HUNTSMAN CORPORATION THE WOODLANDS, Texas, Oct. 27, 2017 /PRNewswire/ --
Third Quarter 2017 Highlights
-- Net income was $179 million compared to $64 million in the prior year
period and $183 million in the prior quarter.
-- Adjusted EBITDA was $340 million (16% EBITDA margin), impacted by $50
million from Hurricane Harvey, compared to $234 million in the prior
year period and $299 million in the prior quarter.
-- Diluted income per share was $0.60 compared to $0.23 in the prior year
period and $0.69 in the prior quarter.
-- Adjusted diluted income per share was $0.67 compared to $0.31 in the
prior year period and $0.59 in the prior quarter.
-- Net cash provided by operating activities was $261 million. Free cash
flow generation was $227 million.
-- The balance sheet was transformed by applying the $1.2 billion in
Venator IPO net proceeds to reduce Huntsman debt. On October 25, 2017,
we made an additional $100 million early repayment of debt. From the
beginning of 2016 to this most recent quarter our net-debt was reduced
by 47%, from $4.5 billion to $2.4 billion.
-- Merger of equals with Clariant terminated by mutual agreement.
Three months ended Nine months ended
September 30, June 30, September 30,
------------- -------------
In millions, except per share amounts 2017 2016 2017 2017 2016
------------------------------------- ---- ---- ---- ---- ----
Revenues $2,169 $1,831 $2,054 $6,155 $5,614
Net income $179 $64 $183 $454 $220
Adjusted net income(1) $164 $74 $144 $418 $302
Diluted income per share $0.60 $0.23 $0.69 $1.60 $0.83
Adjusted diluted income per share(1) $0.67 $0.31 $0.59 $1.72 $1.26
Adjusted EBITDA(1) $340 $234 $299 $899 $787
Pro forma adjusted EBITDA(2) $340 $227 $299 $899 $765
Net cash provided by operating activities $261 $333 $207 $538 $736
Free cash flow(3) $227 $251 $155 $404 $523
See end of press release for footnote explanations
Huntsman Corporation (NYSE: HUN) today reported third quarter 2017 results with revenues of $2,169 million, net income of $179 million and adjusted EBITDA of $340 million.
Peter R. Huntsman, our President and CEO, commented:
"While I am disappointed that the merger of equals agreement with Clariant has been terminated, Huntsman's future has never been brighter as our businesses continue to improve across the board, our balance sheet is as strong as it has ever been and will get even stronger with proceeds from upcoming Venator secondary sales. We look forward to achieving investment grade metrics in the near future. Huntsman remains focused on growing our downstream differentiated and specialty businesses, expanding our margins, and generating a consistently strong free cash flow.
"Notwithstanding a $50 million impact from Hurricane Harvey on our third quarter EBITDA, our business was up $113 million over last year. Our business is operating at a 16% EBITDA margin to sales. Excluding the impact from Harvey, each one of our businesses performed well, growing adjusted EBITDA versus the prior year, as our underlying fundamentals remain positive across our core markets. I expect each of our businesses to show year over year growth in the fourth quarter as well. In addition to our strong operating performance in the third quarter, we successfully completed the IPO of our Pigments and Additives segment, now called Venator, and the $1.2 billion in the initial proceeds were used to reduce our leverage. We also paid down an additional $100 million in debt from free cash flow earlier this week. We are delivering on our commitments to our shareholders, as to date we have generated over $1 billion in free cash flow and reduced our net-debt by over $2 billion since 2016, while at the same time investing in our differentiated and specialty businesses."
Segment Analysis for 3Q17 Compared to 3Q16
Polyurethanes
The increase in revenues in our Polyurethanes segment for the three months ended September 30, 2017 compared to the same period of 2016 was due to higher average selling prices and higher sales volumes. MDI average selling prices increased in response to continued strong market conditions and higher raw material costs. MTBE average selling prices increased primarily as a result of higher pricing for high octane gasoline. MDI sales volumes increased due to increased demand across most major markets. MTBE sales volumes increased due to the timing of shipments in the 2016 period, partially offset by the impact of hurricane related production outages during the third quarter of 2017. The increase in segment adjusted EBITDA was primarily due to higher MDI margins, partially offset by lower MTBE earnings and the $15 million estimated impact of hurricane related production outages during the third quarter of 2017.
