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 September 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 October 18, 2017, 240,008,103 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.

 

 

 

 

 


 

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10‑Q FOR THE QUARTERLY PERIOD

ENDED SEPTEMBER 30, 2017

 

TABLE OF CONTENTS

 

 

    

 

 

Page

PART I 

 

FINANCIAL INFORMATION

 

4

ITEM 1. 

 

Condensed Consolidated Financial Statements (Unaudited)

 

4

 

 

Huntsman Corporation and Subsidiaries:

 

 

 

 

Condensed Consolidated Balance Sheets

 

4

 

 

Condensed Consolidated Statements of Operations

 

5

 

 

Condensed Consolidated Statements of Comprehensive Income

 

6

 

 

Condensed Consolidated Statements of Equity

 

7

 

 

Condensed Consolidated Statements of Cash Flows

 

8

 

 

Huntsman International LLC and Subsidiaries:

 

 

 

 

Condensed Consolidated Balance Sheets

 

10

 

 

Condensed Consolidated Statements of Operations

 

11

 

 

Condensed Consolidated Statements of Comprehensive Income 

 

12

 

 

Condensed Consolidated Statements of Equity

 

13

 

 

Condensed Consolidated Statements of Cash Flows

 

14

 

 

Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

16

ITEM 2. 

 

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

 

55

ITEM 3. 

 

Quantitative and Qualitative Disclosures About Market Risk

 

73

ITEM 4. 

 

Controls and Procedures

 

74

PART II 

 

OTHER INFORMATION

 

75

ITEM 1. 

 

Legal Proceedings

 

75

ITEM 1A. 

 

Risk Factors

 

75

ITEM 2. 

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

75

ITEM 6. 

 

Exhibits

 

75

 

 

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10‑Q FOR THE QUARTERLY PERIOD

ENDED SEPTEMBER 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.

 

As previously disclosed, on May 21, 2017, Huntsman, Clariant Ltd, a Swiss corporation, (“Clariant”), and HurricaneCyclone Corporation, a Delaware corporation and wholly owned indirect subsidiary of Clariant (“Merger Sub”, collectively, the “Parties”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) which contemplated that Merger Sub would be merged with and into Huntsman, with Huntsman surviving the merger as a wholly-owned subsidiary of Clariant. On October 26, 2017, Huntsman, Clariant and Merger Sub entered into a Termination Agreement, dated as of October 26, 2017 (the “Termination Agreement”), pursuant to which the parties mutually terminated the Merger Agreement. No fees are currently payable under the terms of the Termination Agreement. Huntsman and Clariant also agreed to release each other from certain claims and liabilities arising out of or related to the Merger Agreement or the transactions contemplated therein or thereby.  Pursuant to the Termination Agreement, each party agrees to bear its own costs, fees and expenses in connection with Merger Agreement and the transactions contemplated thereby, except for specified joint filing fees and related expenses as set forth in the Merger Agreement.    During the three and nine months ended September 30, 2017 and 2016, we incurred merger-related costs of $12 million, $18 million, nil and nil, respectively.

 

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 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. 

3


 

Table of Contents

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)

 

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

    

2017

    

2016

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents(a)

 

$

440

 

$

385

Restricted cash(a)

 

 

11

 

 

11

Accounts and notes receivable (net of allowance for doubtful accounts of $24 and $23, respectively), ($369 and $328 pledged as collateral, respectively)(a)

 

 

1,223

 

 

1,168

Accounts receivable from affiliates

 

 

24

 

 

15

Inventories(a)

 

 

1,084

 

 

918

Prepaid expenses

 

 

47

 

 

49

Other current assets(a)

 

 

193

 

 

232

Current assets held for sale

 

 

2,745

 

 

777

Total current assets 

 

 

5,767

 

 

3,555

Property, plant and equipment, net(a)

 

 

3,035

 

 

3,034

Investment in unconsolidated affiliates

 

 

255

 

 

248

Intangible assets, net(a)

 

 

56

 

 

43

Goodwill

 

 

139

 

 

121

Deferred income taxes

 

 

268

 

 

253

Other noncurrent assets(a)

 

 

463

 

 

472

Noncurrent assets held for sale

 

 

 —

 

 

1,463

Total assets 

 

$

9,983

 

$

9,189

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable(a)

 

$

871

 

$

774

Accounts payable to affiliates

 

 

20

 

 

16

Accrued liabilities(a)

 

 

537

 

 

471

Current portion of debt(a)

 

 

29

 

 

50

Current liabilities held for sale

 

 

1,633

 

 

467

Total current liabilities 

 

