EX-99.1 2 a16-4057_1ex99d1.htm EX-99.1

Exhibit 99.1

 

News Release

 

FOR IMMEDIATE RELEASE

Investor Relations:

Media:

February 11, 2016

Kurt Ogden

Gary Chapman

The Woodlands, TX

(801) 584-5959

(281) 719-4324

NYSE: HUN

 

 

 

HUNTSMAN REPORTS FOURTH QUARTER AND FULL YEAR 2015 RESULTS;

2015 ADJUSTED EPS IMPROVES TO $2.00 FROM $1.94 IN 2014

 

Fourth Quarter 2015 Highlights

 

·                 Adjusted EBITDA was $240 million compared to $292 million in the prior year period and $311 million in the prior quarter.

 

·                 Adjusted diluted income per share was $0.51 compared to $0.33 in the prior year period and $0.47 in the prior quarter.

 

·                 Net income attributable to Huntsman Corporation was $4 million compared to net loss of $38 million in the prior year period and net income of $55 million in the prior quarter.

 

·                 The stronger U.S. dollar reduced adjusted EBITDA by an estimated $24 million compared to the prior year period; a negative impact of approximately $0.07 loss per diluted share.

 

·                 The combination of effective tax planning, certain unusual tax benefits and regional mix of income created an approximate $0.25 per diluted share net tax benefit during the fourth quarter 2015.

 

·                 $100 million accelerated share repurchase program completed; $50 million authorization remaining.

 

Full Year 2015 Highlights

 

·                 Adjusted EBITDA was $1,221 million compared to $1,340 million in the prior year.

 

·                 Adjusted diluted income per share was $2.00 compared to $1.94 in the prior year.

 

·                 Net income attributable to Huntsman Corporation was $93 million compared to $323 million in the prior year.

 

·                 The stronger U.S. dollar reduced adjusted EBITDA by an estimated $136 million compared to the prior year; a negative impact of approximately $0.39 loss per diluted share.

 

·                 Planned PO/MTBE maintenance at our Port Neches, TX facility reduced adjusted EBITDA in 2015 by approximately $95 million.  This maintenance occurs approximately once every five years.

 


 

 

 

Three months ended

 

Twelve months ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

In millions, except per share amounts, unaudited

 

2015

 

2014

 

2015

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,332

 

$

2,951

 

$

2,638

 

$

10,299

 

$

11,578

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Huntsman Corporation

 

$

4

 

$

(38

)

$

55

 

$

93

 

$

323

 

Adjusted net income(1)

 

$

124

 

$

81

 

$

115

 

$

492

 

$

478

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) per share

 

$

0.02

 

$

(0.16

)

$

0.22

 

$

0.38

 

$

1.31

 

Adjusted diluted income per share(1)

 

$

0.51

 

$

0.33

 

$

0.47

 

$

2.00

 

$

1.94

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA(1)

 

$

111

 

$

141

 

$

255

 

$

741

 

$

1,022

 

Adjusted EBITDA(1)

 

$

240

 

$

292

 

$

311

 

$

1,221

 

$

1,340

 

 

See end of press release for footnote explanations

 

The Woodlands, TX — Huntsman Corporation (NYSE: HUN) today reported fourth quarter 2015 results with revenues of $2,332 million and adjusted EBITDA of $240 million.

 

Peter R. Huntsman, our President and CEO, commented:

 

“During the fourth quarter this year, EBITDA from our cyclical businesses — which include our MTBE, ethylene and TiO2 products — decreased approximately $78 million compared to the prior year. This overshadowed the real strength of our portfolio which is in our downstream differentiated businesses.  Excluding approximately $24 million of foreign currency headwind, the EBITDA from our differentiated businesses improved approximately $50 million compared to the prior year or 27%.

 

“In 2016, primarily as a result of lower priced oil and a lower global economic growth environment, we expect continued EBITDA pressure on our cyclical businesses.  Growth from our differentiated businesses will offset cyclical pressure and inflationary costs such that we expect our 2016 EBITDA to be a similar amount to 2015.  Importantly however, we expect our free cash flow generation to improve by $350 million in 2016 through lower capital expenditures, restructuring and maintenance.  In 2016 we will continue to pursue actively a separation of our TiO2 business through a spinoff to shareholders or other strategic transaction.”

