EX-99.1 2 a11-28913_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

Investor Relations:

Media:

November 2, 2011

Kurt Ogden

Gary Chapman

The Woodlands, TX

(801) 584-5959

(281) 719-4324

NYSE: HUN

 

 

 

HUNTSMAN RELEASES THIRD QUARTER 2011 RESULTS

EARNS HIGHEST ADJUSTED EBITDA IN HISTORY (a)

 

Third Quarter 2011 Highlights

 

·                  Revenues improved 24% compared to the prior year period.

 

·                  Adjusted EBITDA improved 26% to $345 million compared to the prior year period.

 

·                  Adjusted diluted income per share improved 32% to $0.45 compared to the prior year period.

 

·                  A higher than normal adjusted effective tax rate of 38% had a negative impact of approximately $0.08 per diluted share.

 

·                  Negative foreign currency impact on earnings in our Advanced Materials and Textile Effects businesses of approximately $17 million compared to the prior year primarily due to the strong Swiss franc.

 

·                  We announced restructuring plans within our Advanced Materials and Textile Effects businesses.  We recorded $155 million of restructuring charges during the third quarter of 2011 consisting of $102 million of cash charges and $53 million of non-cash impairment of assets.  We expect additional future cash charges of approximately $35 million.  We expect future annual benefits of approximately $90 million.

 

 

 

Three months ended

 

Nine months ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

In millions, except per share amounts, unaudited

 

2011

 

2010

 

2011

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,976

 

$

2,401

 

$

2,934

 

$

8,589

 

$

6,838

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to Huntsman Corporation

 

$

(34

)

$

55

 

$

114

 

$

142

 

$

(3

)

Adjusted net income(1)

 

$

108

 

$

83

 

$

117

 

$

339

 

$

142

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss) income per share

 

$

(0.14

)

$

0.23

 

$

0.47

 

$

0.59

 

$

(0.01

)

Adjusted diluted income per share(1)

 

$

0.45

 

$

0.34

 

$

0.48

 

$

1.40

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA(1)

 

$

204

 

$

257

 

$

323

 

$

766

 

$

533

 

Adjusted EBITDA(1)

 

$

345

 

$

273

 

$

318

 

$

965

 

$

653

 

 

See end of press release for footnote explanations

 


(a) Excluding the Base Chemicals and Polymers businesses divested in 2006 and 2007

 



 

The Woodlands, TX — Huntsman Corporation (NYSE: HUN) today reported third quarter 2011 results with revenues of $2,976 million and Adjusted EBITDA of $345 million.

 

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

 

“Our third quarter was the strongest in our company’s history.  Our revenues, adjusted EBITDA and adjusted net income are all stronger than a year ago as we appear to be heading towards a record year.

 

This past quarter we announced large restructuring plans to mitigate the impact of the strong Swiss Franc and to address the challenging business conditions of the global textile industry.  We expect to record cash restructuring charges of approximately $135 million and expect annual benefits of approximately $90 million between our Textile Effects business and our Swiss based Advanced Materials divisions.  We expect to see the impact of these changes beginning in the first quarter of 2012.

 

As satisfied as we feel about our strong quarter, we are still mindful of the sluggish global business conditions.  As the economy gradually improves in the coming year, we fully expect stronger earnings from our business as many of our larger product lines are still quite some distance from their peak earnings potential.  In short, I am quite pleased with our third quarter results, but expect stronger performance as the global economy returns to more stable growth.”

 

Segment Analysis for 3Q11 Compared to 3Q10

 

Polyurethanes

 

The increase in revenues in our Polyurethanes division for the three months ended September 30, 2011 compared to the same period in 2010 was due to higher average selling prices and higher MDI sales volumes.  Average MDI selling prices increased primarily in response to higher raw material costs, improved demand and the strength of European currencies against the U.S. dollar.  Average PO/MTBE selling prices increased primarily in response to higher raw material costs.  MDI sales volumes increased primarily due to improved demand in the insulation, furniture and automotive sectors but were offset by lower PO/MTBE sales volumes.  The increase in Adjusted EBITDA was due to higher contribution margins partially offset by higher manufacturing and selling, general and administrative costs.

