Exhibit 99.1

 

News Release

 

 

Huntsman Announces Fourth Quarter and Full Year 2016 Results;

Delivers a Record $686 Million of Free Cash Flow

 

Fourth Quarter 2016 Highlights

 

·                 Net income was $137 million compared to $9 million in the prior year period and $64 million in the prior quarter.

 

·                 Adjusted EBITDA was $256 million compared to $240 million in the prior year period and $272 million in the prior quarter.

 

·                 Diluted income per share was $0.53 compared to $0.02 in the prior year period and $0.23 in the prior quarter.

 

·                 Adjusted diluted income per share was $0.30 compared to $0.51 in the prior year period and $0.38 in the prior quarter.

 

·                  Net cash provided by operating activities was $240 million. Free cash flow generation was $117 million.

 

·                  On December 30, 2016, we completed the sale of our European surfactants business for an enterprise value of $225 million.

 

·                  On December 30, 2016, we made a $260 million early repayment of debt.

 

Full Year 2016 Highlights

 

·                 Net income was $357 million compared to $126 million in the prior year.

 

·                 Adjusted EBITDA was $1,127 million compared to $1,221 million in the prior year.

 

·                  Net cash provided by operating activities was $1,088 million compared to $575 million in the prior year. Free cash flow generation was $686 million compared to negative free cash flow of $30 million in the prior year.

 

·                  We repaid $560 million of debt during the year from cash generation and proceeds from the sale of our European surfactants business.  This represents a 12% reduction in debt during 2016.

 

 

		Three months ended									Twelve months ended
		December 31,						September 30,			December 31,
In millions, except per share amounts		2016			2015			2016			2016			2015
Revenues		$	2,395		$	2,332		$	2,363		$	9,657		$	10,299
Net income		$	137		$	9		$	64		$	357		$	126
Adjusted net income(1)		$	72		$	124		$	91		$	377		$	492
Diluted income per share		$	0.53		$	0.02		$	0.23		$	1.36		$	0.38
Adjusted diluted income per share(1)		$	0.30		$	0.51		$	0.38		$	1.57		$	2.00
Adjusted EBITDA(1)		$	256		$	240		$	272		$	1,127		$	1,221
Net cash provided by operating activities		$	240		$	188		$	405		$	1,088		$	575
Free cash flow(3)		$	117		$	(29	)	$	300		$	686		$	(30	)

 

See end of press release for footnote explanations

 

THE WOODLANDS, Texas — Huntsman Corporation (NYSE: HUN) today reported fourth quarter 2016 results with revenues of $2,395 million, net income of $137 million and adjusted EBITDA of $256 million.

 

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

 

“At the beginning of 2016, we announced our intent to generate more than $350 million of free cash flow. We delivered a record $686 million of free cash flow in 2016, including $117 million during the fourth quarter. We used this cash, together with proceeds from the sale of our European surfactants business, to repay $560 million in debt, significantly strengthening our balance sheet.

 

“As I look at the past year, I am impressed by the quality of earnings that our businesses have achieved and how we are positioned moving into 2017. MDI urethanes continues to show steady and impressive growth, with differentiated MDI sales volumes growing 6% compared to last year and representing 85% of MDI urethanes EBITDA. Advanced Materials and Textile Effects have become solid performers with steady and modestly improving earnings. Our Performance Products business is poised for recovery in 2017. As TiO2 prices have rebounded, our Pigments and Additives division saw earnings double from 2015 and we expect earnings to improve meaningfully in 2017, due largely to price increases in TiO2 and the cumulative benefits of restructuring.

 

“We are also delivering on our commitment to separate the TiO2 business through the spin-off of Venator. We continue to make steady progress with the IRS to allow Huntsman to retain a 40% economic interest in Venator.”

 

Segment Analysis for 4Q16 Compared to 4Q15

 

Polyurethanes

 

The increase in revenues in our Polyurethanes division for the three months ended December 31, 2016 compared to the same period in 2015 was primarily due to higher MDI average selling prices and higher MDI sales volumes. MDI average selling prices increased sharply in Asia primarily as a result of a competitor’s outage.  MDI sales volumes increased primarily due to higher demand in the Americas region. The decrease in adjusted EBITDA was primarily due to lower MTBE margins, partially offset by higher MDI margins and sales volumes.

 

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Performance Products

 

The decrease in revenues in our Performance Products division for the three months ended December 31, 2016 compared to the same period in 2015 was primarily due to lower average selling prices.  Average selling prices decreased primarily in response to lower raw material costs and competitive market conditions.  The decrease in adjusted EBITDA was primarily due to lower margins in our amines and maleic anhydride businesses.

