Huntsman CORP

Previous wording

Our management uses adjusted EBITDA to assess financial performance. Adjusted EBITDA is defined as net income of Huntsman Corporation or Huntsman International, as appropriate, before interest, income tax, depreciation and amortization, net income attributable to noncontrolling interests and certain Corporate and other items, as well as eliminating the following adjustments: (a) business acquisition and integration expenses and purchase accounting inventory adjustments; (b) EBITDA from discontinued operations; (c) fair value adjustments to Venator investment, net; (d) certain legal and other settlements and related expenses; (e) certain nonrecurring information technology project implementation costs; (f) amortization of pension and postretirement actuarial losses; and (g) restructuring, impairment and plant closing and transition costs (credits). We believe that net income of Huntsman Corporation or Huntsman International, as appropriate, is the performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to adjusted EBITDA.

Current wording

Our management uses adjusted EBITDA to assess financial performance. Adjusted EBITDA is defined as net income of Huntsman Corporation or Huntsman International, as appropriate, before interest, income tax, depreciation and amortization, net income attributable to noncontrolling interests and certain Corporate and other items, as well as eliminating the following adjustments: (a) business acquisition and integration expenses and purchase accounting inventory adjustments, net; (b) EBITDA from discontinued operations; (c) fair value adjustments to Venator investment, net and other tax matter adjustments; (d) certain legal and other settlements and related expenses; (e) gain on sale of business/assets; (f) certain nonrecurring information technology project implementation costs; (g) amortization of pension and postretirement actuarial losses; and (h) restructuring, impairment and plant closing and transition costs. We believe that net income of Huntsman Corporation or Huntsman International, as appropriate, is the performance measure calculated and presented in accordance with U.S. GAAP that is most directly comparable to adjusted EBITDA.

Previous wording

Adjusted net income is computed by eliminating the after-tax amounts related to the following from net income attributable to Huntsman Corporation: (a) business acquisition and integration expenses and purchase accounting inventory adjustments; (b) loss (income) from discontinued operations; (c) fair value adjustments to Venator investment, net; (d) certain legal and other settlements and related expenses; (e) certain nonrecurring information technology project implementation costs; (f) amortization of pension and postretirement actuarial losses; and (g) restructuring, impairment and plant closing and transition costs (credits). Basic adjusted net income per share excludes dilution and is computed by dividing adjusted net income by the weighted average number of shares outstanding during the period. Adjusted diluted net income per share reflects all potential dilutive common shares outstanding during the period and is computed by dividing adjusted net income by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive securities. Adjusted net income and adjusted net income per share amounts are presented solely as supplemental information.

Current wording

Adjusted net income is computed by eliminating the after-tax amounts related to the following from net income attributable to Huntsman Corporation: (a) business acquisition and integration expenses and purchase accounting inventory adjustments, net; (b) loss (income) from discontinued operations; (c) fair value adjustments to Venator investment, net and other tax matter adjustments; (d) certain legal and other settlements and related expenses; (e) gain on sale of business/assets; (f) certain nonrecurring information technology project implementation costs; (g) amortization of pension and postretirement actuarial losses; and (h) restructuring, impairment and plant closing and transition costs. Basic adjusted net income per share excludes dilution and is computed by dividing adjusted net income by the weighted average number of shares outstanding during the period. Adjusted diluted net income per share reflects all potential dilutive common shares outstanding during the period and is computed by dividing adjusted net income by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive securities. Adjusted net income and adjusted net income per share amounts are presented solely as supplemental information.

Previous wording

The decrease in revenues in our Polyurethanes segment for the three months ended March 31, 2024 compared to the same period of 2023 was primarily due to lower MDI average selling prices and unfavorable sales mix, partially offset by higher sales volumes. MDI average selling prices decreased primarily due to less favorable supply and demand dynamics. Sales volumes increased due to modestly improved demand and share gains in certain markets, primarily in the Americas and Europe regions. The decrease in segment adjusted EBITDA was primarily due to lower MDI average selling prices, partially offset by lower raw materials costs, higher sales volumes, higher equity earnings and cost savings from our cost optimization programs.

