Huntsman's Q4 net income up 250% to US$105M on revenues of US$2.63B, up 9%; pigments revenues up due to higher average selling prices partially offset by lower sales volumes

THE WOODLANDS, Texas , February 16, 2012 (press release) – Fourth Quarter 2011 Highlights

Revenues improved 9% compared to the prior year period.
Net income attributable to Huntsman Corporation was $105 million or $0.44 per diluted share compared to $30 million or $0.12 per diluted share in the prior year period.
Adjusted EBITDA improved 11% to $243 million compared to the prior year period.
Adjusted diluted income per share improved 12% to $0.28 compared to the prior year period.


Full Year 2011 Highlights

Revenues improved 21% compared to the prior year.
Net income attributable to Huntsman Corporation was $247 million or $1.02 per diluted share compared to $27 million or $0.11 per diluted share in the prior year period.
Adjusted EBITDA improved 39% to $1,214 million compared to the prior year.
Adjusted diluted income per share improved 104% to $1.69 compared to the prior year.

   

Three months ended

 

Year ended

 
   

December 31,

 

September 30,

 

December 31,

 

In millions, except per share amounts, unaudited

 

2011

 

2010

 

2011

 

2011

 

2010

 
                       

Revenues

 

$ 2,632

 

$ 2,412

 

$ 2,976

 

$ 11,221

 

$ 9,250

 
                       

Net income (loss) attributable to Huntsman Corporation

 

$ 105

 

$ 30

 

$ (34)

 

$ 247

 

$ 27

 

Adjusted net income(1)

 

$ 68

 

$ 60

 

$ 114

 

$ 408

 

$ 200

 
                       

Diluted income (loss) per share

 

$ 0.44

 

$ 0.12

 

$ (0.14)

 

$ 1.02

 

$ 0.11

 

Adjusted diluted income per share(1)

 

$ 0.28

 

$ 0.25

 

$ 0.47

 

$ 1.69

 

$ 0.83

 
                       

EBITDA(1)

 

$ 273

 

$ 167

 

$ 204

 

$ 1,039

 

$ 700

 

Adjusted EBITDA(1)

 

$ 243

 

$ 219

 

$ 346

 

$ 1,214

 

$ 875

 
                       

See end of press release for footnote explanations

 
Huntsman Corporation (NYSE: HUN - News) today reported fourth quarter 2011 results with revenues of $2,632 million and adjusted EBITDA of $243 million.

Peter R. Huntsman, our President and CEO, commented:

"Our adjusted EBITDA of $1.2 billion represents the best year we have accomplished with our current business portfolio. This took place despite earnings pressure from foreign currency movements within the year and lower demand trends and aggressive customer destocking within the fourth quarter.

Looking forward, we anticipate that the corporation will see an improving global economy from this point forward. Most of our businesses have strong upside potential as we see a continued recovery in the world's economy. In 2012, we expect margin pressure on our Pigments business to be offset by improved earnings in our other divisions."

Segment Analysis for 4Q11 Compared to 4Q10

Polyurethanes

The increase in revenues in our Polyurethanes division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to higher average selling prices. Average MDI and PO/MTBE selling prices increased primarily in response to higher raw material costs. The decrease in adjusted EBITDA was due to higher manufacturing and selling, general and administrative costs and lower MDI contribution margins.

Performance Products

The increase in revenues in our Performance Products division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to higher average selling prices partially offset by lower sales volumes. Average selling prices increased across most product groups with the exception of certain amines primarily in response to higher raw material costs. Sales volumes decreased due to lower demand and customer destocking. The decrease in adjusted EBITDA was primarily due to lower sales volumes and higher manufacturing and selling, general and administrative costs.

Advanced Materials

The decrease in revenues in our Advanced Materials division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to lower sales volumes partially offset by higher average selling prices. Sales volumes decreased primarily due to lower demand in the wind energy market in the Asia Pacific region. Average selling prices increased primarily in response to higher raw material costs. The decrease in adjusted EBITDA was primarily due to the impact of the stronger Swiss franc, on our manufacturing and selling, general and administrative costs.

Textile Effects

The decrease in revenues in our Textile Effects division for the three months ended December 31, 2011 compared to the same period in 2010 was primarily due to lower sales volumes. Sales volumes decreased due to lower demand. The decrease in adjusted EBITDA was primarily due to lower sales volumes and the impact of the stronger Swiss franc, on our manufacturing and selling, general and administrative costs.

Pigments

The increase in revenues in our Pigments division for the three months ended December 31, 2011 compared to the same period in 2010 was due to higher average selling prices partially offset by lower sales volumes. Average selling prices increased in all regions of the world primarily as a result of higher raw material costs. Sales volumes decreased primarily due to lower global economic growth and customer destocking particularly in the Asia Pacific region. The increase in adjusted EBITDA in our Pigments division was primarily due to higher contribution margins partially offset by lower sales volumes.

Corporate, LIFO and Other

Corporate, LIFO and other includes unallocated corporate overhead, LIFO inventory valuation reserve adjustments and unallocated foreign exchange gains and losses. During the fourth quarter of 2011, we began including unallocated foreign exchange gains and losses in adjusted EBITDA and adjusted income (loss) per share. We believe this more accurately reflects the ongoing cost of operating a global business. All relevant information for prior periods has been recast to reflect these changes. Adjusted EBITDA from Corporate, LIFO and other increased by $22 million to a loss of $34 million for the three months ended December 31, 2011 compared to a loss of $56 million for the same period in 2010. The increase in adjusted EBITDA was primarily the result of a $13 million decrease in LIFO inventory valuation expense ($6 million gain in 2011 compared to $7 million loss in 2010) and an increase in unallocated foreign exchange gains of $4 million ($5 million gain in 2011 compared to $1 million gain in 2010).

Income Taxes

During the three months and full year ended December 31, 2011 we recorded income tax benefit of $2 million and income tax expense of $109 million respectively. Our adjusted effective income tax rate for the three months and full year ended December 31, 2011 was approximately 12% and 26% respectively. We have tax valuation allowances in certain countries. Improved earnings from our Pigments business generated a partial release of tax valuation allowances in the fourth quarter 2011 which had the effect of decreasing our effective income tax rate and resulted in an approximate benefit of $0.04 per diluted share. We expect our long term effective income tax rate to be approximately 30 - 35%. During the three months and full year ended December 31, 2011 we paid $35 million and $119 million in cash for income taxes respectively.

Liquidity, Capital Resources and Outstanding Debt

As of December 31, 2011, we had $1,043 million of combined cash and unused borrowing capacity compared to $1,434 million at December 31, 2010. In 2011, our primary net working capital increased by $258 million. For the year ended December 31, 2011, we redeemed approximately $305 million of senior subordinated notes, including all of our remaining 6.875% senior subordinated euro notes due 2013 worth approximately $94 million which were redeemed during the fourth quarter of 2011.

Total capital expenditures, net of reimbursements for the three months and full year ended December 31, 2011 were $113 million and $327 million respectively. We expect to spend approximately $425 million on capital expenditures, net of reimbursements, in 2012 which approximates our annual depreciation and amortization of $439 million in 2011.
                   

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