Performance Products
The decrease in revenues in our Performance Products segment for the three months ended September 30, 2017 compared to the same period of 2016 was due to lower sales volumes, partially offset by higher average selling prices. Sales volumes decreased primarily due to the sale of the European surfactants business to Innospec Inc. on December 30, 2016 as well as the impact of hurricane related production outages in the third quarter of 2017, partially offset by higher sales volumes in our maleic anhydride and amines businesses. Average selling prices increased primarily in response to higher raw material costs and a favorable product mix effect. The decrease in segment adjusted EBITDA was primarily due to the estimated $35 million impact of hurricane related production outages in the third quarter of 2017 and the sale of the European surfactants business at the end of 2016. Pro-forma for the sale of our European surfactants business, adjusted EBITDA was flat year-over-year.
Advanced Materials
The increase in revenues in our Advanced Materials segment for the three months ended September 30, 2017 compared to the same period of 2016 was due to higher sales volumes and higher average selling prices. Sales volumes increased primarily due to growth in our specialty electronics and electrical and coatings components businesses, partially offset by our withdrawal from certain low margin business. Average selling prices increased in response to higher raw material costs and favorable product mix. The increase in segment adjusted EBITDA was primarily due to higher sales volumes and higher average selling prices, partially offset by higher raw material costs.
Textile Effects
The increase in revenues in our Textile Effects segment for the three months ended September 30, 2017 compared to the same period of 2016 was due to higher sales volumes, partially offset by lower average selling prices. Sales volumes increased in both textile chemicals and dyes, particularly in our Asia region. Average selling prices decreased primarily due to competitive market conditions. The increase in segment adjusted EBITDA was primarily due to higher sales volumes and lower fixed costs, partially offset by lower margins.
Corporate, LIFO and other
For the three months ended September 30, 2017, segment adjusted EBITDA from Corporate and other for Huntsman Corporation increased by $3 million to a loss of $42 million from a loss of $45 million for the same period in 2016.
Held for Sale and Discontinued Operations
Our Pigments and Additives division, known as Venator, is now classified as Held for Sale on our balance sheet and treated as discontinued operations on our income statement. We will be issuing a form 8K with certain restated historical financial data.
Liquidity, Capital Resources and Outstanding Debt
During the quarter we generated adjusted free cash flow of $227 million compared to $251 million a year ago. As of September 30, 2017, we had $1,211 million of combined cash and unused borrowing capacity compared to $1,208 million as of December 31, 2016. Year to date, including the $1.2 billion debt repayment made with the proceeds of the Venator separation and the $100 million early repayment of debt made on our term loan this week, we have repaid approximately $1.6 billion of debt.
During the nine months ended September 30, 2017, we spent $159 million on capital expenditures compared to $214 million in 2016. We expect to spend approximately $290 million on capital expenditures in 2017.
Income Taxes
During the three months ended September 30, 2017, we recorded income tax expense of $35 million compared to $6 million during the same period in 2016. In the third quarter 2017, our adjusted effective tax rate was 24%. We expect our fourth quarter adjusted effective tax rate to be similar to the third quarter. Our 2018 adjusted effective tax rate will be approximately 25% - 28%.
Earnings Conference Call Information
We will hold a conference call to discuss our third quarter 2017 financial results on Friday, October 27, 2017 at 10:00 a.m. ET.
Call-in numbers for the
conference call:
U.S. participants (888) 680 - 0890
International participants (617) 213 - 4857
Passcode 547 974 21#
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=PRRFWWDBY.
Webcast Information
The conference call will be available via webcast and can be accessed from the company's website at ir.huntsman.com.
Replay Information
The conference call will be available for replay beginning October 27, 2017 and ending November 3, 2017.
