Table of Contents

 

UNITED STATES

SECURITIES AND     EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 

Form 10‑Q

(Mark One)

 

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2017

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

For the transition period from                          to                         

 

 

Commission
File Number

    

Exact Name of Registrant as Specified in its Charter,
Principal Office Address and Telephone Number

    

State of
Incorporation
or Organization

    

I.R.S. Employer
Identification No.

001‑32427

 

Huntsman Corporation
10003 Woodloch Forest Drive
The Woodlands, Texas 77380
(281) 719-6000

 

Delaware

 

42‑1648585

333‑85141

 

Huntsman International LLC
10003 Woodloch Forest Drive
The Woodlands, Texas 77380
(281) 719-6000

 

Delaware

 

87‑0630358


Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Huntsman Corporation

YES ☒

NO ☐

Huntsman International LLC

YES ☒

NO ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S‑T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Huntsman Corporation

YES ☒

NO ☐

Huntsman International LLC

YES ☒

NO ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b‑2 of the Exchange Act. (Check one):

 

 

 

 

 

 

Huntsman Corporation

Large accelerated filer ☒

Accelerated filer ☐

Non‑accelerated filer ☐
(Do not check if a
smaller reporting company)

Smaller reporting company ☐

Emerging growth company ☐

Huntsman International LLC

Large accelerated filer ☐

Accelerated filer ☐

Non‑accelerated filer ☒
(Do not check if a
smaller reporting company)

Smaller reporting company ☐

Emerging Growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. 

 

 

 

Huntsman Corporation

YES ☐

NO ☐

Huntsman International LLC

YES ☐

NO ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).

Huntsman Corporation

YES ☐

NO ☒

Huntsman International LLC

YES ☐

NO ☒


On July 20, 2017, 240,022,198 shares of common stock of Huntsman Corporation were outstanding and 2,728 units of membership interests of Huntsman International LLC were outstanding. There is no trading market for Huntsman International LLC’s units of membership interests. All of Huntsman International LLC’s units of membership interests are held by Huntsman Corporation.


This Quarterly Report on Form 10‑Q presents information for two registrants: Huntsman Corporation and Huntsman International LLC. Huntsman International LLC is a wholly-owned subsidiary of Huntsman Corporation and is the principal operating company of Huntsman Corporation. The information reflected in this Quarterly Report on Form 10‑Q is equally applicable to both Huntsman Corporation and Huntsman International LLC, except where otherwise indicated. Huntsman International LLC meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10‑Q and, to the extent applicable, is therefore filing this form with a reduced disclosure format.

 

 

 

 

 


 

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10‑Q FOR THE QUARTERLY PERIOD

ENDED JUNE 30, 2017

 

TABLE OF CONTENTS

 

 

    

 

    

Page

PART I 

 

FINANCIAL INFORMATION

 

5

ITEM 1. 

 

Condensed Consolidated Financial Statements (Unaudited)

 

5

 

 

Huntsman Corporation and Subsidiaries:

 

 

 

 

Condensed Consolidated Balance Sheets

 

5

 

 

Condensed Consolidated Statements of Operations

 

6

 

 

Condensed Consolidated Statements of Comprehensive Income

 

7

 

 

Condensed Consolidated Statements of Equity

 

8

 

 

Condensed Consolidated Statements of Cash Flows

 

9

 

 

Huntsman International LLC and Subsidiaries:

 

 

 

 

Condensed Consolidated Balance Sheets

 

11

 

 

Condensed Consolidated Statements of Operations

 

12

 

 

Condensed Consolidated Statements of Comprehensive Income 

 

13

 

 

Condensed Consolidated Statements of Equity

 

14

 

 

Condensed Consolidated Statements of Cash Flows

 

15

 

 

Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

17

ITEM 2. 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

56

ITEM 3. 

 

Quantitative and Qualitative Disclosures About Market Risk

 

76

ITEM 4. 

 

Controls and Procedures

 

77

PART II 

 

OTHER INFORMATION

 

78

ITEM 1. 

