12

 

$

0.48

 

$

0.02

 

$

0.14

 

$

0.71

 

Adjusted diluted income per share(1)

 

$

0.63

 

$

0.59

 

$

0.40

 

$

1.02

 

$

1.02

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA(1)

 

$

216

 

$

327

 

$

159

 

$

375

 

$

588

 

Adjusted EBITDA(1)

 

$

385

 

$

363

 

$

285

 

$

670

 

$

692

 

 

See end of press release for footnote explanations

 



 

The Woodlands, TX — Huntsman Corporation (NYSE: HUN) today reported second quarter 2015 results with revenues of $2,740 million and adjusted EBITDA of $385 million.

 

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

 

“Our Performance Products and Advanced Materials businesses continue to demonstrate remarkable earnings. Combined, these businesses represent approximately 50% of our adjusted EBITDA; they have EBITDA margins of approximately 20% and low earnings volatility. Their EBITDA grew approximately 20% compared to the prior year and we have growth projects in place for these businesses that are expected to deliver an additional $100 million over the next couple of years.

 

Notwithstanding EBITDA headwinds in the second quarter 2015 such as $49 million from foreign currency and $35 million from the extended maintenance outage at our Port Neches, TX facility, our earnings are growing. We are delivering on our announced restructuring savings and growth projects.  Our aggressive efforts to deliver $200 million of synergy and restructuring savings within our Pigments and Additives division by the middle of 2016 are progressing on-time and according to plan.”

 

Segment Analysis for 2Q15 Compared to 2Q14

 

Polyurethanes

 

The decrease in revenues in our Polyurethanes division for the three months ended June 30, 2015 compared to the same period in 2014 was primarily due to a planned maintenance outage at our PO/MTBE facility in Port Neches, Texas that extended into the second quarter of 2015 and lower average selling prices.  PO/MTBE sales volumes decreased due to the planned maintenance outage.  MDI sales volumes increased due to improved demand in the European region primarily due to improved demand within the insulation, composite wood products and automotive markets.    PO/MTBE average selling prices decreased in-line with lower pricing for high octane gasoline.  MDI average selling prices decreased in response to lower raw material costs and the foreign currency exchange impact of a stronger U.S. dollar against major European currencies.  The decrease in adjusted EBITDA was primarily due to lower PO/MTBE earnings, partially offset by higher MDI contribution margins.  We estimate the reduction to adjusted EBITDA from the planned PO/MTBE maintenance outage was approximately $30 million within this division in the second quarter 2015.

 

Performance Products

 

The decrease in revenues in our Performance Products division for the three months ended June 30, 2015 compared to the same period in 2014 was due to lower sales volumes and lower average selling prices.  Sales volumes decreased primarily due to the sale of our European commodity surfactants business at the end of the second quarter 2014 although sales volumes increased 2% excluding the impact of this sale.  Average selling prices decreased in response to lower raw material costs and the foreign currency exchange impact of a stronger U.S. dollar against major European currencies.  The increase in adjusted EBITDA was primarily due to higher contribution margins in our amines and upstream intermediate businesses.

 

Advanced Materials

 

The decrease in revenues in our Advanced Materials division for the three months ended June 30, 2015 compared to the same period in 2014 was primarily due to lower sales volumes.  Sales volumes decreased primarily due to the de-selection of certain business and our restructuring efforts.  Average selling prices increased on a local currency basis due to certain price increase initiatives and our focus on higher value markets, but were more than offset by the foreign currency exchange impact of a stronger U.S. dollar against major European currencies.  The increase in adjusted EBITDA was primarily due to higher contribution margins from our focus on higher value business and lower fixed costs.

 

2



 

Textile Effects

 

The decrease in revenues in our Textile Effects division for the three months ended June 30, 2015 compared to the same period in 2014 was due to lower average selling prices and lower sales volumes.  Average selling prices decreased primarily due to the impact of a stronger U.S. dollar against major European currencies.  Sales volumes decreased primarily due to the de-selection of lower value business and destocking within the fibers and dyes supply chain.  The increase in adjusted EBITDA was primarily due to higher contribution margins from our focus on higher value business and lower fixed costs.

