Huntsman Announces Second Quarter 2020 Earnings; Targets Total Annualized Cost Savings and Synergies of $100+ Million by End of 2021

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 2020 results with revenues of $1,247 million, net loss of $59 million, adjusted net loss of $30 million and adjusted EBITDA of $54 million.

“We were fortunate to have been more prepared than ever as we entered the second quarter in an unprecedented global economic crisis, with little to no visibility. With our transformed balance sheet, there was no need to access capital markets and we completed the quarter with $2.6 billion of overall liquidity and generated positive free cash flow. We remain focused on what we can control and have accelerated and improved integration plans for our recent acquisitions, CVC Thermoset Specialties and Icynene-Lapolla. The total annualized targeted synergies for these acquisitions, to be achieved by the end of 2021, is now $35 million. Including these synergies, we have plans to achieve in excess of $100 million of targeted annualized savings by year end 2021. While the ongoing related global effects of COVID-19 remain uncertain and visibility continues to be poor, we see improving trends within most of our major markets and are optimistic that the worst of this economic slowdown is behind us.”

The decrease in revenues in our Polyurethanes segment for the three months ended June 30, 2020 compared to the same period of 2019 was due to lower MDI average selling prices and lower overall polyurethanes sales volumes. MDI average selling prices decreased across most major markets in relation to the global economic slowdown resulting from the COVID-19 pandemic. Overall polyurethanes sales volumes decreased in primarily relation to the global economic slowdown and the resulting decrease in demand across most major markets, partially offset by growth in China during the second quarter of 2020 and additional sales volumes in connection with the Icynene-Lapolla acquisition. The decrease in segment adjusted EBITDA was primarily due to lower component and polymeric systems margins largely driven by lower MDI pricing and lower polyurethanes sales volumes.

The decrease in revenues in our Performance Products segment for the three months ended June 30, 2020 compared to the same period of 2019 was due to lower average selling prices and lower sales volumes. Average selling prices decreased primarily in response to lower raw material costs. Sales volumes decreased primarily in relation to the global economic slowdown. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes, partially offset by higher margins in our performance amines business and lower fixed costs.

The decrease in revenues in our Advanced Materials segment for the three months ended June 30, 2020 compared to the same period in 2019 was due to lower sales volumes while overall average selling prices remained unchanged. Sales volumes decreased significantly across all markets and regions, except in our global power market, in primarily relation to the global economic slowdown and customer destocking. Average selling prices increased in local currencies, offset by the impact of a stronger U.S. dollar against major international currencies. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes, partially offset by lower fixed costs.

The decrease in revenues in our Textile Effects segment for the three months ended June 30, 2020 compared to the same period of 2019 was due to lower sales volumes and sales mix changes. Sales volumes decreased primarily due to significantly weaker demand in relation to the global economic slowdown. Average selling prices in local currencies increased mainly due to geographical mix change, offset by the impact of a stronger U.S. dollar against major international currencies. The decrease in segment adjusted EBITDA was primarily due to lower sales volumes and lower capitalization of indirect costs because of reduced production, partially offset by lower raw material costs and lower fixed costs.

For the three months ended June 30, 2020, adjusted EBITDA from Corporate and other for Huntsman Corporation increased by $4 million to a loss of $32 million from a loss of $36 million for the same period of 2019.

During the three months ended June 30, 2020, our adjusted free cash flow from continuing operations was $38 million as compared to $160 million in the prior year period. As of June 30, 2020, we had $2.6 billion of combined cash and unused borrowing capacity.

During the three months ended June 30, 2020, we spent $55 million on capital expenditures as compared to $57 million in the same period of 2019. For 2020 we expect to spend between approximately $225 million and $235 million on capital expenditures.

On May 18, 2020 we completed our acquisition of CVC Thermoset Specialties and paid approximately $300 million from available cash. In the second half of 2020, we expect to pay from available cash approximately $365 million in taxes related to the sale of our Chemical Intermediates and Surfactants businesses which was completed on January 3, 2020.