 

3,090

 

 

1,778

Long-term debt(a)

 

 

2,845

 

 

4,122

Notes payable to affiliates

 

 

 —

 

 

 1

Deferred income taxes

 

 

426

 

 

371

Other noncurrent liabilities(a)

 

 

1,031

 

 

1,057

Noncurrent liabilities held for sale

 

 

 —

 

 

393

Total liabilities 

 

 

7,392

 

 

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, 252,529,511 and 250,802,175 shares issued and 238,609,819 and 236,370,347 shares outstanding, respectively

 

 

 3

 

 

 3

Additional paid-in capital

 

 

3,683

 

 

3,447

Treasury stock, 12,607,223 shares

 

 

(150)

 

 

(150)

Unearned stock-based compensation

 

 

(19)

 

 

(17)

Accumulated deficit

 

 

(48)

 

 

(325)

Accumulated other comprehensive loss

 

 

(1,358)

 

 

(1,671)

Total Huntsman Corporation stockholders’ equity 

 

 

2,111

 

 

1,287

Noncontrolling interests in subsidiaries

 

 

480

 

 

180

Total equity 

 

 

2,591

 

 

1,467

Total liabilities and equity 

 

$

9,983

 

$

9,189


(a)

At September 30, 2017 and December 31, 2016, respectively, $35 and $20 of cash and cash equivalents, $11 and $10 of restricted cash, $29 and $21 of accounts and notes receivable (net), $42 and $45 of inventories, $6 and $5 of other current assets, $272 and $279 of property, plant and equipment (net), $10 each of intangible assets (net), $39 and $37 of other noncurrent assets, $81 and $89 of accounts payable, $29 and $30 of accrued liabilities, $20 and $12 of current portion of debt, $94 and $114 of long‑term debt, and $80 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.

4


 

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Millions, Except Per Share Amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

Nine months

 

 

ended

 

ended

 

 

September 30, 

 

September 30, 

 

 

2017

 

2016

    

2017

    

2016

Revenues:

    

 

 

    

 

 

    

 

 

    

 

 

Trade sales, services and fees, net

 

$

2,137

 

$

1,802

 

$

6,048

 

$

5,519

Related party sales

 

 

32

 

 

29

 

 

107

 

 

95

Total revenues 

 

 

2,169

 

 

1,831

 

 

6,155

 

 

5,614

Cost of goods sold 

 

 

1,695

 

 

1,475

 

 

4,852

 

 

4,444

Gross profit 

 

 

474

 

 

356

 

 

1,303

 

 

1,170

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

198

 

 

185

 

 

583

 

 

564

Research and development

 

 

35

 

 

34

 

 

103

 

 

103

Restructuring, impairment and plant closing costs

 

 

 1

 

 

38

 

 

13

 

 

56

Merger costs

 

 

12

 

 

 —

 

 

18

 

 

 —

Other operating expense (income), net

 

 

 5

 

 

(2)

 

 

(9)

 

 

(3)

Total expenses

 

 

251

 

 

255

 

 

708

 

 

720

Operating income   

 

 

223

 

 

101

 

 

595

 

 

450

Interest expense

 

 

(39)

 

 

(52)

 

 

(134)

 

 

(153)

Equity in income of investment in unconsolidated affiliates

 

 

 1

 

 

 1

 

 

 4

 

 

 4

Loss on early extinguishment of debt

 

 

(35)

 

 

(1)

 

 

(36)

 

 

(3)

Other income (loss), net

 

 

 1

 

 

(3)

 

 

 2

 

 

(1)

Income from continuing operations before income taxes 

 

 

151

 

 

46

 

 

431

 

 

297

Income tax expense

 

 

(35)

 

 

(6)

 

 

(78)

 

 

(65)

Income from continuing operations 

 

 

116

 

 

40

 

 

353

 

 

232

Income (loss) from discontinued operations, net of tax

 

 

63

 

 

24

 

 

101

 

 

(12)

Net income

 

 

179

 

 

64

 

 

454

 

 

220

Net income attributable to noncontrolling interests

 

 

(32)

 

 

(9)

 

 

(64)

 

 

(22)

Net income attributable to Huntsman Corporation 

 

$

147

 

$

55

 

$

390

 

$

198

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to Huntsman Corporation common stockholders

    

$

0.36

    

$

0.13

    

$

1.22

    

$

0.89

Income (loss) from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax

 

 

0.26

 

 

0.10

 

 

0.42

 

 

(0.05)

Net income attributable to Huntsman Corporation common stockholders

 

$

0.62

 

