HUNTSMAN CORPORATION 
By THE WOODLANDS, Texas, April 29, 2014 /PRNewswire/ --
First Quarter 2014 Highlights
-- Adjusted EBITDA was $329 million compared to $220 million in the prior
year period, an improvement of 50%.
-- Adjusted diluted income per share was $0.43 compared to $0.19 in the
prior year period.
-- Net income attributable to Huntsman Corporation was $54 million compared
to net loss of $24 million in the prior year period.
Three months ended
------------------
March 31, December 31,
---------
In millions, except per
share amounts, unaudited 2014 2013 2013
------------------------- ---- ---- ----
Revenues $2,755 $2,702 $2,705
Net income (loss)
attributable to Huntsman
Corporation $54 $(24) $41
Adjusted net income(1) $105 $46 $118
Diluted income (loss) per
share $0.22 $(0.10) $0.17
Adjusted diluted income
per share(1) $0.43 $0.19 $0.48
EBITDA(1) $261 $112 $225
Adjusted EBITDA(1) $329 $220 $313
See end of press release
for footnote explanations
Huntsman Corporation (NYSE: HUN) today reported first quarter 2014 results with revenues of $2,755 million and adjusted EBITDA of $329 million.
Peter R. Huntsman, our President and CEO, commented:
"Our first quarter results demonstrated broad earnings strength as all of our businesses exceeded the previous year with the exception of PO/MTBE. The benefits of our previous year's restructuring efforts are visible in both our Advanced Materials and Textile Effects results. We continue to see strong results in our Performance Products and MDI polyurethanes, which make up the core of our earnings.
We remain actively engaged with the European Union in their antitrust review of our proposed acquisition of Rockwood Holding's Performance Additives and Titanium Dioxide businesses.
This past month, at our Investor Day we presented a plan to achieve $2 billion of Adjusted EBITDA within the next 2-3 years. With these strong first quarter results, we're well on our way to achieving this target."
Segment Analysis for 1Q14 Compared to 1Q13
Polyurethanes
The increase in revenues in our Polyurethanes division for the three months ended March 31, 2014 compared to the same period in 2013 was primarily due to higher sales volumes partially offset by lower average selling prices. MDI sales volumes increased 6% as a result of improved demand in all regions and across most major markets whereas PO/MTBE sales volumes were essentially unchanged. PO/MTBE average selling prices decreased primarily due to less favorable market conditions and MDI Urethane average selling prices were essentially flat. The decrease in adjusted EBITDA was due to lower PO/MTBE margins partially offset by an increase in MDI Urethane earnings.
Performance Products
The increase in revenues in our Performance Products division for the three months ended March 31, 2014 compared to the same period in 2013 was due to higher sales volumes and higher selling prices partially offset by the mix effect of more toll business. Sales volumes increased primarily due to the impact of the scheduled maintenance on our olefins and ethylene oxide facilities in Port Neches, Texas in the first quarter of 2013, as well as improved demand for amines and maleic anhydride. Average selling prices increased, notably for maleic anhydride and surfactants, in response to higher raw materials costs. The increase in adjusted EBITDA was primarily due to the impact of our scheduled maintenance in the first quarter of 2013, estimated at $55 million.
Advanced Materials
The decrease in revenues in our Advanced Materials division for the three months ended March 31, 2014 compared to the same period in 2013 was primarily due to lower sales volumes, partially offset by higher average selling prices and favorable sales mix. Sales volumes decreased in our base resins business primarily due to our restructuring efforts. During the fourth quarter 2013 we closed two of our base resins production units as we focus on higher value component and formulations sales such as aerospace, transportation and industrial markets. Average selling prices increased in all regions primarily due to increased prices for certain products as well as an increased focus on higher value component and formulations sales. The increase in adjusted EBITDA was primarily due to higher contribution margins and lower manufacturing and selling, general and administrative costs as a result of our restructuring efforts.
Textile Effects
The increase in revenues in our Textile Effects division for the three months ended March 31, 2014 compared to the same period in 2013 was due to higher average selling prices and higher sales volumes. Average selling prices increased primarily in response to higher raw material costs. Sales volumes increased primarily due to increased market share and stronger consumer end market sentiment. The increase in adjusted EBITDA was primarily due to higher contribution margins as a result of our restructuring efforts.
