The following excerpt is from the company's SEC filing.
$501 million of Buybacks in First Half of
2022
Second Quarter Highlights
Second quarter 2022 net income
of $242 million compared to net income of $172 million in the prior year period; second quarter 2022 diluted earnings per share of $1.10
compared to diluted earnings per share of $0.70 in the prior year period.
Second quarter 2022 adjusted
net income of $265 million compared to adjusted net income of $191 million in the prior year period; second quarter 2022 adjusted diluted
earnings per share of $1.28 compared to adjusted diluted earnings per share of $0.86 in the prior year period.
Sec
ond quarter 2022 adjusted
EBITDA of $432 million compared to adjusted EBITDA of $334 million in the prior year period.
Second quarter 2022 net cash provided by operating activities from continuing
operations was $231 million. Free cash flow from continuing operations was $162 million for the second quarter 2022 compared to an outflow
of $83 million in the prior year period.
Repurchased approximately 8.4 million shares for approximately $291 million
in the second quarter 2022.
Three months ended
Six months ended
June 30,
In millions, except per share amounts
Revenues
Net income
Adjusted net income
Diluted income per share
Adjusted diluted income per share
Adjusted EBITDA
Net cash provided by (used in) operating activities from continuing operations
See end of press release for footnote explanations and reconciliations of non-GAAP measures.
THE WOODLANDS, Texas
– Huntsman Corporation (NYSE: HUN)
today reported second quarter 2022 results with revenues of $2,362 million, net income of $242 million, adjusted net income of $265 million
and adjusted EBITDA of $432 million.
Peter R. Huntsman, Chairman, President, and CEO,
commented:
“Second quarter EBITDA margins exceeded
18% on the back of our value over volume strategy, improved pricing, and solid cost control. We remain well ahead or on track to meet
the targets that we presented at our Investor Day in November 2021, despite an increasingly challenging economic environment due to extremely
high European natural gas prices, headwinds in China associated with government-mandated shutdowns and monetary tightening in the United
States. In addition to the positive results, we repurchased approximately $500 million in shares in the first six months of the year and
our balance sheet remains extremely strong with a net leverage ratio of 0.6x.
“Regardless of any macro headwinds that
may impact the chemical industry in the coming quarters, our priorities around cost control, a focus on downstream businesses and returning
capital to shareholders will remain unchanged. Our balance sheet and cash generation places us in an enviable position to take advantage
of opportunities as they present themselves to invest in our core businesses.”
Segment Analysis for 2Q22 Compared to 2Q21
Polyurethanes
The increase in revenues in our Polyurethanes segment for the three
months ended June 30, 2022 compared to the same period of 2021 was primarily due to higher MDI average selling prices, partially offset
by lower sales volumes. MDI average selling prices increased in all our regions. Sales volumes decreased primarily due to the extended
government-mandated COVID lockdown in Shanghai, China and lower demand, partially offset by favorable comparisons in Europe due to the
scheduled turnaround at our Rotterdam, Netherlands facility in the second quarter of 2021. The increase in segment adjusted EBITDA
was primarily due to higher MDI margins and a gain from an insurance settlement, partially offset by lower sales volumes, the negative
impact of weaker major international currencies against the U.S. dollar and lower equity earnings from our minority-owned joint venture
in China.
Performance Products
The increase in revenues in our Performance Products segment for
the three months ended June 30, 2022 compared to the same period of 2021 was primarily due to higher average selling prices,
partially offset by lower sales volumes. Average selling prices increased primarily due to commercial excellence programs and
in response to an increase in raw material costs. Sales volumes decreased primarily due to a shift in product mix based on demand
and business strategy. The increase in segment adjusted EBITDA was primarily due to increased revenues and margins, partially
offset by a slight increase in fixed costs.
Advanced Materials
The increase in revenues in our Advanced Materials segment for the
three months ended June 30, 2022 compared to the same period of 2021 was primarily due to higher average selling prices, partially
offset by lower sales volumes. Average selling prices increased largely in response to higher raw material, energy and logistics
costs as well as improved sales mix. Sales volumes decreased primarily due to deselection of lower margin base resins business. The increase in
segment adjusted EBITDA was primarily due to higher sales prices and improved sales mix.