 

Segment Analysis for 4Q15 Compared to 4Q14

 

Polyurethanes

 

The decrease in revenues in our Polyurethanes division for the three months ended December 31, 2015 compared to the same period in 2014 was due to lower average selling prices and lower MTBE sales volumes.  MDI average selling prices decreased in response to lower raw material costs and the currency exchange impact of a stronger U.S. dollar primarily against the Euro.  PO/MTBE average selling prices decreased in-line with lower pricing for high octane gasoline.  MDI sales volumes increased due to higher demand as well as competitor outages in the Asian region.  The decrease in adjusted EBITDA was primarily due to lower MTBE contribution margins and the foreign currency exchange impact of a stronger U.S. dollar primarily against the Euro partially offset by higher MDI contribution margins.

 

Performance Products

 

The decrease in revenues in our Performance Products division for the three months ended December 31, 2015 compared to the same period in 2014 was primarily due to lower average selling prices and lower sales

 

2


 

volumes.  Average selling prices decreased primarily in response to lower raw material costs and the foreign currency exchange impact of a stronger U.S. dollar primarily against the Euro.  Sales volumes decreased primarily due to customer destocking and competitive pressure.  The decrease in adjusted EBITDA was primarily due to lower ethylene contribution margins partially offset by higher contribution margins in our amines business.

 

Advanced Materials

 

The decrease in revenues in our Advanced Materials division for the three months ended December 31, 2015 compared to the same period in 2014 was due to lower sales volumes and lower average selling prices.  Sales volumes decreased primarily due to the de-selection of certain business, customer destocking and competitive pressure.  Average selling prices increased on a local currency basis in the Americas primarily due to our focus on higher value markets but this was more than offset by the foreign currency exchange impact of a stronger U.S. dollar primarily against the Euro globally.  The increase in adjusted EBITDA was primarily due to higher global contribution margins from lower raw material costs and higher selling prices in the Americas.

 

Textile Effects

 

The decrease in revenues in our Textile Effects division for the three months ended December 31, 2015 compared to the same period in 2014 was due to lower average selling prices and lower sales volumes.  Average selling prices increased on a local currency basis due to certain price increase initiatives but this was more than offset by the foreign currency exchange impact of a stronger U.S. dollar primarily against the Euro.  Sales volumes decreased primarily due to the de-selection of lower value business and challenging market conditions.  The increase in adjusted EBITDA was primarily due to higher contribution margins from lower raw material costs and product mix improvements.

 

Pigments and Additives

 

The decrease in revenues in our Pigments and Additives division for the three months ended December 31, 2015 compared to the same period in 2014 was due to lower average selling prices and lower sales volumes.  Average selling prices decreased primarily as a result of titanium dioxide over supply in the market place and the foreign currency exchange impact of a stronger U.S. dollar primarily against the Euro.  Sales volumes decreased primarily as a result of lower end use demand.  The decrease in adjusted EBITDA was primarily due to lower contribution margins for titanium dioxide.

 

Corporate, LIFO and Other

 

Adjusted EBITDA from Corporate, LIFO and Other increased by $10 million to a loss of $38 million for the three months ended December 31, 2015 compared to a loss of $48 million for the same period in 2014.  The increase in adjusted EBITDA was primarily the result of an increase in income from benzene sales of $7 million.

 

Liquidity, Capital Resources and Outstanding Debt

 

As of December 31, 2015, we had $1,023 million of combined cash and unused borrowing capacity compared to $1,601 million on December 31, 2014.

 

On September 29, 2015, our Board of Directors authorized the repurchase of up to $150 million in shares of our common stock.  On October 27, 2015 we entered into and funded an accelerated share repurchase agreement to repurchase $100 million of our common stock.  The accelerated share repurchase was completed in January 2016 with 8.6 million shares repurchased.

 

During 2015 we spent $663 million on capital expenditures; we expect to spend approximately $450 million annually on capital expenditures in 2016 and 2017.

 

3


 

Income Taxes

 

During the three months ended December 31, 2015, we recorded an income tax benefit of $39 million as a result of the combination of effective tax planning, certain unusual tax benefits and the regional mix of income.  During the same period we paid $45 million in cash for income taxes.