Call-in numbers for the replay:
U.S. participants (888) 286 - 8010
International participants (617) 801 - 6888
Replay code 29385180
Upcoming Conferences
During the fourth quarter a member of management is expected to present at the Citi Basic Materials Conference on November 28, 2017 and the Bank of America Merrill Lynch Leveraged Finance Conference on November 30, 2017. A webcast of the presentation, if applicable, along with accompanying materials will be available at ir.huntsman.com.
Table 1 - Results of Operations
-------------------------------
Three months ended Nine months ended
September 30, September 30,
------------- -------------
In millions, except per share amounts 2017 2016 2017 2016
------------------------------------- ---- ---- ---- ----
Revenues $2,169 $1,831 $6,155 $5,614
Cost of goods sold 1,695 1,475 4,852 4,444
----- ----- ----- -----
Gross profit 474 356 1,303 1,170
Operating expenses 238 217 677 664
Restructuring, impairment and plant closing costs 1 38 13 56
Expenses associated with the merger 12 - 18 -
--- --- --- ---
Operating income 223 101 595 450
Interest expense (39) (52) (134) (153)
Equity in income of investment in unconsolidated affiliates 1 1 4 4
Loss on early extinguishment of debt (35) (1) (36) (3)
Other income (expense) 1 (3) 2 (1)
--- ---
Income before income taxes 151 46 431 297
Income tax expense (35) (6) (78) (65)
--- ---
Income from continuing operations 116 40 353 232
Income (loss) from discontinued operations, net of tax(4) 63 24 101 (12)
Net income 179 64 454 220
Net income attributable to noncontrolling interests, net of tax (32) (9) (64) (22)
Net income attributable to Huntsman Corporation $147 $55 $390 $198
==== === ==== ====
Adjusted EBITDA(1) $340 $234 $899 $787
Adjusted net income(1) $164 $74 $418 $302
Basic income per share $0.62 $0.23 $1.64 $0.84
Diluted income per share $0.60 $0.23 $1.60 $0.83
Adjusted diluted income per share(1) $0.67 $0.31 $1.72 $1.26
Common share information:
Basic shares outstanding 239 236 238 236
Diluted shares 244 240 244 239
Diluted shares for adjusted diluted income per share 244 240 244 239
See end of press release for
footnote explanations
Table 2 - Results of Operations by Segment
------------------------------------------
Three months ended Nine months ended
September 30, Better / September 30, Better /
------------- -------------
In millions 2017 2016 (Worse) 2017 2016 (Worse)
----------- ---- ---- ------ ---- ---- ------
Segment Revenues:
Polyurethanes $1,197 $891 34% $3,172 $2,703 17%
Performance Products 501 509 (2)% 1,595 1,611 (1)%
Performance Products, pro forma(2) 501 451 11% 1,595 1,433 11%
Advanced Materials 263 247 6% 782 774 1%
Textile Effects 193 184 5% 586 567 3%
Corporate and eliminations 15 - n/m 20 (41) n/m
--- --- --- ---
Total $2,169 $1,831 18% $6,155 $5,614 10%
====== ====== ====== ======
Total, pro forma(2) $2,169 $1,773 22% $6,155 $5,436 13%
====== ====== ====== ======
Segment Adjusted EBITDA(1):
Polyurethanes $245 $137 79% $556 $439 27%
Performance Products 63 70 (10)% 249 248 0%
Performance Products, pro forma(2) 63 63 0% 249 226 10%
Advanced Materials 56 55 2% 166 173 (4)%
Textile Effects 19 17 12% 64 59 8%
Corporate, LIFO and other (43) (45) 4% (136) (132) (3)%
---- ----
Total $340 $234 45% $899 $787 14%
==== ==== ==== ====
Total, pro forma(2) $340 $227 50% $899 $765 18%
==== ==== ==== ====
n/m = not meaningful
See end of press release for
footnote explanations
Table 3 - Factors Impacting Sales Revenue
-----------------------------------------
Three months ended
September 30, 2017 vs. 2016
---------------------------
Average Selling Price(a)
-----------------------
Local Exchange Sales Mix Sales