 

Advanced Materials

 

The decrease in revenues in our Advanced Materials division for the three months ended December 31, 2016 compared to the same period in 2015 was due to lower sales volumes and lower average selling prices.  Sales volumes decreased primarily due to soft demand for low value business in our coatings and construction market, partially offset by growth in our electrical and electronic markets.  Average selling prices decreased primarily as a result of lower raw material costs.  Adjusted EBITDA increased as lower costs for raw materials and fixed costs more than offset lower sales volumes and lower average selling prices.

 

Textile Effects

 

Revenues in our Textile Effects division for the three months ended December 31, 2016 compared to the same period in 2015 were essentially flat as lower local currency average selling prices were offset by higher sales volumes.  Average selling prices decreased primarily due to lower raw material costs.  Sales volumes increased in in Asia, Europe and South America.  The increase in adjusted EBITDA was primarily due to higher volumes and lower raw material costs.

 

Pigments and Additives

 

The increase in revenues in our Pigments and Additives division for the three months ended December 31, 2016 compared to the same period in 2015 was due to higher average selling prices and higher volumes.  Average selling prices increased primarily due to improved business conditions for titanium dioxide.  Sales volumes increased broadly across all of the business.  The increase in adjusted EBITDA was primarily due to higher average selling prices for titanium dioxide and lower costs resulting from restructuring savings.

 

Corporate, LIFO and Other

 

Adjusted EBITDA from Corporate, LIFO and Other decreased by $14 million to a loss of $52 million for the three months ended December 31, 2016 compared to a loss of $38 million for the same period in 2015.  The decrease in adjusted EBITDA was primarily the result of an increase in LIFO inventory valuation expense and an increase in unallocated foreign currency exchange losses.

 

Liquidity, Capital Resources and Outstanding Debt

 

As of December 31, 2016, we had $1,208 million of combined cash and unused borrowing capacity compared to $1,023 million as of December 31, 2015.

 

We repaid $560 million in debt during 2016, including an early repayment of $260 million on our 2015 Extended Term Loan B on December 30, 2016.

 

During 2016 we spent $421 million on capital expenditures compared to $663 million in 2015. We expect to spend approximately $400 million annually on capital expenditures in 2017.

 

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Income Taxes

 

During the three months ended December 31, 2016, we recorded an income tax expense of $29 million.  During the same period we paid $11 million in cash for income taxes.

 

In 2016, our adjusted effective tax rate was 22%. We expect our long term adjusted effective tax rate will be approximately 30%. We believe our 2017 adjusted effective tax rate will be slightly less than the long term rate.

 

Earnings Conference Call Information

 

We will hold a conference call to discuss our fourth quarter 2016 financial results on Wednesday, February 15, 2017 at 10:00 a.m. ET.

 

Call-in numbers for the conference call:
U.S. participants	(888) 713 - 4209
International participants	(617) 213 - 4863
Passcode	207 418 41#

 

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=PKGK6Q9D7

 

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 February 15, 2017 and ending February 22, 2017.

 

Call-in numbers for the replay:
U.S. participants	(888) 286 - 8010
International participants	(617) 801 - 6888
Replay code	30397182

 

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Table 1 — Results of Operations

 

		Three months ended						Twelve months ended
		December 31,						December 31,
In millions, except per share amounts		2016			2015			2016			2015
Revenues		$	2,395		$	2,332		$	9,657		$	10,299
Cost of goods sold		1,988			1,956			7,979			8,451
Gross profit		407			376			1,678			1,848
Operating expenses		180			282			932			1,141
Restructuring, impairment and plant closing (credits) costs		(6		)	81			81			302
Spin-off separation expenses		18			—			18			—
Operating income		215			13			647			405
Interest expense		(50		)	(47		)	(202		)	(205		)
Equity in income of investment in unconsolidated affiliates		1			1			5			6
Loss on early extinguishment of debt		—			—			(3		)	(31		)
Other income		1			3			1			1
Income (loss) before income taxes		167			(30		)	448			176
Income tax (expense) benefit		(29		)	39			(87		)	(46		)
Income from continuing operations		138			9			361			130
Loss from discontinued operations, net of tax(2)		(1		)	—			(4		)	(4		)
Net income		137			9			357			126
Net income attributable to noncontrolling interests, net of tax		(9		)	(5		)	(31		)	(33		)
Net income attributable to Huntsman Corporation		$	128		$	4		$	326		$	93
Adjusted EBITDA(1)		$	256		$	240		$	1,127		$	1,221
Adjusted net income(1)		$	72		$	124		$	377		$	492
Basic income per share		$	0.54		$	0.02		$	1.38		$	0.38
Diluted income per share		$	0.53		$	0.02		$	1.36		$	0.38
Adjusted diluted income per share(1)		$	0.30		$	0.51		$	1.57		$	2.00
Common share information:
Basic shares outstanding		236			239			236			243
Diluted shares		241			241			240			245
Diluted shares for adjusted diluted income per share		241			241			240			245