 

We expect our 2016 and long term adjusted effective tax rate to be approximately 30%.

 

Earnings Conference Call Information

 

We will hold a conference call to discuss our fourth quarter and full year 2015 financial results on Thursday, February 11, 2016 at 9:00 a.m. ET.

 

Call-in numbers for the conference call:

U.S. participants

(888) 713 - 4199

International participants

(617) 213 - 4861

Passcode

810 262 68#

 

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=P8K7QH79L

 

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 February 11, 2016 and ending February 18, 2016.

 

Call-in numbers for the replay:

U.S. participants

(888) 286 - 8010

International participants

(617) 801 - 6888

Replay code

29385180

 

4


 

Table 1 — Results of Operations

 

 

 

Three months ended

 

Twelve months ended

 

 

 

December 31,

 

December 31,

 

In millions, except per share amounts, unaudited

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,332

 

$

2,951

 

$

10,299

 

$

11,578

 

Cost of goods sold

 

1,956

 

2,502

 

8,451

 

9,659

 

Gross profit

 

376

 

449

 

1,848

 

1,919

 

Operating expenses

 

282

 

317

 

1,141

 

1,128

 

Restructuring, impairment and plant closing costs

 

81

 

67

 

302

 

158

 

Operating income

 

13

 

65

 

405

 

633

 

Interest expense

 

(47

)

(57

)

(205

)

(205

)

Equity in income of investment in unconsolidated affiliates

 

1

 

—

 

6

 

6

 

Loss on early extinguishment of debt

 

—

 

(28

)

(31

)

(28

)

Other income (loss)

 

3

 

(2

)

1

 

(2

)

(Loss) income before income taxes

 

(30

)

(22

)

176

 

404

 

Income tax benefit (expense)

 

39

 

(12

)

(46

)

(51

)

Income (loss) from continuing operations

 

9

 

(34

)

130

 

353

 

Loss from discontinued operations, net of tax(3)

 

—

 

(1

)

(4

)

(8

)

Net income (loss)

 

9

 

(35

)

126

 

345

 

Net income attributable to noncontrolling interests, net of tax

 

(5

)

(3

)

(33

)

(22

)

Net income (loss) attributable to Huntsman Corporation

 

$

4

 

$

(38

)

$

93

 

$

323

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA(1)

 

$

240

 

$

292

 

$

1,221

 

$

1,340

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income(1)

 

$

124

 

$

81

 

$

492

 

$

478

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per share

 

$

0.02

 

$

(0.16

)

$

0.38

 

$

1.33

 

Diluted income (loss) per share

 

$

0.02

 

$

(0.16

)

$

0.38

 

$

1.31

 

Adjusted diluted income per share(1)

 

$

0.51

 

$

0.33

 

$

2.00

 

$

1.94

 

 

 

 

 

 

 

 

 

 

 

Common share information:

 

 

 

 

 

 

 

 

 

Basic shares outstanding

 

239

 

243

 

243

 

242

 

Diluted shares

 

241

 

243

 

245

 

246

 

Diluted shares for adjusted diluted income per share

 

241

 

247

 

245

 

246

 

 

See end of press release for footnote explanations

 

5


 

Table 2 — Results of Operations by Segment

 

 

 

Three months ended

 

 

 

Twelve months ended

 

 

 

 

 

December 31,

 

Better /

 

December 31,

 

Better /

 

In millions, unaudited

 

2015

 

2014

 

(Worse)

 

2015

 

2014

 

(Worse)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

909

 

$

1,201

 

(24

)%

$

3,811

 

$

5,032

 

(24

)%

Performance Products

 

552

 

712

 

(22

)%

2,501

 

3,072

 

(19

)%

Advanced Materials

 

256

 

295

 

(13

)%

1,103

 

1,248

 

(12

)%

Textile Effects

 

186

 

203

 

(8

)%

804

 

896

 

(10

)%

Pigments & Additives

 

453

 

573

 

(21

)%

2,160

 

1,549

 

39

%

Eliminations and other

 

(24

)

(33

)

27

%

(80

)

(219

)

63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

2,332

 

$

2,951

 

(21

)%

$

10,299

 

$

11,578

 

(11

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Adjusted EBITDA(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

141

 

$

171

 

(18

)%

$

573

 