Currency Rate & Other Volume(b) Total
-------- ---- ------- -------- -----
Polyurethanes 20% 2% 0% 12% 34%
Polyurethanes, adj 21% 2% 1% 10% 34% (d)
Performance Products 9% 1% 4% (16)% (2)%
Performance Products, adj 9% 1% (2)% 18% 26% (c)(d)
Advanced Materials 1% 2% 0% 3% 6%
Textile Effects (1)% 1% (2)% 7% 5%
Total Company 12% 2% 3% 1% 18%
Total Company, adj 11% 2% 1% 12% 26% (c)(d)
Nine months ended
September 30, 2017 vs. 2016
---------------------------
Average Selling Price(a)
-----------------------
Local Exchange Sales Mix Sales
Currency Rate & Other Volume(b) Total
-------- ---- ------- -------- -----
Polyurethanes 15% 0% 5% (3)% 17%
Polyurethanes, adj 15% 0% 4% 1% 20% (d)(e)
Performance Products 6% 0% 2% (9)% (1)%
Performance Products, adj 6% 0% (2)% 12% 16% (c)(d)
Advanced Materials 1% 0% 0% 0% 1%
Textile Effects (2)% 0% (3)% 8% 3%
Total Company 9% 0% 6% (5)% 10%
Total Company, adj 8% 0% 3% 5% 16% (c)(d)(e)
(a) Excludes sales from tolling
arrangements, by-products and raw
materials.
(b) Excludes sales from by-products
and raw materials.
(c) Pro forma adjusted to exclude
the sale of the European
differentiated surfactants on
December 30, 2016.
(d) Pro forma adjusted to exclude
the impact from Hurricane Harvey in
3Q17 and Other weather realted
outages in 2H16.
(e) Pro forma adjusted to exclude
the impact from maintenance outages
in 2Q17.
Table 4 - Reconciliation of U.S. GAAP to Non-GAAP Measures
----------------------------------------------------------
Income Tax Diluted Income
EBITDA Expense Net Income Per Share
------ ------- ---------- ---------
Three months ended Three months ended Three months ended Three months ended
September 30, September 30, September 30, September 30,
------------- ------------- ------------- -------------
In millions, except per share amounts 2017 2016 2017 2016 2017 2016 2017 2016
------------------------------------- ---- ---- ---- ---- ---- ---- ---- ----
Net income $179 $64 $179 $64 $0.73 $0.27
Net income attributable to noncontrolling interests (32) (9) (32) (9) (0.13) (0.04)
Net income attributable to Huntsman Corporation 147 55 147 55 0.60 0.23
---- ----
Interest expense from continuing operations 39 52
Interest expense from discontinued operations(4) 8 -
Income tax expense from continuing operations 35 6 $(35) $(6)
Income tax expense (benefit) from discontinued operations(4) 17 (7)
Depreciation and amortization from continuing operations 80 83
Depreciation and amortization from discontinued operations(4) 9 30
Acquisition and integration expenses 10 6 (3) (2) 7 4 0.03 0.02
EBITDA / Income from discontinued operations, net of tax(4) (97) (47) N/A N/A (63) (24) (0.26) (0.10)
Minority interest of discontinued operations(1)(4) 12 3 N/A N/A 12 3 0.05 0.01
Loss on early extinguishment of debt 35 1 (12) - 23 1 0.09 -
Expenses associated with merger, net of tax 12 - (1) - 11 - 0.05 -
Net plant incident costs 13 - (4) - 9 - 0.04 -
Amortization of pension and postretirement actuarial losses 19 14 (3) (5) 16 9 0.07 0.04
Restructuring, impairment and plant closing and transition costs 1 38 1 (12) 2 26 0.01 0.11
Adjusted(1) $340 $234 $(57) $(25) $164 $74 $0.67 $0.31
---- ---- ==== ==== ==== === ----- -----
Pro forma adjustments(2) - $(7)
Pro forma adjusted EBITDA(1) $340 $227
==== ====
Adjusted income tax expense(1) $57 $25
Net income attributable to noncontrolling interests, net of tax 32 9
Minority interest of discontinued operations(1)(4) (12) (3)
Adjusted pre-tax income(1) $241 $105
==== ====
Adjusted effective tax rate 24% 24%
Income Tax Diluted Income
EBITDA Expense Net Income 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 2017 2017 2017 2017
------------------------------------- ---- ---- ---- ----
