SECOND QUARTER RESULTS INCLUDE: NET INCOME OF $406 MILLION; ADJUSTED EBITDA IMPROVEMENT OF $96 MILLION FROM $50 MILLION IN THE FIRST QUARTER; POSITIVE CASH FLOW BENEFIT FROM PRIMARY WORKING CAPITAL IMPROVEMENTS OF $165 MILLION
THE WOODLANDS, Texas, Aug. 6 /PRNewswire-FirstCall/ -- Huntsman Corporation (NYSE: HUN)
Second Quarter 2009 Highlights
- Revenues for the second quarter of 2009 were $1,866 million, a decrease of 36% compared to $2,896 million for the second quarter of 2008 and an increase of 10% compared to $1,693 million for the first quarter of 2009.
- Net income attributable to Huntsman Corporation for the second quarter of 2009 was $406 million or $1.51 per diluted share compared to net income attributable to Huntsman Corporation of $24 million or $0.10 per diluted share for the same period in 2008 and net loss attributable to Huntsman Corporation of $290 million or $1.24 loss per diluted share for the first quarter of 2009. Adjusted net loss from continuing operations attributable to Huntsman Corporation for the second quarter of 2009 was $64 million or $0.27 loss per diluted share compared to adjusted net income from continuing operations attributable to Huntsman Corporation of $20 million or $0.09 per diluted share for the same period in 2008 and adjusted net loss from continuing operations attributable to Huntsman Corporation excluding a UK tax valuation allowance of $128 million or $0.55 loss per diluted share for the first quarter of 2009.
- Adjusted EBITDA from continuing operations for the second quarter of 2009 was $96 million compared to $210 million for the same period in 2008 and $50 million for the first quarter of 2009.
- On June 22, 2009, we reached an agreement with Credit Suisse and Deutsche Bank to settle our claims against them in Texas state court for, among other things, fraud and tortious interference in connection with our terminated merger agreements with Basell and Hexion Specialty Chemicals, Inc. Under the terms of the settlement agreement, Credit Suisse and Deutsche Bank provided to us:
- $632 million in cash
- $500 million senior secured term loan financing, 7 year term at LIBOR + 2.25%
- $600 million unsecured note financing, 7 year term at 5.5%
- On July 23, 2009, we redeemed all ($296 million principal amount) of our outstanding 11.625% senior secured notes due 2010 and on August 3, 2009, we redeemed all ($198 million principal amount) of our outstanding 11.5% senior notes due 2012. This debt reduction, which will be reflected in our balance sheet as of September 30, 2009, eliminates all meaningful debt maturities until 2013.
- As of June 30, 2009, we had $2,301 million of cash on hand. During the second quarter we generated positive cash flow of approximately $165 million through effective management of our primary working capital.
Summarized earnings are as follows:
Three months Six months
ended Three Months ended
June 30, Ended June 30,
In millions, except per ------------- March 31, -------------
share amounts 2009 2008 2009 2009 2008
----------------------- ------ ----- --------- ------ -----
Net income (loss) attributable to
Huntsman Corporation $406 $24 $(290) $116 $31
Adjusted net (loss) income from
continuing operations $(64) $20 $(274) $(338) $37
Diluted income (loss) per share $1.51 $0.10 $(1.24) $0.47 $0.13
Adjusted diluted (loss) income per
share from continuing operations $(0.27) $0.09 $(1.17) $(1.45) $0.16
EBITDA $874 $210 $30 $904 $380
Adjusted EBITDA from continuing
operations $96 $210 $50 $146 $398
See end of press release for important explanations
Peter R. Huntsman, our President and CEO, stated:
"I am pleased with our accomplishments and results during the second quarter. We successfully reached a settlement agreement with Credit Suisse and Deutsche Bank resulting in a very favorable outcome for our company. This brings to an end what could have been a lengthy period of litigation and appeals and provides us with a considerable amount of cash and financing that significantly strengthens our balance sheet and liquidity. More importantly, our monthly year-over-year volume order pattern shows positive trends which are reflected in our results, as adjusted EBITDA in the second quarter increased to $96 million from $50 million in the first quarter."
He added, "We will continue our vigilance over those business elements under our control, including effective management of our working capital and aggressive reduction of controllable costs. We are on target to have eliminated more than $150 million from our cost structure by year end."