As of the end of the second quarter 2020, we have approximately $420 million remaining on our existing $1 billion multiyear share repurchase program. Our share repurchase program remains suspended.

In the second quarter 2020, our adjusted effective tax rate was 18%. For 2020, our adjusted effective tax rate is expected to be approximately 20%. We expect our forward adjusted effective tax rate will be approximately 22% - 24%.

We will hold a conference call to discuss our second quarter 2020 financial results on Tuesday, July 28, 2020 at 10:00 a.m. ET.

Webcast link: https://78449.themediaframe.com/dataconf/productusers/hun/mediaframe/38928/indexl.html

The conference call will be accompanied by presentation slides that will be accessible via the webcast link and Huntsman’s investor relations website, ir.huntsman.com. Upon conclusion of the call, the webcast replay will be accessible via Huntsman’s website.

A webcast of the presentation, if applicable, along with accompanying materials will be available at ir.huntsman.com.

(a) Represents the changes in market value in Huntsman's remaining interesting in Venator.

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 reconciliation of adjusted EBITDA to net income (loss) 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 reconciliation of adjusted EBITDA to 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 do not provide reconciliations for adjusted EBITDA, adjusted net income (loss) or adjusted diluted income (loss) per share on a forward-looking basis because we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, (a) business acquisition and integration expenses and purchase accounting adjustments, (b) merger costs, and (c) certain legal and other settlements and related costs. Each of such adjustments has not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.

The reconciliation of historical adjusted effective tax rate and effective tax rate is set forth in Table 4 above. We do not provide reconciliations for adjusted effective tax rate on a forward-looking basis because we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, (a) business acquisition and integration expenses, (b) merger costs, and (c) certain legal and other settlements and related costs. Each of such adjustments has not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2019 revenues of approximately $7 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.

Certain information in this release constitutes 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 statements are based on management's current beliefs and expectations. The forward-looking statements in this release are subject to uncertainty and changes in circumstances and involve risks and uncertainties that may affect the company's operations, markets, products, services, prices and other factors as discussed under the caption "Risk Factors" in the Huntsman companies' filings with the U.S. Securities and Exchange Commission. Significant risks and uncertainties may relate to, but are not limited to, volatile global economic conditions, cyclical and volatile product markets, disruptions in production at manufacturing facilities, reorganization or restructuring of Huntsman’s operations, including any delay of, or other negative developments affecting the ability to implement cost reductions, timing of proposed transactions, and manufacturing optimization improvements in Huntsman businesses and realize anticipated cost savings, and other financial, economic, competitive, environmental, political, legal, regulatory and technological factors. The company assumes no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by applicable laws.

Delaware	001-32427	42-1648585
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

10003 Woodloch Forest Drive
The Woodlands, Texas		77380
(Address of principal executive offices)		(Zip Code)

Registrant		Title of each class		Trading Symbol		Name of each exchange on which registered
Huntsman Corporation		Common Stock, par value $0.01 per share		HUN		New York Stock Exchange

Number		Description of Exhibits

99.1		Press Release dated July 28, 2020 regarding second quarter 2020 earnings
104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

FOR IMMEDIATE RELEASE	Media:	Investor Relations:
July 28, 2020	Gary Chapman	Ivan Marcuse
The Woodlands, TX	(281) 719-4324	(281) 719-4637
NYSE: HUN

	HUNTSMAN CORPORATION

	/s/ IVAN MARCUSE
	Vice President, Investor Relations

	Three months ended					Six months ended
	June 30,					June 30,
In millions, except per share amounts	2020			2019		2020			2019
Revenues	$	1,247		$	1,784	$	2,840		$	3,453

Net (loss) income	$	(59	)	$	118	$	649		$	249
Adjusted net (loss) income⁽¹⁾	$	(30	)	$	108	$	35		$	193

Diluted (loss) income per share	$	(0.28	)	$	0.47	$	2.90		$	0.98
Adjusted diluted (loss) income per share⁽¹⁾	$	(0.14	)	$	0.47	$	0.16		$	0.83