 

Pigments and Additives

 

Pro forma for the acquisition of Rockwood Performance Additives and Titanium Dioxide businesses, revenues decreased in our Pigments and Additives division for the three months ended June 30, 2015 compared to the same period in 2014 due to lower sales volumes and lower average selling prices.  Sales volumes decreased primarily as a result of lower end use demand in Europe and North America.  Average selling prices decreased primarily as a result of high titanium dioxide industry inventory levels and the foreign currency exchange impact of a stronger U.S. dollar against major European currencies.  The decrease in pro forma adjusted EBITDA was primarily due to lower contribution margins for titanium dioxide.

 

Corporate, LIFO and Other

 

Adjusted EBITDA from Corporate, LIFO and Other improved by $16 million to a loss of $31 million for the three months ended June 30, 2015 compared to a loss of $47 million for the same period in 2014.  The increase in adjusted EBITDA was primarily the result of a benefit from LIFO inventory valuation income of $9 million and an increase in income from benzene sales of $5 million.

 

Liquidity, Capital Resources and Outstanding Debt

 

As of June 30, 2015, we had $1,418 million of combined cash and unused borrowing capacity compared to $1,601 million at December 31, 2014.

 

Total capital expenditures for the three months ended June 30, 2015 were $147 million.  We expect to spend approximately $525 million on base capital expenditures in 2015, net of reimbursements.  In addition, in 2015 we expect to spend approximately $100 million combined on our new Chinese MDI facility, the completion of our Augusta, Georgia color pigments facility and replacement of Rockwood computer systems.

 

Based on the preliminary allocation of the purchase accounting for the Rockwood Performance Additives and Titanium Dioxide businesses, we expect our annual depreciation and amortization rate to be approximately $400 million.

 

Income Taxes

 

During the three months ended June 30, 2015, we recorded an income tax expense of $34 million and paid $19 million in cash for income taxes.  Our adjusted effective income tax rate for the three months ended June 30, 2015 was 32%.

 

We expect our 2015 and long term adjusted effective tax rate to be approximately 30%.

 

3



 

Earnings Conference Call Information

 

We will hold a conference call to discuss our second quarter 2015 financial results on Wednesday, July 29, 2015 at 10:00 a.m. ET.

 

Call-in numbers for the conference call:

U.S. participants

 

(888) 713 - 4211

International participants

 

(617) 213 - 4864

Passcode

 

43780722

 

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=PWX3M7V4U

 

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 29, 2015 and ending August 5, 2015.

 

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 11, 2015.  A webcast of the presentation, if applicable, along with accompanying materials will be available at ir.huntsman.com.

 

4



 

Table 1 — Results of Operations

 

 

 

Three months ended

 

Six months ended

 

 

 

June 30,

 

June 30,

 

In millions, except per share amounts, unaudited

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,740

 

$

2,988

 

$

5,329

 

$

5,743

 

Cost of goods sold

 

2,191

 

2,483

 

4,330

 

4,788

 

Gross profit

 

549

 

505

 

999

 

955

 

Operating expenses

 

289

 

276

 

569

 

537

 

Restructuring, impairment and plant closing costs

 

114

 

13

 

207

 

52

 

Operating income

 

146

 

216

 

223

 

366

 

Interest expense

 

(53

)

(51

)

(109

)

(99

)

Equity in income of investment in unconsolidated affiliates

 

3

 

2

 

5

 

4

 

Loss on early extinguishment of debt

 

(20

)

 

(23

)

 

Other (expense) income

 

(1

)

 

(2

)

1

 

Income before income taxes

 

75

 

167

 

94

 

272

 

Income tax expense

 

(34

)

(43

)

(36

)

(79

)

Income from continuing operations

 

41

 

124

 

58

 

193

 

Loss from discontinued operations, net of tax(3)

 

(2

)

 

(4

)

(7

)

Net income

 

39

 

124

 

54

 

186

 

Net income attributable to noncontrolling interests, net of tax

 

(10

)

(5

)

(20

)

(13

)

Net income attributable to Huntsman Corporation

 

$

29

 

$

119

 

$

34

 

$

173

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA(1)

 

$

385

 

$

363

 

$

670

 

$

692

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income(1)

 

$

155

 

$

145

 

$

253

 

$

250

 

 

 

 

 

 

 

 

 

 

 

Basic income per share

 

$

0.12

 

$

0.49

 

$

0.14

 

$

0.72

 

Diluted income per share

 

$

0.12

 

$

0.48

 

$

0.14

 