$

722

 

(21

)%

Performance Products

 

76

 

111

 

(32

)%

460

 

473

 

(3

)%

Advanced Materials

 

48

 

43

 

12

%

220

 

199

 

11

%

Textile Effects

 

13

 

6

 

117

%

63

 

58

 

9

%

Pigments & Additives

 

—

 

9

 

(100

)%

61

 

76

 

(20

)%

Corporate, LIFO and other

 

(38

)

(48

)

21

%

(156

)

(188

)

17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

240

 

$

292

 

(18

)%

$

1,221

 

$

1,340

 

(9

)%

 

See end of press release for footnote explanations

 

Table 3 — Pro Forma (2) Results of Operations by Segment

 

 

 

Three months ended

 

 

 

Twelve months ended

 

 

 

 

 

December 31,

 

Better /

 

December 31,

 

Better /

 

In millions, unaudited, pro forma

 

2015

 

2014

 

(Worse)

 

2015

 

2014

 

(Worse)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

909

 

$

1,201

 

(24

)%

$

3,811

 

$

5,053

 

(25

)%

Performance Products

 

552

 

712

 

(22

)%

2,501

 

3,072

 

(19

)%

Advanced Materials

 

256

 

295

 

(13

)%

1,103

 

1,248

 

(12

)%

Textile Effects

 

186

 

203

 

(8

)%

804

 

896

 

(10

)%

Pigments & Additives

 

453

 

559

 

(19

)%

2,160

 

2,673

 

(19

)%

Eliminations and other

 

(24

)

(33

)

27

%

(80

)

(219

)

63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma total

 

$

2,332

 

$

2,937

 

(21

)%

$

10,299

 

$

12,723

 

(19

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Adjusted EBITDA(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

$

141

 

$

171

 

(18

)%

$

573

 

$

728

 

(21

)%

Performance Products

 

76

 

111

 

(32

)%

460

 

473

 

(3

)%

Advanced Materials

 

48

 

43

 

12

%

220

 

199

 

11

%

Textile Effects

 

13

 

6

 

117

%

63

 

58

 

9

%

Pigments & Additives

 

—

 

17

 

(100

)%

61

 

225

 

(73

)%

Corporate, LIFO and other

 

(38

)

(48

)

21

%

(156

)

(188

)

17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma total

 

$

240

 

$

300

 

(20

)%

$

1,221

 

$

1,495

 

(18

)%

 

See end of press release for footnote explanations

 

6


 

Table 4 — Factors Impacting Sales Revenues

 

 

 

Three months ended

 

 

 

December 31, 2015 vs. 2014

 

 

 

Average Selling Price(a)

 

 

 

 

 

 

 

 

 

Local

 

Exchange

 

Sales Mix

 

Sales

 

 

 

Unaudited

 

Currency

 

Rate

 

& Other

 

Volume(b)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

(19

)%

(4

)%

2

%

(3

)%

(24

)%

Performance Products

 

(11

)%

(4

)%

(1

)%

(6

)%

(22

)%

Advanced Materials

 

2

%

(8

)%

1

%

(8

)%

(13

)%

Textile Effects

 

2

%

(7

)%

0

%

(3

)%

(8

)%

Pigments & Additives

 

(9

)%

(7

)%

(2

)%

(3

)%

(21

)%

Total Company

 

(14

)%

(5

)%

2

%

(4

)%

(21

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended

 

 

 

December 31, 2015 vs. 2014

 

 

 

Average Selling Price(a)

 

 

 

 

 

 

 

 

 

Local

 

Exchange

 

Sales Mix

 

Sales

 

 

 

Unaudited

 

Currency

 

Rate

 

& Other(c)

 

Volume(b)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

(12

)%

(5

)%

3

%

(10

)%

(24

)%

Performance Products

 

(7

)%

(5

)%

(3

)%

(4

)%

(19

)%

Advanced Materials

 

2

%

(8

)%

(1

)%

(5

)%

(12

)%

Textile Effects

 

1

%

(6

)%

2

%

(7

)%

(10

)%

Pigments & Additives

 

(10

)%

(8

)%

62

%

(5

)%

39

%

Total Company

 

(8

)%

(6

)%

10

%

(7

)%

(11

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma

 

 

 