Adjusted EBITDA⁽¹⁾	$	54		$	245	$	219		$	449

Net cash provided by operating activities from continuing operations	$	85		$	217	$	45		$	177
Free cash flow from continuing operations⁽²⁾	$	30		$	160	$	(71	)	$	59
Adjusted free cash flow from continuing operations⁽⁶⁾	$	38		$	160	$	(61	)	$	59

Domestic callers:	(877) 402-8037
International callers:	(201) 378-4913

	Three months ended
	June 30, 2020 vs. 2019
	Average Selling Price^(a)
	Local			Exchange			Sales Mix			Sales
	Currency			Rate			& Other			Volume^(b)			Total
Polyurethanes		(7	)%		(2	)%		(3	)%		(16	)%		(28	)%

Performance Products		(7	)%		(1	)%		4	%		(20	)%		(24	)%

Advanced Materials		3	%		(3	)%		1	%		(31	)%		(30	)%

Textile Effects		1	%		(1	)%		(5	)%		(48	)%		(53	)%

							Income Tax												Diluted (Loss) Income
	EBITDA						Benefit (Expense)						Net (Loss) Income						Per Share
	Three months ended						Three months ended						Three months ended						Three months ended
	June 30,						June 30,						June 30,						June 30,
In millions, except per share amounts	2020			2019			2020			2019			2020			2019			2020			2019
Net (loss) income	$	(59	)	$	118								$	(59	)	$	118		$	(0.27	)	$	0.51
Net income attributable to noncontrolling interests		(3	)		(8	)								(3	)		(8	)		(0.01	)		(0.03	)
Net (loss) income attributable to Huntsman Corporation		(62	)		110									(62	)		110			(0.28	)		0.47
Interest expense from continuing operations		21			29
Income tax (benefit) expense from continuing operations		(13	)		38		$	13		$	(38	)
Income tax expense from discontinued operations⁽³⁾		1			14
Depreciation and amortization from continuing operations		69			69
Depreciation and amortization from discontinued operations⁽³⁾		-			23
Business acquisition and integration expenses and purchase accounting inventory adjustments		8			-			-			-			8			-			0.04			-
EBITDA / Income from discontinued operations, net of tax⁽³⁾		(6	)		(72	)		N/A			N/A			(5	)		(35	)		(0.02	)		(0.15	)
U.S. tax reform impact on tax expense		-			-			-			3			-			3			-			0.01
Loss on sale of businesses/assets		1			-			-			-			1			-			0.00			-
Income from transition services arrangements		(5	)		-			1			-			(4	)		-			(0.02	)		-
Fair value adjustments to Venator Investment^(a)		(4	)		18			-			-			(4	)		18			(0.02	)		0.08
Certain legal settlements and related expenses		4			-			(1	)		-			3			-			0.01			-
Certain non-recurring information technology project implementation costs		1			-			-			-			1			-			0.00			-
Amortization of pension and postretirement actuarial losses		19			16			(4	)		(4	)		15			12			0.07			0.05
Restructuring, impairment and plant closing and transition costs		19			-			(3	)		-			16			-			0.07			-
Plant incident remediation costs		1			-			-			-			1			-			0.00			-
Adjusted⁽¹⁾	$	54		$	245		$	6		$	(39	)	$	(30	)	$	108		$	(0.14	)	$	0.47

Adjusted income tax (benefit) expense⁽¹⁾													$	(6	)	$	39
Net income attributable to noncontrolling interests, net of tax														3			8
Adjusted pre-tax (loss) income⁽¹⁾													$	(33	)	$	155
Adjusted effective tax rate⁽⁴⁾														18	%		25	%
Effective tax rate														17	%		31	%