$

0.71

 

Adjusted diluted income per share(1)

 

$

0.63

 

$

0.59

 

$

1.02

 

$

1.02

 

 

 

 

 

 

 

 

 

 

 

Common share information:

 

 

 

 

 

 

 

 

 

Basic shares outstanding

 

244.1

 

241.8

 

244.0

 

241.3

 

Diluted shares

 

247.5

 

245.7

 

247.3

 

245.0

 

Diluted shares for adjusted diluted income per share

 

247.5

 

245.7

 

247.3

 

245.0

 

 

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

 

2015

 

2014

 

(Worse)

 

2015

 

2014

 

(Worse)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

995

 

$

1,310

 

(24

)%

$

1,885

 

$

2,510

 

(25

)%

Performance Products

 

675

 

833

 

(19

)%

1,331

 

1,598

 

(17

)%

Advanced Materials

 

282

 

324

 

(13

)%

572

 

643

 

(11

)%

Textile Effects

 

216

 

248

 

(13

)%

422

 

472

 

(11

)%

Pigments & Additives

 

592

 

340

 

74

%

1,164

 

658

 

77

%

Eliminations and other

 

(20

)

(67

)

70

%

(45

)

(138

)

67

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

2,740

 

$

2,988

 

(8

)%

$

5,329

 

$

5,743

 

(7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Adjusted EBITDA(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

159

 

$

197

 

(19

)%

$

264

 

$

364

 

(27

)%

Performance Products

 

141

 

115

 

23

%

262

 

233

 

12

%

Advanced Materials

 

58

 

53

 

9

%

116

 

99

 

17

%

Textile Effects

 

23

 

22

 

5

%

40

 

38

 

5

%

Pigments & Additives

 

35

 

23

 

52

%

56

 

49

 

14

%

Corporate, LIFO and other

 

(31

)

(47

)

34

%

(68

)

(91

)

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

385

 

$

363

 

6

%

$

670

 

$

692

 

(3

)%

 

See end of press release for footnote explanations

 

Table 3 — Pro Forma (2) Results of Operations by Segment

 

 

 

Three months ended

 

 

 

Six months ended

 

 

 

 

 

June 30,

 

Better /

 

June 30,

 

Better /

 

In millions, unaudited, pro forma

 

2015

 

2014

 

(Worse)

 

2015

 

2014

 

(Worse)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

995

 

$

1,318

 

(25

)%

$

1,885

 

$

2,525

 

(25

)%

Performance Products

 

675

 

833

 

(19

)%

1,331

 

1,598

 

(17

)%

Advanced Materials

 

282

 

324

 

(13

)%

572

 

643

 

(11

)%

Textile Effects

 

216

 

248

 

(13

)%

422

 

472

 

(11

)%

Pigments & Additives

 

592

 

740

 

(20

)%

1,164

 

1,429

 

(19

)%

Eliminations and other

 

(20

)

(67

)

70

%

(45

)

(138

)

67

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma total

 

$

2,740

 

$

3,396

 

(19

)%

$

5,329

 

$

6,529

 

(18

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Adjusted EBITDA(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

159

 

$

199

 

(20

)%

$

264

 

$

368

 

(28

)%

Performance Products

 

141

 

115

 

23

%

262

 

233

 

12

%

Advanced Materials

 

58

 

53

 

9

%

116

 

99

 

17

%

Textile Effects

 

23

 

22

 

5

%

40

 

38

 

5

%

Pigments & Additives

 

35

 

79

 

(56

)%

56

 

152

 

(63

)%

Corporate, LIFO and other

 

(31

)

(47

)

34

%

(68

)

(91

)

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma total

 

$

385

 

$

421

 

(9

)%

$

670

 

$

799

 

(16

)%

 

See end of press release for footnote explanations

 

6



 

Table 4 — Factors Impacting Sales Revenues

 

 

 

Three months ended

 

 

 

June 30, 2015 vs. 2014

 

 

 

Average Selling Price(a)

 

 

 

 

 

 

 

 

 

Local

 

Exchange

 

Sales Mix

 

Sales

 

 

 

Unaudited

 

Currency

 

Rate

 

& Other(c)

 

Volume(b)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

(9

)%

(7

)%

8

%

(16

)%

(24

)%

Performance Products

 

(6

)%

(6

)%

(4

)%

(3

)%

(19

)%

Advanced Materials

 