Pigments
The decrease in revenues in our Pigments division for the three months ended March 31, 2014 compared to the same period in 2013 was primarily due to lower average selling prices as sales volumes were essentially unchanged. Average selling prices decreased primarily as a result of high industry inventory levels partially offset by the strength of the euro against the U.S. dollar. The increase in adjusted EBITDA was primarily due to lower manufacturing costs as a result of higher production volumes.
Corporate, LIFO and Other
Adjusted EBITDA from Corporate, LIFO and Other improved by $1 million to a loss of $44 million for the three months ended March 31, 2014 compared to a loss of $45 million for the same period in 2013.
Liquidity, Capital Resources and Outstanding Debt
As of March 31, 2014 we had $902 million of combined cash and unused borrowing capacity compared to $1,048 million at December 31, 2013.
Total capital expenditures for the quarter ended March 31, 2014 were $107 million. We expect to spend approximately $500 million on capital expenditures in 2014, net of reimbursements and excluding any amounts associated with the planned acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc.
Income Taxes
During the three months ended March 31, 2014 we recorded income tax expense of $36 million and paid $46 million in cash for income taxes. Our adjusted effective income tax rates for the three months ended March 31, 2014 was approximately 32%.
We expect our 2014 adjusted effective tax rate to be approximately 35% excluding the impact of the acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc. We expect our long term adjusted effective tax rate to be approximately 30%.
Earnings Conference Call Information
We will hold a conference call to discuss our first quarter 2014 financial results on Tuesday, April 29, 2014 at 10:00 a.m. ET.
Call-in numbers for the conference call:
U.S. participants (888) 713 - 4214
International participants (617) 213 - 4866
Passcode 60716193
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=PXFJDHCNN
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 April 29, 2014 and ending May 6, 2014.
Call-in numbers for the replay:
U.S. participants (888) 286 - 8010
International participants (617) 801 - 6888
Replay code 10497006
Table 1 - Results of Operations
-------------------------------
Three
months
ended
March 31,
---------
In millions, except per share
amounts, unaudited 2014 2013
----------------------------- ---- ----
Revenues $2,755 $2,702
Cost of goods sold 2,305 2,353
----- -----
Gross profit 450 349
Operating expenses 261 255
Restructuring, impairment and
plant closing costs 39 44
--- ---
Operating income 150 50
Interest expense (48) (51)
Equity in income of investment
in unconsolidated affiliates 2 1
Loss on early extinguishment of
debt - (35)
Other income 1 -
Income (loss) before income
taxes 105 (35)
Income tax (expense) benefit (36) 20
Income (loss) from continuing
operations 69 (15)
Loss from discontinued
operations, net of tax(2) (7) (2)
Net income (loss) 62 (17)
Net income attributable to
noncontrolling interests, net
of tax (8) (7)
Net income (loss) attributable
to Huntsman Corporation $54 $(24)
=== ====
Adjusted EBITDA(1) $329 $220
Adjusted net income(1) $105 $46
Basic income (loss) per share $0.22 $(0.10)
Diluted income (loss) per share $0.22 $(0.10)
Adjusted diluted income per
share(1) $0.43 $0.19
Common share information:
Basic shares outstanding 240.9 239.0
Diluted shares 244.5 239.0
Diluted shares for adjusted
diluted income per share 244.5 241.8
See end of press release for
footnote explanations
Table 2 - Results of Operations by Segment
------------------------------------------
Three months ended
------------------
March 31, Better /
(Worse)
------
In millions,
unaudited 2014 2013
------------ ---- ----
Segment Revenues:
Polyurethanes $1,200 $1,182 2%
Performance
Products 765 722 6%
Advanced Materials 319 336 (5)%
Textile Effects 224 188 19%
Pigments 318 330 (4)%
Eliminations and
other (71) (56) (27)%
--- ---
Total $2,755 $2,702 2%
====== ======
Segment Adjusted EBITDA(1):
Polyurethanes $167 $178 (6)%
Performance
Products 118 54 119%
Advanced Materials 46 27 70%
Textile Effects 16 (3) NM
Pigments 26 9 189%
Corporate, LIFO and
other (44) (45) 2%
Total $329 $220 50%
==== ====
See end of press release for
footnote explanations NM-Not meaningful
Table 3 - Factors Impacting Sales Revenues
------------------------------------------
Three months ended
March 31, 2014 vs. 2013
-----------------------
Average Selling
Price(a)
----------------
Local Exchange Sales Mix Sales
Unaudited Currency Rate & Other Volume(b) Total
--------- -------- ---- ------- -------- -----
Polyurethanes (4)% --- 1% 5% 2%
Performance
Products 2% --- (10)% 14% 6%
Advanced
Materials 6% (1)% 6% (16)% (5)%
Textile
Effects 15% (2)% 2% 4% 19%
Pigments (5)% 1% --- --- (4)%
Total Company (2)% --- (4)% 8% 2%
(a) Excludes sales from
tolling arrangements, by-
products and raw materials.
