HUN Huntsman Corporation

Three months ended

Nine months ended

September 30,

September 30,

In millions, except per share amounts

2023

2022

2023

2022

Revenues

$     1,506

$     2,011

$     4,708

$     6,373

Net income attributable to Huntsman Corporation

$          -

$       100

$       172

$       551

Adjusted net income ⁽¹⁾

$         27

$       141

$       103

$       628

Diluted income per share

$          -

$      0.50

$      0.95

$      2.66

Adjusted diluted income per share⁽¹⁾

$      0.15

$      0.71

$      0.57

$      3.03

Adjusted EBITDA⁽¹⁾

$       136

$       271

$       428

$     1,068

Net cash provided by operating activities from continuing operations

$       167

$       285

$         85

$       595

Free cash flow from continuing operations⁽²⁾

$       117

$       228

$        (62)

$       409

See end of press release for footnote explanations and reconciliations of non-GAAP measures.

Table 1 – Results of Operations

Three months ended

Nine months ended

September 30,

September 30,

In millions, except per share amounts

2023

2022

2023

2022

Revenues

$     1,506

$     2,011

$     4,708

$     6,373

Cost of goods sold

1,275

1,662

3,954

5,017

Gross profit

231

349

754

1,356

Operating expenses, net

198

199

609

621

Restructuring, impairment and plant closing costs

6

12

7

36

Operating income

27

138

138

699

Interest expense, net

(15)

(16)

(48)

(46)

Equity in income of investment in unconsolidated affiliates

30

21

70

55

Other income (expense), net

-

3

(2)

14

Income from continuing operations before income taxes

42

146

158

722

Income tax expense

(27)

(30)

(66)

(155)

Income from continuing operations

15

116

92

567

(Loss) income from discontinued operations, net of tax⁽³⁾

-

(1)

120

30

Net income

15

115

212

597

Net income attributable to noncontrolling interests

(15)

(15)

(40)

(46)

Net income attributable to Huntsman Corporation

$           -

$       100

$       172

$       551

Adjusted EBITDA⁽¹⁾

$       136

$       271

$       428

$     1,068

Adjusted net income ⁽¹⁾

$         27

$       141

$       103

$       628

Basic income per share

$          -

$      0.51

$      0.96

$      2.69

Diluted income per share

$          -

$      0.50

$      0.95

$      2.66

Adjusted diluted income per share⁽¹⁾

$      0.15

$      0.71

$      0.57

$      3.03

Common share information:

Basic weighted average shares

176

198

179

205

Diluted weighted average shares

177

199

181

207

Diluted shares for adjusted diluted income per share

177

199

181

207

See end of press release for footnote explanations.

Three months ended

Nine months ended

September 30,

Better /

September 30,

Better /

In millions

2023

2022

(Worse)

2023

2022

(Worse)

Segment Revenues:

Polyurethanes

$       967

$     1,257

(23 %)

$     2,970

$     3,996

(26 %)

Performance Products

277

434

(36 %)

918

1,406

(35 %)

Advanced Materials

268

328

(18 %)

841

999

(16 %)

Total Reportable Segments' Revenues

1,512

2,019

(25 %)

4,729

6,401

(26 %)

Intersegment Eliminations

(6)

(8)

n/m

(21)

(28)

n/m

Total Revenues

$     1,506

$     2,011

(25 %)

$     4,708

$     6,373

(26 %)

Segment Adjusted EBITDA⁽¹⁾:

Polyurethanes

$         81

$       138

(41 %)

$       235

$       591

(60 %)

Performance Products

47

110

(57 %)

173

408

(58 %)

Advanced Materials

49

58

(16 %)

148

192

(23 %)

Total Reportable Segments' Adjusted EBITDA⁽¹⁾

177

306

(42 %)

556

1,191

(53 %)

Corporate, LIFO and other

(41)

(35)

(17 %)

(128)

(123)

(4 %)

$       136

$       271

(50 %)

$       428

$     1,068

(60 %)

n/m = not meaningful

See end of press release for footnote explanations.

Three months ended

September 30, 2023 vs. 2022

Average Selling Price^(a)

Local

Exchange

Sales

Sales Mix

Currency

Rate

Volume^(b)

& Other

Total

Polyurethanes

(14 %)

0 %

(4 %)

(5 %)

(23 %)

Performance Products

(12 %)

1 %

(26 %)

1 %

(36 %)

Advanced Materials

(2 %)

1 %

(18 %)

1 %

(18 %)

Nine months ended

September 30, 2023 vs. 2022

Average Selling Price^(a)

Local

Exchange

Sales

Sales Mix

Currency

Rate

Volume^(b)

& Other

Total

Polyurethanes

(8 %)

(1 %)

(12 %)

(5 %)

(26 %)

Performance Products

(6 %)

0 %

(30 %)

1 %

(35 %)

Advanced Materials

2 %

(1 %)

(17 %)

0 %

(16 %)

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

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

Table 4 – Reconciliation of U.S. GAAP to Non-GAAP Measures

 Income Tax 

 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

2023

2022

2023

2022

2023

2022

2023

2022

Net income

$          15

$        115

$          15

$        115

$       0.08

$       0.58

Net income attributable to noncontrolling interests

(15)

