HUNTSMAN CORPORATION 
By THE WOODLANDS, Texas, Feb. 16, 2012 /PRNewswire/ --
Fourth Quarter 2011 Highlights
-- Revenues improved 9% compared to the prior year period.
-- Net income attributable to Huntsman Corporation was $105 million or
$0.44 per diluted share compared to $30 million or $0.12 per diluted
share in the prior year period.
-- Adjusted EBITDA improved 11% to $243 million compared to the prior year
period.
-- Adjusted diluted income per share improved 12% to $0.28 compared to the
prior year period.
Full Year 2011 Highlights
-- Revenues improved 21% compared to the prior year.
-- Net income attributable to Huntsman Corporation was $247 million or
$1.02 per diluted share compared to $27 million or $0.11 per diluted
share in the prior year period.
-- Adjusted EBITDA improved 39% to $1,214 million compared to the prior
year.
-- Adjusted diluted income per share improved 104% to $1.69 compared to the
prior year.
Three months ended Year ended
------------------
September
December 31, 30, December 31,
------------ ------------
In
millions,
except
per
share
amounts,
unaudited 2011 2010 2011 2011 2010
--------- ---- ---- ---- ---- ----
Revenues $2,632 $2,412 $2,976 $11,221 $9,250
Net
income
(loss)
attributable
to
Huntsman
Corporation $105 $30 $(34) $247 $27
Adjusted
net
income(1) $68 $60 $114 $408 $200
Diluted
income
(loss)
per
share $0.44 $0.12 $(0.14) $1.02 $0.11
Adjusted
diluted
income
per
share(1) $0.28 $0.25 $0.47 $1.69 $0.83
EBITDA(1) $273 $167 $204 $1,039 $700
Adjusted
EBITDA(1) $243 $219 $346 $1,214 $875
See end of press release for footnote
explanations
Huntsman Corporation (NYSE: HUN) today reported fourth quarter 2011 results with revenues of $2,632 million and adjusted EBITDA of $243 million.
Peter R. Huntsman, our President and CEO, commented:
"Our adjusted EBITDA of $1.2 billion represents the best year we have accomplished with our current business portfolio. This took place despite earnings pressure from foreign currency movements within the year and lower demand trends and aggressive customer destocking within the fourth quarter.
Looking forward, we anticipate that the corporation will see an improving global economy from this point forward. Most of our businesses have strong upside potential as we see a continued recovery in the world's economy. In 2012, we expect margin pressure on our Pigments business to be offset by improved earnings in our other divisions."
Segment Analysis for 4Q11 Compared to 4Q10
Polyurethanes
The increase in revenues in our Polyurethanes division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to higher average selling prices. Average MDI and PO/MTBE selling prices increased primarily in response to higher raw material costs. The decrease in adjusted EBITDA was due to higher manufacturing and selling, general and administrative costs and lower MDI contribution margins.
Performance Products
The increase in revenues in our Performance Products division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to higher average selling prices partially offset by lower sales volumes. Average selling prices increased across most product groups with the exception of certain amines primarily in response to higher raw material costs. Sales volumes decreased due to lower demand and customer destocking. The decrease in adjusted EBITDA was primarily due to lower sales volumes 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 December 31, 2011 compared to the same period in 2010 was primarily due to lower sales volumes partially offset by higher average selling prices. Sales volumes decreased primarily due to lower demand in the wind energy market in the Asia Pacific region. Average selling prices increased primarily in response to higher raw material costs. The decrease in adjusted EBITDA was primarily due to the impact of the stronger Swiss franc, on our manufacturing and selling, general and administrative costs.
Textile Effects
The decrease in revenues in our Textile Effects division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to lower sales volumes. Sales volumes decreased due to lower demand. The decrease in adjusted EBITDA was primarily due to lower sales volumes and the impact of the stronger Swiss franc, on our manufacturing and selling, general and administrative costs.
Pigments
The increase in revenues in our Pigments division for the three months ended December 31, 2011 compared to the same period in 2010 was due to higher average selling prices partially offset by lower sales volumes. Average selling prices increased in all regions of the world primarily as a result of higher raw material costs. Sales volumes decreased primarily due to lower global economic growth and customer destocking particularly in the Asia Pacific region. The increase in adjusted EBITDA in our Pigments division was primarily due to higher contribution margins partially offset by lower sales volumes.
