10-Q 1 hun-20190331x10q.htm 10-Q hun_Current_Folio_10Q

`

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 

Form 10‑Q

Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2019

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

For the transition period from                          to                         

 

 

Commission
File Number

    

Exact Name of Registrant as Specified in its Charter,
Principal Office Address and Telephone Number

    

State of
Incorporation
or Organization

    

I.R.S. Employer
Identification No.

001‑32427

 

Huntsman Corporation
10003 Woodloch Forest Drive
The Woodlands, Texas 77380
(281) 719-6000

 

Delaware

 

42‑1648585

333‑85141

 

Huntsman International LLC
10003 Woodloch Forest Drive
The Woodlands, Texas 77380
(281) 719-6000

 

Delaware

 

87‑0630358


 

 

 

 

 

 

 

Registrant

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

Huntsman Corporation

 

Common Stock, par value $0.01 per share

 

HUN

 

New York Stock Exchange

Huntsman International LLC

 

None

 

None

 

None

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Huntsman Corporation

YES ☒

NO ☐

Huntsman International LLC

YES ☒

NO ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Huntsman Corporation

YES ☒

NO ☐

Huntsman International LLC

YES ☒

NO ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act. (Check one):

 

 

 

 

 

 

Huntsman Corporation

Large accelerated filer ☒

Accelerated filer ☐

Non‑accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

Huntsman International LLC

Large accelerated filer ☐

Accelerated filer ☐

Non‑accelerated filer ☒

Smaller reporting company ☐

Emerging Growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

Huntsman Corporation

 

Huntsman International LLC

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).

Huntsman Corporation

YES ☐

NO ☒

Huntsman International LLC

YES ☐

NO ☒


On April 22, 2019, 233,187,607 shares of common stock of Huntsman Corporation were outstanding and 2,728 units of membership interests of Huntsman International LLC were outstanding. There is no trading market for Huntsman International LLC’s units of membership interests. All of Huntsman International LLC’s units of membership interests are held by Huntsman Corporation.


This Quarterly Report on Form 10‑Q presents information for two registrants: Huntsman Corporation and Huntsman International LLC. Huntsman International LLC is a wholly-owned subsidiary of Huntsman Corporation and is the principal operating company of Huntsman Corporation. The information reflected in this Quarterly Report on Form 10‑Q is equally applicable to both Huntsman Corporation and Huntsman International LLC, except where otherwise indicated. Huntsman International LLC meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10‑Q and, to the extent applicable, is therefore filing this form with a reduced disclosure format.

 

 

 

 

 


 

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10‑Q FOR THE QUARTERLY PERIOD

ENDED MARCH 31, 2019

 

TABLE OF CONTENTS

 

 

    

 

 

Page

PART I 

 

FINANCIAL INFORMATION

 

4

ITEM 1. 

 

Condensed Consolidated Financial Statements (Unaudited)

 

4

 

 

Huntsman Corporation and Subsidiaries:

 

 

 

 

Condensed Consolidated Balance Sheets

 

4

 

 

Condensed Consolidated Statements of Operations

 

5

 

 

Condensed Consolidated Statements of Comprehensive Income

 

6

 

 

Condensed Consolidated Statements of Equity

 

7

 

 

Condensed Consolidated Statements of Cash Flows

 

8

 

 

Huntsman International LLC and Subsidiaries:

 

 

 

 

Condensed Consolidated Balance Sheets

 

10

 

 

Condensed Consolidated Statements of Operations

 

11

 

 

Condensed Consolidated Statements of Comprehensive Income 

 

12

 

 

Condensed Consolidated Statements of Equity

 

13

 

 

Condensed Consolidated Statements of Cash Flows

 

14

 

 

Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

16

ITEM 2. 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

42

ITEM 3. 

 

Quantitative and Qualitative Disclosures About Market Risk

 

55

ITEM 4. 

 

Controls and Procedures

 

56

PART II 

 

OTHER INFORMATION

 

57

ITEM 1. 

 

Legal Proceedings

 

57

ITEM 1A. 

