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Huntsman Releases Fourth Quarter and Full Year 2011 Results; Reports Record Full Year Adjusted EBITDA of $1.2 Billion

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THE WOODLANDS, Texas, Feb. 16, 2012 /PRNewswire/ --

Fourth Quarter 2011 Highlights

  • Revenues improved 9% compared to the prior year period.
  • Net income attributable to Huntsman Corporation was $105 million or $0.44 per diluted share compared to $30 million or $0.12 per diluted share in the prior year period.
  • Adjusted EBITDA improved 11% to $243 million compared to the prior year period.
  • Adjusted diluted income per share improved 12% to $0.28 compared to the prior year period.

Full Year 2011 Highlights

  • Revenues improved 21% compared to the prior year.
  • Net income attributable to Huntsman Corporation was $247 million or $1.02 per diluted share compared to $27 million or $0.11 per diluted share in the prior year period.
  • Adjusted EBITDA improved 39% to $1,214 million compared to the prior year.
  • Adjusted diluted income per share improved 104% to $1.69 compared to the prior year.

Three months ended

Year ended


December 31,

September 30,

December 31,

In millions, except per share amounts, unaudited

2011

2010

2011

2011

2010











Revenues

$    2,632

$      2,412

$        2,976

$    11,221

$      9,250











Net income (loss) attributable to Huntsman Corporation

$       105

$           30

$           (34)

$         247

$           27

Adjusted net income(1)

$         68

$           60

$           114

$         408

$         200











Diluted income (loss) per share

$       0.44

$        0.12

$        (0.14)

$        1.02

$        0.11

Adjusted diluted income per share(1)

$       0.28

$        0.25

$          0.47

$        1.69

$        0.83











EBITDA(1)

$        273

$         167

$           204

$      1,039

$         700

Adjusted EBITDA(1)

$        243

$         219

$           346

$      1,214

$         875











See end of press release for footnote explanations


Huntsman Corporation (NYSE: HUN) today reported fourth quarter 2011 results with revenues of $2,632 million and adjusted EBITDA of $243 million.  

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

"Our adjusted EBITDA of $1.2 billion represents the best year we have accomplished with our current business portfolio.  This took place despite earnings pressure from foreign currency movements within the year and lower demand trends and aggressive customer destocking within the fourth quarter.

Looking forward, we anticipate that the corporation will see an improving global economy from this point forward.  Most of our businesses have strong upside potential as we see a continued recovery in the world's economy.  In 2012, we expect margin pressure on our Pigments business to be offset by improved earnings in our other divisions."

Segment Analysis for 4Q11 Compared to 4Q10

Polyurethanes

The increase in revenues in our Polyurethanes division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to higher average selling prices.  Average MDI and PO/MTBE selling prices increased primarily in response to higher raw material costs.  The decrease in adjusted EBITDA was due to higher manufacturing and selling, general and administrative costs and lower MDI contribution margins.

Performance Products

The increase in revenues in our Performance Products division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to higher average selling prices partially offset by lower sales volumes.  Average selling prices increased across most product groups with the exception of certain amines primarily in response to higher raw material costs.  Sales volumes decreased due to lower demand and customer destocking.  The decrease in adjusted EBITDA was primarily due to lower sales volumes and higher manufacturing and selling, general and administrative costs.

Advanced Materials

The decrease in revenues in our Advanced Materials division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to lower sales volumes partially offset by higher average selling prices.  Sales volumes decreased primarily due to lower demand in the wind energy market in the Asia Pacific region.  Average selling prices increased primarily in response to higher raw material costs.  The decrease in adjusted EBITDA was primarily due to the impact of the stronger Swiss franc, on our manufacturing and selling, general and administrative costs.

Textile Effects

The decrease in revenues in our Textile Effects division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to lower sales volumes.  Sales volumes decreased due to lower demand.  The decrease in adjusted EBITDA was primarily due to lower sales volumes and the impact of the stronger Swiss franc, on our manufacturing and selling, general and administrative costs.

Pigments

The increase in revenues in our Pigments division for the three months ended December 31, 2011 compared to the same period in 2010 was due to higher average selling prices partially offset by lower sales volumes.  Average selling prices increased in all regions of the world primarily as a result of higher raw material costs.  Sales volumes decreased primarily due to lower global economic growth and customer destocking particularly in the Asia Pacific region.  The increase in adjusted EBITDA in our Pigments division was primarily due to higher contribution margins partially offset by lower sales volumes.