(15)

(15)

(15)

(0.08)

(0.08)

Net income attributable to Huntsman Corporation

-

100

-

100

-

0.50

Interest expense, net from continuing operations

15

16

Income tax expense from continuing operations

27

30

$         (27)

$         (30)

Income tax expense (benefit) from discontinued operations⁽³⁾

(2)

7

Depreciation and amortization from continuing operations

69

72

Depreciation and amortization from discontinued operations⁽³⁾

-

3

Business acquisition and integration expenses and purchase accounting inventory adjustments

-

1

1

(1)

1

-

0.01

-

Costs associated with the Albemarle Settlement, net

-

1

-

(1)

-

-

-

-

EBITDA / Loss (income) from discontinued operations⁽³⁾

2

(9)

 N/A 

 N/A 

-

1

-

0.01

Loss on sale of business/assets

-

16

-

(4)

-

12

-

0.06

Fair value adjustments to Venator investment, net

-

7

-

-

-

7

-

0.04

Certain legal and other settlements and related expenses

2

1

-

(1)

2

-

0.01

-

Certain non-recurring information technology project implementation costs

2

1

1

-

3

1

0.02

0.01

Amortization of pension and postretirement actuarial losses

10

10

-

(2)

10

8

0.06

0.04

Restructuring, impairment and plant closing and transition costs

11

14

-

(3)

11

11

0.06

0.06

Plant incident remediation costs

-

1

-

-

-

1

-

0.01

Adjusted⁽¹⁾

$        136

$        271

$         (25)

$         (42)

27

141

$       0.15

$       0.71

Adjusted income tax expense⁽¹⁾

25

42

Net income attributable to noncontrolling interests

15

15

Adjusted pre-tax income ⁽¹⁾

$          67

$        198

Adjusted effective tax rate⁽⁴⁾

37 %

21 %

Effective tax rate

64 %

21 %

 Income Tax 

 Diluted Income 

 EBITDA 

Expense

 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

2023

2022

2023

2022

2023

2022

2023

2022

Net income

$        212

$        597

$        212

$        597

$       1.17

$       2.88

Net income attributable to noncontrolling interests

(40)

(46)

(40)

(46)

(0.22)

(0.22)

Net income attributable to Huntsman Corporation

172

551

172

551

0.95

2.66

Interest expense, net from continuing operations

48

46

Income tax expense from continuing operations

66

155

$         (66)

$       (155)

Income tax expense from discontinued operations⁽³⁾

14

14

Depreciation and amortization from continuing operations

208

207

Depreciation and amortization from discontinued operations⁽³⁾

-

11

Business acquisition and integration expenses and purchase accounting inventory adjustments

3

11

-

(3)

3

8

0.02

0.04

Costs associated with the Albemarle Settlement, net

-

3

-

(1)

-

2

-

0.01

EBITDA / Income from discontinued operations⁽³⁾

(134)

(55)

N/A

N/A

(120)

(30)

(0.66)

(0.14)

(Gain) loss on sale of business/assets

(1)

27

-

(6)

(1)

21

(0.01)

0.10

Income from transition services arrangements

-

(2)

-

-

-

(2)

-

(0.01)

Fair value adjustments to Venator Investment

5

9

-

-

5

9

0.03

0.04

Certain legal settlements and related expenses

4

15

-

(4)

4

11

0.02

0.05

Certain non-recurring information technology project implementation costs

5

4

-

(1)

5

3

0.03

0.01

Amortization of pension and postretirement actuarial losses

25

32

(2)

(7)

23

25

0.13

0.12

Restructuring, impairment and plant closing and transition costs

13

44

(1)

(11)

12

33

0.07

0.16

Plant incident remediation credits

-

(4)

-

1

-

(3)

-

(0.01)

Adjusted⁽¹⁾

$        428

$     1,068

$         (69)

$       (187)

103

628

$       0.57

$       3.03

Adjusted income tax expense⁽¹⁾

69

187

Net income attributable to noncontrolling interests

40

46

Adjusted pre-tax income⁽¹⁾

$        212

$        861

Adjusted effective tax rate⁽⁴⁾

33 %

22 %

Effective tax rate

42 %

21 %

N/A = not applicable

See end of press release for footnote explanations.

Table 5 – Selected Balance Sheet Items

September 30,

December 31,

In millions

2023

2022

Cash

$              496

$              654

Accounts and notes receivable, net

827

834

Inventories

941

995

Other current assets

130

190

Current assets held for sale⁽³⁾

-

472

Property, plant and equipment, net

2,313

2,377

Other noncurrent assets

2,662

2,698

Total assets

$            7,369

$            8,220

Accounts payable

$              726

$              961

Other current liabilities

432

480

Current portion of debt

113

66

Current liabilities held for sale⁽³⁾

-

194

Long-term debt

1,493

1,671

Other noncurrent liabilities

951

1,008

Huntsman Corporation stockholders' equity

3,429

3,624

Noncontrolling interests in subsidiaries

225

216

Total liabilities and equity

$            7,369

$            8,220

Table 6 – Outstanding Debt

September 30,

December 31,

In millions

2023

2022

Debt:

Revolving credit facility

$                 -

$                55

Accounts receivable programs

101

166

Senior notes

1,454

1,455

Variable interest entities

28

35

Other debt

23

26

Total debt - excluding affiliates

1,606

1,737

Total cash

496

654

Net debt - excluding affiliates⁽⁵⁾

$            1,110

$            1,083

See end of press release for footnote explanations.