 

Risk Factors

 

57

ITEM 2. 

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

57

ITEM 6.

 

Exhibits

 

58

 

 

2


 

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10‑Q FOR THE QUARTERLY PERIOD

ENDED MARCH 31, 2019

 

FORWARD‑LOOKING STATEMENTS

 

Certain information set forth in this report contains “forward‑looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical factual information are forward‑looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, business separations, spin‑offs, or other distributions, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into; new or modified laws, regulations and accounting pronouncements; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; general economic and capital markets conditions; the timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that we intend or believe will or may occur in the future. In some cases, forward‑looking statements can be identified by terminology such as “believes,” “expects,” “may,” “will,” “should,” “anticipates” or “intends” or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward‑looking statements from time to time. All such subsequent forward‑looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.

 

All forward‑looking statements, including without limitation any projections derived from management’s examination of historical operating trends, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that management’s expectations, beliefs and projections will be achieved. All forward‑looking statements apply only as of the date made. We undertake no obligation to publicly update or revise forward‑looking statements whether because of new information, future events or otherwise, except as required by securities and other applicable law.

 

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward‑looking statements contained in or contemplated by this report. Any forward‑looking statements should be considered in light of the risks set forth in “Part II. Item 1A. Risk Factors” below and “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, 2018.  

3


 

PART I. FINANCIAL INFORMATION

 

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions, Except Share and Per Share Amounts)

 

 

 

 

 

 

 

 

 

 

March 31, 

 

December 31, 

 

    

2019

    

2018

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents(a)

 

$

444

 

$

340

Accounts and notes receivable (net of allowance for doubtful accounts of $23 and $22, respectively), ($375 and $341 pledged as collateral, respectively)(a)

 

 

1,276

 

 

1,254

Accounts receivable from affiliates

 

 

10

 

 

18

Inventories(a)

 

 

1,228

 

 

1,134

Prepaid expenses

 

 

68

 

 

66

Other current assets(a)

 

 

110

 

 

146

Total current assets 

 

 

3,136

 

 

2,958

Property, plant and equipment, net(a)

 

 

3,055

 

 

3,064

Investment in unconsolidated affiliates

 

 

612

 

 

526

Intangible assets, net(a)

 

 

215

 

 

219

Goodwill

 

 

277

 

 

275

Deferred income taxes

 

 

292

 

 

324

Notes receivable from affiliate

 

 

34

 

 

34

Operating lease right-of-use assets

 

 

453

 

 

 —

Other noncurrent assets(a)

 

 

566

 

 

553

Total assets 

 

$

8,640

 

$

7,953

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable(a)

 

$

881

 

$

929

Accounts payable to affiliates

 

 

30

 

 

32

Accrued liabilities(a)

 

 

476

 

 

554

Current portion of debt(a)

 

 

276

 

 

96

Current operating lease liabilities(a)

 

 

55

 

 

 —

Total current liabilities 

 

 

1,718

 

 

1,611

Long-term debt(a)

 

 

2,323

 

 

2,224

Deferred income taxes

 

 

279

 

 

296

Noncurrent operating lease liabilities(a)

 

 

430

 

 

 —

Other noncurrent liabilities(a)

 

 

1,027

 

 

1,073

Total liabilities 

 

 

5,777

 

 

5,204

Commitments and contingencies (Notes 15 and 16)

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Huntsman Corporation stockholders’ equity:

 

 

 

 

 

 

Common stock $0.01 par value, 1,200,000,000 shares authorized, 257,221,351 and 256,006,849 shares issued and 232,682,908 and 232,994,172 shares outstanding, respectively

 

 

 3

 

 

 3

Additional paid-in capital

 

 

4,010

 

 

3,984

Treasury stock, 24,538,447 and 23,012,680 shares, respectively

 

 

(461)

 

 

(427)

Unearned stock-based compensation

 

 

(28)

 

 

(16)

Retained earnings

 

 

360

 

 

292

Accumulated other comprehensive loss

 