Net income $183 $183 $0.75
Net income attributable to noncontrolling interests (16) (16) (0.07)
Net income attributable to Huntsman Corporation 167 167 0.69
----
Interest expense from continuing operations 47
Interest expense from discontinued operations(4) -
Income tax expense from continuing operations 24 $(24)
Income tax expense from discontinued operations(4) 21
Depreciation and amortization from continuing operations 79
Depreciation and amortization from discontinued operations(4) 29
Acquisition and integration expenses 4 - 4 0.02
EBITDA / Income from discontinued operations, net of tax(4) (95) N/A (45) (0.18)
Minority interest of discontinued operations(1)(4) 3 N/A 3 0.01
Gain on disposition of businesses/assets (8) - (8) (0.03)
Loss on early extinguishment of debt 1 - 1 -
Expenses associated with merger 6 N/A 6 0.02
Certain legal settlements and related expenses 1 - 1 -
Amortization of pension and postretirement actuarial losses 17 (4) 13 0.05
Restructuring, impairment and plant closing and transition costs 3 (1) 2 0.01
Adjusted(1) $299 $(29) $144 $0.59
==== ==== ==== -----
Adjusted income tax expense(1) $29
Net income attributable to noncontrolling interests, net of tax 16
Minority interest of discontinued operations(1)(4) (3)
Adjusted pre-tax income(1) $186
====
Adjusted effective tax rate 16%
Income Tax Diluted Income
EBITDA (Expense) Benefit Net Income 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 2017 2016 2017 2016 2017 2016 2017 2016
------------------------------------- ---- ---- ---- ---- ---- ---- ---- ----
Net income $454 $220 $454 $220 $1.86 $0.92
Net income attributable to noncontrolling interests (64) (22) (64) (22) (0.26) (0.09)
Net income attributable to Huntsman Corporation 390 198 390 198 1.60 0.83
---- ----
Interest expense from continuing operations 134 153
Interest expense (income) from discontinued operations(4) 8 (1)
Income tax expense from continuing operations 78 65 (78) (65)
Income tax expense (benefit) from discontinued operations(4) 41 (8)
Depreciation and amortization from continuing operations 235 238
Depreciation and amortization from discontinued operations(4) 68 84
Acquisition and integration expenses 17 11 (4) (3) 13 8 0.05 0.03
EBITDA / Income (loss) from discontinued operations, net of tax(4) (218) (63) N/A N/A (101) 12 (0.41) 0.05
Minority interest of discontinued operations(1)(4) 18 8 N/A N/A 18 8 0.07 0.03
Gain on disposition of businesses/assets (8) - - - (8) - (0.03) -
Loss on early extinguishment of debt 36 3 (12) (1) 24 2 0.10 0.01
Expenses associated with merger 18 - N/A N/A 17 - 0.07 -
Certain legal settlements and related expenses 1 - - - 1 - - -
Net plant incident costs 13 - (4) - 9 - 0.04 -
Amortization of pension and postretirement actuarial losses 55 42 (11) (10) 44 32 0.18 0.13
Restructuring, impairment and plant closing and transition costs 13 57 (2) (15) 11 42 0.05 0.18
Adjusted(1) $899 $787 $(111) $(94) $418 $302 $1.72 $1.26
==== ==== ===== ==== ==== ==== ----- -----
Pro forma adjustments(2) - $(22)
Pro forma adjusted EBITDA(1) $899 $765
==== ====
Adjusted income tax expense(1) $111 $94
Net income attributable to noncontrolling interests, net of tax 64 22
Minority interest of discontinued operations(1)(4) (18) (8)
Adjusted pre-tax income(1) $575 $410
==== ====
Adjusted effective tax rate 19% 23%
See end of press release for
footnote explanations
Table 5 - Selected Balance Sheet Items
--------------------------------------
September 30, June 30, December 31,
In millions 2017 2017 2016
----------- ---- ---- ----
Cash $451 $486 $396
Accounts and notes receivable, net 1,247 1,207 1,183
Inventories 1,084 1,089 918