(b) Excludes sales from by-
products and raw materials.
Table 4 - Reconciliation of U.S. GAAP to Non-GAAP Measures
----------------------------------------------------------
Income Tax Net Income (loss) Diluted Income
EBITDA Expense Attrib. to HUN Corp. Per Share
------ ------- -------------------- ---------
Three months ended Three months ended Three months ended Three months ended
March 31, March 31, March 31, March 31,
--------- --------- --------- ---------
In millions,
except per share
amounts,
unaudited 2014 2013 2014 2013 2014 2013 2014 2013
----------------- ---- ---- ---- ---- ---- ---- ---- ----
GAAP(1) $261 $112 $(36) $20 $54 $(24) $0.22 $(0.10)
Adjustments:
Acquisition
expenses and
purchase
accounting
inventory
adjustments 8 3 (2) (1) 6 2 0.02 0.01
Loss from
discontinued
operations, net
of tax(2) 7 3 N/A N/A 7 2 0.03 0.01
Discount
amortization on
settlement
financing
associated with
the terminated
merger N/A N/A - (1) - 2 - 0.01
Loss on early
extinguishment
of debt - 35 - (13) - 22 - 0.09
Certain legal
settlements and
related expenses - 2 - (1) - 1 - -
Amortization of
pension and
postretirement
actuarial losses 13 19 (4) (7) 9 12 0.04 0.05
Restructuring,
impairment and
plant closing
and transition
costs 40 46 (11) (17) 29 29 0.12 0.12
Adjusted(1) $329 $220 $(53) $(20) $105 $46 $0.43 $0.19
==== ==== ==== ==== ==== === ----- -----
Adjusted income
tax expense 53 20
Net income
attributable to
noncontrolling
interests, net
of tax 8 7
Adjusted pre-tax
income(1) $166 $73
==== ===
Adjusted
effective tax
rate 32% 27%
Income Tax Net Income Diluted Income
EBITDA Expense Attrib. to HUN Corp. Per Share
------ ------- -------------------- ---------
Three months ended Three months ended Three months ended Three months ended
December 31, December 31, December 31, December 31,
In millions,
except per share
amounts,
unaudited 2013 2013 2013 2013
----------------- ---- ---- ---- ----
GAAP(1) $225 $(20) $41 $0.17
Adjustments:
Acquisition
expenses and
purchase
accounting
inventory
adjustments 7 (3) 4 0.02
Loss from
discontinued
operations, net
of tax(2) 2 N/A 1 -
Discount
amortization on
settlement
financing
associated with
the terminated
merger N/A (1) 1 -
Loss on early
extinguishment
of debt 16 (6) 10 0.04
Certain legal
settlements and
related expenses 1 - 1 -
Amortization of
pension and
postretirement
actuarial losses 18 (7) 11 0.05
Restructuring,
impairment and
plant closing
and transition
costs 44 5 49 0.20
Adjusted(1) $313 $(32) $118 $0.48
==== ==== ==== -----
Adjusted income
tax expense 32
Net income
attributable to
noncontrolling
interests, net
of tax 1
Adjusted pre-tax
income(1) $151
====
Adjusted
effective tax
rate 21%
See end of press release for footnote explanations
Table 5 - Reconciliation of Net Income (Loss) to EBITDA
-------------------------------------------------------
Three months ended
------------------
March 31, December 31,
---------
In millions, unaudited 2014 2013 2013
---------------------- ---- ---- ----
Net income (loss)
attributable to Huntsman
Corporation $54 $(24) $41
Interest expense 48 51 44
Income tax expense
(benefit) from continuing
operations 36 (20) 20
Income tax benefit from
discontinued operations(2) - (2) (2)
Depreciation and
amortization 123 107 122
EBITDA(1) $261 $112 $225
==== ==== ====
See end of press release
for footnote explanations
Table 6 - Selected Balance Sheet Items
--------------------------------------
March 31, December 31,
In millions 2014 2013
----------- ---- ----
(unaudited)
Cash $286 $529
Accounts and notes
receivable, net 1,724 1,575
Inventories 1,911 1,741
Other current assets 307 314
Property, plant and
equipment, net 3,794 3,824
Other assets 1,205 1,205
Total assets $9,227 $9,188
====== ======
Accounts payable $1,185 $1,113
Other current
