HUNTSMAN CORPORATION 
By THE WOODLANDS, Texas, May 1, 2012 /PRNewswire/ --
First Quarter 2012 Highlights
-- Revenues improved 9% compared to the prior year period.
-- Net income attributable to Huntsman Corporation increased to $163
million compared to $62 million in the prior year period.
-- Adjusted EBITDA improved 31% to $397 million compared to the prior year
period.
-- Adjusted diluted income per share improved 64% to $0.74 compared to the
prior year period.
Three months ended
------------------
March 31, December 31,
---------
In millions, except
per share amounts,
unaudited 2012 2011 2011
------------------- ---- ---- ----
Revenues $2,913 $2,679 $2,632
Net income
attributable to
Huntsman
Corporation $163 $62 $105
Adjusted net
income(1) $177 $110 $68
Diluted income per
share $0.68 $0.26 $0.44
Adjusted diluted
income per share(1) $0.74 $0.45 $0.28
EBITDA(1) $390 $239 $273
Adjusted EBITDA(1) $397 $304 $243
See end of press release for footnote explanations
Huntsman Corporation (NYSE: HUN) today reported first quarter 2012 results with revenues of $2,913 million and adjusted EBITDA of $397 million.
Peter R. Huntsman, our President and CEO, commented:
"Our first quarter 2012 earnings represented a record performance. Improvements in our MDI selling prices and attractive margins in our PO/MTBE business were notable.
There are still considerable financial benefits forthcoming from our restructuring efforts. Notwithstanding certain economic challenges in various parts of the world, I am most optimistic about our earnings potential."
Segment Analysis for 1Q12 Compared to 1Q11
Polyurethanes
The increase in revenues in our Polyurethanes division for the three months ended March 31, 2012 compared to the same period in 2011 was primarily due to higher average selling prices and higher sales volumes. MDI average selling prices increased primarily in response to improved demand, while PO/MTBE average selling prices increased primarily in response to improved demand and industry supply constraints. MDI sales volumes increased as a result of improved demand in all regions and across all major markets with the exception of appliances. PO/MTBE sales volumes increased due to strong demand. The increase in adjusted EBITDA was primarily due to higher contribution margins and higher sales volumes.
Performance Products
The increase in revenues in our Performance Products division for the three months ended March 31, 2012 compared to the same period in 2011 was primarily due to higher sales volumes partially offset by lower average selling prices. Sales volumes increased primarily due to the consolidation of our maleic anhydride joint venture with Sasol in Germany, partially offset by lower demand for amines and surfactants. Average selling prices decreased primarily due to the sales mix, competitive market pressure for certain amines and in response to lower raw material costs for certain products. The decrease in adjusted EBITDA was primarily due to lower contribution margins and higher manufacturing and selling, general and administrative costs.
Advanced Materials
The decrease in revenues in our Advanced Materials division for the three months ended March 31, 2012 compared to the same period in 2011 was primarily due to lower average selling prices partially offset by higher sales volumes. Average selling prices decreased primarily due to sales mix and the strength of the U.S. dollar against major international currencies. Sales volumes increased across most regions, primarily due to strong demand in our base resins business in Europe, partially offset by lower demand in the wind energy market in the Asia Pacific region. The decrease in adjusted EBITDA was primarily due to lower contribution margins.
Textile Effects
The decrease in revenues in our Textile Effects division for the three months ended March 31, 2012 compared to the same period in 2011 was primarily due to lower average selling prices as sales volumes were essentially unchanged. Average selling prices decreased primarily due to the strength of the U.S. dollar against major international currencies and sales mix. The decrease in adjusted EBITDA was primarily due to higher manufacturing costs.
Pigments
The increase in revenues in our Pigments division for the three months ended March 31, 2012 compared to the same period in 2011 was due to higher average selling prices partially offset by lower sales volumes. Average selling prices increased in all regions of the world primarily as a result of higher raw material costs. Sales volumes decreased primarily due to lower global demand and continued customer destocking, particularly in the Asia Pacific region. The increase in adjusted EBITDA in our Pigments division was primarily due to higher contribution margins.
Corporate, LIFO and Other
Corporate, LIFO and other includes unallocated corporate overhead, LIFO inventory valuation reserve adjustments and unallocated foreign exchange gains and losses. Adjusted EBITDA from Corporate, LIFO and other increased by $5 million to a loss of $40 million for the three months ended March 31, 2012 compared to a loss of $45 million for the same period in 2011. The increase in adjusted EBITDA was primarily the result of an $11 million decrease in LIFO inventory valuation expense ($3 million of income in 2012 compared to $8 million of expense in 2011) partially offset by an increase in unallocated foreign currency losses of $5 million ($3 million loss in 2012 compared to $2 million gain in 2011).