Other current assets 240 236 281
Current assets held for sale 2,745 962 777
Property, plant and equipment, net 3,035 3,039 3,034
Other assets 1,181 1,194 1,137
Noncurrent assets held for sale - 1,475 1,463
Total assets $9,983 $9,688 $9,189
====== ====== ======
Accounts payable $891 $864 $790
Other current liabilities 537 460 471
Current portion of debt 29 41 50
Current liabilities held for sale 1,633 518 467
Long-term debt 2,845 4,061 4,122
Other liabilities 1,457 1,466 1,429
Noncurrent liabilities held for sale - 400 393
Total equity 2,591 1,878 1,467
Total liabilities and equity $9,983 $9,688 $9,189
====== ====== ======
Table 6 - Outstanding Debt
--------------------------
September 30, December 31,
In millions 2017 2016
----------- ---- ----
Debt:
Senior credit facilities $592 $1,967
Accounts receivable programs 184 208
Senior notes 1,913 1,812
Variable interest entities 114 126
Other debt 71 59
Total debt - excluding affiliates 2,874 4,172
----- -----
Total cash 451 396
--- ---
Net debt- excluding affiliates $2,423 $3,776
====== ======
Table 7 - Summarized Statement of Cash Flows
--------------------------------------------
Three months ended Nine months ended
September 30, September 30,
------------- -------------
In millions 2017 2016 2017 2016
----------- ---- ---- ---- ----
Total cash at beginning of period(a) $520 $383 $425 $269
Net cash provided by operating activities - continuing operations 261 333 538 736
Net cash provided by operating activities - discontinued operations(4) 88 72 205 112
Net cash used in investing activities - continuing operations (50) (82) (145) (213)
Net cash used in investing activities - discontinued operations(4) (61) (14) (49) (57)
Net cash used in financing activities (125) (244) (349) (397)
Effect of exchange rate changes on cash 4 1 12 1
Change in restricted cash - 1 - (1)
-
Total cash at end of period(a) $637 $450 $637 $450
==== ==== ==== ====
Supplemental cash flow information - continuing operations:
Cash paid for interest $(30) $(36) $(122) $(139)
Cash (paid) received for income taxes (21) (8) 36 (29)
Cash paid for capital expenditures (58) (82) (159) (214)
Depreciation and amortization 80 83 235 238
-
Changes in primary working capital:
Accounts and notes receivable $(28) $68 $(148) $(3)
Inventories 19 57 (118) 133
Accounts payable 16 13 95 (11)
Total cash (used in) provided by primary working capital $7 $138 $(171) $119
=== ==== ===== ====
Three months ended Nine months ended
September 30, September 30,
------------- -------------
2017 2016 2017 2016
---- ---- ---- ----
Free cash flow(3):
Net cash provided by operating activities $261 $333 $538 $736
Capital expenditures (58) (82) (159) (214)
All other investing activities, excluding acquisition and disposition activities(b) 6 - 7 1
Non-recurring merger costs(c) 18 - 18 -
Total free cash flow $227 $251 $404 $523
==== ==== ==== ====
Adjusted EBITDA $340 $234 $899 $787
Capital expenditures (58) (82) (159) (214)
Capital reimbursements - 2 1 28
Interest (30) (36) (122) (139)
Income taxes (21) (8) 36 (29)
Primary working capital change 7 138 (171) 119
Restructuring (7) (19) (26) (42)
Pensions (48) (13) (85) (45)
Maintenance & other 44 35 31 58
Total free cash flow(3) $227 $251 $404 $523
==== ==== ==== ====
Free cash flow of discontinued operations(3)(4) $61 $52 $217 $49
=== === ==== ===
(a) Includes restricted cash and cash held in
discontinued operations.
(b) Represents "Acquisition of business, net
of cash acquired", "Cash received from
purchase price adjustment for business
acquired", and "Proceeds from sale of
business/assets".
(c) Represents payments associated with one-
time costs of the proposed merger of equals
with Clariant.
