Huntsman Announces First Quarter 2022 Earnings; Over $200 million in Share Repurchases During the First Quarter

Three months ended

March 31,

In millions, except per share amounts

2022

2021

Revenues

$     2,389

$     1,837

Net income

$       240

$       100

Adjusted net income ⁽¹⁾

$       256

$       147

Diluted income per share

$      1.04

$      0.37

Adjusted diluted income per share⁽¹⁾

$      1.19

$      0.66

Adjusted EBITDA⁽¹⁾

$       415

$       289

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

$         85

$        (16)

Free cash flow from continuing operations⁽²⁾

$         16

$      (114)

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

Table 1 – Results of Operations

Three months ended

March 31,

In millions, except per share amounts

2022

2021

Revenues

$     2,389

$     1,837

Cost of goods sold

1,824

1,445

Gross profit

565

392

Operating expenses (credits)

261

242

Restructuring, impairment and plant closing costs

-

24

Operating income

304

126

Interest expense, net

(14)

(19)

Equity in income of investment in unconsolidated affiliates

15

38

Fair value adjustments to Venator investment and related loss on disposal

(2)

(19)

Other income, net

1

7

Income from continuing operations before income taxes

304

133

Income tax expense

(65)

(34)

Income from continuing operations

239

99

Income (loss) from discontinued operations, net of tax

1

1

Net income

240

100

Net income attributable to noncontrolling interests, net of tax

(17)

(17)

Net income attributable to Huntsman Corporation

$       223

$         83

Adjusted EBITDA ⁽¹⁾

$       415

$       289

Adjusted net income ⁽¹⁾

$       256

$       147

Basic income per share

$      1.05

$      0.38

Diluted income per share

$      1.04

$      0.37

Adjusted diluted income per share ⁽¹⁾

$      1.19

$      0.66

Common share information:

Basic weighted average shares

213

220

Diluted weighted average shares

215

223

Diluted shares for adjusted diluted income per share

215

223

See end of press release for footnote explanations.

Table 2 – Results of Operations by Segment

Three months ended

March 31,

Better /

In millions

2022

2021

(Worse)

Segment Revenues:

Polyurethanes

$     1,386

$     1,068

30%

Performance Products

480

305

57%

Advanced Materials

335

278

21%

Textile Effects

197

193

2%

Total Reportable Segments' Revenue

2,398

1,844

30%

Intersegment Eliminations

(9)

(7)

n/m

$     2,389

$     1,837

30%

Segment Adjusted EBITDA⁽¹⁾:

Polyurethanes

$       224

$       207

8%

Performance Products

146

63

132%

Advanced Materials

67

44

52%

Textile Effects

28

25

12%

Total Reportable Segments' Adjusted EBITDA

465

339

37%

Corporate, LIFO and other

(50)

(50)

0%

$       415

$       289

44%

n/m = not meaningful

See end of press release for footnote explanations.

Table 3 – Factors Impacting Sales Revenue

Three months ended

March 31, 2022 vs. 2021

Average Selling Price^(a)

Local

Exchange

Sales Mix

Sales

Currency

Rate

& Other

Volume^(b)

Total

Polyurethanes

29%

(3%)

0%

4%

30%

Performance Products

49%

(3%)

8%

3%

57%

Advanced Materials

34%

(4%)

8%

(17%)

21%

Textile Effects

16%

(2%)

(1%)

(11%)

2%

(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

March 31,

March 31,

March 31,

March 31,

In millions, except per share amounts

2022

2021

2022

2021

2022

2021

2022

2021

Net income

$        240

$        100

$        240

$        100

$       1.11

$       0.45

Net income attributable to noncontrolling interests

(17)

(17)

(17)

(17)

(0.08)

(0.08)

Net income attributable to Huntsman Corporation

223

83

223

83

1.04

0.37

Interest expense from continuing operations

14

19

Income tax expense, net from continuing operations

65

34

$         (65)

$         (34)