Corporate, LIFO and Other

Corporate, LIFO and other includes unallocated corporate overhead, LIFO inventory valuation reserve adjustments and unallocated foreign exchange gains and losses.  During the fourth quarter of 2011, we began including unallocated foreign exchange gains and losses in adjusted EBITDA and adjusted income (loss) per share.  We believe this more accurately reflects the ongoing cost of operating a global business.  All relevant information for prior periods has been recast to reflect these changes.  Adjusted EBITDA from Corporate, LIFO and other increased by $22 million to a loss of $34 million for the three months ended December 31, 2011 compared to a loss of $56 million for the same period in 2010.  The increase in adjusted EBITDA was primarily the result of a $13 million decrease in LIFO inventory valuation expense ($6 million gain in 2011 compared to $7 million loss in 2010) and an increase in unallocated foreign exchange gains of $4 million ($5 million gain in 2011 compared to $1 million gain in 2010).

Income Taxes

During the three months and full year ended December 31, 2011 we recorded income tax benefit of $2 million and income tax expense of $109 million respectively.  Our adjusted effective income tax rate for the three months and full year ended December 31, 2011 was approximately 12% and 26% respectively.  We have tax valuation allowances in certain countries.  Improved earnings from our Pigments business generated a partial release of tax valuation allowances in the fourth quarter 2011 which had the effect of decreasing our effective income tax rate and resulted in an approximate benefit of $0.04 per diluted share.  We expect our long term effective income tax rate to be approximately 30 - 35%.  During the three months and full year ended December 31, 2011 we paid $35 million and $119 million in cash for income taxes respectively.  

Liquidity, Capital Resources and Outstanding Debt

As of December 31, 2011, we had $1,043 million of combined cash and unused borrowing capacity compared to $1,434 million at December 31, 2010.  In 2011, our primary net working capital increased by $258 million.  For the year ended December 31, 2011, we redeemed approximately $305 million of senior subordinated notes, including all of our remaining 6.875% senior subordinated euro notes due 2013 worth approximately $94 million which were redeemed during the fourth quarter of 2011.

Total capital expenditures, net of reimbursements for the three months and full year ended December 31, 2011 were $113 million and $327 million respectively.  We expect to spend approximately $425 million on capital expenditures, net of reimbursements, in 2012 which approximates our annual depreciation and amortization of $439 million in 2011.

Conference Call Information

We will hold a conference call to discuss our fourth quarter and full year 2011 financial results on Thursday February 16, 2012 at 10:00 a.m. ET.

Call-in numbers for the conference call:

U.S. participants

(888) 713 - 4213

International participants

(617) 213 - 4865

Passcode

46407990


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=PRVR4F6KC

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 February 16, 2012 and ending February 23, 2012.

Call-in numbers for the replay:

U.S. participants

(888) 286 - 8010

International participants

(617) 801 - 6888

Replay code

36963242


Table 1 -- Results of Operations


Three months ended

Year ended


December 31,

December 31,

In millions, except per share amounts, unaudited

2011

2010

2011

2010









Revenues

$     2,632

$      2,412

$    11,221

$      9,250

Cost of goods sold

2,243

2,032

9,381

7,789

Gross profit

389

380

1,840

1,461

Operating expenses

246

281

1,067

1,022

Restructuring, impairment and plant closing (credits) costs

(4)

5

167

29

Operating income

147

94

606

410

Interest expense, net

(62)

(61)

(249)

(229)

Equity in income of investment in unconsolidated affiliates

2

4

8

24

Loss on early extinguishment of debt

(2)

(14)

(7)

(183)

Expenses associated with the terminated merger and related litigation

-

-

-

(4)

Other income (loss)

2

(1)

2

2

Income before income taxes

87

22

360

20

Income tax benefit (expense)

2

17

(109)

(29)

Income (loss) from continuing operations

89

39

251

(9)

Income (loss) from discontinued operations, net of tax(2)

4

(6)

(1)

42

Extraordinary gain (loss) on the acquisition of a business, net of tax of nil

2

(1)

4

(1)

Net income

95

32

254

32

Net loss (income) attributable to noncontrolling interests, net of tax

10

(2)

(7)

(5)

