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Huntsman Releases First Quarter 2010 Results

Please Click here for the PDF version of this release EARNINGS MORE THAN DOUBLE PRIOR YEAR DESPITE THE NEGATIVE IMPACT OF APPROXIMATELY $51 MILLION IN PRODUCTION DISRUPTIONS

THE WOODLANDS, Texas, May 7, 2010 /PRNewswire via COMTEX/ --(NYSE: HUN)

First Quarter 2010 Highlights

 

  • Revenues for the first quarter of 2010 were $2,094 million, an increase of 25% compared to $1,680 million for the same period in 2009 and an increase of 1% compared to $2,065 million for the fourth quarter of 2009.
  • Adjusted EBITDA for the first quarter of 2010 was $123 million compared to $57 million for the same period in 2009 and $174 million for the fourth quarter of 2009 (adjusted to account for the reclassification of results from our Australian styrenics business into discontinued operations).
  • Net loss attributable to Huntsman Corporation for the first quarter of 2010 was $172 million or $0.73 loss per diluted share, including charges related to the early extinguishment of debt of $155 million. This compares to net loss attributable to Huntsman Corporation of $290 million or $1.24 loss per diluted share for the same period in 2009 and net income attributable to Huntsman Corporation of $66 million or $0.26 per diluted share for the fourth quarter of 2009 which was impacted favorably by year end accounting for taxes of approximately $79 million.
  • Adjusted net loss for the first quarter of 2010 was $16 million or $0.07 loss per diluted share. This compares to an adjusted net loss of $267 million or $1.14 loss per diluted share for the same period in 2009 and adjusted net income of $79 million or $0.31 per diluted share for the fourth quarter of 2009 which was impacted favorably by year end accounting for taxes of approximately $79 million.

 

Summarized earnings are as follows:

                                         Three months ended      Three months
                                             March 31,               ended
                                         ------------------   ------------
    In millions, except per share                              December 31,
     amounts                           2010             2009        2009
    -----------------------------      ----             ----  -------------

    Net (loss) income attributable
     to Huntsman                      $(172)           $(290)            $66
       Corporation
    Adjusted net (loss) income(1)      $(16)           $(267)            $79

    Diluted (loss) income per
     share                           $(0.73)          $(1.24)          $0.26
    Adjusted diluted (loss) income
     per share(1)                    $(0.07)          $(1.14)          $0.31

    EBITDA(1)                          $(55)             $30            $147
    Adjusted EBITDA(1)                 $123              $57            $174

    See end of press release for important explanations


Recent Highlights

 

  • On January 11, 2010, we repurchased all of our outstanding 7% convertible notes due 2018 for approximately $382 million. These notes were convertible into approximately 31.8 million shares of common stock.
  • On February 27, 2010, we announced the completion of our ethyleneamines joint venture plant in Jubail, Saudi Arabia with our partner the Zamil Group Holding Company. The plant commissioning is almost complete and will soon begin deliveries of product. Results from this operation will be consolidated in our financial statements within our Performance Products division.
  • On March 9, 2010, we entered into an amendment of our existing bank credit facilities. Among other things, the amendment extends the maturity of the revolving credit facility to March 9, 2014.
  • On March 17, 2010, we completed a $350 million offering of senior subordinated notes due 2020 through our wholly owned subsidiary, Huntsman International LLC. We used the net proceeds of the notes to refinance approximately euro 184 million of senior subordinated notes due 2013 and approximately euro 59 million of senior subordinated notes due 2015.
  • Effective March 24, 2010, Dr. Patrick Harker was appointed as a new independent director to our Board of Directors. Dr. Harker, age 51, is President of the University of Delaware. He has been the Dean of the Wharton School of the University of Pennsylvania and has served as a Professor at the University of Pennsylvania.