Current wording

The decrease in revenues in our Polyurethanes segment for the three months ended June 30, 2024 compared to the same period of 2023 was primarily due to lower MDI average selling prices, partially offset by higher sales volumes. MDI average selling prices decreased primarily due to less favorable supply and demand dynamics. Sales volumes increased due to improved demand and share gains in certain markets. The decrease in segment adjusted EBITDA was primarily due to lower MDI average selling prices and lower equity earnings from our minority-owned joint venture in China, partially offset by lower raw materials costs and higher sales volumes.

Previous wording

The decrease in revenues in our Advanced Materials segment for the three months ended March 31, 2024 compared to the same period of 2023 was primarily due to lower average selling prices and lower sales volumes. Average selling prices decreased primarily in response to lower raw materials costs. Sales volumes decreased in our general industry and commodity markets, partially offset by an increase in our aerospace and electrical infrastructure markets in response to customer demand. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes and foreign currency exchange rate fluctuations, partially offset by improved sales mix.

Current wording

The decrease in revenues in our Advanced Materials segment for the three months ended June 30, 2024 compared to the same period of 2023 was primarily due to lower average selling prices, partially offset by higher sales volumes. Average selling prices decreased primarily due to unfavorable sales mix. Sales volumes increased in our aerospace and infrastructure markets driven by market recovery. The increase in segment adjusted EBITDA was primarily due to favorable variable margins resulting from lower raw materials costs, partially offset by higher fixed costs.

Previous wording

For the three months ended March 31, 2024, loss from continuing operations attributable to Huntsman Corporation was $30 million, a decrease of $61 million from income of $31 million in the 2023 period. For the three months ended March 31, 2024, loss from continuing operations attributable to Huntsman International was $28 million, a decrease of $61 million from income of $33 million in the 2023 period. The decreases noted above were the result of the following items:

Current wording

For the six months ended June 30, 2024, loss from continuing operations attributable to Huntsman Corporation was $15 million, a decrease of $67 million from income of $52 million in the 2023 period. For the six months ended June 30, 2024, loss from continuing operations attributable to Huntsman International was $13 million, a decrease of $67 million from income of $54 million in the 2023 period. The decreases noted above were the result of the following items:

Previous wording

The decrease in revenues in our Performance Products segment for the three months ended March 31, 2024 compared to the same period of 2023 was primarily due to lower average selling prices and unfavorable sales mix, partially offset by higher sales volumes. Average selling prices decreased primarily due to competitive pressure, particularly in Europe. Sales volumes increased primarily due to improvement in industrial and construction activity as well as increased demand in coatings and adhesives and lubes markets. The decrease in segment adjusted EBITDA was primarily due to lower average selling prices, partially offset by higher sales volumes and lower raw materials costs.

Current wording

The decrease in revenues in our Performance Products segment for the six months ended June 30, 2024 compared to the same period of 2023 was primarily due to lower average selling prices and unfavorable sales mix, partially offset by higher sales volumes. Average selling prices decreased primarily due to competitive pressure, particularly in Europe and the Americas. Sales volumes increased primarily due to improvement in industrial and construction activity as well as increased demand in coatings and adhesives and lubes markets. The decrease in segment adjusted EBITDA was primarily due to lower average selling prices, partially offset by higher sales volumes and lower raw materials costs.

Previous wording

Corporate and other includes unallocated corporate overhead, unallocated foreign currency exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt, unallocated restructuring, impairment and plant closing costs, nonoperating income and expense and gains and losses on the disposition of corporate assets. For the three months ended March 31, 2024, adjusted EBITDA from Corporate and other for Huntsman Corporation was a loss of $43 million as compared to a loss of $49 million for the same period of 2023. For the three months ended March 31, 2024, adjusted EBITDA from Corporate and other for Huntsman International was a loss of $41 million as compared to a loss of $47 million for the same period of 2023. The increase in adjusted EBITDA from Corporate and other resulted primarily from a decrease in corporate overhead, partially offset by a decrease in unallocated foreign currency exchange gains and an increase in LIFO valuation losses.