2

%

(9

)%

(2

)%

(4

)%

(13

)%

Textile Effects

 

(3

)%

(6

)%

3

%

(7

)%

(13

)%

Pigments & Additives

 

(10

)%

(10

)%

99

%

(5

)%

74

%

Total Company

 

(5

)%

(8

)%

15

%

(10

)%

(8

)%

 

 

 

Six months ended

 

 

 

June 30, 2015 vs. 2014

 

 

 

Average Selling Price(a)

 

 

 

 

 

 

 

 

 

Local

 

Exchange

 

Sales Mix

 

Sales

 

 

 

Unaudited

 

Currency

 

Rate

 

& Other(c)

 

Volume(b)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

(7

)%

(6

)%

7

%

(19

)%

(25

)%

Performance Products

 

(4

)%

(5

)%

(2

)%

(6

)%

(17

)%

Advanced Materials

 

3

%

(8

)%

(1

)%

(5

)%

(11

)%

Textile Effects

 

3

%

(6

)%

1

%

(9

)%

(11

)%

Pigments & Additives

 

(9

)%

(9

)%

102

%

(7

)%

77

%

Total Company

 

(4

)%

(7

)%

16

%

(12

)%

(7

)%

 


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

(b) Excludes sales from by-products and raw materials.

(c) Includes full revenue impact from the October 1, 2014 acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc.

 

7



 

Table 5 — Factors Impacting Pro Forma (2) Sales Revenues

 

 

 

Three months ended

 

 

 

June 30, 2015 vs. 2014

 

 

 

Average

 

 

 

 

 

 

 

 

 

Selling

 

Sales Mix

 

Sales

 

 

 

Unaudited, pro forma

 

Price(a)

 

& Other

 

Volume(b)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

(16

)%

7

%

(4

)%

(c)

(13

)%

Performance Products

 

(12

)%

(4

)%

2

%

(d)

(14

)%

Advanced Materials

 

(7

)%

(2

)%

 

(e)

(9

)%

Textile Effects

 

(9

)%

3

%

(7

)%

 

(13

)%

Pigments & Additives

 

(20

)%

2

%

(2

)%

 

(20

)%

Total Company

 

(15

)%

6

%

(2

)%

 

(11

)%

 

 

 

Six months ended

 

 

 

June 30, 2015 vs. 2014

 

 

 

Average

 

 

 

 

 

 

 

 

 

Selling

 

Sales Mix

 

Sales

 

 

 

Unaudited, pro forma

 

Price(a)

 

& Other

 

Volume(b)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

(13

)%

7

%

(19

)%

(25

)%

Performance Products

 

(9

)%

(2

)%

(6

)%

(17

)%

Advanced Materials

 

(5

)%

(1

)%

(5

)%

(11

)%

Textile Effects

 

(3

)%

1

%

(9

)%

(11

)%

Pigments & Additives

 

(19

)%

2

%

(2

)%

(19

)%

Total Company

 

(13

)%

7

%

(12

)%

(18

)%

 


(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 planned maintenance at our PO/MTBE facility in 2Q15.

(d) Excludes volume impact from closure of European surfactants plant in 2Q14.

(e) Excludes volume impact from de-selection of lower margin business.

 

8



 

Table 6 — Reconciliation of U.S. GAAP to Non-GAAP Measures

 

 

 

 

 

 

 

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

 

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

In millions, except per share amounts, unaudited

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP(1)

 

$

216

 

$

327

 

$

(34

)

$

(43

)

$

29

 

$

119

 

$

0.12

 

$

0.48

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration expenses, purchase accounting adjustments

 

12

 

9

 

(3

)

(2

)

9

 

7

 

0.04

 

0.03

 

Loss from discontinued operations, net of tax(3)

 

1

 

2

 

N/A

 

N/A

 

2

 

 

0.01

 

 

Loss (gain) on disposition of businesses/assets

 

1

 

(2

)

 

1

 

1

 

(1

)

 

 

Loss on early extinguishment of debt

 

20

 

 

(7

)

 

13

 

 

0.05

 

 

Certain legal settlements and related expenses

 

1

 

2

 

(1

)

 

 

2

 

 

0.01

 

Amortization of pension and postretirement actuarial losses

 

19

 

12

 

(5

)

(4

)

14

 

8

 