 

Performance Products

 

The increase in revenues in our Performance Products division for the three months ended September 30, 2011 compared to the same period in 2010 was primarily due to higher average selling prices.  Average selling prices increased across almost all product groups primarily in response to higher raw material costs and the strength of major European currencies against the U.S. dollar.  Sales volumes were essentially unchanged as the positive impact from the consolidation of our Sasol-Huntsman maleic anhydride joint venture during the second quarter 2011 was offset by lower sales volumes of amines and surfactants.  The decrease in Adjusted EBITDA was primarily due to a planned maintenance outage at our Port Neches, TX facility which had an approximate $8 million negative impact.

 

Advanced Materials

 

The increase in revenues in our Advanced Materials division for the three months ended September 30, 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 primarily in response to higher raw material costs and the strength of major European currencies against the U.S. dollar.  Sales volumes decreased in our base resins business partially offset by a modest increase in combined sales volumes in our core formulation systems and specialty components businesses.  The decrease in Adjusted EBITDA was primarily due to lower contribution margins and approximately $7 million of negative foreign currency impact primarily due to the stronger Swiss franc on our manufacturing and selling, general and administrative costs.

 

2



 

Textile Effects

 

The decrease in revenues in our Textile Effects division for the three months ended September 30, 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 due to lower demand.  Average selling prices increased primarily due to the strength of major currencies against the U.S. dollar.  The decrease in Adjusted EBITDA was primarily due to lower sales volumes and approximately $10 million of negative foreign currency impact primarily due to 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 September 30, 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 and the strength of major European currencies against the U.S. dollar.  Sales volumes decreased primarily due to lower finished goods inventory available for sale and lower global demand.  The increase in Adjusted EBITDA in our Pigments division was primarily due to higher contribution margins partially offset by lower sales volumes and higher manufacturing and selling, general and administrative costs.

 

Corporate, LIFO and Other

 

Corporate, LIFO and other includes unallocated corporate overhead, unallocated foreign exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt and unallocated restructuring costs.  Adjusted EBITDA from Corporate, LIFO and other decreased by $6 million to a loss of $50 million for the three months ended September 30, 2011 compared to a loss of $44 million for the same period in 2010.  The decrease in Adjusted EBITDA was primarily the result of a $7 million increase in LIFO inventory valuation expense ($8 million of loss in 2011 compared to $1 million loss in 2010).

 

Income Taxes

 

During the three months ended September 30, 2011 we recorded income tax expense of $55 million compared to $41 million in the same period in 2010.  Our adjusted effective income tax rate for the three months ended September 30, 2011 was approximately 38%.  We have tax valuation allowances in countries such as Switzerland and the United Kingdom where our Textile Effects and Pigments businesses have meaningful operations.  The increase in forecasted losses in Switzerland from our Textile Effects business during the third quarter, along with other changes in our geographic mix of income, had the effect of increasing our projected effective income tax rate for the year.  We are required to adjust our third quarter year-to-date tax rate to our expected full year rate.  This resulted in the recognition of more tax expense during the third quarter.  We expect our long term effective income tax rate to be approximately 30 - 35% and expect the fourth quarter and full year 2011 adjusted tax rate to be slightly less than that.  During the three months ended September 30, 2011 we paid $49 million in cash for income taxes.  We expect our cash tax rate to continue to be less than our effective income tax rate.

 

3



 

Liquidity, Capital Resources and Outstanding Debt

 

As of September 30, 2011, we had $1,024 million of combined cash and unused borrowing capacity compared to $1,434 million at December 31, 2010.  The decrease from 2010 year end was primarily attributable to an increase in primary net working capital of $506 million.