Corporate, LIFO and Other
Corporate, LIFO and other includes unallocated corporate overhead, LIFO inventory valuation reserve adjustments and unallocated foreign exchange gains and losses. During the fourth quarter of 2011, we began including unallocated foreign exchange gains and losses in adjusted EBITDA and adjusted income (loss) per share. We believe this more accurately reflects the ongoing cost of operating a global business. All relevant information for prior periods has been recast to reflect these changes. Adjusted EBITDA from Corporate, LIFO and other increased by $22 million to a loss of $34 million for the three months ended December 31, 2011 compared to a loss of $56 million for the same period in 2010. The increase in adjusted EBITDA was primarily the result of a $13 million decrease in LIFO inventory valuation expense ($6 million gain in 2011 compared to $7 million loss in 2010) and an increase in unallocated foreign exchange gains of $4 million ($5 million gain in 2011 compared to $1 million gain in 2010).
Income Taxes
During the three months and full year ended December 31, 2011 we recorded income tax benefit of $2 million and income tax expense of $109 million respectively. Our adjusted effective income tax rate for the three months and full year ended December 31, 2011 was approximately 12% and 26% respectively. We have tax valuation allowances in certain countries. Improved earnings from our Pigments business generated a partial release of tax valuation allowances in the fourth quarter 2011 which had the effect of decreasing our effective income tax rate and resulted in an approximate benefit of $0.04 per diluted share. We expect our long term effective income tax rate to be approximately 30 - 35%. During the three months and full year ended December 31, 2011 we paid $35 million and $119 million in cash for income taxes respectively.
Liquidity, Capital Resources and Outstanding Debt
As of December 31, 2011, we had $1,043 million of combined cash and unused borrowing capacity compared to $1,434 million at December 31, 2010. In 2011, our primary net working capital increased by $258 million. For the year ended December 31, 2011, we redeemed approximately $305 million of senior subordinated notes, including all of our remaining 6.875% senior subordinated euro notes due 2013 worth approximately $94 million which were redeemed during the fourth quarter of 2011.
Total capital expenditures, net of reimbursements for the three months and full year ended December 31, 2011 were $113 million and $327 million respectively. We expect to spend approximately $425 million on capital expenditures, net of reimbursements, in 2012 which approximates our annual depreciation and amortization of $439 million in 2011.
Conference Call Information
We will hold a conference call to discuss our fourth quarter and full year 2011 financial results on Thursday February 16, 2012 at 10:00 a.m. ET.
Call-in numbers for the
conference call:
U.S. participants (888) 713 - 4213
International participants (617) 213 - 4865
Passcode 46407990
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=PRVR4F6KC
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 February 16, 2012 and ending February 23, 2012.
Call-in numbers for the
replay:
U.S. participants (888) 286 - 8010
International participants (617) 801 - 6888
Replay code 36963242
Table 1 -- Results of Operations
--------------------------------
Three months ended Year ended
December 31, December 31,
------------ ------------
In millions,
except per
share amounts,
unaudited 2011 2010 2011 2010
--------------- ---- ---- ---- ----
Revenues $2,632 $2,412 $11,221 $9,250
Cost of goods
sold 2,243 2,032 9,381 7,789
----- ----- ----- -----
Gross profit 389 380 1,840 1,461
Operating
expenses 246 281 1,067 1,022
Restructuring,
impairment and
plant closing
(credits)
costs (4) 5 167 29
--- --- --- ---
Operating
income 147 94 606 410
Interest
expense, net (62) (61) (249) (229)
Equity in
income of
investment in
unconsolidated