Income Taxes
During the three months ended March 31, 2012 we recorded income tax expense of $60 million. Our adjusted effective income tax rate for the three months ended March 31, 2012 was approximately 26%. We expect our long term effective income tax rate to be approximately 30 - 35%. 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 profitability from our Pigments business has had a significant impact on reducing our adjusted effective income tax rate. During the three months ended March 31, 2012, we paid $13 million in cash for income taxes.
Liquidity, Capital Resources and Outstanding Debt
As of March 31, 2012, we had $1,109 million of combined cash and unused borrowing capacity compared to $1,043 million at December 31, 2011. For the three months ended March 31, 2012, our primary net working capital increased by $118 million. During this period, we redeemed approximately $86 million of our 7.5% senior subordinated notes due 2015 and repaid all of the approximately $27 million outstanding under our Australia credit facility.
During the first quarter 2012, we successfully completed an amendment of our senior secured credit facilities that increased the capacity of our revolving credit facility to $400 million and extended the maturity of our revolving credit facility and $346 million of our term loan B facility from 2014 to 2017.
On March 14, 2012, Moody's Investors Service upgraded our corporate credit rating to Ba3. On April 26, 2012, Standard & Poor's Ratings Services upgraded our corporate credit rating to BB.
Total capital expenditures for the three months ended March 31, 2012 were $81 million. We expect to spend approximately $425 to $450 million on capital expenditures in 2012 which approximates our annual depreciation and amortization.
Conference Call Information
We will hold a conference call to discuss our first quarter 2012 financial results on Tuesday May 1, 2012 at 10:00 a.m. ET.
Call-in numbers for the conference call:
U.S. participants (888) 713 - 4209
International participants (617) 213 - 4863
Passcode 64640525
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=PFAU7RJVV
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 May 1, 2012 and ending May 8, 2012.
Call-in numbers for the replay:
U.S. participants (888) 286 - 8010
International participants (617) 801 - 6888
Replay code 60083341
Table 1 - Results of Operations
-------------------------------
Three months ended
March 31,
---------
In millions, except per share amounts,
unaudited 2012 2011
-------------------------------------- ---- ----
Revenues $2,913 $2,679
Cost of goods sold 2,363 2,219
----- -----
Gross profit 550 460
Operating expenses 265 291
Restructuring, impairment and plant
closing costs - 7
--- ---
Operating income 285 162
Interest expense, net (59) (59)
Equity in income of investment in
unconsolidated affiliates 2 2
Loss on early extinguishment of debt (1) (3)
Income before income taxes 227 102
Income tax expense (60) (22)
Income from continuing operations 167 80
Loss from discontinued operations, net
of tax(2) (4) (14)
Extraordinary gain on the acquisition
of a business, net of tax of nil - 1
Net income 163 67
Net income attributable to
noncontrolling interests, net of tax - (5)
Net income attributable to Huntsman
Corporation $163 $62
==== ===
Adjusted EBITDA(1) $397 $304
Adjusted net income(1) $177 $110
Basic income per share $0.69 $0.26
Diluted income per share $0.68 $0.26
Adjusted diluted income per share(1) $0.74 $0.45
Common share information:
Basic shares outstanding 236.5 237.6
Diluted shares 240.1 242.9
Diluted shares for adjusted diluted
income per share 240.1 242.9
See end of press release for footnote explanations
Table 2 - Results of Operations by Segment
------------------------------------------
Three months ended
March 31,
---------
In millions, unaudited 2012 2011 Change
---------------------- ---- ---- ------
Segment Revenues:
Polyurethanes $1,220 $1,047 17%
Performance Products 807 804 ---
Advanced Materials 340 350 (3)%
Textile Effects 185 190 (3)%
Pigments 424 364 16%
Eliminations and other (63) (76) (17)%
--- ---
Total $2,913 $2,679 9%
====== ======
Segment Adjusted EBITDA(1):
Polyurethanes $177 $114 55%
Performance Products 90 115 (22)%
Advanced Materials 32 39 (18)%
Textile Effects (9) (6) 50%
Pigments 147 87 69%
Corporate, LIFO and other (40) (45) (11)%
Total $397 $304 31%
==== ====
See end of press release for footnote explanations
Table 3 - Factors Impacting Sales Revenues
------------------------------------------
Three months ended
March 31, 2012 vs. 2011
-----------------------
Average Selling Price(a)
-----------------------
Local Exchange Sales Mix Sales
Unaudited Currency Rate & Other Volume(a) Total
--------- -------- ---- ------- -------- -----
Polyurethanes 10% (1)% 1% 7% 17%
Performance Products 2% (1)% (3)% 2% ---
Advanced Materials (1)% (2)% (3)% 3% (3)%
Textile Effects (1)% (1)% (1)% --- (3)%
Pigments 36% (3)% (1)% (16)% 16%
Total Company 7% (1)% 1% 2% 9%
(a) Excludes revenues and sales volumes from tolling, by-products and raw materials
Table 4 - Reconciliation of U.S. GAAP to Non-GAAP Measures
----------------------------------------------------------
EBITDA Income Tax Net Income (Loss) Diluted Income (Loss)
Per Share
(Expense) Benefit Attrib. to HUN Corp.