$

0.23

 

$

1.64

 

$

0.84

Weighted average shares

 

 

238.5

 

 

236.3

 

 

238.0

 

 

236.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to Huntsman Corporation common stockholders

 

$

0.34

 

$

0.13

 

$

1.19

 

$

0.88

Income (loss) from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax

 

 

0.26

 

 

0.10

 

 

0.41

 

 

(0.05)

Net income attributable to Huntsman Corporation common stockholders

 

$

0.60

 

$

0.23

 

$

1.60

 

$

0.83

Weighted average shares

 

 

244.0

 

 

240.1

 

 

243.5

 

 

239.1

Amounts attributable to Huntsman Corporation common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

84

 

$

31

 

$

289

 

$

210

Income (loss) from discontinued operations, net of tax

 

 

63

 

 

24

 

 

101

 

 

(12)

Net income

 

$

147

 

$

55

 

$

390

 

$

198

Dividends per share 

 

$

0.125

 

$

0.125

 

$

0.375

 

$

0.375

 

See accompanying notes to condensed consolidated financial statements.

 

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

 

Nine months

 

 

ended

 

 

ended

 

 

September 30, 

 

 

September 30, 

 

    

2017

    

2016

 

    

2017

    

2016

Net income

 

$

179

 

$

$ 64

 

 

$

454

 

$

220

Other comprehensive income (loss), net of tax: 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translations adjustments

 

 

66

 

 

15

 

 

 

201

 

 

(11)

Pension and other postretirement benefits adjustments

 

 

18

 

 

11

 

 

 

55

 

 

35

Other, net

 

 

(1)

 

 

 4

 

 

 

(3)

 

 

(2)

Other comprehensive income, net of tax

 

 

83

 

 

30

 

 

 

253

 

 

22

Comprehensive income

 

 

262

 

 

94

 

 

 

707

 

 

242

Comprehensive income attributable to noncontrolling interests

 

 

(37)

 

 

(9)

 

 

 

(76)

 

 

(22)

Comprehensive income attributable to Huntsman Corporation 

 

$

225

 

$

85

 

 

$

631

 

$

220

 

See accompanying notes to condensed consolidated financial statements.

 

 

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Table of Contents

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

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

390

 

 

 —

 

 

64

 

 

454

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

313

 

 

(60)

 

 

253

Issuance of nonvested stock awards

 

 —

 

 

 —

 

 

17

 

 

 —

 

 

(17)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Vesting of stock awards

 

1,200,218

 

 

 —

 

 

 8

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 8

Recognition of stock-based compensation

 

 —

 

 

 —

 

 

 7

 

 

 —

 

 

13

 

 

 —

 

 

 —

 

 

 —

 

 

20

Repurchase and cancellation of stock awards

 

(348,887)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(8)

 

 

 —

 

 

 —

 

 

(8)

Contribution from noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 4

 

 

 4

Dividends paid to noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(26)

 

 

(26)

Disposition of a portion of P&A Business

 

 —

 

 

 —

 

 

209

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

209

Separation costs of P&A Business

 

 —

 

 

 —

 

 

(40)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(40)

Conversion of restricted awards to P&A Business awards

 

 —

 

 

 —

 

 

(2)

 

 

 —

 

 

 2

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Minority interest on disposal of P&A Business

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

318

 

 

318

Stock options exercised

 

1,388,141

 

 

 —

 

 

37

 

 

 —

 

 

 —

 

 

(15)

 

 

 —

 

 

 —

 

 

22

Dividends declared on common stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(90)

 

 

 —

 

 

 —

 

 

(90)

Balance, September 30, 2017

 

238,609,819

 

$

 3

 

$

3,683

 

$

(150)

 

$

(19)

 

$

(48)

 

$

(1,358)

 

$

480

 

$

2,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2016

 

237,080,026

 

$

 3

 

$

3,407

 

$

(135)

 

$

(17)

 

$

(528)

 

$

(1,288)

 

$

187

 

$

1,629

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

198

 

 

 —

 

 

22

 

 

220

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

22

 

 

 —

 

 

22

Issuance of nonvested stock awards

 

 —

 

 

 —

 

 

17

 

 

 —

 

 

(17)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Vesting of stock awards

 

895,660

 

 

 —

 

 

 2

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 2

Recognition of stock-based compensation

 

 —

 

 

 —

 

 

 7

 

 

 —

 

 

13

 

 

 —

 

 

 —

 

 

 —

 

 

20

Repurchase and cancellation of stock awards

 

(249,155)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(3)

 

 

 —

 

 

 —

 