 

(1,264)

 

 

(1,316)

Total Huntsman Corporation stockholders’ equity 

 

 

2,620

 

 

2,520

Noncontrolling interests in subsidiaries

 

 

243

 

 

229

Total equity 

 

 

2,863

 

 

2,749

Total liabilities and equity 

 

$

8,640

 

$

7,953


(a)

At March 31, 2019 and December 31, 2018, respectively, $23 and $7 of cash and cash equivalents, $29 and $30 of accounts and notes receivable (net), $60 and $49 of inventories, $5 each of other current assets, $266 and $265 of property, plant and equipment (net), $10 each of intangible assets (net), $51 and $52 of other noncurrent assets, $113 and $123 of accounts payable, $25 and $30 of accrued liabilities, $27 and $25 of current portion of debt, $5 and nil of current operating lease liabilities, $58 and $61 of long‑term debt, $15 and nil of noncurrent operating lease liabilities and $97 each of other noncurrent liabilities from consolidated variable interest entities are included in the respective balance sheet captions above. See “Note 6. Variable Interest Entities.”

 

See accompanying notes to condensed consolidated financial statements.

 

4


 

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Millions, Except Per Share Amounts)

 

 

 

 

 

 

 

 

 

 

Three months

 

    

ended

 

 

March 31, 

 

 

2019

 

2018

Revenues:

 

 

 

 

 

 

Trade sales, services and fees, net

 

$

2,004

 

$

2,255

Related party sales

 

 

30

 

 

40

Total revenues 

 

 

2,034

 

 

2,295

Cost of goods sold 

 

 

1,637

 

 

1,755

Gross profit 

 

 

397

 

 

540

Operating expenses:

 

 

 

 

 

 

Selling, general and administrative

 

 

216

 

 

192

Research and development

 

 

37

 

 

38

Restructuring, impairment and plant closing costs

 

 

 1

 

 

 2

Other operating (income) expense, net

 

 

(2)

 

 

12

Total operating expenses

 

 

252

 

 

244

Operating income   

 

 

145

 

 

296

Interest expense

 

 

(30)

 

 

(27)

Equity in income of investment in unconsolidated affiliates

 

 

10

 

 

13

Fair value adjustments to Venator investment

 

 

76

 

 

 —

Loss on early extinguishment of debt

 

 

(23)

 

 

 —

Other income, net

 

 

 4

 

 

 7

Income from continuing operations before income taxes 

 

 

182

 

 

289

Income tax expense

 

 

(52)

 

 

(53)

Income from continuing operations 

 

 

130

 

 

236

Income from discontinued operations, net of tax

 

 

 1

 

 

114

Net income

 

 

131

 

 

350

Net income attributable to noncontrolling interests

 

 

(12)

 

 

(76)

Net income attributable to Huntsman Corporation 

 

$

119

 

$

274

 

 

 

 

 

 

 

Basic income per share:

 

 

 

 

 

 

Income from continuing operations attributable to Huntsman Corporation common stockholders

 

$

0.51

 

$

0.66

Income from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax

 

 

 —

 

 

0.48

Net income attributable to Huntsman Corporation common stockholders

 

$

0.51

 

$

1.14

Weighted average shares

 

 

233.1

 

 

240.8

 

 

 

 

 

 

 

Diluted income per share:

 

 

 

 

 

 

Income from continuing operations attributable to Huntsman Corporation common stockholders

 

$

0.51

 

$

0.65

Income from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax

 

 

 —

 

 

0.46

Net income attributable to Huntsman Corporation common stockholders

 

$

0.51

 

$

1.11

Weighted average shares

 

 

235.1

 

 

245.9

 

 

 

 

 

 

 

Amounts attributable to Huntsman Corporation common stockholders:

 

 

 

 

 

 

Income from continuing operations

 

$

118

 

$

160

Income from discontinued operations, net of tax

 

 

 1

 

 

114

Net income

 

$

119

 

$

274

 

See accompanying notes to condensed consolidated financial statements.