----------------- --------------------
Three months ended Three months ended Three months ended Three months
In millions, except per share amounts,
unaudited ended
--------------------------------------
March 31, March 31, March 31, March 31,
--------- --------- --------- ---------
2012 2011 2012 2011 2012 2011 2012 2011
---- ---- ---- ---- ---- ---- ---- ----
GAAP(1) $390 $239 $(60) $(22) $163 $62 $0.68 $0.26
Adjustments:
Legal settlements and related expenses 1 34 - (13) 1 21 - 0.09
Loss on early extinguishment of debt 1 3 - (1) 1 2 - 0.01
Restructuring, impairment, plant closing
and transition costs 4 7 (1) - 3 7 0.01 0.03
Discount amortization on settlement
financing associated with the terminated
merger N/A N/A (2) (3) 5 4 0.02 0.02
Acquisition expenses - 1 - - - 1 - -
Loss from discontinued operations, net of
tax(2) 1 21 N/A N/A 4 14 0.02 0.06
Extraordinary gain on the acquisition of a
business, net of tax - (1) N/A N/A - (1) - -
Adjusted(1) $397 $304 $(63) $(39) $177 $110 $0.74 $0.45
---- ---- ---- ---- ---- ---- ----- -----
Adjusted income tax expense 63 39
Net income attributable to noncontrolling
interests, net of tax - 5
Adjusted pre-tax income(1) $240 $154
---- ----
Adjusted effective tax rate 26% 25%
EBITDA Income Tax Net Income (Loss) Diluted Income (Loss)
(Expense) Benefit Attrib. to HUN Corp. Per Share
----------------- -------------------- ---------
Three months ended Three months ended Three months ended Three months
In millions, except per share amounts,
unaudited ended
--------------------------------------
December 31, December 31, December 31, December 31,
2011 2011 2011 2011
---- ---- ---- ----
GAAP(1) $273 $2 $105 $0.44
Adjustments:
Legal settlements and related expenses 8 (3) 5 0.02
Loss on early extinguishment of debt 2 (1) 1 -
Restructuring, impairment, plant closing
and transition credits (4) (7) (11) (0.05)
Discount amortization on settlement
financing associated with the
terminated merger N/A (2) 5 0.02
Gain on disposition of businesses/assets (34) 3 (31) (0.13)
Income from discontinued operations, net
of tax(2) - N/A (4) (0.02)
Extraordinary gain on the acquisition of a
business, net of tax(3) (2) N/A (2) (0.01)
Adjusted(1) $243 $(8) $68 $0.28
---- --- --- -----
Adjusted income tax expense 8
Net loss attributable to noncontrolling
interests, net of tax (10)
Adjusted pre-tax income(1) $66
---
Adjusted effective tax rate 12%
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 2012 2011 2011
------------ ---- ---- ----
Net income
attributable to
Huntsman
Corporation $163 $62 $105
Interest expense,
net 59 59 62
Income tax expense
(benefit) from
continuing
operations 60 22 (2)
Income tax benefit
from discontinued
operations(2) (1) (7) (4)
Depreciation and
amortization of
continuing
operations 105 103 112
Depreciation and
amortization of
discontinued
operations(2) 4 - -
EBITDA(1) $390 $239 $273
==== ==== ====
See end of press release for footnote explanations
Table 6 - Selected Balance Sheet Items
--------------------------------------
March 31, December 31,
In millions 2012 2011
----------- ---- ----
(unaudited)
Cash $478 $562
Accounts and notes
receivable, net 1,801 1,529
Inventories 1,638 1,539
Other current assets 292 316
Property, plant and
equipment, net 3,648 3,622
Other assets 1,096 1,089
Total assets $8,953 $8,657
====== ======
Accounts payable $1,089 $862
Other current liabilities 704 752
Current portion of debt 193 212
Long-term debt 3,628 3,730
Other liabilities 1,319 1,325
Total equity 2,020 1,776
Total liabilities and
equity $8,953 $8,657
====== ======
Table 7 - Outstanding Debt
--------------------------
March 31, December 31,
In millions 2012 2011
----------- ---- ----
(unaudited)
Debt:
Senior credit facilities $1,698 $1,696
Accounts receivable programs 242 237
Senior notes 478 472
Senior subordinated notes 893 976
Variable interest entities 279 281
Other debt 231 280
Total debt - excluding affiliates 3,821 3,942
----- -----
Total cash 478 562
--- ---
Net debt- excluding affiliates $3,343 $3,380
====== ======
Table 8 - Summarized Statement of Cash Flows
--------------------------------------------
Three months ended
March 31,
---------
In millions, unaudited 2012 2011
---------------------- ---- ----
Total cash at beginning of period $562 $973
Net cash provided by (used in)
operating activities 190 (124)
Net cash used in investing activities (109) (57)