Textile Effects
The decrease in revenues in our Textile Effects segment for the three
months ended June 30, 2022 compared to the same period of 2021 was primarily due to lower sales volumes, partially offset by higher average
selling prices. Sales volumes decreased primarily due to a deselection of certain volume as well as lower demand. Average selling
prices increased in response to higher direct costs. The decrease in segment adjusted EBITDA was primarily due to lower revenues,
partially offset by improved portfolio mix.
Corporate, LIFO and other
For the three months ended June 30, 2022, adjusted EBITDA from
Corporate and other was a loss of $38 million as compared to a loss of $48 million for the same period of 2021. The year-over-year difference
was primarily due to translational foreign currency gains related to the Chinese Yuan.
Liquidity and Capital Resources
During the three months ended June 30, 2022, our free cash flow from
continuing operations was a source of cash of $162 million as compared to a use of cash of $83 million in the same period of 2021. As
of June 30, 2022, we had approximately $2.1 billion of combined cash and unused borrowing capacity.
During the three months ended June 30, 2022, we spent $69 million on
capital expenditures as compared to $76 million in the same period of 2021. For 2022, we expect to spend approximately $300 million on
capital expenditures.
Income Taxes
In the second quarter of 2022, both our effective tax rate and our
adjusted effective tax rate was 22%. We expect our 2022 adjusted effective tax rate to be approximately 22% to 24%.
Earnings Conference Call Information
We will hold a conference call to discuss our second quarter 2022 financial
results on Tuesday, August 2, 2022 at 10:00 a.m. ET.
Webcast link:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=E6B5RbBA
Participant dial-in numbers:
Domestic callers:
(877) 402-8037
International callers:
(201) 378-4913
The conference call will be accompanied by presentation slides that
will be accessible via the webcast link and Huntsman’s investor relations website,
www.huntsman.com/investors
. Upon conclusion
of the call, the webcast replay will be accessible via Huntsman’s website.
Upcoming Conferences
During the second quarter 2022, a member of management is expected
to present at:
Jefferies Industrials Conference on August 10, 2022
Seaport Global Virtual Chemicals Conference on August 23, 2022
UBS Chemicals Conference on September 7, 2022
A webcast of the presentation, if applicable, along with accompanying
materials will be available at
Table 1 – Results of Operations
Cost of goods sold
Gross profit
Operating expenses, net
Restructuring, impairment and plant closing costs
Operating income
Interest expense, net
Equity in income of investment in unconsolidated affiliates
Fair value adjustments to Venator investment, net
Loss on early extinguishment of debt
Other income, net
Income from continuing operations before income taxes
Income tax expense
Income from discontinued operations, net of tax
Net income attributable to noncontrolling interests, net of tax
Net income attributable to Huntsman Corporation
Basic income per share
Common share information:
Basic weighted average shares
Diluted weighted average shares
Diluted shares for adjusted diluted income per share
See end of press release for footnote explanations.
Table 2 – Results of Operations by Segment
Three months
ended
Six months
ended
June
30,
Better /
(Worse)
Segment Revenues:
Performance
Products
Advanced
Materials
Textile
Effects
Total
Reportable Segments' Revenue
Intersegment
Eliminations
Total
Revenues
Segment
Adjusted EBITDA
Total
Reportable Segments' Adjusted EBITDA
Corporate,
LIFO and other
Total
Adjusted EBITDA
n/m
= not meaningful
See
end of press release for footnote explanations.
Table 3 – Factors Impacting Sales Revenue
June 30, 2022 vs. 2021
Average Selling Price
Exchange
Sales Mix
Currency
& Other
Volume
(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
Diluted Income
(Expense) Benefit
Net Income
Per Share
Interest expense, net from continuing operations
Income tax expense from continuing operations
Depreciation and amortization from continuing operations
Business acquisition and integration expenses and purchase accounting inventory adjustments
Costs associated with the Albemarle Settlement, net
EBITDA / Income from discontinued operations, net of tax
Loss (gain) on sale of businesses/assets
Income from transition services arrangements
Fair value adjustments to Venator Investment, net
Certain legal and other settlements and related expenses
Certain non-recurring information technology project implementation costs
Amortization of pension and postretirement actuarial losses
Restructuring, impairment and plant closing and transition costs
Plant incident remediation credits
Adjusted income tax expense
Adjusted pre-tax income
Adjusted effective tax rate
Effective tax rate
Income
Tax
Diluted Income
Net
Income
Per
Share
Certain legal settlements and related expenses
Plant incident remediation (credits) costs
(a) Represents the changes in market value in Huntsman's remaining interest in Venator and related option to sell those remaining Venator shares.