 

 

Twelve months ended

 

 

 

 

 

December 31, 2015 vs. 2014

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

Selling

 

Sales Mix

 

Sales

 

 

 

 

 

Unaudited, pro forma

 

Price(a)

 

& Other

 

Volume(b)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Polyurethanes

 

(17

)%

2

%

(2

)%

(17

)%(d)

 

 

Performance Products

 

(12

)%

(3

)%

(2

)%

(17

)%(e)

 

 

Advanced Materials

 

(6

)%

(1

)%

(5

)%

(12

)%

 

 

Textile Effects

 

(5

)%

2

%

(7

)%

(10

)%

 

 

Pigments & Additives

 

(19

)%

2

%

(2

)%

(19

)%(f)

 

 

Total Company

 

(15

)%

2

%

(2

)%

(15

)%

 

 

 

(a) Excludes sales from tolling arrangements, by-products and raw materials.

(b) Excludes sales from by-products and raw materials.

(c) Includes impact from the acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc. on October 1, 2014.

(d) Excludes volume impact from planned maintenance at our PO/MTBE facility in 1H15.

(e) Excludes volume impact from closure of our European surfactants plant in 2Q14.

(f) Excludes volume impact from nitrogen tank incident at our Uerdingen, Germany facility in 3Q15.

 

7


 

Table 5 — Reconciliation of U.S. GAAP to Non-GAAP Measures

 

 

 

 

 

 

 

Income Tax

 

Net Income (Loss)

 

Diluted Income

 

 

 

EBITDA

 

Benefit (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

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP(1)

 

$

111

 

$

141

 

$

39

 

$

(12

)

$

4

 

$

(38

)

$

0.02

 

$

(0.16

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration expenses, purchase accounting adjustments

 

22

 

40

 

(6

)

(4

)

16

 

36

 

0.07

 

0.15

 

Loss from discontinued operations, net of tax(3)

 

3

 

1

 

N/A

 

N/A

 

—

 

1

 

—

 

—

 

Loss (gain) on disposition of businesses/assets

 

1

 

(1

)

—

 

—

 

1

 

(1)

 

—

 

—

 

Loss on early extinguishment of debt

 

—

 

28

 

—

 

(10

)

—

 

18

 

—

 

0.07

 

Certain legal settlements and related expenses

 

1

 

—

 

—

 

—

 

1

 

—

 

—

 

—

 

Plant incident remediation costs

 

1

 

—

 

—

 

—

 

1

 

—

 

—

 

—

 

Amortization of pension and postretirement actuarial losses

 

18

 

14

 

(3

)

—

 

15

 

14

 

0.06

 

0.06

 

Restructuring, impairment, plant closing and transition costs

 

83

 

69

 

3

 

(18

)

86

 

51

 

0.36

 

0.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted(1)

 

$

240

 

$

292

 

$

33

 

$

(44

)

$

124

 

$

81

 

$

0.51

 

$

0.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income tax (benefit) expense

 

 

 

 

 

 

 

 

 

(33

)

44

 

 

 

 

 

Net income attributable to noncontrolling interests, net of tax

 

 

 

 

 

 

 

 

 

5

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted pre-tax income(1)

 

 

 

 

 

 

 

 

 

$

96

 

$

128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted effective tax rate

 

 

 

 

 

 

 

 

 

-34

%

34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax

 

Net Income

 

Diluted Income

 

 

 

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

 

2015

 

2015

 

2015

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP(1)

 

$

255

 

 

 

$

(49

)

 

 

$

55

 

 

 

$

0.22

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration expenses, purchase accounting adjustments

 

10

 

 

 

(2

)

 

 

8

 

 

 

0.03

 

 

 

Loss from discontinued operations, net of tax(3)

 

1

 

 

 

N/A

 

 

 

—

 

 

 

—

 

 

 

Loss on early extinguishment of debt

 

8

 

 

 

(3

)

 

 

5

 

 

 

0.02

 

 

 

Certain legal settlements and related expenses

 

1

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

Plant incident remediation costs

 

3

 

 

 

(1

)

 

 

2

 

 

 

0.01

 

 

 

Amortization of pension and postretirement actuarial losses

 

19

 

 

 

(4

)

 

 

15

 

 

 