affiliates 2 4 8 24
Loss on early
extinguishment
of debt (2) (14) (7) (183)
Expenses
associated
with the
terminated
merger and
related
litigation - - - (4)
Other income
(loss) 2 (1) 2 2
--- ---
Income before
income taxes 87 22 360 20
Income tax
benefit
(expense) 2 17 (109) (29)
---- ---
Income (loss)
from
continuing
operations 89 39 251 (9)
Income (loss)
from
discontinued
operations,
net of tax(2) 4 (6) (1) 42
Extraordinary
gain (loss) on
the
acquisition of
a business,
net of tax of
nil 2 (1) 4 (1)
--- ---
Net income 95 32 254 32
Net loss
(income)
attributable
to
noncontrolling
interests, net
of tax 10 (2) (7) (5)
Net income
attributable
to Huntsman
Corporation $105 $30 $247 $27
==== === ==== ===
Adjusted
EBITDA(1) $243 $219 $1,214 $875
Adjusted net
income(1) $68 $60 $408 $200
Basic income
per share $0.45 $0.13 $1.04 $0.11
Diluted income
per share $0.44 $0.12 $1.02 $0.11
Adjusted
diluted income
per share(1) $0.28 $0.25 $1.69 $0.83
Common share
information:
Basic shares
outstanding 235.7 236.6 237.6 236.0
Diluted shares 239.5 242.1 241.7 236.0
Diluted shares
for adjusted
diluted income
per share 239.5 242.1 241.7 241.0
See end of press release for footnote explanations
Table 2 -- Results of Operations by Segment
-------------------------------------------
Three months ended Year ended
December 31, December 31,
------------ ------------
In
millions,
unaudited 2011 2010 Change 2011 2010 Change
--------- ---- ---- ------ ---- ---- ------
Segment
Revenues:
Polyurethanes $1,043 $946 10% $4,434 $3,605 23%
Performance
Products 755 696 8% 3,301 2,659 24%
Advanced
Materials 313 315 (1)% 1,372 1,244 10%
Textile
Effects 174 189 (8)% 737 787 (6)%
Pigments 399 330 21% 1,642 1,213 35%
Eliminations
and
other (52) (64) (19)% (265) (258) 3%
--- --- ---- ----
Total $2,632 $2,412 9% $11,221 $9,250 21%
====== ====== ======= ======
Segment
Adjusted
EBITDA(1):
Polyurethanes $79 $99 (20)% $476 $320 49%
Performance
Products 60 89 (33)% 374 367 2%
Advanced
Materials 15 17 (12)% 111 141 (21)%
Textile
Effects (22) (1) NM (64) 15 NM
Pigments 145 71 104% 508 215 136%
Corporate,
LIFO
and
other (34) (56) (39)% (191) (183) 4%
Total $243 $219 11% $1,214 $875 39%
==== ==== ====== ====
See end of
press release
for footnote
explanations NM - Not meaningful
Table 3 -- Factors Impacting Sales Revenue
------------------------------------------
Three months ended
December 31, 2011 vs. 2010
--------------------------
Average Selling
Price(a)
----------------
Sales
Local Exchange Mix Sales
Unaudited Currency Rate & Other Volume(a) Total
--------- -------- ---- ------- --------- -----
Polyurethanes 11% - (1)% - 10%
Performance
Products 17% - (3)% (6)% 8%
Advanced
Materials 3% - (2)% (2)% (1)%
Textile Effects - - (1)% (7)% (8)%
Pigments 38% - 1% (18)% 21%
Total Company 12% - 1% (4)% 9%
Year ended
December 31, 2011 vs. 2010
--------------------------
Average Selling
Price(a)
----------------
Sales
Local Exchange Mix Sales
Unaudited Currency Rate & Other Volume(a) Total
--------- -------- ---- ------- --------- -----
Polyurethanes 16% 2% (3)% 8% 23%
Performance
Products 20% 2% (1)% 3% 24%
Advanced
Materials 7% 3% - - 10%
Textile Effects - 3% - (9)% (6)%
Pigments 34% 4% (1)% (2)% 35%
Total Company 16% 3% (3)% 5% 21%
(a) Excludes revenues and sales volumes from
tolling, by-products and raw materials
Table 4 -- Reconciliation of U.S. GAAP to Non-GAAP Measures
-----------------------------------------------------------
Diluted Income
Income Tax Net Income (Loss) (Loss)
EBITDA (Expense) Benefit 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 2011 2010 2011 2010 2011 2010 2011 2010
------------------- ---- ---- ---- ---- ---- ---- ---- ----
GAAP(1) $273 $167 $2 $17 $105 $30 $0.44 $0.12
Adjustments:
Legal settlements and
related expenses 8 8 (3) (3) 5 5 0.02 0.02
Loss on early
extinguishment of
debt 2 14 (1) (5) 1 9 - 0.04
Restructuring,
impairment and plant
closing (credits) (4) 5 (7) (1) (11) 4 (0.05) 0.02
costs
Discount amortization
on settlement
financing associated N/A N/A (2) (3) 5 4 0.02 0.02