 

Legal Proceedings

 

78

ITEM 1A. 

 

Risk Factors

 

78

ITEM 2. 

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

82

ITEM 6. 

 

Exhibits

 

83

 

 

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10‑Q FOR THE QUARTERLY PERIOD

ENDED JUNE 30, 2017

 

FORWARD‑LOOKING STATEMENTS

 

Certain information set forth in this report contains “forward‑looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical factual information are forward‑looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, business separations, spin‑offs, or other distributions, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into; new or modified laws, regulations and accounting pronouncements; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; general economic and capital markets conditions; the timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that we intend or believe will or may occur in the future. In some cases, forward‑looking statements can be identified by terminology such as “believes,” “expects,” “may,” “will,” “should,” “anticipates” or “intends” or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward‑looking statements from time to time. All such subsequent forward‑looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.

 

On May 21, 2017, Huntsman, Clariant and Merger Sub entered into a merger agreement, pursuant to which, subject to the satisfaction or waiver of certain conditions, Merger Sub will merge with and into Huntsman, with Huntsman surviving as a wholly owned subsidiary of Clariant, and Clariant will be renamed HuntsmanClariant. We have operated and, until completion of the merger, will continue to operate independently of Clariant. This report also contains statements about our proposed merger of equals with Clariant resulting in a new combined company, HuntsmanClariant, which include, without limitation, statements about the anticipated benefits of the merger, including future financial and operating results and expected synergies and cost savings related to the merger, the plans, objectives, expectations and intentions of Clariant, Huntsman or the combined company, the expected timing of the completion of the merger and information relating to the proposed initial public offering of ordinary shares of Venator Materials PLC. Such statements are based on the current expectations of the management of Clariant or Huntsman, as applicable, are qualified by the inherent risks and uncertainties surrounding future expectations generally, and actual results could differ materially from those currently anticipated due to a number of risks and uncertainties. Neither Clariant nor Huntsman, nor any of their respective directors, executive officers or advisors, provide any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements will actually occur. Risks and uncertainties that could cause results to differ from expectations include: uncertainties as to the timing of the merger; uncertainties as to the approval of Huntsman's stockholders and Clariant's shareholders required in connection with the merger; the possibility that a competing proposal will be made; the possibility that the closing conditions to the merger may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory approval; the effects of disruption caused by the announcement of the merger making it more difficult to maintain relationships with employees, customers, vendors and other business partners; the risk that stockholder litigation in connection with the merger may affect the timing or occurrence of the merger or result in significant costs of defense, indemnification and liability; ability to refinance existing indebtedness of Clariant or Huntsman in connection with the merger; other business effects, including the effects of industry, economic or political conditions outside of the control of the parties to the merger; transaction costs; actual or contingent liabilities; disruptions to the financial or capital markets, including with respect to the initial public offering of ordinary shares by Venator or financing activities related to the merger; and any delay of, or other negative developments, affecting the Separation. 

 

All forward‑looking statements, including without limitation management’s examination of historical operating trends, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that

3

 


 

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management’s expectations, beliefs and projections will result or be achieved. All forward‑looking statements apply only as of the date made. We undertake no obligation to publicly update or revise forward‑looking statements whether because of new information, future events or otherwise, except as required by securities and other applicable law.

 

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward‑looking statements contained in or contemplated by this report. Any forward‑looking statements should be considered in light of the risks set forth in “Part II. Item 1A. Risk Factors” below and “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, 2016.