 

During the third quarter of 2011, we redeemed approximately $111 million of our senior subordinated notes due 2015.

 

On November 1, 2011, we provided notice to redeem all of our remaining 6.875% senior subordinated euro notes due 2013 worth approximately $93 million.

 

Total capital expenditures, net of reimbursements for the three months ended September 30, 2011 were $93 million compared to $54 million for the same period in 2010.  We expect to spend approximately $350 million on capital expenditures, net of reimbursements, in 2011.

 

On August 5, 2011 we announced that our Board of Directors authorized the repurchase of up to $100 million in shares of our common stock.  During the third quarter of 2011, we acquired approximately four million shares of our outstanding common stock for approximately $50 million under the repurchase program.

 

Conference Call Information

 

We will hold a conference call to discuss our third quarter 2011 financial results on Wednesday November 2, 2011 at 9:00 a.m. ET.

 

Call-in numbers for the conference call:

U.S. participants

(888) 713 - 4213

International participants

(617) 213 - 4865

Passcode

98395744

 

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=PLFWDW8GP

 

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 http://www.huntsman.com.

 

Replay Information

 

The conference call will be available for replay beginning November 2, 2011 and ending November 9, 2011.

 

Call-in numbers for the replay:

U.S. participants

(888) 286 - 8010

International participants

(617) 801 - 6888

Replay code

63107396

 

 

4



 

Table 1 — Results of Operations

 

 

 

Three months ended

 

Nine months ended

 

 

 

September 30,

 

September 30,

 

In millions, except per share amounts, unaudited

 

2011

 

2010

 

2011

 

2010

 

Revenues

 

$

2,976

 

$

2,401

 

$

8,589

 

$

6,838

 

Cost of goods sold

 

2,486

 

1,986

 

7,138

 

5,757

 

Gross profit

 

490

 

415

 

1,451

 

1,081

 

Operating expenses

 

258

 

244

 

821

 

741

 

Restructuring, impairment and plant closing costs

 

155

 

4

 

171

 

24

 

Operating income

 

77

 

167

 

459

 

316

 

Interest expense, net

 

(63

)

(64

)

(187

)

(168

)

Equity in income of investment in unconsolidated affiliates

 

2

 

3

 

6

 

20

 

Loss on early extinguishment of debt

 

(2

)

(7

)

(5

)

(169

)

Expenses associated with the terminated merger and related litigation

 

 

(3

)

 

(4

)

Other (loss) income

 

(1

)

2

 

 

3

 

Income (loss) before income taxes

 

13

 

98

 

273

 

(2

)

Income tax expense

 

(55

)

(41

)

(111

)

(46

)

(Loss) income from continuing operations

 

(42

)

57

 

162

 

(48

)

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

 

10

 

(1

)

(5

)

48

 

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

 

 

 

2

 

 

Net (loss) income

 

(32

)

56

 

159

 

 

Net income attributable to noncontrolling interests, net of tax

 

(2

)

(1

)

(17

)

(3

)

Net (loss) income attributable to Huntsman Corporation

 

$

(34

)

$

55

 

$

142

 

$

(3

)

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA(1)

 

$

345

 

$

273

 

$

965

 

$

653

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income(1)

 

$

108

 

$

83

 

$

339

 

$

142

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) income per share

 

$

(0.14

)

$

0.23

 

$

0.60

 

$

(0.01

)

Diluted (loss) income per share

 

$

(0.14

)

$

0.23

 

$

0.59

 

$

(0.01

)

Adjusted diluted income per share(1)

 

$

0.45

 

$

0.34

 

$

1.40

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

Common share information:

 

 

 

 

 

 

 

 

 

Basic shares outstanding

 

237.6

 

236.4

 

238.2

 

235.9

 

Diluted shares

 

237.6

 

241.0

 

242.6

 

235.9

 

Diluted shares for adjusted diluted income per share

 

241.3

 