with the terminated
merger
Acquisition expenses - 1 - - - 1 - -
Gain on disposition of
businesses/assets (34) - 3 - (31) - (0.13) -
Loss (income) from
discontinued
operations, net of
tax(2) - 23 N/A N/A (4) 6 (0.02) 0.02
Extraordinary (gain)
loss on the
acquisition of a
business, net of tax (2) 1 N/A N/A (2) 1 (0.01) -
Adjusted(1) $243 $219 $(8) $5 $68 $60 $0.28 $0.25
---- ---- --- --- --- --- ----- -----
Adjusted income tax
expense (benefit) 8 (5)
Net (loss) income
attributable to
noncontrolling
interests, net of tax (10) 2
Adjusted pre-tax
income(1) $66 $57
--- ---
Adjusted effective tax
rate 12% -9%
Diluted Income
Income Tax Net Income (Loss) (Loss)
EBITDA (Expense) Benefit Attrib. to HUN Corp. Per Share
------ ----------------- -------------------- ---------
Three months ended Three months ended Three months ended Three months ended
September 30, September 30, September 30, September 30,
In millions, except
per share amounts,
unaudited 2011 2011 2011 2011
------------------- ---- ---- ---- ----
GAAP(1) $204 $(55) $(34) $(0.14)
Adjustments:
Legal settlements and
related expenses 4 (1) 3 0.01
Loss on early
extinguishment of
debt 2 (1) 1 -
Restructuring,
impairment and plant
closing costs 155 (3) 152 0.63
Discount amortization
on settlement
financing associated
with the terminated
merger N/A (3) 4 0.02
Acquisition expenses 1 - 1 -
Gain on disposition of
businesses/assets (3) - (3) (0.01)
Income from
discontinued
operations, net of
tax(2) (17) N/A (10) (0.04)
Adjusted(1) $346 $(63) $114 $0.47
---- ---- ---- -----
Adjusted income tax
expense 63
Net income
attributable to
noncontrolling
interests, net of tax 2
Adjusted pre-tax
income(1) $179
----
Adjusted effective tax
rate 35%
Diluted Income
Income Tax Net Income (Loss) (Loss)
EBITDA (Expense) Benefit Attrib. to HUN Corp. Per Share
------ ----------------- -------------------- ---------
Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31,
------------ ------------ ------------ ------------
In millions, except
per share amounts,
unaudited 2011 2010 2011 2010 2011 2010 2011 2010
------------------- ---- ---- ---- ---- ---- ---- ---- ----
GAAP(1) $1,039 $700 $(109) $(29) $247 $27 $1.02 $0.11
Adjustments:
Legal settlements and
related expenses 46 8 (17) (3) 29 5 0.12 0.02
Loss on early
extinguishment of
debt 7 183 (3) (22) 4 161 0.02 0.67
Gain on consolidation
of a variable
interest entity (12) - 2 - (10) - (0.04) -
Restructuring,
impairment and plant
closing costs 167 29 (11) (2) 156 27 0.65 0.11
Expenses associated
with the terminated
merger and related
litigation - 4 - (1) - 3 - 0.01
Discount amortization
on settlement
financing associated N/A N/A (10) (10) 18 16 0.07 0.07
with the terminated
merger
Acquisition expenses 5 3 (1) (1) 4 2 0.02 0.01
Gain on disposition of
businesses/assets (40) - 3 - (37) - (0.15) -
Loss (income) from
discontinued
operations, net of
tax(2) 6 (53) N/A N/A 1 (42) - (0.17)
Extraordinary (gain)
loss on the
acquisition of a
business, net of tax (4) 1 N/A N/A (4) 1 (0.02) -
Adjusted(1) $1,214 $875 $(146) $(68) $408 $200 $1.69 $0.83
------ ---- ----- ---- ---- ---- ----- -----
Adjusted income tax
expense 146 68
Net income
attributable to
noncontrolling
interests, net of tax 7 5
Adjusted pre-tax
income(1) $561 $273
---- ----
Adjusted effective tax
rate 26% 25%
See end of press
release for footnote
explanations
Table 5 -- Reconciliation of Net Income (Loss) to EBITDA
--------------------------------------------------------
Three months ended Year ended
------------------
September
December 31, 30, December 31,
------------ ------------
In millions, unaudited 2011 2010 2011 2011 2010
---------------------- ---- ---- ---- ---- ----
Net income (loss) attributable
to Huntsman Corporation $105 $30 $(34) $247 $27
Interest expense, net 62 61 63 249 229
Income tax (benefit) expense
from continuing operations (2) (17) 55 109 29
Income tax (benefit) expense
from discontinued
operations(2) (4) (17) 7 (5) 10
Depreciation and amortization
of continuing operations 112 110 113 439 404