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PART I. FINANCIAL INFORMATION

 

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions, Except Share and Per Share Amounts)

 

 

 

 

 

 

 

 

 

 

June 30, 

 

December 31, 

 

    

2017

    

2016

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents(a)

 

$

509

 

$

414

Restricted cash(a)

 

 

11

 

 

11

Accounts and notes receivable (net of allowance for doubtful accounts of $28 and $27, respectively), ($369 and $437 pledged as collateral, respectively)(a)

 

 

1,586

 

 

1,402

Accounts receivable from affiliates

 

 

43

 

 

33

Inventories(a)

 

 

1,520

 

 

1,344

Prepaid expenses

 

 

58

 

 

60

Other current assets(a)

 

 

253

 

 

291

Total current assets 

 

 

3,980

 

 

3,555

Property, plant and equipment, net(a)

 

 

4,228

 

 

4,212

Investment in unconsolidated affiliates

 

 

325

 

 

332

Intangible assets, net(a)

 

 

79

 

 

66

Goodwill

 

 

137

 

 

121

Deferred income taxes

 

 

431

 

 

396

Other noncurrent assets(a)

 

 

508

 

 

507

Total assets 

 

$

9,688

 

$

9,189

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable(a)

 

$

1,138

 

$

1,071

Accounts payable to affiliates

 

 

32

 

 

31

Accrued liabilities(a)

 

 

669

 

 

616

Current portion of debt(a)

 

 

44

 

 

60

Total current liabilities 

 

 

1,883

 

 

1,778

Long-term debt(a)

 

 

4,072

 

 

4,135

Notes payable to affiliates

 

 

 —

 

 

 1

Deferred income taxes

 

 

454

 

 

427

Other noncurrent liabilities(a)

 

 

1,401

 

 

1,381

Total liabilities 

 

 

7,810

 

 

7,722

Commitments and contingencies (Notes 13 and 14)

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Huntsman Corporation stockholders’ equity:

 

 

 

 

 

 

Common stock $0.01 par value, 1,200,000,000 shares authorized, 252,549,390 and 250,802,175 shares issued and 238,427,254 and 236,370,347 shares outstanding, respectively

 

 

 3

 

 

 3

Additional paid-in capital

 

 

3,511

 

 

3,447

Treasury stock, 12,607,223 shares

 

 

(150)

 

 

(150)

Unearned stock-based compensation

 

 

(25)

 

 

(17)

Accumulated deficit

 

 

(164)

 

 

(325)

Accumulated other comprehensive loss

 

 

(1,508)

 

 

(1,671)

Total Huntsman Corporation stockholders’ equity 

 

 

1,667

 

 

1,287

Noncontrolling interests in subsidiaries

 

 

211

 

 

180

Total equity 

 

 

1,878

 

 

1,467

Total liabilities and equity 

 

$

9,688

 

$

9,189


(a)

At June  30, 2017 and December 31, 2016, respectively, $32 and $25 of cash and cash equivalents, $10 each of restricted cash, $35 and $27 of accounts and notes receivable (net), $51 and $46 of inventories, $5 each of other current assets, $274 and $284 of property, plant and equipment (net), $39 and $31 of intangible assets (net), $38 and $37 of other noncurrent assets, $82 and $90 of accounts payable, $33 and $34 of accrued liabilities, $21 and $14 of current portion of debt, $104 and $114 of long‑term debt, and $78 and $76 of other noncurrent liabilities from consolidated variable interest entities are included in the respective balance sheet captions above. See “Note 5. Variable Interest Entities.”

 

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Millions, Except Per Share Amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

Six months

 

 

 

ended

 

ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

2016

    

2017

    

2016

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Trade sales, services and fees, net

 

$

2,582

 

$

2,512

 

$

5,010

 

$

4,833

Related party sales

 

 

34

 

 

32

 

 

75

 

 

66

Total revenues 

 

 

2,616

 

 

2,544

 

 

5,085

 

 

4,899

Cost of goods sold 

 

 

2,095

 

 

2,087

 

 

4,098

 

 

4,026

Gross profit 

 

 

521

 

 

457

 

 

987

 

 

873

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

227

 

 

234

 

 

455

 

 

457

Research and development

 

 

38

 

 

39

 

 

75

 

 

76

Restructuring, impairment and plant closing costs

 

 

10

 

 

29

 

 

46

 

 

42

Business separation expenses

 

 

12

 

 

 —

 

 

21

 

 

 —

Merger costs

 

 

 6

 

 

 —

 

 

 6

 

 