N/A = not applicable
Table 5 – Selected Balance Sheet Items
December 31,
Accounts and notes receivable, net
Inventories
Receivable associated with the Albemarle Settlement
Other current assets
Property, plant and equipment, net
Other noncurrent assets
Total assets
Accounts payable
Other current liabilities
Current portion of debt
Long-term debt
Other noncurrent liabilities
Huntsman Corporation stockholders’ equity
Noncontrolling interests in subsidiaries
Total liabilities and equity
Table 6 – Outstanding Debt
Revolving credit facility
Accounts receivable programs
Senior notes
Variable interest entities
Other debt
Total debt - excluding affiliates
Total cash
Net debt - excluding affiliates
Table 7 – Summarized Statement of Cash
Flows
Total cash at beginning of period
Net cash used in operating activities from discontinued operations
Net cash used in investing activities
Net cash used in financing activities
Effect of exchange rate changes on cash
Total cash at end of period
Capital expenditures
Supplemental cash flow information:
Cash paid for interest
Cash paid for income taxes
Cash paid for restructuring and integration
Cash paid for pensions
Change in primary working capital:
Total change in primary working capital
Footnotes
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
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 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.
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.
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.
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.
About Huntsman:
Huntsman Corporation is a publicly traded global manufacturer and
marketer of differentiated and specialty chemicals with 2021 revenues of approximately $8 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 70 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately
9,000 associates within our four distinct business divisions. For more information about Huntsman, please visit the company's website
at
www.huntsman.com.
Social Media:
Twitter:
www.twitter.com/Huntsman_Corp
Facebook:
www.facebook.com/huntsmancorp
LinkedIn:
www.linkedin.com/company/huntsman
Forward-Looking Statements:
This press release includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital
expenditures, financing needs, plans or intentions relating to acquisitions, divestitures or strategic transactions, including the review
of the Textile Effects Division, business trends and any other information that is not historical information. When used in this press
release, the words "estimates," "expects," "anticipates," "likely," "projects," "outlook,"
"plans," "intends," "believes," "forecasts," or future or conditional verbs, such as "will,"
"should," "could" or "may," and variations of such words or similar expressions are intended to identify
forward-looking statements. These forward-looking statements, including, without limitation, management's examination of historical operating
trends and data, are based upon our current expectations and various assumptions and beliefs. In particular, such forward-looking statements
are subject to uncertainty and changes in circumstances and involve risks and uncertainties that may affect the Company's operations,
markets, products, prices and other factors as discussed in the Company's filings with the Securities and Exchange Commission (the "SEC").
In addition, there can be no assurance that the review of the Textile Effects Division will result in one or more transactions or other
strategic change or outcome. Significant risks and uncertainties may relate to, but are not limited to, increased energy costs in Europe,
inflation and resulting monetary tightening in the US, geopolitical instability, ongoing impact of COVID-19 on our operations and financial
results, volatile global economic conditions, cyclical and volatile product markets, disruptions in production at manufacturing facilities,
timing of proposed transactions, reorganization or restructuring of the Company's operations, including any delay of, or other negative
developments affecting the ability to implement cost reductions and manufacturing optimization improvements in the Company's businesses
and to realize anticipated cost savings, and other financial, operational, economic, competitive, environmental, political, legal, regulatory
and technological factors. Any forward-looking statement should be considered in light of the risks set forth under the caption "Risk
Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021, which may be supplemented by other risks and uncertainties
disclosed in any subsequent reports filed or furnished by the Company from time to time. All forward-looking statements apply only as
of the date made. Except as required by law, the Company undertakes no obligation to update or revise forward-looking statements to reflect
events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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