Net cash used in financing activities (176) (156)
Effect of exchange rate changes on
cash 4 3
Change in restricted cash 7 -
Total cash at end of period $478 $639
==== ====
Supplemental cash flow information:
Cash paid for interest $(82) $(66)
Cash paid for income taxes $(13) $(5)
Cash paid for capital expenditures $(81) $(60)
Depreciation & amortization $109 $103
Changes in primary working capital:
Accounts and notes receivable $(239) $(287)
Inventories (65) (171)
Accounts payable 186 213
Total $(118) $(245)
----- -----
Footnotes
---------
(1) We use EBITDA and adjusted EBITDA to measure
the operating performance of our business. We
provide adjusted net income because we feel it
provides meaningful insight for the investment
community into the performance of our
business. We believe that net income (loss)
attributable to Huntsman Corporation is the
performance measure calculated and presented
in accordance with generally accepted
accounting principles in the U.S. ("GAAP")
that is most directly comparable to EBITDA,
adjusted EBITDA and adjusted net income.
Additional information with respect to our use
of each of these financial measures follows:
EBITDA is defined as net income (loss)
attributable to Huntsman Corporation before
interest, income taxes, and depreciation and
amortization. EBITDA as used herein is not
necessarily comparable to other similarly
titled measures of other companies. The
reconciliation of EBITDA to net income (loss)
attributable to Huntsman Corporation is set
forth in Table 5 above.
Adjusted EBITDA is computed by eliminating the
following from EBITDA: EBITDA from
discontinued operations; restructuring,
impairment, plant closing and transition costs
(credits); income and expense associated with
the terminated merger and related litigation;
acquisition related expenses; certain legal
and contract settlements; losses on the early
extinguishment of debt; gain on consolidation
of a variable interest entity; extraordinary
(gain) loss on the acquisition of a business;
and loss (gain) on disposition of businesses/
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 , plant closing and
transition costs (credits); income and expense
associated with the terminated merger and
related litigation; discount amortization on
settlement financing associated with the
terminated merger; acquisition related
expenses; certain legal and contract
settlements; losses on the early
extinguishment of debt; gain on consolidation
of a variable interest entity; extraordinary
(gain) loss on the acquisition of a business;
and loss (gain) on disposition of businesses/
assets. We do not adjust for changes in tax
valuation allowances because we do not believe
it provides more meaningful information than
is provided under GAAP. The reconciliation of
adjusted net income (loss) to net income
(loss) attributable to Huntsman Corporation
common stockholders is set forth in Table 4
above.
(2) During the first quarter 2010 we closed our
Australian styrenics operations, results from
this business are treated as discontinued
operations.
About Huntsman:
Huntsman is a global manufacturer and marketer of differentiated chemicals. Our operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging. Originally known for pioneering innovations in packaging and, later, for rapid and integrated growth in petrochemicals, Huntsman has approximately 12,000 employees and operates from multiple locations worldwide. The Company had 2011 revenues of over $11 billion. For more information about Huntsman, please visit the company's website at www.huntsman.com.
Forward-Looking Statements:
Statements in this release that are not historical are forward-looking statements. These statements are based on management's current beliefs and expectations. The forward-looking statements in this release are subject to uncertainty and changes in circumstances and involve risks and uncertainties that may affect the company's operations, markets, products, services, prices and other factors as discussed in the Huntsman companies' filings with the U.S. Securities and Exchange Commission. Significant risks and uncertainties may relate to, but are not limited to, financial, economic, competitive, environmental, political, legal, regulatory and technological factors. The company assumes no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by applicable laws.
SOURCE Huntsman Corporation