0.06

 

 

 

Restructuring, impairment, plant closing and transition costs

 

14

 

 

 

15

 

 

 

29

 

 

 

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted(1)

 

$

311

 

 

 

$

(44

)

 

 

$

115

 

 

 

$

0.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income tax expense

 

 

 

 

 

 

 

 

 

44

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests, net of tax

 

 

 

 

 

 

 

 

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted pre-tax income(1)

 

 

 

 

 

 

 

 

 

$

167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted effective tax rate

 

 

 

 

 

 

 

 

 

26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax

 

Net Income

 

Diluted Income

 

 

 

EBITDA

 

Expense (Benefit)

 

Attrib. to HUN Corp.

 

Per Share

 

 

 

Twelve months ended

 

Twelve months ended

 

Twelve months ended

 

Twelve months ended

 

 

 

December 31,

 

December 31,

 

December 31,

 

December 31,

 

In millions, except per share amounts, unaudited

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP(1)

 

$

741

 

$

1,022

 

$

(46

)

$

(51

)

$

93

 

$

323

 

$

0.38

 

$

1.31

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration expenses, purchase accounting adjustments

 

53

 

67

 

(13

)

(10

)

40

 

57

 

0.16

 

0.23

 

Impact of certain foreign tax credit elections

 

N/A

 

N/A

 

—

 

(94

)

—

 

(94

)

—

 

(0.38

)

Loss from discontinued operations, net of tax(3)

 

6

 

10

 

N/A

 

N/A

 

4

 

8

 

0.02

 

0.03

 

Loss (gain) on disposition of businesses/assets

 

2

 

(3

)

—

 

1

 

2

 

(2

)

0.01

 

(0.01

)

Loss on early extinguishment of debt

 

31

 

28

 

(11

)

(10

)

20

 

18

 

0.08

 

0.07

 

Certain legal settlements and related expenses

 

4

 

3

 

(1

)

—

 

3

 

3

 

0.01

 

0.01

 

Plant incident remediation costs

 

4

 

—

 

(1

)

—

 

3

 

—

 

0.01

 

—

 

Amortization of pension and postretirement actuarial losses

 

74

 

51

 

(17

)

(10

)

57

 

41

 

0.23

 

0.17

 

Restructuring, impairment, plant closing and transition costs

 

306

 

162

 

(36

)

(38

)

270

 

124

 

1.10

 

0.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted(1)

 

$

1,221

 

$

1,340

 

$

(125

)

$

(212

)

$

492

 

$

478

 

$

2.00

 

$

1.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income tax expense

 

 

 

 

 

 

 

 

 

125

 

212

 

 

 

 

 

Net income attributable to noncontrolling interests, net of tax

 

 

 

 

 

 

 

 

 

33

 

22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted pre-tax income(1)

 

 

 

 

 

 

 

 

 

$

650

 

$

712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted effective tax rate

 

 

 

 

 

 

 

 

 

19

%

30

%

 

 

 

 

 

See end of press release for footnote explanations

 

8

 


 

Table 6 — Pro Forma (2) Reconciliation of U.S. GAAP to Non-GAAP Measures

 

 

 

Pro Forma EBITDA

 

 

 

Three months ended

 

 

 

December 31,

 

In millions, except per share amounts, unaudited, pro forma

 

2015

 

2014

 

 

 

 

 

 

 

GAAP(1)

 

$

111

 

$

191

 

Adjustments:

 

 

 

 

 

Acquisition and integration expenses, purchase accounting adjustments

 

22

 

(2

)

Loss from discontinued operations, net of tax(3)

 

3

 

1

 

Loss (gain) on disposition of businesses/assets

 

1

 

(1

)

Loss on early extinguishment of debt

 

—

 

28

 

Certain legal settlements and related expenses

 

1

 

—

 

Plant incident remediation costs

 

1

 

—

 

Amortization of pension and postretirement actuarial losses

 

18

 

14

 

Restructuring, impairment, plant closing and transition costs

 

83

 

69

 

 

 

 

 

 

 

Pro forma adjusted(2)

 

$

240

 

$

300

 

 

 

 

Pro Forma EBITDA

 

 

 

Three months ended

 

 

 

September 30,

 