0.06

 

0.03

 

Restructuring, impairment, plant closing and transition costs

 

115

 

13

 

(28

)

(3

)

87

 

10

 

0.35

 

0.04

 

Adjusted(1)

 

$

385

 

$

363

 

$

(78

)

$

(51

)

$

155

 

$

145

 

$

0.63

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income tax expense

 

 

 

 

 

 

 

 

 

78

 

51

 

 

 

 

 

Net income attributable to noncontrolling interests, net of tax

 

 

 

 

 

 

 

 

 

10

 

5

 

 

 

 

 

Adjusted pre-tax income(1)

 

 

 

 

 

 

 

 

 

$

243

 

$

201

 

 

 

 

 

Adjusted effective tax rate

 

 

 

 

 

 

 

 

 

32

%

25

%

 

 

 

 

 

 

 

 

 

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

 

2015

 

2015

 

2015

 

2015

 

 

 

 

 

 

 

 

 

 

 

GAAP(1)

 

$

159

 

$

(2

)

$

5

 

$

0.02

 

Adjustments:

 

 

 

 

 

 

 

 

 

Acquisition and integration expenses, purchase accounting adjustments

 

9

 

(2

)

7

 

0.03

 

Loss from discontinued operations, net of tax(3)

 

1

 

N/A

 

2

 

0.01

 

Loss on early extinguishment of debt

 

3

 

(1

)

2

 

0.01

 

Certain legal settlements and related expenses

 

1

 

 

1

 

 

Amortization of pension and postretirement actuarial losses

 

18

 

(5

)

13

 

0.05

 

Restructuring, impairment, plant closing and transition costs

 

94

 

(26

)

68

 

0.28

 

Adjusted(1)

 

$

285

 

$

(36

)

$

98

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

Adjusted income tax expense

 

 

 

 

 

36

 

 

 

Net income attributable to noncontrolling interests, net of tax

 

 

 

 

 

10

 

 

 

Adjusted pre-tax income(1)

 

 

 

 

 

$

144

 

 

 

Adjusted effective tax rate

 

 

 

 

 

25

%

 

 

 

 

 

 

 

 

 

Income Tax

 

Net Income

 

Diluted Income

 

 

 

EBITDA

 

Expense

 

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

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP(1)

 

$

375

 

$

588

 

$

(36

)

$

(79

)

$

34

 

$

173

 

$

0.14

 

$

0.71

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration expenses, purchase accounting adjustments

 

21

 

17

 

(5

)

(4

)

16

 

13

 

0.06

 

0.05

 

Loss from discontinued operations, net of tax(3)

 

2

 

9

 

N/A

 

N/A

 

4

 

7

 

0.02

 

0.03

 

Loss (gain) on disposition of businesses/assets

 

1

 

(2

)

 

1

 

1

 

(1

)

 

 

Loss on early extinguishment of debt

 

23

 

 

(8

)

 

15

 

 

0.06

 

 

Certain legal settlements and related expenses

 

2

 

2

 

(1

)

 

1

 

2

 

 

0.01

 

Amortization of pension and postretirement actuarial losses

 

37

 

25

 

(10

)

(8

)

27

 

17

 

0.11

 

0.07

 

Restructuring, impairment, plant closing and transition costs

 

209

 

53

 

(54

)

(14

)

155

 

39

 

0.63

 

0.16

 

Adjusted(1)

 

$

670

 

$

692

 

$

(114

)

$

(104

)

$

253

 

$

250

 

$

1.02

 

$

1.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income tax expense

 

 

 

 

 

 

 

 

 

114

 

104

 

 

 

 

 

Net income attributable to noncontrolling interests, net of tax

 

 

 

 

 

 

 

 

 

20

 

13

 

 

 

 

 

Adjusted pre-tax income(1)

 

 

 

 

 

 

 

 

 

$

387

 

$

367

 

 

 

 

 

Adjusted effective tax rate

 

 

 

 

 

 

 

 

 

29

%

28

%

 

 

 

 

 

See end of press release for footnote explanations

 

9



 

Table 7 — Pro Forma (2) Reconciliation of U.S. GAAP to Non-GAAP Measures

 

 

 

Pro Forma EBITDA

 

 

 

Three months ended

 

 

 

June 30,

 

In millions, except per share amounts, unaudited, pro forma

 

2015

 