241.0

 

242.6

 

240.7

 

 

See end of press release for footnote explanations

 

5



 

Table 2 — Results of Operations by Segment

 

 

 

Three months ended

 

 

 

Nine months ended

 

 

 

 

 

September 30,

 

 

 

September 30,

 

 

 

In millions, unaudited

 

2011

 

2010

 

Change

 

2011

 

2010

 

Change

 

Segment Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

1,209

 

$

960

 

26

%

$

3,391

 

$

2,659

 

28

%

Performance Products

 

846

 

678

 

25

%

2,546

 

1,963

 

30

%

Advanced Materials

 

349

 

318

 

10

%

1,059

 

929

 

14

%

Textile Effects

 

173

 

190

 

(9

)%

563

 

598

 

(6

)%

Pigments

 

455

 

327

 

39

%

1,243

 

883

 

41

%

Eliminations and other

 

(56

)

(72

)

(22

)%

(213

)

(194

)

10

%

Total

 

$

2,976

 

$

2,401

 

24

%

$

8,589

 

$

6,838

 

26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Adjusted EBITDA(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

140

 

$

99

 

41

%

$

397

 

$

221

 

80

%

Performance Products

 

97

 

102

 

(5

)%

314

 

278

 

13

%

Advanced Materials

 

26

 

42

 

(38

)%

96

 

124

 

(23

)%

Textile Effects

 

(29

)

8

 

NM

 

(42

)

16

 

NM

 

Pigments

 

161

 

66

 

144

%

363

 

144

 

152

%

Corporate, LIFO and other

 

(50

)

(44

)

14

%

(163

)

(130

)

25

%

Total

 

$

345

 

$

273

 

26

%

$

965

 

$

653

 

48

%

 

See end of press release for footnote explanations

NM—Not meaningful

 

Table 3 — Factors Impacting Sales Revenues

 

 

 

Three months ended

 

 

 

September 30, 2011 vs. 2010

 

 

 

Average Selling Price(a)

 

 

 

 

 

 

 

 

 

Local

 

Exchange

 

Sales Mix

 

Sales

 

 

 

Unaudited

 

Currency

 

Rate

 

& Other

 

Volume(a)

 

Total

 

Polyurethanes

 

18

%

5

%

4

%

(1

)%

26

%

Performance Products

 

20

%

5

%

 

 

25

%

Advanced Materials

 

5

%

7

%

(1

)%

(1

)%

10

%

Textile Effects

 

(2

)%

6

%

 

(13

)%

(9

)%

Pigments

 

38

%

9

%

 

(8

)%

39

%

Total Company

 

20

%

6

%

3

%

(5

)%

24

%

 

 

 

Nine months ended

 

 

 

September 30, 2011 vs. 2010

 

 

 

Average Selling Price(a)

 

 

 

 

 

 

 

 

 

Local

 

Exchange

 

Sales Mix

 

Sales

 

 

 

Unaudited

 

Currency

 

Rate

 

& Other

 

Volume(a)

 

Total

 

Polyurethanes

 

18

%

3

%

(4

)%

11

%

28

%

Performance Products

 

20

%

3

%

1

%

6

%

30

%

Advanced Materials

 

8

%

4

%

2

%

 

14

%

Textile Effects

 

1

%

4

%

(1

)%

(10

)%

(6

)%

Pigments

 

33

%

5

%

 

3

%

41

%

Total Company

 

15

%

4

%

2

%

5

%

26

%

 


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

 

6



 

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

 

 

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

In millions, except per share amounts, unaudited

 

2011

 

2010

 

2011

 

2010

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP(1)

 

$

204

 

$

257

 

$

(55

)

$

(41

)

$

(34

)

$

55

 

$

(0.14

)

$

0.23

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated foreign exchange (gain) loss

 

(1

)

(2

)

(5

)

14

 

(6

)

12

 

(0.02

)

0.05

 

Legal settlements and related expenses

 