 —

Other operating income, net

 

 

(47)

 

 

(21)

 

 

(53)

 

 

(16)

Total expenses

 

 

246

 

 

281

 

 

550

 

 

559

Operating income   

 

 

275

 

 

176

 

 

437

 

 

314

Interest expense

 

 

(47)

 

 

(50)

 

 

(95)

 

 

(100)

Equity in income of investment in unconsolidated affiliates

 

 

 3

 

 

 2

 

 

 3

 

 

 3

Loss on early extinguishment of debt

 

 

(1)

 

 

(2)

 

 

(1)

 

 

(2)

Other (loss) income, net

 

 

(1)

 

 

 1

 

 

 1

 

 

 2

Income from continuing operations before income taxes 

 

 

229

 

 

127

 

 

345

 

 

217

Income tax expense

 

 

(45)

 

 

(32)

 

 

(68)

 

 

(59)

Income from continuing operations 

 

 

184

 

 

95

 

 

277

 

 

158

Loss from discontinued operations

 

 

(1)

 

 

(1)

 

 

(2)

 

 

(2)

Net income

 

 

183

 

 

94

 

 

275

 

 

156

Net income attributable to noncontrolling interests

 

 

(16)

 

 

(7)

 

 

(32)

 

 

(13)

Net income attributable to Huntsman Corporation 

 

$

167

 

$

87

 

$

243

 

$

143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to Huntsman Corporation common stockholders

 

$

0.70

    

$

0.37

    

$

1.03

    

$

0.62

Loss from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax

 

 

 

 

 —

 

 

(0.01)

 

 

(0.01)

Net income attributable to Huntsman Corporation common stockholders

 

$

0.70

 

$

0.37

 

$

1.02

 

$

0.61

Weighted average shares

 

 

238.3

 

 

236.3

 

 

237.8

 

 

236.2

Diluted income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to Huntsman Corporation common stockholders

 

$

0.69

 

$

0.36

 

$

1.01

 

$

0.61

Loss from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax

 

 

 

 

 —

 

 

(0.01)

 

 

(0.01)

Net income attributable to Huntsman Corporation common stockholders

 

$

0.69

 

$

0.36

 

$

1.00

 

$

0.60

Weighted average shares

 

 

243.7

 

 

239.5

 

 

243.2

 

 

238.3

Amounts attributable to Huntsman Corporation common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

168

 

$

88

 

$

245

 

$

145

Loss from discontinued operations, net of tax

 

 

(1)

 

 

(1)

 

 

(2)

 

 

(2)

Net income

 

$

167

 

$

87

 

$

243

 

$

143

Dividends per share 

 

$

0.125

 

$

0.125

 

$

0.25

 

$

0.25

See accompanying notes to condensed consolidated financial statements.

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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

Six months

 

 

ended

 

 

ended

 

 

June 30, 

 

 

June 30, 

 

    

2017

    

2016

 

    

2017

    

2016

Net income

 

$

183

 

$

$ 94

 

 

$

275

 

$

156

Other comprehensive income (loss), net of tax: 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translations adjustments

 

 

58

 

 

(53)

 

 

 

135

 

 

(26)

Pension and other postretirement benefits adjustments

 

 

19

 

 

11

 

 

 

37

 

 

24

Other, net

 

 

(4)

 

 

 5

 

 

 

(2)

 

 

(6)

Other comprehensive income (loss), net of tax

 

 

73

 

 

(37)

 

 

 

170

 

 

(8)

Comprehensive income

 

 

256

 

 

57

 

 

 

445

 

 

148

Comprehensive income attributable to noncontrolling interests

 

 

(21)

 

 

(5)

 

 

 

(39)

 

 

(13)

Comprehensive income attributable to Huntsman Corporation 

 

$

235

 

$

52

 

 

$

406

 

$

135

 

See accompanying notes to condensed consolidated financial statements.