 

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

"I am pleased with our first quarter results. Our first quarter 2010 Adjusted EBITDA was more than double our prior year results despite the negative impact of approximately $40 million from planned maintenance and approximately $11 million from unplanned mechanical shut downs. Throughout the first quarter and April we saw positive signs of economic recovery within our business. Adjusted for the effect of our planned maintenance, first quarter sales volumes improved 19% compared to the previous year and 5% compared to the fourth quarter. Results from our restructuring efforts this past year are positively reflected in our earnings and are most visible in our Textile Effects business which had break-even earnings and our Pigments business which recorded the highest level of quarterly earnings since early 2006."

He added, "The positive momentum we are seeing in underlying demand suggests that second quarter sales volumes should continue to improve. We are aggressively working to increase our product prices to offset the increase we are seeing in raw materials."

                             Huntsman Corporation
                               Operating Results


                                              Three months ended March 31,
    In millions, except per share amounts          2010                2009
    -------------------------------------          ----                ----

    Revenues                                     $2,094              $1,680
    Cost of goods sold                            1,813               1,531
                                                  -----               -----
    Gross profit                                    281                 149
    Operating expenses                              256                 222
    Restructuring, impairment and plant
     closing costs                                    3                  14
                                                    ---                 ---
    Operating income (loss)                          22                 (87)
    Interest expense, net                           (61)                (55)
    Loss on accounts receivable
     securitization programs                          -                  (4)
    Equity in income of investment in
     unconsolidated affiliates                        1                   1
    Loss on early extinguishment of debt           (155)                  -
    Expenses associated with the Terminated
     Merger and related                               -                  (7)
       litigation                                   ---                 ---
    Loss before income taxes                       (193)               (152)
    Income tax benefit (expense)                     34                (138)
                                                    ---                ----
    Loss from continuing operations                (159)               (290)
    Loss from discontinued operations, net of
     tax(2)                                         (13)                 (4)
                                                    ---                 ---
    Net loss                                       (172)               (294)
    Less net loss attributable to
     noncontrolling interests                         -                   4
    Net loss attributable to Huntsman
     Corporation                                  $(172)              $(290)
                                                  =====               =====


    Net loss attributable to Huntsman
     Corporation                                  $(172)              $(290)
    Interest expense, net                            61                  55
    Income tax (benefit) expense from
     continuing operations                          (34)                138
    Income tax (benefit) expense from
     discontinued operations(1)(2)                   (8)                  1
    Depreciation and amortization                    98                 126
                                                    ---                 ---
    EBITDA(1)                                      $(55)                $30

    Adjusted EBITDA(1)                             $123                 $57

    Basic loss per share                         $(0.73)             $(1.24)
    Diluted loss per share                       $(0.73)             $(1.24)
    Adjusted diluted loss per share(1)           $(0.07)             $(1.14)

    Common share information:
      Basic shares outstanding                    234.8               233.7
      Diluted shares                              234.8               233.7


    See end of press release for footnote explanations

                   Huntsman Corporation
                      Segment Results


                               Three months ended March 31,
    In millions                      2010              2009
    -----------                      ----              ----

    Segment Revenues:
      Polyurethanes                  $767              $600
      Performance Products            616               500
      Advanced Materials              291               257
      Textile Effects                 195               152
      Pigments                        269               196
      Eliminations and
       other                          (44)              (25)
                                      ---               ---

        Total                      $2,094            $1,680
                                   ======            ======

    Segment EBITDA(1):
      Polyurethanes                   $52               $26
      Performance Products             60                63
      Advanced Materials               33                10
      Textile Effects                                   (11)
      Pigments                         28               (29)
      Corporate, LIFO and
       other                         (207)              (26)
      Discontinued
       operations(2)                  (21)               (3)

              Total                  $(55)              $30
                                     ====               ===

    Segment Adjusted
     EBITDA(1) :
      Polyurethanes                   $52               $27
      Performance Products             60                63
      Advanced Materials               31                10
      Textile Effects                                   (11)
      Pigments                         29               (16)
      Corporate, LIFO and
       other                          (49)              (16)
                                      ---               ---
        Total                        $123               $57
                                     ====               ===