2014

 

 

 

 

 

 

 

GAAP(1)

 

$

216

 

$

383

 

Adjustments:

 

 

 

 

 

Allocation of Rockwood general corporate overhead

 

 

7

 

Acquisition and integration expenses, purchase accounting adjustments

 

12

 

3

 

Loss from discontinued operations, net of tax(3)

 

1

 

2

 

Loss (gain) on disposition of businesses/assets

 

1

 

(2

)

Loss on early extinguishment of debt

 

20

 

 

Certain legal settlements and related expenses

 

1

 

2

 

Amortization of pension and postretirement actuarial losses

 

19

 

13

 

Restructuring, impairment, plant closing and transition costs

 

115

 

13

 

 

 

 

 

 

 

Pro forma adjusted(2)

 

$

385

 

$

421

 

 

 

 

Pro Forma EBITDA

 

 

 

Three months ended

 

 

 

March 31,

 

In millions, except per share amounts, unaudited pro forma

 

2015

 

 

 

 

 

GAAP(1)

 

$

159

 

Adjustments:

 

 

 

Acquisition and integration expenses, purchase accounting adjustments

 

9

 

Loss from discontinued operations, net of tax(3)

 

1

 

Loss on early extinguishment of debt

 

3

 

Certain legal settlements and related expenses

 

1

 

Amortization of pension and postretirement actuarial losses

 

18

 

Restructuring, impairment, plant closing and transition costs

 

94

 

 

 

 

 

Pro forma adjusted(2)

 

$

285

 

 

 

 

Pro Forma EBITDA

 

 

 

Six months ended

 

 

 

June 30,

 

In millions, except per share amounts, unaudited pro forma

 

2015

 

2014

 

 

 

 

 

 

 

GAAP(1)

 

$

375

 

$

691

 

Adjustments:

 

 

 

 

 

Allocation of general corporate overhead

 

 

14

 

Acquisition and integration expenses, purchase accounting adjustments

 

21

 

5

 

Loss from discontinued operations, net of tax(3)

 

2

 

9

 

Loss (gain) on disposition of businesses/assets

 

1

 

(2

)

Loss on early extinguishment of debt

 

23

 

 

Certain legal settlements and related expenses

 

2

 

2

 

Amortization of pension and postretirement actuarial losses

 

37

 

27

 

Restructuring, impairment, plant closing and transition costs

 

209

 

53

 

 

 

 

 

 

 

Pro forma adjusted(2)

 

$

670

 

$

799

 

 

See end of press release for footnote explanations

 

10



 

Table 8 — Reconciliation of Net Income to EBITDA

 

 

 

Three months ended

 

Six months ended

 

 

 

June 30,

 

March 31,

 

June 30,

 

In millions, unaudited

 

2015

 

2014

 

2015

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Huntsman Corporation

 

$

29

 

$

119

 

$

5

 

$

34

 

$

173

 

Interest expense

 

53

 

51

 

56

 

109

 

99

 

Income tax expense from continuing operations

 

34

 

43

 

2

 

36

 

79

 

Income tax expense (benefit) from discontinued operations(3)

 

1

 

(2

)

1

 

2

 

(2

)

Depreciation and amortization

 

99

 

116

 

95

 

194

 

239

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA(1)

 

216

 

327

 

159

 

375

 

588

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma adjustments to:

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Huntsman Corporation

 

 

23

 

 

 

38

 

Interest expense

 

 

8

 

 

 

23

 

Income tax expense from continuing operations

 

 

19

 

 

 

28

 

Depreciation and amortization

 

 

6

 

 

 

14

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma EBITDA(2)

 

$

216

 

$

383

 

$

159

 

$

375

 

$

691

 

 

See end of press release for footnote explanations

 

Table 9 — Selected Balance Sheet Items

 

 

 

June 30,

 

March 31,

 

December 31,

 

In millions

 

2015

 

2015

 

2014

 

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

608

 

$

1,003

 

$

870

 

Accounts and notes receivable, net

 

1,754

 

1,668

 

1,707

 

Inventories

 

1,938

 

1,869

 

2,025

 

Other current assets

 

295

 

347

 

437

 

Property, plant and equipment, net

 

4,328

 

4,250

 

4,423

 

Other assets

 

1,655

 

1,614

 

1,540

 

 

 

 

 

 

 

 

 