 

 

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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In Millions, Except Share Amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Huntsman Corporation Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Shares

 

 

 

 

Additional

 

 

 

 

Unearned

 

 

 

 

other

 

Noncontrolling

 

 

 

 

 

Common

 

Common

 

paid-in

 

Treasury

 

stock-based

 

Accumulated

 

comprehensive

 

interests in

 

Total

 

    

stock

    

stock

    

capital

    

stock

    

compensation

    

deficit

    

loss

    

subsidiaries

    

equity

Balance, January 1, 2017

 

236,370,347

    

$

 3

    

$

3,447

    

$

(150)

    

$

(17)

    

$

(325)

    

$

(1,671)

    

$

180

    

$

1,467

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

243

 

 

 —

 

 

32

 

 

275

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

163

 

 

 7

 

 

170

Issuance of nonvested stock awards

 

 —

 

 

 —

 

 

17

 

 

 —

 

 

(17)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Vesting of stock awards

 

1,162,963

 

 

 —

 

 

 8

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 8

Recognition of stock-based compensation

 

 —

 

 

 —

 

 

 5

 

 

 —

 

 

 9

 

 

 —

 

 

 —

 

 

 —

 

 

14

Repurchase and cancellation of stock awards

 

(344,918)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(8)

 

 

 —

 

 

 —

 

 

(8)

Contribution from noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 2

 

 

 2

Dividends paid to noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(10)

 

 

(10)

Stock options exercised

 

1,238,862

 

 

 —

 

 

34

 

 

 —

 

 

 —

 

 

(14)

 

 

 —

 

 

 —

 

 

20

Dividends declared on common stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(60)

 

 

 —

 

 

 —

 

 

(60)

Balance, June 30, 2017

 

238,427,254

 

$

 3

 

$

3,511

 

$

(150)

 

$

(25)

 

$

(164)

 

$

(1,508)

 

$

211

 

$

1,878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2016

 

237,080,026

 

$

 3

 

$

3,407

 

$

(135)

 

$

(17)

 

$

(528)

 

$

(1,288)

 

$

187

 

$

1,629

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

143

 

 

 —

 

 

13

 

 

156

Other comprehensive loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(8)

 

 

 —

 

 

(8)

Issuance of nonvested stock awards

 

 —

 

 

 —

 

 

17

 

 

 —

 

 

(17)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Vesting of stock awards

 

886,555

 

 

 —

 

 

 2

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 2

Recognition of stock-based compensation

 

 —

 

 

 —

 

 

 5

 

 

 —

 

 

10

 

 

 —

 

 

 —

 

 

 —

 

 

15

Repurchase and cancellation of stock awards

 

(246,663)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(2)

 

 

 —

 

 

 —

 

 

(2)

Dividends paid to noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(21)

 

 

(21)

Stock options exercised

 

22,854

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Treasury stock repurchased

 

(1,444,769)

 

 

 —

 

 

15

 

 

(15)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Excess tax shortfall related to stock-based compensation

 

 —

 

 

 —

 

 

(3)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(3)

Dividends declared on common stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(60)

 

 

 —

 

 

 —

 

 

(60)

Balance, June 30, 2016

 

236,298,003

 

$

 3

 

$

3,443

 

$

(150)

 

$

(24)

 

$

(447)

 

$

(1,296)

 

$

179

 

$

1,708

 

See accompanying notes to condensed consolidated financial statements.

 

 

8

 


 

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

 

 

 

 

 

 

 

 

 

 

Six months

 

 

ended

 

 

June 30, 

 

    

2017

    

2016

Operating Activities:

 

 

 

 

 

 

Net income

 

$

275

 

$

156

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Equity in income of investment in unconsolidated affiliates

 

 

(3)

 

 

(3)

Depreciation and amortization

 

 

214

 

 

209

(Gain) loss on disposal of businesses/assets, net

 

 

(6)

 

 

 2

Loss on early extinguishment of debt

 

 

 1

 

 

 2

Noncash interest expense

 

 

 6

 

 

 8

Noncash restructuring and impairment charges

 

 

 8

 

 

 9

Deferred income taxes

 

 