4

 

 

(1

)

 

3

 

 

0.01

 

 

Loss on early extinguishment of debt

 

2

 

7

 

(1

)

(2

)

1

 

5

 

 

0.02

 

Restructuring, impairment and plant closing costs

 

155

 

4

 

(3

)

 

152

 

4

 

0.63

 

0.02

 

Expenses associated with the terminated merger and related litigation

 

 

3

 

 

(1

)

 

2

 

 

0.01

 

Discount amortization on settlement financing associated with the terminated merger

 

N/A

 

N/A

 

(3

)

(2

)

4

 

4

 

0.02

 

0.02

 

Acquisition expenses

 

1

 

1

 

 

(1

)

1

 

 

 

 

Gain on sale of assets related to plant closures

 

(3

)

 

 

 

(3

)

 

(0.01

)

 

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

 

(17

)

3

 

N/A

 

N/A

 

(10

)

1

 

(0.04

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted(1)

 

$

345

 

$

273

 

$

(68

)

$

(33

)

$

108

 

$

83

 

$

0.45

 

$

0.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income tax expense

 

 

 

 

 

 

 

 

 

68

 

33

 

 

 

 

 

Net income attributable to noncontrolling interests, net of tax

 

 

 

 

 

 

 

 

 

2

 

1

 

 

 

 

 

Adjusted pre-tax income(1)

 

 

 

 

 

 

 

 

 

$

178

 

$

117

 

 

 

 

 

Adjusted effective tax rate

 

 

 

 

 

 

 

 

 

38

%

28

%

 

 

 

 

 

 

 

 

 

 

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

 

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

In millions, except per share amounts, unaudited

 

2011

 

2011

 

2011

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP(1)

 

$

323

 

 

 

$

(34

)

 

 

$

114

 

 

 

$

0.47

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated foreign exchange (gain) loss

 

(3

)

 

 

4

 

 

 

1

 

 

 

 

 

 

Gain on consolidation of a variable interest entity

 

(12

)

 

 

2

 

 

 

(10

)

 

 

(0.04

)

 

 

Restructuring, impairment and plant closing costs

 

9

 

 

 

(1

)

 

 

8

 

 

 

0.03

 

 

 

Discount amortization on settlement financing associated with the terminated merger

 

N/A

 

 

 

(2

)

 

 

5

 

 

 

0.02

 

 

 

Acquisition expenses

 

3

 

 

 

(1

)

 

 

2

 

 

 

0.01

 

 

 

Gain on sale of assets related to plant closures

 

(3

)

 

 

 

 

 

(3

)

 

 

(0.01

)

 

 

Loss from discontinued operations, net of tax(2)

 

2

 

 

 

N/A

 

 

 

1

 

 

 

 

 

 

Extraordinary gain on the acquisition of a business, net of tax(3)

 

(1

)

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted(1)

 

$

318

 

 

 

$

(32

)

 

 

$

117

 

 

 

$

0.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income tax expense

 

 

 

 

 

 

 

 

 

32

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests, net of tax

 

 

 

 

 

 

 

 

 

10

 

 

 

 

 

 

 

Adjusted pre-tax income(1)

 

 

 

 

 

 

 

 

 

$

159

 

 

 

 

 

 

 

Adjusted effective tax rate

 

 

 

 

 

 

 

 

 

20

%

 

 

 

 

 

 

 

 

 

 

 

Income Tax

 

Net Income (Loss)

 

Diluted Income (Loss)

 

 

 

EBITDA

 

(Expense) Benefit

 

Attrib. to HUN Corp.