Total assets

 

$

10,578

 

$

10,751

 

$

11,002

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,209

 

$

1,191

 

$

1,275

 

Other current liabilities

 

786

 

754

 

790

 

Current portion of debt

 

127

 

529

 

267

 

Long-term debt

 

4,920

 

4,829

 

4,933

 

Other liabilities

 

1,694

 

1,675

 

1,786

 

Total equity

 

1,842

 

1,773

 

1,951

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

10,578

 

$

10,751

 

$

11,002

 

 

11



 

Table 10 — Outstanding Debt

 

 

 

June 30,

 

March 31,

 

December 31,

 

In millions

 

2015

 

2015

 

2014

 

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Debt:

 

 

 

 

 

 

 

Senior credit facilities

 

$

2,509

 

$

2,512

 

$

2,528

 

Accounts receivable programs

 

217

 

214

 

229

 

Senior notes

 

1,884

 

1,862

 

1,596

 

Senior subordinated notes

 

198

 

493

 

531

 

Variable interest entities

 

165

 

198

 

207

 

Other debt

 

74

 

79

 

109

 

 

 

 

 

 

 

 

 

Total debt - excluding affiliates

 

5,047

 

5,358

 

5,200

 

 

 

 

 

 

 

 

 

Total cash

 

608

 

1,003

 

870

 

 

 

 

 

 

 

 

 

Net debt- excluding affiliates

 

$

4,439

 

$

4,355

 

$

4,330

 

 

Table 11 — Summarized Statement of Cash Flows

 

 

 

Three months ended

 

Six months ended

 

 

 

June 30,

 

June 30,

 

In millions, unaudited

 

2015

 

2015

 

2014

 

 

 

 

 

 

 

 

 

Total cash at beginning of period(a)

 

$

1,003

 

$

870

 

$

529

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

 

147

 

181

 

(17

)

Net cash used in investing activities

 

(152

)

(233

)

(202

)

Net cash (used in) provided by financing activities

 

(391

)

(202

)

103

 

Effect of exchange rate changes on cash

 

1

 

(7

)

(1

)

Change in restricted cash

 

 

(1

)

 

 

 

 

 

 

 

 

 

Total cash at end of period(a)

 

$

608

 

$

608

 

$

412

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

Cash paid for interest

 

$

(67

)

$

(115

)

$

(91

)

Cash paid for income taxes

 

(19

)

(30

)

(143

)

Cash paid for capital expenditures

 

(147

)

(296

)

(214

)

Depreciation and amortization

 

99

 

194

 

239

 

 

 

 

 

 

 

 

 

Changes in primary working capital:

 

 

 

 

 

 

 

Accounts and notes receivable

 

$

(93

)

$

(142

)

$

(300

)

Inventories

 

(47

)

7

 

(109

)

Accounts payable

 

14

 

12

 

94

 

 

 

 

 

 

 

 

 

Total cash used in primary working capital

 

$

(126

)

$

(123

)

$

(315

)

 


(a) Includes restricted cash.

 

12



 


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:  (a) acquisition and integration expenses, purchase accounting adjustments; (b) loss (gain) on initial consolidation of subsidiaries; (c) EBITDA from discontinued operations; (d) loss (gain) on disposition of businesses/assets; (e) loss on early extinguishment of debt; (f) extraordinary loss (gain) on the acquisition of a business; (g) certain legal settlements and related expenses; (h) amortization of pension and postretirement actuarial losses (gains); and (i) 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: (a) acquisition and integration expenses, purchase accounting adjustments; (b) impact of certain foreign tax credit elections; (c) loss (gain) on initial consolidation of subsidiaries; (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) extraordinary loss (gain) on the acquisition of a business; (i) certain legal settlements and related expenses; (j) amortization of pension and postretirement actuarial losses (gains); and (k) 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)   Pro forma adjusted as if it had occurred at the beginning of the relevant period to (a) include the October 1, 2014 acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc.; (b) to exclude the related sale of our TR52 product line — used in printing inks — to Henan Billions Chemicals Co., Ltd. in December 2014; and (c) to exclude the allocation of general corporate overhead by Rockwood.

 

(3)   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 2014 revenues of approximately $13 billion including the acquisition of Rockwood’s performance additives and titanium dioxide businesses. 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 more than 30 countries and employ approximately 16,000 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.

 

13