Net income attributable to Huntsman Corporation

$        105

$           30

$         247

$           27


















Adjusted EBITDA(1)

$        243

$         219

$      1,214

$         875









Adjusted net income(1)

$           68

$           60

$         408

$         200


















Basic income per share

$       0.45

$        0.13

$        1.04

$        0.11

Diluted income per share

$       0.44

$        0.12

$        1.02

$        0.11

Adjusted diluted income per share(1)

$       0.28

$        0.25

$        1.69

$        0.83









Common share information:







Basic shares outstanding

235.7

236.6

237.6

236.0

Diluted shares

239.5

242.1

241.7

236.0

Diluted shares for adjusted diluted income per share

239.5

242.1

241.7

241.0









See end of press release for footnote explanations


Table 2 -- Results of Operations by Segment


Three months ended


Year ended



December 31,


December 31,

In millions, unaudited

2011

2010

Change

2011

2010

Change













Segment Revenues:











Polyurethanes

$     1,043

$         946

10%

$     4,434

$     3,605

23%

Performance Products

755

696

8%

3,301

2,659

24%

Advanced Materials

313

315

(1)%

1,372

1,244

10%

Textile Effects

174

189

(8)%

737

787

(6)%

Pigments

399

330

21%

1,642

1,213

35%

Eliminations and other

(52)

(64)

(19)%

(265)

(258)

3%













Total

$      2,632

$      2,412

9%

$   11,221

$    9,250

21%













Segment Adjusted EBITDA(1):











Polyurethanes

$           79

$           99

(20)%

$        476

$      320

49%

Performance Products

60

89

(33)%

374

367

2%

Advanced Materials

15

17

(12)%

111

141

(21)%

Textile Effects

(22)

(1)

NM

(64)

15

NM

Pigments

145

71

104%

508

215

136%

Corporate, LIFO and other

(34)

(56)

(39)%

(191)

(183)

4%













Total

$         243

$         219

11%

$     1,214

$      875

39%













See end of press release for footnote explanations

NM - Not meaningful


Table 3 -- Factors Impacting Sales Revenue


Three months ended


December 31, 2011 vs. 2010


Average Selling Price(a)







Local

Exchange

Sales Mix

Sales

Unaudited

Currency

Rate

& Other

Volume(a)

Total











Polyurethanes

11%   

-

(1)%   

-

10%

Performance Products

17%  

-

(3)%   

(6)%   

8%

Advanced Materials

3%  

-

(2)%   

(2)%   

(1)%

Textile Effects

-

-

(1)%   

(7)%   

(8)%

Pigments

38%  

-

1%   

(18)%   

21%

Total Company

12%  

-

1%   

(4)%   

9%













Year ended


December 31, 2011 vs. 2010


Average Selling Price(a)







Local

Exchange

Sales Mix

Sales

Unaudited

Currency

Rate

& Other

Volume(a)

Total











Polyurethanes

16%  

2%

(3)%   

8%   

23%

Performance Products

20%  

2%

(1)%   

3%   

24%

Advanced Materials

7%  

3%

-

-

10%

Textile Effects

-

3%

-

(9)%   

(6)%

Pigments

34%  

4%

(1)%   

(2)%   

35%

Total Company

16%  

3%

(3)%   

5%   

21%











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



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






Income Tax

Net Income (Loss)

Diluted Income (Loss)


EBITDA

(Expense) Benefit

Attrib. to HUN Corp.

Per Share


Three months ended

Three months ended

Three months ended

Three months ended


December 31,

December 31,

December 31,

December 31,

In millions, except per share amounts, unaudited

2011

2010

2011

2010

2011

2010

2011

2010

















GAAP(1)

$         273

$       167

$           2

$         17

$       105

$         30

$      0.44

$      0.12

Adjustments:















Legal settlements and related expenses

8

8

(3)

(3)

5

5

0.02

0.02

Loss on early extinguishment of debt

2

14

(1)

(5)

1

9

-

0.04

Restructuring, impairment and plant closing (credits)

costs

(4)

5

(7)

(1)

(11)

4

(0.05)

0.02

Discount amortization on settlement financing associated

with the terminated merger

N/A   


N/A   

(2)

(3)

5

4

0.02

0.02

Acquisition expenses

-

1

-

-

-

1

-

-

Gain on disposition of businesses/assets

(34)

-

3

-

(31)

-

(0.13)