In millions, except per share amounts, unaudited pro forma

 

2015

 

 

 

 

 

GAAP(1)

 

$

255

 

Adjustments:

 

 

 

Acquisition and integration expenses, purchase accounting adjustments

 

10

 

Loss from discontinued operations, net of tax(3)

 

1

 

Loss on early extinguishment of debt

 

8

 

Certain legal settlements and related expenses

 

1

 

Plant incident remediation costs

 

3

 

Amortization of pension and postretirement actuarial losses

 

19

 

Restructuring, impairment, plant closing and transition costs

 

14

 

 

 

 

 

Pro forma adjusted(2)

 

$

311

 

 

 

 

Pro Forma EBITDA

 

 

 

Twelve months ended

 

 

 

December 31,

 

In millions, except per share amounts, unaudited pro forma

 

2015

 

2014

 

 

 

 

 

 

 

GAAP(1)

 

$

741

 

$

1,214

 

Adjustments:

 

 

 

 

 

Allocation of general corporate overhead

 

—

 

20

 

Acquisition and integration expenses, purchase accounting adjustments

 

53

 

7

 

Loss from discontinued operations, net of tax(3)

 

6

 

10

 

Loss (gain) on disposition of businesses/assets

 

2

 

(3

)

Loss on early extinguishment of debt

 

31

 

28

 

Certain legal settlements and related expenses

 

4

 

3

 

Plant incident remediation costs

 

4

 

—

 

Amortization of pension and postretirement actuarial losses

 

74

 

54

 

Restructuring, impairment, plant closing and transition costs

 

306

 

162

 

 

 

 

 

 

 

Pro forma adjusted(2)

 

$

1,221

 

$

1,495

 

 

See end of press release for footnote explanations

 

9


 

Table 7 — Reconciliation of Net Income to EBITDA

 

 

 

Three months ended

 

Twelve months ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

In millions, unaudited

 

2015

 

2014

 

2015

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Huntsman Corporation

 

$

4

 

$

(38

)

$

55

 

$

93

 

$

323

 

Interest expense

 

47

 

57

 

49

 

205

 

205

 

Income tax (benefit) expense from continuing operations

 

(39

)

12

 

49

 

46

 

51

 

Income tax benefit from discontinued operations(3)

 

(3

)

—

 

(1

)

(2

)

(2

)

Depreciation and amortization

 

102

 

110

 

103

 

399

 

445

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA(1)

 

111

 

141

 

255

 

741

 

1,022

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma adjustments to:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Huntsman Corporation

 

—

 

26

 

—

 

—

 

75

 

Interest expense

 

—

 

1

 

—

 

—

 

34

 

Income tax (benefit) expense from continuing operations

 

—

 

13

 

—

 

—

 

43

 

Depreciation and amortization

 

—

 

10

 

—

 

—

 

40

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma EBITDA(2)

 

$

111

 

$

191

 

$

255

 

$

741

 

$

1,214

 

 

See end of press release for footnote explanations

 

Table 8 — Selected Balance Sheet Items

 

 

 

December 31,

 

September 30,

 

December 31,

 

In millions

 

2015

 

2015

 

2014

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

Cash

 

$

269

 

$

437

 

$

870

 

Accounts and notes receivable, net

 

1,449

 

1,632

 

1,707

 

Inventories

 

1,692

 

1,850

 

2,025

 

Other current assets

 

424

 

332

 

437

 

Property, plant and equipment, net

 

4,446

 

4,380

 

4,423

 

Other assets

 

1,540

 

1,535

 

1,461

 

 

 

 

 

 

 

 

 

Total assets

 

$

9,820

 

$

10,166

 

$

10,923

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,061

 

$

1,068

 

$

1,275

 

Other current liabilities

 

686

 

839

 

790

 

Current portion of debt

 

170

 

158

 

267

 

Long-term debt

 

4,625

 

4,639

 

4,854

 

Other liabilities

 

1,649

 

1,671

 

1,786

 

Total equity

 

1,629

 

1,791

 

1,951

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

9,820

 

$

10,166

 

$

10,923

 

 

10


 

Table 9 — Outstanding Debt

 

 

 

December 31,

 

September 30,

 

December 31,

 

In millions

 

2015

 

2015

 

2014

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Debt:

 