 

Per Share

 

 

 

Nine months ended

 

Nine months ended

 

Nine months ended

 

Nine months ended

 

 

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

In millions, except per share amounts, unaudited

 

2011

 

2010

 

2011

 

2010

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP(1)

 

$

766

 

$

533

 

$

(111

)

$

(46

)

$

142

 

$

(3

)

$

0.59

 

$

(0.01

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated foreign exchange (gain) loss

 

(6

)

(3

)

5

 

5

 

(1

)

2

 

 

0.01

 

Legal settlements and related expenses

 

38

 

 

(14

)

 

24

 

 

0.10

 

 

Loss on early extinguishment of debt

 

5

 

169

 

(2

)

(17

)

3

 

152

 

0.01

 

0.63

 

Gain on consolidation of a variable interest entity

 

(12

)

 

2

 

 

(10

)

 

(0.04

)

 

Restructuring, impairment and plant closing costs

 

171

 

24

 

(4

)

(1

)

167

 

23

 

0.69

 

0.10

 

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

 

(8

)

(7

)

13

 

12

 

0.05

 

0.05

 

Acquisition expenses

 

5

 

2

 

(1

)

(1

)

4

 

1

 

0.02

 

 

Gain on sale of assets related to plant closures

 

(6

)

 

 

 

(6

)

 

(0.02

)

 

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

 

6

 

(76

)

N/A

 

N/A

 

5

 

(48

)

0.02

 

(0.20

)

Extraordinary gain on the acquisition of a business, net of tax

 

(2

)

 

 

 

(2

)

 

(0.01

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted(1)

 

$

965

 

$

653

 

$

(133

)

$

(68

)

$

339

 

$

142

 

$

1.40

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income tax expense

 

 

 

 

 

 

 

 

 

133

 

68

 

 

 

 

 

Net income attributable to noncontrolling interests, net of tax

 

 

 

 

 

 

 

 

 

17

 

3

 

 

 

 

 

Adjusted pre-tax income(1)

 

 

 

 

 

 

 

 

 

$

489

 

$

213

 

 

 

 

 

Adjusted effective tax rate

 

 

 

 

 

 

 

 

 

27

%

32

%

 

 

 

 

 

See end of press release for footnote explanations

 

7



 

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

 

 

 

Three months ended

 

Nine months ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

In millions, unaudited

 

2011

 

2010

 

2011

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to Huntsman Corporation

 

$

(34

)

$

55

 

$

114

 

$

142

 

$

(3

)

Interest expense, net

 

63

 

64

 

65

 

187

 

168

 

Income tax expense from continuing operations

 

55

 

41

 

34

 

111

 

46

 

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

 

7

 

(2

)

(1

)

(1

)

27

 

Depreciation and amortization of continuing operations

 

113

 

99

 

111

 

327

 

294

 

Depreciation and amortization of discontinued operations(2)

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA(1)

 

$

204

 

$

257

 

$

323

 

$

766

 

$

533

 

 

See end of press release for footnote explanations

 

Table 6 — Selected Balance Sheet Items

 

 

 

September 30,

 

June 30,

 

December 31,

 

September 30,

 

In millions

 

2011

 

2011

 

2010

 

2010

 

 

 

(unaudited)

 

(unaudited)

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

459

 

$

690

 

$

973

 

$

1,011

 

Accounts and notes receivable, net

 

1,762

 

1,836

 

1,413

 

1,611

 

Inventories

 

1,687

 

1,746

 

1,396

 

1,375

 

Other current assets

 

366

 

308

 

226

 

248

 

Property, plant and equipment, net

 

3,659

 

3,825

 

3,605

 

3,594

 

Other assets

 

1,075

 

1,071

 

1,101

 

1,027

 

Total assets

 

$

9,008

 

$

9,476

 

$

8,714

 

$

8,866

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

941

 

$

1,110

 

$

842

 

$

817

 

Other current liabilities

 

787

 

800

 

692

 

656

 

Current portion of debt

 

230

 

289

 

519

 

384

 

Long-term debt

 

3,847

 

3,886

 

3,627

 

3,953

 

Other liabilities

 

1,269

 

1,155

 

1,184

 

1,168

 

Total equity

 

1,934

 