    See end of press release for footnote explanations


                               Three months ended March 31,
                                      2010 vs. 2009
                                      -------------
    Period-Over-              Average Selling
     Period                       Price(a)                Sales
                             ----------------
      Increase
       (Decrease)         Local       Currency        Volume(a)
                          -----       --------        ---------

      Polyurethanes          34%             3%            (11)%
      Performance
       Products               1%             3%              21%
      Advanced
       Materials(b)         (9)%             3%              27%
      Textile Effects         4%             4%              18%
      Pigments                1%             3%              33%
        Total Company(b)     12%             4%               7%
                            ---            ---              ---

    (a) Excludes revenues and sales volumes from
     tolling and by-products
    (b) Excludes APAO business sold July 31, 2009


Three Months Ended March 31, 2010 Compared to Three Months Ended March 31, 2009

Revenues for the three months ended March 31, 2010 increased to $2,094 million from $1,680 million for the same period in 2009. Revenues increased primarily due to higher sales volumes in all divisions with the exception of Polyurethanes which was impacted by a planned maintenance outage at our Port Neches, Texas PO/MTBE facility and higher average selling prices in all divisions with the exception of Advanced Materials. For the three months ended March 31, 2010, Adjusted EBITDA was $123 million compared to $57 million for the same period in 2009.

Starting in the first quarter of 2010, we reclassed the impact of LIFO inventory accounting gains and losses from our Performance Products division into Corporate, LIFO and Other. All prior period segment results have been conformed to this presentation. This reclass has no impact on the total Adjusted EBITDA or Adjusted net earnings of our company; however, we believe it provides greater transparency to the underlying operating results of our Performance Products division.

Polyurethanes

The increase in revenues in our Polyurethanes division for the three months ended March 31, 2010 compared to the same period in 2009 was primarily due to higher MDI sales volumes and higher average selling prices for MTBE. MDI sales volumes were higher with demand recovery across all major markets as a result of the worldwide economic recoverywhile average selling prices for MTBE increased in response to higher raw material costs and tight supply due in part to a 60-day planned maintenance outage at our Port Neches, Texas PO/MTBE facility. PO/MTBE sales volumes decreased due to the planned outage. Average MDI selling prices decreased primarily due to competitive pressures and lower raw material costs. The increase in Adjusted EBITDA was primarily due to higher MDI sales volumes partially offset by the approximate $40 million impact of the planned maintenance outage at our Port Neches, Texas PO/MTBE facility.

Performance Products

The increase in revenues in our Performance Products division for the three months ended March 31, 2010 compared to the same period in 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased primarily due to higher demand across nearly all product groups and additional sales of a portion of our ethylene glycol production no longer tolled. Average selling prices increased as a result of the strength of major European currencies and the Australian dollar against the U.S. dollar and in response to higher raw material costs. The decrease in Adjusted EBITDA was primarily due to unplanned mechanical shut downs resulting in approximately $11 million of higher costs.

Advanced Materials

The increase in revenues in our Advanced Materials division for the three months ended March 31, 2010 compared to the same period in 2009 was due to higher sales volumes partially offset by lower average selling prices. Sales volumes increased primarily due to the worldwide economic recovery. Average selling prices decreased in our specialty components business primarily as a result of changes in our product mix and competitive pressure in the wind generation and coating systems markets. Average selling prices decreased in our base resins business primarily due to lower raw material costs. There was no change in average selling prices within our formulation systems business. The increase in Adjusted EBITDA was primarily due to higher sales volumes across our businesses, higher contribution margins in our core formulations systems and specialty components businesses and lower fixed costs.

Textile Effects

The increase in revenues in our Textile Effects division for the three months ended March 31, 2010 compared to the same period in 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased across all business lines and in all regions primarily due to the worldwide economic recovery. Average selling prices increased primarily due to the strength of the Euro, Indian Rupee and Brazilian Real against the U.S. dollar as well as favorable changes in product mix. The increase in Adjusted EBITDA was primarily due to higher sales volumes and higher contribution margins partially offset by higher fixed costs in part due to our second quarter 2009 acquisition of Baroda.