 

See end of press release for footnote explanations

 

5

 

Table 2 — Results of Operations by Segment

 

		Three months ended								Twelve months ended
		December 31,						Better /		December 31,						Better /
In millions		2016			2015			(Worse)		2016			2015			(Worse)
Segment Revenues:
Polyurethanes		$	964		$	909		6	%	$	3,667		$	3,811		(4	)%
Performance Products		515			552			(7	)%	2,126			2,501			(15	)%
Advanced Materials		246			256			(4	)%	1,020			1,103			(8	)%
Textile Effects		184			186			(1	)%	751			804			(7	)%
Pigments & Additives		491			453			8	%	2,139			2,160			(1	)%
Corporate and eliminations		(5		)	(24		)	n/m		(46		)	(80		)	n/m
Total		$	2,395		$	2,332		3	%	$	9,657		$	10,299		(6	)%
Segment Adjusted EBITDA(1):
Polyurethanes		$	130		$	141		(8	)%	$	569		$	573		(1	)%
Performance Products		68			76			(11	)%	316			460			(31	)%
Advanced Materials		50			48			4	%	223			220			1	%
Textile Effects		14			13			8	%	73			63			16	%
Pigments & Additives		46			—			n/m		130			61			113	%
Corporate, LIFO and other		(52		)	(38		)	(37	)%	(184		)	(156		)	(18	)%
Total		$	256		$	240		7	%	$	1,127		$	1,221		(8	)%

 

n/m = not meaningful

See end of press release for footnote explanations

 

6

 

Table 3 — Factors Impacting Sales Revenue

 

		Three months ended
		December 31, 2016 vs. 2015
		Average Selling Price(a)
		Local		Exchange		Sales Mix		Sales
		Currency		Rate		& Other		Volume(b)		Total
Polyurethanes		4	%	(1	)%	0	%	3	%	6	%
Polyurethanes, adj								9	%	12	%	(e)
Performance Products		(5	)%	0	%	(3	)%	1	%	(7	)%
Performance Products, adj								6	%	(2	)%	(e)
Advanced Materials		(2	)%	0	%	1	%	(3	)%	(4	)%
Textile Effects		(8	)%	(1	)%	0	%	8	%	(1	)%
Pigments & Additives		7	%	(1	)%	(3	)%	5	%	8	%
Total Company		1	%	(1	)%	0	%	3	%	3	%
Total Company, adj								7	%	7	%	(e)

 

		Twelve months ended
		December 31, 2016 vs. 2015
		Average Selling Price(a)
		Local		Exchange		Sales Mix		Sales
		Currency		Rate		& Other		Volume(b)		Total
Polyurethanes		(9	)%	(1	)%	(5	)%	11	%	(4	)%
Polyurethanes, adj								6	%	(9	)%	(c)(e)
Performance Products		(8	)%	(1	)%	(4	)%	(2	)%	(15	)%
Performance Products, adj								0	%	(13	)%	(e)
Advanced Materials		(2	)%	(2	)%	3	%	(7	)%	(8	)%
Textile Effects		(6	)%	(3	)%	(1	)%	3	%	(7	)%
Pigments & Additives		(4	)%	(1	)%	0	%	4	%	(1	)%
Pigments & Additives, adj								3	%	(2	)%	(d)
Total Company		(7	)%	(1	)%	(3	)%	5	%	(6	)%
Total Company, adj								4	%	(7	)%	(c)(d)(e)

 

(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 the planned maintenance at our PO/MTBE facility that occurred in 1H15.

(d) Excludes volume impact from nitrogen tank incident at our Uerdingen, Germany facility in 3Q15.

(e) Excludes volume impact from weather related and other production outages in 2H16.

 

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

 