Table 7 – Summarized Statement of Cash Flows

Three months ended

Nine months ended

September 30,

September 30,

In millions

2023

2022

2023

2022

Total cash at beginning of period

$           502

$           608

$           654

$         1,041

Net cash provided by operating activities from continuing operations

167

285

85

595

Net cash (used in) provided by operating activities from discontinued operations⁽³⁾

(4)

3

(40)

9

Net cash (used in) provided by investing activities from continuing operations

(49)

(56)

395

(176)

Net cash used in investing activities from discontinued operations⁽³⁾

-

(3)

(4)

(12)

Net cash used in financing activities

(117)

(296)

(581)

(905)

Effect of exchange rate changes on cash

(3)

(26)

(13)

(37)

Total cash at end of period

$           496

$           515

$           496

$           515

Free cash flow from continuing operations⁽²⁾:

Net cash provided by operating activities from continuing operations

$           167

$           285

$             85

$           595

Capital expenditures

(50)

(57)

(147)

(186)

Free cash flow from continuing operations⁽²⁾

$           117

$           228

$            (62)

$           409

Supplemental cash flow information:

Cash paid for interest

$              (9)

$              (8)

$            (43)

$            (41)

Cash paid for income taxes

(20)

(17)

(82)

(171)

Cash paid for restructuring and integration

(13)

(18)

(51)

(43)

Cash paid for pensions

(21)

(11)

(41)

(35)

Depreciation and amortization from continuing operations

69

72

208

207

Change in primary working capital:

Accounts and notes receivable

$             17

$             69

$             17

$            (60)

Inventories

56

72

33

(128)

Accounts payable

(11)

(80)

(209)

(113)

Total change in primary working capital

$             62

$             61

$          (159)

$          (301)

See end of press release for footnote explanations.

(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 (loss).  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) amortization of pension and postretirement actuarial losses (gains); (f) restructuring, impairment and plant closing and transition costs; and further adjusted for certain other items set forth in the reconciliation of net income (loss) to adjusted EBITDA 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) amortization of pension and postretirement actuarial losses (gains); (c) restructuring, impairment and plant closing and transition costs; and further adjusted for certain other items set forth in the reconciliation of net income (loss) to adjusted net income (loss) in Table 4 above.  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 may disclose forward-looking adjusted EBITDA because we cannot adequately forecast certain items and events that may or may not impact us in the near future, such as business acquisition and integration expenses and purchase accounting inventory adjustments, certain legal and other settlements and related expenses, gains on sale of businesses/assets and certain tax only items, including tax law changes not yet enacted. Each of such adjustment has not yet occurred, is out of our control and/or cannot be reasonably predicted. In our view, our forward-looking adjusted EBITDA represents the forecast net income on our underlying business operations but does not reflect any adjustments related to the items noted above that may occur and can cause our adjusted EBITDA to differ.

(2)

Management internally uses free cash flow measure: (a) to evaluate our liquidity, (b) evaluate strategic investments, (c) plan stock buyback and dividend levels and (d) evaluate our ability to incur and service debt. Free cash flow is defined as net cash provided by operating activities less capital expenditures. 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.

(3)

During the first quarter 2023, we completed the divestiture of our Textile Effects business, which is reported as discontinued operations on the income and cash flow statements and held for sale on the December 31, 2022 balance sheet.

(4)

We believe adjusted effective tax rate provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the businesses' operational profitability and that may obscure underlying business results and trends. In our view, effective tax rate is the performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to adjusted effective tax rate. The reconciliation of historical adjusted effective tax rate and effective tax rate is set forth in Table 4 above. Please see the reconciliation of our net income to adjusted net income in Table 4 for details regarding the tax impacts of our non-GAAP adjustments.

Our forward-looking adjusted effective tax rate is calculated based on our forecast effective tax rate, and the range of our forward-looking adjusted effective tax rate equals the range of our forecast effective tax rate. We disclose forward-looking adjusted effective tax rate because we cannot adequately forecast certain items and events that may or may not impact us in the near future, such as business acquisition and integration expenses and purchase accounting inventory adjustments, certain legal and other settlements and related expenses, gains on sale of businesses/assets and certain tax only items, including tax law changes not yet enacted. Each of such adjustment has not yet occurred, is out of our control and/or cannot be reasonably predicted. In our view, our forward-looking adjusted effective tax rate represents the forecast effective tax rate on our underlying business operations but does not reflect any adjustments related to the items noted above that may occur and can cause our effective tax rate to differ.

(5)

Net debt is a measure we use to monitor how much debt we have after taking into account our total cash. We use it as an indicator of our overall financial position, and calculate it by taking our total debt, including the current portion, and subtracting total cash.