Pigments

The increase in revenues in our Pigments division for the three months ended March 31, 2010 compared to the same period in 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased primarily due to demand recovery in all regions as a result of the worldwide economic recovery. Average selling prices increased as a result of the strength of major European currencies against the U.S. dollar and higher local currency selling prices in Asia, Africa, Latin America and Middle East regions. The increase in Adjusted EBITDA in our Pigments division was primarily due to higher sales volumes, lower raw material and energy costs and the benefits of recent restructuring efforts.

Corporate, LIFO and Other

Corporate and other includes unallocated foreign exchange gains and losses, unallocated corporate overhead, loss on our accounts receivable securitization program, income (expenses) associated with the terminated merger with Hexion and related litigation, loss on early extinguishment of debt, income (loss) attributable to non-controlling interests, unallocated restructuring costs, extraordinary gain on the acquisition of a business, LIFO inventory valuation reserve adjustments and non-operating income and expense. The decrease in Adjusted EBITDA from Corporate and other for the three months ended March 31, 2010 compared to the same period in 2009 resulted primarily from an increase of LIFO inventory valuation expense of $30 million.

Income Taxes

During the three months ended March 31, 2010, we recorded an income tax benefit of $34 million compared to $138 million of income tax expense in the same period of 2009. Our adjusted effective tax rate for the first quarter 2010 was a benefit of approximately 45%. We have tax valuation allowances in countries such as Switzerland and the United Kingdom where our Textile Effects and Pigments businesses have meaningful operations. As these businesses return to greater levels of profitability we expect these tax valuation allowances to eventually be removed. In the mean time, we expect our income tax rate to be fairly volatile. We expect our long term effective income tax rate to be approximately 30 - 35%; however, for 2010 our adjusted income tax rate could be as high as 100%. This unusual income tax rate caused by the tax valuation allowances has no impact on our cash taxes. During the first quarter of 2010 we paid $8 million in cash for income taxes and expect a long term cash tax rate of approximately 20%.

Liquidity, Capital Resources and Outstanding Debt

As of March 31, 2010, we had $1,468 million of combined cash and unused borrowing capacity compared to $2,510 million at December 31, 2009. The decrease was primarily attributable to the repurchase of convertible notes of $382 million and the reduction in unused bank credit facilities of $450 million.

Beginning January 1, 2010, as a result of changes in accounting guidelines outstanding borrowings related to the sales of accounts receivable under our accounts receivable programs are accounted for as secured borrowings. Excluding the impact of this change, our primary working capital (accounts receivable, inventory and accounts payable) increased which created a use of cash of $57 million in the first quarter of 2010. Total capital expenditures were $37 million during the first quarter of 2010 compared to $61 million for the same period in 2009. In addition, we used additional cash in the first quarter to fund normal seasonal items and the planned maintenance outage at our Port Neches, Texas PO/MTBE facility. We expect to spend between $250 and $275 million on capital expenditures in 2010.

In connection with our ongoing insurance claim related to the April 29, 2006 Port Arthur, Texas fire, we have received partial insurance proceeds to date of $365 million. We are currently in binding arbitration with the insurers. While we continue to respond to requests of the arbitration panel, based on preliminary rulings to date, the current maximum amount of remaining recoveries will not exceed approximately $170 million. Any additional recoveries will be used to repay secured debt.

On January 11, 2010, we repurchased all of our outstanding 7% convertible notes due 2018 which were held by funds controlled by Apollo Management, L.P. The convertible notes were issued to Apollo in December 2008 in connection with the settlement of litigation related to our terminated merger agreement with Hexion Specialty Chemicals, Inc. The total purchase amount was approximately $382 million. The convertible notes would have been convertible into approximately 31.8 million shares of Huntsman common stock. This early extinguishment of the convertible notes resulted in a loss on extinguishment of debt of approximately $146 million in the first quarter of 2010.