								Income Tax												Diluted Income
		EBITDA						(Expense) Benefit						Net Income						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		2016			2015			2016			2015			2016			2015			2016			2015
Net income		$	137		$	9								$	137		$	9		$	0.57		$	0.04
Net income attributable to noncontrolling interests		(9		)	(5		)							(9		)	(5		)	(0.04		)	(0.02		)
Net income attributable to Huntsman Corporation		128			4									128			4			0.53			0.02
Interest expense		50			47
Income tax expense (benefit) from continuing operations		29			(39		)	(29		)	39
Income tax benefit from discontinued operations(2)		(1		)	(3		)
Depreciation and amortization		110			102
Acquisition and integration expenses, purchase accounting adjustments		2			22			—			(6		)	2			16			0.01			0.07
Loss from discontinued operations, net of tax(2)		2			3			N/A			N/A			1			—			—			—
(Gain) loss on disposition of businesses/assets		(97		)	1			14			—			(83		)	1			(0.34		)	—
Loss on early extinguishment of debt		—			—			—			—			—			—			—			—
Certain legal settlements and related expenses		2			1			(1		)	—			1			1			—			—
Plant incident remediation costs, net		3			1			(1		)	—			2			1			0.01			—
Business separation costs		18			—			(5		)	—			13			—			0.05			—
Amortization of pension and postretirement actuarial losses		16			18			(2		)	(3		)	14			15			0.06			0.06
Restructuring, impairment, plant closing and transition (credits) costs		(6		)	83			—			3			(6		)	86			(0.02		)	0.36
Adjusted(1)		$	256		$	240		$	(24	)	$	33		$	72		$	124		$	0.30		$	0.51
Adjusted income tax expense (benefit)(4)														$	24		$	(33	)
Net income attributable to noncontrolling interests, net of tax														9			5
Adjusted pre-tax income(1)														$	105		$	96
Adjusted effective tax rate														23		%	-34		%

 

					Income Tax						Diluted Income
		EBITDA			(Expense) Benefit			Net Income			Per Share
		Three months ended			Three months ended			Three months ended			Three months ended
		September 30,			September 30,			September 30,			September 30,
In millions, except per share amounts		2016			2016			2016			2016
Net income		$	64					$	64		$	0.27
Net income attributable to noncontrolling interests		(9		)				(9		)	(0.04		)
Net income attributable to Huntsman Corporation		55						55			0.23
Interest expense		52
Income tax benefit from continuing operations		(1		)	1
Depreciation and amortization		113
Acquisition and integration expenses, purchase accounting adjustments		8			(4		)	4			0.02
Loss from discontinued operations, net of tax(2)		1			N/A			1			—
Gain on disposition of businesses/assets		(22		)	2			(20		)	(0.08		)
Loss on early extinguishment of debt		1			—			1			—
Certain legal settlements and related expenses		—			—			—			—
Plant incident remediation costs, net		4			—			4			0.02
Amortization of pension and postretirement actuarial losses		16			(4		)	12			0.05
Restructuring, impairment, plant closing and transition costs		45			(11		)	34			0.14
Adjusted(1)		$	272		$	(16	)	$	91		$	0.38
Adjusted income tax expense(4)								$	16
Net income attributable to noncontrolling interests, net of tax								9
Adjusted pre-tax income(1)								$	116
Adjusted effective tax rate								14		%

 

										Income Tax												Diluted Income
		EBITDA							(Expense) Benefit							Net Income						Per Share
		Twelve months ended							Twelve months ended							Twelve months ended						Twelve months ended
		December 31,							December 31,							December 31,						December 31,
In millions, except per share amounts		2016			2015				2016				2015			2016			2015			2016			2015
Net income		$	357		$	126										$	357		$	126		$	1.49		$	0.51
Net income attributable to noncontrolling interests		(31		)	(33			)								(31		)	(33		)	(0.13		)	(0.13		)
Net income attributable to Huntsman Corporation		326			93											326			93			1.36			0.38
Interest expense		202			205
Income tax expense from continuing operations		87			46				(87			)	(46		)
Income tax benefit from discontinued operations(2)		(2		)	(2			)
Depreciation and amortization		432			399
Acquisition and integration expenses, purchase accounting adjustments		23			53				(7			)	(13		)	16			40			0.07			0.16
Loss from discontinued operations, net of tax(2)		6			6				N/A				N/A			4			4			0.02			0.02
(Gain) loss on disposition of businesses/assets		(119		)	2				16				—			(103		)	2			(0.43		)	0.01
Loss on early extinguishment of debt		3			31				(1			)	(11		)	2			20			0.01			0.08
Certain legal settlements and related expenses		3			4				(1			)	(1		)	2			3			0.01			0.01
Plant incident remediation costs, net		1			4				—				(1		)	1			3			—			0.01
Business separation costs		18			—				(5			)	—			13			—			0.05			—
Amortization of pension and postretirement actuarial losses		65			74				(12			)	(17		)	53			57			0.22			0.23
Restructuring, impairment, plant closing and transition costs		82			306				(19			)	(36		)	63			270			0.26			1.10
Adjusted(1)		$	1,127		$	1,221			$		(116	)	$	(125	)	$	377		$	492		$	1.57		$	2.00
Adjusted income tax expense(4)																$	116		$	125
Net income attributable to noncontrolling interests, net of tax																31			33
Adjusted pre-tax income(1)																$	524		$	650
Adjusted effective tax rate																22		%	19		%

 

See end of press release for footnote explanations

 

8