-

Loss (income) from discontinued operations, net of tax(2)

-

23

N/A   

N/A   

(4)

6

(0.02)

0.02

Extraordinary (gain) loss on the acquisition of a business, net of tax

(2)

1

N/A   

N/A   

(2)

1

(0.01)

-

















Adjusted(1)

$          243

$       219

$         (8)

$           5

$         68

$         60

$      0.28

$      0.25

















Adjusted income tax expense (benefit)








8

(5)



Net (loss) income attributable to noncontrolling interests, net of tax








(10)

2




















Adjusted pre-tax income(1)








$          66

$          57




















Adjusted effective tax rate








12%  

-9%  











































Income Tax

Net Income (Loss)

Diluted Income (Loss)


EBITDA

(Expense) Benefit

Attrib. to HUN Corp.

Per Share


Three months ended

Three months ended

Three months ended

Three months ended


September 30,

September 30,

September 30,

September 30,

In millions, except per share amounts, unaudited

2011

2011

2011

2011

















GAAP(1)

$          204


$       (55)


$       (34)


$     (0.14)

Adjustments:















Legal settlements and related expenses

4


(1)


3


0.01

Loss on early extinguishment of debt

2


(1)


1


-

Restructuring, impairment and plant closing costs

155


(3)


152


0.63

Discount amortization on settlement financing associated with the terminated merger

N/A




(3)


4


0.02

Acquisition expenses

1


-


1


-

Gain on disposition of businesses/assets

(3)


-


(3)


(0.01)

Income from discontinued operations, net of tax(2)

(17)


N/A




(10)


(0.04)


















Adjusted(1)

$          346


$       (63)


$       114


$       0.47


















Adjusted income tax expense








63





Net income attributable to noncontrolling interests, net of tax








2






















Adjusted pre-tax income(1)








$        179






















Adjusted effective tax rate








35%  













































Income Tax

Net Income (Loss)

Diluted Income (Loss)


EBITDA

(Expense) Benefit

Attrib. to HUN Corp.

Per Share


Year ended

Year ended

Year ended

Year ended


December 31,

December 31,

December 31,

December 31,

In millions, except per share amounts, unaudited

2011

2010

2011

2010

2011

2010

2011

2010

















GAAP(1)

$       1,039

$       700

$     (109)

$       (29)

$       247

$         27

$      1.02

$      0.11

Adjustments:















Legal settlements and related expenses

46

8

(17)

(3)

29

5

0.12

0.02

Loss on early extinguishment of debt

7

183

(3)

(22)

4

161

0.02

0.67

Gain on consolidation of a variable interest entity

(12)

-

2

-

(10)

-

(0.04)

-

Restructuring, impairment and plant closing costs

167

29

(11)

(2)

156

27

0.65

0.11

Expenses associated with the terminated merger and related litigation

-

4

-

(1)

-

3

-

0.01

Discount amortization on settlement financing associated

with the terminated merger

N/A


N/A


(10)

(10)

18

16

0.07

0.07

Acquisition expenses

5

3

(1)

(1)

4

2

0.02

0.01

Gain on disposition of businesses/assets

(40)

-

3

-

(37)

-

(0.15)

-

Loss (income) from discontinued operations, net of tax(2)

6

(53)

N/A


N/A


1

(42)

-

(0.17)

Extraordinary (gain) loss on the acquisition of a business, net of tax

(4)

1

N/A


N/A


(4)

1

(0.02)

-

















Adjusted(1)

$       1,214

$       875

$     (146)

$       (68)

$       408

$        200

$       1.69

$       0.83

















Adjusted income tax expense








146

68



Net income attributable to noncontrolling interests, net of tax








7

5




















Adjusted pre-tax income(1)








$       561

$       273




















Adjusted effective tax rate








26%  

25%  




















See end of press release for footnote explanations

















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


Three months ended

Year ended


December 31,

September 30,

December 31,

In millions, unaudited

2011

2010

2011

2011

2010











Net income (loss) attributable to Huntsman Corporation

$       105

$         30

$           (34)

$        247

$          27

Interest expense, net

62

61

63

249

229

Income tax (benefit) expense from continuing operations

(2)

(17)

55

109

29

Income tax (benefit) expense from discontinued operations(2)

(4)

(17)

7

(5)

10

Depreciation and amortization of continuing operations

112

110

113

439

404

Depreciation and amortization of discontinued operations(2)