On March 9, 2010, we entered into an amendment to our existing bank credit facilities. Among other things the amendment limits the aggregate amount of revolving commitments allowable under the revolving credit facility to an amount up to $300 million, including $225 million currently committed by our lenders and extends the maturity to 2014. As of March 31, 2010 we had no borrowings however, we had approximately $40 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our revolving credit facility

On March 17, 2010, we completed a $350 million offering of senior subordinated notes due 2020 through our wholly owned subsidiary, Huntsman International LLC. We used the net proceeds of the notes to refinance approximately euro 184 million of senior subordinated notes due 2013 and approximately euro 59 million of senior subordinated notes due 2015.

On April 26, 2010, we prepaid $164 million of outstanding Term Loans.

Below is our outstanding debt:

                                      March 31,          December 31,
    In millions                              2010           2009(a)
    -----------                              ----           -------

    Debt:
        Senior Credit Facilities           $1,950               $1,968
        Accounts Receivable
         Programs(a)                          242                  254
        Senior Notes                          438                  434
        Subordinated Notes                  1,268                1,294
        Other Debt                            277                  280
        Convertible Notes                       -                  236
                                              ---                  ---
    Total Debt -excluding
     affiliates                             4,175                4,466
                                            -----                -----

    Total Cash                              1,118                1,750
                                            -----                -----

    Net Debt- excluding
     affiliates                            $3,057               $2,716
                                           ======               ======

       (a) Effective January 1, 2010, as a result of changes in
        accounting guidelines, our off-
          balance sheet accounts receivable securitization programs
           are now reported on
          balance sheet as secured debt.  December 31, 2009 figures
           are presented on
          a pro-forma basis to reflect this change.



    Huntsman Corporation
     Reconciliation of Adjustments

                                               Net Income
                                                (Loss)
                                              Attributable     Diluted Income
                                              to Huntsman          (Loss)
                                   EBITDA     Corporation        Per Share
                               Three months   Three months     Three months
                                   ended         ended            ended
    In millions, except           March 31,     March 31,        March 31,
     per share amounts           2010  2009    2010  2009       2010    2009

    GAAP                         $(55) $30    $(172) $(290)   $(0.73) $(1.24)
    Adjustments:
      Loss on accounts
       receivable securitization
       programs                     -    4        -      -         -       -
      Unallocated foreign
       currency gain               (1)  (2)      (6)     -     (0.03)      -
      Loss on early
       extinguishment of debt     155    -      143      -      0.61       -
      Other restructuring,
       impairment and plant
       closing costs                3   14        2     14      0.01    0.06
      Expenses associated with
       the Terminated Merger and
       related litigation           -    7        -      4         -    0.02
      Discount amortization on
       settlement financing
       associated with the
       Terminated Merger            -    -        4      -      0.02       -
      Acquisition related
       expenses                     -    1        -      1         -       -
      Loss from discontinued
       operations, net of tax(2)   21    3       13      4      0.06    0.02

    Adjusted(1)                  $123  $57     $(16) $(267)   $(0.07) $(1.14)

    Discontinued operations      $(21) $(3)    $(13)   $(4)   $(0.06) $(0.02)
      Restructuring, impairment
       and plant closing costs      5    -        3      -      0.01       -
      Loss (gain) on disposition
       of assets                    8   (4)       5     (3)     0.02   (0.01)
      Gain on hurricane
       insurance settlement        (7)   -       (4)     -     (0.02)      -

    Adjusted discontinued
     operations(1)(2)            $(15) $(7)     $(9)   $(7)   $(0.04) $(0.03)

    Total -adjusted
     continuing and
     discontinued operations     $108  $50     $(25) $(274)   $(0.11) $(1.17)
                                 ----  ---     ----  -----    ------  ------




                                        Three months ended December
    In millions                                  31, 2009
    -----------                         ---------------------------

    Net income attributable to
     Huntsman Corporation                                        66
    Interest expense, net                                        60
    Income tax benefit from
     continuing operations                                      (73)
    Income tax benefit from
     discontinued operations(2)                                 (10)
    Depreciation and amortization                               104
                                                                ---
    EBITDA(1)                                                  $147