 

(3)

Dividends paid to noncontrolling interests

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(26)

 

 

(26)

Stock options exercised

 

35,170

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Treasury stock repurchased

 

(1,444,769)

 

 

 —

 

 

15

 

 

(15)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Excess tax shortfall related to stock-based compensation

 

 —

 

 

 —

 

 

(3)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(3)

Dividends declared on common stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(90)

 

 

 —

 

 

 —

 

 

(90)

Balance, September 30, 2016

 

236,316,932

 

$

 3

 

$

3,445

 

$

(150)

 

$

(21)

 

$

(423)

 

$

(1,266)

 

$

183

 

$

1,771

 

See accompanying notes to condensed consolidated financial statements.

 

 

7


 

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

 

 

 

 

 

 

 

 

 

 

Nine months

 

 

ended

 

 

September 30, 

 

    

2017

    

2016

Operating Activities:

 

 

 

 

 

 

Net income

 

$

454

 

$

220

Less: (Income) loss from discontinued operations

 

 

(101)

 

 

12

Income from continuing operations

 

 

353

 

 

232

Adjustments to reconcile income from continuing operations to net cash provided by operating activities from continuing operations:

 

 

 

 

 

 

Equity in income of investment in unconsolidated affiliates

 

 

(4)

 

 

(4)

Depreciation and amortization

 

 

235

 

 

238

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

 

 

(5)

 

 

 1

Loss on early extinguishment of debt

 

 

36

 

 

 3

Noncash interest expense

 

 

 7

 

 

12

Noncash restructuring and impairment charges

 

 

 —

 

 

 2

Deferred income taxes

 

 

24

 

 

90

Noncash gain on foreign currency transactions

 

 

(4)

 

 

 —

Stock-based compensation

 

 

25

 

 

23

Other, net

 

 

 3

 

 

(3)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts and notes receivable

 

 

(148)

 

 

(3)

Inventories

 

 

(118)

 

 

133

Prepaid expenses

 

 

 2

 

 

(6)

Other current assets

 

 

31

 

 

(14)

Other noncurrent assets

 

 

(22)

 

 

(13)

Accounts payable

 

 

95

 

 

(11)

Accrued liabilities

 

 

46

 

 

49

Other noncurrent liabilities

 

 

(18)

 

 

 7

Net cash provided by operating activities from continuing operations

 

 

538

 

 

736

Net cash provided by operating activities from discontinued operations

 

 

205

 

 

112

Net cash provided by operating activities

 

 

743

 

 

848

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Capital expenditures

 

 

(159)

 

 

(214)

Investment in unconsolidated affiliates

 

 

 —

 

 

(2)

Acquisition of business, net of cash acquired

 

 

(14)

 

 

 —

Proceeds from sale of businesses/assets

 

 

21

 

 

 —

Cash received from termination of cross-currency interest rate contracts

 

 

 7

 

 

 —

Change in restricted cash

 

 

 —

 

 

 1

Other, net

 

 

 —

 

 

 2

Net cash used in investing activities from continuing operations

 

 

(145)

 

 

(213)

Net cash used in investing activities from discontinued operations

 

 

(49)

 

 

(57)

Net cash used in investing activities

 

 

(194)

 

 

(270)

 

(Continued)

8


 

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Millions)

 

 

 

 

 

 

 

 

 

 

Nine months

 

 

ended

 

 

September 30, 

 

    

2017

    

2016

Financing Activities:

 

 

 

 

 

 

Net repayments under revolving loan facilities

 

$

(36)

 

$

 —

Net repayments on overdraft facilities

 

 

 —

 

 

(1)

Repayments of short-term debt

 

 

(10)

 

 

(41)

Borrowings on short-term debt

 

 

 6

 

 

 8

Repayments of long-term debt

 

 

(1,439)

 

 

(795)

Proceeds from long-term debt of P&A Business

 

 

750

 

 

 —

Proceeds from issuance of long-term debt

 

 

24

 

 

552

Repayments of notes payable

 

 

(20)

 

 

(25)

Borrowings on notes payable

 

 

11

 

 

31

Debt issuance costs paid

 

 

(21)

 

 

(8)

Dividends paid to noncontrolling interests

 

 

(26)

 

 

(26)

Contribution from noncontrolling interests

 

 

 4

 

 

 —

Dividends paid to common stockholders

 

 

(90)

 

 

(90)

Repurchase and cancellation of stock awards

 

 

(8)

 

 

(3)

Proceeds from issuance of common stock

 

 

22

 

 

 —

Proceeds from the IPO of P&A Business