 

 

 

 

 

 

Senior credit facilities

 

$

2,454

 

$

2,453

 

$

2,468

 

Accounts receivable programs

 

215

 

217

 

229

 

Senior notes

 

1,850

 

1,867

 

1,582

 

Senior subordinated notes

 

—

 

—

 

526

 

Variable interest entities

 

151

 

158

 

207

 

Other debt

 

125

 

102

 

109

 

 

 

 

 

 

 

 

 

Total debt - excluding affiliates

 

4,795

 

4,797

 

5,121

 

 

 

 

 

 

 

 

 

Total cash

 

269

 

437

 

870

 

 

 

 

 

 

 

 

 

Net debt- excluding affiliates

 

$

4,526

 

$

4,360

 

$

4,251

 

 

Table 10 — Summarized Statement of Cash Flows

 

 

 

Three months ended

 

Year ended

 

 

 

December 31,

 

December 31,

 

In millions, unaudited

 

2015

 

2015

 

2014

 

 

 

 

 

 

 

 

 

Total cash at beginning of period(a)

 

$

437

 

$

870

 

$

529

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

188

 

575

 

760

 

Net cash used in investing activities

 

(217

)

(600

)

(1,606

)

Net cash (used in) provided by financing activities

 

(144

)

(562

)

1,197

 

Effect of exchange rate changes on cash

 

(3

)

(16

)

(11

)

Change in restricted cash

 

8

 

2

 

1

 

 

 

 

 

 

 

 

 

Total cash at end of period(a)

 

$

269

 

$

269

 

$

870

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

Cash paid for interest

 

$

(67

)

$

(225

)

$

(208

)

Cash paid for income taxes

 

(45

)

(126

)

(165

)

Cash paid for capital expenditures

 

(209

)

(663

)

(601

)

Depreciation and amortization

 

102

 

399

 

445

 

 

 

 

 

 

 

 

 

Changes in primary working capital:

 

 

 

 

 

 

 

Accounts and notes receivable

 

$

174

 

$

121

 

$

2

 

Inventories

 

133

 

179

 

(20

)

Accounts payable

 

(46

)

(157

)

86

 

 

 

 

 

 

 

 

 

Total cash provided by primary working capital

 

$

261

 

$

143

 

$

68

 

 

(a) Includes restricted cash.

 

11


 

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 7 above.

 

Adjusted EBITDA is computed by eliminating the following from EBITDA:  (a) acquisition and integration expenses, purchase accounting adjustments; (b) loss (gain) on initial consolidation of subsidiaries; (c) EBITDA from discontinued operations; (d) loss (gain) on disposition of businesses/assets; (e) loss on early extinguishment of debt; (f) extraordinary loss (gain) on the acquisition of a business; (g) certain legal settlements and related expenses; (h) plant incident remediation costs; (i) amortization of pension and postretirement actuarial losses (gains); and (j) restructuring, impairment, plant closing and transition costs (credits).  The reconciliation of adjusted EBITDA to EBITDA is set forth in Table 5 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: (a) acquisition and integration expenses, purchase accounting adjustments; (b) impact of certain foreign tax credit elections; (c) loss (gain) on initial consolidation of subsidiaries; (d) loss (income) from discontinued operations; (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) extraordinary loss (gain) on the acquisition of a business; (i) certain legal settlements and related expenses; (j) plant incident remediation costs; (k) amortization of pension and postretirement actuarial losses (gains); and (l) 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 5 above.

 

(2)         Pro forma adjusted as if it had occurred at the beginning of the relevant period to (a) include the October 1, 2014 acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc.; (b) to exclude the related sale of our TR52 product line — used in printing inks — to Henan Billions Chemicals Co., Ltd. in December 2014; and (c) to exclude the allocation of general corporate overhead by Rockwood.

 

(3)         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 2015 revenues of approximately $10 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 100 manufacturing and R&D facilities in approximately 30 countries and employ approximately 15,000 associates within our 5 distinct business divisions. For more information about Huntsman, please visit the company’s website at www.huntsman.com.

 

Social Media:

 

Twitter: twitter.com/Huntsman_Corp

Facebook: www.facebook.com/huntsmancorp

LinkedIn: www.linkedin.com/company/huntsman

 

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.

 

12