                                                              Diluted Income
                               EBITDA      Net Income (Loss)      (Loss)
                                            Attributable to      Per Share
                                                Huntsman
                                               Corporation
    In millions,
     except per             Three months       Three months    Three months
     share                     ended               ended           ended
                            December 31,                       December 31,
      amounts                   2009       December 31, 2009        2009
      -------              -------------   -----------------   ------------

    GAAP                             $147                $66            $0.26
    Adjustments:
      Loss on
       accounts
       receivable                      10                  -                -
            securitization
            programs
      Unallocated
       foreign
       currency
       gain                            (1)                (3)           (0.01)
      Other
       restructuring,
       impairment                       5                  4             0.01
           and plant
            closing
            costs
      Discount
       amortization
       on                               -                  5             0.02
           settlement
            financing
            associated
           with the
            Terminated
            Merger
      Acquisition
       related
       income                          (9)                (6)           (0.02)
      Loss from
       discontinued                    28                 19             0.07
           operations,
            net of
            tax(2)
       Extraordinary
       gain on the                     (6)                (6)           (0.02)
           acquisition
            of a
            business,
            net of
           tax(3)
    Adjusted                         $174                $79            $0.31
                                                                        -----

    Discontinued
     operations                      $(28)              $(19)          $(0.07)
      Other
       restructuring,
       impairment                       8                  3             0.01
           and plant
            closing
            costs
      Gain on
       disposition
       of assets                       (6)                (4)           (0.01)
      Loss on
       partial
       fire
       insurance                       17                 11             0.04
           settlement
    Adjusted
     discontinued                     $(9)               $(9)          $(0.03)
      operations(2)
    Total -
     adjusted
     continuing
     and                             $165                $70            $0.27
       discontinued
        operations                   ----                ---            -----



    See end of press release for footnote explanations

Conference Call Information

We will hold a conference call to discuss our 2010 first quarter results on Friday, May 7, 2010 at 10:00 a.m. ET.

    Call-in number for U.S. participants:          (888) 713 - 4209
    Call-in number for international participants: (617) 213 - 4863
    Participant access code:                               75478626


In order to facilitate the registration process, you may use the following link to pre-register for the conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. You may pre-register at any time, including up to and after the call start time. To pre-register, please go to: https://www.theconferencingservice.com/prereg/key.process?key=PAUV3KHBY

The conference call will be available via webcast and can be accessed from the investor relations portion of the company's website at http://www.huntsman.com/.

The conference call will be available for replay beginning May 7, 2010 and ending May 14, 2010.

    Call-in numbers for the
     replay:
         Within the U.S.:   (888) 286 - 8010
         International:     (617) 801 - 6888
    Access code for replay:         97188446


About Huntsman:

Huntsman is a global manufacturer and marketer of differentiated chemicals. Its operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging. Originally known for pioneering innovations in packaging and, later, for rapid and integrated growth in petrochemicals, Huntsman has approximately 11,000 employees and operates from multiple locations worldwide. The Company had 2009 revenues of approximately $8 billion. For more information about Huntsman, please visit the company's website at www.huntsman.com.

Forward-Looking Statements:

Statements in this release that are not historical are forward-looking statements. 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 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, 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.


           We use EBITDA, Adjusted EBITDA, Adjusted EBITDA from discontinued
           operations, Adjusted net income and Adjusted net income from
           discontinued operations. We believe that net income (loss)
           attributable to Huntsman Corporation 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 EBITDA, Adjusted EBITDA and Adjusted net income. We
           believe that income (loss) from discontinued operations is the
           performance measure calculated and presented in accordance with
           GAAP that is most directly comparable to Adjusted EBITDA from
           discontinued operations and Adjusted net income from discontinued
           operations. Additional information with respect to our use of
    (1)    each of these financial measures follows:









      EBITDA is defined as net income (loss) attributable to Huntsman
       Corporation before interest, income taxes, and depreciation and
       amortization. EBITDA as used herein is not necessarily comparable to
       other similarly titled measures of other companies. The
       reconciliation of EBITDA to net income (loss) attributable to
       Huntsman Corporation is set forth in the operating results table
       above.