Huntsman Corporation
Operating Results
Three months ended Six months ended
In millions, except per June 30, June 30,
share amounts 2009 2008 2009 2008
----------------------- ----- ----- ----- -----
Revenues $1,866 $2,896 $3,559 $5,436
Cost of goods sold 1,629 2,514 3,177 4,687
----- ----- ----- -----
Gross profit 237 382 382 749
Operating expenses 235 277 460 553
Restructuring, impairment
and plant closing costs 63 1 77 5
----- ----- ----- -----
Operating (loss) income (61) 104 (155) 191
Interest expense, net (58) (65) (113) (130)
Loss on accounts receivable
securitization program (6) (5) (10) (9)
Equity in income of
investment in
unconsolidated affiliates 1 4 2 7
Income (expenses) associated
with the Terminated Merger
and related litigation 844 (4) 837 (9)
----- ----- ----- -----
Income from continuing
operations before income taxes 720 34 561 50
Income tax expense (311) (21) (449) (25)
----- ----- ----- -----
Income from continuing
operations 409 13 112 25
(Loss) income from discontinued
operations, net of tax(1) (3) 5 - 4
Extraordinary gain on the
acquisition of a business, net
of tax - 9 - 9
----- ----- ----- -----
Net income 406 27 112 38
Less net (income) loss
attributable to
noncontrolling interests - (3) 4 (7)
----- ----- ----- -----
Net income attributable to
Huntsman Corporation $406 $24 $116 $31
===== ===== ===== =====
Net income attributable to
Huntsman Corporation $406 $24 $116 $31
Interest expense, net 58 65 113 130
Income tax expense from
continuing operations 311 21 449 25
Income tax (benefit)
expense from
discontinued
operations(1,3) (1) 2 - 2
Depreciation and amortization 100 98 226 192
----- ----- ----- -----
EBITDA(3) $874 $210 $904 $380
Adjusted EBITDA - continuing
operations(3) $96 $210 $146 $398
Basic income per share $1.74 $0.10 $0.50 $0.13
Diluted income per share $1.51 $0.10 $0.47 $0.13
Adjusted diluted (loss)
income per share from
continuing operations(3) $(0.27) $0.09 $(1.45) $0.16
Common share information:
Basic shares outstanding 234.0 233.5 233.8 230.3
Diluted shares 271.3 233.7 268.8 233.7
Diluted shares for adjusted
income (loss) per share from
continuing operations 234.0 233.7 233.8 233.7
See end of press release for footnote explanations
Huntsman Corporation
Segment Results
Three months ended Six months ended
June 30, June 30,
In millions 2009 2008 2009 2008
------ ------ ------ ------
Segment Revenues:
Polyurethanes $695 $1,161 $1,295 $2,163
Advanced Materials 255 427 512 806
Textile Effects 179 262 331 505
Performance Products 482 725 982 1,356
Pigments 254 321 450 606
Eliminations and
other 1 - (11) -
------ ------ ------ ------
Total $1,866 $2,896 $3,559 $5,436
====== ====== ====== ======
Segment EBITDA(3):
Polyurethanes $86 $148 $112 $280
Advanced Materials (1) 46 9 86
Textile Effects (20) 4 (31) 3
Performance Products 37 51 118 104
Pigments (26) 8 (55) 18
Corporate and other 802 (54) 751 (117)
Discontinued
operations(1) (4) 7 - 6
------ ------ ------ ------
Total $874 $210 $904 $380
====== ====== ====== ======
Segment Adjusted
EBITDA(3):
Polyurethanes $87 $148 $114 $280
Advanced Materials 14 46 24 86
Textile Effects (10) 4 (21) 4
Performance Products 37 51 118 104
Pigments 4 8 (12) 19
Corporate and other (36) (47) (77) (95)
------ ------ ------ ------
Total $96 $210 $146 $398
====== ====== ====== ======
Three months ended Six months ended
June 30, June 30,
2009 vs. 2008 2009 vs. 2008
---------------------- ----------------------
Period-Over-Period Average Sales Average Sales
Decrease Selling Price Volume Selling Price Volume
------------- ------ ------------- ------
Polyurethanes (27)% (18)% (27)% (18)%
Advanced Materials (10)% (34)% (9)% (30)%
Textile Effects (7)% (27)% (6)% (30)%
Performance
Products (a) (24)% (13)% (19)% (12)%
Pigments (7)% (15)% (5)% (22)%
--- --- --- ---
Total Company (22)% (18)% (20)% (18)%
--- --- --- ---
(a) Excludes revenues and sales volumes from tolling arrangements.
See end of press release for footnote explanations
Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
Revenues for the three months ended June 30, 2009 decreased to $1,866 million from $2,896 million during the same period in 2008. Revenues decreased primarily due to lower sales volumes and lower average selling prices in all of our segments.
For the three months ended June 30, 2009, EBITDA was $874 million compared to $210 million in the same period in 2008. Adjusted EBITDA from continuing operations for the three months ended June 30, 2009 was $96 million compared to $210 million for the same period in 2008.
Polyurethanes
The decrease in revenues in the Polyurethanes segment for the three months ended June 30, 2009 compared to the same period in 2008 was primarily due to lower MDI sales volumes and overall lower average selling prices. MDI sales volumes decreased primarily due to lower demand in Europe and the Americas whereas sales volumes increased in Asia. Effects of the worldwide economic slowdown continue to affect global demand. MDI average selling prices decreased primarily due to competitive pressures, lower raw material costs and the strength of the U.S. dollar against the Euro. PO and MTBE sales volumes decreased as a result of the worldwide economic slowdown, while average selling prices decreased with lower raw material costs. The decrease in EBITDA in the Polyurethanes segment was primarily the result of lower MDI sales volumes partially offset by higher MTBE margins.
Advanced Materials
The decrease in revenues in the Advanced Materials segment for the three months ended June 30, 2009 compared to the same period in 2008 was due to lower sales volumes and lower average selling prices. Sales volumes decreased due to lower demand in all regions and across all major markets as a result of the worldwide economic slowdown.