Depreciation and amortization from continuing operations

71

74

Business acquisition and integration expenses and purchase accounting inventory adjustments

6

9

-

(2)

6

7

0.03

0.03

Costs associated with the Albemarle Settlement, net

1

-

-

-

1

-

-

-

EBITDA / Income from discontinued operations, net of tax

(1)

(1)

 N/A 

 N/A 

(1)

(1)

-

-

Loss on sale of businesses/assets

4

-

(1)

-

3

-

0.01

-

Income from transition services arrangements

(1)

(1)

-

-

(1)

(1)

-

-

Fair value adjustments to Venator Investment

2

19

-

-

2

19

0.01

0.09

Certain legal and other settlements and related expenses

12

2

(4)

(1)

8

1

0.04

-

Certain non-recurring information technology project implementation costs

2

1

-

-

2

1

0.01

-

Amortization of pension and postretirement actuarial losses

14

22

(3)

(5)

11

17

0.05

0.08

Restructuring, impairment and plant closing and transition costs

3

24

(1)

(6)

2

18

0.01

0.08

Plant incident remediation costs

-

4

-

(1)

-

3

-

0.01

Adjusted⁽¹⁾

$        415

$        289

$         (74)

$         (49)

$        256

$        147

$       1.19

$       0.66

Adjusted income tax expense ⁽¹⁾

$          74

$          49

Net income attributable to noncontrolling interests, net of tax

17

17

Adjusted pre-tax income ⁽¹⁾

$        347

$        213

Adjusted effective tax rate ⁽³⁾

21%

23%

Effective tax rate

21%

26%

N/A = not applicable

See end of press release for footnote explanations.

Table 5 – Selected Balance Sheet Items

March 31,

December 31,

In millions

2022

2021

Cash

$              807

$            1,041

Accounts and notes receivable, net

1,310

1,186

Inventories

1,382

1,201

Receivable associated with the Albemarle Settlement

333

333

Other current assets

156

167

Property, plant and equipment, net

2,551

2,576

Other noncurrent assets

2,863

2,888

Total assets

$            9,402

$            9,392

Accounts payable

$            1,315

$            1,208

Other current liabilities

782

831

Current portion of debt

21

12

Long-term debt

1,529

1,538

Other noncurrent liabilities

1,215

1,244

Huntsman Corporation stockholders' equity

4,343

4,378

Noncontrolling interests in subsidiaries

197

181

Total liabilities and equity

$            9,402

$            9,392

Table 6 – Outstanding Debt

March 31,

December 31,

In millions

2022

2021

Debt:

Revolving credit facility

$                 -

$                 -

Accounts receivable programs

-

-

Senior notes

1,468

1,473

Variable interest entities

50

45

Other debt

32

32

Total debt - excluding affiliates

1,550

1,550

Total cash

807

1,041

Net debt - excluding affiliates ⁽⁴⁾

$              743

$              509

See end of press release for footnote explanations.

Three months ended

March 31,

2022

2021

$         1,041

$         1,593

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

85

(16)

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

-

(1)

Net cash used in investing activities

(65)

(323)

Net cash provided by investing activities from discontinued operations⁽³⁾

-

-

Net cash used in financing activities

(252)

(579)

Effect of exchange rate changes on cash

(2)

(1)

Total cash at end of period

$           807

$           673

Free cash flow from continuing operations⁽²⁾:

Net cash provided by (used in) operating activities

$             85

$            (16)

Capital expenditures

(69)

(98)

Free cash flow from continuing operations

$             16

$          (114)

Supplemental cash flow information:

Cash paid for interest

$              (9)

$            (16)

Cash paid for income taxes

(32)

(8)

Cash paid for restructuring and integration

(13)

(9)

Cash paid for pensions

(13)

(14)

Depreciation and amortization

71

74

Change in primary working capital:

Accounts and notes receivable

$          (134)

$          (117)

Inventories

(187)

(156)

Accounts payable

120

94

$          (201)

$          (179)

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 (credits); 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 (credits); 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)

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 4for 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.

(4)

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.