2,236

 

1,850

 

1,888

 

Total liabilities and equity

 

$

9,008

 

$

9,476

 

$

8,714

 

$

8,866

 

 

8



 

Table 7 — Outstanding Debt

 

 

 

September 30,

 

June 30,

 

December 31,

 

September 30,

 

In millions

 

2011

 

2011

 

2010

 

2010

 

 

 

(unaudited)

 

(unaudited)

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Debt:

 

 

 

 

 

 

 

 

 

Senior credit facilities

 

$

1,694

 

$

1,692

 

$

1,688

 

$

1,686

 

Accounts receivable programs

 

245

 

254

 

238

 

243

 

Senior notes

 

467

 

462

 

452

 

447

 

Senior Subordinated notes

 

1,076

 

1,198

 

1,279

 

1,442

 

Variable interest entities

 

306

 

313

 

200

 

199

 

Other debt

 

289

 

256

 

289

 

320

 

 

 

 

 

 

 

 

 

 

 

Total debt - excluding affiliates

 

4,077

 

4,175

 

4,146

 

4,337

 

 

 

 

 

 

 

 

 

 

 

Total cash

 

459

 

690

 

973

 

1,011

 

 

 

 

 

 

 

 

 

 

 

Net debt- excluding affiliates

 

$

3,618

 

$

3,485

 

$

3,173

 

$

3,326

 

 

Table 8 — Summarized Statement of Cash Flows

 

 

 

Three months ended

 

Nine months ended

 

 

 

September 30,

 

September 30,

 

In millions, unaudited

 

2011

 

2011

 

2010

 

 

 

 

 

 

 

 

 

Total cash at beginning of period

 

$

690

 

$

973

 

$

1,750

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

 

24

 

25

 

(350

)

Net cash used in investing activities

 

(89

)

(200

)

(85

)

Net cash used in financing activities

 

(157

)

(335

)

(314

)

Change in restricted cash

 

(1

)

(1

)

3

 

Effect of exchange rate changes on cash

 

(8

)

(3

)

7

 

 

 

 

 

 

 

 

 

Total cash at end of period

 

$

459

 

$

459

 

$

1,011

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

Cash paid for interest

 

$

(70

)

$

(178

)

$

(142

)

Cash paid for income taxes

 

$

(49

)

$

(84

)

$

(19

)

Cash paid for capital expenditures

 

$

(93

)

$

(217

)

$

(132

)

Depreciation & amortization

 

$

113

 

$

327

 

$

295

 

 

 

 

 

 

 

 

 

Changes in primary working capital:

 

 

 

 

 

 

 

Accounts and notes receivable

 

$

11

 

$

(314

)

$

(318

)

Inventories

 

(3

)

(273

)

(184

)

Accounts payable

 

(119

)

81

 

61

 

Total

 

$

(111

)

$

(506

)

$

(441

)

 

9



 


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:  gains and losses from discontinued operations; restructuring, impairment and plant closing (credits) costs; income and expense associated with the terminated merger and related litigation; acquisition related expenses; unallocated foreign currency (gain) loss; certain legal and contract settlements; losses from early extinguishment of debt; gain on consolidation of a variable interest entity; extraordinary loss (gain) 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; unallocated foreign currency (gain) loss;  certain legal and contract settlements; losses on the early extinguishment of debt; gain on consolidation of a variable interest entity; extraordinary loss (gain) on the acquisition of a business; and loss (gain) on disposition of business/assets.   The reconciliation of adjusted net income (loss) to net income (loss) attributable to Huntsman Corporation common stockholders is set forth in Table 4 above.

 

During the first quarter of 2010, we began reporting the (income) loss attributable to noncontrolling interests in the reporting segment to which the subsidiary relates. Previously, (income) loss attributable to noncontrolling interests was reported in our Corporate and other segment. All relevant information for prior periods has been reclassified 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 2010 revenues of over $9 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.

 

10