Current wording

Corporate and other includes unallocated corporate overhead, unallocated foreign currency exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt, unallocated restructuring, impairment and plant closing costs, nonoperating income and expense and gains and losses on the disposition of corporate assets. For the six months ended June 30, 2024, adjusted EBITDA from Corporate and other for Huntsman Corporation was a loss of $90 million as compared to a loss of $87 million for the same period of 2023. For the six months ended June 30, 2024, adjusted EBITDA from Corporate and other for Huntsman International was a loss of $88 million as compared to a loss of $85 million for the same period of 2023. The decrease in adjusted EBITDA from Corporate and other resulted primarily from an increase in LIFO valuation losses and unallocated foreign currency exchange losses, partially offset by a decrease in corporate overhead costs.

Previous wording

Cash Flows for the Three Months Ended March 31, 2024 Compared with the Three Months Ended March 31, 2023

Current wording

Cash Flows for the Six Months Ended June 30, 2024 Compared with the Six Months Ended June 30, 2023

Previous wording

Net cash used in operating activities from continuing operations for the three months ended March 31, 2024 and 2023 was $63 million and $122 million, respectively. The decrease in net cash used in operating activities from continuing operations during the three months ended March 31, 2024 as compared with the same period of 2023 was primarily attributable to a net cash inflow of $112 million related to changes in operating assets and liabilities, partially offset by increased operating loss as described in “—Results of Operations” above for the three months ended March 31, 2024 as compared with the same period of 2023.

Current wording

Net cash used in operating activities from continuing operations for the six months ended June 30, 2024 and 2023 was $8 million and $82 million, respectively. The decrease in net cash used in operating activities from continuing operations during the six months ended June 30, 2024 as compared with the same period of 2023 was primarily attributable to a net cash inflow of $110 million related to changes in operating assets and liabilities, partially offset by decreased operating income as described in “—Results of Operations” above for the six months ended June 30, 2024 as compared with the same period of 2023.

Previous wording

Net cash (used in) provided by investing activities from continuing operations for the three months ended March 31, 2024 and 2023 was $(30) million and $493 million, respectively. During the three months ended March 31, 2024 and 2023, we paid $42 million and $46 million for capital expenditures, respectively. During the three months ended March 31, 2024, we received $12 million for the sale of businesses, net, related to the resolution of net working capital from the sale of our Textile Effects Business. During the three months ended March 31, 2023, we received $541 million for the sale of businesses, net, primarily related to net proceeds of $530 million from the sale of our Textile Effects Business. See “Note 4. Discontinued Operations—Sale of Textile Effects Business” to our condensed consolidated financial statements.

Current wording

Net cash (used in) provided by investing activities from continuing operations for the six months ended June 30, 2024 and 2023 was $(80) million and $444 million, respectively. During the six months ended June 30, 2024 and 2023, we paid $92 million and $97 million for capital expenditures, respectively. During the six months ended June 30, 2024, we received $12 million for the sale of businesses, net, related to the resolution of net working capital from the sale of our Textile Effects Business. During the six months ended June 30, 2023, we received $541 million for the sale of businesses, net, primarily related to net proceeds of $530 million from the sale of our Textile Effects Business. See “Note 4. Discontinued Operations—Sale of Textile Effects Business” to our condensed consolidated financial statements.

Previous wording

Net cash provided by (used in) financing activities for the three months ended March 31, 2024 and 2023 was $108 million and $(379) million, respectively. During the three months ended March 31, 2024 and 2023, we had net borrowings from (repayments against) our 2022 Revolving Credit Facility and our A/R Programs of $191 million and $(220) million, respectively. During the three months ended March 31, 2024, HPS paid approximately $28 million against the note payable with SLIC for the acquisition of assets. See “Note 3. Business Combinations and Acquisitions—Separation and Acquisition of Assets of SLIC Joint Venture” to our condensed consolidated financial statements. During the three months ended March 31, 2023, we paid $97 million for repurchases of our common stock.