							Income Tax												Diluted Income
	EBITDA						Benefit (Expense)						Net Income						Per Share
	Six months ended						Six months ended						Six months ended						Six months ended
	June 30,						June 30,						June 30,						June 30,
In millions, except per share amounts	2020			2019			2020			2019			2020			2019			2020			2019
Net income	$	649		$	249								$	649		$	249		$	2.93		$	1.07
Net income attributable to noncontrolling interests		(6	)		(20	)								(6	)		(20	)		(0.03	)		(0.09	)
Net income attributable to Huntsman Corporation		643			229									643			229			2.90			0.98
Interest expense from continuing operations		39			59
Income tax (benefit) expense from continuing operations		(6	)		83		$	6		$	(83	)
Income tax expense from discontinued operations⁽³⁾		239			19
Depreciation and amortization from continuing operations		136			136
Depreciation and amortization from discontinued operations⁽³⁾		-			46
Business acquisition and integration expenses and purchase accounting inventory adjustments		21			1			(3	)		-			18			1			0.08			0.00
EBITDA / Income loss from discontinued operations, net of tax⁽³⁾		(1,021	)		(123	)		N/A			N/A			(782	)		(58	)		(3.53	)		(0.25	)
U.S. tax reform impact on tax expense		-			-			-			3			-			3			-			0.01
Impact of Switzerland income tax rate change		-			-			-			32			-			32			-			0.14
Gain on sale of businesses/assets		(1	)		-			-			-			(1	)		-			(0.00	)		-
Income from transition services arrangements		(5	)		-			1			-			(4	)		-			(0.02	)		-
Fair value adjustments to Venator Investment^(a)		106			(58	)		-			-			106			(58	)		0.48			(0.25	)
Loss on early extinguishment of debt		-			23			-			(5	)		-			18			-			0.08
Certain legal settlements and related expenses		6			-			(1	)		-			5			-			0.02			-
Certain non-recurring information technology project implementation costs		2			-			-			-			2			-			0.01			-
Amortization of pension and postretirement actuarial losses		37			33			(8	)		(8	)		29			25			0.13			0.11
Restructuring, impairment and plant closing and transition costs		22			1			(4	)		-			18			1			0.08			0.00
Plant incident remediation costs		1			-			-			-			1			-			0.00			-
Adjusted⁽¹⁾	$	219		$	449		$	(9	)	$	(61	)	$	35		$	193		$	0.16		$	0.83

Adjusted income tax expense⁽¹⁾													$	9		$	61
Net income attributable to noncontrolling interests, net of tax														6			20
Adjusted pre-tax income⁽¹⁾													$	50		$	274
Adjusted effective tax rate⁽⁴⁾														18	%		22	%
Effective tax rate														4	%		30	%

	June 30,		March 31,		December 31,
In millions	2020		2020		2019
Cash	$	1,254	$	1,594	$	525
Accounts and notes receivable, net		835		1,027		953
Inventories		885		1,008		914
Other current assets		130		145		155
Current assets held for sale		-		-		1,208
Property, plant and equipment, net		2,457		2,357		2,383
Other noncurrent assets		2,565		2,327		2,182

Total assets	$	8,126	$	8,458	$	8,320

Accounts payable	$	610	$	856	$	822
Other current liabilities		767		784		462
Current portion of debt		650		134		212
Current liabilities held for sale		-		-		512
Long-term debt		1,527		2,049		2,177
Other noncurrent liabilities		1,248		1,252		1,311
Huntsman Corporation stockholders’ equity		3,181		3,243		2,687
Noncontrolling interests in subsidiaries		143		140		137

Total liabilities and equity	$	8,126	$	8,458	$	8,320

Cover	Jul. 28, 2020
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 28, 2020
Entity File Number	001-32427
Entity Registrant Name	Huntsman Corporation
Entity Central Index Key	0001307954
Entity Tax Identification Number	42-1648585
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	10003 Woodloch Forest Drive
Entity Address, City or Town	The Woodlands
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77380
City Area Code	281
Local Phone Number	719-6000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	HUN
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

	June 30,		March 31,		December 31,
In millions	2020		2020		2019
Debt:
Revolving credit facility	$	-	$	-	$	40
Accounts receivable programs		34		55		167
Term loan		103		101		103
Senior notes		1,969		1,950		1,963
Variable interest entities		53		58		65
Other debt		18		19		51

Total debt - excluding affiliates		2,177		2,183		2,389

Total cash		1,254		1,594		525

Net debt - excluding affiliates⁽⁵⁾	$	923	$	589	$	1,864