 

5


 

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Millions)

 

 

 

 

 

 

 

 

 

 

Three months

 

 

ended

 

 

March 31, 

 

    

2019

    

2018

Net income

 

$

131

 

$

350

Other comprehensive income, net of tax: 

 

 

 

 

 

 

Foreign currency translations adjustments

 

 

42

 

 

87

Pension and other postretirement benefits adjustments

 

 

12

 

 

25

Other, net

 

 

 —

 

 

(9)

Other comprehensive income, net of tax

 

 

54

 

 

103

Comprehensive income

 

 

185

 

 

453

Comprehensive income attributable to noncontrolling interests

 

 

(14)

 

 

(83)

Comprehensive income attributable to Huntsman Corporation 

 

$

171

 

$

370

 

See accompanying notes to condensed consolidated financial statements.

 

 

6


 

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In Millions, Except Share Amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Huntsman Corporation Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Shares

 

 

 

 

Additional

 

 

 

 

Unearned

 

 

 

other

 

Noncontrolling

 

 

 

 

 

Common

 

Common

 

paid-in

 

Treasury

 

stock-based

 

Retained

 

comprehensive

 

interests in

 

Total

 

    

stock

    

stock

    

capital

    

stock

    

compensation

    

earnings

    

loss

    

subsidiaries

    

equity

Balance, January 1, 2019

 

232,994,172

    

$

 3

    

$

3,984

    

$

(427)

    

$

(16)

    

$

292

    

$

(1,316)

    

$

229

    

$

2,749

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

119

 

 

 —

 

 

12

 

 

131

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

52

 

 

 2

 

 

54

Issuance of nonvested stock awards

 

 —

 

 

 —

 

 

16

 

 

 —

 

 

(16)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Vesting of stock awards

 

1,619,502

 

 

 —

 

 

 7

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 7

Recognition of stock-based compensation

 

 —

 

 

 —

 

 

 2

 

 

 —

 

 

 4

 

 

 —

 

 

 —

 

 

 —

 

 

 6

Repurchase and cancellation of stock awards

 

(483,053)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(12)

 

 

 —

 

 

 —

 

 

(12)

Stock options exercised

 

78,054

 

 

 —

 

 

 1

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 1

Treasury stock repurchased

 

(1,525,767)

 

 

 —

 

 

 —

 

 

(34)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(34)

Dividends declared on common stock ($0.1625 per share)

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(39)

 

 

 —

 

 

 —

 

 

(39)

Balance, March 31, 2019

 

232,682,908

 

$

 3

 

$

4,010

 

$

(461)

 

$

(28)

 

$

360

 

$

(1,264)

 

$

243

 

$

2,863

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2018

 

240,213,606

    

$

 3

    

$

3,889

    

$

(150)

    

$

(15)

    

$

161

    

$

(1,268)

    

$

751

    

$

3,371

Cumulative effect of changes in fair value of equity investments

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

10

 

 

(10)

 

 

 —

 

 

 —

Revised balance January 1, 2018

 

240,213,606

 

 

 3

 

 

3,889

 

 

(150)

 

 

(15)

 

 

171

 

 

(1,278)

 

 

751

 

 

3,371

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

274

 

 

 —

 

 

76

 

 

350

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

80

 

 

23

 

 

103

Issuance of nonvested stock awards

 

 —

 

 

 —

 

 

14

 

 

 —

 

 

(14)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Vesting of stock awards

 

985,493

 

 

 —

 

 

11

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

11

Recognition of stock-based compensation

 

 —

 

 

 —

 

 

 2

 

 

 —

 

 

 3

 

 

 —

 

 

 —

 

 

 —

 

 

 5

Repurchase and cancellation of stock awards

 

(253,345)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(11)

 

 

 —

 

 

 —

 

 

(11)

Dividends paid to noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(18)

 

 

(18)

Stock options exercised

 

571,417

 

 

 —

 

 

 7

 

 

 —

 

 

 —

 

 

(2)

 

 

 —

 

 

 —

 

 

 5

Treasury stock repurchased

 