Depreciation and amortization
of discontinued operations(2) - - - - 1
EBITDA(1) $273 $167 $204 $1,039 $700
==== ==== ==== ====== ====
See end of press release for
footnote explanations
Table 6 -- Selected Balance Sheet Items
---------------------------------------
December September December
31, 30, 31,
In millions 2011 2011 2010
----------- ---- ---- ----
(unaudited)
Cash $562 $459 $973
Accounts and notes
receivable, net 1,529 1,762 1,413
Inventories 1,539 1,687 1,396
Other current assets 316 366 226
Property, plant and
equipment, net 3,622 3,659 3,605
Other assets 1,089 1,075 1,101
Total assets $8,657 $9,008 $8,714
====== ====== ======
Accounts payable $862 $941 $842
Other current liabilities 752 787 692
Current portion of debt 212 230 519
Long-term debt 3,730 3,847 3,627
Other liabilities 1,325 1,269 1,184
Total equity 1,776 1,934 1,850
Total liabilities and
equity $8,657 $9,008 $8,714
====== ====== ======
Table 7 -- Outstanding Debt
---------------------------
December September December
31, 30, 31,
In millions 2011 2011 2010
----------- ---- ---- ----
(unaudited)
Debt:
Senior credit facilities $1,696 $1,694 $1,688
Accounts receivable
programs 237 245 238
Senior notes 472 467 452
Senior Subordinated notes 976 1,076 1,279
Variable interest entities 281 306 200
Other debt 280 289 289
Total debt -excluding
affiliates 3,942 4,077 4,146
----- ----- -----
Total cash 562 459 973
--- --- ---
Net debt- excluding
affiliates $3,380 $3,618 $3,173
====== ====== ======
Table 8 -- Summarized Statement of Cash Flows
---------------------------------------------
Three months
ended Year ended
December 31, December 31,
------------
In millions, unaudited 2011 2011 2010
---------------------- ---- ---- ----
Total cash at beginning of
period $459 $973 $1,750
Net cash provided by (used in)
operating activities 340 365 (58)
Net cash used in investing
activities (80) (280) (182)
Net cash used in financing
activities (155) (490) (543)
Effect of exchange rate changes
on cash (4) (7) 4
Change in restricted cash 2 1 2
Total cash at end of period $562 $562 $973
==== ==== ====
Supplemental cash flow
information:
Cash paid for interest $(26) $(204) $(203)
Cash paid for income taxes $(35) $(119) $(6)
Cash paid for capital
expenditures $(113) $(330) $(236)
Depreciation & amortization $112 $439 $405
Changes in primary working
capital:
Accounts and notes receivable $193 $(121) $(183)
Inventories 112 (161) (207)
Accounts payable (57) 24 83
Total $248 $(258) $(307)
---- ----- -----
Footnotes
---------
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
(1) 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 and
plant closing (credits) costs; 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 business/assets. The
reconciliation of adjusted EBITDA to EBITDA is set forth in Table 4
above.
Adjusted net income (loss) is computed by eliminating the after tax
impact of the following items from net income (loss) attributable to
Huntsman Corporation: loss (income) from discontinued operations;
restructuring, impairment and plant closing (credits) costs; income
and expense associated with the terminated merger and related
litigation; discount amortization on settlement financing associated
with the terminated merger; acquisition related expenses; 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 business/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.
Starting in the fourth quarter of 2011, we no longer exclude
unallocated foreign exchange gains and losses in adjusted EBITDA and
adjusted income (loss) per share. We believe this more accurately
reflects the ongoing cost of operating a global business. All
relevant information for prior periods has been recast to reflect
these changes.
On November 5, 2007, we completed the sale of our U.S. base
chemicals business to Flint Hills Resources. During the first
quarter 2010 we closed our Australian styrenics operations.
Results from these businesses are treated as discontinued
(2) 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