liabilities 760 769
Current portion of debt 270 277
Long-term debt 3,621 3,633
Other liabilities 1,214 1,267
Total equity 2,177 2,129
Total liabilities and
equity $9,227 $9,188
====== ======
Table 7 - Outstanding Debt
--------------------------
March 31, December 31,
In millions 2014 2013
----------- ---- ----
(unaudited)
Debt:
Senior credit facilities $1,338 $1,351
Accounts receivable
programs 247 248
Senior notes 1,060 1,061
Senior subordinated notes 891 891
Variable interest entities 238 247
Other debt 117 112
Total debt -excluding
affiliates 3,891 3,910
----- -----
Total cash 286 529
--- ---
Net debt- excluding
affiliates $3,605 $3,381
====== ======
Table 8 - Summarized Statement of Cash Flows
--------------------------------------------
Three
months
ended
March 31,
---------
In millions, unaudited 2014 2013
---------------------- ---- ----
Total cash at beginning of
period $529 $396
Net cash used in operating
activities (67) (74)
Net cash used in investing
activities (104) (85)
Net cash (used in) provided by
financing activities (71) 21
Effect of exchange rate changes
on cash (1) (2)
Total cash at end of period $286 $256
==== ====
Supplemental cash flow
information:
Cash paid for interest $(56) $(59)
Cash paid for income taxes (46) (17)
Cash paid for capital
expenditures (107) (89)
Depreciation and amortization 123 107
Changes in primary working
capital:
Accounts and notes receivable (149) (85)
Inventories (172) (9)
Accounts payable 107 10
Total cash used in primary
working capital $(214) $(84)
===== ====
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: acquisition expenses and
purchase accounting inventory
adjustments; loss (gain) on initial
consolidation of subsidiaries; EBITDA
from discontinued operations; loss
(gain) on disposition of businesses/
assets; loss on early extinguishment
of debt; extraordinary loss (gain) on
the acquisition of a business;
certain legal settlements and related
expenses; amortization of pension and
postretirement actuarial losses
(gains); and restructuring,
impairment, plant closing and
transition costs (credits). The
reconciliation of adjusted EBITDA to
EBITDA is set forth in Table 4 above.
Adjusted net income (loss) is computed
by eliminating the after tax impact
of the following items from net
income (loss) attributable to
Huntsman Corporation: acquisition
expenses and purchase accounting
inventory adjustments; loss (gain) on
initial consolidation of
subsidiaries; loss (income) from
discontinued operations; discount
amortization on settlement financing
associated with the terminated
merger; loss (gain) on disposition of
businesses/assets; loss on early
extinguishment of debt; extraordinary
loss (gain) on the acquisition of a
business; certain legal settlements
and related expenses; amortization of
pension and postretirement actuarial
losses (gains); and restructuring,
impairment, plant closing and
transition costs (credits). We do
not adjust for changes in tax
valuation allowances because we do
not believe it provides more
meaningful information than is
provided under GAAP. The
reconciliation of adjusted net income
(loss) to net income (loss)
attributable to Huntsman Corporation
common stockholders is set forth in
Table 4 above.
(2) During the first quarter 2010 we
closed our Australian styrenics
operations; results from this
business are treated as discontinued
operations.
About Huntsman:
Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals with 2013 revenues of over $11 billion. Our chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. We operate more than 80 manufacturing and R&D facilities in 30 countries and employ approximately 12,000 associates within our 5 distinct business divisions. 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