      Adjusted EBITDA is computed by eliminating the following from EBITDA:
       gains and losses from discontinued operations; restructuring,
       impairment and plant closing (credits) costs; income and expense
       associated with the Terminated merger and related litigation;
       acquisition related expenses; losses on the sale of accounts
       receivable to our securitization program; unallocated foreign
       currency (gain) loss; certain legal and contract settlements; losses
       from early extinguishment of debt; extraordinary loss (gain) on the
       acquisition of a business; and loss (gain) on disposition of
       business/assets.  The reconciliation of Adjusted EBITDA to EBITDA is
       set forth in the Reconciliation of Adjustments table above.

      Adjusted EBITDA from discontinued operations is computed by
       eliminating the following from income (loss) from discontinued
       operations: income taxes; depreciation and amortization;
       restructuring, impairment and plant closing (credits) costs; losses
       on the sale of accounts receivable to our securitization program;
       unallocated foreign currency (gain) loss; gain on partial fire
       insurance settlement; and (gain) loss on disposition of business/
       assets. The following table provides a reconciliation of Adjusted
       EBITDA from discontinued operations to income (loss) from
       discontinued operations:



                                           Three months ended March
                                                      31,
    In millions                                2010             2009
    -----------                                ----             ----

    Net loss from discontinued
     operations, net of tax                    $(13)             $(4)
      Income tax (benefit) expense               (8)               1
    EBITDA from discontinued
     operations                                 (21)              (3)
      Restructuring, impairment and
       plant closing costs                        5                -
      Loss (gain) on disposition of
       assets                                     8               (4)
      Gain on hurricane insurance
       settlement                                (7)               -
    Adjusted EBITDA from discontinued
     operations                                $(15)             $(7)
                                               ====              ===



      Adjusted net income (loss) is computed by eliminating the after tax
       impact of the following items from net income (loss) attributable to
       Huntsman Corporation: loss (income) from discontinued operations;
       restructuring, impairment and plant closing (credits) costs; income
       and expense associated with the Terminated merger and related
       litigation; discount amortization on settlement financing associated
       with the Terminated merger; acquisition related expenses; unallocated
       foreign currency (gain) loss;  certain legal and contract
       settlements; losses on the early extinguishment of debt;
       extraordinary loss (gain) on the acquisition of a business; and loss
       (gain) on disposition of business/assets.   The reconciliation of
       adjusted net income (loss) to net income (loss) attributable to
       Huntsman Corporation common stockholders is set forth in the
       Reconciliation of Adjustments table above.

      Adjusted net income (loss) from discontinued operations is computed by
       eliminating the after tax impact of the following items from income
       (loss) from discontinued operations: restructuring, impairment and
       plant closing (credits) costs; gain on partial fire insurance
       settlement; and (gain) loss on the disposition of business/assets.
       The reconciliation of Adjusted net income (loss) from discontinued
       operations to net income (loss) attributable to Huntsman Corporation
       is set forth in the Reconciliation of Adjustments table above.

           On August 1, 2007, we completed the sale of our U.S. polymers
           business to Flint Hills Resources.  On November 5, 2007, we
           completed the sale of our U.S. base chemicals business to Flint
           Hills Resources.  Results from these businesses are treated as
           discontinued operations.  Division EBITDA from discontinued
           operations only includes the results of our U.S. base chemicals
           and U.S. polymers businesses.  During the first quarter 2010 we
    (2)    closed our Australian styrenics operations.

           On June 30, 2006, we acquired the global textile effects business
           of Ciba Specialty Chemicals Inc. for approximately $172 million.
           Because the fair value of acquired current assets less
           liabilities assumed exceeded the acquisition price and planned
           restructuring costs, the excess was recorded as an extraordinary
    (3)    gain on the acquisition of a business.



SOURCE Huntsman Corporation

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