Current wording

Net cash used in financing activities for the six months ended June 30, 2024 and 2023 was $102 million and $464 million, respectively. During the six months ended June 30, 2024 and 2023, we had net borrowings from (repayments against) our 2022 Revolving Credit Facility and our A/R Programs of $252 million and $(164) million, respectively. During the six months ended June 30, 2024, HPS paid approximately $218 million against the note payable with SLIC for the acquisition of assets. See “Note 3. Business Combinations and Acquisitions—Separation and Acquisition of Assets of SLIC Joint Venture” to our condensed consolidated financial statements. During the six months ended June 30, 2023, we paid $194 million for repurchases of our common stock.

Previous wording

​Free cash flow from continuing operations for the three months ended March 31, 2024 and 2023 was a use of cash of $105 million and $168 million, respectively. The increase in free cash flow from continuing operations was primarily attributable to a decrease in cash used in operating activities from continuing operations and a decrease in cash used for capital expenditures during the three months ended March 31, 2024 as compared with the same period of 2023.

Current wording

​Free cash flow from continuing operations for the six months ended June 30, 2024 and 2023 was a use of cash of $100 million and $179 million, respectively. The increase in free cash flow from continuing operations was primarily attributable to a decrease in cash used in operating activities from continuing operations and a decrease in cash used for capital expenditures during the six months ended June 30, 2024 as compared with the same period of 2023.

Previous wording

​Our working capital decreased by $278 million as a result of the net impact of the following significant changes:

Current wording

​Our working capital decreased by $617 million as a result of the net impact of the following significant changes:

Previous wording

We depend upon our cash, our 2022 Revolving Credit Facility, A/R Programs and other debt instruments to provide liquidity for our operations and working capital needs. As of March 31, 2024, we had $1,607 million of combined cash and unused borrowing capacity, consisting of $552 million in cash, $995 million in availability under our 2022 Revolving Credit Facility and $60 million in availability under our A/R Programs. Our liquidity can be significantly impacted by various factors. The following matters are expected to have a significant impact on our liquidity:

Current wording

We depend upon our cash, our 2022 Revolving Credit Facility, A/R Programs and other debt instruments to provide liquidity for our operations and working capital needs. As of June 30, 2024, we had $1,334 million of combined cash and unused borrowing capacity, consisting of $335 million in cash, $949 million in availability under our 2022 Revolving Credit Facility and $50 million in availability under our A/R Programs. Our liquidity can be significantly impacted by various factors. The following matters are expected to have a significant impact on our liquidity:

Previous wording

As of March 31, 2024, we had $396 million classified as current portion of debt, including $195 million outstanding under our 2022 Revolving Credit Facility, an outstanding U.S. dollar equivalent note payable of approximately $190 million related to the separation and acquisition of assets of the SLIC joint venture, debt at our variable interest entities of $9 million and certain other short-term facilities and scheduled amortization payments totaling $2 million. We intend to renew, repay or extend the majority of these short-term facilities in the next twelve months.

Current wording

As of June 30, 2024, we had $576 million classified as current portion of debt, including $245 million outstanding under our 2022 Revolving Credit Facility, $320 million outstanding under our 2025 Senior Notes, debt at our variable interest entities of $9 million and certain other short-term facilities and scheduled amortization payments totaling $2 million. We intend to renew, repay or extend the majority of these short-term facilities in the next twelve months.

Previous wording

As of March 31, 2024, we had approximately $529 million of cash and cash equivalents held by our foreign subsidiaries, including our variable interest entities. With the exception of certain amounts that we expect to repatriate in the foreseeable future, we intend to use cash held in our foreign subsidiaries to fund our local operations. Nevertheless, we could repatriate additional cash as dividends, and the repatriation of cash as a dividend would generally not be subject to U.S. taxation. However, such repatriation may potentially be subject to limited foreign withholding taxes. ​

Current wording

As of June 30, 2024, we had approximately $326 million of cash and cash equivalents held by our foreign subsidiaries, including our variable interest entities. With the exception of certain amounts that we expect to repatriate in the foreseeable future, we intend to use cash held in our foreign subsidiaries to fund our local operations. Nevertheless, we could repatriate additional cash as dividends, and the repatriation of cash as a dividend would generally not be subject to U.S. taxation. However, such repatriation may potentially be subject to limited foreign withholding taxes. ​