(1,685,300)

 

 

 —

 

 

 —

 

 

(51)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(51)

Disposition of a portion of Venator

 

 —

 

 

 —

 

 

18

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

18

Costs of the secondary offering of Venator

 

 —

 

 

 —

 

 

(2)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(2)

Noncontrolling interest from partial disposal of Venator

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

27

 

 

27

Dividends declared on common stock ($0.1625 per share)

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(39)

 

 

 —

 

 

 —

 

 

(39)

Balance, March 31, 2018

 

239,831,871

 

$

 3

 

$

3,939

 

$

(201)

 

$

(26)

 

$

393

 

$

(1,198)

 

$

859

 

$

3,769

 

See accompanying notes to condensed consolidated financial statements.

 

 

7


 

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

 

 

 

 

 

 

 

 

 

 

Three months

 

 

ended

 

 

March 31, 

 

    

2019

    

2018

Operating Activities:

 

 

 

 

 

 

Net income

 

$

131

 

$

350

Less: Income from discontinued operations, net of tax

 

 

(1)

 

 

(114)

Income from continuing operations

 

 

130

 

 

236

Adjustments to reconcile income from continuing operations to net cash (used in) provided by operating activities from continuing operations:

 

 

 

 

 

 

Equity in income of investment in unconsolidated affiliates

 

 

(10)

 

 

(13)

Unrealized gains on fair value adjustments to Venator investment

 

 

(76)

 

 

 —

Depreciation and amortization

 

 

90

 

 

82

Loss on disposal of businesses/assets, net

 

 

 1

 

 

 2

Loss on early extinguishment of debt

 

 

23

 

 

 —

Noncash interest expense

 

 

 1

 

 

 —

Noncash restructuring and impairment charges

 

 

 —

 

 

 2

Deferred income taxes

 

 

14

 

 

 2

Noncash loss on foreign currency transactions

 

 

 6

 

 

 5

Stock-based compensation

 

 

 8

 

 

 8

Other, net

 

 

 5

 

 

 —

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts and notes receivable

 

 

(13)

 

 

(104)

Inventories

 

 

(90)

 

 

(105)

Prepaid expenses

 

 

(2)

 

 

(8)

Other current assets

 

 

22

 

 

15

Other noncurrent assets

 

 

(14)

 

 

 1

Accounts payable

 

 

(35)

 

 

36

Accrued liabilities

 

 

(75)

 

 

(42)

Other noncurrent liabilities

 

 

(16)

 

 

(6)

Net cash (used in) provided by operating activities from continuing operations

 

 

(31)

 

 

111

Net cash provided by operating activities from discontinued operations

 

 

 —

 

 

52

Net cash (used in) provided by operating activities

 

 

(31)

 

 

163

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Capital expenditures

 

 

(70)

 

 

(55)

Acquisition of a business, net of cash acquired

 

 

 —

 

 

(14)

Cash received from forward swap contract related to the sale of investment in Venator

 

 

16

 

 

 —

Net cash used in investing activities from continuing operations

 

 

(54)

 

 

(69)

Net cash used in investing activities from discontinued operations

 

 

 —

 

 

(67)

Net cash used in investing activities

 

 

(54)

 

 

(136)

 

(Continued)

8


 

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Millions)

 

 

 

 

 

 

 

 

 

 

Three months

 

 

ended

 

 

March 31, 

 

    

2019

    

2018

Financing Activities:

 

 

 

 

 

 

Net borrowings on revolving loan facilities

 

$

211

 

$

 —

Repayments of long-term debt

 

 

(652)

 

 

(4)

Proceeds from issuance of long-term debt

 

 

742

 

 

 —

Repayments of notes payable

 

 

(7)

 

 

(9)

Debt issuance costs paid

 

 

(6)

 

 

 —

Dividends paid to noncontrolling interests

 

 

 —

 

 

(18)

Dividends paid to common stockholders

 

 

(39)

 

 

(39)

Repurchase and cancellation of stock awards

 

 

(12)

 

 