Footnotes
---------
(1) We use adjusted EBITDA to measure the operating
performance of our business and for planning and
evaluating the performance of our business
segments. 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) 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 adjusted EBITDA and
adjusted net income. Additional information with
respect to our use of each of these financial
measures follows:
Adjusted EBITDA, adjusted net income (loss) and
adjusted diluted income (loss) per share, as used
herein, are not necessarily comparable to other
similarly titled measures of other companies.
Adjusted EBITDA is computed by eliminating the
following from net income (loss): (a) net income
attributable to noncontrolling interests, net of
tax; (b) interest; (c) income taxes; (d)
depreciation and amortization; (e) acquisition and
integration expenses; (f) Income (loss) from
discontinued operations, net of tax; (g) minority
interest from discontinued operations (h) loss
(gain) on disposition of businesses/assets; (i)
loss on early extinguishment of debt; (j) expenses
associated with merger; (k) certain legal
settlements and related expenses (l) net plant
incident costs (credits); (m) amortization of
pension and postretirement actuarial losses
(gains); and (n) restructuring, impairment and
plant closing costs (credits). The reconciliation
of adjusted EBITDA to net income (loss) is set
forth in Table 4 above.
Adjusted net income (loss) and adjusted diluted
income (loss) per share are computed by
eliminating the after tax impact of the following
items from net income (loss: (a) net income
attributable to noncontrolling interest; (b)
acquisition and integration expenses, purchase
accounting adjustments; (c) impact of certain
foreign tax credit elections; (d) Income (loss)
from discontinued operations, net of tax;; (e)
discount amortization on settlement financing
associated with the terminated merger; (f) loss
(gain) on disposition of businesses/assets; (g)
loss on early extinguishment of debt; (h) expenses
associated with the merger; (i) certain legal
settlements and related expenses; (j) net plant
incident costs (credits); (k) minority interest
from discontinued operations; (l) amortization of
pension and postretirement actuarial losses
(gains); and (m) restructuring, impairment and
plant closing costs (credits). The income tax
impacts, if any, of each adjusting item represent
a ratable allocation of the total difference
between the unadjusted tax expense and the total
adjusted tax expense, computed without
consideration of any adjusting items using a with
and without approach. 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) is set forth in Table 4 above.
(2) Pro forma adjusted to exclude the sale of our
European differentiated surfactants business to
Innospec on December 30, 2016 as if it had
occurred at the beginning of the relevant period.
(3) Management internally uses a free cash flow
measure: (a) to evaluate the Company's liquidity,
(b) to evaluate strategic investments, (c) to plan
stock buyback and dividend levels and (d) to
evaluate the Company's ability to incur and
service debt. Free cash flow is not a defined term
under U.S. GAAP, and it should not be inferred
that the entire free cash flow amount is available
for discretionary expenditures. The Company
defines free cash flow as cash flow provided by
operating activities less cash flow used in
investing activities, excluding acquisition/
disposition activities and non-recurring
separation costs. Free cash flow is typically
derived directly from the Company's condensed
consolidated statement of cash flows; however, it
may be adjusted for items that affect
comparability between periods.
(4) During the third quarter of 2017 we separated our
Pigments and Additives division through an Initial
Public Offering of Venator Materials PLC;
Additionally, during the first quarter 2010 we
closed our Australian styrenics operations.
Results from these associated businesses are
treated as discontinued operations.
About Huntsman:
Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2016 revenues of more than $7 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 75 manufacturing, R&D and operations facilities in over 30 countries and employ approximately 10,000 associates within our four distinct business divisions. For more information about Huntsman, please visit the company's website at www.huntsman.com.
Social Media:
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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: effects of disruption caused by the announcement of and termination of the merger of equals transaction and its termination making it more difficult to maintain relationships with employees, customers, vendors and other business partners; the risk that stockholder litigation in connection with the contemplated transaction and its termination may result in significant costs of defense, indemnification and liability; transaction costs; volatile global economic conditions, cyclical and volatile product markets, disruptions in production at manufacturing facilities, reorganization or restructuring of Huntsman's operations, the ability to implement cost reductions and manufacturing optimization improvements in Huntsman businesses, and other 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.
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SOURCE Huntsman Corporation