22

 

 

52

Noncash gain on foreign currency transactions

 

 

(6)

 

 

 —

Stock-based compensation

 

 

19

 

 

17

Insurance proceeds for business interruption, net of gain on recovery

 

 

28

 

 

 —

Other, net

 

 

 4

 

 

(9)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts and notes receivable

 

 

(148)

 

 

(90)

Inventories

 

 

(125)

 

 

177

Prepaid expenses

 

 

 3

 

 

14

Other current assets

 

 

47

 

 

22

Other noncurrent assets

 

 

(11)

 

 

(36)

Accounts payable

 

 

73

 

 

(56)

Accrued liabilities

 

 

(7)

 

 

(39)

Other noncurrent liabilities

 

 

 —

 

 

 8

Net cash provided by operating activities 

 

 

394

 

 

443

Investing Activities:

 

 

 

 

 

 

Capital expenditures

 

 

(147)

 

 

(189)

Insurance proceeds for recovery of property damage

 

 

50

 

 

 8

Cash received from unconsolidated affiliates

 

 

27

 

 

19

Investment in unconsolidated affiliates

 

 

(19)

 

 

(14)

Acquisition of business, net of cash acquired

 

 

(14)

 

 

 —

Proceeds from sale of businesses/assets

 

 

19

 

 

 —

Change in restricted cash

 

 

 —

 

 

 2

Other, net

 

 

 1

 

 

 —

Net cash used in investing activities 

 

 

(83)

 

 

(174)

 

(Continued)

9

 


 

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Millions)

 

 

 

 

 

 

 

 

 

 

Six months

 

 

ended

 

 

June 30, 

 

    

2017

    

2016

Financing Activities:

 

 

 

 

 

 

Net repayments under revolving loan facilities

 

$

(36)

 

$

 —

Net repayments on overdraft facilities

 

 

 —

 

 

(1)

Repayments of short-term debt

 

 

(8)

 

 

(18)

Borrowings on short-term debt

 

 

 4

 

 

 6

Repayments of long-term debt

 

 

(122)

 

 

(582)

Proceeds from issuance of long-term debt

 

 

10

 

 

547

Repayments of notes payable

 

 

(13)

 

 

(16)

Borrowings on notes payable

 

 

 —

 

 

 2

Debt issuance costs paid

 

 

(3)

 

 

(8)

Dividends paid to noncontrolling interests

 

 

(10)

 

 

(21)

Contribution from noncontrolling interests

 

 

 2

 

 

 —

Dividends paid to common stockholders

 

 

(60)

 

 

(60)

Repurchase and cancellation of stock awards

 

 

(8)

 

 

(2)

Proceeds from issuance of common stock

 

 

20

 

 

 —

Net cash used in financing activities 

 

 

(224)

 

 

(153)

Effect of exchange rate changes on cash

 

 

 8

 

 

 —

Increase in cash and cash equivalents

 

 

95

 

 

116

Cash and cash equivalents at beginning of period

 

 

414

 

 

257

Cash and cash equivalents at end of period

 

$

509

 

$

373

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

92

 

$

103

Cash (received) paid for income taxes

 

 

(57)

 

 

21

 

As of June 30, 2017 and 2016, the amount of capital expenditures in accounts payable was $50 million and $59 million, respectively.

 

See accompanying notes to condensed consolidated financial statements.

10

 


 

Table of Contents

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions)

 

 

 

 

 

 

 

 

 

 

June 30, 

 

December 31, 

 

    

2017

    

2016

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents(a)

 

$

506

 

$

413

Restricted cash(a)

 

 

11

 

 

11

Accounts and notes receivable (net of allowance for doubtful accounts of $28 and $27, respectively), ($369 and $437 pledged as collateral, respectively)(a)

 

 

1,584

 

 

1,402

Accounts receivable from affiliates

 

 

369

 

 

347

Inventories(a)

 

 

1,520

 

 

1,344

Prepaid expenses

 

 

57

 

 

60

Other current assets(a)

 

 

250