(11)

Proceeds from issuance of common stock

 

 

 1

 

 

 5

Repurchase of common stock

 

 

(33)

 

 

(51)

Costs of early extinguishment of debt

 

 

(21)

 

 

 —

Proceeds from the secondary offering of Venator

 

 

 —

 

 

44

Cash paid for expenses of the secondary offering of Venator

 

 

 —

 

 

(2)

Other, net

 

 

(1)

 

 

(1)

Net cash provided by (used in) financing activities

 

 

183

 

 

(86)

Effect of exchange rate changes on cash

 

 

 6

 

 

16

Increase (decrease) in cash, cash equivalents and restricted cash

 

 

104

 

 

(43)

Cash, cash equivalents and restricted cash from continuing operations at beginning of period

 

 

340

 

 

481

Cash, cash equivalents and restricted cash from discontinued operations at beginning of period

 

 

 —

 

 

238

Cash, cash equivalents and restricted cash at end of period

 

$

444

 

$

676

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

26

 

$

31

Cash paid for income taxes 

 

 

14

 

 

41

 

As of March 31, 2019 and 2018, the amount of capital expenditures in accounts payable was $50 million and $32 million, respectively. In addition, as of March 31, 2018, the amount of cash interest and cash income taxes included in our supplemental cash flow information related to cash paid for interest and cash paid for income taxes that was paid by Venator after the initial public offering date was $19 million and $15 million, respectively.

 

See accompanying notes to condensed consolidated financial statements.

9


 

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions)

 

 

 

 

 

 

 

 

 

 

March 31, 

 

December 31, 

 

    

2019

    

2018

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents(a)

 

$

443

 

$

340

Accounts and notes receivable (net of allowance for doubtful accounts of $23 and $22, respectively), ($375 and $341 pledged as collateral, respectively)(a)

 

 

1,276

 

 

1,254

Accounts receivable from affiliates

 

 

405

 

 

399

Inventories(a)

 

 

1,228

 

 

1,134

Prepaid expenses

 

 

67

 

 

65

Other current assets(a)

 

 

112

 

 

148

Total current assets 

 

 

3,531

 

 

3,340

Property, plant and equipment, net(a)

 

 

3,055

 

 

3,064

Investment in unconsolidated affiliates

 

 

612

 

 

526

Intangible assets, net(a)

 

 

215

 

 

219

Goodwill

 

 

277

 

 

275

Deferred income taxes

 

 

292

 

 

324

Notes receivable from affiliate

 

 

34

 

 

34

Operating lease right-of-use assets

 

 

453

 

 

 —

Other noncurrent assets(a)

 

 

566

 

 

553

Total assets 

 

$

9,035

 

$

8,335

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable(a)

 

$

880

 

$

929

Accounts payable to affiliates

 

 

106

 

 

104

Accrued liabilities(a)

 

 

473

 

 

551

Notes payable to affiliates

 

 

100

 

 

100

Current portion of debt(a)

 

 

276

 

 

96

Current operating lease liabilities(a)

 

 

55

 

 

 —

Total current liabilities 

 

 

1,890

 

 

1,780

Long-term debt(a)

 

 

2,323

 

 

2,224

Notes payable to affiliates

 

 

454

 

 

488

Deferred income taxes

 

 

277

 

 

294

Noncurrent operating lease liabilities(a)

 

 

430

 

 

 —

Other noncurrent liabilities(a)

 

 

1,021

 

 

1,061

Total liabilities 

 

 

6,395

 

 

5,847

Commitments and contingencies (Notes 15 and 16)

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Huntsman International LLC members’ equity:

 

 

 

 

 

 

Members’ equity, 2,728 units issued and outstanding

 

 

3,665

 

 

3,658

Retained earnings (accumulated deficit)

 

 

(12)

 

 

(91)

Accumulated other comprehensive loss

 

 

(1,256)

 

 

(1,308)

Total Huntsman International LLC members’ equity 

 

 

2,397

 

 

2,259

Noncontrolling interests in subsidiaries