-

-

-

-

1











EBITDA(1)

$       273

$       167

$         204

$     1,039

$        700











See end of press release for footnote explanations











Table 6 -- Selected Balance Sheet Items


December 31,

September 30,

December 31,

In millions

2011

2011

2010




(unaudited)








Cash

$                562

$                459

$                973

Accounts and notes receivable, net

1,529

1,762

1,413

Inventories

1,539

1,687

1,396

Other current assets

316

366

226

Property, plant and equipment, net

3,622

3,659

3,605

Other assets

1,089

1,075

1,101







Total assets

$             8,657

$             9,008

$             8,714







Accounts payable

$                  862

$                  941

$                  842

Other current liabilities

752

787

692

Current portion of debt

212

230

519

Long-term debt

3,730

3,847

3,627

Other liabilities

1,325

1,269

1,184

Total equity

1,776

1,934

1,850







Total liabilities and equity

$             8,657

$             9,008

$             8,714


Table 7 -- Outstanding Debt


December 31,

September 30,

December 31,

In millions

2011

2011

2010




(unaudited)








Debt:





Senior credit facilities

$             1,696

$             1,694

$             1,688

Accounts receivable programs

237

245

238

Senior notes

472

467

452

Senior Subordinated notes

976

1,076

1,279

Variable interest entities

281

306

200

Other debt

280

289

289







Total debt - excluding affiliates

3,942

4,077

4,146







Total cash

562

459

973







Net debt- excluding affiliates

$             3,380

$             3,618

$             3,173


Table 8 -- Summarized Statement of Cash Flows

Three months ended

Year ended


December 31,

December 31,

In millions, unaudited

2011

2011

2010







Total cash at beginning of period

$                       459

$        973

$      1,750







Net cash provided by (used in) operating activities

340

365

(58)

Net cash used in investing activities

(80)

(280)

(182)

Net cash used in financing activities

(155)

(490)

(543)

Effect of exchange rate changes on cash

(4)

(7)

4

Change in restricted cash

2

1

2







Total cash at end of period

$                      562

$        562

$         973







Supplemental cash flow information:





Cash paid for interest

$                       (26)

$       (204)

$       (203)

Cash paid for income taxes

$                       (35)

$       (119)

$           (6)

Cash paid for capital expenditures

$                     (113)

$       (330)

$       (236)

Depreciation & amortization

$                      112

$        439

$        405







Changes in primary working capital:





Accounts and notes receivable

$                      193

$       (121)

$      (183)

Inventories

112

(161)

(207)

Accounts payable

(57)

24

83

Total

$                      248

$       (258)

$      (307)









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:  EBITDA from discontinued operations; restructuring, impairment and plant closing (credits) costs; income and expense associated with the terminated merger and related litigation; acquisition related expenses; certain legal and contract settlements; losses on the early extinguishment of debt; gain on consolidation of a variable interest entity; extraordinary (gain) loss on the acquisition of a business; and loss (gain) on disposition of business/assets.  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: loss (income) from discontinued operations; restructuring, impairment and plant closing (credits) costs; income and expense associated with the terminated merger and related litigation; discount amortization on settlement financing associated with the terminated merger; acquisition related expenses; certain legal and contract settlements; losses on the early extinguishment of debt; gain on consolidation of a variable interest entity; extraordinary (gain) loss on the acquisition of a business; and loss (gain) on disposition of business/assets.   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.



Starting in the fourth quarter of 2011, we no longer exclude unallocated foreign exchange gains and losses in adjusted EBITDA and adjusted income (loss) per share.  We believe this more accurately reflects the ongoing cost of operating a global business.  All relevant information for prior periods has been recast to reflect these changes.


(2)

On November 5, 2007, we completed the sale of our U.S. base chemicals business to Flint Hills Resources.  During the first quarter 2010 we closed our Australian styrenics operations.  Results from these businesses are treated as discontinued operations.  


About Huntsman:

Huntsman is a global manufacturer and marketer of differentiated chemicals. Our operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging. Originally known for pioneering innovations in packaging and, later, for rapid and integrated growth in petrochemicals, Huntsman has approximately 12,000 employees and operates from multiple locations worldwide. The Company had 2011 revenues of over $11 billion. 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.

SOURCE Huntsman Corporation

Released February 16, 2012

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